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KAYVON TEHRANIAN: Today we have Mission Bicycle.
To my left is Zack Rosen, the founder.
And to my right is Jefferson McCarley, the general manager
of the store.
It's up on Valenica Street in the Mission District.
So I'm a little bit biased.
I actually do own a Mission Bicycle, just as a disclaimer.
It's sitting right over there.
And it's just been an awesome experience.
I built it myself.
Or not really just by myself, with a little bit of
assistance.
But chose every piece of it.
It was such an awesome, awesome experience that I
decided that I wanted to share it kind of with Googlers.
And also, I think we kind of care a lot about urban
transportation.
We obviously care about bikes.
We have thousands of them littered all over our campus.
So I thought these guys would be e great kind of pair to
come here to talk about a number of things.
Because Zack actually, is also in the software business.
So I think, if I look at what we're going to be talking
about today, it'll span a pretty wide gamut.
It will go from urban environments, the history of
the bicycle technology, to even perhaps agile software
development, and other geeky topics.
And also, we want to make this as interactive as possible.
If you have a question-- we're going to have question and
answers at the end.
But if you have a question that's burning, kind of given
what Jefferson just says, like jump in, raise your hand, I'll
call on you.
And we can make this as engaging as you want.
So to kick it off, Jefferson, I want to ask you, what makes
a Mission Bicycle unique?
JEFFERSON MCCARLEY: I'd like to introduce
this guy right here.
This is a Mission bicycle.
This is sort of what we call the Valencia.
This is our first frame design right here.
There is a lot of things that makes this unique.
Specifically, let's start with the frame.
So the Valencia is a frame design that we commissioned, a
local San Francisco frame builder, [INAUDIBLE],
brilliant guy, worked with us to develop this design.
It's a track geometry.
So if you think of a velodrome, like the race
course, a big, oval race course for bicycles, that's
the birthplace of this frame design.
Around 1999, 2000--
it's hotly debated--
someone discovered that if you take a track bike out of the
velodrome and you put it in the city, it makes a really
amazing urban bike.
It's fast.
It corners so smoothly.
It's really light.
So this guy is 19 pounds--
1 finger.
I have a strong finger.
It's super easy to take care of.
It's virtually maintenance free.
And it's elegant.
It's simple.
It's clean.
It's beautiful.
So Zach and Matt saw that there were these weird bikes
appearing on the scene, but you couldn't actually buy one
in a store.
You had to kind of have the know-how to find a track
frame, to put them together yourself, and so that's sort
of the birthplace of this bike.
Let me talk a little bit more specifically about the bike.
The tubing is 4130 chromoly steel.
It's got a high strength to weight ratio.
So think aircraft tubing.
It's not a straight gauge tube, so the tube in the
middle is thinner than it is at the ends.
That's so that we've got the strength at the welds where we
need it, but we don't have all the extra weight of all this
extra metal in the middle.
It makes it a lot lighter.
The steel is very forgiving.
A lot of people think, oh, well, wait.
Aluminum is a much lighter metal.
Why don't you use aluminum?
Well, aluminum is a lighter metal, but it's
a much softer metal.
So you have to use a lot more of it to give it the strength
that you have with steel.
That's why you see the tubes are big and
fat on aluminum bikes.
Aluminum is also a very rigid material, so this is very
forgiving and very comfortable on the road.
The customer gets to pick every component on the bike.
We start at $750, with sort of base components.
They're all good quality.
And then we move up from there.
Usually have two levels of quality above
good to choose from.
You get to choose your handlebar style, your saddle,
the wheel colors.
As you can see, we actually build each wheel by hand.
Dan is over there lacing spokes into a wheel right now.
Every bike is built completely by hand.
James is building a bike right here.
They're built on Valencia in San Francisco part by part.
So let me move forward from the single speed, our original
bike, to the Sutro.
So this is a single speed right here.
It's one of the reasons why it's so light.
And people are often shocked and surprised that there are
so many single speed bikes in San Francisco.
We have a lot of tourists that come into the shop.
We're sort of a tourist destination for bike geeks all
over the world.
And they're like, how is it that San Francisco can be
known as the hilliest city in the world and also the single
speed capital of the world?
And Google Maps is part of the answer.
We actually look at the terrain and we are thoughtful
about how we plan our routes.
We don't go straight up one hill and down the other side.
We're very smart about getting around.
So the way this is geared is actually quite easy to get up
a nice incline.
Now, like Russian Hill is going to be tough on any bike.
But on a single speed, it's actually not too hard to get
from point A to point B in the city.
We do have a lot of customers though, that do live at the
top of Russian Hill, or at the top of a hill, or a hill is a
part of their commute and they need gears.
So we try to be as accommodating as possible, we
always have been.
Try to build a truly custom bike for each customer.
So we started putting
internally-geared hubs on our frames.
Internally-geared hubs are amazing.
They give you the versatility of a full range of gears that
you would find on any road bike or hybrid that was 21,
27, 29 speeds.
But it's all done inside the hub.
So instead of having an external derailleur sprockets
chain ring, front derailleur, back derailleur, two shifters,
two cables, like this whole mess of mechanics that easily
goes out of alignment, goes out of
adjustment, needs a lot of--
I'm seeing some smiles.
Needs a lot of maintenance.
We have this solution that is virtually maintenance free.
The thing that we didn't--
there's just one thing we don't like about the
internally-geared hub, and that's that it made our
beautiful bikes a little bit more cluttered looking.
So this bike, for example.
you can see it has cable guides on it.
When it comes to single speed, a lot of our customers ask us
to just put one front brake on.
It's 80% of your stopping power.
For a lot of people, that's enough.
Of course, 100% is safer than 80%.
But some people like the fact that it makes your bike a
little bit lighter.
It makes it a little bit cheaper.
But really, it's vanity.
Having just one front brake means that we don't have to
add these cable guides.
There's no cable that runs back here.
It's just a cleaner look.
So what we found is that with people who want eight speeds,
they also want a rear brake, generally.
So now we have two cable guides, one for the shifter
that goes down here and down here.
And now we have added this one.
And our beautiful bikes are still beautiful, but they're
not quite as elegant and clean as they once were.
So for the last year, we've been working on a new design
that solves that problem.
And let me show you what that is.
It's called the Sutro.
And we named it the Sutro because you climb up to Sutro
Tower on this bike.
So this is a fully geared bike, but look how elegant.
Can I get an ooh or an ahh?
AUDIENCE: Ooh.
AUDIENCE: Ahh.
AUDIENCE: It's so pretty.
ZACHARY ROSEN: This is Jefferson's boyfriend's bike.
JEFFERSON MCCARLEY: It is.
It is.
Yeah.
He let me borrow it for you guys.
KAYVON TEHRANIAN: It's interesting to compare them
right next to each other.
JEFFERSON MCCARLEY: So you see, no cable guides.
Not even for the rear brake.
This has got a rear brake on it.
It has gears.
It's a fully geared bike.
But incredibly, incredibly simple and beautiful.
OK, so I'll show you this side, so you
can see how it works.
Cable's running right through the frame.
Now, going back to the geometry, track geometry, one
of the things that we like about it is how it feels.
It puts us in a nice upright riding position without being
like Dutch bike style.
I've seen a lot of Google bikes on this campus and they
don't look like the most efficient bikes necessarily.
So there is sort of a rule like, the lower down you are,
usually you've got drop handlebars.
You're aerodynamic.
It's a very efficient use of your leg muscles.
On the other end of the scale, think Amsterdam.
Very short distances, very slow.
But very comfortable.
So we're looking for that sweet spot between comfort and
efficiency.
And track geometry gives us that.
So we didn't invent track geometry.
We didn't invent the internally-geared hub.
We didn't invent internally-routed cables.
But nobody's ever done this in this combination before.
We're lucky because we don't have the constraints of an
old-fashioned bike industry.
We get to think.
We get to start from scratch.
And we get to think, well, we ride in the city.
What kind of bike would we like to ride?
KAYVON TEHRANIAN: Can you explain a little bit more what
those constraints were?
When you say, you don't have to operate in those
constraints, kind of explain that a little bit more.
JEFFERSON MCCARLEY: Yeah, sure.
On a traditional bike, you go into a bike shop and you say,
I'm looking for a city bike.
A hybrid.
They're going to show you a bunch of bikes off the shelf.
They're going to have a lot of features that are supposed to
help sell the bike.
And ooh, this one has two water bottle holders.
That sounds great.
Although, my ride from home to the movies is only 20 minutes
and I don't really necessarily need to hydrate for a
20-minute ride.
And oh, how convenient, there's a quick release here.
It makes it so fast and easy to adjust my saddle height,
which is something I'll do once when I buy the bike.
And then, my legs aren't going to grow or shrink regularly.
So I don't really need to make that adjustment ever again.
What the quick release does here is it does make it super
easy for someone to steal my saddle.
Not a great feature for a city bike.
Same thing with the front hub and the rear hub.
No quick releases on these wheels.
So they're just that much harder to
steal in an urban setting.
What about the kickstand?
I need a kickstand?
Well, what we did was we sort of exploded the bike.
We took traditional bike with fenders, and kickstand, and
water bottle cages, and quick releases.
We took everything apart and we put back what was only
absolutely necessary for urban commuting.
And what we have as a result is something that's
lightweight, beautiful, simple, practical.
Our philosophy really here is form and function.
KAYVON TEHRANIAN: So what happens when a
customer walks in?
Because I can imagine the bike geek that maybe even is
traveling out of state comes and they're at home.
They know the derailleur.
They can talk the language.
What is your customer base look like?
And how do you guys kind of interact with people that are
coming from that experience where they're like, I need a
kickstand, two water bottles, every possible gear that you
can give me?
How do they feel in the Mission Bicycle shop, and how
do you guys approach that problem?
JEFFERSON MCCARLEY: Well, so I don't try to tell people what
the best solution is for them.
What we try to do is we just give people information.
KAYVON TEHRANIAN: Kind of like what you just did now, like a
pitch almost?
JEFFERSON MCCARLEY: Yeah, exactly.
Someone comes in and they say, well, I want to sit upright.
I want to be up like this.
This is the most comfortable.
I was at Burning Man and my Burning Man bike, I sat
upright like this.
It has a big, cushy wide saddle, and
that's what I want.
And the answer is, yes, OK.
That is very comfortable.
I can identify with that.
And so here are the pros and cons to that.
So just giving people information, like yes, it's
comfortable.
But after a few blocks, it starts to get frustrating when
everybody's passing you on the left.
KAYVON TEHRANIAN: Probably.
JEFFERSON MCCARLEY: Here in the US, we ride bikes
differently than in Europe.
And Amsterdam--
and this is something we can talk a little
bit more about later.
But Amsterdam, everybody rides a bike.
And it's a beautiful sight.
It's a very specific kind of bike.
They're all the same bike.
There's no diversity.
They're super comfortable, but Amsterdam's a very small town.
And they ride very slowly.
And they're not in a big hurry.
Americans, we get up late.
And we're late for work.
And our goal is we've got to make that time up on the road.
And the movie starts in 15 minutes.
And I'm hungry.
And I just want to get home quickly.
So we don't necessarily want to have to always have a very
slow ride home.
It's nice for us to be able to coast if we want to.
But if we need to book it, then we can totally book it.
KAYVON TEHRANIAN: Yeah.
So I mean kind of given that shop experience, so now tell
me about Mission Bicycle, the company.
What drove you to start this?
What is the company, not just as a bicycle, but as an
institution, or as a group of kind of
people working on something?
ZACHARY ROSEN: Yeah, I mean, I can run you guys through some
of the story, but I want to build a little on what
Jefferson said.
KAYVON TEHRANIAN: Sure, go for it.
ZACHARY ROSEN: So the story was honestly, I had no bike
industry experience when I got into Mission Bikes.
This has been a hobby project that's just gone completely
out of control in a really wonderful way.
And it was purely, like the beginning of it was just I
wanted a great city bike.
I bought that crappy hybrid bike.
It got me around, but it wasn't fun.
And I ended up having a friend help me design a bike.
Essentially, a track bike.
And I went from biking being this thing I did to get around
the city because it was better than the bus system, to
falling in love with biking.
It was a really amazing experience.
Because in a literal way, it changed my life, like the way
I got around the city became really enjoyable.
And it made me a happier person.
My quality of life, like went up a notch.
This conversation I had with my friend and business
partner, Matt Cheney, was basically, why are no bike
stores selling awesome city bikes?
Why do I have to go on Craigslist and get
one from some guy?
Or like, build one myself?
This is crazy.
And there was no good answer.
The answer was the industry just wasn't building great
city bikes.
No one had put together the bikes, or designed it with the
constraints that we had in mind.
They were designing with different constraints.
A hybrid bike is built for trail riding on the weekends.
It actually isn't built for the city.
So we started from scratch.
We've been iterating on this.
I was talking to Kayvon about this the other day.
One thing that kind of blows my mind is the bike is about
100 plus years old as a product.
JEFFERSON MCCARLEY: As a technology.
ZACHARY ROSEN: As a technology.
And it's a really simple technology.
Like there's, how many parts on a bike--
20?
MALE SPEAKER: Maybe a little more.
ZACHARY ROSEN: 25?
Not many parts.
JEFFERSON MCCARLEY: And we're literally building one in the
duration of this talk.
So it's not like it takes years.
ZACHARY ROSEN: Right.
So we're 20 some parts, 100 years of evolution.
Many generations of bike designs, and we're still
making it better, which is awesome.
The specific constraints we had in mind were just our
experience being--
how many people here ride bikes in San Francisco?
Cool.
JEFFERSON MCCARLEY: How many ride bikes in general?
ZACHARY ROSEN: Right.
There we go.
And our bike is definitely not designed for everyone
in every use case.
That's part of the point.
We designed it for what we had in mind as an amazing city
bike riding experience.
So no maintenance.
Like you can't get up in the morning, be like, oh, my
bike's broken.
This suck.
You have to be able to get on it every day, ride it hard for
an hour every day, and rely that'll always work.
And not have to futz with it.
That was a first big constraint.
And the old road bike, or a bike with the derailleur on it
that you can't really generally do that.
They're finicky.
The second constraint was it needed to be really
comfortable for city riding, which is the geometry and
everything.
And another constraint was we thought it needed
to be 20 or 25 pounds.
That was a sweet spot.
Because it turns out that bike theft is a real problem.
That's why people don't leave their bikes outside like they
do in Amsterdam because it will get stolen.
So people bring their bike inside their house.
They put it on the landing.
They put in their office place.
And so part of our design constraint is, how do you make
a bike really easy to throw over your shoulder and go up a
flight of stairs?
Which I don't think many in the bike industry think about.
They don't have that in mind.
So that's where we ended up with this kind of-- it's been
an evolutionary process designing the bike, but that's
been the ethos.
And just like you design software with design
constraints in mind, or you design an application to be
experienced with design constraints in mind.
We're doing the same thing on a bicycle.
And that's been our take.
KAYVON TEHRANIAN: So how has your background--
when you kind of had that increase in quality of life,
you were basically in the software world.
And you had no experience in the bicycle world, but you
knew that this was something that you were really
passionate about.
Like, what did you learn or what did you kind of take with
you from that software experience that kind of just
channeled into making a very successful bicycle company?
Which is a very physical product, very different.
ZACHARY ROSEN: It's definitely a different experience walking
into Mission Bikes than it is walking into a tech company.
There's no doubt about it.
Although guys have an interesting blend here, which
is awesome.
So there's definitely things that there is just--
part of things just don't map at all, for sure.
But a surprisingly large amount of things in what I did
for my job at Mission Bikes and then at the software
companies I work at, is exactly the same.
One of the basic things that's the same is, what are we
trying to do for our customers?
We're trying to provide the best experience for them.
From the moment they go to our website and the moment they
walk into our store, the moment they design a bike, or
buy a bike, or have a bike and ride it every day, we want
that entire experience front to back to be amazing.
Same thing you do when you design a phone, or you design
a Gmail or a web app.
That's at the center of the company.
And that exactly maps to the software world.
And organizationally, I think-- and we were geeking
out about this.
Me and maybe Kayvon are the only people who find this
really awesome and interesting.
But how many people know about just-in-time manufacturing or
lean manufacturing?
A little bit?
Cool.
KAYVON TEHRANIAN: That's a good percentage.
ZACHARY ROSEN: Yeah, that's really high.
So there's--
and now I'm going to go into the geek world.
So this is a series of essentially, as I understand
it, manufacturing process improvements spearheaded or
credited to, in large part to Toyota as a company.
There's a lot of ideas in this.
It's really a philosophy about how you do
manufacturing very, very well.
But one of the principal ideas is you try reduce as much a
waste as you can in a manufacturing process.
And one of the ways they think about how to do that is--
one of the things you will notice about a Toyota factory
is there's no inventory.
So it turns out American car companies for 50 years were
just buying a bunch of parts, sticking them in storage, and
then they go grab a part when they needed it
and go build a car.
And a lot of that inventory would just sit around and rot.
If you look at Toyota factories, their ideal is
there is no inventory.
The truck pulls up to the factory the moment they need
that part and instantly goes--
turns into a car, drives off the lot.
There's no inventory at all.
To build a car factory that delivers millions of cars a
year with that level of precision--
I mean, that's an art.
They've been working on that for, literally, 60 years.
And that's why--
KAYVON TEHRANIAN: Yeah, decades.
ZACHARY ROSEN: --they are who they are.
Decades.
So one of the big things that's different about our
company is we don't carry bike inventory.
Sometimes the bike is built to pick up.
But the bicycle actually--
when the customer walks in the store, that bike actually is
in their mind.
They're thinking about that bike.
Then they get it into our system.
And then, we order the parts and it gets
assembled into a bike.
And then they ride it out of the shop.
So here's the punchline of the story.
What is agile in scrum?
It's lean manufacturing applied to software
engineering.
Almost all of the inspiration and a lot of the theory and
thinking in agile in scrum came directly from the lean
manufacturing world.
And so all the things organizationally we're trying
to do in software development to make engineering and
product design a really efficient process that's more
of a kind of an art and a dance is the same exact thing
we try to think about in how we're building bikes.
KAYVON TEHRANIAN: Cool.
And so with any software company, I feel like the most
successful ones have a mission to them.
Obviously, like Google, we organize the world's
information and make it universally
accessible and useful.
So what would you describe--
do you guys want to be the Toyota of bicycles?
I mean, what is the larger mission that you guys think
you're tackling with Mission Bicycle?
And I actually would love to get kind of both your
reactions to that, see how much they line up.
Because I feel you're much more in the visionary stage,
or in the role, right?
Much more of the higher level.
You're in there every day, seeing the customers come in
and engaging with them.
Just kind of your two perspectives on that question.
ZACHARY ROSEN: That's a really good question.
My take on this is--
I mean, at the root of it, we're trying to improve
people's quality of life living in
cities through biking.
That's our vehicle to do that.
And the experience that we all have who work at the company
riding bikes every day, and experience of our friends who
ride bikes every day in the cities, it's a better life
than the alternatives.
It's actually a remarkable, interesting story.
But basically, biking has almost doubled in most major
American cities in the last four or five years.
And no one really, I believe, knows exactly why and how.
A lot of the city planners are trying to kind of claim credit
for a lot of that.
In some cases, you can tie it back to that.
But it actually started before all this new investment in
bike infrastructure.
It kind of happened as a grassroots thing.
But essentially, in cities, like you get to a density.
You're not going to build more roads.
You can't fit cars, or enough cars into cities.
And European cities are kind of maybe 20, 30 years ahead of
us in how they think about this.
But essentially, we're getting into urban planning nerding.
KAYVON TEHRANIAN: It's allowed.
ZACHARY ROSEN: We need to have a vision for what we want a
city experience to be.
And a piece of that vision has to be biking, I think.
Not the entire thing, but a good chunk of it.
And we want to be a part of that.
It's not just about making bikes and
selling bikes to customers.
For us it's about how we actually drive that forward.
KAYVON TEHRANIAN: So that would be the mission, right?
And you execute on the mission by producing these bicycles?
ZACHARY ROSEN: Yeah, exactly.
So in a very real way we're building bikes to enable
people to have an amazing experience biking in cities.
JEFFERSON MCCARLEY: Yeah.
Our mission is aligned.
But being in the trenches--
KAYVON TEHRANIAN: It was a test.
It was a test to make share.
Execution and theoretical align.
JEFFERSON MCCARLEY: But talking more from the
trenches, like the day-to-day store experience, one of my
missions as general manager is to make sure that the
experience is accessible.
That it feels accessible, and friendly, and warm.
And we speak in layman's terms.
Because I don't know if anybody's ever had the
experience of walking into a bike shop.
And there's a level of intimidation.
There's often a level of attitude that
comes from the staff.
They are sort of dusty, dirty places that look more hardware
stores than a place that you want to go and
spend $1,000 or more.
We actually see it.
There's like an invisible barrier at
the door of our shop.
And there's something about crossing into the store that's
difficult and intimidating.
A lot of us don't know a lot about bikes.
We don't know what a headset is.
We don't know what the difference between
a Kevlar tire is.
We don't know about chromoly tubing.
So we feel a little dumb.
We feel a little intimidated.
And the sometimes attitude that we get from bike store
employees just makes that so much worse.
So what we try to do is create an environment that's
welcoming, and warm, and open, and friendly.
And we just hold people's hands
through the entire process.
AUDIENCE: Can you talk about some of the things that
[INAUDIBLE] to do that?
KAYVON TEHRANIAN: Can you repeat the question?
JEFFERSON MCCARLEY: So he asked, specifically, what are
some of the things that we do to do that?
One is we welcome everybody with a hello that
walks in the store.
KAYVON TEHRANIAN: Pretty simple, right?
JEFFERSON MCCARLEY: Pretty simple, yep.
KAYVON TEHRANIAN: Crazy.
JEFFERSON MCCARLEY: And then we back off a little bit and
we let people--
after doing this for enough years, there's sort of a
science to it.
There's a psychology about the customer has to come in and
sort of get acclimated.
And just sort of soak in the store, and the energy, and
kind of look and listen.
And is it safe to ask a question?
What is the vibe of this place?
So that's one of things we do is we say hello and then we
leave them alone.
We look for eye contacts.
If somebody makes eye contact with us, then we're there to
answer questions.
We try to approach people and talk non-bike stuff if we can
to let them know that we're human beings and we can have
the skill set to talk non-bike stuff.
It builds a sense of trust and rapport that makes--
KAYVON TEHRANIAN: Software engineers have the same
problem sometimes.
JEFFERSON MCCARLEY: Yeah.
And then we do our best to get people actually on a bike.
Because I can talk about geometry.
And I could talk about the position and efficiency, and
the way something feels and handles.
But until you get on the bike itself, that is what really
sells a bike.
I always recommend test rides.
We have a map that we give everybody in the store.
And this is kind of unconventional.
It's a map of all the local bike shops in the
neighborhood.
There's like six.
And we encourage people to test ride our competitors'
bikes, and then come back to us if they think that our bike
is right for them.
We don't work on commission, too.
KAYVON TEHRANIAN: I saw you had a question as well.
AUDIENCE: Yes.
What about sources?
There's not that much manufacturing happening in
America sourcing.
So what are you seeing in sourcing your parts?
Is it America?
[INAUDIBLE].
ZACHARY ROSEN: Right.
So the question is on sourcing.
Where do we source the parts and how do we think about
sourcing parts, particularly around American manufacturing.
So our job is to buy the best bike parts period for every
part that we use.
And so we bought-- if you look at one of our bikes over
there, the rims from Velocity based in Australia, although
moving to Florida.
That's a Brooks saddle.
That came from England.
Thompson stems and seat posts, we love them.
Made in Georgia by a jet engine manufacturer whose
employees love biking and use their tools.
And we've just kind of gone down the line of every part.
And we're trying to buy the best parts that we can find.
So some of them are made in the USA.
Some of them are made in Taiwan, and England,
all over the place.
it's a very big question.
The way we think about it is purely how we
build the best bicycle.
And how we deliver that to a customer.
And we love the parts manufacturers we work with.
The folks that we work with, like Brooks Saddle company,
like has been obsessing for literally a hundred plus years
on how to design an amazing leather saddle.
And they have that in the bones of the company.
And it makes the saddle tremendous.
So that's totally what we look for.
There still are specialty bike manufacturing parts companies
in the states, like Chris King and Thompson.
So Chris King is up in the Pacific Northwest--
Portland.
MALE SPEAKER: Seattle.
ZACHARY ROSEN: Seatlle.
And Thompson is in Georgia.
And what you find are companies that are very
high-end, very precision focused.
They build the best part that they do in their industry.
They care the most about it.
And it's not our job to buy the cheapest stuff.
People don't come into Mission Bikes to buy a cheap bike.
They come in to buy a bike that lasts them a lifetime.
And so that's what we deliver, and it costs more.
JEFFERSON MCCARLEY: Right.
It costs more upfront.
ZACHARY ROSEN: Sure.
JEFFERSON MCCARLEY: It doesn't cost more in
the long run, possibly.
My last hybrid I had for several years.
And I had to take it into the shop for a tune-up
about once a year.
Tune-ups run about $100.
I have to call.
I have to make an appointment to drop my bike off.
Drop the bike off.
And then I have to come back another day to
pick the bike up.
This needed replacing.
And this needed replacing.
And it was easy over $100 a year in maintenance.
Our bikes--
we've been selling bikes now for about five years.
And we don't see anything coming back.
I mean, it's really rare that we see any kind of maintenance
issues at all.
So if you add up $100 a year savings on maintenance, our
bike becomes pretty cheap after a couple years.
KAYVON TEHRANIAN: Yeah.
And it's one of those things that, for me, it's like with
comfort, you're going to use it more and get more
value out of it.
That's what you're actually buying it for.
So when you buy a bike that fits well, that does exactly
what you want it to do, I mean that's where the real value
is, irrespective of price tag.
Just to a certain extent.
JEFFERSON MCCARLEY: Absolutely.
What I've seen in this industry a lot-- and it's a
really sad thing to have to witness.
But a lot of people come in and they say, well, I'm
thinking about getting into cycling.
So what I want to do is not spent a bunch of money because
I don't know if I'm going to like it or not.
So I'm going to buy a cheap city bike for $400 to
see if I like it.
And if I like it, then I'll come back and I buy a nice
bike, which is a guarantee that you won't like it.
It's going to make noise.
It was probably not assembled correctly.
It's going to rattle.
It's not comfortable.
It's not fun.
And you've just wasted your $400.
ZACHARY ROSEN: Yeah, totally.
JEFFERSON MCCARLEY: Our goal is to not sell bikes, but to
sell bikes to people that are going to ride them.
When someone comes in and says, yeah, I'm probably going
to ride this bike a couple times a year on the bike path.
Then I give them a business card to our competitor.
That's probably not our bike.
That's the $400 bike.
What makes us happy is to know that our bikes are on
the road every day.
KAYVON TEHRANIAN: So I want to get kind of back to this
mission aspect of it.
Because I think it's interesting, right?
Because you guys obviously--
when you have a mission, there's a future.
And we're not in that future yet.
So kind of what is to you the future of the city?
How does a company like Mission Bicycle play in that,
and push it forward, and change it?
If that makes any sense.
ZACHARY ROSEN: Totally.
So there's definitely a big, grand vision behind this.
We're actually caught in the practicalities of this.
So the next bike we want to design--
this is my take on this.
We're still talking about this internally.
Some of the biggest unsolved problems in biking in the city
is theft and safety.
It's things like having to take your lights on and off
your bike every time because someone will just grab them.
Or dealing with rain and weather.
Bikes get stolen all the time in the city.
And so I would love it for Mission to play a big role in
solving these--
really solving these types of problems for our customers.
And they're some of the more practical things.
If you ask people, what are the biggest obstacles to
getting into biking in cities?
It's literally how you get from your home to your office
feeling safe and comfortable.
And how to deal with the fact that there's crime.
A lot of the bikes are not designed to make it hard for
people to steal things off the bikes.
Ours are.
We put a lot of effort to make these things really rugged.
So those are things that-- and I think that's not something
we can do only as a company.
That is something that the city has to really invest in.
And you're seeing that.
You're seeing bike path improvements.
You're seeing the police taking bike
crime a lot more seriously.
A lot of that is policy.
JEFFERSON MCCARLEY: One of the things that I think is really
cool about Mission Bicycle is that all we sell are urban
bike products.
There is no Spandex in our shop anywhere.
There are no water bottles for long distance rides.
We're just completely, 100% percent urban bike commuter.
So we have this passion.
And everybody in the staff has this passion that you can just
feel when you walk in the store
for urban bike commuting.
It's what we talk about all the time.
It's almost like we make efforts to make the bike--
make the city more bike friendly.
That's something a lot of shops aren't able to do.
KAYVON TEHRANIAN: I mean, I agree.
When I walk in, there's that feeling.
There's that sense to commuting.
Even talking with you guys, everyone has that vision.
It's awesome.
I kind of want to open up this question.
So perfect.
AUDIENCE: Got a follow-up question to your discussion
about practicality.
On my commuting bike, I have mud guards, fenders.
I have the rack.
I have mountain bikes.
I kind of need these things.
They kind of spoil the pristine [INAUDIBLE].
But some [INAUDIBLE]
I find necessary.
How do you balance that.
ZACHARY ROSEN: That's a really good question.
Jefferson gets this question more than I do.
Generally, our bikes--
the folks, when it rains, use detachable fenders.
And that's a recommended practice.
We have a couple bikes here with racks.
They're not huge racks, but they're elegant and they work.
And in general, what I would love to do is to find ways to
make these type of accoutrements really easy to
take off when you don't need them.
Part of it is to make these things 20 pounds, simple,
light, and useful every day.
But when you need to go grocery shopping or it's
raining outside, it's really easy to deal with that.
So we're trying to-- the ideal is we can design these things
with the best of both worlds.
KAYVON TEHRANIAN: Perfect example.
JEFFERSON MCCARLEY: So this is a very beautiful, elegant rear
fender made from bamboo by two brothers in Pittsburgh.
They tell me that they even travel by bike to get the
hardware, which is also made in Pittsburgh.
It's kind of with a varnish, a green varnish that's supposed
to last 27 years.
And it is removable.
So here in this part of the world, we have a rainy season.
And it's going to start pretty soon.
A couple of months from now--
December, November on the earliest.
And then it lasts through the spring.
So sometimes we put our fender on our bike for rainy season
and then we take it off for the rest of the year.
Because yeah, it's a little cluttered visually.
But also, it's a little extra weight that
we add to the bike.
And then, on the rear rack, we have found an amazing fender
made in Canada.
I'm sorry, a rear rack made in Canada.
It's on that baby blue bike right there.
One of the reasons why I think it's the best rack ever made
is because if you've ridden with [INAUDIBLE], you may know
of this thing called heel strike.
Where as you're peddling, your heel hits the bag-- your bag.
It's super annoying.
And this rack in particular, has sort of an arm that
extends it far enough back to alleviate that.
It's the Only rack I've ever seen to do that.
It does have a really nice, sleek profile.
So it's not great for putting stuff on top, but it's perfect
for putting bags on the side for big grocery trips.
ZACHARY ROSEN: Our ideal is form and function.
That's definitely what we try to design for.
Yep.
AUDIENCE: Curious about your thoughts on the scalability of
your model.
Are you thinking lateral scalability?
KAYVON TEHRANIAN: That's a very good Google question.
ZACHARY ROSEN: Yeah, it's--
KAYVON TEHRANIAN: Repeat it.
ZACHARY ROSEN: The question is around scalability for our
business model, the model for business.
We've been growing fairly quickly, especially for a bike
company since we started.
And it's a question we obviously wrestle with a lot
and we think about a lot as we look to grow as we have in the
past to the next three, four, five years.
So there's definitely a limit to the number of people in the
world who will buy a bicycle through a computer and never
having test ridden it.
But you'd be surprised how many people walk in our shop
from Paris saying, my friend bought a bike when he was in
San Francisco last year.
I love it, and I'm here to buy a bike.
And so our assumption is, we're reaching a very defined
group of people who are living in major
cities across the world.
Our shop on Valenica Street- how many people have actually
been to it or seen it?
It's like 400 square feet.
It's very small.
It's very focused.
So our assumption is that we can reach these people pretty
efficiently who need to probably physically, in the
real world, with stores in these major cities over time.
But much of the business is focused in terms of how we
support customers, or how we're reaching customers and
publishing online.
So we have a pretty big web following.
Kai and Kristin, that's essentially what they do with
most of their time is interact with our
customers and publish.
And so that's kind of the model for our business is work
with our followers and grow our audience of people who are
connecting with us through the internet.
And then to use these kind of physical presence as brand
hubs in different parts of the world.
And we definitely assume we're going to be opening another
store at some point soonish, next few years.
But it's hard and capital-intensive, fly cross
the country a bunch, I guess, to manage it.
So that's something we're taking very seriously.
Yep.
KAYVON TEHRANIAN: Sorry.
[INAUDIBLE], you first.
AUDIENCE: This is to Jefferson's point about
somebody getting on a bike like that and really loving
it, becoming a cyclist.
And the corollary being if they get on a bike that's kind
of crappy, they might not like it.
They not become a cyclist.
That's a premium product and I believe anybody who gets on
that bike is going to really love it.
But $1,000 is still a premium price.
And so there's a big gap for people who can't aspire to
$1,000 bike.
And for people who are concerned about things like
urban transportation, we know that if we get more cyclists
on the road, we're going to get more advocacy for bike
lanes, bicycles rights, parking off the streets, all
these things that we want to happen.
Hopefully, I think we all want that to happen.
What are you guys doing or are thinking either offering a
more introductory bike or maybe having a workshop that
people can bring in their own sort of Frankenstein bike and
get it stripped down and made into a sweet track bike.
Basically, the experience that you had before Mission Bikes
was around.
Have you guys thought about entering that domain and being
influential there in any way?
ZACHARY ROSEN: So really excellent question.
KAYVON TEHRANIAN: So let's try to make it--
just repeat it concisely.
ZACHARY ROSEN: So the question is $1,000, it's a premium
price and a premium product.
And there's a limited reach.
Not everyone is going to have $1,000 to invest in a bike.
KAYVON TEHRANIAN: We need more bikers.
How do we get there?
ZACHARY ROSEN: And we need more bikers.
How do we get more bikers?
Yeah, exactly.
Awesome question.
And
I want to reiterate that on that point.
So there's actually really great studies on biking
safety, basically showing that while the amount of biking in
San Francisco and other cities--
they've shown this in many cities across the country--
has been doubling.
The number of basically, accidents people have had has
stayed pretty much flat.
So essentially biking has gotten twice or three times
safer just in the last three or four years.
Purely because people are seeing more bikes on the roads
and cars are learning how to drive.
And bikers are learning how to bike.
That's an amazing thing.
And I completely agree that needs to happen.
So we are a very small and focused company.
We can only do so many things.
And we're still trying to--
and we still have a long way to go continually refining
just what we do already and making it better.
So I definitely don't see ourselves doing something
drastically different anytime soon in terms of how--
what types of bikes we're making and how
we're reaching customers.
That's just not what we think about.
But we love all the other stuff that's happening, like
Bike Hut kitchens are awesome.
I agree that people don't go from not biking to a Mission
Bicycle in one fell swoop all the time.
Usually the experience is maybe
somewhat similar to mine.
They borrow a bike, or they had an old bike in a garage
that they start riding.
And within a couple weeks, they know that they need a
better bike.
Or they want to buy a bike to get them a lifetime.
We definitely have a number of people who do walk into the
shop and know they want a bike.
Are ready to bike.
Want a bike that lasts them a lifetime and
we work with them.
JEFFERSON MCCARLEY: Yeah.
So it's a great point.
And all of us on staff would rather see people on a bike
than not on a bike, whether it's our bike or another
cheaper bike.
It's maybe we want to stay focused on producing a
superior quality product, and not get distracted by trying
to offer too many things.
So that's probably one reason why we need to just maintain
our brand in that way.
But also--
and I hope this doesn't sound too ranty.
But when you can buy a bike at Toys"R"Us, or Kmart, an adult
bike, we tend to think of bikes as toys.
We grew up with bikes.
And we don't think that we should pay
very much for bikes.
It's unfortunate.
It's an unfortunate mindset.
We don't think twice about paying a lot
of money for a car.
Cars are just expensive.
And we've just sort of accepted that.
And it's funny because people come into Mission Bicycle
often and they balk at the price because they're used to
seeing bikes for $200 or $300.
But it turns out they drive a very expensive car and they
use a MacBook Pro.
And they use-- like everything else in their lives is very
high-quality.
But when it comes to a bike, they don't want to spend very
much money.
So part of it may be a little bit different mind shift.
KAYVON TEHRANIAN: Cultural.
Yeah.
That's a good answer.
You had a question?
No?
Abagail?
AUDIENCE: So I was wondering, did you guys raise any money
or are you self-funded?
And are you profitable?
ZACHARY ROSEN: That's a good question.
Yeah, we--
KAYVON TEHRANIAN: Repeat the question.
ZACHARY ROSEN: So the question is, have we raised money?
Are we self-financed?
Are we profitable?
Yeah, the company is profitable.
And it's been growing.
We've set a pretty good pace.
And we like our rate of growth, although
we're pretty ambitious.
So we want this company to be--
we really want to be all around the world.
In many ways, we're already kind of a global company.
But we want to really make that real.
So we ended up--
the business story behind Mission Bikes is we started it
in a web development consulting company that I
started with a couple business partners called Chapter Three,
which is still running.
We were literally building bikes in our conference room,
which was interesting.
When we had clients there, it was really interesting.
We had no idea what we were doing.
And we ended up spinning it out as its own independent
company in 2009 in opening a store.
And to do that, we raised some small financing from friends
and family.
So just to get the store up and running and get the
business going.
And since then, through scaling out our profits and
some modest reinvestment, it's been growing.
But it's not--
so the other back story here we didn't talk much about is
Jefferson really does--
is the general manager.
Operates it day-to-day with this awesome staff.
These guys run the show.
I don't run the show.
I have a separate job doing tech work at a startup called
Pantheon that I work 9:00 AM to whenever.
KAYVON TEHRANIAN: Not 5:00 PM?
ZACHARY ROSEN: No.
And I come bug these guys on nights
and weekends, generally.
Or an email.
So I'm very familiar with the kind of
venture financing model.
We're doing that at Pantheon.
I get it.
It's not what we do at Mission Bicycle.
It's a different kind of company.
KAYVON TEHRANIAN: Can you explain that though?
Software company-- right, everyone's like VC capital.
I got to raise rounds, all of this.
And then all of a sudden you transition to this other type
of company.
You're creating a physical product.
And it seems like that whole culture, entrepreneurial
culture of raising rounds, everyone paying
attention to it--
there seems to be
disproportionate attention maybe?
ZACHARY ROSEN: Yeah.
KAYVON TEHRANIAN: I don't know what your
thoughts on that are.
ZACHARY ROSEN: Oh, I think there's a lot.
I think every year in America--
I don't know how many millions of companies get started.
And maybe 10,000 of them are venture tech companies.
So most of the startups that happen in
the country are not--
tech venture is its own thing.
If you look at the numbers for tech venture, you take a step
back and look at it as an ecosystem, it has a really
defined character.
Some number of thousands of companies get venture financed
every year.
Every year, maybe 100 or so of them have really great exits,
like get sold for $100 plus, or IPO, or whatever.
And maybe one Google comes around a decade.
That's kind of the rule.
And so if you go down the venture path int he tech world
and you raise money, that's the path you're on.
That's the ownership path that you're on.
So in exchange for being a tech venture company, you
accept that's your kind of destiny.
That's not the destiny that I know that I want to have for
Mission Bicycle.
We don't see this as a company that needs to get to a billion
dollar exit in 10 years.
That's not the goal.
The goal is the mission.
The goal is to change bike commuting in the world.
And so the path we're on looks much more like any other
startup in America, which is--
KAYVON TEHRANIAN: The other 999--
ZACHARY ROSEN: The other 999,000, whatever, companies
that get starting every year.
Which is, it looks more brick and mortar.
It looks more bank loans.
It looks more like you're profitable
and you grow in profits.
KAYVON TEHRANIAN: You're advertising based.
ZACHARY ROSEN: And advertising based.
And it's very built brick by brick by brick.
And that's definitely what we do at Mission Bikes.
JEFFERSON MCCARLEY: And that comes with growing pains.
So we are growing pretty quickly.
And this is an unconventional model.
There's nobody else that we can look to, to see exactly,
well, OK, what did they do and how did they do this?
We're starting from scratch and we're really coming up
with a new model.
We've learned a lot of hard lessons along the way.
ZACHARY ROSEN: Yeah, we're doing something weird.
mean, bike companies don't not carry bicycle products.
I went to by Interbike a couple years ago, which it's
basically the big trade show for the bike industry.
And I could rant for a while on this.
But one of the things that really irked me about
Interbike was the way that industry thinks is that the
bike brands think the bike stores are their customers.
They think they're selling bicycles to stores and that
the stores sell the customers.
So what that means is the people who actually design the
bikes don't actually think about the person
who's riding the bike.
It's disconnected.
And it leads, I think, to a very insular thinking about
how you design products.
I think it leads to a lot of--
just the way it operates is just kind of dysfunctional.
We're not in that bucket.
We both design the bike and people come
in our story everyday.
We interact with customers all the time.
And so we can kind of close that gap a lot.
And we can have a much deeper relationship with our
customers because we're not just a local bike store that
has someone else's product.
We have our product.
Any feedback you give us, we take it very personally.
This is our bike.
So we're able to design,
incorporate design much quicker.
And we kind of live and breathe our customer's needs,
I think, much more clearly.
And that's pretty exciting.
I think the fact that we look weird.
The fact that we build bikes on an as-needed basis and we
don't carry inventory, customers can design every
little parts.
They can come in our shop and build a bike with us, that's
just awesome.
That's kind of unexplored territory where we're just
kind of making it up.
And we're just trying to design an amazing experience
for customers.
And wherever that leads us, we'll go.
JEFFERSON MCCARLEY: And that creates missionaries.
So when we are able to produce a really fantastic product and
give a really fantastic customer experience, we
convert our customers to missionaries who want to help
share the message.
KAYVON TEHRANIAN: Guilty as charged.
JEFFERSON MCCARLEY: That's part of
our advertising strategy.
We spend almost $0 on advertising.
KAYVON TEHRANIAN: Cool.
I think what we'll do is we'll wrap it up because there's so
much to interact with and I want to give you guys the
opportunity before you got to run off to your next meeting,
or your next event.
But, I mean, the bike looks like it's almost done in the
duration that we spoke.
So you guys are going to get that kind of experience.
And there's, I think, seven people from
Mission Bicycle here.
So why don't we just kind of let everyone mingle.
There's plenty of bikes.
And give them a round of applause.
[APPLAUSE]