How We Built A $250K/Month Fixed Gear Bike Business
Hello! Who are you and what business did you start?
Hello, I’m Xavi Claveria and I’m the founder of Santafixie.com. Santafixie is an e-commerce focused on urban bicycles, and since 2018 we are a brand with our own products (Bicycles and components). Now we are a mix between marketplace and a Brand of bicycles and components.
Since 2018, our flagship products are our bicycles Santafixie Raval and Born. Both Single speed with 2 speed option and coaster brake, all of them designed and built one by one in our headquarters in Barcelona.
Our monthly turnover is 200.000€. Our main markets are France, Spain, Netherlands, Italy and UK. And our brand represents around 20% of the turnover. The rest are third brands on our marketplace.
What's your backstory and how did you come up with the idea?
Born in 1982 in Barcelona, I studied in a liberal and secular school where art and music were an important role in education.
My personal goals were focused on my music band, I love playing the guitar, but although it may sound weird, I ended up studying for a degree in Economics. But as you can imagine, I was not the typical economics student, it took awhile for me to finish my degree. I liked it, but it was just too soon for me to sit and decide what I would be.
A few years later, in 2010, I was working as a financial controller. Everything seemed to be fine, good salary, good position, and a whole career ahead to professionally grow. But I felt empty. I quit my music band and my job and I moved to London, where it all started.
I found a room in Bethnal Green and I met my flatmates. They were riding two nice fixed gear bikes. As a fan of bicycles, I used to commute in Barcelona when nobody used to do it, I fell in love with these beauties and I started to look for nice second hand fixed gear bike in Gumtree.co.uk. A few days later I got my first Single Speed Bike.. During the next weeks I fell in love with the city commuting with my bike, it felt just different, a completely different London for me. Meanwhile, I also realized that in Barcelona, people were starting to commute by bike , however they were using old ugly and uncomfortable mountain bikes instead of nice bicycles.
It didn’t make sense to me, aesthetics is always important. So I decided to find a supplier for that type of bicycles and started to think about a business idea and naming.
Once I decided to move to Barcelona, I took with me 30 bicycles and I stored them in my parent’s house outside Barcelona.
A friend of mine developed our first website. The website was pretty poor, and the first customer sent me an email saying that our website was not giving confidence to the customers. We developed a bit more the website, and with some friends we did some brainstorming to find a name for the company.
For us, bicycles are like saints: they give you everything and they ask you very little things in exchange. A bike gives you freedom, a way of thinking, gives you time to think, time to enjoy, makes the day easier and happier. In exchange, you just have to make sure the wheels and brakes are in good shape from time to time. And this is how Santafixie was born. And then, I started to look for a team, to make this dream happen.
Take us through the process of designing, prototyping, and manufacturing your first product.
Beginning of Santafixie was a pure market place, so we only needed to find good suppliers to work with. In 2018 we decided to move forward and to create our own brand and our first bicycle prototip.
First point was to decide what kind of bicycle, what price and what quality would be our first bicycle.
Second question to solve was: would the name of the website be the name of the brand? Santafixie? Had we need to create a new name? Keeping the same logo or a different one?
Meanwhile, we had to find a company that could manufacture the frameset of the bicycle, the main part of a bicycle.
After some meetings, we decided to keep the same name of Santafixie, because we were already known and it was not worthy to create a new naming for our brand.
Plus, Santafixie is a registered brand and we would avoid problems in this matter if we kept the same name.
Logo would be different and we created a new logo for the brand.
There was another very important process, once we decided the name would be Santafixie, we had to decide the creation of namings for each bicycle model.
That process was not easy either, as there were different opinions. At the end, we decided that first bicycle will be called Raval, in honor to Barcelona neighbour called Raval in the city Center.
Our second bicycle, is called Born. Born and Raval sounds good in different idioms, plus are areas of our city Barcelona.
Describe the process of launching the business.
As I mentioned before, first website design was made by a friend. I paid him with a bicycle, so it was a really low cost website. At that time, Shopify started to grow, but it was not as big as it is nowadays. Now I’d probably recommend Shopify to validate a product.
We grew organically during the first years, after 2 years we had first loan of 25.000€. Six years later we had first investors in the company.
In 2017 we received an investment of 500.000 from a Spanish Venture Capital, Axon Partners Group.
Regarding Crowdfunding, we had a bad experience with Crowdcube, as we launched a campaign and we realized that there were not investors on their side and all the small investors we found were from our side.
We realized that we had to do all of the work to find small investors, which does not make sense because I personally think is better to focus with professional investors rather than smalls one, which also give you a lot of work as they are not professional and they ask some basic questions.
At this point, I really recommend other companies to ask for references in any funding process. Not only positive reference, the best is if you can talk with someone that have had a bad experience with funding or crowdfunding.
Since launch, what has worked to attract and retain customers?
I think the best growth advice is to grow in SEO and in brand awareness. SEO will give you “free” visits and your cost of acquisition will be lower than Adwords or Facebook Ads.
Branding will give you fans, followers and they will remember you once they need something related to your business.
Important things to do. Create content like videos and images. Who does not want a Raval bicycle after watching this video? Probably some will want one Raval Bicycle :)
Working with good influencers helps also to boost your brand. You need to show them that you exist, choose the right influencer/s and contact them.
For Spain we colaborate with Abel Rincón.
But also you need to be aware of the things that are happening around you. For instance, a few months ago, an Spanish TV programm did a kind of contest. They are humorous and ironic TV night show called “La Resistencia”.
They did a free request for a bicycle for one colaborator, they called #unabiciparaponce (#onebikeforponce) and Santafixie was there, we contacted them through twitter, we got the social media attention for a few hours, as we were the fastest and funny brand to answer them.
The cost of the campaign was around 225€ (cost of the bicycle + shipping). They have more than 550.000 views on Youtube, they mentioned our name a few times and they showed our bicycle in front of everybody.
To support it, we also wrote a post on our blog talking about it, so any spectator than searched “una bicicleta para ponce” “ bicicleta La Resistencia” on google, they would find us :)
We also realized that all the tools related to Adwords / Facebook ads shows you the data that you want to see and “believe” , but is not 100% the reality with your business..
For instance, last year, we did a big effort on Facebook Ads. We never invested in Facebook ads. So our idea was clear. Any increase of sales in France, would be related to this investment.
The Marketing Tools gave us very positive feedback: Sales in France were increasing a lot thanks to the ads. However , the reality was different. Our Sales in France were the same as the previous year without investment.
Be careful with this marketing tools. Is very easy to spend thousands of pounds per month they will show you good results according to their tools but you need to check the reality.
There happened to be a similar scenario with Google ads and a professional tool that helps you to invest on campaigns. We invested a lof of money, their tool show us an increase of sales, however once we check our real sales, they were the same as the previous year.
My recommendation: be careful with this marketing tools. Is very easy to spend thousands of pounds per month they will show you good results according to their tools but you need to check the reality. What happens if you stop spending thousands of pounds in this channel? Probably you will decrease a little bit your turnover, however you need to compare this to your margin. Does it make sense to expend 20.000gdp per month? Or is better to spend only 5.000gdp , decreasing a little bit your turnover, but increase the rentability of your company?
I think each business has its marketing channel, if you are a brand, focus on content, videos, images and social media (including influencers) = brand awareness.
If you are a MarketPlace focus on SEO and Google Shopping.
If you sell services like car sharing, then you probably need to do a mix of everything, including Offline Marketing and also have a lot of money to spend.
How are you doing today and what does the future look like?
This 2019 we focused on rentability, so yes, we are already profitable at the end of June 2019.
To do that, we focused on:
- Increase our margin- For instance increasing the sales of our own Santafixie products and avoid doing discounts codes or big offers.
- Reduce a lot our marketing Cost - Focusing on SEO and your brand awareness and conversion rate.
- Reduce some structure costs like salaries or “stupid” costs that all companies have, they are not big and you do not pay enough attention to them.
We build all the bicycles of Santafixie one by one on our HeadQuarters in Barcelona, we have a great team of mechanics.
Regarding the marketplace, 90% of the products we sell are in our warehouse.
Through starting the business, have you learned anything particularly helpful or advantageous?
In general terms, creating a company like Santafixie has been an incredible learning. No Master’s Degree give you these experiences.
For instance, how to manage the team, how to manage your suppliers, banks, partners.
From my point of view, the most challenging was to negotiate an exit with a former founder and also negotiate the funding of the company with the investors.
Why? Because nobody teaches you how to negotiate to an investor or how to negotiate the exit of a partner.
What platform/tools do you use for your business?
- Website: Magento
- ERP: Odoo
- Review Tools: Trusted Shops
What have been the most influential books, podcasts, or other resources?
During the creation of Santafixie, I had an influence of a few books, the most important were:
- Start with Why (Simon Sinek)
- Rework (Jason Fried & David Heinemeier Hansson)
- The 7 habits of highly effective people (Stephen Covey)
Advice for other entrepreneurs who want to get started or are just starting out?
Be realistic and act. Start and don’t wait until the perfect timing, never is the perfect timing to start a business and there are always things to improve.
Work hard and enjoy your journey. You will need to find solutions and be strong because you will need to climb mountains.
Are you looking to hire for certain positions right now?
Yes, we are looking multi-language people for customer service department. Dutch Required.
Where can we go to learn more?
- Website - www.santafixie.co.uk
- Facebook - SantaFixie
- Instagram - santafixie
If you have any questions or comments, drop a comment below!
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