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1:44

Now you're a full year into the business, right?

1:46

August of 2015. Yeah.

1:49

And you had that really successful initial

1:52

Kickstarter, but a year later,

1:54

not much. Yeah,

1:57

the classic bike was still doing well.

1:59

So I knew that we had a win that

2:02

could carry the company,

2:05

though it couldn't carry me. Yeah. And

2:07

now I'm pretty

2:09

deep. I have one successful product.

2:12

I have one unsuccessful product. I

2:14

know that the way I can grow this business

2:18

is simple in theory and hard in reality.

2:21

I need to have a bike that

2:24

changes everything. Welcome

2:33

to How I Built This, a show about

2:35

innovators, entrepreneurs, idealists,

2:38

and the stories behind the movements

2:41

they built.

2:44

I'm Guy Roz, and on the show today, how Dave

2:46

Wiener quit his job in tech to build

2:48

a bike that wouldn't rust or need

2:51

a new chain, and grew priority

2:53

bicycles from a Brooklyn startup into

2:55

a major player in bikes.

3:03

Back in the early days of this

3:06

show, we used to run a segment called How

3:08

You Built That, and it was where

3:10

founders of very small mom-and-pop

3:13

businesses could tell us their story, usually

3:15

in two to three minutes. Anyway,

3:18

one of those companies was founded by a guy named

3:20

Dave Wiener, and at the time,

3:22

this is back in 2017, nearly

3:26

three years into founding his small bicycle

3:28

company. So we heard a bit about

3:31

it. Dave talked about what made the bikes

3:33

different, and we parted ways.

3:36

But six years on, priority

3:38

bicycles has become a formidable brand.

3:42

So today on the show, we're bringing Dave back

3:44

to tell the full-blown story of how

3:46

he built priority. Now,

3:48

initially, the idea was to make a low-maintenance

3:51

bike at an affordable price, and

3:54

Dave's bike would include things like disc

3:56

brakes, puncture-resistant tires,

3:59

and internal gear. gear hub and most importantly,

4:02

instead of a metal chain, his

4:04

bikes would have a carbon fiber belt

4:06

drive. Now normally, components

4:09

like these would drive the price of

4:11

a bike up to three or even

4:13

four thousand dollars. Only

4:15

super high-end bikes had these features.

4:18

But Dave wanted to price his bikes at

4:21

under a thousand dollars. But to do

4:23

that would require a whole lot of engineering

4:26

and an entirely new business model.

4:29

Dave decided to start Priority after

4:31

a career in computer software. It

4:33

was a risky pivot because his job

4:36

was steady and the money was good. And

4:38

the bike industry is a hard nut to crack.

4:41

Three companies tend to dominate sales,

4:44

at least in the U.S. Giant,

4:46

specialized, and trek. But

4:48

over time, Priority managed to carve

4:51

out a place for itself. Dave would

4:53

have to draw on his skills from his first career

4:55

in software to handle the challenges

4:58

of selling these bikes, including

5:00

the chaotic rollout of his first models

5:03

after an unexpectedly successful

5:05

Kickstarter campaign, and an

5:07

explosion in demand during COVID

5:09

that basically emptied his warehouse,

5:12

followed by a big fall-off in

5:14

bike sales this year, which has affected

5:17

the entire industry. All

5:19

along, though, the driving force behind

5:22

Priority Bikes was rooted in Dave's

5:24

own love of cycling, which began

5:26

when he was a kid riding around with his

5:28

friends in a small town in northern

5:30

California. I loved riding

5:32

my bike. And my friends and

5:35

I went riding. That's what we did

5:37

after school. Long

5:39

before there were kids playing video

5:41

games, we were mountain biking.

5:44

We loved it, and that was absolutely my

5:46

passion, and still very much is. So

5:49

you grew up really, like a lot

5:51

of kids, just into the 80s. All

5:56

you have to do to understand the 80s is just watch

5:58

E.T.

6:00

That's all they did. They biked around and sometimes

6:02

they'd have an alien in the basket of the bike. And

6:05

that's what like kids did. It's spot

6:07

on. We got home from school. Well, first off, we rode

6:09

our bike to school and then rode our bikes home

6:12

and then stayed in front of the house or down the

6:14

street at the mountain. And not only did I

6:16

like to ride my bike, I love to work

6:18

on it. I like changing my bike and

6:20

fixing my bike and making my

6:22

bike better. And then I loved working on the neighbor's

6:25

bikes and doing everything I

6:27

could to be involved in how the bike

6:29

worked and how to

6:30

improve it.

6:31

This wasn't just about putting like a playing card

6:33

in the spokes to make the sound, which I

6:36

did. Every kid seemed to have done that in

6:38

the 80s. You put a playing

6:40

cards and rubber bands in the spokes. I

6:44

think it was more... Yeah, it was playing cards,

6:46

not like a baseball card. You need like a wax coated

6:48

playing cards. Playing cards to make that

6:51

better sound. Yeah, that's right. That's right. Yep. Yeah,

6:53

that was fun. And in high school, you got

6:55

jobs at bike shops,

6:58

right? Yeah. So I was fortunate

7:00

enough to work for the local chain of bike

7:02

shops. Had a wonderful owner who

7:04

took me in and

7:09

let me extend my knowledge of how to

7:11

work on bikes through their mechanics,

7:13

which were all great with me. And I learned

7:16

a lot more about how a bike shop ran. Yeah.

7:19

So, all right. So for college, I

7:22

guess you studied business at UC

7:25

Santa Barbara. And I

7:27

guess you also got a pretty solid

7:30

background in like IT because

7:32

I guess all during

7:34

college, you worked at a company that did

7:36

like software for bike shops. That's

7:38

right. And so then when you graduated,

7:41

did you stay in the bike

7:43

world? Like what did you wind up doing? Yeah.

7:45

So I got a job opportunity from Giant Bicycle,

7:48

which was one

7:51

of the top and still is of course, one of the top

7:53

bicycle companies in the world. And I saw

7:56

myself growing in the bike industry.

7:58

Yeah. work for one

8:00

of the top bike companies. And there they

8:02

were based, they were based or still are based

8:04

maybe in Los Angeles? Yeah, yeah,

8:06

Newbury Park, so kind of halfway between Santa

8:09

Barbara and LA. And what did you do for

8:11

Giant? I worked a dual

8:13

role in both parts ordering

8:15

and the aftermarket parts ordering and I worked

8:18

in IT. And was, I mean,

8:20

at that time, I imagine

8:22

that the IT part of a bike company

8:25

was still very new, very small

8:27

part of Giant at the time.

8:29

It was tiny.

8:31

Yeah, and that's why having me who, you

8:33

know, I was, I both had this kind

8:36

of database in my head of every bike for

8:38

doing it for four years. You

8:41

didn't need the software, you had me, I could

8:44

tell you every little specific

8:47

off the top of my head. And I knew

8:49

a lot about software and that's why they

8:52

asked to put me in this joint role because they had

8:54

a small IT department and they were going through a big

8:56

system implementation. What

8:59

kind of, what was the software doing? So

9:01

it was enterprise resource planning and that

9:04

entails all aspects of the company. So

9:07

it's your inventory management, your financial

9:09

management, you know, everybody in accounting

9:12

and down the line. Yeah. And all

9:14

of a sudden, I realized that

9:17

Microsoft owned this software and they

9:19

were gonna be putting tremendous resources

9:22

behind it. And I

9:24

knew it really well. Right. And so

9:26

I started to look for a

9:29

role in doing this new

9:33

software, which was later

9:35

called Microsoft Dynamics. And

9:38

I found a company in New York that needed

9:40

someone to head a group to take

9:42

this software on. And I took that opportunity

9:45

to move to New York and try something new.

9:48

And plus my friend Connor Swiegel just

9:51

moved to New York and he was having a good time

9:53

and it seemed like a fun place to be in your

9:56

early 20s. And did you,

9:58

I mean, were you, commuter?

10:00

Were you riding a bike to work every day?

10:03

Yeah,

10:04

right when I got to New York, I got

10:06

a, you know, a used 70s Schwinn

10:09

and made sure it was properly adjusted

10:13

and used it every day to get to work

10:15

and get around the city. And so I've

10:18

now been in New York 19 years and I rarely

10:22

go anywhere that's not my bike. And by

10:24

the way, the company you were working for

10:26

in New York had

10:27

nothing to do with bikes. I think

10:29

it was just, it was strictly like a software

10:31

business called Cole

10:34

Systems. And you

10:36

started there as, I guess, like an

10:38

IT consultant, but then you

10:40

stayed for a long time. In fact, you actually rose

10:43

the ranks, you eventually became the CEO. That's

10:45

right. And so how did that happen?

10:47

I mean, did the founders, I know it was a small

10:50

business when you joined, probably 10

10:51

or 15 people. But

10:53

did the founders kind of

10:55

like mentor you into that role?

10:58

Yeah, there were two founders, and they mentored

11:00

me extensively. And they

11:02

also really encouraged

11:05

me to grow my area

11:07

of the business. And then at some point, take

11:10

over management of the business. And I liked

11:12

managing, I would say I liked managing the business

11:14

more than I liked managing people. You

11:17

know, but we had a really nice group

11:20

that were all passionate about the software.

11:22

And, and even more importantly, we're passionate

11:24

about our customers. While

11:27

you were, I mean, you would

11:29

end up working there for 10 years. But I guess you

11:31

like with your friends and people you knew in the

11:33

city, you kind of had a reputation as the as the bike

11:36

guy, like people knew you as they

11:38

come to you for like recommendations for what

11:40

to buy or like, ask you to

11:42

help them fix their bikes, right? Like people

11:44

knew you as that

11:46

person.

11:46

Yeah, absolutely. So something that was

11:48

different for me in New York than California.

11:51

In California, we ran our bikes all year round.

11:54

Right in New York, we don't. And it

11:57

gets really wet and the

11:59

snow and the ice are on the ground and we stop riding

12:01

bikes. And so people here in New

12:03

York, spring comes and their bike

12:06

sat in the basement all

12:08

winter. And if they're lucky in the basement

12:10

didn't flood, the

12:12

bike probably needs a tune up and needs

12:14

some adjustment. And so I found a lot that

12:17

every time I wanted to go ride a bike

12:19

with a friend, my bike was

12:21

ready to go because that was part

12:23

of what I did, but their bike never was ready

12:25

to go. So I always had to call a friend,

12:28

get there early, tune their bike and make

12:30

sure it's ready to ride. And

12:33

I guess even while you are kind

12:35

of rising through the ranks at

12:37

Cole, this company, you

12:40

still were thinking about

12:42

bikes, like maybe, I mean,

12:45

not even thinking about it, but you were literally

12:49

sketching out ideas for like, could

12:51

you create a bike company?

12:55

Yeah.

12:57

In 2013, I started to think about what would

12:59

be next for me. I loved having

13:01

entrepreneurial ideas. I loved

13:05

in software being able to twist

13:07

and turn with the bike, with

13:10

the software company and figure

13:12

out how we could evolve. We grew

13:14

to, we grew much larger. We had,

13:16

I think, 280 something employees

13:18

when I left in 2014. This

13:20

was, I think, just to clarify that the company

13:23

was bought. It was acquired by a bigger company,

13:25

right? That's correct. Yeah. We

13:28

wound up selling the company to a

13:30

bigger company, which was the right thing to do. It's where

13:33

our industry was going. But

13:36

it got to the point that I felt like I

13:39

wasn't using my entrepreneurial

13:43

energy the way I wanted to. Yeah. So

13:46

I had the title of president and CEO,

13:48

but I certainly didn't feel like it. And

13:51

I was getting told to run the

13:53

business in ways that I

13:56

disagreed with. And so I felt

13:58

like it was time to go. Yeah.

13:59

When I stepped down,

14:03

I was used to working seven days a week,

14:05

and

14:07

I've never known how to relax. And

14:09

so relaxing wasn't going to start then.

14:13

And I had a young family. So I

14:15

knew I needed to do something. In selling

14:18

the company a year

14:20

earlier, my non-compete was heavy. And

14:24

I knew software at this point. I knew bikes.

14:27

And all I could think about is, how can I put

14:29

those two together? And

14:31

this idea that I'd written down a year

14:34

earlier about starting a bike company

14:36

kept ringing in my head as

14:39

the only answer. So

14:41

I guess, from what I understand, you were really

14:43

landing, kept landing on this idea of like,

14:46

could I make a different kind of

14:48

bicycle? Could we sell like

14:50

a bicycle that didn't require a whole lot of maintenance?

14:54

Yeah, that's right. So

14:56

I was trying to take my experience of working

14:59

in a bike shop, working for a bike manufacturer.

15:02

And when you're in that world, you're

15:04

most excited about the high-end bikes.

15:06

You're excited about the carbon fiber,

15:09

the titanium, the full suspension. And

15:12

when I left the bike industry, the

15:16

way I used a bike changed. I wasn't

15:19

riding $5,000 bikes off-road. I

15:21

was riding $300 bikes on the road. And

15:24

so were my friends. And so I started

15:27

to think about, what do my friends need?

15:29

Well, I go to their house and have to tune their bikes

15:31

every time before we go for a ride.

15:34

And the bike needs to be reliable. So people aren't

15:37

getting flat tires. And they're not ruining

15:39

their pants as they ride, with

15:42

their pants getting stuck in the chain. I

15:44

started to just think about all these really simple

15:47

creature comforts. And I

15:49

also started to bring in my experience of software.

15:52

And back then, in 2014,

15:54

there wasn't a lot of bicycles

15:56

being sold online. And those that are,

15:59

were... were pretty low quality.

16:01

So I thought, gee, if we could bring something to

16:04

market that's a bike shop quality

16:06

bike

16:07

that's really reliable, really long-lasting,

16:10

that maybe that'll resonate with people.

16:12

And you basically

16:16

now, I mean, spring

16:18

of 2014, you were unemployed,

16:21

but you had this plan to kind

16:23

of build a bike. And I think at this time, you

16:26

convinced your friend Connor Sweagel from

16:28

college

16:29

to help out. Was there anybody

16:32

around you who thought this

16:34

was kind of...

16:36

I'm sure there are lots of people who are excited for you, but

16:39

were there any anyone who is like, I don't

16:41

know, maybe your parents or family

16:44

who cared about you, or like, you know, you're leaving

16:46

this job

16:47

to do this? It's really risky. There

16:49

was. My parents have

16:51

always been nothing but supportive of me.

16:54

And my wife, I had her full

16:56

support to do this and to give it a shot.

16:58

But there was other people

17:00

in my life that when I told I

17:03

left a high paying job, CEO

17:05

of a company, and

17:08

a very good paycheck to start

17:10

a startup with

17:13

no money, and I'm not going

17:15

to make any money, but I'm going to make this work.

17:18

There were definitely others in my life

17:20

that looked at me like I was crazy. And

17:23

the bike industry is an overcrowded

17:25

industry. It's not

17:28

an industry that is needing

17:30

another brand not 10

17:32

years ago, not today. It's

17:36

not a slam dunk. When we

17:38

come back in just a moment, Dave

17:40

pulls together a prototype and

17:42

a Kickstarter campaign, but then has

17:45

to make a decision that carries a lot

17:47

more risk and costs a

17:49

lot more money. Stay with

17:51

us. I'm Guy Roz, and you're listening to How I Built

17:54

This. As

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Hi, I'm Elizabeth from Monaco and

20:32

my favorite episode is the one with Danny

20:34

Meyer of Shake Shack. It's

20:36

especially the part where he says that in

20:39

order to be in business, he has to learn

20:41

to love problems. That really

20:43

resonated with me and in fact, it

20:45

changed my whole perspective on how

20:48

I run my business. I think

20:50

in order to be an entrepreneur and enjoy

20:52

it, you just have to learn to

20:55

flex that problem-solver muscle.

20:57

That episode really

20:59

reminded me of that.

21:00

In fact, I think you can apply that to life

21:03

in general. If you just approach life

21:05

with a problem-solver mindset, you have a much

21:08

better time. Thank you.

21:10

If you want to share your favorite episode

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21:35

And now,

21:36

back to the show.

21:44

Hey, welcome back to How I Built This. General,

21:46

if you just approach life with

21:48

a problem-solver mindset, you have a much

21:51

better time. Thank you.

21:53

If you want to share your favorite episode

21:56

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21:58

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22:18

And now,

22:19

back to the show. Hey,

22:28

welcome back to How I Built This. I'm Guy Roz.

22:31

So it's 2014, and Dave

22:33

Weiner has just left his job as the

22:35

CEO of a successful software company

22:37

to build a new kind of bicycle.

22:40

I knew how to design everything

22:42

on the bike, other than the color

22:44

and graphics where I needed some help. But I knew

22:46

how to do all of the basics. And

22:49

I wanted this bike to last a long time. You

22:53

still see a lot of older

22:55

bikes on the road because they were made with good

22:57

materials. A lot of what you buy

22:59

today doesn't last like it used to. So we wanted

23:01

to go back to that and really

23:04

use every component with stainless

23:06

steel and aluminum where we could so

23:08

that the components would last.

23:11

You know, would last.

23:14

All right, so let's talk about this bike that you were designing.

23:17

Because most bike maintenance

23:20

involves the chain or

23:23

the brakes or the tires, I think,

23:25

right? That's the worst part. That probably

23:28

covers like 60, 70 percent of why people need their bikes repaired.

23:31

That's right. That's right. And so

23:33

you wanted to completely overhaul

23:35

those things. Yeah, and you know,

23:37

we didn't want to, if you will say, reinvent

23:39

the wheel. We wanted to use the best parts

23:42

that were out there. So simple

23:44

things. I knew that when I worked in a bike shop,

23:47

people got flaunts a lot. And they came

23:49

in, I could say, hey,

23:51

in addition to changing your tube, let's

23:54

put a thorn

23:56

resistant tire on here or a thorn

23:59

resistant tube. and let's make sure

24:01

that it's less likely you'll get

24:03

the next fund. Nine out

24:05

of 10 tires, customers say, great,

24:07

we want that. Other bike companies,

24:10

they weren't selling bikes with things

24:12

like puncture resistant tires because

24:14

those cost more, and most customers don't

24:17

see that on the price tag. They

24:19

see a bike and they want the cheapest bike that does what

24:21

they need, and if one guy says, our

24:24

bike has puncture resistant tires, most people don't care.

24:27

So I just tried to do things like the

24:29

puncture resistant tires. Tried to do

24:31

the brakes. We wanted low maintenance

24:33

brakes, and I always rode, it was called

24:36

a coaster brake bike, which is probably

24:38

how you grew up riding a bike guy. We

24:41

pedal forward to go and backward to stop. Right,

24:43

backward to stop, yeah. Yeah, and

24:45

called a coaster brake. So coaster brake bikes are

24:49

rather maintenance free. You can run

24:52

those for thousands of miles without ever tuning

24:54

the brakes. Because they don't have any brake pads on

24:56

the tires. Yeah, there's some braking

24:59

components inside the hub, but they go

25:01

thousands of miles without ever needing anything.

25:04

So, you know, just, we tried to think

25:06

of simple things. Like, you

25:08

know,

25:09

very high end spokes, the wheels

25:11

don't go out of true, or don't

25:13

rust. And to use a comfortable seat, little

25:17

things like the bike should come with a kickstand. Right?

25:19

Yeah. And then the final

25:21

one was the belt drive, and that was

25:23

really our differentiating feature.

25:27

And I guess we should explain this for, I

25:29

mean, lots of people know what it is now, but basically

25:31

most bikes have a chain, which requires

25:33

oil. And that chain, especially

25:36

if it's a bike with gears, will

25:38

like move from one gear to the next as

25:41

you switch the gears, right? A belt

25:44

drive is literally a

25:45

belt made out of carbon fiber, and

25:48

there's no, the whole gear system's

25:50

in an internal hub. So it

25:53

essentially replaces a metal chain.

25:56

Yeah, that's right. So the belt drive

25:58

that we use made for polyurelating. and inside

26:01

of it is carbon fiber cords. And

26:04

the carbon fiber cords keep

26:06

it together. And the belt

26:08

drive lasts three times longer. And

26:11

the advantage is you don't have to oil it at all.

26:14

You don't have to oil it. It's not going to eat

26:16

your pants or stain your pants. You

26:18

never have to grease it. It's not going to rust.

26:21

All of the gearing is inside the hub.

26:24

And the advantage there is it's

26:26

sealed from all the elements. And so

26:28

it doesn't need all the constant maintenance. And

26:31

if your bike falls over, nothing bends. You

26:33

can just really focus on riding your bike. So

26:37

Dave, when you went from

26:40

running a company with 200-plus people to

26:42

just being by yourself, and then Connor

26:44

was on the West Coast kind of giving you feedback,

26:47

that must have been kind of lonely just sitting there

26:49

all day just kind of working on this.

26:51

No, it was

26:54

great. I liked

26:57

having a small company. I didn't

26:59

like having no company. So Connor

27:02

was helping in the beginning, nights and weekends,

27:05

so that moved to full-time

27:07

pretty quickly. Our

27:09

first employee, Lauren, was

27:11

working with me. We've been in the same building

27:14

on Hudson Street in Tribeca ever

27:16

since we started. So one

27:18

of the founders of Cole

27:20

Systems, a software company, was

27:23

the initial financier

27:25

of priority. And

27:27

so he gave us office space, and

27:29

I've only worked

27:31

in that building since 2004. So

27:35

you did not – you decided that

27:37

you were going to go start raising money from venture

27:40

funds or whatever, but you

27:43

needed some money to start. So how much money

27:46

did you sort of need

27:49

to get this off the ground? I don't

27:51

remember the exact number, but it was in the hundreds

27:53

of thousands of dollars. It

27:55

was not a little amount of money. I approached

27:58

John, who was –

28:00

one of the founders of coal systems and

28:03

I presented him what my plan

28:05

was for priority bicycles. He said

28:07

right away that he would support it and he would finance

28:10

it and he did. So he wrote you

28:12

a check and because you needed the money

28:14

to presumably to for

28:17

the research and to source the

28:20

components to build the bike

28:23

and then to even start a production,

28:25

you know, small production line.

28:28

That's right. So I worked before

28:30

we started the company. I, of course, worked on

28:33

how much this bike would cost, how many we need

28:35

to make to to even start production

28:37

of it. And the first thing I did is I got

28:40

on a plane. I went to Taiwan because

28:43

Taiwan is still where most quality

28:45

bicycles are made because all

28:47

of the suppliers are there from

28:50

the frame welding to the seats to

28:52

the handlebars to the grips. Everything is

28:54

made in Taiwan or at least in if

28:57

you want a high quality bike, it's

28:59

all very much made in Taiwan. And

29:01

I met with I think about 30 different

29:05

suppliers to show my idea. And

29:07

this is what in the spring of 2014? Yeah,

29:12

it would have been in the spring of 2014 and

29:14

there is a annual bike show that

29:17

was coming up in Taiwan. So

29:19

I made those my dates and I made sure

29:21

I had all of my all

29:24

of my spec sheet and what I wanted to build with the

29:26

bike ready. And I started

29:29

weeks beforehand emailing

29:31

many of the suppliers

29:34

to set up a meeting. And when you

29:36

say suppliers, like you couldn't just

29:38

go to one factory and say,

29:41

here's what I want. You guys go

29:43

make it for me. You had to go to like the people who

29:45

made every component

29:47

of the bike separately? Yes and no.

29:50

Certainly when we talk about the belt drive, that

29:53

was very much on us and we had to do on our own

29:55

because bike companies, bike manufacturers

29:57

didn't know anything about belt drives yet. And

30:02

working with the tire makers to make sure we get the tires

30:04

the right color and the right

30:07

type of rubber in them, that was really important.

30:10

But the simpler components

30:12

like a handlebar, I drew

30:14

what we wanted as a handlebar, and I handed

30:17

that over to the different bike companies. And they

30:19

can price out getting what

30:21

I'll call the more straightforward

30:23

components. So you go to this trade

30:25

show with your plans. And

30:28

by the way, I mean, I

30:30

have to assume that most of these factories

30:32

had minimum orders. And

30:35

probably the minimum order

30:37

would have been, I don't know, in the hundreds

30:40

of thousands of dollars. Absolutely.

30:43

Yeah. Any serious factory

30:45

doesn't want to talk to you about making a couple

30:47

hundred bikes. The

30:49

number used often in the industry

30:52

is 300 because it used to be

30:54

you could get 300 bicycles

30:56

in a container. You can't anymore,

30:59

but because the box has gotten bigger,

31:01

but no one will entertain

31:03

an order under 300. And that

31:05

said, most better factories won't

31:08

talk to you under 3,000. So

31:11

you go to this show in Taiwan in the

31:13

spring of 2014 with your plans. And tell me about the experience.

31:19

I mean, was it was a resistance

31:21

for most of the companies like I am not

31:24

I don't work with such a small work

31:26

with big brands or I'm not interested in such a small

31:28

order. Yeah, 80 to 90

31:31

percent of the companies I had tried to make appointments

31:33

with would

31:35

take them but didn't want to talk to me. And

31:38

the first question they ask is, you know, where's

31:40

the money coming from? How many bikes are

31:42

on your first order?

31:45

And my confidence was the other way

31:47

around. I remember

31:50

meeting with the supplier saying, I know we're going to sell

31:53

a significant number of these bikes. I need

31:55

to know if you can make them and how good you can make

31:57

them. And also where you can improve.

32:00

on our designs and our ideas. So

32:03

you were looking to order, I mean, did

32:05

you have a number of bikes that you thought

32:08

you needed to make for that first run?

32:10

Not quite yet, because we hadn't started selling it yet.

32:13

I was confident that if we had a good quality

32:15

product that we could sell some. I didn't know

32:18

if we could get to the 3,000 that

32:21

some of the better factories wanted. I

32:23

did think I could get to 300, which some

32:25

of the smaller companies wanted. So there

32:27

was this idea that a friend gave you to go to Kickstarter,

32:30

try to put it on Kickstarter, and see

32:32

what happens. And

32:34

when you made

32:35

that decision, did you have a prototype

32:38

already built or not yet? When

32:41

we started working on the Kickstarter, we

32:44

only had a prototype that I had made

32:48

in New York. You welded it yourself? I

32:50

didn't weld myself. I bought it off

32:52

the shelf bicycle frame,

32:55

and I made modifications to it.

32:57

I made a cut in the frame to get the belt

33:00

drive on. I had

33:02

a friend of a friend weld it in his

33:04

kitchen. It

33:07

wasn't the prettiest, but it did work, and it did

33:10

start to show

33:12

what we wanted to create. And

33:14

so leading up to the Kickstarter,

33:17

I had narrowed it down to three different

33:19

factories, and I paid

33:22

all three factories to make, essentially

33:25

the exact same thing, knowing

33:27

that if you ask three companies to make

33:29

the same thing, you'll get three very different

33:31

items.

33:32

And when they arrived, was there clearly

33:36

a better one out of the three? Yeah, absolutely.

33:39

There was, and also that factory,

33:42

they had worked better with

33:45

us in the process. I think one

33:47

of the factories took our drawings and didn't ask

33:49

any questions and produced what they thought it was. The

33:52

other two asked questions, and certainly

33:54

the one we went with, asked the most questions. And because

33:56

they asked the most questions, they got the best

33:59

answers. And we also thought that

34:02

they had suggestions on how

34:04

to make that design a little bit better. And

34:07

they were right. So one of the questions I have about

34:09

the chain-free bikes, right? The belt

34:12

drives. Was the reason

34:14

why most bicycles at the time

34:17

were not made with that? Was because it was more expensive?

34:19

Yeah, it's significantly more expensive. Certainly

34:22

the belt drive is more expensive

34:24

than a chain drive. But how are you going to make

34:27

a cheaper bike with these components? That's

34:29

what I understand. I mean,

34:31

if internal hubs and belt

34:33

drives and puncture-resistant

34:36

tires were just inherently more

34:38

expensive

34:40

and really were on high-end bikes,

34:42

how are you going to sell it for, I guess, under $1,000?

34:48

Yeah, so that's where some

34:51

of my experience in working with software

34:54

systems came in. I knew we had to sell

34:56

the bike online. As

34:58

much as I grew up working in a bike

35:00

shop, and I love, love, love bike shops,

35:03

we wanted the bike shops to help the customer

35:05

make sure it's assembled correctly and

35:08

certainly be there if they have a problem. But we wanted

35:10

to ship these bikes directly to consumers. You

35:12

did not want to sell them through bike shops. We

35:15

couldn't. Because it would be too expensive. It couldn't

35:17

be cost-effective. Yeah. And so,

35:19

you know, we're, you know, 10 years

35:22

later, we worked with many bike shops and we actually

35:24

sell quite a bit of bikes now through bike shops

35:27

and more to come. But back then, it was

35:30

we needed to have a direct relationship

35:32

with the customers. The only way we could

35:35

get to that price that they needed.

35:38

And we felt that customers

35:41

were looking for that product, or at least I did. All

35:43

right. So you guys,

35:46

so you decide

35:47

to launch this Kickstarter

35:49

in July of 2014. It's about four

35:51

or five months after you left your job as CEO.

35:55

What was the offer? You

35:59

could pay what? get a bike. $350? I believe

36:02

they included shipping. $350 and you would get a belt drive

36:09

bike,

36:10

aluminum frame,

36:13

it would be

36:16

shipped to your door. And I

36:19

mean that's it.

36:20

And how much were you hoping to raise

36:22

for that Kickstarter? Yeah,

36:24

and at the time I don't think you could find a belt

36:26

drive bike under $1,000. It was a really

36:29

amazing value bike. And at the time

36:35

we wanted to raise $30,000, I felt that if we raised $30,000, it would be

36:37

the world showing me

36:41

that this was good enough to make

36:43

more and figure out how to sell them. $350? So

36:49

I mean, you're basically looking to make what, like, 100

36:52

bikes, right? A

36:54

little less than a few, but 100 bikes

36:56

for $30,000. Yeah. Okay.

36:59

And, you know, we always felt that

37:01

if we got some bikes out in the field, people

37:04

are going to love these and they're going to go to work the next

37:06

day and say what a cool and different

37:08

and unique bike they bought.

37:11

But were you going to cover your costs? I mean, 350

37:13

bucks per bike and shipping? We

37:16

would cover our costs, but not anymore.

37:18

Right. So you were essentially just,

37:21

it was just a wash. Yeah,

37:23

we had one part time employee

37:26

and Connor and I were at

37:28

the low, low price of nothing. Right. Okay.

37:31

So you launched this Kickstarter

37:34

and it actually, I mean, you know,

37:36

as some cool Kickstarter

37:38

campaigns go, it did very

37:40

well. Was it on the front page of Kickstarter?

37:44

You know, I think it did make it to the front page of Kickstarter

37:46

at some point, not on day one. A

37:49

friend who I just met, a friend of a friend who had

37:52

a watch company I met with about maybe

37:55

60 days before our launch. And he was telling

37:57

me about growing his watch company.

37:59

And when I told him about. priority bicycles and

38:01

what I wanted to do, his

38:04

advice to me was you need to hire

38:06

a PR firm today. 60 days

38:09

to go, you need to hire him today

38:12

because otherwise you're only gonna, the

38:14

only people are gonna support you on Kickstarter or

38:17

your friends. Yeah, so you got

38:19

to spend the money, you got to hire a PR

38:21

firm and they need to tell your story

38:24

and then you got to hope it works.

38:26

And did you do that?

38:29

I did it the next day. I think I did

38:31

the same thing as looking for a bike company.

38:33

I think I called ten of them, set up appointments

38:37

and I dropped everything I was doing

38:39

and I found a PR firm. And how

38:41

did you, I mean PR companies

38:43

are expensive. Presumably you had to use

38:46

a significant amount of your

38:47

working capital to pay

38:50

them.

38:51

It was the biggest risk

38:54

decision we made at launch.

38:56

That was our single biggest expense

38:59

before we launched. But they

39:02

told our story to the media and

39:04

we had, it

39:05

must have been a dozen

39:08

articles on the day we launched on Kickstarter

39:11

with major media. And I

39:13

think in the first day in Kickstarter

39:15

we sold over $200,000 in bikes. Wow,

39:20

your goal was $30,000 and

39:22

by the time the campaign ended,

39:25

how much had you raised on Kickstarter? $550,000. So

39:28

half a million dollars. So that's a big order.

39:35

And you get 1,500 bikes

39:37

that you had to order at that point

39:40

and you promised to have them

39:43

by

39:44

Christmas I think, right? That was the deal? We did. The Kickstarter

39:48

ended in August and I thought

39:50

we could make them in 60 to 90 days and

39:52

have them by Christmas.

39:54

And

39:55

so as we've experienced

39:58

in the show with other companies

40:00

that have started on Kickstarter like Uni and

40:03

some others. It's

40:06

kind of a mixed blessing, right?

40:08

Because you have to fulfill the orders.

40:10

And I have to imagine, I mean, 1,500 orders, that's 1,500 different customers.

40:16

And it was just the three of you at priority.

40:19

Yeah, I became very

40:21

good at customer support. And any of our

40:24

original Kickstarter backers, they've asked a

40:26

question, and I was generally up

40:28

to 10 or 11 at night doing support.

40:30

Yeah. And this is a conversation

40:32

that my wife and I have. I like to say

40:34

that when I started Priority,

40:38

I worked less, because I worked so much in

40:40

software. And she says there's

40:42

no chance I 100% worked more. And

40:47

so I've got to assume, like most things, she's right. I

40:50

never felt like I was working more, because

40:52

I loved it. And I can talk

40:54

about bicycles all day long, and I can

40:57

talk about customer experience all day.

40:59

And I love going to Asia to work

41:02

on the bikes and work with the production

41:04

team. I just loved every

41:07

moment of it. How are you, so

41:09

between the time that you close this

41:11

Kickstarter and the time that you have to start, get

41:13

these bikes out. There

41:16

are lots of, every single

41:19

day, there are at least

41:22

two, three maybe more

41:24

roadblocks.

41:26

You get a call or an email from a customer,

41:28

a supplier can't

41:30

make this part in time. Big

41:33

and small challenges every day.

41:35

And

41:37

how did you kind of handle

41:39

those mentally? I

41:41

mean, did you ever like get,

41:44

did they ever stress you out? Did they create anxiety,

41:46

or were you like, okay, let's just tackle this one

41:48

thing at a time? Well, I live

41:50

on stress. I do very well under

41:53

stress. I think that's kind of my

41:55

happy place, unfortunately. When

41:57

you're doing software programs.

41:59

I became a project manager. So I handled

42:02

this the same way I would a

42:04

big software implementation. I had every

42:07

step, I had every supplier, everybody

42:10

was in my database. I knew who I was contacting

42:12

which days, I knew who I was following up on,

42:15

and I wasn't letting anything

42:17

slide. And

42:19

if you were my supplier back then, I'm sorry.

42:22

I probably called you too much, I probably checked

42:24

in too much. I wanted every update,

42:26

and I stayed on top of every detail, and

42:29

I loved it. I loved that time.

42:32

When we come back in just a moment, how

42:34

Dave grows priority with some big

42:37

wins, but also some stumbles.

42:39

His first model has a chaotic rollout,

42:42

his second one falls flat, and

42:44

then the extreme whiplash

42:47

of COVID.

42:48

Stay with us, I'm Guy Raz, and you're listening

42:50

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44:50

Hey, welcome back to How I Built This. I'm Guy

44:53

Raj. So, it's late 2014, and Dave is on

44:55

the hook to

44:57

deliver 1,500 bikes to

44:59

his customers on Kickstarter.

45:02

And he manages to deliver most of them

45:04

by Christmas with just a few days

45:06

to spare. Yeah, so for

45:08

the most part, we got most

45:11

of them out, I think, around the 22nd, and

45:13

most of them got to people by

45:15

the 25th. Why

45:18

so late? What happened? So,

45:21

it was our first time importing anything, and

45:24

U.S. Customs held all

45:26

of our containers for random

45:29

inspection.

45:30

You just got unlucky. You just got picked. Yeah,

45:33

yeah, we got unlucky. There was nothing more

45:35

to it. But that's a stressful time,

45:38

because we're going into Christmas. We promised

45:40

everybody they'd get it at Christmas. Your bike's

45:42

going to ship in two weeks, and then two weeks later we say,

45:45

we don't know when your bike's going to ship, because

45:47

Customs held our containers, and

45:49

they won't tell us anything. And you just have

45:51

to wait until they are inspected. You couldn't expedite

45:54

it. You couldn't make it go faster. No

45:56

one you can call. You couldn't drive to the port.

46:00

I threatened some of our

46:03

importing guys that I would drive to the port

46:05

in Newark and be there in a half hour,

46:08

but they told me that wouldn't help. That would

46:10

only make things worse. And we waited, and

46:12

that was incredibly stressful

46:14

time because customers who

46:17

bought these for Christmas gifts were

46:20

not happy. And so they

46:23

were just eventually finally inspected and

46:26

saw that there was nothing illicit in there and then released? That's

46:29

it. And you get to pay

46:32

for the time that they were held to. You have

46:34

to pay them for the storage fees, right? Yeah,

46:37

exactly. I mean,

46:39

you're still a small company, and

46:41

now once you sell a product to people, you

46:44

also have to sell the customer service

46:46

to them. I mean, were the bikes working?

46:48

Were there issues that were cropping up? No,

46:52

the bikes were great. The problem was getting

46:54

the customer the bike they ordered more than anything.

46:58

We had this task of eight

47:00

labels, eight boxes, and somehow

47:02

they got it all wrong.

47:06

And so somebody that ordered a white small got

47:08

a black large, and someone that

47:10

ordered a black large got a white small. And that

47:12

was really stressful. I

47:14

was doing all but 100% of

47:16

the customer support at that time, and

47:18

that was a really stressful time, and especially

47:21

because we didn't have spare bikes

47:23

yet. So if

47:25

one customer got a white one, ordered

47:28

a black one, we had to find out how to get that white

47:31

one to the person that ordered it. All right. So

47:33

the bikes arrived to customers,

47:35

and in that first year, do

47:38

you remember what you're – I mean, you launched in

47:40

July. So you're sort

47:43

of that half year of 2014.

47:45

Do you remember how much you guys brought in? You brought

47:47

in $550,000 from the Kickstarter, but

47:51

I'm assuming you didn't sell another half a million

47:53

dollars for the bikes that first year. Yeah,

47:55

that was disheartening because you do – like I said, you

47:57

do have a Kickstarter where you raise half a million dollars.

48:00

million dollars in 30 days. The next 30 days will be

48:02

another half million. No,

48:06

but it was more like 10,000 maybe, 20,000. Yeah, if I remember correctly,

48:08

we sold about 2,000 bikes

48:14

that year, at 1,500 in the first month and then 500 in the next six

48:16

months that follows.

48:19

Right, so probably about $600,000

48:22

in total revenue that maybe

48:25

that year. Yeah, that sounds

48:28

right. So, 600,000 is pretty great for

48:31

your one, but I'm assuming you had loftier

48:33

goals for the first full year in business.

48:36

Yeah, we did. And the

48:39

first thing we realized is that while we had this

48:41

amazing model,

48:44

we probably need more than one. Yeah.

48:46

So, the next lesson learned came

48:49

in a bike. I wanted to design

48:51

the next bike and at that point I had

48:53

a two-year-old. And so, I couldn't think

48:56

of anything better than designing

48:58

a bike for him. A kid's bike. Absolutely.

49:01

So, I made him a training

49:04

wheel bike and I made it with all the

49:06

features I want. A belt drive, of course, all

49:08

these rust-free aluminum features.

49:12

I made it with puncture-resistant tires.

49:15

The whole tire didn't need any air. So,

49:20

as a parent, you could just get the bike and go. You have to

49:22

worry about putting air in the tire every month. It's just

49:24

a solid rubber tire. Yeah, yeah,

49:26

exactly. And it

49:30

was an awesome bike that totally failed.

49:32

So, what happened? I mean, it's just kids

49:34

bikes, it didn't connect

49:37

with people? Yeah, I

49:39

think there were a variety of problems. One is I built

49:41

a bike that I wanted, not a bike that

49:44

our customers were telling us they wanted.

49:46

And so, the first lesson there is, you

49:49

know, listen to your customer because if much

49:51

customer support is I was personally doing

49:54

at the time, I was hearing from customers

49:56

what they wanted all day. And

49:58

I didn't deliver it. I delivered.

49:59

saying that I wanted. And also, to

50:02

make a $300 bike for a

50:05

three-year-old is

50:08

a tall number for a lot of parents as it should

50:10

be.

50:11

You know, now you're a full

50:13

year in to the business, right? August of 2015, and

50:16

that must have been

50:18

disheartening. And I wonder, I mean,

50:20

the business was not far from being

50:23

profitable at that point. You were not paying yourself

50:25

anything. Correct. You stressed out

50:28

at all. I mean, you're a full year in,

50:30

and you had that really successful

50:32

initial Kickstarter, but a year later,

50:35

not much action. Yeah. The

50:38

classic bike was still doing well. So

50:40

I knew that we had a win that

50:42

could carry the company,

50:45

though it couldn't carry me. Yeah. And

50:48

when you say we're doing pretty well, like, what

50:50

do you remember about 2015? Like, $20,000, $30,000 a month in

50:52

revenue? I

50:55

would say that's about right. And

50:58

now I'm

50:59

pretty deep. I have one successful

51:01

product. I have one unsuccessful product.

51:04

I know that the way I can grow this business

51:08

is simple in theory and hard in

51:10

reality. I need to have a bike

51:13

that changes again, that changes everything.

51:16

So basically, you

51:18

had this

51:22

challenge, which was you needed to make a new,

51:25

you know, you needed to make more models. And I guess

51:27

sort of in 2015, you start to work

51:29

on a new bike that would become

51:32

a commuter bike. Yeah, that's right.

51:35

In listening to our customer, we learned that

51:37

a lot of people were using the classic

51:40

as a commuter because it was low maintenance.

51:43

And anyone who rides their bike

51:46

to work every day needs the most reliable

51:48

bike they can because they get up and they've

51:50

got however many minutes they have to ride

51:53

their bike to the office. And the bike

51:55

can't let them down. And we

51:57

needed to make this

52:00

bike to turn it up to make

52:02

it more aggressive and how someone sits on the bike.

52:04

So the geometry needed to change. The

52:07

brakes needed to change. You can't go fast

52:09

on a city street, for example, with a coaster

52:12

brake. You need disc brakes,

52:14

just like you'd see on a motorcycle or any other high-end

52:16

bicycle. You needed disc brakes, and it needed

52:19

more gearing. And it needed a belt

52:21

drive system that scaled to

52:23

the type of power that

52:26

a everyday cyclist could put out.

52:28

That bike, right, now you had really

52:33

many more expensive components on it.

52:36

So what were the

52:39

margins? I know what

52:41

the margins on clothing is, for example.

52:43

We've done a lot of clothing brands. But was

52:46

it under 10%

52:48

for you guys?

52:49

No, we were getting it up to

52:51

the 30s. We were getting the margin

52:53

up there. But we were also starting

52:56

to buy in volume. At that point,

52:58

we knew that we weren't going to make 100 of these.

53:01

We needed to make 1,000 of them. And like

53:03

anything else, when you buy in volume, you

53:05

do get better pricing. And we also knew that

53:08

if we were going to make a run at this, we

53:10

had to give it our all. And

53:12

at the same time, we started going to hotels, which were really

53:14

good for us. Tell

53:16

me about hotels. I mean, this

53:19

is 2015. How did you

53:21

work with hotels? Yeah, so one

53:24

of the things we started in our Kickstarter

53:26

was you could buy 10 bikes and get your brand

53:28

name on them. And we

53:31

did that thinking there were companies

53:34

and there were there were companies that bought 10

53:37

bikes and wanted their name on it. You know,

53:39

how I built this right on a bike. Yeah, put

53:41

on a bike. Yeah, wouldn't that look

53:43

good. So we

53:46

had never thought about hotels until

53:49

the Viceroy Santa Monica was our first hotel

53:52

and they called and Connor

53:54

and I had actually lived together briefly

53:56

in Santa Monica. So we knew the area and that was

53:58

a very cool hotel. So they contacted

54:01

you and they said hey We

54:04

want your bikes for our hotel. Yeah,

54:06

you know, they're right there across the street

54:08

from the ocean And they said we have a bike

54:10

program and our guests

54:14

Use our bikes to ride around the beach But the

54:16

problem is we bought some six months

54:19

ago and their rust buckets. Yeah, cuz

54:21

it by the ocean. That's right Yeah,

54:23

they said they started looking online and they found our

54:25

Kickstarter and they found this idea

54:28

of a no rust bike and

54:31

they were really intrigued and they

54:33

were our first hotel and they were a wonderful

54:35

customer that helped our brand

54:38

look good and we started to open

54:40

up a Sales

54:42

department in you know in

54:45

priority that just focused on selling to

54:47

hotels and really this idea came from

54:49

the hotel Not from you guys. I mean they approached

54:51

you it turned out to be great like

54:54

a sort of You know stroke

54:56

of luck because then you kind of thought oh,

54:58

well, this is a great way to advertise our

55:00

bikes That's it. It

55:03

goes back to listening to the customer

55:12

Red that you guys also one of the

55:14

struggles you have is with manufacturers like You

55:17

went through different manufacturers over the

55:19

first three years like three different manufacturers

55:22

This is not uncommon but but what what

55:24

were the issues you were having with manufacturers?

55:29

Reliability was was at the fore

55:31

the forefront none of them made bad products But

55:34

they made unreliable products and and the

55:36

timing wasn't always what we expected Mm-hmm

55:39

the first three assembly factories were

55:41

not meeting our timeline I was

55:44

going to every single one of our productions

55:47

and they might have the wrong components

55:50

That they didn't know

55:53

how to assemble a bike the way I

55:55

would expect them to and it was taking much

55:58

more of my time than I could

56:00

ever imagine. And we needed

56:03

to do too much rework on the bikes that were coming

56:05

in. And it became to the

56:08

point where not only was it not

56:11

sustainable for our current

56:13

bikes,

56:14

but we worried that we were going to add these higher-end

56:17

commuter bikes, and how could we grow

56:20

with this company? So

56:21

what did you do?

56:23

I did the same thing I

56:25

did before, but I did it differently, right?

56:27

So I went to China and Taiwan,

56:30

and I met with 10 different

56:32

manufacturers, narrowed it down

56:35

to three. I asked the three to make

56:37

the exact same thing and waited.

56:39

It was the exact same process I did earlier,

56:42

but the difference was we were a bigger

56:44

company. We now had

56:47

a bank account. We now could

56:49

come and say, all right, we need to order a few

56:51

thousand bikes. We now have three

56:53

models, not one. We

56:57

actually had a website and an email address

57:00

and articles that say that

57:02

our bikes are good. And so we

57:04

were able to go to a different tier

57:07

of manufacturing and found

57:10

three great factories that

57:12

could all do the job, and wound

57:15

up settling with one, I think, around 2016, 2017.

57:20

So as you were sort

57:22

of growing year over year,

57:25

were you able to reach profitability

57:27

within a few years, or

57:30

not quite yet? Yeah, in

57:32

year three, I started to take

57:35

home a salary and started to realize that we

57:37

had a real company. We had a handful of

57:39

employees at that time, and I could

57:41

take vacation, both financially and physically. And

57:48

in terms of growing the business,

57:53

did you ever, in those

57:56

first few years, did you ever think about going out and raising

57:58

money?

57:59

Did you?

58:01

I didn't in those first few years because I

58:03

didn't

58:04

see yet how it

58:06

could help us. Right. You look

58:09

at a business and you say, well, if we had more money, we could grow

58:11

faster, right? But

58:13

did we want to? Did we want to grow

58:15

that fast? Yeah. And we were getting

58:18

approached by VC and PE firms rather

58:20

consistently. And a lot of the people that run

58:23

those companies ride bikes

58:25

and they were hearing about us and they were reaching out.

58:28

And the timing just didn't feel right. We

58:30

didn't have enough staff to even think

58:32

that through. We just wanted to keep growing

58:35

slowly and happily. And

58:37

slowly is probably the wrong word. We were growing

58:40

at 50 to 100 percent year over year. And

58:42

when you're that small, you should be,

58:45

right? You can't grow at 10 percent

58:48

when you're a brand new company or something's wrong.

58:51

So we were growing substantially, but

58:54

we didn't feel the need to bring in outside money yet.

58:57

And your price point was basically at that

58:59

high end, the priority rate was

59:01

under $1,000, but you also

59:03

had like $400 bikes. That's

59:06

right. We launched the Beach Cruiser

59:08

at that point too, which was really successful

59:11

for us. That was a huge seller. So probably

59:13

by year three or four, you were

59:15

probably doing about at least $5 million in annual

59:20

revenue. I don't know if it was five. I

59:22

would say it was a little south of that, but it was a couple

59:24

million dollars. And we were cash flow positive.

59:27

Not by much, but we were cash flow

59:30

positive every year. And

59:32

I love the organic nature of growing

59:34

the company. And I didn't feel any

59:38

need at that point to

59:40

put gas on the fire. Yeah. All

59:44

right. So 2020 hits. And

59:47

what happened right when the pandemic hit? What

59:49

happened to your business? Yeah. So in the

59:52

beginning, our business

59:53

fell apart. Nobody

59:55

was thinking about buying a bike. When

59:58

COVID started, everybody was thinking about...

1:00:00

buying eggs, buying milk,

1:00:03

and what was it? Lysol wipes, right?

1:00:06

And it was really hard. Our employees

1:00:08

didn't want to come to work. Nobody

1:00:10

was emailing in asking about bikes.

1:00:13

Certainly they weren't coming to our showroom in

1:00:15

Manhattan to look at bikes. It

1:00:19

was really scary. I mean, you

1:00:21

went from shipping bikes

1:00:25

every day, probably a hundred or so,

1:00:27

to none.

1:00:29

None. I mean, there would be a

1:00:31

trickle, but it was nothing that could

1:00:34

keep us in business. How long did that last?

1:00:36

Probably the better part of three months. And

1:00:39

all of a sudden, everything

1:00:41

started to sell. And the emails,

1:00:44

you couldn't stop them from coming in. The

1:00:46

media was saying, you know, you

1:00:49

can't go to the office, but you surely can

1:00:51

ride the bikes outside with your family. And

1:00:54

people were doing it. And, you know,

1:00:57

when the media started to send that message,

1:00:59

it wasn't just us. Every

1:01:01

single bike company had no inventory.

1:01:04

We sold out of everything quickly. You

1:01:07

sold out, right, because there were no shipments coming in

1:01:09

either for a while. Our factories were shut down?

1:01:13

Your factories were shut down. And so

1:01:16

your website was sold out, sold out, sold out. Everything.

1:01:19

Every single model. Wow.

1:01:20

And our warehouse,

1:01:23

at the time we had about a 50,000 square

1:01:25

foot warehouse,

1:01:27

it was empty.

1:01:30

So 2020 turned out to be a good

1:01:33

and bad year, a good year in the sense that your

1:01:35

orders were way up, but bad,

1:01:37

because you couldn't actually deliver them. You couldn't fulfill those

1:01:40

orders quickly. That's right.

1:01:42

And when did it become, when did the supply

1:01:44

chain issues start to work themselves out? By 2022?

1:01:47

The last half of 2022. Wow.

1:01:50

It took that long. We're right around a year.

1:01:53

And even, you know, I'll say that,

1:01:55

not on high-end components. So about

1:01:57

a year ago, we started to get basic.

1:02:00

inner tubes and tires and things like that.

1:02:02

But the higher end gearing system

1:02:04

that we're using on our higher

1:02:07

end bikes, some of them we

1:02:09

still are six months out.

1:02:10

Wow.

1:02:11

In meantime, you

1:02:13

are producing different

1:02:16

models, right? I mean, this is part

1:02:18

of your whole approach.

1:02:20

You've got like what, 20, 25 different models? Yeah,

1:02:24

we've got about 25 now. From kids

1:02:26

bikes to commuter bikes, to

1:02:28

adventure bikes, to gravel bikes. And

1:02:31

now we're working with cargo bikes as well.

1:02:33

By the way, I should mention, during

1:02:36

COVID, you actually did take on

1:02:39

some outside investment from a private

1:02:41

equity group. That's right. And

1:02:43

you were probably able to take a little bit of money

1:02:46

off the table after, presumably

1:02:48

putting in lots of years into

1:02:50

the business. But I also wanna ask you about

1:02:52

this

1:02:53

year, because it's

1:02:56

been a challenging year for a

1:02:58

lot of consumer brands, consumer products.

1:03:02

I mean, COVID was just, it was like a shot of steroids

1:03:04

for probably every bike company.

1:03:07

Yeah. It's no secret there's been

1:03:09

a significant slowdown in bike

1:03:12

sales in 2023. And even

1:03:14

some bike companies, some well known ones, I think like VanMoof,

1:03:16

I think, have gone out of business. Yeah.

1:03:20

The, everything we read

1:03:22

with industry data says that most

1:03:24

bike companies are down 30 to 60%. Wow.

1:03:28

And at the same time, a lot of these

1:03:30

companies, and there were a lot of new companies that started.

1:03:33

They invested some money, they bought a lot

1:03:35

of inventory. And now they're selling it really

1:03:38

cheap, trying to turn that inventory into cash

1:03:40

as quick as they can. And so there's a lot

1:03:42

of sales going on, because

1:03:44

people need to move their inventory.

1:03:47

And so it's just a, it's a much harder

1:03:50

time to sell a bike than it's been

1:03:52

in our nine years, and

1:03:55

this will be our first year that we don't grow. And,

1:03:59

you know, we're not. doing what we hope

1:04:01

to do this year, but I think not losing

1:04:03

right now is winning. And

1:04:06

we're doing a good job of not losing.

1:04:08

And you know it means while our

1:04:11

competitors, some of them are shutting down locations,

1:04:13

some of them are laying off staff, we're

1:04:16

not doing that. But

1:04:18

we also know that the industry will rebound.

1:04:22

We know we got to keep our head down and

1:04:25

keep working at it.

1:04:26

You also had

1:04:28

another challenge

1:04:30

here, a challenge and understatement. You

1:04:33

had an accident, a pretty bad

1:04:36

bike accident, which is of course

1:04:39

you know it's unfortunate

1:04:41

for somebody who's been in this industry and devoted

1:04:44

his life to cycling, but

1:04:46

you got you adored

1:04:48

in New York City, right? Yeah,

1:04:51

on January 11th I was riding

1:04:55

to my kids school to volunteer

1:04:57

at an event and I got doored.

1:05:00

Somebody opened their door without

1:05:02

looking, which laid

1:05:05

me on the street. And you know what

1:05:07

followed was not good. So there

1:05:09

was a couple of incidents that followed

1:05:11

that, but you know I

1:05:13

wound up in the hospital for four weeks and

1:05:16

over a week and I see you.

1:05:18

Wow. So you spent four weeks

1:05:20

in hospital and

1:05:23

obviously had to step away from the business for some

1:05:26

time this year.

1:05:27

But didn't miss me in the business and they

1:05:30

were continuing to do everything they could to

1:05:33

run the business responsibly, especially in

1:05:35

a bad time. And it showed

1:05:37

me today how fortunate

1:05:39

I am to have an amazing partner

1:05:42

at work and family

1:05:44

at home and great people behind

1:05:47

me every step of the way. Yeah.

1:05:49

Last night I was at an

1:05:52

event in San Francisco and I was in an elevator.

1:05:55

Somebody recognized me in the elevator and said

1:05:57

how much she loves this question I'm about to ask.

1:05:59

you and it is polarizing because

1:06:02

about 20% of our listeners hate it but it's

1:06:04

gonna come anyway which is when you

1:06:06

think about your journey and and all

1:06:08

the things that have gone into it where you are now almost 10

1:06:11

years in you've got a great brand

1:06:13

that people know you've got 20 plus

1:06:15

different models price points from 300

1:06:18

all the way to 5,000 so there's something of everybody

1:06:20

how much of where

1:06:22

you are today do you think has to do with with the

1:06:25

work you put in and the time and

1:06:27

the planning and the project management how much do you

1:06:29

think has to do with just getting lucky I think

1:06:33

it's all hard work we

1:06:36

have been in the right place at the right time but

1:06:39

we wouldn't have been in the right place at the right time

1:06:43

if we didn't work our butts off and

1:06:46

you know what I learned in doing business

1:06:48

systems and I think I probably

1:06:51

was involved in implementing close to a hundred

1:06:54

what I learned is that some

1:06:56

of the most successful businesses were just

1:06:58

the ones that worked really hard we

1:07:01

work really hard at everything we do and

1:07:03

so we have got lucky sometimes

1:07:06

but but I think that's because we were prepared

1:07:09

for the situation and always

1:07:11

being prepared for the situation that means

1:07:14

that when those opportunities come and when luck

1:07:16

hits us that we're able to capitalize on it

1:07:19

that's Dave Wiener founder and CEO

1:07:22

of priority bicycles

1:07:24

by the way is there a world where we bring

1:07:26

back the playing card

1:07:27

in the in the spokes like why isn't that back

1:07:30

like doing that anymore

1:07:33

you know I have actually thought about that before

1:07:36

and I have taped the

1:07:38

card to my kids

1:07:40

bikes and they find it amazing

1:07:43

they like it oh yeah they love it yeah

1:07:45

but then five of the people in the street find them annoying

1:07:47

yeah it's

1:07:49

sad maybe that's the thing maybe maybe

1:07:51

we should just like maybe it's a business

1:07:54

maybe somebody listening just just make that business a

1:07:56

playing card that you put in the spokes of a bike

1:07:58

I think I think we need a

1:08:01

Guy Ross, Dave Wiener playing card that'll

1:08:03

go out with a series of decks. We'll have to think about

1:08:05

that. That's a very possible. I love it. episode

1:08:10

of the show.

1:08:11

And as always, it's free. I'm

1:08:14

your host, Michael O'Brien. We'll see you next week. Bye.

1:08:16

This is a production of the J.M. Kramer Foundation. This

1:08:21

episode was produced by Josh Lash with

1:08:23

music composed by Ramtina Rablui.

1:08:26

It was edited by Neva Grant with research

1:08:28

help from Carla Estevez. Our production

1:08:30

staff also includes JC Howard,

1:08:32

Casey Herman, Kerry Thompson, Alex

1:08:35

Chung, John Isabella, Chris Messini,

1:08:37

Sam Paulson, and Malia Agudelo. Our

1:08:40

audio engineers were

1:08:41

Gilly Moon and Robert Rodriguez. I'm

1:08:43

Guy Ross, and you've been listening to How I

1:08:45

Built This.

1:09:04

If you like How I Built This, you can listen early

1:09:07

and ad-free right now by

1:09:09

joining Wondery Plus in the Wondery app

1:09:11

or on Apple Podcasts. Prime members

1:09:13

can listen ad-free on Amazon Music.

1:09:16

Before you go, tell us about yourself by filling

1:09:18

out a short survey at wondery.com

1:09:21

slash survey. Hey, while

1:09:24

we're taking a little break here, I wanted to tell you about

1:09:26

an episode of How I Built This we released a couple

1:09:28

of weeks ago about the company BioFire.

1:09:30

After looking into the data, engineer and

1:09:33

founder Kai Klopfer discovered that two-thirds

1:09:36

of gun deaths in America

1:09:37

are due to accidents and unauthorized

1:09:40

use by children and teens. Now,

1:09:42

his company BioFire has created the world's

1:09:44

first handgun with an electronic firing

1:09:47

system that unlocks instantaneously

1:09:49

upon fingerprint or facial verification,

1:09:52

and then, most importantly, relocks

1:09:55

once the user lets go of it. The idea

1:09:57

is by no means new, so in this episode,

1:09:59

I spoke...

1:09:59

with Kai about what makes his technology

1:10:02

so groundbreaking and a little

1:10:04

bit about the evolving US gun market. You

1:10:06

can find this episode by following how I built this

1:10:09

in your podcast app and scrolling back

1:10:11

a little bit to the episode of Biometric

1:10:13

Smart Gun with Kai Klopfer of Biofire.