How to Break Into The Cycling Industry – Brave Soldier Founder & Ergon USA VP Jeffrey Neal
Back when I was racing a lot and seeking personal and team sponsors, I hit up Brave Soldier. At the time, it was still run by its founder Jeffrey Neal, and he ended up hooking us up with product to use and sample to other racers in our area.
As I moved into the consumer goods industry with a product of my own (beverage industry, long story), I became fascinated with anyone who was able to create a consumer packaged good and see success. And success they had…so much so that it quickly outpaced their capital resources and, well, I’m getting ahead of myself. From there, he moved to his current position as VP for Ergon’s U.S. operations.
Over the years, I’ve talked to Jeffrey many times, but it was finally time to dive into details. Here we go…
BIKERUMOR: Who are you and what are you doing here?
JEFFREY: For the past four years, I’ve been VP of Ergon USA’s North American Operations. My primary responsibilities are working with our distributors in the U.S. and Canada, developing the marketing and advertising strategies, and communicating everything back to our headquarters in Germany. There are a lot of moving parts to any international company so at times we are putting out a lot of fires. But Ergon is a very exciting and challenging company to work for because we are constantly designing innovative new products. We are particularly excited about our new SM3 saddle line.
BIKERUMOR: What was your first job or experience in the cycling industry? How did you “break” in?
JEFFREY: I was in entertainment industry for many years working in television production and TV commercials. When I reached the point of professional burn out I took off to Europe to clear my head, to get a brand new start. I sold everything I owned, house, furniture, and clothes and bought a Cannondale mountain bike. I told myself I would be open to any opportunity if it presented itself.
So when I returned from Europe, I was literally walking past a bike shop window and saw a help wanted sign. I knew I could sell and I thought I knew everything about bicycles. How hard could it be? Of course I knew nothing beyond having a passion for the sport. Luckily the owner, who is now someone very high up at the big red S, had written a concise employment training manual on everything you need to know about working in a bike shop… dealing with customers, the technical aspects of bicycles, and he went into great depth about the business of selling bikes…margins, dealer costs, customer service, price shoppers. He was very open with this information, which made you feel you had a stake in everything you sold. A bike shop is an excellent place to learn the basics of any kind of business regardless of the size it’s just scalable.
BIKERUMOR: What’s your educational background?
JEFFREY: Graduated high school in Mountain View, California, which is now home to Google! Two years at Monterey Pensinsula College and two years at UCLA doing independent film study. But I’m always best at jumping in over my head and learning everything from the ground up which is a major asset in the bicycle world.
BIKERUMOR: After that first experience/job, what was the path to your current position?
JEFFREY: After I moved back to Los Angeles, I realized I had something of a new retail skill so I applied at the craziest bike shop I could find. If I was going to work retail it had to be insanely busy. I. Martin Imports, now owned by Helen’s, was like jumping into the bicycle trench wars. The phone rang off the hook constantly and you never knew who would walk in the door. From A-list celebrities, to a Saudi Prince who wanted a dozen XTR equipped Merlins to have on his yacht, all the way down to the most interesting creatures Hollywood has to offer.
We were in a highly competitive market and the mountain bike world was blowing up. It was like the fixed gear craze times 1,000. To truly understand the bicycle business you have to work at the shop level.
I can’t stress this enough. Dealing with all aspects of retail especially security, closing huge sales with demanding customers, and personal relationships within the work place. Firing staff. Hiring staff. Learning to manage people. And working at the bike shop you are exposed to many entrepreneur’s dreams in the form of new products…and being one of the largest shops in the country, we were one of the first dealers in the country for many new products. Electra, Camelbak, and Speedplay were just a few during my time.
Marty the owner was never afraid to be the first to try something new and it was a forward thinking strategy that really paid off because by the time a product had become the hot seller we’d already had the market cornered.
Now that I’m on the entrepreneurial side of things I get see how a lot of other shops operate and experience the consumer potential they offer.
After a few years in retail I quickly realized the most bang for your buck is in ownership. And after a rather spectacular crash on my road bike, I started a company called Brave Soldier with, Dr. Ezra Kest, a riding buddy and mountain biking dermatologist who lived in Beverly Hills. This was where I really learned how to create a business in the bike world. Setting COGs, stretching margins, trying to make payrolls with little outside capitalization.
The biggest challenge was Brave’s success at the department store world. This little bike shop brand was suddenly selling at Barneys of New York, Sephora, even Bath and Body Works. Bigger POs meant more capitalization for inventory, more employees and more travel to stores. It got crazy fast.
It wasn’t the direction we had set up for so I sold my share and decided to find new a opportunity. But I had learned so much from the Brave experience. Even to this day when someone comes up and tells me a story of how our ointment helped them heal from some gnarly crash it makes my day.
BIKERUMOR: Were you mixing the stuff up in his office?
JEFFREY: No, we went to a lab immediately. It was a very sophisticated formula. This one lab we worked with told me there was one certain chemist I should meet, David Wood, that did really with complex formulas.
My inspiration came from a really bad case of road rash I got doing a century ride. It just wasn’t going away, so I asked Ezra if he had anything. He had been combining more natural ingredients like Jojoba and Lavendar oils with standard over the counter antibacterial ingredients. The combination worked really well. I started testing them on myself and anyone else I could get it on.
Brave Soldier worked so well because of the combination of ingredients plus what we called “moist wound healing.” If you keep it moist, it’ll heal faster than if it scabbed up. We felt it was a great alternative to Neosporin, which was petrolatum based, and we could add a lot more healing ingredients.
JEFFREY: We had a really fantastic board of directors of people I knew from the shop. One of the guys was the North American VP of Red Bull, another was the owner of a huge ad agency and another was a woman who owned a big cosmetic store. One thing led to another and we started getting a lot of good PR outside of the cycling industry. Our initial goal was to focus on the athletic world, but things were going so well we just kind of had to go with it. We started developing some general skin care line like the men’s shaving cream. When we started getting the large orders from stores like Barneys, we realized we were pretty under capitalized.
When you’re selling at Nordstroms and the like, you have to employ outside sales reps that make $20 an hour to stand around and get people to try your products. When you start having to pay their travel and incidentals, plus your own travel for training and sales meetings, things can get expensive really fast. The way a lot of small businesses do, we followed the money. We did that, and in the end I was constantly going back to my board saying we needed more money to continue the growth.
One of the consultants we hired along the way with a lot of experience in the industry put together a group to buy it. They bought the name and formulas and grew it. Compared to their usual $100 million brands, it was a bit small for the portfolio I guess, and they ended up selling it to someone else about a year ago to someone that had more of an athletic focus. I met the new owner at Interbike last year, which was really cool, and he’s doing a really good job of getting it back to its roots.
BIKERUMOR: And once you sold…
JEFFREY: I started working as a consultant in the bike industry. I had learned every little trick to get good PR and save money.
I met Franc Arnold, the owner and inventor of Ergon at Interbike in Vegas. I had gained tremendous insight into the bicycle world in the U.S. and he needed someone to consult about launching in the U.S. When he tasked me with finding someone to officially run the company, I realized I would be the best person because of my past bicycle experience and I really believed in Ergon as a product and Franc as a business man and a friend. So I said, ‘What about me?’ and Franc sent me a plane ticket to Germany the next day.
BIKERUMOR: What’s a normal day for you?
JEFFREY: I get up very early and begin Skyping and emailing with my associates in Germany. After taking my kids to school, I’m in the office by 8:30 answering work emails. From there it’s mostly strategic in terms plotting marketing and execution of our daily Ergon business operations.
Then, when Taiwan opens up in the afternoon we begin on that end. Our goal with everyone on the Ergon International team is to communicate to the best of our ability in 2012. And with our new saddles, we are now adding Italy into the mix. Luckily everyone speaks English and technology is usually the same language. We’ve become quite adept at solving conflicts in many languages because sometimes the problems are simply about different cultural interpretations.
Franc and I have this dream that someday our US operation will somehow be on autopilot but it keeps growing bigger and more complex. The headaches are bigger, the pressure is more intense, but the rewards are more substantial. We believe the future is very bright for Ergon.
BIKERUMOR: What are the highlights of your job?
JEFFREY: As much I as whine about it, Interbike is always a blast. It’s one of the few times where you have a real sense that all of your efforts throughout the year are actually making an impact and the positives are becoming a tangible reality. Sea Otter is always a favorite too. It’s the tribal bike nation coming together and seeing old friends and sharing in their successes. Scot Nichol from Ibis, Chris from Niner, and Hap from Competitive Cyclist are all wonderful people to know and bring a lot of innovation to the cycling industry.
I love traveling and going to Germany three or four times a year. I never take this aspect of my job for granted. It’s always special. Same with Taiwan. To really see how the entire U.S. Bicycle industry is basically produced in a different country to the level of precision and logistical coordination it takes, is quite impressive.
With Ergon, our owner Franc Arnold is unique in his design vision and his truly patient business sense is wonderful. Americans expect things to blow up over night when in reality true success and real innovation takes time. But in the meantime, the German beer and the hot laps on the Nurburgring can’t be beat.
BIKERUMOR: What could you do without?
JEFFREY: Scammers- the people that are trying to get deals for no apparent reason. Even at the bike shop level there are always people trying to hustle something and leverage their personal relationships with dealers to their own benefit without the bike shop ever knowing about it.
With the advent of social media it’s become very easy to see how much exposure your brand is getting from an event you’ve sponsored. So it’s been fun to be able to hold the gimmie-gimmie-gimmie crowd accountable while at the same time social media has introduced us to many great riders and events we never would have found otherwise.
BIKERUMOR: What advice would you give to someone looking to follow your path today?
JEFFREY: If you truly love cycling and you are willing to start in the trenches at the bike shop level, then the cycling world it can be an amazing experience.
I believe you have to be a “people person” to be a success in the bike world because in the end its all about personal relations. I would bet that the bicycle business is the smallest billion-dollar business in America. You have to be realistic to its financial limitations at the start and be flexible to the best direction it will lead you. But I can promise you in the end, you will have fantastic adventures and meet the most interesting people in your life. At the bike shop level you never know who will be the next person to walk through that front door. You will make lifetime friends. One of the best aspects is learning basic business strategies immediately. And in the end it seems, everyone loves bicycles.
To really benefit long term, you have to establish equity in whatever you do in the bike business and this is extremely hard. To be the owner of a product or a shop or even a unique website is your best bet. Obviously this is the future.