The Whyte stuff - BikeBiz

The Whyte stuff

In his first ever feature length interview for a trade magazine, Peter Holton of ATB Sales talks frankly to BikeBiz about the Whyte project, Marin, margins and the future for IBDs
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The Whyte full-sus Jon Whyte-designed magnesium framed bike from ATB Sales isn't a Marin. What's the story? Take it away Mr. Peter Holton...

PH = Peter Holton

CR = Carlton Reid

CR: Whats so special about the Whyte suspension, then?

PH: Because it's a four bar link, what Jon's been able to do is tune the

shape of the stroke, yeah, so what he's done is effectively it's got a

J-shaped stroke which means that - you know when you hit a bump, you tend to hit it front on initially? So, what happens is we tuned the stroke so that it goes it goes backwards and then up and so, again, it is very, very

responsive over all terrain and because of the way he has managed to tune the linkages, the fork loses, you know, I think it loses about two percent of trail even on full compression. So, even when you are on very hairy, sort of down hill, fully locked up, fully compressed fork situations, the bike stays as stable as it does at ride height. So that, you know, they are the major advantages of the fork and it's going to be very light, it's going to weigh about - it's going to be under a kilo for the shock unit, the blades and the linkages.


CR: Is that ever going to be available separately to the bike?

PH: It can't be, really, because if you've seen the bike, it's got that rather large lower wishbone which precludes using it on a bike unless it's been designed to take it. But I mean that's possible.

CR: That's possible?

PH: Oh, it's possible. Yeah, yeah.

CR: Possible? Like the following year?

PH: It's theoretical. If we want to go down that route, I'm not sure yet. It is possible, I mean if we get strong demand for it. Because we could.


CR: The whole suspension system could be copied...?

PH: No, it's very thoroughly patented and protected. We've spent a lot of time

and money protecting it. We've both put a copyright on the look and the

shape of the system, which is one line of defence which is quite thorough in

this country. And we've also got a patent pending on the design. So we're

pretty well covered on that.

CR: It's often said there's no such thing as true innovation in the bike

world because everything was done in the 1890s first. Is that true in

Whyte's case?

PH: When you are applying for patents all prior art gets taken into

consideration. In order to get a patent you have to prove your idea is

novel. So to answer your question, Jon's ideas are new and as such we will

get patent protection.

CR: I'm thinking of similar front suspension systems from BMW (current model) and the concept version of the Corratec at the Cologne Show in 1994, and the Dave Smart Muddy Fox (the one with interlinked suspension). How does Jon's unit differ, apart from the preying mantis shape?

PH: The side profiles are very simillar on the bikes you mentioned. However, the BMW uses a telescopic fork so is not able to control the way in which the fork reacts to frontal impact. It only goes up and down. Jon's design has a J shape stroke. It will also also suffer from the same stiction and flexing problems explained later.

Jon's design is different from Dave Smarts in that ours is a true 4 bar

link, which allows for better control od suspension action and steering.

Remember that the Smart design was actually conceived of as an interactive

design (front and rear) so is conceptually different.

CR: With all those pivots, will this be a bike easily maintained/setup by

consumers? Will be it a good bike for IBDs to get their teeth into because

it's complex?

PH: We will be marketing the forks as zero maintainance. We are using special bearings that we will guarentee for a lifetime. The only setup will involve tuning the external shock to the riders weight. So while it looks

complicated it is actually more user friendly than a standard telescopic

fork.

It will be good from the IBD's point of view because the system needs

explaining and demoing. The switched on dealers are very good at making

sales as a result of this process.

CR: Honda, Yamaha etc have spent billions on R&D over the years and

motorbike companies have dallied with all sorts of differing suspension

systems. They always revert back to the sliding pillar principle. Why does Jon think his bikes are different?

PH: This is an interesting question because often suspension experts from the

motorcycle field get roped in to develop bike suspension systems. However a

mountain bike is not a motorbike. The problems are completely different and

that is why the suspension systems some motorbike engineers come up with

don't always work all that well on a mountain bike.

The major difference is that with a motorbike, the machine weighs a lot more than the rider. That is reversed with a mountain bike where the rider weighs a lot more than the bike. What is more, on a mountain bike the rider moves around a great deal, causing massive centre of gravity shifts. Both of these issues have major implications in how the relative suspension systems should be designed.

To answer your specific point about telescopic forks on a motorbike, they

work well because they are supporting the weight of the machine, which is

far greater than the rider. As there is so much more mass to activate the

forks, stiction really in not an issue.

On a mountain bike there is very little weight on the forks, as nearly all

the riders weight gets supported via the saddle or pedals and the frame is

very light. Therefore, there is very little mass to activate the fork, so

even very low levels of stiction become a big issue.

What is more, the all up weight of a motorbike is not as important an issue

as it is on a mountain bike, so the fork legs can be built very stiff to

avoid flex, and the extra weight is not such a problem. With so many

horsepower available, the power to weight ratio is not really badly

affected. Just use a bigger engine! On a mountain bike, riders have a very

limited amount of horsepower, especially in my case! so we want a bike to be

as light as possible. In making the forks light, stiffness is sacrificed. As

the forks bend, under heavy braking or impact, they bind up, so just at the

point you most need plush suspension, the system all but stops working.


CR: All these technological developments that have been made on this bike, is that something that Marin couldn't handle because they are a big company and they are not flexible so you didn't offer it to them or did you offer it to them and because they are inflexible they couldn't do it?

PH: Well, to go back to the other thing that this has got, you know this very

clever through-axle dropout? You know, this hinging type system that basically

you can take any extended hub and convert it to a twenty-mil three-axle

system so that means that you don't have to use, you can get, basically, the

three-axle stiffeners without having to supply a specific hub? Now, that is

something that we did offer to Marin and they were reluctant to take it

because of obviously, the US market, and all the issues of liability and

things. So, to answer your question, well, first of all we didn't offer it

to them and I will come on to that. But I think if we had offered them this

they wouldn't have wanted to take it because of the liability issues in the

US. But secondly, what we spotted in the market place is the niche brands,

so that, if you like, the traditional, smaller players in the marketplace

have always been the innovators. Over the last four or five years they've

really lost that position and now the niche brands which dealers have stocked

because they were a bit special, a bit different .

CR: Orange and stuff?

PH: Well, I wouldn't really like to mention any particular brands but there is a

range of brands which are quite small and which have been quite innovative in

previous years. But, since really the advent of suspension and the necessity

to have quite smart people, if you like, and expensive people working on the

project, the smaller brands are sort of struggling to keep up with the larger

brands. So, what we spotted in the market place was that dealers the

specialist dealers need specialist products and they need, you know, as well

as the mainstream brands, and really in this market I consider we are pretty

much a mainstream brand, they need these players and they really ? when you

are looking at the brands they are stocking, they weren't ? on an innovation

side, they were actually less innovative than that mainstream brands.

CR: This is just really an IBD friendly brand?

PH: Yes. So, what we wanted to do was to broaden our offering, if you like, to

the independent dealers and say, well look we can offer you Marin and this

really innovative niche brand who fit the high end sales as well, so we are

not confined to increase our main sales, we like to think we can increase

those as well, but we also think we can kind of offer a wider range of

products to the dealers we are supplying with a really innovative niche

brand. And its been very welcomed by the large number of the dealers who've

had it.

CR: The last time I asked you this, I asked you what do Marin think about all

of this, you said 'Oh, I don't think I've told them or words to that effect'.

So, if I asked you the same question now, what would you say?

PH: Well, we didn't do out of our way to give them all the details . We've got a very good relationship and a very close relationship with Marin, but

obviously it's growing year by year in a market that I feel is declining,

so they were made aware of what we were doing but we didn't go into all the

details about it. We know that, at the end of the day, we are separate

companies.

I think a lot of people in this country, you know, in fact, a lot of our

dealers, think that we are Marin or Marin are us or that we own Marin and

there is a lot of confusion about the relationship between the two companies

and basically we are two independent companies.

CR: I would like to explore that. Specialized, Scott, all these

different brands, they are subsidiaries of the US companies. How come you

aren't Marin UK Limited? Has there ever been any pressure to be so and

why have you always steered clear of that?

PH: Well, there's never been any pressure actually, it works quite nicely, I

think, for both sides in that we have obviously built the Marin brand, put a

lot of effort and money into the Marin brand in this market and it's been

very successful for us. We over perform with Marin in this market compared with their international profile which, you know, that is not saying anything negative about Marin. The US market is a very tough market and hundreds of brands all jostling for position and Marin are quite a small player but we have managed to, for various reasons, get ourselves into quite a strong position in this market and really we are of similar sizes actually, the UK sales and the US sales.

CR: What are the deciders?

PH: Well, numbers really.

CR: Numbers and turnover?

PH: Well, obviously if we take the domestic turnovers, yeah, but its slightly

ahead of the - I think you printed the numbers you thought we were selling in

the magazine. You were quite a bit out actually.

CR: Really?

PH: On the downside.

CR: Go on, then, tell us.

PH: Well, we don't sort of ? we're not a big player but we do a bit better than

you suggested.

CR: Okay, well, that's good

PH: So, really, when you know, I think that when you are looking at subsidiaries

it tends to be very large corporations who really want to really, if you

like, have a concerted sort of marketing and purchasing and the whole thing

but we are not really a company of that sort of size really. But they're

very happy with what we're doing, we've got a good relationship with them,

and it works very well so why change it? And the other thing is we obviously

finance our own bikes which, you know, with the quantity we are selling, you

know, it's prudent to come up with a finance for a company the size of Marin

to do that in the US and repeat that in the UK is not really practical.

CR: So, what you are saying about how you are being successful with the brand -

is that down, in great part, to your strength with IBDs the fact that you

have exclusive territories, protected margins.

PH: Well, what we have tried to do is, if you like, just offer a service, a

product and a style of distribution that's very IBD friendly to use your term

and one of the things that is interesting about the way we do business is

that we have never gone out to chase volume. I think a lot of the brands

think right, you know, they are under a lot of pressure from their parent

companies - they are 'right, this year you've got to do x amount of

turnovers, x amount of ? just get out and get it.' You know, we've never

taken that view, we've always felt that ? well, let me tell you a proverb

that the Chinese use. They say that men have got two legs and money has got

four legs, so if men ever tried to chase money they'd never catch it. So, if

you are just out to chase money, forget it because what you have got to do is

be clever and make the money come to you. So, this was explained to me quite

a few years ago by one of our Chinese suppliers and I thought yeah, you know,

absolutely right. So, what we have tried to do is try is create a product

and you know a style of business whereby people want to spend money with us

as opposed to other buyers, if you like. And if you like, the volume and the

successful business comes to us as opposed to us going out and chasing ? you

know, being absolutely ruthless about chasing every last firm, you know,

supplying every last dealer and ? do you know what I mean? It's just a

different sort of philosophy, really.

CR: So, how was your '99 in terms of percentage growth?

PH: Um, let's try to think . I mean, off the top of my head I couldn't give you

exact figures but I think we were about fifteen percent up last year.

CR: That's way above industry average.

PH: Oh, yes, well that was after '98 which was a record year and '99 was a record year and we are already about fifteen percent up from last year.

CR: Have you had any bad years in that time?

PH: We've had years where the sales have dipped, yes, we've had dips, prior to

launching the suspension bike things were showing a bit of a dip.

CR: Right. How many dealers do you have?

PH: Round about two hundred.

CR: Not a lot at all, is it?

PH: No, not really. Well, that's what we say to our dealers. You know, we don't have a lot of dealers but partly because of not having too many and the way we do things we do tend to have a very good commitment.

CR: How many dealers have you now signed up to Whyte that are not Merin dealers?

PH: Well, we haven't signed any actually. But that's not to say ? we're not

against it in principle but what we try and do is to ?

CR: Sorry to interrupt you - is that because Merin dealers are the best would you say?

PH: Well, we don't have all of the best dealers in the country I wouldn't say,

I'd say we've got the majority but we are making efforts but I would say that

our job with distributing the brand is to choose dealers that you know can do

the best job for the brand, if you like. Now, obviously in certain areas

there are geographical problems and you might have two excellent dealers very

close to each other and for political reasons you only have one of the two,

but generally we have been making an effort in the last few years to really

make sure that the best dealers really are representing the brand in a

positive way because we feel it is very confusing for one to be saying good

things about the brand and for the other to be less positive about it because

they are not stocking it. And we have also found from our experience that if

you have two very good dealers even in quite close proximity you know when we

have taken on the additional dealer the other guy has been fairly upset about

it but I mean, you know, we have said to them well, look, in our experience

you will actually do better with the brand than you were previously with a

larger area and that does work, providing the original dealer is really a

first rate dealer. It doesn't work if you take on additional dealers who are

not first rate dealers. So, we have taken on quite a few people we haven't

dealt with in the past, Hardisty's, for example, up in Newcastle and a few of

the larger people we have taken on recently because we feel they are, you

know, very good shops and we feel that we should allow them to have access to

our brand, if you like.


CR: How many of those two hundred dealers are going to be Whyte dealers too?

PH: I should think round about half, initially.

CR: Why is that?

PH: Well, it is a pretty technical product and there is a range, even with our

dealer network, there is a range of profiles of businesses and you know some

do very well with suspension, I mean London dealers typically do very poorly

with suspension. So, I mean it really is a reflection of how well they are

doing with suspension in the market place, how it is fitting into their

customer base really. You know, a hundred we are happy with. That gives us

a very thorough distribution and that will give the brand, I think, some

credibility with our consumers, which is important. But pretty well all have

understood the importance of going ahead with it, from a profiling point of

view.

CR: And when do they get the first stocks?

PH: We're hoping it to be the end of this month for the cross country bike and

then it's going to be early March for Preston.

CR: Is that slightly behind schedule?

PH: It is slightly, yeah.

CR: And how many are you looking to sell?

PH: Well, not massive quantities. Well, we are looking for about twenty percent

of what we do with the Marin for first year bikes.

CR: That's a hell of a lot.

PH: A reasonable amount, yes. Well, to be honest, even just the dealers' initial stock and demo bikes - I mean, it adds up. And I mean, you know, dealers are taking deposits on bikes so I think that you know we have got a reasonable length street ahead of us and there's interest in the product, so I think that's a realistic target.

One of the things we have been so successful with the Marin that we are aware of is that right at the top end there are people who would argue that the bike is the best technically on the market, there will be people who will be adverse to buying it simply because they feel it is a bit too common, if you like, just not something that you want to do with a Whyte brand, I mean, that does happen unfortunately. BMW had it with their 3 series, I think. A very nice position to be in.

CR: What kind of margin structure - the same as Marin?

PH: Well, yes, pretty much the same. We actually talk about our ATB discount

structure so it is pretty much along the same lines of that. We are running

with a fixed discount on the bikes, which we have done with the Marin bikes,

so people seem quite happy with that.

CR: And which of the journos have tested it so far?

PH: Well, Steve Worlands had the bike, he had a test on the bike. And obviously

MBR.

CR: You sent him the magnesium one?

PH: No, no, nobody has ridden the magnesium Preston one yet. All the testing has been done on the aluminium prototype.

CR: Have you actually had a magnesium one so far?

PH: No, that's still in production. The prototype. There are so many new parts

and different parts to fabricate and that is the reason we have got slight

delays.

CR: Could that be brought out and not be magnesium.

PH: Yes, absolutely, we are working on an aluminium version as well.

CR: In exactly the same shape?

PH: Oh, I mean subtly different - the materials are different so you can use them in slightly different ways, but you know the overall profile will be very

similar.

CR: And what have the journos said so far, I mean I know what one of them has

said because we put it in the magazine straight away.

PH: Well, what did he say - 'the best XC bike ever', I think he said. Quite a

claim, but I think that it is a pretty revolutionary design.

CR: This is a product that isn't going into the ultra niche world of downhilling.

PH: No, no.

CR: This is a cross country bike pure and simple, you are not aiming this at

downhillers.

PH: No, no,

CR: So, how are you going to be marketing it, then?


PH: Well, really as just the ultimate XC bike, if you like. I mean, the down

hill market gets a lot of hype. In reality, the type of customers tend to be

quite transient.

CR: Into motorbikes next?

PH: Yeah, perhaps faddish about brands and products, and in reality you know, I

mean if there is three or four hundred down hillers at a race event a

weekend, there is probably twenty or thirty thousand people riding with their

mates or girlfriends cross country, so the silent minority really, but that

is how we've been very successful into that market with Jon Whyte's designs

that we've marketed under the Marin name, been incredibly successful, so

they're the sort of people who will riding out in the trails every weekend

with their mates or their girlfriends or just really want to have the best

bit of kit out there, really, and I think we've probably gone a long way to

winning the argument over the hard tails versus suspension bikes cross

country, the effectiveness of the team, sort of dominant, with Paul and Aden

and Allan dominating the cross country scene as they have over the last

couple of years with you know cross country racing and trial cross, which are

both very arduous disciplines and we are still the only people out there who

are actually doing that despite other people's advertising which can be a bit

misleading.

CR: Will there be a Whyte race team?


PH: Well, we won't initially, but having said that that is something we are looking very hard at. I think, you know, if Paul goes to the Olympics there's a chance he might be riding a Whyte bike.

CR: Do you want me to say that?

PH:It's a bit too early, it's presuming that Paul's going to go to the Olympics.

If he does go, it will be a lot of interest I think.

CR: So, your riders have signed to ATB Sales, they haven't signed to Marin?

PH: Everything we do with everybody whether it's dealers or the riders, we

do with no financial assistance from Marin, so we are free agents but obviously we have built up a fabulous business with Marin and we don't want to do anything to jeapordise that. We are still totally committed to the Marin business, absolutely committed to it. We've spent twelve years building it, it would be very silly to do anything to damage it. It is additional business we are looking for with Whyte, we are not looking to replace Marin with Whyte.


CR: Any chance of coals to Newcastle in sending your stuff to America?

PH: We've got a lot of interest actually, we've had a lot of emails from American customers who've somehow stumbled across the bike. I mean, our plan in the first year is just to build the domestic market, we've not really sort of sat down and said well, in year one we're going to do domestic and in the second

year we're Europe, third year US, but I think that because the product is so revolutionary and it's actually a real world solution to a

real world problem and not just a solution looking for a problem, which it

obviously is I think there will be international interest.

CR: Any chance of Marin doing the Stateside distribution?

PH: Well, you never know. It's not beyond the realms of possibility.

CR: Have Marin actually physically talked to you about the Whyte brand?

PH: Yes.

CR: And what did they say?

PH: Um, what are your plans for Whyte...ha ha ha

CR: Are they worried? Are they intrigued?

PH: They're bound to be a little worried, I think it's natural - a bit like a dealer,

they've done a very good job for you and they take on what seems to be a

rival brand, they're bound to be a little unsettled by it. I mean we want to

declare our business and they're still going to be the major part of our

business, so, you know while they may be a little unsettled they've got

nothing to worry about and you know, there will be, what we are trying to do

is keep the Whyte brand built around the Preston type, the Linkage Four. So

we want to have a completely separate brand identity. I mean, Jon's coming

up with all sorts of ideas which you know are very innovative and will go

directly onto Marin. So, you know, we've got a pure stream of development if

you like but the things that are a little bit more out there, you know,

really at the cutting edge if you like, will probably be run through the

Whyte brand initially. That's not to say that the things like the drop out

will not appear on the Marins or other brands come to that.

CR: How come so few bike businesses in the UK invest a goodly percent of their turnover on R&D?

PH: Well, I don't think it's just UK companies, I think it's, I mean, going back

to the niche brands and the key players, over the last few years there has

been a lot of globalisation within the industry, and you know the big players

have been swallowing up brands and what seems to be happening is that the

management structures or the company structures become so unwieldy or the key

people tend to be focussing upon fire fighting within the organisation and

they are not really ? there are very few plans that are focussed on R&D if

you like. What they are more worried about is how they are going to

manufacture the amount of bikes they need for a particular market and a lot

of detailed business questions are involved in, but the R&D side is for

various reasons is really slightly overlooked and I think the reasons for

that is that for a very large company to come up with a brand new product and

actually filter it through their manufacturing and marketing partners is a

major difficulty. It's a very high risk strategy coming up with a very new

and revolutionary product. It can be sort of ? carrying on with what you

have been doing and tweaking it and coming up with something up with

something totally new and whether the companies are investing in the right

sort of people to come up with you know, come up with innovative ideas and we

were incredibly fortunate to have someone like Jon with the engineering

background that he's got and his cycling background too, he is able to do

what he is able to do. But typically, the brands have just not been

focussing enough on R&D and that's a worry for the whole industry I think

because it is only innovation that drives the market.

CR: Drives the independent market?

PH: Well, drives any market really. You know, when we were looking at the market, I feel the number of people actually involved in the sport is declining and obviously for the brand that is a worry. I mean, our growth has been as a

result of getting market share, but we've got to look to areas of growth...about twenty percent of our sales are on city bikes now. You've got to look at all areas and not close your mind to anything.

CR: How many non-Marin dealers do you have as Whyte stockists?

PH: None really.

CR: Is that because you've refused them or because no one's coming on to you?

PH: We've got most of the best dealers anyway. And there is really only, you

know, a very few dealers that would be suitable for the brand, I can't think

of many at all that we are not dealing with.

CR: How many key bike shops are there in the UK?

PH: Probably 250 would be the figure...Out of the 250, I would say at least 30 percent of those aren't really that viable. I mean, everybody's seeing the fact that you know that out of the 250 a lot of people out of that aren't doing that fantastic a job. And are struggling. So, I think it will probably come down to about 150.

CR: Is that good or bad for the trade?

PH: Well, I think it is probably quite good from the consumer's point of view that the ones left will be very good shops offering a good service, good stock

levels and doing the job really thoroughly...The biggest problem with this industry is lack of competition, tot too much competition. Really high quality competition. What happens is that when the competition is really intense, the shops do get to be extremely good. Same with every industry. The better the competition, the better you've got to be to compete in it. Otherwise you disappear. A good thing, I think.

Providing you're on the right side, not a good thing to be on the bad side of it. I think the only thing that does worry me is that there is not enough

profile for cycling in the broader media. When you pick up the papers and you

see DVDs advertised, you know all of the latest computers and yet in this industry we've got some really quite exciting products. But they are not being exposed on a national mainstream level and that is a worry.

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