There are some industries – finance, insurance, and telecom come to mind – that are so big and so regulated, that they just seem insurmountable. Yes, they could all be better. Much better, but where do you start? This week’s guest is Bill Alcorn, founder of BikeFlights.com. He tackled another giant, complicated segment – shipping – in order to make it easier and cheaper for cyclists to ship their bikes to events, races or just ahead of them for a long weekend with friends. And when I say cheaper, I mean a LOT cheaper. So, how did he build an incredible customer service and benefits layer on top of FedEx’s existing network while talking them into offering rates as low as half of standard ground shipping? That answer and so much more in this interview!
This episode is brought to you by HealthIQ, be sure to check out the note at the bottom of this post and see why, as an entrepreneur, that matters for you!
DISCUSSION TIMELINE
01:40 – – Where did the idea come from? What problems did it solve?
11:20 – How they talked FedEx into working with a startup
14:30 – How do they make customers care about using them?
19:20 – Anticipating problems and adding features
21:40 – Creating the customer interface
25:15 – Team size, sales growth & just launching
34:00 – Who are they really competing with?
37:58 – Can they grow beyond bikes?
41:42 – What keeps him up at night?
43:22 – Parting advice
POST-GAME ANALYSIS
Bill sums up the reason for starting his company nicely by saying “We created the service we wanted for ourselves.” That’s the reason so many of us start a business, to solve a problem we have when no one else seems to be solving it. It’s a good reason. Chances are, if you have a problem, there are thousands more people who have that same problem.
One of the big lessons here is to do research ahead of time and see how people are likely to use the service. They started out with the idea of offering a complete travel service that helped book airfare and hotel, line up ride guides, and ship your bike and gear where it needed to go. The problems, they found, were that people didn’t always plan as far ahead as Bill needed them to to take full advantage of their program, or they would comparison shop based on flight prices and other details out of his control. And they wanted to use their frequent flyer miles to pay for the travel, which they couldn’t do through his elaborate, full service platform. What he could control was the shipping, and that became the service he could provide which was most valuable to his customers.
“Trying to come up with a revenue model for changing someone’s behavior, you’re going to be really hungry.”
From there, the business became figuring out how to best serve riders who wanted to ship their bikes from point A to B, whether for a trip or because they sold their bike. A big part of that was thinking about all the things that can go wrong, and solve those problems in advance. The better they (and you) can do this, the happier your customers will be and more likely they are to recommend your service. Especially if they’ve had a bad experience elsewhere (like shipping directly through a carrier or airline and having to deal with damage or lost items). Extra steps – like having shipping container sizes and brands pre-loaded into a drop down menu, integrating Google Location Services to automatically find the closest bike shops to ship to and from, and working with those shops to replace and repair anything that gets broken along the way – are the things that provide the customer service that sets them apart.
I really like how they just launched, even though the site, in his own words, only worked 100% properly about 80% of the time. But he had the gumption to just launch and fix things as they went along. Why wasn’t that scary for him? Well, as he says, technology is changing so fast that on any given day, most of what we’re using is only a few months old, anyway. So they built in backup systems (like a phone call) that lets them still process the orders and make sure the end result is there. They’re continually iterating and improving their systems to stay on top of new tech…and new user habits, like mobile.
How They Talked FedEx and Google into Working With Them
They showed them the possibility, and showed them how big it could get. They pitched the big idea, then worked backwards to create milestones. And they built the system in advance, so they were ready to go without requiring any work from FedEx. They negotiated a tiered discount program with FedEx, too, so the more business they send them, the better commission BikeFlights earns per shipment.
Expansion Opportunities
Bill makes a very short comment about integrating their system into other shopping carts like Shopify, BigCommerce, etc. to offer BikeFlights shipping as an option, which is a brilliant way to expand not just sales, but also awareness for their service. Another way they’re growing is corporate accounts, like having a bike brand sending all review and demo bikes through BikeFlights. More bike brands are moving to a consumer direct sales model, too, and BikeFlights is positioned perfectly to help minimize the delivery cost. These are more frequent shippers than individual riders, too, so it’s a win for everyone.
On the flip side, Bill’s intentionally focused and narrow customer base still provides plenty of market size and growth opportunities, but is admittedly limited in the grand scheme of things. There are plenty more products they could ship beyond bicycles, but they want to keep it simple and enjoy life. He’s running a successful business, able to employ others, and is still seeing growth in their space while still having time to actually go ride his bike and enjoy life. So why complicate that just to try to grow into new markets? Sometimes, doing well is good enough and that’s a challenge many entrepreneurs struggle with as they continually seek more growth or pursue new opportunities outside their core competency. While I don’t always practice this myself, finding balance and focusing on one thing is great advice.
The Challenge of Consumer Expectations
Perhaps the biggest hurdle BikeFlights has is that their pricing is dictated by their competitors. But their competition isn’t another service doing the same thing, it’s the airlines or shipping directly through a service like USPS, UPS or FedEx. They’re also competing against the cost of renting a bike at the destination, too. Bill had to ensure they could get a bike to and from the rider’s destination for less than other delivery options and within spittin’ distance of rental costs. Otherwise, there wasn’t enough reason for customers to use them, even with all of the other benefits they offered. As he says, customers (and particularly online consumers) are incredibly price driven.
Bill’s parting advice is golden. Launching a business is not something you do part time. You need to be committed to the long haul. You might have a great idea, but that’s only the start. You’ve got to put in the hours, sometimes many, many hours every day to get the business off the ground. Bill worked and did consulting to pay the bills while launching BikeFlights, burning the midnight oil with his team to bring the project to life. When you see one of those ideas and think “Wow, I can’t believe nobody thought of that before!”, rest assured someone probably did, they just didn’t want to put in the work. Talk is cheap, take action, even if it’s just one small thing every day, and before you know it the momentum will build and you’ll be off the ground.
Links & Resources
- Bikeflights.com
- Find them on Facebook, Twitter and Instagram
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