How I Started A $300K/Year Bike Lube Business From South Africa

$25,000
revenue/mo
1
Founders
5
Employees
product
Spoke Works cc
from Pretoria
started February 2008
$25,000
revenue/mo
1
Founders
5
Employees
2.39M
alexa rank
3.04K
followers
318
followers
155
subs
platform
shipping
customer service
accounting
productivity
payments
analytics

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

Hi I’m Ruan Deyzel I started a business 11 years ago in the South African cycling industry that develops, manufactures and sells the SMOOVE Chain Lube and SMOOVE PREP chain cleaner.

We have since grown and currently export to 15 countries selling SMOOVE products to discerning cyclist.

We have grown 60% year on year over the last couple of years making us very excited and somewhat nervous in a good way for what the future holds!

We are more determined than ever to work hard and to hold on for the ride!

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

At the age of 11, my friend’s dad bought him a Diamondback Topanga Mountainbike this was about 1989 - I still vividly remember how amazing it was and how badly I wanted something like that.

At the time, South Africa was still very much in the grip of the apartheid regime and due to the sanctions imposed by the rest of the world, most consumer goods were locally made.

I just wasn't earning enough money to support my wife and child, just having a basic lifestyle was making us get further into debt with every month that went by.

I started saving and made little business plans until I had enough money to buy myself an imported Mountain Bike. From that day on, my life has been revolving around two wheels. I worked in bike shops learning how to sell, work on bikes and how the inner workings of business work.

The mechanical aspect of bicycles was what came most natural to me and the fascination of the technology in cycling kept me motivated to learn more. At the age of 28, I got married and not long after that my wife was expecting our first child, at the time I was the manager of a big Bicycle store.

Working in retail wasn't paying much, I just wasn't earning enough money to support my wife and child, just having a basic lifestyle was making us get further into debt with every month that went by. I started building high-quality bicycle wheels at night after work in our little apartment under the staircase to boost our income and after a few months doing endless calculations I told my wife that I think I can manage to make up my salary building wheels and servicing suspension forks.

I saw a small gap in the market at the time and that is how Spoke Works was born, we serviced Suspension for all the other bicycle stores around us and quickly built a great reputation for building some of the best wheels in South Africa. We made some money but I realized that our income was limited by my two hands and the number of hours in a day, it was very hard to scale the current business model we had!

I’m a tinkerer and maker, always trying to fix things that are broken and to improve things that frustrate me. One of those things was chain lube, a small but very frustrating part of riding a bicycle. You often have to choose between using a lubricant that causes a black sticky mess on your chain leaving marks on your legs (rookie tattoo’s) or a cleaner alternative that you have to reapply during the ride because it won't last more than 30km’s. Nothing out there could do both, keep everything clean while giving great durability.

I started bouncing the idea of some people and most of them told me that there are way to many chain lubes on the market, I knew this from the days that I was involved in retail. There are just some products like supplements, chain lubes and bike wash that you see a new brand all the time due to little barrier to entry, they all tell the same story and offer the same performance. I knew that I really had to solve a problem worth solving and a problem that is not just my own but that its common enough that everybody riding a bike will be relieved by the performance that my product offers. I knew that It had to be good enough to instantly create the wow factor with anybody that gave it a try to stand out and be taken serious.

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

I came up with a set of fundamental specifications that I wanted to achieve based on what the issues where of all the other lubricants on the market, my father always told me to aim high!

When I told one of my best friends what I felt my chain lube had to be able to achieve I vividly remembered him letting out a cuss word and starting to laugh telling me that it's impossible for a chain lube to do all that. Right there I knew that I was aiming high enough!

I always tell myself that I cannot just sit in my office hoping for business to come my way. The best thing is to get in the car or in the airplane face your fears and make it happen!

I started mixings ingredients together in my garage testing them on our morning rides getting feedback from my wife, trying different combinations until I thought I had something that was good enough to give to more people to test.

I chose about 40 test riders from all walks of life over all cycling disciplines, I chose people that didn't know each other so that they couldn't influence each other's opinions, I made coded samples and gave each person a set of little bottles and a questionnaire to complete with each round of testing. To be honest I gave up a few times, but luckily my wife encouraged me to keep going! The feedback from the test riders kept me very humble, if the sample was bad 30 people told me so, I kept on making small improvements until I managed to not just achieve the performance specifications that I set out to do but in many cases improve on them by a healthy margin! While this was going on we were still running our wheel building and suspension servicing business to keep food on the table!

The next step was to come up with a brand and packaging. I have always been a big fan of good packaging and striking simple well defined brands. There is something that just makes a swiss chocolate taste better when it's packaged beautifully, I wanted some of that for my own product we spent a good part of the next 2 years working part time with some amazing creative people to come up with SMOOVE and the whole visual language around it.

Consumer buyer behavior is a science and I knew I had one chance to nail it. We didn't have money to pay for all this and somehow scraped it together to pay for it using very creative ways , credit cards, small bank overdrafts but to name a few.

I’m a firm believer to start with the end in mind, so as far as I could plan ahead I tried to set things up that I will be able to scale it with as little money as possible and one day be the number one selling chain lube in the world. I went to the best packaging companies and with some persuasion convinced them to lower their minimum order quantities to levels that I could manage with the funds that I had available. I came up with simple manufacturing methods that I could give some people jobs with and that was easy to scale up when I had to with little effort and money.Some of them worked well and others we had to change as the demand and our experience grew.

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This was our first bottle and box we made using a live stock dosing pump. It gave Tony a great right hand forearm but was way to slow!

how-i-started-a-300k-year-bike-lube-business-from-south-africa

With almost everything in place at this time I knew it was time to start finding a way of protecting our brand and product against copying, to be honest it was a bit scary because I know very little about the legal stuff and I have heard some horror stories about how quickly legal costs can escalate.

I ended up with a South African law firm Spoor & Fisher, they specialize in patents and trademarks. They were absolutely wonderful and gave me advice that was most helpful to my brand and product and most importantly help that I would be able to afford.

They were very accommodating over the next few years with payments. I guess the most important thing was that I did what I said I was going to do and they trusted me for that.

Describe the process of launching the business.

I always tell myself that I cannot just sit in my office hoping for business to come my way, I think it's human nature to come up with little excuses why it's not a great time to go see that new customer, area of the country or new country.

The best thing is to get in the car or in the airplane face your fears and make it happen! I still remember it very well, it was a rainy Monday morning I took our first 6 boxes of SMOOVE that we made and drove to the closest bicycle dealer an hour later I had my first order and at the end of they day I had managed to sell the 6 boxes I had with me in the car. I kept on doing that until I covered all 300 bicycle dealers that we have in South Africa.

A big part of our income was spent on having a good online presence that looked professional with a clear message. I managed to set up a deal with a company called Dieselbrook brand consulting, they take care of all our online needs including design work and copywriting. It's super important to us to always look great and have a well thought out strategic online presence with everything we do.

I guess we were kind of lucky with the type of business and product that we have, we didn't need a huge amount of capital to get it going, I think without realizing it, I was always looking for something that will suit my appetite for risk and exposure. I have always been more comfortable with smaller risks rather than making or losing it all in one go. We kept on trading and reinvesting small amounts of our own money in growing the business. Most of our capital came from an overdraft facility that we have with our bank, it was the cheapest interest rate and easiest to acquire and the numbers worked for us.

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

I believe that growing too fast can be detrimental to your business especially if you are going to do your own manufacturing and fund your own growth like in our case.

I don't know what the exact number is but about 50% growth year on year is already posing enough of a challenge.

We have actively made the decision to grow SMOOVE as organic as possible using the old school word of mouth approach, of course, it's possible to supercharge this with social media using authentic lifestyle post that hopefully inspire people to get on their bikes and ride.

Being a wholesale manufacturer we have found that the big online type stores like amazon and also the distributors that have adopted a B2B only approach without any sales reps are really bad at setting new trends.

We need good people to tell the dealers about our products and the benefits of our products and at the same time need good bicycle dealers to actively sell to the end consumer. This is probably considered an old school approach but after much trial and error we have found that it works best for us.

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

Since we launched SMOOVE we have closed down all other activities that we started the business on to solely focus on the manufacturing and distribution of SMOOVE products its so easy for us to dilute our resources and lose focus. We have been able to secure distributors in about 15 countries and have been in negotiations with half a dozen new distributors in countries around the world. It's always hard to find the right fit so a lot of it is done on gut feel trying to get like minded companies that are willing to put in the hard work with us to grow our business.

We have been steadily ramping up production with the production methods that we learnt over the last few years always making sure that our input costs stay in control to make it profitable for every body in the supply chain including ourselves.

Every new distributor that we add to the list have to start from scratch in their own country, it takes time to establish a new product in any market but we have found that a lot of what worked in the South African market can be applied to other markets with great success.

In the short term we want to grow our list of countries from 15 to 30 and also be able to cope with the demand in terms of our manufacturing capacity and in the long term we want to be one of the top selling chain lube brands in the world using this distribution platform to launch and distribute more products carrying the SMOOVE logo. Its very important to us to only add products that have the same quality and performance that SMOOVE is known for.

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A* Sea Otter classic in California showing our products for the first time in the USA.*

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Showing Smoove to Brazil in São Paulo

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

The last 11 years have been a very steep learning curve for me, I have learned a lot about myself about what I'm really bad at doing and what i’m really good with.

I have learned how to deal with the frustration of having to do lots of tasks that are not in my sweet spots like admin and bookkeeping but at the same time learning everything about what makes my business tick and understanding things better that make us lose money or be profitable.

I think that business owners can often feel isolated and alone facing the problems they have and reading about great companies like Nike and that they went through exactly the same issues really makes it better!

I have learned the value of having my wife as my most trusted partner helping me build this business from the ground up trusting her to take the burden of dealing with the books and finances of my shoulders so that I can have the freedom to lead the business to success. I have learned how to find the elusive work-life balance to have the time to invest in my children and my marriage.

I have learned how to be patient, how to wait for things that are worthwhile and how to roll with the punches. I have learned how to be resourceful with very little at hand and to always have a plan to get us to the next month end. I guess the stress that goes with all of that becomes a way of life and after a few years you are addicted to it in some way or the other.

There is always some luck in business being there at the right time with the right product, but I also believe that we have been very blessed over the last 11 years and that we are merely clay in the hands of our Lord Jesus Christ.

What platform/tools do you use for your business?

Some of my most favorite tools in our business is WooCommerce we use it for our B2B site and it integrates seamlessly with Sage Accounting our bookkeeping platform.

Our B2B site almost immediately took a lot of work of my shoulders automating the whole ordering and payment process.

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

By far the most influential book that I have read was Shoe Dog by Phill Knight the founder of Nike.

I felt a very big relive reading about his early struggles with multi-tasking, raising capital and cash flow problems.

I think that business owners can often feel isolated and alone facing the problems they have and reading about great companies like Nike and that they went through exactly the same issues really makes it better!

I also often listen to podcasts by Guy Raz called how I built this for pretty much the same reason while driving or riding my bike.

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

I would say that some of the best advice that I can give any aspiring entrepreneur is to start with the end in mind. Always try to think what the effect of your current decision will be 5 or 10 years from now. It's often a few small wrong decisions that eventually catch up to you.

Get started!! I think people often plan and strategize too much while you sometimes just have to get your head stuck in and get going. You will very soon find out where you have to make changes and where the opportunities are.

Be honourable, I always thought that South Africa is a small place and that you have to look after your name over here but have realized that in any industry with the way that information travels the world is a small place! Make sure that every business dealing is ethical and honorable no matter how big or small!

Where can we go to learn more?

-  
Ruan Deyzel,   Founder of Spoke Works cc

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