What Entrepreneurs Can Learn From The Bicycle

What is the greatest threat the hat industry ever faced?

No, it wasn't the Reign of Terror.  

Since you are reading this blog, you may have already guessed that it was--the bicycle!

Believe it or not, in 1896, supposedly sane and rational businesspeople actually believed that the bicycle would bring an end to la fabrication des chapeaux. Apparently, cyclists were wearing cheaper caps and saving their more expensive headwear for special occasions--or doing without it altogether.  One irate hatter even proposed asking Congress to pass a law that would have required every cyclist to purchase at least two felt hats a year.

But the makers of cranial coverings weren't the only ones who feared for their livelihoods because of the newfangled two-wheelers.  Before the bicycle craze of the 1890s, men went for a shave and haircut on Saturday afternoons, in preparation for a night out.  "Now they go off on a bicycle and do not care whether they are shaved or not," lamented one barber.

(Imagine how he would react to today's young male denizens of Portland, Oregon and Williamsburg, Brooklyn!)

Shoemakers also complained they were losing business because people weren't walking.  Not surprisingly, cigar makers were in a panic:  Even in those days, before people knew about the health hazards of smoking, pedal pushers saw that cycling and stogies didn't go together very well.  Saloon owners said they were losing business because cyclists preferred other beverages to beer.  And, interestingly, booksellers complained that times were tough because people were riding instead of reading.

That last complaint seems really odd to me:  Cyclists, at least the ones I know, tend to read more than other people.  Perhaps things were different in 1896.

Moreover, I haven't seen that cycling keeps people from drinking beer.  Now, I can understand the panic of cigar makers:  I can't think of a single cyclist I've ever known who smoked them.  Then again, I've never known a lot of people who smoked cigars.  For the record, I've smoked two in my entire life, and don't plan on lighting another.

Jason Feifer, the Editor-in-Chief of Entrepreneur, talks about the "panic" I've described to make this point:  that change should be embraced rather than fought.  We may be experiencing another "golden age" of bicycling and, he explains, it presents all sorts of business opportunities, some in industries that have no apparent relation to cycling.  He draws parallels with other innovations that some companies should have embraced, but didn't--or did so when it was too late.  For example, he says, music companies should not have resisted streaming, any more than energy companies should have shied away from solar technology.

All you have to do is look at how many books about cycling and bike-themed beers are on the market to understand what he means!

P.S.:  A reproduction of the photo in this post hangs on my wall--next to my bicycles, of course!

A Lesson In Bicycle Economics

As the academic term begins in colleges all over this country (and world), thousands of students will purchase Professor N. Gregory ( Mankiw's Principles of Economics.


Those students will, I believe, learn more about economics  by shopping for the book than by actually reading it or attending their Econ 101 classes:  The most recent edition of Professor Mankiw's book goes for nearly $300. 

I'll put that in perspective:  The price of that book is nearly the same as my tuition for each of the first six semesters (out of eight) of my undergraduate schooling.

I mention this because of another lesson in economics I got, rather unexpectedly, a few days ago.  And it didn't come from Professor Mankiw or anyone else who served as a Presidential advisor.  Rather, it came from an authority I trust far more:  a bike mechanic I trust with any repairs or other work for which I don't have the tools, time or patience.

I'm talking about Hal Ruzal of Bicycle Habitat. He was re-tensioning the rear wheel on Tosca (my fixed-gear Mercian), which he built for me seven years ago.  That I rode it for so many miles--and, in fact, for a thousand or two on my DeBernardi before I transferred it to Tosca--is a testament to his skills.  

We chatted about one thing and another and somehow we got onto the topic of past jobs or our youth, or something related.  Anyway, he mentioned that during his senior year in high school, he had a job that involved drawing maps for an insurance broker.  In two weeks of working that job, he said, he'd saved up enough money for the bike he was lusting after:  a Frejus Competition.

As I mentioned in another post, that bike practically defined "Italian racing bike" for many of us who first got into cycling during the early days of the '70's Bike Boom.  I never owned one myself, but I admired it if for no other reason that it was one of the prettiest bikes available at that time.  And while accounts of its ride qualities vary--and the workmanship, while not bad, is not as nice as that of similar bikes I'd encounter later.

At the time Hal bought his, it retailed for around $375. The frame was constructed of Reynolds 531 double-butted tubes, rather than the Columbus SL or SP most Italian builders were using.  The frame was adorned with then-top-of-the-line Campagnolo Record components, including the Nuovo Record rear derailleur.   (Super Record was a couple of years in the future).  And, from what I've heard, Tom Avenia--whose New York City shop was, for decades, the main retailer of Frejus as well as other Italian marques and Campagnolo components--would replace the stock saddle (a Unicanitor, I believe) with a Brooks for an additional five dollars.

Hal, not given to hyperbole, put his job and purchase in perspective:  "Today, a kid could work all summer and not have enough for a 105 bike!"  Shimano's 105 components are good stuff--I've used some myself--but they are not top-of-the-line, as Campy Record was.  And, even though 105 derailleurs and brakes (or even cheaper ones) work better than anything produced at the time Hal bought his Frejus, nothing made today has the kind rugged construction or workmanship of those old Campy components.

Hal's lesson in economics followed one I heard recently in a lecture:  For the minimum wage to have the purchasing power it had in 1968, when it was $1.60 an hour, it would have to be $10.90.  Of course, even that doesn't get you much of anything--in terms of housing, food or clothing, let alone bikes--in places like New York (where I live), San Francisco or Boston. But what kind of lodging (or bike) can you get at the current minimum wage of $7.25?