Some additional context around our Kickstarter-style dojo pre-order

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We rushed to launch the dojo pre-order yesterday and naturally let it loose with a few errors and omissions, which we've since fixed. Thanks to all of you who pointed out things we screwed up or left out. If you see anymore, drop us a note or use the comments here on the blog. Dave blogged about how it's a little different this time around, in that we're bringing the dojo to market only if we have enough pre-orders to signal real demand for it, and - more importantly - alleviate some of the risk required to greenlight the contract manufacturing of 100+ frames. I want to talk a little more about that, and give you all some insight into our decision-making.

First, we fully recognize that pre-orders, and in particular pre-orders requiring a certain volume in order to materialize (a la Kickstarter) can contribute to the perception that November is a bush league outfit. After all, if we were large and successful, couldn't we just stroke a check for a few hundred frames or talk some bank or other source of financing into doing it for us? We realize that what I call conspicuous expenditures are no small part of how brands are built in this industry. Sponsor a pro team or 2, fly journalists to France for new product launch junkett, build a wind tunnel adjacent to your corporate cafeteria, buy the biggest Interbike booth and splashiest Bicycling Magazine ad - all of this tells consumers that you're on solid financial footing and leads them to believe that a) your products are of unrivaled quality, and b) you'll be here for the long haul in the event that (a) didn't quite pan out the way you'd been led to believe. 

Like a lot of companies in this industry, we are not big. And because we're not big, trying to operate in the same way as brands 10, 50 or 100 times our size puts us at a competitive disadvantage. As Dave pointed out in his blog about Frameconomics, contract manufacturing of carbon frames in the Far East is an inhospitable environment. From small companies like us, most suppliers ask for 100% up front, and then deliver products 3 or so months later. Frames take longer to produce than rims in part because it's a more complex manufacturing process spread across a range of sizes. More time means our capital is tied up longer. And because frames come in so many sizes, there's also the greater risk of having sizes you can't sell, and quickly running out of the sizes you can. Add to all this the fact that a frame is a highly considered purchase in a category where switching costs are high, compared to a wheel which has become almost an impluse purchase where switching costs are only as high as switching brake pads. This means that the frame business is hard - not just for us, but for other brands as well. Blue Bicycles out of Georgia had a strong reputation and great products and couldnt make it work. Van Dessel narrowly avoided the same fate. Additionally many of the direct brands that hit the market within the past few years, following a similar model as ours, have disappeared or gone dark. Cruz Bicycles never made it, Pedal Force hasn't shown signs of life for a year, Boyd Cycling have perservered in the wheel business but actually began in the frame business. The bike business isn't easy, and we've amassed enough evidence to conclude that trying to run it in a way that makes us look big and formidable could easily make us extinct and invisible. That's not good for us, and if you like our products it's just as bad for you. 

We might do it differently if we were small trying to be big. But the reality is that we like being small. We don't want to add overhead and see our mission evolve from filling a value-oriented spot in the market to selling as much stuff as we can. Dave and I personally want to stay connected to the product and our customers (respectively), not find ourselves separated from both through layers of management and function. We're small and we're owning it, not apologizing for it. If that means we lose some credibilty among customers who prefer big brands, well then we were probably never going to grow into their expectations anyway. 

That's why the dojo is dependent on our customers' appetite for owning it, rather than ours for offering it. We'd love to have it out there because it aligns with our mission, but we aren't willing to go the way of Blue and other brands if the demand is thin. So if you want the bike, go ahead and pre-order. It certainly wouldn't hurt if you told others about it as well, if only to help ensure that the bike you want actually comes to market. If we don't make our target of 100 frames or bikes, everyone gets a full refund ASAP and we stay in business to fight another day.


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  • Mike May on

    Kevin, we actually hear that all the time. It's not a function of us being small as much as us selling direct. Canyon in Europe faces the same issue. We're not for everyone, and trying to be would make us way too expensive for the customers at whom we're aiming most squarely.AC, you're right that the complexity involved in producing a frame is higher than rims and that the fulfillment complexity of multiple sizes and colors adds more expense still. Our frame should be a lot more expensive than our price indicates. The only reason it's not is because our pre-order allows us to mitigate much of the risk from that complexity, so we're not selling out six figures for a container full of frames, hoping they sell one day. If we decided to bring them all in first and then try to sell, the price would have to push close to $2K per frameset. So yeah, we technically would mitigate some risk if each frameset has an extra $800 in profit, but we have all new risk trying to sell bikes direct at a price that's close to what people pay in a shop, and with the benefit of seeing, inspecting and test riding first (as per Kevin's comment). Those inventory expenses of frames I mentioned? For wheels we have it with rims, spokes (in more lengths than you'd imagine), nipples, hubs, rim strips, skewers, brake pads and valve extenders. Plus the cost of building by hand here in the US is not insignificant. The upside with wheels is that they're more flexible to assemble. A set of Rail rims in 20/24 can be built with any color White Industries hubs we (or customers) choose, which gives inventory a little more nimbleness and lets us turn it over more quickly. Wheels also sell much faster than frames, so we're more willing to take on larger quantities of rim inventory. We know it will move pretty quickly. So the real answer to your question is the pre-order. If we stocked frames the same way we stock rims for wheelsets, our margins on frames would be significantly higher than the margins on wheelsets, putting the selling price for a frame well above a wheelset even though the COGS for the frame is less than all of the pieces that go into a complete wheelset.

  • kevin on

    I draw the line at buying a frame sight unseen unless I have gone through the fit/build process with a vendor/custom builder or I have completed a recent fit session with a professional (i.e. 1-3 years) so that I can at least compare the dimensions/specs. Even then, there is a big difference between what is spec'd on paper and actual road/ride feel, which is why the test ride is so important. And that's a problem for a small operation so you do have my sympathy.Probably not what you want to hear….

  • Jason on

    Production of a rim is easier than a frame…production of a carbon wheelset would often involve multiple suppliers, and separate skilled laborers to build. IMO, at least.

  • AC on

    Could you elaborate on frame pricing vs. wheel pricing? I find it interesting that a frame is roughly $1K, while 2 wheels are approx. 1200. The frame seems significantly more complex to product, costlier to ship, and requires more molds for various sizes. So why aren't frame more expensive, or conversely, wheels cheaper?Not complaining about any of your prices. It does appear that the frame is a better value though (even though I'm eying Rails, not the frame).

  • Dave Kirkpatrick on

    Jim – You aren't going to be close to getting a set of 33s in there. Challenge Roubaix 25s fit in with some space, and those measure almost 27mm wide. Putting big tires in road bikes requires doing a few things that are challenging to outright counterproductive to their use as road bikes. First you have to increase fork clearance height. Not that huge a deal but you don't want to do it. The rear end is worse. You have to increase the chainstay length in order to fit the tire behind the seat tube, and increase the width between the chainstays to clear the tire sides. As someone whose heels hit chainstays with some chronic regularity I dislike that idea, and as someone who enjoys the heck out of a crit I don't want a longer rear end either. Getting road brakes around a 33mm tire is quite a trick too – there are plenty of brakes that need you to deflate a 28 in order to get over them. By the time you've done all of these things, you've pretty much got a cx bike on your hands. Dave



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