History Lessons

The Price Is Right

Many earlier versions of all-wheel-drive mountain bikes failed because they weren't durable enough. That's partly because four or five years ago, mountain bikes sold for $300 to $500. They targeted serious bike enthusiasts who didn't necessarily have a lot of disposable income. At the $300 to $500 price point, Steve Christini says, it was impossible to introduce a quality all-wheel-drive bike. External flexible cable drive shafts were the only feasible option, but their performance was lacking.

Today, high-end mountain bikes sell for $1,000 and more. The 20- to 30-year-olds who buy them have lots of disposable income and ride for recreation, not competition. At those prices, you can manufacture a high-performance, durable all-wheel-drive bike and still make a profit.

Christini's main reason for delaying his start-up was to gain job experience, but the delay benefited him in another way: His bike is now in the right price range. When you pursue your idea, make sure you can deliver both the right price and the right performance. If you can't, you might end up losing everything.

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This article was originally published in the June 1999 print edition of Entrepreneur with the headline: History Lessons.

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