Company: State Bicycle Co.
Entrepreneurs: Mehdi Farsi, Reza Farsi, and Eric Ferguson
Location: Tempe, AZ
Website: State Bicycle
Facebook: State Bicycle Facebook
YouTube: State Bicycle YouTube
Vimeo: State Bicycle Vimeo
Tumblr: State Bicycle Tumblr
Taking your hobby and your passion and turning it into a viable business is the holy grail for many entrepreneurs. Brothers Mehdi and Reza Farsi, along with longtime friend Eric Ferguson, have been able to achieve just that. They have taken their love of bikes, particularly fixed gear bicycles, and, in a very short time, have turned that love into a very viable business – State Bicycle Co.
As a provider of fixed gear/single speed bicycles, State Bicycle Company realized a need in the marketplace and was able to very successfully fill that need through an effective mix of the right product, and great marketing. They offer each bike model for only a limited time, while offering a variety of colors, heights, and handle bar choices..
Since their start in late 2009, State Bicycle Company has grown from a one-location operation, including strong online sales, to adding three additional retail locations (known as concept stores), as well as a UK branch. Mehdi, Reza, and Eric answer some questions about their latest entrepreneurial venture in this installment of Talking Small Biz.
Why did you and your partners choose to be an entrepreneur?
Eric: We had the opportunity to take matters into our own hands – making the business decisions WE wanted to, instead of suggesting to superiors how we think things should be done. Once you initiate ideas or methods, and see them work out successfully, you get hooked. And, personally, I wanted to find success faster than I thought I could by climbing a corporate ladder.
Reza: I chose to be an entrepreneur because I knew even if things didn’t work out, there is still plenty of time to get what is considered a more traditional job. I like working for myself and being able to choose the people I work with. I love the team we got here and I couldn’t imagine not working with them.
Mehdi: There has always been an allure to being independent and self-sufficient to me. I love the freedom that comes with having my own business.
Wouldn’t it have been easier to work for an established bike manufacturer?
Mehdi: Yes, but that isn’t State Bicycle Co. We noticed a void in the market for a reasonably priced product that is both highly aesthetically pleasing and high-quality.
Eric: Easier, perhaps, yes. But without the experience we have created for ourselves, it likely would have been an entry-level position, which I wasn’t looking for. And “easier” is not really our style anyways…
Reza: Yes, but it would not have been as fun. We would not have been able to do everything our way.
This isn’t your first entrepreneurial venture. What did you learn from your previous experience(s) to make State Bicycle Company a success?
Mehdi: Learning how to take chances and deal with adversity is the biggest lesson you gain with experience.
Eric: There is an entrepreneurial mentality that comes with the territory. You have to learn how to just “figure it out”; how do we ship things to customers, how are we supposed to file taxes, how do we reach our customer base? They don’t teach these things in business school – they teach principals, not action steps. Personally, when I saw things going wrong in early ventures, I used to overreact; now, I realize that we just need to reevaluate the WAY we do that particular task. No need to panic or stop doing it. For example, in the past, we had an item that kept getting damaged in the shipping process. I told my partners we needed to stop selling that product; it was too subjective to damage. It didn’t dawn on me that we should just improve the packaging.
Reza: I knew in order to be successful, I had to work with a product that I was in love with. This has made it a lot easier to put in long work weeks since we are loving the work we are doing.
Why bicycles? In particular, why fixed-gear bikes?
Reza: We love riding bicycles. It was a lot easier to start a fixie company than a road bike company at first. The overhead is a lot lower. Also, riding fixed is a little more fun.
Eric: Love of the game…
Mehdi: I grew up around bicycles. The fixed gear scene is right up my ally. Several years ago it was very uncommon to see a bunch of 20-somethings riding at night for recreation. In a nutshell, it’s fun and gratifying to put out a product that I use myself, as well as my peers.
You aren’t the only manufacturer of fixed-gear bikes. How do you ensure that you are the #1 choice for consumers looking for this type of bicycle?
Mehdi: Staying relevant and knowing your customers. It’s important to evolve as the fixed-gear trend evolves. Being active and hanging out with customers helps us have a pulse on things.
Eric: Value-proposition. You offer the best product for the price range and you make it a “no-brainer” to choose your product/brand. And you improve over time; we’re constantly evolving and adapting.
Reza: Making sure the customers know that they are getting the best value with us.
What sets State Bicycle apart from the competition?
Eric: Well, again, value-proposition. But aside from that, there is a strong brand that comes with State Bicycle; videos, race teams, events, video premieres, races and rides, promos, new products, apparel, etc. We are moving at 1,000 mph. There is something new every week, it seems. Bottom line though, in one word, energy.
What is the idea behind your concept stores?
Eric: It’s a different venue for our customers to experience the product. And it’s a manifestation of the brand in cities we don’t live in…
How do you choose their locations?
Eric: Market success probability and operators that we trust or believe in; where those two things intersect is where we will be.
What percentage of sales do your brick and mortar stores represent in comparison to your online operation?
Eric: I can’t say for sure. We have so many sales channels that contribute to our success, it would be difficult to decipher the percentage, exactly. But the concept shops do great and we love having that feature.
You were featured on CNBC.com in a piece on millennial entrepreneurs. How did this come about?
Mehdi: We are very active with an organization called OurTime. This is to promote young businesses started by young entrepreneurs.
What other “mainstream” media attention are you getting?
Eric: Well, mainstream attention isn’t necessarily our focus, but we do have some product placement in a major feature film coming out later this year, as well as product placement in a recent Samsung commercial and Subaru ad. But I am sure we’ll have a few tricks up our sleeves in 2012…
You have a large following on FaceBook and Twitter and actively engage your audience. Do you find this is where your target audience is?
Mehdi: The majority of our customers are under the age of 30. These are people who spend a large amount of time on their computers and with their smart phones. Twitter and Facebook have allowed us to interact with our customers in a way that wasn’t possible 10 years ago.
How else do you market your company?
Mehdi: Events, partnerships, networking, word of mouth. There is really no stone we leave unturned.
You have a UK website to serve the EU. That seems pretty incredible for a company barely 2 years old. Is this a risky move?
Reza: It would have been risky if we started in the UK. However, we figured out the formula of success for our product in the US first, now we are just trying to replicate that for our European audience
How do you control your brand now that you are international?
Mehdi: We make sure we instill the State Bicycle Co. brand ethos in everyone we work with. We only work with first-class people and companies to ensure that nothing is ever compromised.
How do you leverage technology to be more competitive?
Eric and Mehdi: We’re pretty analytical. We use Google Analytics, for one thing, to see who is coming to the site, how long they stay there, how they browse, etc. Our website contains a lot of helpful features, like being able to see every abandoned cart that a customer leaves behind. We just concentrate on learning from this data and improving. From a marketing perspective, our technological presence is one of the major things that pushes us ahead of the competition.
Mehdi: We do. Whether it’s Dropbox to transfer files back and forth with a photographer that lives across the country, or using Spotify to sync the playlists for all of the State Bicycle Co. concept stores, cloud computing definitely has a place in our business.
What have been your biggest obstacles to getting State Bicycle off the ground?
Reza: When we were first getting State Bicycle off the ground, we all had other jobs that were supporting us financially. We had to essentially work 2 full time jobs for the first 6 months straight. Once we started getting more of a regular income from State Bicycle, we quickly gave that our complete focus.
Eric: To be honest, we tackle speed bumps before they become obstacles, so this is a difficult question to address. But if I had to answer, I would say that managing inventory levels properly has been one of the hardest tasks. For example, if we decide to make X units of a certain model, it takes several months to have the final product ready for sale. A lot of times, we are producing a third batch of products that have never seen the light of the market. A bike’s color-scheme, for example, could be outrageously successful, when we thought it would only be moderately successful. It takes months to adapt to the success, and we might be out of stock for a while before we’re properly stocked; in the meantime, we are losing sales because the item is unavailable for such a long period of time. We’ve had backordered sales for 3 months before. Reza, in particular, does a great job with forecasting these things, though.
How did you overcome them?
Reza: It was easy for me to overcome the time needed to get State Bicycle off the ground because I saw how focused Mehdi and Eric were on it. We all kept our focus and gave each other the support each of us needed. It was a lot easier to put in all the hours we needed to at the beginning, knowing the 2 people right next to you are doing all they can as well.
Lastly, do you have any advice for budding entrepreneurs?
Mehdi: Don’t be afraid to take chances. This may sound cliché, but it’s true. There are a lot of people who will doubt your idea because they don’t have the courage to execute it themselves. Believe in yourself.
Reza: Do not slow down. Take your idea step by step and get closer to it every day. Get better every day at what you are doing. Take wise risks, and trust yourself.
Eric: Yep! Actually, I have a lot. First off, you better surround yourself with partners that you trust and that bring something to the table; ideas are one thing and execution is another. I can’t speak highly enough about the partners I have; they are relentless, and the balance that we all have is outstanding. Secondly, your product and value-proposition must be great and people need to be able to find/see it; otherwise, you’re dead in the water. Thirdly, don’t get comfortable with a little success. Someone else is out there working their ass off trying to catch you, don’t get caught sleeping. Next, you need to see things objectively; admit when you were wrong, know when to cut losses, don’t get attached to an unsuccessful product just because it was your idea, and don’t be complacent with a vendor/price/relationship just because it’s comfortable. Never shut down an idea, either; if you don’t like it, try to conceive how it MIGHT work before you close the book on it. Lastly, if you are spending one single dollar on anything that doesn’t return MORE than one dollar in value, get rid of it. Stay thin.
Note: This interview has been edited for clarity.
Read more Talking Small Biz interviews with other entrepreneurs to learn what they are doing.