INDUSTRY PROFILE by Dan D'ambrosio
Total Page：16
File Type：pdf, Size：1020Kb
INDUSTRY PROFILE QBP QUALITY BICYCLE PRODUCTS by Dan D’Ambrosio photos by Mike Deme he first time I talked to Steve decent bike shop, Flagg said. Haul Trucker for touring cyclists. Flagg, founder and president of Flagg, a former bike-shop owner him- QBP also purchased Salsa Cycles, Quality Bicycle Products (QBP), self, remembers a conversation with one of which offers a full range of premium road, he was riding his bike home his early employees as they discussed how mountain, and cross bikes, and is heavily Tthrough Highland Park, not far from the big QBP might become. At the time, they pushing adventure touring. The Fargo — 265,000-square-foot warehouse that hous- had reached $2 million in sales. named after a Coen brothers movie — has es his business in the Minneapolis suburb “We came up with the number of $10 a relaxed geometry, 700c wheels with of Bloomington. Flagg rides to work nearly million,” Flagg said. “That was as big as knobby tires, drop handlebars, bar-end every day. we could possibly get.” shifters, and can accommodate as many as “I have a four- or five-mile ride through Although Flagg doesn’t release the six water bottle cages. The Vaya, loaded the park,” he said. “It’s impossible not to exact annual sales figures of his company, with braze-on’s for fenders, racks, and do on a nice day.” it is higher than $160 million. QBP sells to lowriders is their road adventure bike, There isn’t much Flagg has found virtually every one of the 5,000 bike shops designed to take on most surfaces. impossible since he and his wife, Mary in the country and has a reputation for a “The Fargo is perfect for dirt road riding Henrickson, started QBP in 1981 with deep inventory, a highly knowledgeable and extended packed riding on gravel roads about $30,000 that they raised by mort- sales staff, and quick shipping. and bike trails,” said Gary Sjoquist, QBP’s gaging their modest home and scraping The company carries about 30,000 advocacy director. “I think we’re going to together their savings. That first year, they items from 400 vendors, and has launched see something happen here like what they did about $100,000 in sales. The next year, its own bike lines including Civia, a new have in Germany, where people ride out they netted $250,000, then $500,000 and line of high-end “transportation” bikes, of city centers all packed, going out for a in the fourth year, $1 million in sales — and Surly, “sturdy, no-frills” road, moun- three- or four-day mountain bike trip.” exciting because it equalled the sales of a tain, and cross bikes, including the Long Sjoquist was hired in 1994 when a group of employees went to management Since its founding, Bikes Belong has given added up the staffs of all the bicycle advo- (i.e. Flagg and his wife) and said they away nearly $2 million raised from the cacy organizations in the country, includ- wanted to create a full-time advocate posi- industry to help communities build bike ing Adventure Cycling Association, plus tion on staff. trails, bike lanes, or BMX parks. In almost all of the people who work in the indus- “At the time, there was nobody in the every instance, there also was federal try, and even threw in all of the high-end bike industry working full-time as an grant money on the table. enthusiasts who are willing to spend advocate,” Sjoquist said. “We like to say a dollar in Bikes Belong $5,000 on a bike, you’d probably only Todd Cravens, QBP’s director of sales money leverages $550 in federal funds,” have 300,000 to 400,000 people. That’s not and customer service, remembers being in Sjoquist said. enough for a $6.5 billion industry. the room with Flagg when the advocacy So far, more than 4,000 miles of trails, “The advocacy end is too small,” position came up. The idea was quickly including those in BMX facilities, have Sjoquist said. “Down the road, anytime accepted. Because Flagg and his wife own been built. The most recent effort from there’s a bike issue at the federal level the company outright, there was no board Bikes Belong is a campaign to get one there should be hundreds of people calling of directors or outside investors to consult. million people to sign a pledge saying or writing. This is just basically NRA stuff “Steve and Mary have always been big they support bicycling. The campaign is or the Sierra Club. It’s an existing, proven on giving back to the industry and being being managed by Blue State Digital, the strategy.” really good stewards,” Cravens said. same company that ran President Barack To understand how Steve Flagg took a Since his hiring, Sjoquist has been at Obama’s online campaign when he was small business importing hard-to-find bot- the center of every important develop- running for president in 2008. tom-bracket spindles and chainrings from ment in bicycle advocacy, including Bikes Sjoquist said an estimated 53 million Japan and turned it into the largest parts Belong, founded in 1999 by QBP and a people in the U.S. own bikes, but many and accessories distributor in the bicycle group of big players in the bike business. don’t even ride them. He also said if you industry, it helps to consider his response to a strict foreign-language requirement at Then in 1984, a few years after they Washington, DC, called Century Cycles, the University of Minnesota, where he was founded QBP, Flagg and his wife latched and bought parts from QBP. a student in the early 1970s. on to a new niche in the market known as “They were technically astute, very The university required five quarters mountain bikes. polite, and humble,” Cravens said. “As a of foreign language, and a restless Flagg “Mountain bikes took off and so did dealer, if I had a technical question, they could answer it, and they would help you before you purchased. That was not very common.” Cravens sold his shop in 1993 and went to work as a sales manager for Serotta Cycles in Saratoga Springs, New York. He left Serotta a year later and had offers from several companies, but he went with the offer from QBP. “I knew Steve had integrity, and he was honorable. Out of the chute, our val- ues aligned. That’s why I chose Quality,” Cravens said. “It’s been a very good choice.” When I talked to Flagg by telephone after he finished his ride, he was sitting on the back deck of his home, a chorus of frogs croaking in the background. He has reached a point in his life where he could do anything he wants, including retire. But instead, he’s opening a LEED gold-certified warehouse in Ogden, Utah, in December to better serve the West, especially the large California market, and to make an environmental statement at the same time. The new warehouse will utilize geo- thermal energy, tapping into a 350-foot well to pump 55-degree water and run it Proud papa. General Manager of Salsa Cycles Jason Boucher with their precision parts. through a heat exchanger that can be used for heating in winter and cooling in sum- could not bear the thought of sitting we,” says Flagg. mer. Flagg will also preserve as many trees through the agony of learning a language In fact, there were similarities to the as possible on the nine-acre property. The by rote. Instead, he moved to Germany touring market. Both types of bikes warehouse in Bloomington is also LEED for eight months, immersed himself in the required triple chainrings. As his business gold-certified. language, came back and tested out of the grew, Flagg was careful to stay in close “What I really want to do with this requirement. That’s the definition of risk touch with his customers and to cultivate is show [that] you can construct a green taking and innovative thinking, require- his contacts with manufacturers overseas. building and make a business case for it,” ments for any successful entrepreneur. “I’d talk to my customers first to make Flagg said. Flagg, 59, also bought a Motobecane sure I had a strong interest in a product,” It’s a good bet Flagg will have no while he was in Germany and toured Flagg said. “Bicycle retailers helped guide problem making his “green” case. He has around Europe, which led to his opening me, and I’m eternally grateful. They told already shown a person can build a phe- a bike shop called Freewheel with several me what they needed and supported me nomenally successful business with a few partners in Minneapolis in 1974. The shop even when I had a kid crying at work.” basic principles. specialized in touring — way ahead of its Flagg and his wife raised two daughters “Basically I trust that people want to time — and Flagg was having a hard time while they built their business. He remem- do the right thing,” Flagg said. “I hire finding the spindles and chainrings he bers paying his young daughters a penny people who are better than I am. At the needed to set up triple cranksets. When for every brake cable they rolled into a end of the day, it isn’t that complicated. the company from which he was buy- circle and dropped into a plastic bag while Apparently it worked because we have ing parts for his shop — a small concern they watched Saturday morning cartoons.