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In passion driven entrepreneurship, one of the biggest and most rewarding challenges is overcoming negative thinking. This year, there’s been a lot of talk about changes and instability in the bike industry. But for creative entrepreneurs like my guest this week, Andre Shoumatoff of Park City Bike Demos, change can be a huge opportunity!

Andre’s sharing how he and his partners used their knowledge of bikes and the current struggles of the industry to pivot into a new model of selling and renting bikes. We’re also discussing how to notice and respond to optimization points to grow your business, and what to do with customer feedback.

For anyone wondering how to turn what’s not working into a success, this episode is eye-opening. Andre’s got some amazing insights on evaluating the industry, advertising partnerships, and listening to your customers.

Bravery in Business quote

“We really do believe that we’ve stumbled on to something, and it’s been literally a brutal, brutal chore to get there.”- Andre Shoumatoff

(click to tweet)

 

Cliff Notes

  • Started Park City Demos with some friends as a mobile bike rental business. 20% bike sales, 80% rentals, hoping to go on to sell a bike to 1 in 10 renters
  • Pay attention to market demand and adjust your business/inventory according to these points of optimization. Originally, Park City Demos was only selling and renting expensive bikes, but they quickly learned there was a demand for a wider variety of bikes. Now, highest selling bikes are cruisers.
  • Started co-marketing with other brands on digital marketing, which brought in a lot of people. This strategy can work really well, but only if you are well versed in it and working with a good partner.
  • Figure out what business like yours that are going under have done wrong.  Identify what needs fixed in these business models so that you can pivot away from it.
  • The traditional bike shop is slowly going away. Andre and his co-founders have evaluated the reasons these stores are suffering and are working to create new models for bike rentals and sales to make Park City Demos a success.
  • Work on building customer experience. Collect customer data to see what people perceive your business to be, and then adjust to portray your message more clearly.
  • Keep track of customer requests/ responses so that you will have a record to see what ideas/products that you’re not selling are the most in demand. Park City Demos keeps a simple excel spreadsheet of all their customer requests.

 

“If we do a good job with our tools, our sales, structure or standard operating procedures, and our technology, and then little things like physical space, etc. then we think we can sell bikes” – Andre Shoumatoff

 

Resources:

parkcitybikedemos.com

Transcription (click to expand)

[INTERVIEW START]

Kristin Carpenter-Ogden: Andre Shoumatoff, welcome to the Intrepid Entrepreneur Podcast.

Andre Shoumatoff: Thanks for having me.

Kristin Carpenter-Ogden: Well, I’m glad that I’m talking with you now, and not on last Friday when you hosted probably the biggest party in Park City history, right?

Andre Shoumatoff: Of all time.

Kristin Carpenter-Ogden: Yes.

Andre Shoumatoff: It was like 40, maybe, 60 people there. But it was pretty fun.

Kristin Carpenter-Ogden: Yeah, but they were the right people. So Andre is—why don’t you tell my audience? You have a lot of different [inaudible], we’re here to talk about Park City Bike Demos, but there’s such a cool story that leads into this. We’re here to focus today on a different model of retail in the bike industry. Ties in tourism, lifestyle, experience, and core bike. I don’t think anybody has cracked the code, but there sure are a lot of people talking around water coolers right now about this very topic. And that’s why I brought up the party because you had a big kick-off moment last Friday, beginning of August, everybody’s who’s listening. So here we are. Let’s talk about what the news is and what you’re trying to shepherd forward.

Andre Shoumatoff: Yeah, absolutely. So basically, we’re bike people. We’re a combination of bike people and then a bunch of digital marketers slash dotcommers. So we’re a group of people who have kind of different business backgrounds and different experiences. Myself, Frances Fu, [inaudible] on our team, [inaudible] etc. And then all the awesome day-to-day people. And basically, what we did is we’ve been raging bike fanatics. We lived in Park City, we’re lifestyle people, but we’re also–we’ve done some pretty cool stuff at digital marketing and big campaigns. And so we sort of sat on the sidelines for almost eight years trying to figure out what we wanted to do and how we could get ourselves involved with bike industry.

And a friend of ours came to us with this idea of a mobile bike rental business. And we launched that last year, called Park City Bike Demos, and what we discovered is that when you really think about customer experience and allowing people to put themselves on bikes on their own terms where they go out for a couple days, but you make sure the bikes are really good and the experience is really good. It can potentially be a different way of selling bikes. So we basically started Park City Bike Demos–it’s about 20% retail-oriented in typical fashion where we carry a bunch of brands and people just come in looking for those bikes.

And then 80% rental-based. And if we do a good job with our tools, our sales, structure or standard operating procedures, and our technology, and then little things like physical space, etc. then we think we can sell bikes to as many as like one and ten in those people. And if we did that based on our current forecast, it would allow us to sell over 200 bikes this year.

Kristin Carpenter-Ogden: That’s great.

Andre Shoumatoff: Yeah.

Kristin Carpenter-Ogden: It’s a bright spot in–I actually met with a couple of bike journalists just last week at the outdoor retailer show. They were there because they usually go. Either they’re local or they’re just trying to keep a pulse on the market. And they said, largely, that traditional IBD market–independent bicycle dealer community, if you will, is in a period of group think right now. It’s lack focus, there’s a lot of uncertainty. The word spooky is being thrown around. I totally get it. And they have served as an important community gateway forever, and those who get it will remain, I believe.

I just think that now is the time to kind of step forward and not be–behold into maybe what the larger brands have always handed to them. Like, do this and you will get this result. Now is the time to reengage with the local community. And what I love about what you’re doing is you’re doing that and you’re delivering it to tourists. You’re doing that and you’re allowing people to discover it online from wherever they are. And I feel like you’re just putting together a formulae here that I don’t think people have actually thought of trying with the experience of buying a bike, a high-end mountain bike or road bike.

Andre Shoumatoff: Yeah. I mean, that’s literally up to the T and everything you said, I pretty much completely agree with–about the industry doing some sort of retrospective or inward thinking. We went to the IDD summit in spring down in Tampe, Arizona that was hosted by the interbike group [inaudible] etc. And that was really interesting. And we talked all about some of the things that they’ve seen in other industries that are similar, and the sort of state of bikes and bike shops. And what was really interesting is that everyone who was there actually runs a pretty good shop. These are the people who care. And those are really the winners.

And in a lot of ways, it was sort of the people who are missing from there who should almost get some of the messaging because all of us, a lot of us have had bad experiences in bike shops. Local shops like where you’re go in and you even know half the people who work there. And if someone treats you like an idiot–I had a friend who–

Kristin Carpenter-Ogden: Try being a chick in that situation.

Andre Shoumatoff: Exactly. Yeah. Exactly.

Kristin Carpenter-Ogden: I had to say it, I’m sorry.

Andre Shoumatoff: Yeah, exactly. And then you go and look at your Facebook page and you see how much she [inaudible]. You know? I’m talking about you. And, yeah, exactly. And that’s the thing. And so what we did is we set–and honestly, it’s a gamble. Just straight up admitting or not admitting, but I’m being comfortable with the fact that what we’re working–what we had is a prototype. But every indicator along the way, everything that’s come through in terms of customer experience and our reviews and response from the industry, and even profitability sales–everything is starting to look pretty good. So we really do believe that we’ve stumbled on to something, and it’s been literally a brutal, brutal chore to get there.

Kristin Carpenter-Ogden: Okay. Well, you have to bring us in on the brutal chore part. And I have a feeling with my companies, we have this idea of where we want to be, and we’ll say, “We are this,” but then when we have the chance to actually do it and you have to put it all in motion and make it fit together and then produce the quality experience that we have to in these markets because we’re passion-driven, and people expect it–it’s a whole different story. The concept to reality can be super painful. Is that what you were referring to?

Andre Shoumatoff: Absolutely. Yeah. We started with the sort of mobile bike rental operation we launched last year. We launched with bikes [inaudible]. Honestly, I think we’re way too expensive. We bought bikes that were too nice. We did all of our marketing based on really high-end bikes. Like a couple local news articles like, somebody said that we had the Ferrari of bicycles, and crazy things like that.

Kristin Carpenter-Ogden: That’s the pigeonhole right there.

Andre Shoumatoff: Exactly. And which honestly wasn’t even true. We had pretty nice bikes, sort of more like Corvettes, American brands. They are still pretty awesome. But we didn’t anticipate the model across the boardwork–that we’d still get a lot of calls for cruisers and burly trailers and basic bikes, expensive bikes, etce. And we call these points of optimization. They’re things that we basically learned along the way. And if we’re smart and we can sort of evolve to embrace them–so we have 30 cruisers is here, and it turns out our cruisers are one totally awesome but to sell very well. They’re our bestselling bikes. So go figure. And we still have that high-end [inaudible].

Kristin Carpenter-Ogden: I was going to say hopefully, your [inaudible] in that town.

Andre Shoumatoff: Yeah, right? That’s something we’re looking at. It’s really interesting.

Kristin Carpenter-Ogden: Yeah. There’s [inaudible] there, actually.

Andre Shoumatoff: Yeah. It is really interesting. So basically, we ran it last year, we had some pretty awesome experiences–we had brands, we had our good friend who I–he’s totally awesome. I hope you get the chance to listen to [inaudible] over at Skratch Labs.

Kristin Carpenter-Ogden: Oh, that guy’s awesome.

Andre Shoumatoff: Totally awesome in Boulder. And we just rented him a bike last year, and he was like, “This is so awesome. We want to be a part of it.” So we’re going to send you 2,000 free samples, and we basically started co-marketing with Skratch, and then we picked up a bunch of other brands and we made it this whole experience where–and it is based on the bike. We combine the level of digital marketing, a really awesome website, good search results–a little bit of proprietary stuff we learned over the years. And we’re able to basically fairly instantly turn on the business which is one of the secrets of digital marketing. It’s pretty awesome.

And that can be a very painful experience if you’re not versed in that or you don’t have a good partner. But then two, is we really started building this customer experience thing. And we collected data along the way so we realized that more than half of people, a little bit more than half wanted to still come into what they perceived as the traditional bike shop. And little things like having an announcement thing, like, “Hi, you’ve reached Park City Bike Demos. Press 1 for immediate assistance. Press 2 to book a bike. Press 3 if you have questions. etc.” Just by having that, we would see as much as even 42% dropoff on phone calls.

Kristin Carpenter-Ogden: Really? Interesting.

Andre Shoumatoff: Yeah, isn’t that interesting? And so you want to have that data and all that. So basically, what we have is we realize that there’s value here. We think that the model of the bike shop is awesome, it is applicable. When a bike shop is really good to have what you need, and has positive customer experience, it can be awesome, but it is also dated. And there are inherent challenges, and we are seeing awesome bike shops that have been around for 25, 30, 40 years, whatever, maybe longer, going out of business. That they did something wrong, they made a bad assumption, they took on too much inventory or whatever it was, and made a mistake.

And then also, honestly, they’re just tons of shitty bike jobs. I say that a little bit poignantly because people might be listening and be like, “You know what the reality is.” I wouldn’t say there are too many shots but there are–the model is a little bit outdated. And how do you pivot from that? I really have no idea–to those people or whatever. But we basically came in and we said, “Look, we have a new way of selling a bike. We have a new experience. We have something that we’ve literally thought of the customer life cycle from beginning to end. And in terms of customer experience. And we believe it’s scalable, so our goal is to basically perfect the prototype here or get it into some pretty good shape here in Park City Bike Demos. And learn a lot of lessons, and hopefully, not make too many mistakes, but when we make them, we’ll fix them. And we’re not sure what the scale will be.”

And then really, do we think that urban market’s population-based areas like suburban Atlanta. North Atlanta turns out this huge cycling community. Dallas, North San Diego county where there’s awesome riding, San Jose, and then honestly, potentially internationally. Because I tried to run a bike in Italy and I tried to run a bike in France, and both were horrible experiences if they’re not super pre-booked and things like that.

Kristin Carpenter-Ogden: So if we’re really going to the weeds here, I have to go back before we get too far away with something you just said.

Andre Shoumatoff: Sure.

Kristin Carpenter-Ogden: There are a lot of bike shops that are falling into bike shop, like, not special. It’s almost like a specialty experience have become commoditized. What I feel would be interesting to hack in this podcast for people listening whether they’re a brand or a retailer or a rep or just somebody who loves cycling or outdoor, right, is I feel and–please, tell me if I’m wrong–I feel like the part of the secret sauce here is that you have an interesting listening mechanism to your audience with your acumen on the digital marketing side. But listening to your audience is where you need to be right now whether you have those skills or not. Would you agree?

Andre Shoumatoff: Yeah. Absolutely. Yeah. Show an example.

Kristin Carpenter-Ogden: You can’t [inaudible] an experience like that unless you do.

Andre Shoumatoff: Exactly. And an example is that–so this is where we learned, these are where we gained a lot of the points of optimization. And the question is how easy is that to implement into a bike shop. But I think it should be–I mean, every bike shop that has computers and all that. So we literally have a spreadsheet that anytime somebody asks for something that we don’t have or service that we don’t provide, we track that. And so we make a record and we’ll say, “Okay, wow. It turned out four people asked for X obscure [inaudible] GPS mount.” And so by the end of the year, again, we’ll notice that four people did. So we’ll go ahead and buy one. We are running a poll on our website, and we’re doing this on purpose, saying what type of bike were you looking for when you came here. And win a free water bottle, and there’s a cost associated on our side. And one in five people wins.

And so we’re building a data set based on that. Like what we’re seeing anecdotally is that 29er, for example, is back on the rise. And in certain new cases like we were–the brands that offered that we’re sold out for a few months. And rcycling, it’s so tribal. And it is so nichey, and there’s this term or whatever–the bicycle, and the bicycle’s like a machine. But the difference is you’d [inaudible] in a road bike between a road bike and a mountain bike, and endure a trail bike or a cross-country bike in a downhill bike, they’re dramatically different. And each one of those, each has their own tribes as well. So there are flare ups, some things like that. So we have to learn and try to pay attention to all these little things. And a lot of people think like the cycling industry bike is in a crappy place, and it is not at all. It is totally awesome.

Kristin Carpenter-Ogden: I agree. And I’m not saying that because I’m generally a positive person. Just because our normal indicators might be showing things are down–I mean, I heard [inaudible] from a trusted client that across the globe, Andre, 25% down right now. The industry has a hole. But if you think about the fact that people are actually excited to ride their bike, and maybe if we are tracking the way that they are experiencing our brands, it’s not the accurate picture.

Andre Shoumatoff: Yeah. And I completely agree. And I’m the same way. I’m normally a positive person and there’s always doom and gloom. And obviously, there are things that you can’t control. It’s an item that–and especially road bike where it could last a long time. And there’s such thing as market saturation, and all these different things, but where we are with cycling is way better, most likely, than where we’ll be in 100 years, 150 years. It’s sort of like 1940, and America with all these car manufacturers. [inaudible] and all these incredible, interesting people, [inaudible] low barrier to entry, higher cost, that everything’s kind of in a similar wavelength, and yeah, you could go buy a fucking [doozy?]. You can go buy an Argon 18, you can go buy SwiftCarbon, you can go–those guys are able to play on the same plane [inaudible] many of these other as huge corporations.

And cycling–this is what our business model’s built on. The small and medium-sized manufactures, bring all the technology, remove quicker all these really cool stuff. There’s nothing wrong with specialized track [inaudible]. But they do move slower. They have to because they have to make 10,000 units or 20,000 units. They can’t gamble.

Kristin Carpenter-Ogden: Well, I’m also looking at the data they’re getting that I think they’re prioritizing, and I’m totally making this up, but I’m not really because I’ve talked to a lot of brands. But they’re looking at their business go forward off of their own brick and mortar now. It’s not so much on their retail partners as it used to be. And interestingly, at the show, I’ve heard from several from our mid-sized brands and outdoor that they were approached by REI buyers for the first time because they’re looking to “edit and amplify” their assortment on a regional basis, driven by community. That’s where they see the money. And honestly, they’re trying to cut back on the larger brands that have their own brick and mortar footprint. How interesting is that?

Andre Shoumatoff: It is.

Kristin Carpenter-Ogden: [inaudible] doing it, it’s like the 800 lbs. gorilla, you know?

Andre Shoumatoff: Exactly. And so what a cycling look like in 100, 150 years, I hope it doesn’t look like this, but it could.

Kristin Carpenter-Ogden: [inaudible], by the way.

Andre Shoumatoff: [inaudible]

Kristin Carpenter-Ogden: Fourteen right now.

Andre Shoumatoff: Yep, exactly. [inaudible], so. So I might be around in 100 years. But it said it could look like–it could be Ford Chevys and Dodges. And that’s it, a couple little blips. But there’s the barrier–

Kristin Carpenter-Ogden: –passion driven

Andre Shoumatoff: I think so. But I mean, there are all these incredible companies making really cool stuff. And the market–like the fact that brands like [Turner?], [inaudible], [Pivot?] are able to compete or honestly, even outdo other companies with their suspension technology just the way the architecture and industry is structured, that felt racing is literally the most advanced carbon fiber manufacture in the entire cycling industry. They’re also the most advance with aerodynamics. Kristin Armstrong won on the [inaudible] time trial like this morning.

Kristin Carpenter-Ogden: MPS. That’s the greatest thing ever.

Andre Shoumatoff: Yeah. Exactly. And things like that. So we’re totally–

Kristin Carpenter-Ogden: So you’re focusing those guys to carry your new model [inaudible] which totally makes sense [inaudible] innovation.

Andre Shoumatoff: Exactly. And that’s not to say that we wouldn’t ever–let’s say everything goes perfectly according to plan, and in 10 years, we have 10 locations and we’re killing it, and it turns out there’s not a good specialized dealer in town. And wherever we are or whatever–maybe it makes sense for us to do it. And it has nothing to do with who the brands are. It does a little bit, but we’ve come up with a scenario where not only–so we looked at all issues that were affecting cycling [inaudible] industry, and we really, really thought it from the beginning and we believed we’ve sort of navigated our way through that. And it has higher margins, it has value for the brands, we assist the brands, we’re partners with the brands in a lot of ways, and we can educate the consumer and put them on a totally awesome bike.

It really gave them a great experience. And it’s, basically, like I said, a different way to buy a bike. Go do it on your own terms, go ride this thing for two or three days. Don’t like it? Trade it in. Figure out if you really are the person who rides a 29 or a 27 5. Or what travel do you like. Or do you want an endurance road bike or a race? Or an aero or whatever. And here’s the opportunity to try and figure it out. To us, it’s like flavors. We rigorously test every single bike we have. We know that every single bike we carry is totally awesome. And it’s a matter of if it’s the right application for the right person or whatever. Does that person like the blue car or the red car. You know, things like that.

Kristin Carpenter-Ogden: So, that’s a little different. I know we need to head to our wrapping up here, but that’s a little different then in my town, Durango, there’s the shop that is a fed by grown by then there’s the big shop that has track and yeti and Santa Cruz, then we have the mountain bike specialists which just picked up Cannondale. They used to be [inaudible]. They’re mostly specialized. Top to bottom. And honestly, it used to be segmented by this shop is this the shop. And you’re segmenting more like we love bikes and we love this region. Let me show you a regionalized experience. Tell me what kind of bike you want.

Andre Shoumatoff: Exactly. Yeah. I do want to give a shoutout to Cliff who owns that tiny, little shop in Durango, too.

Kristin Carpenter-Ogden: Oh yeah, [inaudible].

Andre Shoumatoff: Yeah. He’s awesome, too.

Kristin Carpenter-Ogden: He definitely gets his crowd.

Andre Shoumatoff: Yep, exactly. But yeah, I mean, I would say that’s true, but that said–our bikes are pretty–it’s not boastful, it’s not–but they’re awesome. They work in most places. But yeah, we did an example yesterday. We sold a Felt Decree 1, totally awesome bike. Felt is a brand we really identify well with because they sort of have a chip on their shoulder and something to prove. And they produce the new Decree which was a totally awesome 130 rear, 140 front trail bike. But just pedals like a goat. And he lives in New Jersey, and–but he’s here for a month, the guy who bought it. And so the bike will work well there and it will work well here, too. And that’s the whole thing, is it? And then we do–that’s challenge for us. We have to make sure that this excellent experience here in Park City is identifiable with these people at home, and that the bike is applicable, so.

Kristin Carpenter-Ogden: Cool. Well, this is super exciting and I would love to hear more, but you just had your grand opening, literally running a proto location in Park City of a new bike model, basically. A bike retail model, and this is amazing. Where can my people find out more about what you’re doing?

Andre Shoumatoff: Yeah. So definitely go to parkcitybikedemos.com. I’ll give to you kind of a little formulae. Google Felt Z 2 or Felt Decree 1, your choice, and look at what the results are. You should see us on the first page. And our goal is to use the bike to try to bring people to the town. And that’s–and then look at what the experience is of the bike, and the bike online. And that’s how we educate people. And so you can kind of look at it and come to it as a customer would. And then two is, again, we’re working prototype. And it’s awesome, but it’s also very time-consuming. And we have a lot of things that we’re still trying to make sure we fully dot. So we call the parent company, and honestly, we haven’t even finalized titling it yet, but we call it demos.bike, and it’s really like an explanation and a place that explains how our business operates.

And honestly, we’re looking for advocates. We’re looking for people on local places that–we’ve had people say, “Hey, I want to start a mobile bike rental business in Denver or whatever.” Like, yeah, definitely reach out. If you think you’re into a new way or honestly, your shop is fledgling and you want to change stuff around or whatever, then we’re certainly not experts but we’re really putting a lot of energy into getting all of our stuff [inaudible].

Kristin Carpenter-Ogden: None of us are experts in this world today, but what you’re doing that is expert is listening and responding and being nimble and being independent, frankly. You are [inaudible] like an independent.

Andre Shoumatoff: Yeah. I mean, we hope so. We hope that pans out, we hope it all works out and proves its value. And my gut tells me that it will.

Kristin Carpenter-Ogden: Mine does too.

Andre Shoumatoff: Well, thank you.

Kristin Carpenter-Ogden: And I’m just amazed the way you’ve pulled together what you manage. Your team is great. I advice everybody to go there and look at the reviews and the information on these bikes whether or not you’re going to be in Park City and want a demo [inaudible]. There’s some amazing information on this page. And that in itself is something that kind of–it’s a key takeaway. So thank you so much, and we’re definitely going to be inviting you back to tell us how everything’s going as you continue to grow, and maybe, in the shoulder season or whatever you can talk with us about how you’re kind of continuing the momentum when people might be thinking the off season. So I just seem so curious to see kind of how you approach all of that.

Andre Shoumatoff: Yeah, absolutely. Yeah, thank you so much, Kristin.

Kristin Carpenter-Ogden: Thank you, I’ll talk–

[INTERVIEW END]

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