I’ve known Chris Mogridge for years, and while this interview might seem similar to the podcast with Boyd Johnson (of Boyd Cycling, also a wheel brand), the similarities are limited. Chris has a different mindset when it comes to retail, and he’s constantly dreaming up business ideas. Some he pursues, and we’ll discuss a few of them, and some are just mental exercises…which is also important, so long as they don’t become distractions. This one has a lot of good lessons on thinking different about how an industry works and taking advantage of its weak points.
- 01:40 – Chris’ background and why he decided to launch a wheel company instead of bicycle frames.
- 05:20 – Parts sourcing and why he selects quality components to build his wheels.
- 07:50 – Why he had to switch from catalog items to designing his some own rims.
- 09:00 – Building his wheels to differentiate in an arguably saturated marketplace, and why some rims still come from a catalog.
- 10:50 – What does it cost to make a carbon fiber mold? And what makes theirs different?
- 16:10 – A perfect example of sunk cost and cutting one’s losses.
- 18:30 – Why dump resources into a dying standard? Or a counterintuitive spec?
- 25:00 – Moving from Mississippi to Utah to take advantage of a better work force, quality of life and industry support.
- 29:10 – Getting a state’s support for moving your business, and using industry downturns to your advantage.
- 34:30 – Using alternate retail channels to drive growth.
- 38:50 – The startup vision compared to now, and musing on niches.
- 41:30 – Go deep on what works.
- 43:40 – Expanding beyond wheels, and trying to license a new technology.
- 54:20 – Advice on looking for a need to fill, knowing the market before you jump in.
POST GAME ANALYSIS
The biggest lesson for me was to look at alternate channels for retail distribution. While many (most, really) brands in the cycling industry openly talking about supporting the local bike shop, Chris’ tactic doesn’t do much to coddle that relationship. And it’s working, because going directly through Backcountry.com, which is a massive online retailer known for closeouts and discounted pricing, allows consumers to get a great wheel for a great deal. And Mercury Cycling still gets full margin on their end, allowing them the resources to grow and fund research and development. So, what retail channels can you look at that give you a competitive advantage? The risk is putting all your eggs in a single basket, so find a way to hedge your bets, too.
Opportunities come with size. We’ve seen a number of big brands use their volume to get special spec from their vendors, and Mercury is trying to use its numbers to help Onyx hubs speed up the launch of a lighter, better version. In turn, Mercury might get a limited time exclusive or special edition. That, combined with proprietary rims and their own build system, helps them differentiate against all the other wheel brands. It’s a win-win in that the smaller brand gains volume, and Mercury has something unique to sell.
Chris’ parting advice on looking for a need in the market and filling it is the crux of any good business. He suggests looking into a market you like, then see where it can be improved or figure out what’s missing. And then we throw out a business idea that you’re free to grab…