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“How That Happened” Episode 40: Brendan Quirk – Allied Cycle Works – Turning Your Passion Into a Career

Interview Transcript


Brendan Quirk:             I think autonomy, independence, being a boss is awesome. And I think that that’s probably underappreciated by ambitious people and what’s probably over-weighted is pursuit of money.


Robert Wagner:            From HoganTaylor CPAs and advisors, I’m Robert Wagner and this is How That Happened, a business and innovation success podcast. Each episode of the show, we sit down with the business and community leaders behind thriving organizations to learn how business and innovation success actually happens. Our guest today is Brendan Quirk. Brendan is the CEO of Allied Cycle Works in Bentonville, Arkansas. Allied stated mission is to make the best bicycles and components in the world right here in America. So a very lofty goal. And he’s also a big part of the Cycling Movement in Northwest Arkansas. So Brendan, welcome to the How That Happened podcast.


Brendan Quirk:             Thank you for having me.


Robert Wagner:            Very excited to talk to you and learn more about this industry and about Allied. So looking forward to the conversation. So just for context, maybe describe what part of the cycling industry you play in, who’s the target customer you’re looking for? What does it look like?


Brendan Quirk:             Yeah, absolutely. So Allied is a unique business because we’re a legitimate manufacturer of carbon fiber bicycles. As you look the cycling market or even the outdoor market more broadly, you can talk about skis or tennis rackets or tent poles or whatever it is you want to talk about. Anything that has made, almost anything it’s made out of carbon composite material is going to be manufactured in Asia. And we have a different take on things as we are trying to build a sustainable profitable business where we make carbon fiber bicycle frames in the United States.


                                    And it’s a lofty goal for two primary reasons that are probably pretty obvious. One is cost of labor in the US is a whole lot more than what you’d be paying for labor in Asia. And secondly environmental regulations, we have to play to a much tougher set of rules than what you get in much less regulated markets in Asia. In terms of our customers, we specialize in gravel bikes and road bikes and they’re not cheap. Our average bicycle price is getting close to about $7,000 per bike, but we’ll sell bikes that 12, $13,000. One nice thing about being a manufacturer just soup to nuts is that we can customize almost anything. The most extensive customization we usually do is with paint and the cosmetics and people really enjoy that. But it’s a lot of fun having as much control over the process as we do


Robert Wagner:            So who’s doing this? Who are the gravel road racers? They’re competitive, but they’re mostly amateurs, right?


Brendan Quirk:             Well, that’s a great question. I would say this is the … Cycling industry over time or bike racing over time, you go back to the beginnings of the sports road racing, it’s the tour de France and all of that. And road cycling, as you conjure up those images of Lance Armstrong and so forth, that’s what bike racing has been for 100 years. What happened in the 1980s in Northern California, mountain biking was basically invented there and it was guys who took beach cruisers and put motocross, motorcycle tires and parts on there. And all of a sudden they’re like, man, this is kind cool. That’s when the mountain bike boom happened.


                                    The mountain bike boom really had a big impact on the bike industry. And along with that bike boom came a whole lot of mountain bike racing that went on. And really that has been from a competitive landscape, Olympic cycling, professional cycling has been road and mountain. There are a couple of other niche versions of cycling that are not worth, nobody’s ever heard of. It really boils down to road mountain. What happened in the last, and it’s mostly due to technological development with bicycles.


                                    What’s happened in the last five years or so, is that basically this hybrid kind of bike is kind of like half road, half mountain has been invented and that’s the gravel bike. And what it allows you to do is it allows you to have the speed and what I describe as the sensation of flying that you get on a road bike. But you get what I think is the best advantage of mountain biking, which is you’re not around cars, gravel roads, there’s just nobody out there and the cars that are all out there, it’s a farmer who’s driving 15 miles an hour and he waves to you and gets out of your way.


                                    And so this gravel cycling wave, is this emerging wave of cycling that I think for a large group of people is really exciting because mountain biking for a lot of folks is scary, they don’t want to crash, or road biking is scary because of the cars. I think the biggest limitation to gravel cycling at this point in the United States is that when you go to major metropolitan areas, New York, Los Angeles, so forth, it’s so developed, everything is paved, there is no gravel. So this kind of crazy phenomenon for those of us who live in places like Northwest Arkansas or Tulsa or Texas Hill country or these other places that others sometimes have considered fly over country, all of a sudden we are the epicenter of this sport because we’ve got this abundance of gravel roads. So it’s a lot of fun. It’s a big movement and it’s really an exploding part of the industry that we’re stoked to be part of.


Robert Wagner:            So I want to get into that as we go along here and talk about how cities are taking advantage of that, being a part of that movement, but let’s just kind of go back to the beginning. So I think in a prior conversation, you told me you got a degree in English literature, what was the plan?


Brendan Quirk:             What plan? I didn’t have much of a plan. I fell in love with bike racing when I was about 15, 16 years old. I was no good at it. I was not talented. I was no threat to win any national titles, become professional, but it just, I loved it. And I was just a knuckleheaded teenager and Little Rock is where I grew up. And I’d never seen a mountain before. The first time I saw the Tour de France on TV, it was the first time where I really like stopped to remember like, oh my goodness, those are mountains. Those are really big. Watching guys race their bikes in the Alps in the Tour de France. And it flipped some switch in me where all of a sudden I kind of looked at the whole world in a different way through this love of cycling.


                                    And for me, just where I want to go to college. I want to go to college to a place where the bike racing was really good. And that was really my plan is I just, I wanted to have fun and I want to race my bike. I didn’t have a plan. And as I went to college, moved back to Little Rock, I kind of did what all English majors end up doing, which I applied to law school. And it was literally days away from beginning of law school at the University of Arkansas at Little Rock and I was still racing my bike. I was turning wrenches in a bike shop. I was literally a bike mechanic and building bikes.


                                    And I remember the day where I got the packet for orientation for the beginning of law school. And it just hit me like a ton of bricks. I’m like, oh my goodness, law school kind of sounds intellectually interesting, but I don’t want to be a lawyer. What am I doing? And so my mom is a successful attorney. My dad is a very successful physician. He was the Chairman of the Obstetrics and Gynecology Department at the University of Arkansas Medical School, very successful, very respected physician in the community.


                                    And I remember having to pick up the phone and call my dad, I’m like, “Hey, I want to talk to you about something.” And I know he was like, “Oh boy, what is this conversation going to be about?” And I told him like, look, I don’t want to go to law school here. I am 25 years old. I don’t have a clue. I mean, now as a parent I imagine how terrible that conversation must’ve been, but I’m like, I want to race my bike and I’m enjoying being a bike mechanic and there was no plan. So it was a really interesting time that I think yeah, looking back on it, I definitely want to give my parents a blue ribbon for kind of just taking a step back and let me find myself from there forward.


Robert Wagner:            What a fascinating story. So from that moment somewhere you said with a buddy, you started competitive cyclists. Was that the bike shop you were in at that point?


Brendan Quirk:             Well I was in a bike shop, a friend and I ended up starting our own little bike shop at Mountain West Little Rock. And this was roughly like it was 1995, 1996. So yeah, we were both bike racers, loved high-end products. But that kind of the real linchpin year in the cycling market was 1999. It’s kind of a date that’s etched in, well, ’98 or ’99. It’s been so long ago; I forget which year. But that was the year, the first year that Lance Armstrong won the Tour de France.


                                    That was a game changing year where cycling went from being this kind of freaky niche sport, like saying you like botchy or fencing or something like that, to where it became mainstream, just overnight. We, at that point, we started our bike shop three or four years before that. And so when we were doing it, market was still super small and Little Rock is a small town. And my partner in the shop and I, we just loved imagine like you’re a Porsche mechanic, or you want to sell Porsches or Alfa Romeos or whatever, the market for that Little Rock, the pre-Lance Armstrong boom was really, really small.


                                    So where we turned really early on was this prehistoric, was still the prehistoric internet back then. And the prehistoric internet was for your older folks in your audience, they probably remember and its Usenet forums and listserv groups. And it was just basically like digital message boards is all the internet was. And we turned there early on to just find kind of kindred spirits, other people out there who liked this exotic high-end racing stuff that we loved. And so just by dumb luck, we found ourselves as deep as you could be online in cycling at this very early point of the internet.


                                    What happened is this kind of perfect storm kind of thing is that we were spending as much time on the internet as we were worried about our storefront. And we were selling some used stuff and some exotic stuff that we’ve come across. I still have this little notebook with people’s credit card numbers written down in it from selling people stuff over these message boards. But then what happened is Lance won the tour, we started getting a very rapid, widespread interest in high-end bikes.


                                    But then what also happened is that the first kind of inklings of eCommerce started. The first sort of pseudo encrypted shopping carts and the first businesses that were selling stuff online just began to percolate. And we just kind of put two and two together. We’re like, well, we’re sort of connected to this high end market already on the internet. This market is growing very quickly. But the market here in Little Rock is ultimately, it’s really small. So we started to increase our focus on the internet. We got online really quickly. And like you look at these milestone periods on the internet, and a lot of it’s working hard, being lucky and it’s kind of a land grab to some extent.


                                    And we were the beneficiary, it was a lot of hard work, but also, rule number one in business as far as I’m concerned, timing is everything. And we just had perfect timing. And we really capitalized on that by working our tails off. And shortly thereafter the early 2000s, we closed down our retail storefront to focus 100% on the internet, which in 2020 sounds like a no brainer, but back in whatever, it was 2002, 2003, it was terrifying. And off we went.


Robert Wagner:            That’s amazing. So just one little factoid I guess, was the Lance Armstrong thing because he was an American, is that what made it happen in terms of the interest in America?


Brendan Quirk:             He was an American and I think Nike had a kind of a turnkey playbook for turning sports celebrities into full on media celebrities and so Nike took that. Michael Jordan, Tiger Woods playbook, and applied it to Lance. And you could probably remember the yellow wristbands and the whole Live Strong movement. And it just made cycling as big as it’s probably ever going to be because he was such a mainstream superstar. You might remember he was dating Sheryl Crow and it was just superstar stuff at an unbelievable level. And the entire US bike industry was the beneficiary of it.


Robert Wagner:            Wow. Okay. So it’s a great story, kind of there at the beginning of the internet and internet eCommerce. You built that company up to be very successful. Sold that to a company called Back Country, backcountry.com I guess, which was part of Liberty Media was just fascinating to me. So what did you learn, early in your life, early in your career or doing a transaction like that with a very large company?


Brendan Quirk:             I learned a lot. I think the number one thing I learned in retrospect is that once you’re the boss, it’s really hard not to be the boss anymore. And to go from, I mean, we were running and gunning as hard as we could. And I’d never had PowerPoint literally even on my computer, much less doing PowerPoint presentations. We were instinctive. We knew our customer very well, knew our market very well. And we were just all about running fast and breaking stuff, kind of that typical early internet kind of all the cliché of fail fast and just run like hell, that’s what we did.


                                    And it’s probably a way scale a business up to a point. We took no outside capital. We had an amazing board of advisors of people who I was so fortunate to end up building this advisory group that really, their common thread is they all loved cycling and they all loved this ridiculous long shot story of these knuckleheads in Arkansas were trying to take over the internet in cycling.


                                    And so they were really helpful to us, but we were really accountable to nobody but ourselves. Everything about that business was personally guaranteed 10 times over by what ended up being three partners. And there was something in retrospect now, there’s something very pure about that and about how you make decisions and how easy it was to build consensus, to then switch to a very corporate environment. Liberty Media at that point, 2011, if you go back again, so much of it’s about what you knew at the time.


                                    2009, 2010, 2011, Amazon was still in experiment. You look at Amazon now, you’re like, they’re eating up the whole world. Amazon in 2010, 2011, it’s like, is this thing going to detonate and explode to a billion little bitty pieces? And Liberty being the gigantic company that it was full of really smart people, they had what they thought was an anti-Amazon strategy, which is to build this collection of specialty retailers in different segments. And they wanted to basically connect them in a back-office kind of way. So unlike Amazon, which is even to this day is basically just a vending machine as every product in the world.


                                    What Liberty’s thesis was, well, we’re going to have retail experiences where the retailer has extraordinary ability to curate, to educate and provide great service to their customers. And ultimately, those qualities would be this kind of being this Amazon pursuit of being all things to all people. And so our connection to Liberty is Liberty really valued the outdoor recreation space. They saw Back Country as being a really powerful company in that space. The one market that Back Country couldn’t figure out was cycling. And so that’s why ultimately, they were trying like, heck and they were spending a lot of money trying to figure out cycling, but they’re also trying to figure out skiing and backpacking and fishing and this and that and the other. So we were just crushing them because we cared about one thing and one thing only that was cycling.


                                    And so they came to us and bought us. So it was a perfect timing because the kind of cash flowing our business, leaning on our vendors, leaning on some amazing banking relationships. We were getting to a point where that was just getting too creaky. We were growing so fast. We were having to make such big capital investments in the business to grow that we knew that this is not a sustainable way to fuel the cash needs for our business. So we were beginning to think about what are our options. We just thought we were going to do around a capital.


                                    And Liberty’s pressure on Back Country to grow was intense because at that point, Liberty had four different tracking stocks on the NASDAQ. One of them Liberty Interactive Back Country was a big part of it. So they had to, yes quarter to quarter grow, grow, grow, grow. That’s why they acquired us and it was a great deal for us. But to get caught up in that vortex of acquired by a company that’s whatever, 10 or 15 times as big as we are, which is part of this gigantic tracking stock to sit there in a board meeting with somebody like Greg [Murphy], I’m like, I read about this guy in the Wall Street journal. It’s like, this is surreal. And it’s magical on the one hand, but on the other hand, it’s very corporate, very bureaucratic and ultimately very suffocating.


                                    I would say the leading lesson is once you’re the boss, you’re never not going to be able to be the boss again, that’s going to be too stifling and I’ve come up against that again and again and again, in my career, just the sense of impatience always has kind of eaten at me. I think that’s one thing. I think the other thing that I look back now in retrospect is just to learn a little bit more patience. For any entrepreneur who has the opportunity to exit, once you start getting infatuated by that idea, it’s a little bit hard to play poker. And friends of mine who are entrepreneurs who’ve been on that path, I’ve always counseled them is take your time, you’re going to get the deal done, but just make sure that things are as much as possible to your advantage.


                                    I think the final thing that I learned and I would say it’s my one … The one thing I look back on now, and I would say is the enduring a little bit of pain in that, and this is the other piece of wisdom I’ve tried to impart to other entrepreneurs is that once you pour your life and soul into a startup, and we built that business, took us 13 years from when we started until we sold it. All the lines between your personal life and your professional life get blurred.


                                    You have no sense of selfhood outside of the business that you created. Between the time we started the business and we sold the business, my wife and I had three kids. I felt a deeper sense of connection to my business than I did with my kids. I felt a greater sense of, and it’s a terrible thing to say, but it’s true. A greater sense of self-value and self-worth out of that business. Just some of it’s because I’m an idiot. Some of it’s because I guess I’ve got a big ego, but some of it is just I poured so much of myself into it that it’s hard to let it go. And I wish in retrospect that I had kept a chunk of equity in the business, because that would have … even if it’s just a small single digit percentage amount of equity in it, it would’ve allowed me to preserve that sense of self into this business that still to this day is doing incredibly well.


                                    The fact that it’s gone, it’s kind of queue up your metaphors about death and all of that, but just that the finality of having sold 100% of the company was, it’s the one thing in retrospect I regret because however good the economic outcome might be, the sense of psychological loss once you totally cash out for me anyways, was the thing that has stung. So I guess that’s probably the biggest thing that I learned and the one that I feel the most acutely even to this day.


Robert Wagner:            That’s fascinating. And clearly it’s, I mean, that’s coming from way down within, I can tell, so that’s amazing. So lets kind of fast forward a little bit. I mean, you did your stint at Back Country. You found your way to Northwest Arkansas. There’s a thing called the Runway Group. You did a stint with Rapha as well. Now your part of Allied. Sort of bundle all that together because I think they’re all intertwined, right?


Brendan Quirk:             Yeah.


Robert Wagner:            So what is all of that and what are the leaders here trying to do in Northwest Arkansas around cycling?


Brendan Quirk:             Yeah, so very briefly the history behind that, is that at the same time we started our company, Competitive Cyclist. There’s a company in London called Rapha, which was founded by one of the most amazing people I’ve ever met, his name is Simon Mottram. And Simon’s a chartered accountant, and was a chartered accountant in London, but also a big cycling fan. And he decided at one point that he wanted to create something that didn’t exist, which was cycling apparel that was super premium.


                                    And spare you all the details, but we did a lot of business with them at Competitive Cyclist and I built a really great friendship with Simon over the years. Once I was done at Back Country and sat out a non-compete that I agreed to, at that point Rapha had really grown very successful. They wanted to tee up the company to sell it. They felt that the time was right, their trajectory was right. And they wanted to, I think, build out their US business a little bit more ambitiously. The global view is the US cycling market’s the biggest cycling market in the world. And so for Rapha, it was really important for them to really put an exclamation point on what they were doing in the US.


                                    So I was hired as the president of North American business of Rapha to do exactly that. So I spent almost three years on the leadership team at Rapha, building the US business working on technology initiatives to also elevate our global business. And it was an amazing experience. It was a big time, expensive investment banker type sale process that we went through. And it was interesting because you send out the investment memo. You get all these LOIs from banks from all over the place. And it came down to, as these things do, it’s a horse race. And there were a select number of private equity firms that were the finalists and these were amazing, ridiculous amazing firms. Four of them were based in Europe. And then there was this fifth one that nobody had heard of based out of the US called RZC Investments based out of Bentonville, Arkansas.


                                    And I’d never heard of them before and I’m from Arkansas. RZC was the newly, at that point, newly created direct investment vehicle for Tom and Steuart Walton, who are the grandsons of Sam Walton. And it was just a great, a great connection. These guys loved cycling. So there’s kind of some backstory to kind of a deep connection they have with London and it was just a great fit. So long story short RZC ended up acquiring Rapha and it was amazing for everybody involved and I’m super happy. And as I thought, it was exciting. There was this Arkansas, another Arkansas Rapha connection, how crazy is that?


                                    And I did a lot of traveling in that role, a lot of traveling back and forth to London and my role in the two and a half, three years that I worked for Rapha. I flew from Little Rock to London 30 times which is basically every six weeks I was on a plane over there. And it was tough to do that. And so shortly after we sold the company I was like, okay, job complete I’m resigning, and I need to take a breather. So went through that process started spending a little bit of time with the guys at RZC. And they explained to me all the work that they were doing in Northwest Arkansas to really drive quality of life initiatives.


                                    And one of the marquee initiatives is cycling. And so they asked if I have plans upon leaving Rapha. I said, “Not being in a plane much, it was my only plan.” And they asked if I would help join the Runway Group, which is the holding company, a broader holding company for Tom and Steuart Walton to help them coordinate their strategy across their for-profit investments, philanthropic work and public policy initiatives focused on cycling and active transportation, help to develop that strategy and implement that strategy to make Northwest Arkansas one of the most preeminent regions in the US for cycling. And so that’s how I got connected to them and to Northwest Arkansas. And that’s when I moved to Bentonville.


Robert Wagner:            Yeah, okay. Very good. I love that story. So let’s get into Allied a little bit. The mission as stated is very lofty. You want to build the best bicycle in the world. Why does it matter to you?


Brendan Quirk:             Yeah, it matters to me for a few reasons. It matters to me because everything in my professional life and really in my personal life, almost, everything’s revolved around bikes and cycling, and I have this just infinite passion for the sport. I think it’s the most incredible sport in the world. And I just eat, breathe, sleep, and I want to be around people who feel the same. And so it’s great to be in that kind of environment professionally. It’s also important because all of Arkansas graduated from Little Rock Catholic High, not Central High. My daughter graduated from there. Graduate from Little Rock Catholic High.


                                    Little Rock is very, very close to my heart. I’ve got a ton of family in Arkansas. My wife is from here. My roots are so deep here. The idea that we’re going to be able to build this amazing business, create a lot of jobs, build world-class bikes and do it all here in Arkansas. To me is a combination of the two things I care about the most, which is the sport that I love and the place that I love.


Robert Wagner:            Very good. So what’s the ingredients? What’s are the most of the materials? What’s the technology that’s going to make a bike, a world-class bike?


Brendan Quirk:             The way carbon fiber manufacturing works. It’s starts with, you have to have an incredible design engineer, everything’s done on the computer first and foremost. And you have to have people who really know what they’re doing. Bikes are so light and you’re talking about a frame that weighs 800 grams, right? It’s less than two pounds, but you have to be able to put a guy who weighs 175 pounds on there who’s just going to wail at this thing, with all the energy in his body, going uphill, going downhill. He’s going to be going 60 miles an hour, really literally putting his life on the line.


                                    And the amount of engineering expertise you have to have in order to be able to marry up what you’re looking for in terms of stiffness and lightness and strength. They’re not many other products that are like this. You’re not to get an engineer who works for Boeing, and they’re going to easily be able to come over and build bikes. So it’s a very specialized application. And so you have to have super smart engineering. You have to connect that with is, manufacturing is hard and it doesn’t matter what your manufacturing. It’s bicycles or tractors or whatever. These are human processes and humans on the factory line.


                                    And you have to have oversight over that process because little problems can become big, bad problems where they quickly, if you’re not focused on it. I think the advantage we have is that you’ve got these brilliant engineers who were there with the people who are operating the factory all under one roof. And I think the level of quality and the level of continuous improvement you can have over your products it’s worth a lot.


                                    And that’s when you have this offshoring economy, that’s where things break down. When you talk about 14-hour time gaps between the US and China, language barriers, and then just the slowness of the development cycle of new products. But also if you have a problem with products in the field, trying to understand the root cause, is this a one-off thing, or is this a chronic problem that’s going to cause a lot of issues for us? Trying to diagnose this when your supply chain is across the world, that’s scary. It’s tough. And so I think we’ve got a lot of excellent people, but it’s really great having those people all under one roof. I think it’s a big, big advantage.


Robert Wagner:            So is carbon fiber is the main … is that?


Brendan Quirk:             It is carbon fiber.


Robert Wagner:            What is that? What is for those of us that don’t know?


Brendan Quirk:             An engineer can give you a really glamorous description of it, but just basically you can imagine it’s a bunch of really incredibly strong strands that, we use what’s called prepreg carbon fiber. Imagine you take these really strong strands and you make, think of like a bedsheet. That’s what it looks like when it’s all laid out. It’s just a piece of fabric. And that fabric, because it’s prepreg what that means is it’s impregnated with resin or glue. And the way it works is that you take these various forms of carbon fiber, you cut them into pieces. And the sizes of the pieces that you cut and the way you orient the pieces on top of each other, it’s basically just like papier-mâché is what it looks like when you’re starting to put the pieces of the bike together.


                                    You take these pieces and put them into a mold. And with the use of heat and pressure, it takes what just feels like papier-mâché literally like your kids would do in school. And it turns it into something that’s stronger than steel. It’s this unbelievable transformation that occurs. And it really allows you to tune how the bike feels and just to give it incredible strength and the other qualities, like I mentioned before, the lightness and the stiffness. But carbon fiber, there’s some people out there who are still making bikes from titanium, still making bikes from steel, but all you have to do is look at something like aerospace and you realize that the whole world, it’s not that it’s going towards carbon fiber, it’s already there. And it’s a miraculous material for sure.


Robert Wagner:            Wow. So I’m sorry for the simplicity of these questions, but it’s not welded, it’s like melded, right?


Brendan Quirk:             Yeah. It’s heat and pressure is what it is, and that’s exactly right. And you have pieces that you mold together with heat and pressure, and then you have other pieces that you’ll bond together using like incredibly strong glue in essence, and that’s how you piece the bike together. But yeah, the heat, it’s almost like a Panini press is what it looks like. But it’s a Panini press that’s not just, you have the external pressure of these two pieces of steel coming together, compressing the carbon fiber part that you’re making. But then you also have air pressure, you have air pressure coming from the inside of the parts. So you have pressure from the inside and pressure from the outside plus heat to give it this incredible strength. But yeah, Panini press is probably the best image you can conjure in your mind.


Robert Wagner:            Okay. So that’s a good segue into just the difficulty of doing this in America. So you mentioned labor costs, that’s pretty obvious. And then you also mentioned something that got my curiosity, which is around environmental. How does that play in?


Brendan Quirk:             The environmental stuff, that’s mostly around the finishing, it’s the sanding, the painting, a lot of the stuff we’re using. You’re using a lot of solvents, chemicals, things like that. What these things look like in the US is very different than what they look like in Asia due to environmental considerations. I’d say for us, that’s secondary. The labor component is the big one. And we, our best estimates is that on an hourly basis we are paying our employees 10X what people are doing for the same roles in Asia. And it’s the majority of our cost of goods in one of our frames is the labor, it’s actually not the carbon material, but it’s the number of man hours that we have in building the frame.


                                    So if we’re paying 10X for labor, putting a product out there that is comparably engineered at a price that’s generally the same as Asian manufactured stuff is really, really hard. But that’s what we’re pursuing because the consumer is brutal. I mean, price matters. It doesn’t matter. Somebody could be buying a Ferrari or a Rolex and you think, oh, price doesn’t matter. Price always matters. And so there’s only even the most diehard supporter of made in America is only going to pay so much of a premium to get that.


Robert Wagner:            So this is another facet of labor when you talk about labor costs, but what about just the ability to find the labor to scale a business? The folks who then operate this equipment, which is obviously very specialized stuff, right?


Brendan Quirk:             The Northwest Arkansas has actually an amazing labor pool. So this factory started in Little Rock, which for those folks who aren’t familiar with Arkansas geography, it’s 200 miles from … Little Rock is right in the middle of the state, Bentonville’s in the northwest corner. So we moved this factory, we had to basically replace our entire labor force. We moved the factory to Bentonville this spring. And we were very, very pleasantly surprised at the abundance of available labor here in Northwest Arkansas. There’s a lot of production labor work in Northwest Arkansas between poultry jobs, between … there’s tons of construction going on. We were worried that those jobs pay well, they have established workforces, man oh man, are we going to be able to pry these people away?


                                    Thankfully we could. At any time, we’ve had to have an uptick in labor. It has not been too difficult to fill that labor pool. And to some extent, it’s just a matter of how good is your training. Nobody walks in and says, “Hey, I can paint a carbon fiber bike. I can mold carbon fiber parts.” Nobody knows, it’s all about training and teaching. We’re very fortunate that we’ve got some pretty darn good protocols for training people as they come in to teach them how to build these parts. What this means though for us is that we really prize our production labor because we have so much time invested in their training that it’s important for us to have a great work environment and a great culture so we can retain those people.


Robert Wagner:            So let’s talk a little bit about just the cycling culture in Northwest Arkansas, there’s as you mentioned the guys have a quality of life initiative, which makes very cool. It’s got a lot of prongs to it, cycling being one. You mentioned, I think in a prior conversation that we had about some cycling events may be over in Oklahoma and in Tulsa. We have Tulsa Tough. What is it that the cities are seeing in this? Why is cycling a movement right now you think? Because economic development as well, right?


Brendan Quirk:             Yeah. I think there’s a greater awareness about how do you as a community define quality of life? What does that mean? I think we’re at this moment in time where community leaders and political leaders are asking that question. I think business leaders are also asking that question in particular now during COVID, when it seems like, one of the most common conversations is people are really taking stock of is this the community I want to live in. And the most common story obviously is people fleeing from major metros and coming into the middle of America or in medium-sized to smaller sized cities because they’re tired of the commute. They’re tired of lines. They’re tired of just all the pain in the butt of living in a big city.


                                    And I think it just comes down to quality of life. And so I can’t speak for other communities. Tulsa Tough is amazing, by the way. I mean, nationally it’s recognized as one of the … everybody wants to have a Tulsa Tough. Tulsa Tough just like a metaphor at this point. It’s an amazing community event for cycling, for running, for the town altogether. It’s big admirer of that. But for Northwest Arkansas, it boils down to a few things. You go back to the, I think the real watershed moment was the opening of the Crystal Bridges Museum of American art in 2011.


                                    And I think that’s when the first kind of initial gauntlet was thrown down on the quality of life for Bentonville, at least in saying that the arts is going to become a critical part of how we identify ourselves as a community in Northwest Arkansas. You’ve got Crystal Bridges. You’ve now got the momentary, which is the kind of the cousin museum of Crystal Bridges just opened up in the weeks before COVID up in Bentonville. It’s a contemporary art museum in an old Kraft American singles factory. I mean, this facility, what they did with it will absolutely blow your mind. It’s worth the trip to Bentonville just to see the momentary.


                                    Then on top of that, I think we’re all know this incredible gift that Alice Walton gave to the University of Arkansas to build a legitimate fine arts college at the U of A. It’s the single biggest fine arts gift ever given to a university in the history of America. And you basically see look, Northwest Arkansas is going to become one of the most amazing places in America for artists to live, but also for people to love art, to go see it. There are a lot of others, a lot of other philanthropic giving that goes on that doesn’t get anywhere near as much press that has to do with funding. Up and coming artists that are based in Northwest Arkansas so they can pursue their careers. So it’s amazing.


                                    So you’ve got the arts. You’ve got mountain biking. How mountain biking really comes to life in Northwest Arkansas has been big investments in land with the explicit purpose of developing mountain bike trails. Mountain bike trails they do a couple of things. One thing is that it drives tourism. And there’s no doubt about it. If you go to the Bentonville’s Square this weekend and you see what’s going on there. you’re going to see more bikes than cars and the cars that you see, those license plates are going to be Minnesota, Illinois, Missouri, Oklahoma, Texas. I mean, it’s like Bentonville is part of Texas. You see so many Texas license plates because people will drive five, six, 10 hours to come here to ride the mountain biking trails. Because first of all, there are so many of them.


                                    Northwest Arkansas has I think 400 miles of mountain bike trails at this point, but they’re also incredibly well-built. it’s not like congestion at a lift line at a ski resort. You can get out of town and the trails are all yours, and you’re not going to be running across folks, even on these super busy weekends in the spring, in the fall. So you get the tourism benefits of that, but you also get the quality of life benefits for the residents. And if you stop and think about it, it sort of makes sense.


                                    You’ve got Walmart has 15,000 employees in downtown Bentonville. You’ve got Sam’s clubs world headquarters is there as well. The vendor community in Northwest Arkansas, as we all know, is thriving in terms of Procter and gamble and Anheuser-Busch and Johnson & Johnson, et cetera. And it’s just all about when people choose to move to Northwest Arkansas are considering moving to Northwest Arkansas for a job with Walmart, Sam’s club or Vendors something like that.


                                    What they can do is, they can hit the check box. We’ve got culture. We’ve got restaurants. We’ve got an unbelievable public education system in Benton County and here in Washington County and over we’re sitting right now. And it’s a really dynamic place to live. And ultimately, that’s going to benefit obviously Walmart and Sam’s club and all of those vendors, because people are no longer going to say, “Oh, God, I’ve got to move to Arkansas,” becomes the opposite, which is, “Oh man, I am so stoked. I got to go to this place that not only is the job great culture, great pay, but also when I’m not at work, look at this culture, I get to enjoy and look at this community that I get to live in.” It’s happening so rapidly. It’s just astonishing. And so it’s really, really exciting to watch it happen and to be part of it.


Robert Wagner:            Yeah, very cool. I want to go back just one question here about bike technology. Is there another disruption coming?


Brendan Quirk:             Yes. The other disruption that is coming is e-bikes or electric bikes.


Robert Wagner:            I was going to ask you about that. Is that like a no-no in your world or is it going to be embraced?


Brendan Quirk:             I think it’s amazing. I think it’s amazing. What e-bikes do is they allow people who are not experienced cyclists to go out and do some ambitious riding with people who are really dedicated riders. It’s a great equalizer. And the primary form of e-bikes, the way that they’re sold is it has a motor in it, it’s got software in it where it’s not like a moped with a throttle, but it’s just one of these, what you put into it in terms of the power you put into the pedals is what you get back in terms of added power from the motor.


                                    And so its real exercise, but it’s just enough for compensation for a lack of fitness, for a lack of courage that it creates this equal playing field where it’s, I mean, anybody who rides an e-bike for the first time, it’s the most amazing thing to see it because everybody looks the same. They look like a seven year old who’s just like taking the training wheels off for the first time. The grin is so big, but where I think the game changer is going to be really meaningful is in how people get back and forth to work, how people get back and forth to the grocery store. All of a sudden if two or three miles used to be the limit of, man, if it’s longer than two or three miles, I’m just going to get in my car. E-bikes really changes the equation on that. You can get a lot further, a lot less sweaty, carry a lot more stuff when you have that e-bike, and it’s a lot of fun.


                                    I think the magical combination that I’m hopeful is going to occur is you’ve got the emergence of e-bikes that are increasingly affordable and increasingly practical in terms of how heavy they are in their battery life. You marry that up with aggressive measures from communities to build protected bike infrastructure, because ultimately whether you’re on an e-bike or not, nobody gets really excited about riding amongst cars. So here in Northwest Arkansas, we have the Razorback Regional Greenway. All foot and that connects basically the Missouri border all the way down to Fayetteville. It’s 40 miles long.


                                    What splinters off of the Greenway are all of these spur trails that go to employment centers or downtowns of the major communities here in Northwest Arkansas. And as communities continue to develop these greenways and protected bike lanes, it’s going to take away the barriers from people using their bikes for transportation. And I think it makes people happier. It makes them healthier. It’s better for public health. It’s better for people who are in cars, because there are less cars that are out there. And Northwest Arkansas has made a lot of investments towards that active transportation, infrastructure. It’s also being used by walkers. It’s being used by people who are on motorized scooters. It can be leveraged by communities that are implementing bike share programs or scooter share programs. And I think it is going to become a really exciting permanent part of the future.


Robert Wagner:            That is exciting, it’s very cool. And I love the whole equalization aspect of it, so I get that. Well, Brendan, we’re coming down to the close of our time together, and I really appreciate the conversation and the education about what’s going on in cycling and in your business, so I appreciate it. So we’ve got five questions that we ask every guest.


Brendan Quirk:             Oh worse, okay.


Robert Wagner:            So you’re ready?


Brendan Quirk:             I think.


Robert Wagner:            So this is probably back in Little Rock. What was the first way you made money?


Brendan Quirk:             The first way I made money?


Robert Wagner:            Mm-hmm. (affirmative).


Brendan Quirk:             The first way that I can remember I made money was as a dishwasher at a retirement community called Parkway Village. And that’s how I paid for my first bike. Yeah.


Robert Wagner:            All right. That’s the second recent dishwasher, we usually get mowing lawn, but a dishwasher, that’s good.


Brendan Quirk:             I like air conditioning, so.


Robert Wagner:            So if you were not running Allied Cycle Works, what do you think you would be doing?


Brendan Quirk:             What do I think I would be doing; I think I’d probably be back in Little Rock really trying to push issues of public-private partnerships to make Little Rock a better community. When I was there from 2015 to 2018, before I moved up here to Bentonville, I got to work on some initiatives, particularly with the Parks Department around that, and it was really successful and just deeply meaningful. So I will be trying to figure out how I could double down on, yeah just continuing to make Little Rock a really great place to live.


Robert Wagner:            Nice. So what would you tell your 20 year old self?


Brendan Quirk:             I would remind myself of advice that my dad gave me, which I don’t know, I tell myself, God forbid my dad’s advice was actually right, which is follow your passion and the money will find you. And that definitely was true in my case and best advice I ever got.


Robert Wagner:            Okay. What will the title of your book be?


Brendan Quirk:             What will the title of my book be? Okay, you got to give me a second on that one. Oh, I have to come back to you on that one. I don’t have a good answer.


Robert Wagner:            So you’ve already said your dad gave you the greatest piece of advice, that follow your passion and the money will find you. So the last question is that, so maybe what’s the second piece of advice that you’ve been given?


Brendan Quirk:             Okay. It’s interesting. I think autonomy, independence, being the boss is awesome and I think that, that’s probably underappreciated by ambitious people and what’s probably over-weighted is pursuit of money. How do I get validation of who I am professionally? I think having authority, having creative control is worth a lot to your soul, that your money is not going to fix some of that stuff.


Robert Wagner:            Right.


Brendan Quirk:             And so I think for people who are on the fence, do I stay at this job in this big company, or do I go off and do my own thing? Always go off and do your own thing and scratch that itch. Because once you get your first little taste of success, when it’s legitimately, you’re never going to do it all on your own, but when you feel comfortable, the fact that you get to call those shots, it’s a really great situation to be in.


Robert Wagner:            Very cool. All right.


Brendan Quirk:             Awesome.


Robert Wagner:            The [inaudible], that’s a book.


Brendan Quirk:             Oh, I keep thinking of, there was a receiver for the New York Jets who I can’t remember. I know he’s on one of these NFL shows on the weekend now, but he wrote his biography when he was still a cocky player. I think it was called Give Me the Damn Ball. And I think maybe I’d borrow that one from him. Again, I guess on this theme of enjoying being the boss. It’s a terrible answer, but it’s what came to mind.


Robert Wagner:            Okay. All right. Well Brendan, thanks so much for being with us, we really appreciate it.


Brendan Quirk:             Yeah, that’s right.


Robert Wagner:            Great insights into your business, into your life. So if folks want to find out more about Allied Cycle Works or about you, how do they get ahold of you?


Brendan Quirk:             alliedcycleworks.com. That’s, everything is there. So you can go there, phone number, email, all that’s there. So hopefully people who are interested in a bicycle, go check us out. If you’re in Bentonville and you have some time, come out and visit our factory. Love to give you a tour. It’s to see these carbon bikes being made, it’s magical. It’s a magic trick how these things come to life. And they’re not many factories left in the US and so it’s a quick tour, but it’s a really fun one. So people are always welcome to come by.


Robert Wagner:            I would love to do that. So yeah, that’s awesome.


Brendan Quirk:             Let’s do it.


Robert Wagner:            All right. Thanks so much.


Brendan Quirk:             Thanks.


Robert Wagner:            That’s all for this episode of How That Happened. Thank you for listening. Be sure to visit howthathappened.com for show notes and additional episodes. You can also subscribe to our show on iTunes, Google Play or Stitcher. Thanks for listening.


                                    This content is for informational purposes only and does not constitute professional advice. Copyright 2020, HoganTaylor LLP, all rights reserved. To view the HoganTaylor general terms and conditions, visit www.hogantaylor.com.


 


Brendan Quirk is the CEO of Allied Cycle Works in Bentonville, Arkansas. Allied’s stated mission is “to make the best bicycles and components in the world, right here in America.” Brendan is also the Cycling Program Director for Runway Group, a Bentonville-based investment firm whose focus is the “cultivation of entrepreneurship and other business activity specific to the cycling industry.” Most recently, Brendan has served as the Non-Executive Director for North America for London’s Brompton Bicycle.

In 1999, Brendan co-founded Competitive Cyclist, a retail bike shop, in Little Rock, Arkansas. He recounts the much smaller, pre-Armstrong market at the time, and how he drove his business forward using the limited capabilities of the early Internet.

The timing could not have been better. As Lance Armstrong rose to fame and eCommerce began to take off in the 2000s, Competitive Cyclist closed its brick-and-mortar office and did business exclusively online. The two-man operation never looked back, and in 2011, Competitive Cyclist was sold to Backcountry.com, propelling Brendan’s career in the cycling industry.

In this episode, Brendan shares his experience serving in varied leadership positions throughout his career in the industry, how he came to decide on Allied’s lofty mission, what makes a bike “world-class”, and the ongoing evolution of cycling culture.

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