$1.2M/Annual – Bringing the Bucket Bikes to the west – Jared Madsen Cycles

Sushant Misra of TrepTalks: Hey there entrepreneurs, my name is Sushant and welcome to Treptalks. This is the show where I interview successful e commerce entrepreneurs, business executives, and thought leaders and ask them questions about their business story and also dive deep into some of the strategies and tactics that they have used to start and grow their businesses.

And today I’m really excited to welcome Jared Madsen to the show. Jared is the founder of Madsen Cycles. Madsen Cycles creates cargo bicycles for the whole family. A Madsen bike makes it easy for parents to get their children outside to create unforgettable and happy memories together. And today I’m going to ask Jared a few questions about his entrepreneurial journey and some of the strategies and tactics that he has used to start and grow his business.

So Jared, thank you so much for joining me today at TrepTalks. We really appreciate your time.

Jared Madsen of Madsen Cycle: Yeah. Thank you. I’m glad to be here.

Sushant Misra of TrepTalks: So, um, very interesting business. Um, so how do you [00:01:00] describe your product? So, you know, we, we were just discussing, you know, they’re most commonly known as car cargo bicycles, but of course there’s, it seems like there’s an e bike component to them as well.

Jared Madsen of Madsen Cycle: Yeah, there is an e bike component to them. Uh, and I would describe it as. Again, a cargo bike, but most people that I run up against, they don’t quite know what that is, but our bike is unique that it can carry a big load. It has a big bucket on the back that it comes stocked with 4 seats in the back for kids and that’s our primary customers, moms and dads with kids, but we also sell it into the community.

Delivery, uh, and warehouses for running errands and stuff, but it’s primarily moms and dads with kids.

Sushant Misra of TrepTalks: You know, when I see this, uh, this item, it almost reminds me of, you know, what is called a rickshaw and like Asian countries are commonly on the roads and, you know, they’re, they’re common mode of transportation.

So I’m very [00:02:00] interested to hear, um, a little bit about the story. When did you start this business and what kind of really, you know, what were you doing before and what kind of really gave you the idea for this kind of a product?

Jared Madsen of Madsen Cycle: Yeah, so it started in 2007. So I think we’re on our 14th year or 15th year right now and it’s, I’ve, I’ve been in the bike industry for years.

I started in a Schwinn bike shop when I was 15 years old and I’ve been in bicycles and scooters and motorcycles and, uh, I’ve also been in manufacturing of gumball machines of any machines, just anything mechanical. And with an engineering twist on it, that’s where I’ve always been. And luckily, I worked for a few of those bicycle companies that, uh, we did manufacturing overseas.

And so at a young age, I was sent over there to work with some of the engineers there. So it really opened my eyes to what could happen. And then fast forward, I’m married with. We just are [00:03:00] barely starting a family, my wife and I, and we took, it was the first trip we ever took when we left our kids at home and we went to the Netherlands.

I used to live in the Netherlands and my family’s all from Denmark. My dad immigrated to the U S uh, when he was a teenager. But so we were back in the Netherlands and we just saw all these. Cargo bikes, which were commonplace, but they were usually only used by the butcher and the baker. But since that time period that I hadn’t been there, my wife and I showed up and just saw it had that whole market had been taken over by moms, delivering their kids to school or taking trips to the grocery store.

The bicycle is more common than the car in the Netherlands, but just seeing that it being used in this whole new way with. Families and kids and, and we had our brand new kids at home. So when I got home, I had a little shop and I, I built one that was an exact copy of what they were using their buckets out in the front, which works really great in the Netherlands on the [00:04:00] flat, perfectly smooth bike paths.

And, and I just couldn’t leave it alone. I kept making different prototypes and kind of came up with what we have now. And then started to think that maybe it should be a business. Awesome.

Sushant Misra of TrepTalks: And I mean, it’s, it’s such an interesting point that you brought up. And I didn’t know that this about Netherlands because right now I’m actually following a, a YouTube creator.

She goes by the name of itchy boots and she drives these motor bicycles and she is going all over the world on this bike, like years. And she’s going from place to place. And it’s such a, such an interesting thing. And she’s from Netherlands. And so it’s, it’s, you know, when you shared that, it, it, uh, it makes sense now that.

That seems like a culture, uh, in that part of the

Jared Madsen of Madsen Cycle: world. Yeah, it definitely is a mainstream. And then especially 14 years ago, it was not mainstream in the U. S. So when we, when we launched, we were one of two companies in the whole country [00:05:00] that, that had a product like it. So, and there’s been a lot of popularity since, so there was a lot of really great timing for us to be one of the leaders in the, at least here in the U.

S.

Sushant Misra of TrepTalks: So given that you are, you are coming from like a cycling industry, why not consider a different kind of a product? I mean, Schwinn is, you know, is big into exercise bikes and so forth. Um, why this kind of a product? I mean, to me, um, did you do like any sort of market validation and find that there would be a market in the U S for these kinds of products?

Jared Madsen of Madsen Cycle: No. And in fact, the few people that I talked with some, uh, mentors Did not think it was a, it was a good idea. So, and I’ve been in that bike industry. I went and talked to a few, uh, shop owners and a few people since I’ve been in that industry for so long and asked them what they thought after I’d made some prototypes and showed them either the bike or some photos and everyone [00:06:00] wasn’t excited about it.

I remember the shop that, that exact swing shop that I worked at, I went back. To my old boss, and he says, you know, Jared, no one has ever walked in my shop and asked for anything like this. So I don’t think I would ever buy a bike from you until someone asked for it. I’m not interested. I don’t think it’s a good idea.

And it really, if anything, it drove me to want to. Prove them wrong. So it was more of a passion that drove this, this, uh, this product. And I wanted something in the bike industry. I love bicycles. I love the whole industry. I love everything. Uh, not everything about it, but I, I just really enjoyed that bike, uh, the simplicity of it, the pureness of it and living up in Europe and seeing how it’s used there and then not seeing how it’s used in the U.

S. Uh, but I knew I didn’t want a bike that. Was mainstream either, because there are, there’s a hundred people with deeper pockets [00:07:00] selling mountain bikes and road bikes and touring bikes, and it would just be one of another. So as soon as I saw those and started thinking of it, the more I thought personally, like, oh, this is, this is perfect.

This is perfect. I will be the first in the U. S. I, I passionately felt like it was going to catch on just because we used it all the time. We loved it. People asked us about it. And I also felt like. In the Netherlands, nobody says they’re a cyclist, even though they ride a bike every single day. They would never say they’re a cyclist.

They think that those are the guys with the stretchy pants and a helmet. And that’s always been my idea too, is that bike shops and typical cyclists aren’t necessarily our customers. It’s moms and dads that want to just still go on bike rides and they’ve got little kids and and they see the potential and that it’s fun and they get out.

So that’s no research. Just just a passion. I think they drove it more than anything [00:08:00] and wanting to prove wanting to prove those guys wrong years later, that same boss, uh, from that swing shop contact. He didn’t, but his manager contacted us and tried to buy some bikes. And at that point we were going directly to the consumer, so I wasn’t open to any shops, but it was, it was kind of fun to get that call.

Wow. Very,

Sushant Misra of TrepTalks: very interesting. So what kind of, uh, investment did it take, um, for you to kind of bring this idea to market? I mean, did you kind of start off with a prototype and try to sell it first and, you know, uh, then you went into mass, mass kind of market. What was it like? To kind of, um, I mean, did you target because these bikes were already being, I mean, I’m sure there were manufacturers who are creating it.

If it was already in Netherlands, did you directly go to the, those manufacturers and say, you know, I just want to bring them to the U S can you share a little bit of [00:09:00] that

Jared Madsen of Madsen Cycle: beginning? No, because the design that we came up with was completely unique. There’s, there still is nothing like it, even in the Netherlands or, uh, there’s some things closer to it in the U S, but there’s.

Especially back then there was nothing like it and it was the design that we wanted. So I wasn’t going to help to go to another manufacturer. And because of my experience working with bike, uh, manufacturers already in frame factories. It was easy to settle on who we want to work with and I just knew how the industry works.

They, we get this idea that they’re. Sharing each other’s plans and that you can just knock something off, but that’s really not how it works. I mean, they, you can knock somebody off, but I didn’t want to, I wanted my own unique, unique bike. So I ended up working with a really great, uh, frame factory in Taiwan.

We actually started in China and had some terrible experiences and lost a lot of money. And I knew it because I’d done it [00:10:00] for other companies and seen them do the same thing. But I was so tempted by that lower price tag coming out of China. But we couldn’t maintain quality. We just had so many headaches.

And so our next, that was our first, uh, two containers. And then our next production run, I moved everything over to Taiwan or started over. I should say in Taiwan with. Factories that I knew were going to work for us and that we could control quality. And I’ve always, my name’s on the bike and I want a bike that’s going to last and last and last, and I’d be proud of my name’s on there.

So that’s always been really important for us. And was

Sushant Misra of TrepTalks: the entire investment completely out of your pocket or did you kind of go about finding it?

Jared Madsen of Madsen Cycle: Yeah, no, it was in the beginning. It was. Uh, once we got product and once we started selling to dealers, we did, we took out a line of credit. Uh, I, I looked around and talked to our banker and nobody wanted to give us [00:11:00] any line of credit in the beginning when we really needed it.

But, uh, I did have, uh, a rental property that I had worked really hard to pay it down and build up a lot of equity in there. So we pulled a lot of equity out of that, uh, rental. And that’s. What I’ve done, uh, besides the bicycles is construction. My dad’s a contractor. And so I buy, I’ve in the past, I’ve bought a lot of homes and either flipped them or tried to rent them out.

And so, so we had some, some cash. They was the biggest investment for us. And the thing that made us realize that we’re actually going through with this was getting the molds made for that bucket because everything else is. It’s still just a bicycle. Uh, you know, it’s, it’s a long bicycle, but it’s, it’s just a bike, but that bucket’s what really sets apart.

And it’s, it was a huge investment for us back then. It’s still a big investment to get something that large plastic, uh, molded. So that [00:12:00] was when I put the money down for that mold, that really put everything. In reality for me that oh my gosh, we’re really going to do this This better work out because that’s a lot of that was a lot of money for us

Sushant Misra of TrepTalks: It is it is I mean it is a rift like if you think about it Where you know, it’s a new idea you’re kind of coming up with a newer design product, you know um And you’re trying to launch it in a new market where you’re not, I mean, you have a hunch that it may work, but you don’t really know.

Jared Madsen of Madsen Cycle: Yeah. Not my wife was even a little leery, a little worried that we were, I was spending the money. She wasn’t involved in the business till we were in business for, I think like seven years. But, uh, yeah, she was worried that I was taking our savings and dumping it into something that may not work out. But, but it, it worked out.

So, I mean, it could have. We also, I, you asked the question, like, did we pre sale them from a [00:13:00] prototype? We had, I had filed for some patents. We have a design patent and some provisionals. Uh, actually application patent on our kickstand because it’s totally unique. There’s no kickstand like it, but I was waiting for these provisionals to be filed because legally we can’t, uh, disclose and keep our patents strong until they, until the provisionals were filed.

So we had bikes on our way coming from China at that time, and I had signed up for a, uh, A big bike show, the inner bike show, which was a dealer’s only show. And I wasn’t able to advertise. I wasn’t able to pre send anything out there or anything. So we got those provisionals done literally the week before I showed up to this, uh, big convention set up our little 10 by 10 booth and still wondering, is this even going to work?

You know, is this, was this a good idea? [00:14:00] I actually sold one bike. And every single I’m forgetting a lot of these stories, but all the bikes I had 200 show up in 1 container 1st and we got them out and I started building them and realize that the brake mount on the fork was welded on upside down and I couldn’t sell these bikes.

So we quickly work with the fork manufacturer. They’re afraid of new forks. I’m going to have to swap them all out. And I had a bike shop mechanic that found, found us and really wanted to buy one of our bikes, but I didn’t want to. And this may have been after that at our bike show. I’m sorry, I can’t I can’t remember, but it must have been because we had disclosed, but I wasn’t selling any bikes because I couldn’t ship them with these.

With this fork that problem, but since he was a bike mechanic and he was local, I said, I’ll sell you. They still work. It just wasn’t perfect. It wasn’t the way it should be still work. I sent your bike mechanic. I’ll sell you one. And then as soon [00:15:00] as I get the forks, you know, I can give you the forks and you can put them in there and he took it and they had it for about two weeks and they actually returned it.

So the first bike I ever sold was returned. And they, their feedback was that it’s just way too hard to ride. His wife couldn’t ride it. It was super unstable. It wanted to tip over as soon as they put the kids in there. And of course I took, you know, gave him his money back, but I am. It wiped me out. I think it took years to recover from that.

It, it was our first and only return for years and years and years. Uh, it’s not an easy product to return, but. It’s also, that was just a anomaly. It wasn’t, uh, it wasn’t at all the case. I think they, maybe money was tight. Something else was going on. They wanted that bike, but it took me out. And here I had 200 bikes sitting in my warehouse.

I haven’t shipped out any of them. And I’m worried. Did I just make a huge mistake? If this one mom bike mechanic, you [00:16:00] mean experienced cyclists. If he can’t ride this, have we like, what are we going to do? Luckily, it worked out. We were at that bike show that first day, almost nobody came into our booth.

And here we haven’t done any free advertising. We were off in the corner, uh, and really starting to worry. And, well, not starting, we’ve been worried for a long time, but wishing that we had people coming in and showing an interest. And maybe unrealistically, just to think we could show up at a trade show and take off.

But the very next day we went to our booth and there was actually a line of people wanting to come into our booth. And we’re like, what is going on? You know, yesterday we didn’t talk to anyone. We just started talking to all these people, and finally someone said, Hey, congratulations, getting put into the show Daily, which is a magazine that’s published every day of the show.

And somebody that had come in that first day, talked to one of us, it [00:17:00] was my dad, that was down there, my dad and I, which, he’s awesome, he’s got this thick Danish accent, and he’s just this typical Dane, and people like him, so I wanted him there. And, uh, so I don’t know who he talked to, but they brought up this article and it, that’s really what launched us was that article.

We had a big shop that up in Oregon that, uh, they had multiple shops that they had like 3 or 4 shops and they placed an order that day for 30 bikes, which was huge. I mean, we had a minimum order of like 3 bikes to a dealer and he just sight, you know, just blind said, yeah, I’ll take 30 of them, which would.

It was a great market up there and they had the shops and they had to know how they knew they could move them. And that’s what, that’s where we started.

Sushant Misra of TrepTalks: Wow. That’s, that’s so interesting. So right now is your model direct to consumer or is it more to cycle? It is.

Jared Madsen of Madsen Cycle: Yeah. It’s, so the first few years And I think it was really [00:18:00] key for us to have those dealers.

So we set up dealers in almost every state, just small mom and pop shops, really small bike shops that were ordering three or minimum. And if they talked to me, I’d even sell them one. And what was starting to happen though, is that they would have one on display. And then when a customer. Wanted one, they would order it from us and then put it together for them.

And which was kind of frustrating. We wanted them to have them on hand, you know, so they could just buy it and more have that impulse by, and we, we had been working since the second year. We’d been working with REI, which is a really large retailer in the U S and it took about a year to get signed up on there.

System and to qualify to be a seller to and just this whole new portal that they had all of these checks and we had to go through and we finally got it and we were so excited and the it didn’t turn out [00:19:00] very well. They immediately told us that they didn’t want to put their bikes in the store because they’re too big their margins per square foot.

Uh, don’t work with, uh, with that big giant bike and they wanted to sell them online and then allow the customer to pick them up at the and we would drop ship them directly to the and we were already a little frustrated that bike shops weren’t, uh, selling them. Customers were calling us and asking us all the questions and then going to the bike shop and the bike shop was ordering them.

And when REI said they were only going to sell online, we decided to drop REI and we at the same time decided to drop all of our dealers and only go direct to the consumer. We had, we had worked out a lot of things with shipping direct to consumer. We’ve already been doing it in areas that didn’t have a shop, but with REI, we had to sell three bikes.

To make the same margins of selling one direct to the customer. And in the same token, we had to have three times as many bikes then, which [00:20:00] meant our warehouse needed to be three times bigger, which meant our inventory had to be three times bigger, which meant that was just a lot of money out, you know, that we had to keep inventory.

And so after looking at it that way, the direct consumer, and we thought we would see a decrease, which we were okay with, but we just continued to grow. This was. Also back when like Instagram and Facebook, uh, it was just so easy to market. They’re so easy to sell. Everyone that followed us saw our feeds every day.

I mean, it was, there was this magical time, this window before. That all went away, but, and that’s really what launched. We first started with blogs. We had a really big blogger that wanted one of our bikes, entered a contest to, it was a, it was a girl, her name was Nini, that nene’s dialogue. She was really popular.

She had a, she crashed in a plane, was burned and, and was in a coma for like eight months and had all [00:21:00] these followers. And one of, she entered this, this contest to win a bike and she just made a comment like, oh, I would love to buy this bike. And I didn’t know, we didn’t know anything about this, but I had 2 anonymous customers call me and buy her a bike and she was local.

So I decided, man, I’m going to deliver these because. And then I went online, of course, and read all of her blog and it’s like, wow, this lady’s really great and how cool is she wants one of our bikes. So I took, I deliver them personally and met her and she had just come out of her coma, covered in neoprene skin and this amazing story of her survival and her husband, both in this plane crash.

And, and they use the bike all the time. We kind of became friends. And so they used it more than just, and this was before anyone charged for a post, you know, if we, and I think that’s also why people took the credibility from influencers more back then, because it wasn’t. Well, it wasn’t the same, you know, if I gave someone a great deal on a bike, they would just [00:22:00] post there was no Negotiation about how much and how many times and what kind of you know Compensation we need to give them and so she was huge for us to go direct to consumer and then we realized when we’re direct to consumer we have that relationship with the customer and Not with the bike shop, which is awesome because our our product Just by itself, it builds this community.

So we have lots of little pockets of communities that we stay in contact with. There’s contests all the time with decorating your bike and going on group rides, and you have people in different areas that have taken this responsibility on just because they’re a cyclist. It’s a way more, uh, I don’t know what the right gorilla marketing, but instead of these large.

Influencers, they’re just much smaller and it’s awesome because they still are like those, like they used to [00:23:00] be, you know, they’re just genuinely wanting to use the bike and loving it. And so having that community, having that direct connection with the community is great. And when someone buys a bike, if there’s, if it shows up and has a little scratch on it or something, of course, nobody wants a scratch on their bike, but they wanted the product in the first place.

They call, talk to me. I’m really sorry about that. You know, what can we do to make it better? It’s just so easy. Where the bike shop was, they just couldn’t sell it as a brand new bike. You know, they just wanted money back. That was it. They just wanted to sell the bike to make money. It wasn’t at all about this love of our product or It’s just night and day working with the customer and working with the bite shops.

And so I was, I’m, I’m really glad we did that. And it’s been great moving forward. And we toy every once in a while when a large retailer will contact us, but. It’s just hard to, hard to give up that, what we’ve built with the community. For sure. I

Sushant Misra of TrepTalks: mean, there’s definitely, [00:24:00] definitely an appeal to this kind of a product, especially in the time that we’re, we’re living, you know, everybody wants to be in front of computers and things like that.

And I’m sure there are a lot of people who don’t just want their kids to be sitting in front of their computer. They want to spend more time with their kids. And, you know, this kind of a product really makes it easy for people to get out in nature, get out and, you know, in the evening and kind of have fun.

And. Spent some time together. Um, the communities that you’ve talked about, like, what, what are you like? Like, are these really parents who are buying it or are there like other kinds of more nature enthusiasts and people like that? Who

Jared Madsen of Madsen Cycle: are there? Are we, we say we have a lot of, we, and the whole bike industry, we call them garage bikes.

They’re bikes that are sold. And they sit in somebody’s garage. They don’t they get ridden once or twice a year and then they sit in the garage. So we, of course, we sell a lot of garage bikes, but then we have these customers that will give up a car of going car free that are maybe they have 1 car.

They’re [00:25:00] young with, you know, new newly married, trying to make life work and trying to save up money and they’ll have 1 car. And those are the customers that really get involved in our community. We love anyone that will buy a bike, of course, but and we sell a lot of bikes to someone that really wants a photo opportunity.

I think they’re buying them. They’re getting those really cool photos that you can get with your kids going on an adventure, but then they may just sit in the garage, but we’ll sell them to anyone. Of course, but it’s those customers that really get. Into it and, or really need it, but that probably is a small percentage of our, that’s the smaller quarter or whatever.

I don’t know direct numbers, but it’s, but that’s the community we love, love to work with. And that’s, that’s, that’s who interacts with us also.

Sushant Misra of TrepTalks: Is, is pricing, I mean, how did you come. With your pricing, because, um, from a pricing perspective, like, would this be considered more of a premium [00:26:00] product? I mean, I’m, I’m assuming not everybody can afford like a, I mean, your, your pricing is ranging from like 2, 600 to about 5, 000.

Um, I’m assuming 5, 000 bikes are more of the e bikes and then the one on the 2, 600, that’s more of a manual bike. Um, can you talk a little bit about your pricing? How did you price these products? And is that kind of, uh, I mean, is that like only a certain, um, person who has, um, extra money in their pocket would be kind of, uh, investing in this kind of a product?

Jared Madsen of Madsen Cycle: Yeah. I mean, that’s a really great question. And it’s, uh, it just depends on how you look at how you look at it. If you’ve bought a bike, uh, mid range or bike, uh, lately, you, you’ll think a little different about that price tag. Of course you can go to Walmart and buy a bike for. 100, but you definitely get what [00:27:00] you, what you pay for.

So some of our top competitors, their starting prices are around 5, 000 and going up to like 15, 000. So as much as a car in my, in my mind. So, and it, this is like a balancing act. This is a hard game because as soon as we have a product that’s Priced lower if we really worked hard to try to lower the cost of our bikes and put different componentry on there and which could still be a really great bike, but it starts to cheapen our brand and the perception in someone’s mind.

It’s like, oh, that’s a really that’s a low price bike. It must not be good quality. Uh, I was at Costco the other day and they had some bikes ebikes for sell there and I was. Blown away. What the quality was amazing and had a, it had a buffet motor on there. Uh, it had shmallow componentry. I mean, it was just.

Amazing. And the price was really low. And but in the [00:28:00] same moment, I know that people are looking at that bike and thinking, oh, that’s cheap. That’s got to be a really cheap e bike. And because I go to a bike shop, and I’m paying double that, you know, for the same, something I really want, but, but they’re not, you know, it’s just a.

I don’t know if that’s really answering your question or if I’m kind of tying myself in circles here, but uh, so there is a, there is a balance and there’s a game. We still are one of the best entry level mid. I mean, it is a high end bike and it really, uh, I won’t put anything together that isn’t, that isn’t going to last that we can’t always find parts for.

They’re all name brands. They’re big companies, especially with the e bike and, yeah. Anything that’s specifically to our bike, we want the very best. You can always find another tire or another wheel or that’s made by somebody else. It’s going to fit on our bike. But those parts that are specific to us, we want, we want them to last [00:29:00] them.

I don’t want, I hate those calls from the customer when something isn’t working or something isn’t, uh, you know, working the way they want it, or we try to try to avoid that. So, I think that, I dunno answered your question.

Sushant Misra of TrepTalks: No, I think, I think that makes sense. No, I think, you know, pricing is, as you said, it’s a balancing act.

Like, I don’t think there’s any right or wrong answer. I think No. You know, if, if, uh, you know, if the. If the customer is willing to pay for it and it works, I think, you know, that’s, that’s the best pricing. I mean, sometimes I hear where people increase the price and that kind of increased the demand as well.

So I think pricing is definitely something that, that there’s no right answer to it. Um, one thing that I wanted to ask about, uh, and I think you also kind of briefly touched on that is kind of the size of this product. You know, you’re, it’s a direct to consumer business, but of course, Uh, the bucket itself, it doesn’t seem like it’s kind of foldable, but so you have to, you know, keep the bucket as is.

[00:30:00] Um, does that create any challenges in terms of your warehousing? And especially, I mean, what is the weight, like overall weight of this? And how are you, how are you shipping

Jared Madsen of Madsen Cycle: it out? So luckily that bucket, I designed the bucket, uh, and it, it nests inside of itself, like paper cups, you know, so our storage is.

Is fine with the buckets. What’s the biggest challenges have been shipping it. So there’s no good way to ship that, you know, no tight, easy way, like it was just a regular bike. You can turn the handlebar sideways. You can take the wheel off and you can make it a pretty small box, but with that bucket, we can’t do that.

So what we, we decided years ago is that we were just going to do this white glove service. Because we were stuck paying these premiums, we put it in a box. It’s like a refrigerator box and the bike is completely built, assembled, tuned up, test ride. It just shows up. You got to unpackage it. You do have to put the front wheel on, [00:31:00] but everything else is just completely ready to go.

Everything’s been adjusted. So, and then working with Different because we can’t ship it a FedEx or UPS. It all it has to be freight. So it’s all LTL freight. So we have just I’ve had years of negotiation with freight companies, uh, trying to get those prices down because one little freight and right now with e bikes has become a huge challenge because of some of the fires from from uncertified lithium batteries and I’m sure some certified I’m I can’t say that but most all the Everything I’m aware of, they’ve always been uncertified batteries that have gone up in flames, but that’s that hurts everybody else.

So we have to ship everything hazmat, you know, it’s this giant bike and it’s only this. Battery that’s considered hazmat, but we still have to ship it that way. So that’s been the challenge. That’s a big expense for us is to ship the bike. We often say [00:32:00] we run two companies. We run a bike shop where we’re building bikes and we have this other company that’s almost just as big building.

Boxing and packaging. So what is really hard to keep stored is those boxes. Cause they’re huge that it is like a giant refrigerator and there’s something we can’t store them put together, you know, so they’re flat sheets that we’re always folding and cutting and stapling together and. It’s quite a process to try to keep the weight down, try to keep the size down, and then keep the bike protected, you know, we don’t want any damage or anything, and trying to save every penny we can on the shipping, because it can just eat up our, we, we offer free shipping, so we’re, we’re taking an average of all the shipping from, we’re uh, Yeah.

In the, in the Rocky. So, you know, we shipped to California. It’s a really great deal. We shipped it back East and we’re, we’re paying a lot. So we averaged that out and we, [00:33:00] we eat it a lot of times and we take advantage of it other times, but that’s, that’s the biggest challenge is shipping them and packaging them and staying on top of all those.

Regulations and everything to ship, ship our bikes around. Wow.

Sushant Misra of TrepTalks: That’s, that’s so, so interesting and challenging at the same time. Like, can you not ship the battery separately as like, you know, the hazmat dangerous good

Jared Madsen of Madsen Cycle: kind of, we can, so shipping just a battery, I ended up shipping it. It’s, it’s around a hundred dollars for that small battery.

So the savings that I get from not adding it to the, to the bike. Are just completely totally outweighed. So we thought of that same thing. I mean, we go right there. So good, good idea, but it doesn’t, it doesn’t work out.

Sushant Misra of TrepTalks: So, I mean, it does sound like, you know, the, even just the logistics part is a big operation, like how, what, what does your.

What does your team look like right now?

Jared Madsen of Madsen Cycle: So our team has always been [00:34:00] small. We’ve been really lean Uh, we’re myself my wife, uh, who does all our marketing She doesn’t come down to the shop or the office, but I we have a full-time office Manager and then a full-time mechanic and myself. And then we bring in part time help as things get busy.

We’ll bring in part time here for, as we ramping up for Christmas, cause Christmas is always a big time summer, uh, spring going into summer is, is huge. And so we’ll bring in part time help to help us. But a lot of that comes from working with our assembler in Taiwan. So I’m working with. We have like 50 different factories that I work with in Taiwan to get all the parts needed for one bike.

Whoa. So all those 50 components are getting sent to one central location and they preassemble the bike. So they assemble it as much as they can and still fit it into a really small box. So [00:35:00] that means the wheels aren’t attached, but the wheels are built. You know, they’re all laced with all the spokes and stuff that’s done in Taiwan.

So working with them. In Taiwan and trying to get them to do a premium assembly, which normally doesn’t happen. Normally a bike shop gets a bike from Trek or Giant or whoever they’re getting the bike from to do their shop. They know that they’re going to take it out of the box and they’re going to completely rebuild that bike.

They’re going to have to adjust the brakes, adjust the shifting, check the bearings, check the fitting on everything. They’re basically building it. Just become a mindset in the whole bike industry, and it has been forever since we’ve moved manufacturing over to Taiwan and China, uh, that they’re not doing any of those.

Premium services. I mean, you would, you would never buy a motorcycle from Honda and not have that motorcycle all assembled and ready to go, or a car, you know, from Toyota, it comes, it’s, it’s [00:36:00] ready, maybe you got to break it in or whatever, but it’s, it’s all adjusted, but in the bike industry, it’s not, it’s this total rebuild, which is, has always driven me crazy.

And it’s, that was, it’s been a huge challenge to the point of our assembler trying to explain to them what we wanted in Taiwan and them not. Understanding, you know, at all that I want this premium done. We finally came to an agreement. I said, I’m renting a warehouse right next to yours and I’m hiring people that are going to do the final tune up and then, so you’ll have to deliver it to them in the box, they’ll open up the box, they’ll fix everything and they’ll put it back in the box.

And then they can take it back to you. And it wasn’t until I was serious about this that they said, well, you know, we could probably just do that for you. You know, we could give you that service. I’m like, great. That’s exactly what I want. I mean, charge me a premium. It’s still cheaper than me having an extra mechanic, [00:37:00] uh, that I’ve got to go through training and everything.

So, I’ve been through training with them in Taiwan. We told them exactly how we wanted it put together. I’m over there at least once a year. Well, except for covid, we took a long break from traveling over there, but, uh, and then maybe more if we’re doing some big model changes or introducing some new product, but, uh, and it’s been years now.

So we’ve built those relationships. It’s. It’s a lot smoother and a lot easier now in terms of, I

Sushant Misra of TrepTalks: mean, to me, it seems like even though it’s a difficult operation, like if there are 50 different, um, items that need to become, you know, uh, come together for the one bike, um, Because you’re working in, in Taiwan or the Asian countries, um, I’m assuming like the, the parts are themselves are not that expensive.

Like the overall cost of the bike, uh, is not that huge. And I’m assuming that it has like great [00:38:00] margins for you to work with. There’s

Jared Madsen of Madsen Cycle: great margins on. Some parts. So on some things, our accessories are amazing margins. We make, that’s where we make our biggest margins are selling all the accessories. So we have a lot of accessories.

Uh, when you break it down the e bike side, there’s not great margins because there are so many e bikes right now and everyone’s just cutting into each other. So I think what has helped us. It’s just having a bike that’s so unique. I mean, it’s got this big bucket on the back and you could go buy a comparable bike without the bucket and pay a lot less, but we’re just.

We’ve got a really cool product and that bucket adds a lot of, uh, a lot of value on there. So I’m not sure if I’m answering your question, but the margins aren’t, the margins are great when we’re selling direct to customer. Then when we’re selling to a [00:39:00] shop, the shop is who takes the big margins. The manufacturer is supposed to make their money off of volume, which I don’t think will ever be.

In that position, just because it’s such a boutique product is such a, uh, not mainstream bicycle. So now going direct to the consumer, it makes it a lot easier to stay in business. Um,

Sushant Misra of TrepTalks: I want to talk about your marketing. You said your wife kind of handles that, that part. And, you know, when you started out, it was much easier to, uh, To be present and, you know, different social feeds and things like that.

How has your marketing changed? Um, and what, what kind of marketing you’re doing right now to kind of, uh, get new customer acquisition and what’s, what’s really working well, what’s not working. That’s it.

Jared Madsen of Madsen Cycle: It’s so easy to tell you what used to work. It’s so much harder to, we are, we feel like we’re floundering [00:40:00] with all the.

Changes with, uh, social media and the discredibility of influencers. Cause that was really huge for us, but I just, they just do not hold the same college as they used to. And everyone’s trying to charge money, the algorithms on Instagram and Facebook. They don’t serve up. We have a lot of followers on our account, but they may not see our posts every time.

So what’s working for us right now. This is a hard question to answer because the last two years actually have been the first two years that we haven’t seen growth in our business and it’s, we’re, we’re struggling in that area, you know, I’m just honest with you that we’re not like go out of business struggling, but I’m actually down a mechanic and I haven’t hired one.

Christmas is coming soon. And I’m just putting in a lot of extra hours. Trying to fill that position. So, uh, you know, we’re definitely feeling that entrepreneur, uh, pain that can be there, but, uh, [00:41:00] what’s still working though, and it has always worked and is completely carrying us right now is that community.

So they’re not big influencers, but they’re just regular people that are using the bike. So people out on the bike. Sales of like, we get these hot spots, these zip codes that we just continue to sell to the same zip code or the same school, you know, we find out because they’ll send us photos of like seven mats and bikes all in a row, picking up their kids from the same kindergarten, you know, and they’re, they drove each other, right?

Maybe there was one or two that had a bike and showed up at kindergarten, but all those other sales came because they saw them. And so those. And that’s always been there. But after 14 years of, I just, my wife just showed me a post that somebody sent to us and they got hold of one of our bikes from the original first Madsen.

I’m almost embarrassed that they’re on the road. I mean, they’re still a great bike, but. It’s changed so [00:42:00] much, but he just was raving about him and his daughter. They picked it up for like a hundred dollars and put another a hundred dollars of parts and they’re writing it all around and they draw on pictures all over the bucket.

And, and I, I, I love that. I mean, that’s, that’s a 14 year old Madsen, but it’s out there selling bikes. You know, it’s still, our name is on the side of there and it’s easy to find online. So. I think that’s really what’s carrying us through these really lean, these lean times until we can figure things out or until the economy flips again, or we also have more competitors than we’ve ever had before, uh, in the US, which is great.

That means more people are on bikes, but I don’t know what’s causing this, this little slump that we’ve had the last 2 years, but. I mean, I, I

Sushant Misra of TrepTalks: think your, yeah, I think your product, um, because it’s targeted to such a, you know, uh, kind of, if you can, uh, can [00:43:00] tie in a great story with your product, you know, this idea of, you know, getting out, uh, in nature and spending time with your family and things like that.

I think, you know, I think. creating awareness around that story may, you know, maybe, uh, can, can help drive, because I think because it’s kind of a unique product, the big challenge is probably awareness. Like when somebody sees this item and they, you know, they are into this idea of spending time with their.

Family or going out, you know, uh, biking and things like that, it will make a complete sense to them. Like they will be attracted to it, but unless they’re aware that such a product exists, like they would, they would not even know. So I think, um, building more awareness through, you know, to kind of your target segment through more of a storytelling.

Um, I mean, are you doing any, any of those kinds of things right

Jared Madsen of Madsen Cycle: now? Right. Yeah, we do a lot. I mean, we do a lot of that with this. Smaller community right now. We’ve [00:44:00] we just launched a program. Uh, I don’t know how It’s probably like six months ago where we’ve made these badges these literal metal badges that uh, I don’t know if you remember like the mercedes the old mercedes would have like the The 1000 mile club and the 10 000 mile club and they would get a badge and they could put it on their bumper Anyway, there was It was kind of a, a twist off of that.

So we’ve made a bunch of these badges, uh, and we have these contests or these challenges that if you ride your bike every day for a month, you know, and show us some pictures of you doing it, we send out these badges. That badge goes right onto the front wooden crate that’s on the bike. And it’s been a ton of fun.

So I think there’s like six of them out there right now. Right now, what’s the badge that everyone’s earning is this, uh, costume bike. So it’s decorating and people have done it for years is decorate their bikes for Halloween. [00:45:00] So they decorate the bikes and ride the kids around and they send us a photo.

We give them this badge and it’s kind of this little bragging thing that they get to show, you know, online. They’ll take a picture. Oh, I just got my. You know, my 1000 mile where they hit a thousand miles, they get a badge when they hit 5, 000 miles to get a badge. And that’s, I mean, it’s totally on the grassroots.

Our customers have maybe 200 followers, but they’re real, they’re real, they’re 200 real followers. They actually know them and know their kids. And I think, I mean, it’s way more real for us also just. Because we know those customers and we, it’s, it’s a much more fun way to be marketing. It’s a much more fun way to be in business.

Maybe we’re not on a path to become this big giant of a bike, uh, company, or do we know if we want to, I mean, I would be happy if we did for sure. I mean, someday I gotta, I gotta retire and look at a exit strategy, but until then, we’ll [00:46:00] just keep going the way that we’re going. Maybe something will come out.

We’ve been. Playing with Tik TOK lately, which we used to think that was so irrelevant to our customers. But now those little kids are now our customers. You know, those people playing on Tik TOK, they’re not little kids anymore. They’re moms and dads all of a sudden. So maybe we should have jumped on that sooner when people told us that’s where we need to be.

But there’s a platform all the time and we don’t always have the bandwidth to jump on.

Sushant Misra of TrepTalks: Yeah. Yeah. Um, In every entrepreneur’s journey, there’s always mistakes made, lessons learned, failures. I know you shared a few of them, uh, but has there been any big mistake or failure recently that you kind of, uh, think you could have avoided or, you know, what did you learn from any

Jared Madsen of Madsen Cycle: big mistake?

I mean, I, I briefly talked about how we started manufacturing in China and it would probably be the largest [00:47:00] mistake that if I could go back and change, it would be. Not going down there, but it’s not as well. It’s not as recent, but I would say recently what a lesson that was really learned is during COVID.

We like every bike shop just had the most phenomenal year ever. We sold more bikes than we ever had. We were lucky because we were opening up Europe, Denmark. I had a container of bikes ready to go to Denmark when COVID hit. We couldn’t get bikes. We couldn’t get parts. We couldn’t get anything because everyone’s shut down and everybody else is.

Selling bikes. So everyone’s placing orders all at the same time, but normally took me three months to get, I was getting people telling me that I had to wait 400 days to get some of the parts that we normally got quick. So, but because we were about to open up Denmark, Decided to put that on hold and brought that container to the U of S so that helped that like saved our inventory and we sold it all [00:48:00] and we started to.

See that, oh, we’re going to sell all these bikes. Let’s keep the prices high. Let’s like slow down our marketing that slow down. We can save all this money. You know, we don’t have to, people are buying the bikes anyway, and we really pushed our momentum, like stopped it. We slammed the brakes on because we could see we’re going to run out of bikes.

And we did, we sold everything and we had this wall that we just let. Stay a little. And that was a big mistake. I wish we would have continued all of our momentum and just let people see that they’re back ordered or whatever, but still continue. We just really took a break and a big breather and and didn’t realize it until we got product again and tried to ramp up and realized, oh, my gosh, we, this is really hard to ramp back up.

And that’s even with things weren’t as smooth with, you know, the new algorithms and stuff, but we still have the [00:49:00] momentum going. And so it was a good lesson to learn. And one that I wish I didn’t have to learn because it was a big mistake that we stopped. You know, we could have still all of our social, all of our community, we could have been feeding that still, we could have been riding high, and in fact, we could have probably done it better than we ever did before because we had more cash than we ever have before by selling so many bikes so quick and, you know, full retail, and I think it was maybe a little tempting just to take a break, but, well, there’s a recent, a recent challenge that we failed at.

Yeah. That’s, that’s

Sushant Misra of TrepTalks: very, uh, it’s, it’s almost like, you know, when something is working, it’s, you have to take it one because a lot of the times it’s like, you know, the right time and the right opportunities and everything coming together that, that, that’s like a, there’s sometimes a luck component to that also.

And so it’s like, if you try to recreate that in the future, you know, that may never happen. So, yeah, I think [00:50:00] that’s a great, great. Advice. I know we are at time. Um, I want to quickly do rapid fire segment. Do you have five more minutes? Okay. So I’ll do a quick rapid fire segment in this segment. I’m going to ask you a few quick questions that you have to answer them maybe in a couple of words or a sentence or so.

The first one is one book recommendation for entrepreneurs and why?

Jared Madsen of Madsen Cycle: Oh, I love, uh, I love, let’s see if it’s, uh, brains on fire. It’s a marketing book. It’s a marketing firm. I just really love it. It really is that base roots, getting your customers to do your marketing for you. It’s well written. I love it.

For anyone that’s going to go to China, I would, and do any kind of work, or anywhere in Asia, I would recommend Poorly Made in China, is the name of the book. And I wish I would have read that before. I ever set foot over there because such an eye opener to read that. So, well,

Sushant Misra of TrepTalks: uh, no, that’s awesome. Um, [00:51:00] and innovative product or idea in e commerce, retail or technology that you feel excited about?

Jared Madsen of Madsen Cycle: Uh, let’s see any other product that may not be a question for me, but lately I’ve actually been amazed by this may not sound great, but Alibaba. I, they have exploded and they have made. Things manufacturing over in China. So easy. It is like a light year jump to anyone that wants to come up with any product anywhere.

If they learn to navigate a little bit on Alibaba, maybe read that book for the made in China, but Alibaba also takes away a lot of those challenges. That’s it’s amazing what they’re doing. I know they. Are growing exponentially and it’s huge company and there’s some things with their company that are [00:52:00] problematic and not the best practices, but they, every time I’m on there, it blows me away.

So, for good or bad, that’s, I would say Alibaba.

Sushant Misra of TrepTalks: Awesome. Uh, a business or productivity tool or software or a productivity tip.

Jared Madsen of Madsen Cycle: I’m, I’m really old school and analog. So my only tip is just to make sure that you record, uh, what you have for me. It’s a, it’s a little book that I literally write in so I can go back and look at that. Or I know there’s all kinds of software. My wife uses a lot of other software. She’s always trying to get me to do it, but I’m, I am old school, but it works for me, so that’s a little filled, filled notes, notepad, it’s my technology.

Sushant Misra of TrepTalks: A peer entrepreneur or business person whom you look up to or someone who inspires you?

Jared Madsen of Madsen Cycle: [00:53:00] Oh, I have a, I have a few great mentors from, uh, from young teenage years that, uh, that I’ve, I’ve leaned on. And then recently some of the entrepreneurs that I look up to are their family members. So I have a. I have a brother in law that’s, uh, in a band and is building retro style keyboards, and a sister in law that’s an artist, a painter, and they both They’re entrepreneur, you don’t think of them as being entrepreneurs, but they are killing it in that in both those industries and two industries that you think are like art and that can’t grow the way they’re growing.

They’re, they’re doing an amazing job. So I’ll say those.

Sushant Misra of TrepTalks: Awesome. Final question. Best business advice that you have ever received or you would give

Jared Madsen of Madsen Cycle: to other entrepreneurs? Uh, I had a good answer for that question. [00:54:00] Best advice. Uh, I don’t know. I can’t think of, uh,

maybe it just don’t always listen to what people say. If you believe it’s something that’s, I mean, if it’s your passion, if it’s what you want, you can make it, you can, you can make it work. The other advice is that coming up with the idea. Is the easy part. So often people think that, Oh, if I got this idea, that’s I’m set, but that is the easiest part.

It’s the marketing. It’s the getting the product out there. It’s delivering all these other things. Those are the hard things. Selling the product is the hardest part, not coming up with the idea. That is, that

Sushant Misra of TrepTalks: is the, that is a great advice. And that’s, uh, that’s very, very true. Well, Jared, those were all the questions that I had.

Uh, really, really appreciate you sharing your story and sharing, uh, some of your lessons learned as well as successes. [00:55:00] So yeah, thank you again. Um, if anybody wants to check out your bikes, what’s the best way to do

Jared Madsen of Madsen Cycle: that? Uh, if they Google bucket bike or Madsen cycles or Madsen bike, we got a pretty good presence, but it’s, it’s Madsen cycles.

com. Bucket bikes the best way to find this easy to remember Awesome.

Sushant Misra of TrepTalks: Well, thank you so much again, uh, and I wish you all the very best. Thank you again for joining

Jared Madsen of Madsen Cycle: me today Thank you. This is a fun conversation. Awesome. Bye. Bye