The Build Cycle Podcast #010 – Kogel Bearings’ Ard Kessels

Kogel Bearings offers high end ceramic bearings, and components with those bearings, for bicycles. Founder Ard Kessels got interested in the category because, as a bike shop owner, he saw otherwise very expensive road bikes coming back with problems caused by cheap bearings getting quickly ruined in the wet Belgium weather. After working for another bearing brand, he launched his own company in the U.S. The trick? He lives abroad. Our conversation runs the gamut from how he manages the company from a very remote location to how he designs and sources his products. We also discuss how he differentiates his offering when many brands’ are pulling from the same catalog of parts and contract manufacturers.

DISCUSSION TIMELINE

  • 02:00 – Ard discusses his background in the garment industry and how he transitioned from there into the cycling industry.
  • 10:00 – How he started sourcing his own products and fired up sales.
  • 12:35 – What type of market research he did and how he determined there was a market for high end (read expensive) upgrades.
  • 15:00 – What makes Kogel Bearings unique?
  • 19:20 – How the products go from napkin sketch to a finished good.
  • 21:20 – How a small company can sponsor top athletes and teams.
  • 25:00 – Using the sponsorships as marketing and how to make the most of it.
  • 29:40 – How he determined their product mix, and why he’s staying out of some categories.
  • 34:20 – Bearings go inside other things, and here’s how he makes his products work inside the vast majority of other brands’ products.
  • 36:00 – More about how they differentiate their products.
  • 40:00 – How he runs his U.S. based company from abroad.
  • 45:00 – Using both 3rd party distribution and direct-to-retail sales, and how they manage inventory and production quality to reduce errors and waste.
  • 49:30 – Key differences between U.S. and International distribution.
  • 52:50 – Advice for anyone wanting to start a small parts brand, and a big challenge.

POST GAME ANALYSIS

Two things stood out to me are his parts selection and remote management. There are only a couple manufacturers that make complete bearings, and there’s only a handful of ways to make them. The trick in differentiating yourself in a market where the product could be extremely similar to a competitor’s product comes down to telling the story. For Kogel, they select the premium parts options where it counts, which really does make them better, but then do a good job sharing that story at events and on their website and social media.

Regarding remote management, Ard travels wherever his wife’s work takes them, which is all over the world. Currently living in Germany, Ard manages a mostly U.S. based team via Skype and email. As a naturalized dual citizen, he’s been running his business in the states since having a Green Card. Using a connected iPad and his laptop, he’s able to travel throughout Europe and the U.S. and keep his company growing.

A few other things I found interesting: His entire bottom bracket line, which encompasses most every standard out there, uses just two different bearing sizes. This allows efficiencies of scale and better inventory management. Similar situation with wheel bearings, which are the next area of growth for them. I also like that he laser etches cool slogans or athlete specific messages on the products their sponsored teams use. Not only does it keep the athletes stoked, but it makes it very photo worthy, which increases the viral spread in media.

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