How Two Brothers Started A $1M/Month Bicycle Brand

Mehdi Farsi

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Published: February 11th, 2021

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Mehdi Farsi

Founder, State Bicycle Co.

$1M

revenue/mo

Founders

Employees

State Bicycle Co.

statebicycle.com

from Tempe

started November 2009

$1,000,000

revenue/mo

Founders

Employees

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Klaviyo

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Hello! Who are you and what business did you start?

My name is Mehdi Farsi, I'm the co-founder of State Bicycle Co. in Tempe Arizona. We specialize in great-looking, great riding bicycles, parts, and accessories that are both attractive and affordable.

We sell our own brand of bikes, clothing, and accessories, as well as a handful of curated complimentary products directly on our website and through over 400 bike shops worldwide. The business has grown to over $50m+ in annual sales and we’ve produced over 100,000 bikes.

What's your backstory and how did you come up with the idea?

I co-founded this business with my brother Reza Farsi in 2009. We both grew up around cycling as kids and when we were in college at Arizona State University in Tempe, AZ. Reza was studying Business Management and I was in the business school for Marketing. We started to get into fixed gear bikes. While we were researching different bicycles for ourselves, we realized there was a gap in the market. It was very difficult for us to find complete bicycles (as opposed to parts) that were affordable and attractive. There was not a one-stop-shop for riders on a budget. Thus, we went down the path of creating State Bicycle Co.

Prior to this, we were running a business importing furniture from overseas. We used our connections in manufacturing and online retail to start the business. We were completely bootstrapped, with no outside investment. We both knew there was some risk, but both being young and very passionate about cycling, we knew it was a risk we were willing to take.

Take us through the process of designing, prototyping, and manufacturing your first product.

Manufacturing bikes is fairly difficult and there are a lot of components that we have to juggle. Bikes are complicated. There are lots of different parts. We identified which portions of the bicycle we would do in-house, and which portions that we would outsource to several different suppliers and manufacturers. Coordinating the supply chain is always a juggling act.

Picture from 2010 - first batch of State Bicycle Co. Models - The Matte Black

For our most basic bicycle, for example, there are over 21 suppliers that we work with to produce our final product. We were able to design the frame to our specifications and manufacture, but something like manufacturing tires requires a lot of overhead. This would be an example of a 3rd-party component that we source. The entire process took over a year-and-a-half of sampling, factory visits, and numerous meetings to dial in. Our bikes are designed in Arizona and sourced primarily from Taiwan and China, but certain components are made in Thailand, Vietnam, and the United States.

Describe the process of launching the business.

We launched the business as soon as we received our first order of bikes. Prior to this, we had no website in place. Initially, we started selling bikes to friends and family, students around Arizona State University, and through websites like Craigslist and eBay.

The quality of the product is the most important thing. Your brand, your reputation, and the overall health of the business rely heavily on it.

Our first batch of 140 bikes sold very quickly and we reinvested all the profits in getting a second order together, this time of around 300 bikes. While the 2nd batch was coming we built a website and started running paid ads on Google to capture more traffic.

We invested in good photography, as we were an online shop, customers were not able to touch and feel the bikes, so we know our visual communication had to be top-notch to convey the quality of our product.

Since launch, what has worked to attract and retain customers?

We employ several strategies to attract and retain customers. Initially, we relied highly on word-of-mouth as we didn't have much marketing budget or much brand recognition.

Slowly, throughout the last decade, we have built a brand that is really well trusted and known in our industry. We make sure to sponsor talented riders throughout the country, to give credibility to the brand. These riders have become spokespeople for our company and many new riders look to them for advice on which bikes to select.

Additionally, we have built a great social media presence on YouTube, Instagram, and Facebook to establish a community of riders. Initially, it was really easy with Facebook in 2010 / 2011. There were no ads and social media was a direct conduit to riders. Allowing us to lean on our audience for ideas, feedback and to organize rides and events, not only in Arizona but around the country.

To this day, social media allows us to communicate with our riders across the globe and convey our personality in ways we can’t do with our website. Today, have almost 1M followers across all platforms and engage daily.

Many of our customers also know us for our limited-edition releases. We have done collaborations with iconic properties such as the Wu-Tang Clan and The Simpsons just to name a few. The partnerships come up in a variety of ways. These collaborations serve to broaden our reach and attract new riders to the brand by tapping into fans of our partners’ who may have not had cycling top-of-mind, or may not have been able to relate to any bicycle brands in the past.

Throughout the years we have also built out our catalog of products. We don't want to just be a place where people can buy a bike and leave. We want to be able to offer our advice on gear and clothing and parts so that we can be a one-stop-shop for new and advanced riders.

How are you doing today and what does the future look like?

We are in our 11th year of business and have grossed over $50m lifetime. We are seeing record demand for our product due to several factors from the covid-19 pandemic to several key new product releases that have broadened the scope of our clientele.

We look forward to continuing to welcome New Riders to the sport of cycling with a variety of offerings in the future building on the utility of urban riding. to the recreational area of trail riding.

Through starting the business, have you learned anything particularly helpful or advantageous?

The most important thing that we have learned throughout operating our company is that the quality of the product is the most important thing. Your brand, your reputation, and the overall health of the business rely heavily on this. If the product is quality, you will have repeat customers, word of mouth referrals (which are free), and also less overhead and resources dedicated to customer service.

What platform/tools do you use for your business?

Our website is hosted on Shopify Plus. We use Klaviyo as our ESP, and we use Gorgias for CRM.

I usually advise people to take risks early on. When you are more established you have more to lose.

What have been the most influential books, podcasts, or other resources?

As a company, we draw inspiration from several different things. From the automotive world to sneaker culture to the music industry. Everything that we consume and observe while we are on the bike tends to find its way into our design.

Advice for other entrepreneurs who want to get started or are just starting?

I usually advise people to take risks early on. When you are more established you have more to lose. If possible start young, with something that you are passionate about, and work with people you can trust. Also, try to collaborate with people who have opposite skill sets.

Lastly, don't assume that you need to raise a lot of capital to start. Try to be as lean as possible early on and make do with your resources. This will encourage you to be more resourceful as you grow and ultimately more profitable in the long run.