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By Tom Demerly for tomdemerly.com

Two bicycle specialty stores closed in Metro Detroit this year. Three more suddenly changed “ownership” in November on their way to eventual closure.

On the national scale, Advanced Sport Enterprises, parent company to Performance Bicycle and Bike Nashbar, filed Chapter 11 bankruptcy last month.

After decades of failure to adapt, Southeastern Michigan bicycle retail is in a brutal phase of enforced transition. Despite an overall economic boom many bike shops are a bust. Southeastern Michigan bike store closures and hasty ownership spin-offs that precede further closings confirm that.

The questions are; how did this happen; how can it be avoided and what will the industry look like once the rules of business exact their toll?

Like most significant shifts in business there is no singular cause.  A conspiracy of factors combines to weigh heavily on traditional bicycle retail. The reality that the industry has ignored these factors for so long manifests itself in this crisis.

Not every bicycle retailer is in crisis though, and some old-skool bike shops not only survive but are capitalizing on the increasing failures of retailers who thought they knew it all but had neither solid financials or enough vision to adapt in the changing retail landscape.

Southeastern Michigan bike shops like Jack’s Bicycle and Fitness, Roll Models in Allen Park, Michigan, Brick Wheels in Traverse City and Wheels in Motion in Ann Arbor are still there, still doing business and quietly surviving and growing as the others collapse around them.

In the renaissance of downtown Detroit, a new generation of bike family businesses has emerged on the shoulders of men like Jon Hughes of Downtown Ferndale and Downtown Detroit bike shops. Hughes also leads the family effort to grow the Lexus Velodrome and launch a new demi-empire in media and cycling in post-recession Detroit. He comes from a dynasty of bicycle business that stretches back three generations to Mike Walden and the formation of the country’s second oldest cycling club, the Wolverines. Even Bob Akers, who runs the decades-old, dingy, crumbling International Bike Shop in Garden City has survived as the shiny newcomers who thought they knew it all have tumbled.

Why do some shops survive while others fail? One factor common in the surviving Michigan bike retailers is they own their own real estate. But the ingredients for success, not just survival, are more complex than just owning your building.

Harvard MBAs don’t start bike shops. Bike shop owners don’t have business degrees. They start bike shops because they love bikes or have no other opportunity. They’re hobbyists. Not businessmen. The barriers to entry are low. Got $100K? You can open a bike shop. You’ll never tell a bike shop owner he doesn’t know business. As far as bicycle retail store owners are concerned, they are experts at retail. The crash of Michigan high-end specialty retailers proves otherwise.

I was this guy.  I lost my own store after 17 successful years during the recession. Then, like a scene from a movie where the plot repeats again and again, I went to work for two other retailers around the U.S. who, like me, thought they knew everything and couldn’t be told anything. They’re gone now too. More will follow.

Failure is only failure if you fail to learn. But in bicycle retail, no one listens. The first bike shop I worked for when I was 15 years old went out of business because the owners failed to adapt. The last bike shop I worked for four decades later did exactly the same thing. The owners refused to adapt. In a repetitive pantomime, I tried to convince the owners of the last shop I worked at to move the cash register to facilitate better customer traffic flow. It was a minor change that may have resulted in a minor improvement. I tried for a year. They never moved it. They went out of business months after I finally quit in frustration and left to work in another industry.

I take some small satisfaction in knowing the store that lasted the longest was mine. But business is pass/fail. You can run a successful business for 6,205 days like I did, but if you fail on the 6,206th day, you are a failure.

The first lesson I learned in losing my own store is you have to own your failure. Mine was my fault. While there were factors including a global recession that contributed to my 17-year-old store failing, I could have moderated them. Others did. I wasn’t smart enough or humble enough at the time. Some people pay college tuition for an education. I paid in bankruptcies and a modern day “Grapes of Wrath” by losing everything. While the second way may be a more durable education, it’s also more painful.

I went on to work for two more bike retail owners who made exactly the same mistakes I did while ignoring the changes that could have saved them. But bike shop owners don’t listen.

The specifics on what is killing some of Michigan’s bicycle retailers is a fascinating case study in the evolution of business that could fill a book. Bike shop owners and bike shops are, in many ways, indicative of the American economic condition. They are the epitome of small business America. As the small, independent bike goes, so goes all of small retail- good and bad. Small restaurants, pet stores, book retail, independent jewelers and all small retail can learn something from the enforced evolution and bizarre non-evolution of bicycle retail.

Small bicycle retail has been quick to scapegoat the big, ugly mega-retailer and the .com as the reason for their bust. That is a lie. In the broad sense, bicycle retailers are killing themselves by failing to adapt and innovate. They do it in hundreds of small ways every day they continue to do the same tired things over and over and over. Even the bicycle retailers who have survived could do better. For most of the survivors a major reason they still exist is they own their own real estate and remain impervious to swings in the volatile southeastern Michigan economy. But even their future is increasingly in doubt as forward-thinking innovators understand new opportunities in the age of Amazon One-Click.

What will happen to Michigan small bicycle retail? One thing is certain: it will continue to change at a rate that outpaces the ability of most shop owners to adapt. That means we’ll see more southeastern Michigan bike shops closing. Unless they learn from someone’s mistakes the cycle of failure in Michigan cycling retail will continue.

 


 

Tom Demerly is a 42-year bicycle industry veteran who owned his own business for 17 years. Today he is a defense and aviation analyst for several international publications including TheAviationist.com published in Rome, Italy.

 

 

 

 

 

 

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By Tom Demerly for tomdemerly.com.

There’s no politically correct way to express this, but, yeah… ahhh. I feel a little out of place.

I’m a 56-year old conspicuously Caucasian guy in the crowd-packed center of the massive Mexicantown Cinco de Mayo street celebration late on a hot May afternoon in Detroit.

There’s heavy ganja haze in the air. It’s thick enough for a contact buzz. I’m carrying a huge U.S. flag in my hand, and feeling like I’m not particularly understood or appreciated here. Other than the double file line of about 50 quasi-military, tacticool, mostly white guys and girls with a distinctly law-enforcement look that are behind me, I feel pretty isolated. And pretty conspicuous with my flag and backpack as we navigate the tightly packed downtown party crowd of tens of thousands. There is almost no room on sidewalks, the streets are bumper to bumper and packed with crowds. And smoke.

We’re doing GORUCK Light Detroit 2018.

In the evolution of participation sports GORUCK events have emerged. With approximately 500 events scheduled in 2018, GORUCK challenges are huge now. Today I’m in my first one. I’m wondering if it’s coming slightly off the rails.

GORUCK Light is a team endurance event that includes military style calisthenics, running and a lot of walking or “rucking” between 8 and 12 miles in group formation while you wear a weighted backpack. Think basic military training, then add your new constant companion, a 10- 40-pound weighted backpack that makes everything that would have been easy for a reasonably fit person, a good bit tougher.

GORUCK events are inspired by contingency training for military special operations units.

Jason McCarthy, a fit, chiseled, dark- haired guy with that bolt upright posture that screams former military, founded the GORUCK brand in 2008. There are a lot of remarkable things about GORUCK, but the single most remarkable thing is its growth. In only ten years GORUCK has become huge.

McCarthy founded GORUCK while still in U.S. Army Special Forces and deployed in the Middle East during the Global War on Terror (GWOT). He made an emergency survival and evacuation “Go Bag” backpack for his wife who served in the Foreign Service. If there was a coup d’état, an IED attack, or any other threat in one of the most dangerous places on earth, Jason’s wife Emily could grab her “Go-Ruck” and evacuate with the essentials of food, water, additional clothing and rudimentary survival gear.

GORUCK founder Jason McCarthy (center), a former member of U.S. Army Special Forces.

Without knowing it, McCarthy had conglomerated an idea that had been around for a long time into a saleable brand, then began to parlay that brand into an image, an event and even a lifestyle.

GORUCK could have become just another military backpack brand, and in the wake of the 9/11, there are a lot of them. But Jason McCarthy also built something else along with his simple, sturdy, square, tech-free backpacks. He built a vibe.

The GORUCK vibe is a learned responsibility. It’s isn’t politically yawed, it’s not a “movement”. It’s an insight and acceptance of the real world in accelerated change. A change that in the post-9/11, Arab Spring and polarized U.S. political world can just as easily come off the rails as it can evolve into a new unified world. Either way it goes, the GORUCK ethos is adaptable. And capable.

Most participant endurance sports are compensation. Compensation for a sterile life lived too easily, too slowly, too conveniently. Our culture has become overweight and underprepared. If most Americans got a flat tire in a rural setting and had to walk six miles in hot weather to find a tow truck they would be in deep trouble, especially if their smart phone battery died. GORUCK Light acknowledges that. So, you train for the “real world” and gain some functional fitness and endurance while meeting friends and re-connecting with how to cooperate on a team. GORUCK events are no different in terms of compensating. They offer a “synthetic” or contrived set of discretionary challenges. But much of what you learn and practice at GORUCK is practical, and it may come in handy if you are ever have to walk your way to safety, or even make a connecting flight across the airport after the shuttle has left.

GORUCK Light Detroit on Saturday, May 5, 2018 in Hart Plaza.

In December, 2016 CNN reported that, “Karen Klein, 46, was headed to the Grand Canyon National Park with her husband Eric and their 10-year-old son. State Road 67, which leads to the canyon’s north rim, is closed for the winter and their car’s GPS detoured them through forest service roads.” Klein was stranded in her car and forced to endure a brutal, freezing 26-mile solo hike for 30 hours. CNN reported she, “Subsisted on twigs and drinking her own urine, to get help.”

In December, 2006 Daryl Blake Jane was stranded in snow in his Jeep Cherokee on a remote U.S. Forest Service road west of Mount Adams, Washington. He was forced to survive in his vehicle, in the depth of winter, for nearly two weeks.

In between these instances there have been many more when people had to rely on basic fitness and skills to survive. This isn’t the fringe “prepper” or “survivalist” mindset. This is basic responsibility for your own life and the people around you. GORUCK teaches and tests that responsibility.

Different from the vibe of Ironman triathlons with their finisher photos and individual stories, GORUCK is about the group. It’s about cooperation, teamwork, unity and acceptance. It is about admitting your shortcomings and about doing more than your share while not expecting an extra pat on the back. It’s about carrying someone else’s ruck when the going gets tough, and having them carry yours. Everyone has a bad moment in GORUCK. There are no solo finisher photos in front a branded banner, no medal around your neck. You get a Velcro patch for making it as a team for the hook and loop section of your GORUCK. Every tribe has its icons.

GORUCK events include a community service component where participants have to plan and execute a project that benefits the community. Every participant is required to play a role in the community service project. Our event participants collected food and clothing for homeless people in Detroit and raised cash donations for shelters.

GORUCK events vary in intensity from the GORUCK Light, the easiest and shortest introductory event, to the difficult long distance, non-stop GORUCK events like GORUCK Tough and GORUCK Heavy. GORUCK also provides practical skill training events.

The GORUCK events mesh well with the Crossfit, veteran, law enforcement, emergency services crowd but don’t have an exclusive mindset. This is about teamwork, integration, doing more than your share and accepting help when you inevitably have a weak moment. And everyone has a weak moment sooner or later. But the sum of the parts is greater than the whole, and that is one of the lessons of GORUCK. Two is one, one is none, and synergy gets everyone to the finish as a group. In GORUCK, you are never more than an arm’s length from a teammate. Stray too far, and you are doing another combination of push-ups, bear crawls or eight-count body builders. You don’t even go the bathroom in a GORUCK event by yourself.

We’re through Mexicantown now in full Cinco de Mayo swing. Now we’re making our way at a fast trot along Vernor Highway, underneath the iconic Detroit ruins of the Michigan Central Train Depot. We hump our packs up from underneath the train tracks and through Roosevelt Park where we pose for a group photo. From there it is double-time east on Michigan Ave. as we enter the final miles of the event at a fast clip.

Our team carries a simulated casualty on an improvised litter in the final miles of the event.

But one man goes down from heat, dehydration and the workload of moving fast with a heavy pack. Our “cadre”, the instructor/administrators of a GORUCK event, show us how to rig an expedient casualty litter from an eight-foot section of 1” tubular nylon climbing webbing. In only minutes, we have the “casualty’s” ruck off, I wear it on my chest with my ruck on my back, and we continue east at combat speed on Michigan Ave. You never know the distance or course in GORUCK. We may have another three miles to go, or another five. We may have to climb four parking structures, or one. We may have to cross open waterways (the GORUCK Light event earlier in the day in Detroit was in the Detroit River four times). Not knowing the course or distance is a component of the event.

Finally, we reach Washington Blvd. and take a right, still moving fast, still carrying our “casualty”, a roughly 230-pound lad who is finding out that riding in a field-expedient improvised litter isn’t much more comfortable than humping a 40-pound ruck. Everyone is out of water. There are no aid stations in GORUCK. No support. No mile markers. No course map before the event. Like selection for the most elite special forces units you never know when the instructors will stop the “class”, circle you around, and declare “ENDEX” or “end of exercise”.

The GORUCK baby elephant walk.

One of our scouts veers off into a parking structure two blocks from the Detroit River. It’s dark now and I wasn’t looking forward to figuring out how to move our “casualty”, our rucks and ourselves through the dark water of the Detroit River as the air cools way off. So, I’m glad when our team hits the stairs and begins to run up eight flights to the roof of the parking garage. I’m glad until I realize I am at the front of the group running up flights of stairs wearing two 35 pound rucks. By the fifth floor I am destroyed. Three to go.

At the top of the parking garage our instructors “Wild Will” and “DS”, one a former U.S. Air Force Special Operations Combat Controller, the other a former U.S. Marine Corps Special Operations member, both with combat tours in Iraq and Afghanistan, circle us around. What now? When does this thing end?

Wild Will unzips one of the team weights we have been carrying over the last 8 or nine miles, a massive and awkward cordura duffel, and produces a can of Dos Equis. We’ve learned a lot today at GORUCK Light Detroit, and perhaps the best lesson is that, whether it is in a big party crowd in Mexicantown on Cinco de Mayo or carrying your new buddy in an improvised litter down Michigan Ave in Detroit, GORUCK Light brings people together. Then we hear those magic words:

“ENDEX! You made it.”

GORUCK Light Detroit 2018 ENDEX, “End of Exercise.

 

 

Author Tom Demerly is a former member of a U.S. Army National Guard Long Range Surveillance Team (LRS) and Company Honor Graduate from the U.S. Army Infantry School at Fort Benning, Georgia. He has raced endurance events on all seven continents including Antarctica and completed over 200 triathlons including the Ironman Triathlon World Championships in Kona. Hawaii. His articles have been published in Outside, Business Insider,Velo-News, Bicycle Guide, Bicycling, Inside Triathlon, Triathlete, Triathlon Today!, USA Triathlon Magazine and many other publications around the world.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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By Tom Demerly for tomdemerly.com (originally published in 2004)

The weather report said the sun would go down today at 7:49 pm. And it did.

Now it is dark.

In the street there is a sporadic, somber procession. It is a black and white picture. There is no color, no pageantry, and no grandeur. The grace is gone and now and it is down to gritty reality.

It is the time of The Strugglers. 11:18 pm, Taupo, New Zealand- the 20th, 2004 Anniversary Bonita Banana Ironman Triathlon.

The Pros are asleep. Their stomachs are full, their muscles are massaged. Their performances are a matter of record now. They are done. Have been for quite some time. They finished in the sunlight in the front of cameras and microphones racing for paychecks and trophies.

It’s easy to understand why they race. They should race. They look like they should. Lithe and toned and buff and tan and serious, the Pros and the other talented athletes reap the generous gift of genetic athletic abundance, meticulous preparation and clear-cut motivation. They are here to kick ass. It doesn’t take a psychologist to decode their motives. They’re athletes, and this is the big show. It’s what they do.

The pros’ time is over. Now it is time for The Strugglers.

There are no levels of performance for The Strugglers. You either are or you aren’t one. If you haven’t finished by now and you’re still out under the lights you are a member of this vaunted fraternity, The Strugglers. Just as the stark street lights leave either harsh illumination or black despair for The Strugglers this is a matter of finish or not finish, victory or defeat, do or die, pride or humiliation, success or failure. It is all the chips on one square, all the cards face up on the table, and all the aces have already been dealt today. The Strugglers play high stakes with a bad hand.

It may never have been pretty for The Strugglers. Most of them may not be athletes in the sense that they spend hours and hours every week training, but they line up nonetheless to do this race. The downtrodden, the meek, the ones with something to prove or something to defeat. Whatever it is they bring it here and beat it into ugly submission over 140.6 miles, each one a full 5,280 feet. The Strugglers earn every inch of every foot of every mile.

In a day so daunting and fearful they line up on the beach as if bravely facing the gallows. A cannon sounds the beginning of their trial and there is little known at the onset about how matters will be resolved, except to say it will be hard and uncomfortable and then downright painful. That may be the most frightening part: The not knowing. Some will find absolution, some will teeter and wobble and fall. There will be polite acknowledgement of their ambition, but ultimately, for The Strugglers the only thing that matters is Finishing. It’s what they’re here for.

So for The Strugglers, this is a huge gamble. Hero or failure. No in between.

And struggle they might, against awful odds and distance and poor conditioning and genetic poverty, but in bravery they are absolutely peerless. Without equal.

The Strugglers know it will not be pretty. They know it is not a sure thing. They do not have the luxury of prediction or past performances or experience. This is not their aptitude. But this is their choice and their bold dream.

Imagine being sent to do something, something beastly difficult. You know in your heart of hearts you are not prepared, maybe not even suited for this. You know the stares of others less brave and more envious fall heavily on your effort. They want The Strugglers to fail. For every Struggler who crosses the finish line it is a failure for those who never dared try. For every Struggler who sadly and reluctantly succumbs to the distance before the finish line and is carried off the course it is a victory for those who never started. They take sick pleasure in that. Shame on them.

Those who never had the courage to try have no right to cast judgment on The Strugglers.

The Pros are comfortable and resting. But the Strugglers have not left their sacred vigil. They soldier on, unswerving in their oath to finish, No Matter What. People marvel at the Pros performance, but I say The Strugglers are the real athletes. Explorers on the terrible frontier of self-doubt, fear and potential embarrassment on a grand scale. They bring less to the start line and they do more. Longer, harder, more painful: It is a different race for The Strugglers.

It is a parade really. A parade of people so brave and tough and fearless that they don’t care if it might not work. They bank on the fact that it could. They don’t back away from the possibility of failure. Imagine their performance as set against the backdrop of the very best in the world and they are not self-conscious about their version of the very same dance. Ask yourself, would you take the stage at the Kennedy Center after Barishnikov or Pavoratti? Are you that brave?

The Strugglers are.

Their performance is tedious and grinding. It is utterly relentless in its duration. The distance, the time, the struggle cannot be compromised. The Strugglers know this, they accept it- embrace it even. And they never succumb. Under the street lights, through the cool air, in filthy clothes streaked with their own discharge of minerals and fluids and sometimes even tears and blood.

The Strugglers do a different kind of race. A harder one. And they are Elite. It takes longer. It is less practiced. It seems to never end, and it does more damage.

Decode their motives if you will. But I decode yours as trying to explain more why you didn’t try than why they are. Instead, I respectfully suggest, salute them. Unless you have walked with The Strugglers until midnight on the Ironman course they stand above you in the athletic arena. Struggle as they may, they mustered the courage to try.

 

 

Tom Demerly has been doing triathlons since 1984, still does them (but slower and fatter now) and just completed the Detroit, Michigan GORUCK Light event. He worked in the triathlon industry since it began, and the bicycle industry from the age of 15, over 40 years. Today he is a correspondent for TheAviationist.com in Rome, Italy.

 

 

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By Tom Demerly for tomdemerly.com

Yesterday someone whose opinion I value told me, “You hate the government.”

I was stunned by this summation.

I don’t hate the government.” I thought to myself. “In fact, I am often a formal, working part of the government.

Where did this broad stroke about my emotions toward the government come from? What caused it to happen? Why do we create these opaque and rigid summations?

It occurred to me that the most interesting, and I’ll suggest threatening thing, about a four-letter summation of any belief set, any person, any group is that it is convenient. And convenience is comforting.

Living with me is anything but comforting, orderly and convenient. I am a weird guy, given to remarkably reasoned insights, absurdly chaotic ones and everything in between. I hate furniture, love open space, and fill it with a clutter of superfluous gear and books. I am kind to animals, believe in some form of gun control and own guns. I believe in peace but work in an industry whose mission is war. I like the government but believe it should be smaller and more efficient. None of who I am is congruent or follows a convenient narrative. I don’t fit into anyone’s tidy little four-word box. Even if you try to suggest, “Tom Demerly is complicated”, it’s not that simple.

We live in an age of accelerating and proliferating media. And, as with nearly every new technology from the first crude stone age weapons to atomic power to social media, we develop the technology before we develop the mutually acceptable and broadly beneficial ways to employ it.

We think shit up and then figure out how to use it later. People driving while texting on cell phones is one example that comes to mind. The guys who invented the atom bomb are another.

As a result, the acceleration and proliferation of media has created a world of chaotic stimulus filled with billions of new voices, some of them skilled in delivery, all of them screaming at once in what feels like escalating volume and urgency.

The influx of stimulus is deafening and disorienting, and creates a kind of social or collective panic that, on an individual level, may make us yearn to make some de facto sense of it all. We want one thing we can hang onto, one set of things to believe, one unimpeachable, unassailable truth to comfort us and still our cognitive waters.

Imagine a world where the distance from one end to the other of a thirty six-inch, three-foot-long yardstick changed arbitrarily. No two peoples’ yardstick reading thirty-six inches was actually the same length. It would be immensely confusing and chaotic.

Quickly, people would gravitate toward a consensus on the physical dimension of the thing we call a “36-inch, three-foot yard”. The consensus may vary from broad region to region, especially those separated by wide geographical obstacles, like oceans and the metric system in Europe and Asia, and the imperial measures still used in the U.S. But broadly we would gravitate toward an emotionally convenient and culturally necessary convention on the physical dimension we referred to as “one yard, three-feet, 36-inches”. We would all get on the same measuring stick.

The need for a common social and cultural yardstick is what drives belief sets like common religions, desires, hatreds and prejudices. We like, and need, to all be on the same page, and in the chaotic world of fast, evolving media, the pages of modern media blow by like a book tossed in a hurricane.

In Gia Fu Feng and Jane English’s landmark translation of the philosophical masterwork by Lao Tzu, The Tao De Ching, it has been translated from Chinese that:

“All the Colors blind the eye.
All the sounds deafen the ear.
All the flavors numb the taste.
Too many thoughts weaken the mind.
Too many desires wither the heart.”

The Tao de Ching was written in about the fourth century B.C. Its origins likely came from even earlier, around the sixth century B.C. and took two centuries to summarize into the cryptic, lyrical haikus that we read today. When you read it, you have to stop and contemplate its meaning and context. It is light in text, heavy on interpretation.

The thesis of this passage from the Tao De Ching is that too much cognitive noise bothers us and may tend to make us gravitate toward the opposite extreme, very defined beliefs that can be distilled into a few words. Simple ideas to make sense of complex stimulus.

The remarkable phenomenon of life has never been as simple as a few words. It is complex. As this complexity is hurled at us in an acceleration and proliferation of media we struggle to make some sense of it. As a result, we summarize and rationalize, trying to cram ideas and people and events into convenient boxes as they come at us faster and faster in a rapidly accelerating and stressful game of cognitive whack-a-mole.

That is impossible. And undesirable. If things were simple, we’d get bored.

I’ll offer that exposure to the “drinking from a fire hose” consumption of social and news media benefits from taking some contrasting time of quiet contemplation, deep research into narrow topics for a more thorough insight and, most of all, strong individual reflection while trying to avoid cramming- and being crammed- into convenient thought boxes.

 

 

 

 

 

 

 

 

By Tom Demerly for tomdemerly.com

1. Preserve Price.

Tim Brick, owner of Brick Wheels, a successful independent bike retailer in Traverse City, Michigan told me years ago: “Never discount. You will only go out of business slower.”

Price preservation and the perception of what a product is worth has been destroyed by weak-kneed and undercapitalized bike retailers who give discounts too easily.

Sometimes they give discounts in the hopes of attracting more business, but discounted business is bad business, and it only earns the retailer a reputation for being a sucker to customers who drive a hard bargain. And soon they all drive a hard bargain.

Retailers also give discounts just to keep the lights on. Don’t do that. Just close the business, declare bankruptcy and get a job. The entire industry has been dragged down by incestuous and incessant discounting that has destroyed price integrity, brand identity and even alienated customers who don’t want to negotiate.

If there is one malignant cancer that pervades the entire retail bicycle industry, it is rampant discounting. The problem is so bad most retailers who do it are in total denial of it.

Bike industry, take one tip from a guy who has both succeeded and failed for four decades in this business: Stop Discounting.

2. Don’t Play Favorites: No Sponsored Athletes, No Club Discounts. 

When retailers play favorites with some highly visible athletes and groups through “sponsorships” and discounts, they alienate the rank n’ file average customer who subsidizes the cool girl and guy by paying full price. They train the consumership that through performance and visibility they earn special pricing.

This sends a clear message: Some people are more special than others and price is flexible.

Most importantly, there is no consistent, empirical business metric in small bicycle retail that quantifies how many full-margin additional sales are added to the bottom line by sponsoring anyone. And if you can’t accurately measure a sales promotion, you shouldn’t do it.

Sponsorships of athletes and clubs sends a message of favoritism and exclusion, rewarding persistence in driving pricing down.

Even if a sports marketing campaign were run correctly, as it is at the brand level (not by retail stores) it is extremely time consuming and expensive to manage. One beverage industry metric stated that for every $1 spent on sponsorship to automotive racing, the company budgeted $10 talking about the sponsorship in paid media. No bike retailer can afford the money or time for that. And if they could, they should start a beer brand and sponsor a NASCAR driver.

The most recognizable engagement ring brand, Tiffany’s, has never given a free or discounted sparkler to a Kardashian in exchange for publicity. Instead, news media reports, “Kardashian’s Tiffany Sparkler Was $25M!”. That preserves the perception of value and makes the brand aspirational.

3. Don’t Have Too Much Inventory. 

The worst thing about the bike business is bikes, and bike brands ram inventory down retailers’ throats with a vengeance. Bike shops: less is more. It is better to have money in the bank than bikes on the floor.

Bicycle inventory is like fruit, the second it lands it begins to spoil. Something newer, cooler and better is already under development and months away from release. And with the evolution in media the word about upcoming innovations doesn’t spread fast, it spreads instantly. As soon as something new is announced, what is suddenly old (but current only hours before) is suddenly devalued.

Customers will buy new, relevant bikes sight-unseen if the retailer’s sales process is optimized to facilitate that purchase format. That preserves capital, maintains freshness and keeps prices up. It also provides customers with more options and better integrity in the purchase.

Bike shops with a lot of inventory on the floor, and a lot of invoices on their desk, are compelled to “sell what we’ve got” and that leads to an ugly paradigm of putting customers on the wrong size bike with the wrong equipment rather than ordering the right bike and adding another invoice to the pile.

Consumers should be wary of bike shops with too many bikes on the floor, they’re going to try to ram something they have in stock down your throat just to make an invoice due date instead of getting you the bike you should really have.

4. Do Have Lots of Capital.

Nearly every bicycle retailer is undercapitalized and over leveraged financially. The reason is simple: When you have $500K to invest in something, does opening a bike shop provide the highest return on that investment? No, it doesn’t. You could take that $500K to an Edward Jones office and earn a better return on it the next day with no work than if you did the heavy lifting and ditch-digging of opening, promoting and running a bicycle retail store. As a result, most bike retailers try to start a business with about $50-200K and make a go of it.

If they don’t own their own real estate free and clear, have to pay rent or a mortgage, pay at least one employee payroll (and mandatory withholding taxes and health insurance) then the math doesn’t work.

To make bike retail profitable you have to have deep pockets and a deeper work ethic. You have to love hard work and business, not bikes and bike rides.

In its current iteration, the bicycle retail business model is a rotten investment. But, a new, emerging business model long on service and profit margin and short on inventory and overhead is promising and will be the bike shop of tomorrow.

5. Manage Costs.

This doesn’t mean go cheap. If your biggest overhead item is marketing then you are doing it right. If your customers arrive at your store and consistently say, “I thought this place would be a lot bigger”, you’re doing it right.

If you’re biggest overhead item is inventory, you are already in trouble.

Starting and maintaining a bike shop can be done very cheaply. Never buy new fixtures, so many used fixtures from other retailers that have been closed are available they can be had for pennies on the dollar. Never pay for extraneous and non-paying expenses like alarm systems (they won’t prevent or deter theft anyway) and subscriptions to POS software systems. Those don’t add to the bottom line.

Use low-cost, streamlined, highly adaptive and simple systems to combat the asymmetrical retail war the little bike shop has to fight against the big box e-commerce giants. Think of how the Afghan Guerillas used crude weapons to bring the Soviet Union to its knees, and still give the Americans fits in rural Afghanistan. Be a retail guerilla, a retail Taliban. Keep your costs low, adaptable and maintain a large amount of liquid capital.

6. Invest in Star Employees.

The online retailer you compete against is a faceless enemy. You can defeat him with a friendly face. If you have a star employee whom customers consistently ask for, reward them before anything else. Give them raises before you buy more bikes, pay them first and well and craft a set of “golden handcuffs” that makes it tough for them to go anywhere else. They are your brand, and if you lose them, you will have to rebuild your brand around another star employee. Worse yet, if you lose your star employee to another bicycle retailer across town or if your star opens their own shop, guess what happens, their customers follow them.

For a small bicycle retailer, the star employee is the single most important business tool. Develop them, value them, reward them, retain them.

7. Participate in the Sport. 

Instead of sponsoring the local hotshot, be the local hotshot. This doesn’t mean you have to do a nine-hour Ironman (but it helps) it just means you have to be present at events and participate credibly. This is a part of your business. It is work.

Set up the hours of your store so you can train. Close on key race weekends so you can be where the action is, as a part of the action. Ride the nicest bike you sell and show it off everywhere. Be an aspirational figurehead so when people see you on social media and in the store you have become “That Guy who Knows Everything and is Everywhere”.

If you build your hours correctly and manage your staff correctly the time you spend in the sport will directly and measurably bring full-price buyers into your store and keep them offline.

8. Differentiate Yourself. 

Build a voice, a brand and an identity. If your identity is so lifeless and generic that people confuse your business with others, you haven’t done that.

Understand that you will not please everyone. Nor is that the goal. If you talk about a donation to a wounded veteran’s charity in social media an anti-war activist may stop shopping with you. Fine. You can’t be everything to everyone.

Build your brand with clear vision and narrow focus. Don’t be generic. Don’t appeal to the masses. Keep your brand message narrow, unique and focused and be true to who you are.

If you are gay, fly the rainbow flag in front of your store and sponsor “Pride Rides”. If you are a veteran, have benefits for veteran’s organizations. If you are an animal rights activist, broadcast your donations to the local animal shelter and host an adoption day at your store. If you are an environmentalist, show your commitment to renewable energy and talk about how bikes preserve the environment.

Have the courage and identity to stand for something, be someone different and special. Brand yourself visibly and distinctly.

9. Be Highly Adaptive.

 Small bicycle retail is asymmetrical warfare: A small opponent taking on a much larger, better capitalized foe. Take a page from the teachings of Mao Tse Tung, Ho Chi Minh, Fidel Castro, Che Guevara and Osama Bin Laden’s play book: Never fight fair.

Change your floorplan frequently. Bring in small, low-priced, easily purchased new products first. Seek out niche brands the big-box guys don’t have and use the equalizing power of social media to partner with the brand to promote them.

Build a reputation as a brutal buyer who torments sales reps and sales managers with non-adherence to “program” buying. If the biggest brands’ credit manager loves you but the sales manager hates you, you are doing it right.

Within your brand identity continue to change and adapt. Use every social media platform. Embrace new media. Use video. Never stop changing, evolving and promoting. There are two types of businesses on the retail battlefield: the quick and the dead. Improvise, adapt, overcome.

10. Have An Exit Strategy.

One day, this will all end. What will you have to show for it? Did you squirrel away money in an offshore account? Did you buy real estate? Is your brand developed enough to have some sales value? And, if you begin to fail, and chances are overwhelming that you will, do you have a viable safety net?

It’s a pipe dream to sell a small bicycle retail business. Frankly, they aren’t worth anything. The inventory is usually older than six months, the fixtures are stale, the employees may not come with the deal and rest can be reinvented elsewhere better and cheaper. As a result, you have to have a viable exit strategy.

What is yours? What is your end game? When do you cry “Uncle” and walk away? Know those answers in advance and you can sleep more soundly at night as a bike retailer.

By Tom Demerly for tomdemerly.com

Business rewards bastards. And Seton Claggett was never a bastard.

TriSports.com in Tucson, Arizona is closing after 17 years of being one of the largest, and one of the first, online triathlon retailers. TriSports.com helped invent, define, and then sink the triathlon industry.

What happened to TriSports.com is happening to all of the triathlon and high-end bicycle business, and it is worth looking at.

Seton Claggett, TriSports.com founder and President, messaged me early today with insights on why the business is closing:

“We are closing because I was in litigation with the bank that caused me to go into BK11 4+ years ago. We went to trial on breach of contract, breach of the covenant of good faith and fair dealing, and fraud. The judge ruled last week that the bank committed all of these but ultimately did not cause us any damages. I now owe them the original $1.8M (most of this would have been paid off by now) plus millions in attorney fees and costs.”

There will be a rush to judgment about what caused TriSports.com to close. Set against Claggett’s disclosure of bank litigation I’ll suggest it was not any singular reason that TriSports.com is closing, but rather a creeping, gradual, decade-long “death by a thousand cuts” that pervades an industry populated by people who like bikes and triathlons first, and do business second. Even though Claggett was not that man- he is a formally trained and gifted businessman- the rest of the industry weighed on pricing and distribution strategies. The Internet experts will have their say, but it’s unlikely many of them will understand the real reasons TriSports.com is closing and the industry as a whole is suffering.

The people still in the bike and triathlon business will pay no heed as the industry continues to contract and fails to adapt under the ruthless crush of economic reality and accelerating business change. I know because I have been one of those people- a business owner, and I did not change, so I know firsthand.

You can’t tell a small business owner anything. I’ve tried with four businesses I worked for; people tried it with me when I owned my own business before that. We never listen.

Until we lose everything, you can’t tell us anything.

I’ve seen five other bicycle and triathlon retailers ride their businesses into the ground. TriSports.com is just the biggest of us to close. It’s the 9/11, the Black Tuesday, the Automotive Recession, the Chernobyl, the Fukushima and the Three-Mile Island of the triathlon retail industry. Once the fallout clears, the industry will be radioactive for years and will only be habitable by ego-driven mutants of the small business world deformed by their bizarre and nonsensical toxic obsession with a sport and a “business” that eats its young, then consumes itself as their internal voice tells them, “I am the one who can get this right”.

They’re wrong. The triathlon business is no longer viable on any significant scale beyond hobby. There are a lot of reasons for that, enough to fill a book.

If you want a single narrative to the complex issue of triathlon business failings, then call it the same thing triathletes suffer from as a culture: hubris. I will, however, suggest that in the case of Seton Claggett and TriSports.com, he is a rare man largely immune to hubris.

I worked at TriSports.com for over two years in their bicycle, then marketing department. One memory of many defines the experience:

The employees of TriSports.com are high in the Arizona mountains outside the sleepy town of Show Low, Arizona. It’s a town named after a bet two prospectors made over a gold strike in the area. Both of them lost. We’re putting on the annual Deuces Wild Triathlon Festival, a series of endurance races in the high, wooded area surrounding Show Low.

Most of the about-50-person staff from TriSports.com drove from Tucson to Show Low, Arizona to help put on the Show Low Triathlon Festival. It’s a massive annual multisport event with kids’ races, various distance triathlons, an off-road triathlon and an orgy of the triathletes’ favorite endurance activity, getting free stuff. The event concludes with a giant raffle benefitting charity where tons, and I mean tons, of triathlon gear and schwag are given away for a charity donation- about the same volume of stuff sold in a small triathlon store in a year. But this is TriSports.com, and we are the largest. So, we can afford to give away tons of stuff for free people probably would have bought at full price anyway.

After the festivities are over it is time to clean up.

It’s hot out and Seton Claggett is addressing us while standing chest deep in disgusting, reeking garbage inside a trash hauling semi-trailer. Every one of us is exhausted, filthy, smelly, sore, hungry and sleep deprived.

“If we leave this mess here it goes against everything we stand for.” He tells our downtrodden mass of long-faced employee volunteers as the sun sags. It’s like a scene in a book about forced labor camps. This is the triathlon industry gulag, and I am exiled here like a less-intellectual retail Solzhenitsyn banished to the labor camps for my own personal failings in this business. Like Cool Hand Luke, I gotta get my mind right.

A key tenant of TriSports.com is environmental responsibility, and cramming all this garbage into the back of a couple semis to dump in a landfill is against Seton Claggett’s molecular make-up as an environmentalist, former boy scout, parent and business owner. It is against the Little Red Book of TriSports.com doctrine.

Despite the sickening, nose-permeating stench of rotting banana peels under the high Arizona sun, dirty bottles filled with congealing sports drinks, discarded race equipment soaked in athlete urine, changed diapers from spectators’ toddlers and all the other disgusting offal produced by a couple thousand athletes and their closest friends, Seton wants us to sort the garbage by hand into bins for environmentally responsible recycling and processing.

Claggett is clamped onto the ethos of environmental responsibility like the face-hugger in “Alien”. The Claggetts have two kids, and Seton’s life mission is to leave the world a better place than he found it for those kids, and for everyone else. Seton and Debbie Claggett’s unswerving attachment to environmentalism isn’t corporate feel-good window dressing. They own it. Environmental responsibility and a doctrine of leaving things better than you found them is in Claggett’s DNA, and he has cloned it into the corporate DNA of TriSports.com and its culture. Not to sell more stuff, but because Claggett doesn’t just believe it’s the right thing to do, he knows it is the right thing to do.

And now he stands chest deep is piss-smelling filth to prove it. And prove it he does.

One by one employees slowly churn into action, pulling trash bags out of the back of the disgusting mess, opening the garbage bags, pulling out discarded wet wipes with… something brown on them. It’s not just gross, it’s fucking gross. But Claggett somehow walks the walk with enough conviction he inspires the entire staff to wade into the offal and begin sorting the revolting mess into neatly organized recycling barrels.

Claggett somehow inspires a crew of tired, volunteer employees to sort filthy garbage by hand in the dark after consecutive 14-hour workdays. Show me a leader strong enough to inspire that, and I will show you Seton Claggett.

A couple hours later, in the dark, we stink like hell and the world is a slightly better place. Claggett himself is covered in filth, and the last to stop working. I have found a new hero.

The Claggetts defined themselves repeatedly with acts of generosity and kindness both large and small. When Seton saw me riding my bike to an airshow loaded down with camera equipment early one weekend morning he secured a pass for me to the Air Force base and took me with him to a private air show during the Heritage Flight Conference at Davis-Monthan AFB. When my cat Frederick died of old age Debbie had every employee sign a sympathy card for me. I still have that card.

The charity and giving doctrine of the Claggetts was infectious. It spread like a smiley-faced plague through the building. After riding my bike to work one day in a rare Tucson downpour the Human Resource Director, a woman named Susan, found dry clothes for me to put on and a towel. When I obsessively worked 70-hour weeks she counseled me for working too many hours.

But heroes are fallible and complex, and Seton Claggett is no exception. Claggett was oddly fixated on loading the dishwasher in the employee kitchen correctly. He produced a YouTube tutorial video on the correct procedure, lectured employees at meetings on the correct process and even installed a video camera over the dishwasher to verify compliance. Where did that come from? I chalk it up to Claggett’s penchant for clear thinking and process. He is a smart man, a man of organized thought, spreadsheets and analytical problem solving. To him it is incomprehensible that a person could not load a dishwasher correctly, and that detail mattered. It was a teachable moment.

The dishwasher conundrum.

The story of TriSports.com and the rise and fall of the triathlon industry deserves to be told. It’s a complex story not well suited for Internet chat room fodder. It is more complex, both worse, and better. It doesn’t fit in a 1300 word blog.

If Seton Claggett had opened a software company, an app developer, a social media outlet or any other emerging business I’ll suggest we would mention his name alongside Gates, Jobs, Buffett and Zuckerberg. Claggett is a tirelessly hard-working man with a Masters in business and a deep, analytical mindset and strong stomach for risk. Unfortunately for him his first round of entrepreneurship was spent on an industry filled largely by people long on enthusiasm for the sport, too quick to give a discount and short on business acumen.

I wager Seton Claggett’s next round at business will conclude very differently.

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By Tom Demerly for tomdemerly.com

BIKEREVIEW10

I wrote my first equipment review in 1977.

I was 15, typed it on an Underwood for a paper newsletter mailed by Schuman’s Schwinn Cyclery in Detroit. I reviewed a skateboard- said it was “lame”.

It was probably my last honest review.

Since then I’ve written hundreds of equipment reviews for magazines like Outside, Velo-News, Triathlete and many others.

Bicycle and outdoor equipment reviews are increasingly shady business. They’re assumed to be impartial- expert opinions on what is good and bad about a bike gadget- based on experience. Consumers use them as “research” to help make a buying decision.

It is one of the great lies of the bicycle industry.

Bike and gear reviews are increasingly influenced by the sales motive. Bike brands and retailers often can’t say anything bad about a product. Their primary motive is selling it. Since few people are being objective- writers or readers, anyone attempting objectivity is punished for their honesty. Customers are scared away from a product if a review contains criticism, even when it is valid. We end up with canned press-release product descriptions that are not critical “reviews” at all.

That’s not right. So, as far as my keyboard can reach, I’m changing that.

There are some reviewers who have established credibility in addition to a paycheck by being objective. I spoke to three of them before writing this; James Huang of CyclingTips.com (formerly at BikeRadar.com); Dan Empfield, founder of Slowtwitch.com and Charles Manantan, of Pez Cycling News.

James Huang is among the most read and respected product reviewers in the bike industry. He began as an independent reviewer with his own blog and earned a reputation for being critical and objective. His candor won him increasingly greater readership- and credibility. From 2007-2015 Huang was the U.S. Tech Editor for BikeRadar.com. He recently went to CyclingTips.com.

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Writer and product editorialist James Huang.

Unlike many product reviewers, James Huang is both a pragmatist and a very good writer. This excerpt from his article The Unattainable Quest for Perfection summarizes the craft of the best writers in this industry:

“More than a decade at this beat — writing about bicycles and bicycle technology — has taught me that there’s no such thing as a perfect product. But I like to think that I have a decent handle on when something contributes meaningfully to the enjoyment and beauty of riding.”

Huang has had the courage to comment with balance in his reviews, and his editors have backed him up.

“I’ve certainly had companies pull advertising campaigns or raise hell with the commercial side of the business but nope, I have never had any editorial modified for commercial reasons. I’ve been extremely lucky in that sense; from what I understand not everyone in my position has been so fortunate. “

When I asked James about how objective he feels other media outlets are with their equipment reviews he told me, “I always like to believe that it’s easy to distinguish between thinly veiled pay-to-play editorial and the good stuff but the cynic in me says otherwise.”

James Huang is right. The fault lies partially with the “pay-to-play” editorial, as Huang suggests, and also with consumers reading reviews.

Here’s why: As a reviewer part of my job is writing about the equipment we use- and sell. The reason I write reviews is for people to buy something. I also write for good rankings in SEO, “Search Engine Optimization”. In many cases I am actually not reviewing, I am selling. That motive makes me one of the bad guys- at least until now.

Search engines like Google and Yahoo serve content to consumers from key word searches like “triathlon bike reviews” using complex, secret algorithms that change daily. No one outside the secretive search engine code writing industry knows how to “cheat” them. Hucksters who sell “How to Improve Your SEO” webinars are guessing. I’ve sat through a ton of them. The only proven way to rise to the top of the results is to serve a ton of original content. So I’ve had to work fast. And sometimes loose.

If you count SEO frequency as the high bar of review success, and bike brands often do, I’m pretty good at it: Do a Google search on the key words “triathlon bike reviews” and hit the “images” tab. You get 14 of my photos served to you on the first page. Most are my original content; some are copied and pasted from something I wrote and then used by another writer- an even shadier practice. I don’t care though, because more is more. In the Internet search engine world the person who shouts the loudest and the most gets heard. That’s been me. And judging by my SEO results, I’ve been doing something right- because readers like to read good things about the products they aspire to and my SEO is strong.

Chris Gustafson is a salesman, and a pragmatist. He gave me the key to writing equipment reviews in one sentence, “Tell me what you want, and I’ll tell you why it’s the best.” His doctrine was “knock ’em where they lean”. And Chris sold a ton of bikes. Because it is human nature that we want our thoughts reinforced, not challenged.

If I were completely honest with my opinions in gear reviews I would write things like, “Even after repeated adjustments we couldn’t get the rear brakes to work very well” or “The bike feels oddly heavy because, when we weighed it, it was.” But then consumers would simply click to the next review that says the crap like, “Light and aero, but stiff and comfortable too!”

Here is my challenge to consumers: You can’t handle the truth.

Consumers search for the single best-reviewed bike using some golden BB metric or measure of “best-ness”. This “research” has fed numerous marketing lies like wind-tunnel white papers, ride review payola and ad dollar ransom.

Bike buyers: look for reviewers with the courage to be critical. Consider balance and understand how you will really use something you are researching. Know that there are no perfect products and look for glaring omissions in sugar-sweet product reviews that gush without reservation. There is nothing wrong with a great sales pitch until it is veiled as a critical review.

I have seen the power of candor in equipment reviews.

In 2002 I did a review of the Litespeed Blade where I wrote, “It is an expensive bike that does not return a high degree of performance for most riders.” That was the good part. It got worse from there.

The (then) President of Litespeed phoned me and asked, point blank, “What will it take for you to take that review down?” My answer was simple, “Fix the bike”.

Three years later in 2005 the company had completely redesigned the bike and the new version was greatly improved. Whether my criticisms played a role I do not know. The shortcomings I wrote about weren’t subtle; any triathlete would notice them. But there was still pressure on me to shut up about the bike’s many problems. It was a rare case where I didn’t cave.

The moment any second party has editorial control over review content, it changes. Most times not for the better. A key ingredient in good, credible reviews is commensurate authority for the reviewer to say what they really think- good and bad. The reviewer needs an editor who will back them up, not shut them down to protect advertising and sales motives. That is nearly non-existent in the cycling industry. A key ingredient in delivering meaningful content is to grant commensurate authority for the writer to express an opinion independent from the sales motive.

welcome-to-2009-photo

With Jim Felt, founder of Felt Bicycles (left) and Dan Empfield of Slowtwitch.com (center). That’s me with the idiotic expression on my face.

You can sometimes tell the best reviewers by the ones who have been fired. Dan Empfield has been fired from glossy triathlon publications for speaking his mind. It’s ironic since Empfield is a Triathlon Hall of Fame inductee who invented the triathlon wetsuit, the triathlon bike and a host of other innovations in the industry. He is also the founder of Slowtwitch.com, a website that does publish objective reviews and editorial.

“You have to have balance,” Empfield told me. “A few good things, some bad things. Just tell the truth.” Empfield’s simplistic editorial doctrine is refreshing- and useful to consumers using his reviews as an evaluative tool for buying decisions.

Charles Manantan is a tech writer for Pez Cycling News, a credible, dynamic cycling website packed with fresh content. He also practices an objective editorial policy in equipment reviews.

“I’ve had companies tell me that they had more direct feedback and customers from a review on our site than from sites with many times more eyeballs [on them]. I do think [objective] reviews have an influence on buying decisions.”

Manantan summarized the industry of writing gear reviews succinctly and offered an insightful recommendation for a better doctrine.

“Look at an Editor like John Bradley at Velo-News who held his ground rather than kill a story in the face of Shimano pulling ads. You see another popular bike publication get exposed for straight-up “Pay for Play” advertorial reviews being part of a paid advertising package sold to a large manufacturer. I think the biggest negative impact on public perception of bike reviews comes from publications that work on the ‘more content is better’ theory, especially when they don’t want to pay [writers] for the content. Worse yet, they don’t seem to value the quality of the content as much as the quantity.”

So here is my recommendation, and my promise: If it sounds too good to be true, it is. Not every bike can test “most aero”. Every bike isn’t “stiff, but comfortable”. If a review doesn’t contain at least some balanced criticism you likely just got a sales pitch instead of an honest opinion.

And, I promise in the stuff I write going forward to not pull punches for payola or gush garbage to go viral on Google.

custserv135

 

Author Tom Demerly has written a bunch of crap, some of it you just finished.

Now he’s telling the truth. It’s his new thing.