Bicycle Built For You?
Apply now to be an Entrepreneur 360™ company. Let us tell the world your success story. Get Started »
According to the U.S. Patent and Trademark Office, there were more than 4,200 bike-related patents issued between 1996 and 2000-do the math, and you're talking more than 800 patents per year and more than two bike patents per day. According to Bicycling magazine senior editor Garrett Lai, bikes have always been a product category with plenty of patent action. "Bikes are accessible, people can see all the parts and how they work, and they can create a new bike innovation in their garage," he says.
It's true-inventors come up with new bike inventions all the time. During our interview, Lai reeled off a quick list that included Paul Turner, creator of RockShox, the first commercially viable front suspension system, and Rolf Dietrich, inventor of Rolf Wheels, which are now featured on Trek bikes. Both inventors started on their own, like so many others before them, before eventually selling off their businesses to big companies.
But there's another reason so many bike inventors are successful: The market tends to favor inventor introductions. It's a product category where consumers and bike shop owners can easily see that your product is different-and maybe even better-than competitors'. Not to mention, in the bike market, you have a network of distributors ready and willing to sell your product. Few, if any, product categories make it this easy on inventors.
Getting A Foothold In The Bike Market
In the bicycle business, you have not just one, but three viable ways to get a foothold in the market. Here they are:
1.Get coverage in a trade magazine. Lai estimates that new product reviews make up at least 50 percent of his magazine's content. That's good news for inventors like Carl Winefordner (see "Crankin' 'Em Out.")
Winefordner always sends samples of new products to publications in hopes of scoring press coverage. "We've never spent a dime on advertising," says Winefordner. "The product reviews work out better than advertising because [they're] viewed as impartial."
Erik Koski also relies on magazine reviews. They were a big help in establishing his initial product, DuraTrac. "Bike manufacturers read the positive reviews and then decide to test inventors' products," he says. Winefordner and Koski say there are between 10 and 20 key bike trade magazines focusing heavily on new products.
2.Attend a trade show. That step alone helped Winefordner build an instant distribution network. "We went to the Anaheim, California, Interbike show [now held in Las Vegas] in 1997," he recalls. "We'd given out samples of the Speed Lever to magazines and some distributors before that, but we were overwhelmed by the incredible response at our show. We had distributors from all over the world asking to see our product." Another good trade show guaranteed to give your invention exposure to worldwide distributors is the CABDA (Chicago Area Bicycle Dealers Association) Cycling Expo held every October.
3.Set up booths at races. That allows racers to try out the newest innovations firsthand to see if they'll help them gain that coveted 1 to 2 percent speed advantage over their competitors. Although racers are always anxious to find new products, they're also hard critics who expect high performance. Says Koski, "Many more inventors fail than succeed by displaying their products at races."
Frank Hermansen, 41, and Carl Winefordner, 40, may own a business called Crank Brothers, but they're not actually brothers at all. In reality, the name stems from the fact that people used to constantly mistake the friends as siblings and refer to them as the "Crank" (Carl + Frank = Crank) brothers. When it came time to name their bicycle accessories designing and manufacturing company in Laguna Beach, California, the nickname just seemed a natural choice.
The pair introduced their first product, the Speed Lever, in 1997 at the Anaheim, California, Interbike show. They made quite a splash with distributors by giving away 4,000 units for free. Inexpensive to produce, the product removes bike tires or installs them on the bike rim in mere seconds.
But there were more inventions to come. In 1998, the company introduced the Power Pump, a 5Â½-inch air pump that can be easily carried while biking. It has a unique feature-an air switch that allows the pump to go from high volume to high pressure. And then, in 1999, the company added a Power Pump Alloy, a 9.3-inch aluminum pump with a gauge.
Succeeding In The Market
Although not all inventors can succeed in the bicycle products category, certain attributes make this market stand out from others in terms of accessibility. As mentioned earlier, consumers can see the unique advantages of a bicycling invention. Compare that with a product such as a drip coffee maker, where buyers can't actually see the unique innovation hidden inside, such as a new and improved brewing system. Bikes don't have any such hidden parts. In addition, most bike riders actually understand what each part does. This aspect of the bike business means that every bike shop employee, sport-savvy consumer, bike enthusiast, racer and bicycle magazine writer can immediately distinguish which products are new and different-helping inventors get their products noticed and evaluated.
Lai, Winefordner and Koski all agree that the easy accessibility and visibility of product features is a key reason so many inventors are able to get new bike products on the market. "I tell bike manufacturers that consumers will notice that their products are different if they buy my components," says Koski. "It's one way bike manufacturers can differentiate their products."
But in order for consumers to be able to purchase your product, you need to find a distributor who can take it to retailers worldwide. According to Winefordner, there are more than 100 bike distributors. "Bike distributors will pick your product up if you get good reviews in bike magazines and create product awareness at trade shows or through an advertising program," he says. Bike distributors typically carry around a big catalog of items, and they're always open to competitively priced and innovative products from inventors.
The catch? Distributors require an extra layer of markups, which usually means the manufacturer will only get 33 to 35 percent of the final suggested retail price. "The distributor typically takes a 28 to 35 percent margin, then the stores mark the product up 100 percent," says Winefordner. So if the store pays $10 on a $20 product, the distributor will make $2.80 to $3.50.
Once you find success with your bike product, expect manufacturers to come knocking on your door before long. Most of them are anxious to buy out potential competitors, and most bike inventors are more than happy to either sell their ideas or set up licensing agreements rather than try to run their own businesses.
The difficulty level of introducing a new product varies tremendously by industry and market. Inventors will have more success in those markets where favorable conditions exist-such as the bicycle product category. If you've created several different products, study the market conditions and choose the market best suited to inventors. You'll still need a great product to succeed, but if the choice exists between two markets-one easy and one hard-why not take the road of least resistance?
Back in 1985, Erik Koski's family owned Cove, a bike shop in Tiburon, California. In those days, shops put together mountain bikes out of whatever components they could pick up. Perhaps not surprisingly, that early exposure inspired Koski, now 48, to become a full-time inventor. His first invention was the DuraTrac, a rigid fork for front tires that he sold prior to the introduction of front suspension. Koski advertises in catalogs and sells the products through OEM (original equipment manufacturer) agreements, meaning manufacturers use his components on their new bikes.
Koski then worked for several bike manufacturers before deciding to form Koski Engineering, a Mill Valley, California-based mountain bike components designer, in 1994. His business strategy is still to provide bike manufacturers with components that differentiate their bikes from the competition. To date, he's developed products that improve handlebars, handlebar stems and saddle seats. His next two goals: first, to have his products look and act different from the components developed by other competitors, including Shimano, a Japanese company that supplies most of the components bike manufacturers use. And second, he'd like to create products with better durability.
Thanks in part to help from his own OEM sales force, Koski estimates his 2001 sales will exceed $3 million.
Being serial inventors has certainly paid off for these "brothers" in business: Sales last year neared $1 million. Winefordner credits that success in part to his strong team of distributors: "Distributors are an ideal solution for small companies that can't afford their own sales representatives."