How Mountain Bikes Direct’s Jen Geale and her co-founders harnessed failure to save their $2 million online business from the brink
Wednesday, February 1, 2017/
Ranking 41 in the Smart50 class of 2016, Mountain Bikes Direct boasted a three-year revenue growth rate of 69.1% when SmartCompany checked in with the $2.3 million company last year—but it wasn’t all that long ago that the company was on the brink of closure.
It was a matter of shape up or shut up two years ago, when founders Jen and Michael Geale and Tim and Mylene McCullough put a deadline on their attempts to boost profitability.
“We gave it six months to stabilise, and another six months to start making a certain percentage profit—if those milestones were not achieved, we would make the tough call to wind it up,” the founders told SmartCompany last year.
Tough decisions were made and the company hit its straps by developing a digital-only bike parts business. Jen Geale spoke to SmartCompany about the benefits of working in a small team during that process, and how the business went back to basics.
There’s four of us founders; we’re two husband and wife couples.
The two guys started out with a physical [bike] store back when my husband [Michael] was still in high school. The other guy, Tim, finished his carpentry apprenticeship and joined him. Then, they both got married.
Mylene is French Canadian, and she and Tim work remotely on the business from Canada. Her background is in childcare and things like that; she came to Australia as a backpacker.
I studied economics and law, then did management consulting, and then after a couple of years in the corporate world, I decided to [leave]. When I started looking around at the people in the corporate business, I thought “these people are working really really hard”, but I wasn’t particularly inspired.
Tim and Mike were working in the physical bike store, and there was something appealing in working on something that was your own. I actually wanted to work on some volunteer stuff, but [moving to the bikes business] was a choice about the flexibility.
When I met Michael I could barely ride a bike—but I had no choice, and since then I’ve gotten a lot better at it!
The physical bike store had been around for nearly a decade and Tim primarily ran that business; Michael and I were involved in starting up the Mountain Bikes Direct online business. There was different branding and different price points between the two channels.
We went into it going “we need to be everything to everyone”. We were just not really tight on expenses, to be really honest.
It was like: “Let’s go and do all these things, try all these things”, but then we had to sit back and go, “hang on, profit or growth?”
The decision we made was there was no point getting really, really big if we’re not making any money.
We gave it six months to basically just stabilise to see regular, albeit small profits. We gave it another six months to meet another net profit target.
Initially, you’re certainly thinking, “I don’t want to tell anyone we’ve failed”, but we harnessed it and said, “Okay, I’m going to make this work”.
Because there were four of us, we were able to sit down and ask, “Is everyone on board?” I think with the four of us working side-by-side, you can kind of embrace this emotion and say, “Let’s just get it done”.
A lot of people ask us about [working with a spouse]—because we predominantly work from home, and you’re spending a lot of time at home—but I think it’s been good.
All of us enjoy working on a mutual project and we’ve all got young families. With the business, I could take time off when I needed when I was pregnant with our girls.
The flipside is it’s nine or ten at night and you’re still talking about work.
Before we had kids we weren’t as strict—we once did this thing when we [Michael and I] worked nights. I think about that now and I think, “you’re an idiot”. But it worked, and well, hats off to shift workers.
You couldn’t make that decision if you didn’t work with your partner. It enabled us to probably just make a real dent on a few things we needed to drive the business.
We used to offer phone support in the business, and we used to have people in the warehouse answering the phones but now we have email only.
Often we were still needing to get back to people later anyway on the phone; when people called us with more technical questions, we needed to go away and research. So really, genuinely email support is the best way to resolve things.
When we removed phone support, we though there would be more push back, but we are quite responsive to emails. We were actually having this conversation a few days ago, that we don’t have a phone line and it’s fine, as long as you’re responsive and you’re honest with people.
And again, you can’t be everything to everyone.
We sold our physical bike store and that’s not because we believe they don’t have a place; you have to position yourself in a way to make you different.
We’re looking at a few ways (that we can’t talk to much about) to Amazon-proof things.
I don’t believe Amazon will be death of other e-retailers, but there are going to be challenges. There are plenty of sites that exist in an Amazon world.
You can be the small team, for example. I think people like seeing that we’re real people.
In terms of taking advice, I’m not really good with taking unsolicited advice—I just think I filter it out. Early on, Michael’s dad said “You’ll never make money selling bike parts”.
A lot of different people have different ideas, but we’ve come to realise we’re the only people running our business. We’re the only ones who understand our customer base, but you have to test advice against your own situation.
At the end of the day, you’re the one that has to implement that advice for your customers.
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