Carl Strong is legend within the custom bicycle frame building industry for good reason – he’s been running a successful, profitable business for more than 20 years. He leads seminars, coaches younger builders, and most importantly, leads an industry in running his business as a real business, not a passion play. That’s a mistake so many entrepreneurs make. Sometimes, that allows for a great lifestyle business, but if you want to build a real company that’s highly profitable and capable of growing, Carl’s two decades of lessons are distilled into this episode. On top of that, he’s launching a new, ready-made brand of carbon fiber bikes with a partner, which will focus on limited runs of a single model at a time. And it’ll be high end, which caters to a customer that’s not arguing over price, which lets them focus on building something great. Whether you’re getting into the bicycle business or not, this episode is packed full of amazing advice for any entrepreneur!
- 01:45 – What was Carl doing before launching his namesake bike brand? How’d he get into frame building?
- 07:40 – How to differentiate yourself beyond your product.
- 13:00 – Can you protect your customers from themselves?
- 14:35 – How did he develop his designs and geometry?
- 17:00 – Carl talks revenue, how he determines prices, and dealing with customer wait lists.
- 20:00 – How to deal with supply chain issues outside your control.
- 22:10 – Time management tips when you’re a “one man show”.
- 25:30 – How to deal with constantly changing industry standards, and can you anticipate new ones?
- 31:10 – Carl launches Pursuit Cycles as a production bike brand.
- 33:30 – Why is he intentionally scaling back his custom frame volume?
- 36:15 – How will they differentiate Pursuit from the competition?
- 39:15 – Why limit production if you could sell more?
- 43:20 – Testing the product to make sure it’s safe.
- 47:25 – It’s a lean startup, so it’s taking a while, but that’s OK.
- 52:20 – How do you reach customers?
- 58:50 – You can’t assign your value system to your customers.
- 1:02:30 – Staying sane as a solopreneur…and working with your spouse.
- 1:05:35 – Advice on how to run a business.
POST GAME ANALYSIS
Carl started out building anything and everything, in any style and material customers wanted. Over the years, his business has narrowed into most titanium, and mostly road and gravel bikes. He notes that it was driven mostly by customer demand, but it became a self fulfilling prophecy – if that’s all people were ordering, that was all he was building, so that’s what people assumed he made. What’s important is that he didn’t fight it, he just used that momentum to grow his business.
He started 20 years ago, but he offers sage advice for anyone starting their business today. Many people market themselves and their products based on what THEY think is special, but sometimes your customers are thinking something else entirely. It pays to listen to what the CUSTOMER finds important, then honing your message around that to better resonate with them.
Carl’s refreshingly open about his costs and margins. He operates on a target of 70% gross profit, meaning 30% of the price of the bike is materials costs. The rest is time, which means they have to know how long it takes, how many hours he and his team put into each frame. And then they have to value that time such that they can make a living. Thinking through all of these numbers carefully and adjusting over time is what makes Carl profitable where so many small builders are hesitant to charge enough.
Pursuit Cycles is their new venture, which will be making a completely different type of product than his custom, one-at-a-time frames. It’s a full production, assembly line bicycle, which allows them to use different manufacturing techniques. As Carl puts it, it’s a way for him to stretch his entrepreneurial muscle, which is something many of us (myself included) end up considering after years of doing the same thing. For me, this podcast is an offshoot of Bikerumor, letting me explore the business side of outdoor, adventure lifestyle companies. The risk is getting distracted from the bread and butter business that’s paying the bills, so you want to be careful with time management. It helps when the businesses are similar and complementary, but it helps more if the original business is able to run on its own.
Carl talks about making Pursuit special and unique, which is key. There’s not much point in starting a “me too” product or service in this day and age. You need to differentiate on something substantial, which might be price, but you need to watch out for your competition reacting quickly and creating a race to the bottom where no one’s making any money.
I love that they admit part of their limited run strategy is because they may not want to work any harder. After all, quality of life is paramount to enjoying what you’re doing. And in a town like Bozeman, Montana, where the population is there because of the amazing outdoor recreation opportunities and casual lifestyle, they have to be realistic about how hard their employees want to work, too. The lesson? Read the climate and make sure your company’s culture fits the type of employees you are likely to attract.
Their Lean Startup strategy is giving them the luxury of market research and customer feedback to fine tune the initial product offering. While it may take more time, it helps them ensure the company will succeed by delivering what people really want, and not what Carl and Bill think they’ll want.
One of the key challenges they’ll face is reaching their customers. Going direct to consumer can work, but if their customers aren’t online the same way as most consumers, they need to find unique ways to get their message in front of them. For now, they’re playing with Facebook’s settings, but that’ll only go so far if their type of customer is the one that typically goes to retail stores.
Here’s the biggest lesson I took away from this interview: You can’t attach your own monetary value to your product. Maybe you won’t personally pay $14,000 for a bicycle. But that doesn’t mean your customers won’t. There’s a market for every level of product or service, so don’t be afraid to charge what your product and time are truly worth. And think beyond your own actions…are your employees applying their values to the customers? Are they talking your customers out of higher end, more expensive products just because they wouldn’t buy it themselves?
His parting advice? “The easiest way to make money is the simplest way to make money. You’ve got to pay attention to the bottom line.” Which means, take ALL of your costs, especially your time, into consideration and price your products or services accordingly.
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