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by Wade Wallace
March 25, 2020
I’m thrilled to introduce our new podcast, From the Top. It tells the stories of the founders and personalities in the cycling industry, and the icons they’ve built. If you’ve ever listened to NPR’s ‘How I Build This’, it’s the same formula. If you think running a business is easy, especially in the cycling industry, this podcast is one you’ll find revealing.
In this episode I speak to the founder of Rapha, Simon Mottram.
In recent years Rapha has been one of the most innovative, aspirational and disruptive business in cycling and Simon Mottram is the mastermind behind the brand. He took the company from a single idea, with the premise of how he felt about road cycling and how he wanted it portrayed. From a single jersey that wasn’t even ready in time for the company launch during in 2004, he build Rapha into the darling child of cycling brands that inspired an entirely new market of ‘micro apparel brands’ and showed many others of the cycling industry the power of storytelling and looking at the sport differently.
This is Simon’s remarkable story of how he build Rapha.
Wade Wallace: (CyclingTips):
Tell me about your background and what you were doing before Rapha.
So early ’90s I was an accountant. I finished college and my dad had been an accountant, so I, just like all good sons, had said I’d never be an accountant. And then I finished college and thought “I don’t really know what I want to do but I need to keep moving,” so I worked for Price Waterhouse and trained as a chartered accountant. But I was a chartered accountant who read design magazines and architecture magazines, so I was the one out of 1,000 who did that and always wanted to move on. But it’s a good qualification to get. But I left there in ’91-’92 and I went on to work for a company called Interbrand who valued brands. Which is a weird sort of strange dark art which at the time all accountants hated people like Interbrand who started to value brands because we were the antichrist. Because…
CT: so…valuing intangibles?
Simon Mottram: It was all about valuing good will and intangibles, yeah. And the brand being the most valuable asset. So we’d made up this, or the people before me at Interbrand, have made up this methodology of how you do it, which I love. I mean I just decided there’s a value there, we can figure it out. They worked with some academics to make sure it was fairly robust and they just went out and sold it. And all the accountants were going “Well you can’t do that. You know, this is impossible. We’re the guys who decide.” And now they all value brands by the way, all the accountants do. So that allowed me to get out of accounting and into something more creative and more to do with brands and marketing and design, which is what I loved at the time.
Simon Mottram: I went from being a finance person who liked design to being somebody who understood finance but also understood marketing and understood what works and roughly what worked and what didn’t. And the whole brand thing, we talk about brands now like its, we all know what they are, we all know how it works. Back in those days, in the early ’90s, branded only just become on the tip of the tongue. And Interbrand was the first brand consultancy so they said, listen, there’s something here that’s valuable. We can talk about it. There’s a whole industry here we should build. So yeah, now it’s totally accepted. But it was really good to get that grounding early in what a brand is and what it isn’t and be sort of on the front edge of that for nearly ten years.
CT: And when did the idea of Rapha or the whole idea start bubbling and you started putting pieces together saying “There’s something possibly here?”
Simon Mottram: A long time before we launched, So we launched in 2004 and I was thinking about it probably from ’99, something like that, late ’90s. And I’d left Interbrand around that time and I went freelance for a while because I thought “I’ve got to do something myself.” And the thing about background, my dad was an accountant, but he worked for an entrepreneur and I grew up in the ’80s. And in the ’80s in the U.K. All you were taught about was you were told that being an entrepreneur was a cool thing. You know, “You should go out and it’s like, you know stashes Britain, you can go out and make something of yourself, lad.” And so I sort of grew up sucking that stuff in and eating it up and always wanted to have my own thing.
Simon Mottram: So after a while of advising companies, you kind of realize that you’re either going to be an advisor and happy to be the person who gets paid for giving you advice but never the principal, or you want to be the principal and I totally wanted to have my own thing. So it was a combination of starting to think about what could I do, I wanted to start a brand of my own, I wanted to take all the stuff that I’d learned about brands and apply it how I felt. So I wrote quite a few different business plans for different things. Totally rubbish.
CT: What were some of those things?
Simon Mottram: With a friend we did an in-flight entertainment system. In fact now, every time I get on a plane and I look at that terrible map with the really scratchy plane going over a really bad map with virtually no information. We had it all lined up, it was going to connect to the internet and you’d be able to swoop into every place that you went over, program the flight through, so even if it was dark you’d know what you’re going over. And anyway, things like that. Had an idea for a fashion brand which was really terrible, various things like that, idea for an agency… But the one that I kept coming back to when it’s like midnight and you’re really tired and you’re at your kitchen table and you think “Oh yeah, I’m going to have to do a bit of work again on one of those ideas,” it was always the cycling one from about ’99 onwards.
CT: And from memory, you wanted Rapha or whatever it was going to be called at the time you didn’t have a name I imagine, but a series of cafes. Was that correct?
Simon Mottram: It needed to be experiences. Actually, I had a separate business plan for a series of cafes around when we were together. So early in the first couple of years I was also working on a series of cycling cafes as a concept. Probably should’ve done it earlier but then I thought, “Well, why would I do it myself? I should do it through Rapha.” And Rapha had become, we’d got started and it seemed like it was working, so it made more sense to do it with Rapha. But yeah, that was an early idea. And now there were two names for Rapha actually.
CT: What was the other?
Simon Mottram: And naming, I used to do naming for a living. So there’s a whole load of science about what names you should use and what you shouldn’t use. So you should never use an existing brand name because you have to work so hard to buy the trademarks and to build credibility in it. So of course, what did I do? I chose a couple of trademarks that existed and I fell in love with.
Simon Mottram: And so well yeah, one was Rapha from Sam Raphael and the other one was Motta, which, yes. You know Gianni Motta, who won the Giro in ’66? Just… Kaylee’s nodding. Yeah, he remembers it really well. Yeah, he won the Dura in ’66 and there’s a photo, which was one of the inspirations I kept coming back to of him sitting, sort of chewing his knuckle, looking into the distance, looking like the coolest cyclist you’ve ever seen. I mean still looking cooler than most cyclists out there. And his name was Gianni Motta and he was a pretty punchy, sort of grand tour rider I suppose. And I liked his name because my name is Mottram and I used to be called Motty at school and I just thought “Yeah, that’d be quite funny.” Actually, it would have been a much worse name. But anyway, he had a trademark for bicycles and I just thought “That’s too close. I can’t go near that.” And he’s alive so I dropped that one and coasted with Rapha but it was owned by somebody else.
CT: And what ticked the boxes with Rapha that was spot on with the rules of naming a brand?
Simon Mottram: Yes, I wanted it, it needed to be really easy to pronounce. Although, in the U.S. You still call it Rapha with far too many A’s. But anyway, it’s fairly easy to pronounce. It needed to be fairly, it needed to be distinctive word but really simple. To me it had to be redolent or it needed to connect with my idea of what cycling feels like. And that, for some reason Rapha feels like road racing to me and it’s probably because of the historical context and the connection of reference and Raphael being teams back in the 1960s. But it sounds a bit like a sort of European kind of premium experience. You know Rapha, Prada, you could probably charge a bit of money for some products that had Rapha on them and so it sort of ticked all the boxes. But it’s very European sounding, which is very important to me because I wanted it to be relevant to where I think the sport comes from.
CT: Yeah. And so did you figure out a name and brand identity before you actually started to look for-
Simon Mottram:…No, name was the end.
CT: The name was the end?
Simon Mottram: Well, the name was towards the end. The first thing was just hours and hours and I mean you had been there as well, Wade. Hours and hours of sort of thinking about why I like cycling, what it’s about, what I enjoy about the experience, what I love about the sport, finding pictures, writing stuff. Writing stuff about what is it about that race and that victory that makes me excited. You know, what was it about Eros Poli winning Ventoux in ’94 that that resonates with me? What is it about Charly Mottet in ’58? What were these stories and why did they as a cyclist, why do they make sense? And then writing it down and picking out the pictures and stuff. So I always had scrapbooks and scrapbooks of material and it all kept coming back to things like now cliche words like suffering, strength, and adventure, and bravery, and humility and they all sort of came together in these scrapbooks. And they led into what I felt the brand should feel like. And then sort of later on it’s like “Okay, so what should we call it?”
CT: Right. And I think you picked up on such a profound insight that was in front of everybody but no one actually connected it like you. The glory through suffering and you built a brand platform off of that. Now what was it, what put that altogether for you and what made you run with that? And were there others?
Simon Mottram: No, it was that. Because that is correct, to me it still is exactly what road racing is all about. And it’s exactly what, when I’m out on my bike going very slowly, part of me is still thinking about. And I don’t suffer that much and I never get much glory, but there’s an equation there and if you don’t try, if you don’t push yourself at all beyond your comfort zone, there is no reward. You’re just going for a little spin. And so those scrapbooks and when I was thinking about what is it about racing and the heroes, what have they shown? And it was, it’s the suffering. It’s actually, it’s the human experience.
Simon Mottram: And I think the sport, and it still is, so caught up in metal, and plastic, and things, and bits, and data, and what have you. And we constantly forget that it’s a human sport and it’s the human connection that people get excited about. Hence things are like brilliant for us because they’re really happy to be completely open and vulnerable and be human beings. And they were the heroes that I loved. You know, that’s why I love Pantani, not Armstrong. You know, because Armstrong was just this winning machine who was, wow, but I couldn’t get anywhere near him whereas Pantani was the most, kind of, flawed human being. Same with Charly Gaul, you know, he almost committed suicide and lots of these guys struggle and the struggle is what matters. So it’s what you feel on the bike, but it’s also the human, it connects to sort of broader human things I think.
CT: And all these things too, you’re pulling apart what makes a great story. And that’s the one thing you’ve done incredible job at is connecting every single product and the name with storytelling and it just seems to be a match made in heaven, cycling and storytelling.
Simon Mottram: I was thinking the other day, there are so many people here at Tour Du Monde, who have already been riding for five or six years or something there on that, nice curve up. They probably haven’t discovered half the stories or you know, a 10th of the stories. There’s so much there for people to unpick. And it’s not me telling the stories. All I did was encourage, surround myself with people who could tell stories, whether it’s through photography or filmmaking or writing and then just say to them “Look, this is important. Go and find it and tell it.” But do it really well. And you know, cycling still doesn’t do everything really well. So you didn’t have to do it that well to stand out, you know?
CT: Yeah. So you started conceptualizing this in your head. When did you decide to start, I need to get some capital behind me to start this? And what was the process like for that?
So yeah, the point was always to raise a bit of money. The point was never to sort of, I mean, back then I realized that I didn’t have that many skills and I had zero relevance to cycling because I’m just a punter who rides a bike slowly. I don’t know anything about the sport, I’m not an ex-pro, which actually has turned out to probably be one of my useful assets is to not be of the industry. So I had nothing to go on. I knew I was going to have to raise a bit of money to make it work, but I couldn’t raise very much because I couldn’t and also no one was interested in cycling. So you’re selling something to investors, which they have no concept of why this would be a marketable, valuable asset to invest in. But I had to raise some to get going.
Simon Mottram: I didn’t have much money. I had three kids and I had sort of a consulting job, but I didn’t have savings so I had to raise some capital. So I decided to go out and do that sort of around the same time, ’99-2000. I spent two years writing a business plan and starting off 2002 I started going and meeting anybody I could find who had any money basically. Ideally, they’d have some kind of investment track record and they would have some connection to sort of brands or sport. If they’re a cyclist, even better. In fact, I spent six months going down a rabbit hole of rich angel investors who were also in this weird group I found who are people like me who did the ATAP and rode bikes. I thought they’d be perfect, they’ll totally get it. But for some reason they didn’t get it and I wasted many, many months. Well, most of them didn’t, some invested. But I’d talked to anybody.
CT: How many conversations do you think you would have had?
Simon Mottram: I had over 200 conversations…And I raised virtually nothing. I mean, I raised 150 grand.
CT: How did that feel?
Simon Mottram: I don’t know. There’s obsession, there’s blind obsession, and there’s sort of determination. And I think the combination of those three things, that was the feature of my life for about five years. When my wife would… Well, for 20 years, let’s be honest, my wife would tell you I just was constantly doing it. So I didn’t take any of them as kind of like, they’re all learning, they’re all useful. But I never thought “Oh, I’ll stop. It’s not going to work.” I knew I had to do it. I knew it could work whether it was going to work and be a 20 grand business or be something more successful. I didn’t know, but I knew it. I had to give birth to it almost.
Simon Mottram: You have to do it. The only one that really knocked me back was I ended up getting a meeting with Paul Smith and had found about 15 ways into Paul and eventually met his right hand man. He’s a good friend who said “This is great, Paul’s going to love it.” And so I went to see Paul and showed him all the stuff and he said “Oh yeah, completely love it. Spot on. I think it’s really brilliant. But I’m really busy and I’ve got to focus on my business and it would be a distraction and I’ll help however I can, but I can’t back it and invest in it.” I remember coming out of that meeting and that was late 2002 and sitting in a cafe and just going “Okay shit, maybe this won’t work.”
Yeah, that was the one time, it was only for a day. And then you just carry on.
CT: Were you continuing to work at this point? Have you ever jumped off a ledge that said “I’m committed? I have to…”
Simon Mottram: No, I’m a consultant so, or I was, so it was quite useful. I could sell two or three days a week of consulting work and I wasn’t earning that much, but it was enough. And it also meant when I started I knew there was a safety net. I could get back into it if I had to, which I’m sure was more significant than I give it credit for.
CT: Yeah. And the name Luke Scheybeler, How did you come into him and what was his role? I’ve seen that he was the co-founder along with yourself. Is that accurate or where do you put him in the origins?
Simon Mottram: So Luke was somebody I worked with pretty closely at Sapient, which was a E-services firm. And when I got started I knew I needed somebody who was a really good graphic designer. Because so much of it’s about telling stories and so much of it is about, yes, garment construction is important, but actually what they looked like is more of a graphic exploration. You know how you put colors together and type. So I asked him to come and work with me on it and he came and worked with me on it. He wasn’t a cyclist at the time, but he threw himself into it like lots of people do and became really obsessed, which was great. And he was with me for the first five years or so and was incredibly important to getting the brand mark done. You know, he designed the brand mark, he did lots of things really well. I don’t have many regrets, but I made the mistake of just, I was just desperate for anybody to come and help.
Simon Mottram: And you’re pushing ahead, you’re pushing your ahead. And I never was clear enough with him that he worked for me, which he did. And you know, I paid his salary and everything and I raised the money and I ran the company, but I wasn’t clear enough. And so yeah, it got to a point where he got frustrated and I got frustrated with him and eventually I had to let him go.
CT: Yeah. He’s part of Tracksmith now doing something very similar.
Simon Mottram: He did that. He’s left there a few years ago, but he did that soon afterwards, which was some of the DNAs you can decode, some of it has come from the same sort of playbook and it’s a really nice brand. I think he was there for the first two or three years.
CT: Right, okay.
Simon Mottram: But he was really important in the early days. But yeah, there’s a thing about this that you have to, you bring people in, but you have to keep going. You have to keep going. And I would always do absolutely what I had to do for Rapha, Rapha had to work. Everybody else is kind of secondary.
CT: Okay. So tell me about the official launch. What was that like? What did you do? Did it go to plan?
Simon Mottram: So all those people that are thinking about starting a clothing brand, the key thing is six months from getting my 140,000 pounds of hard won cash to the LTO-
CT: So you were able to raise $140,000?
Simon Mottram: 140 grand.
Simon Mottram: Yeah. Mainly friends and family in the end who just, and people just backing me and my stupid passion and they knew I’d kill myself to do it. So yeah, we got the final money in December 2003. Luke had been helping me on this and I’d got this girl called Claire to come and help and I said to them “Right, I’ve raised this money, we’re going to launch. We have to launch by the first day of the tour. Otherwise, the season’s kind of into its decline.” I mean, actually now we make as much money in the second half of the year as the first half, I didn’t know that at the time.
CT: But that’s where was the hook for you.
Simon Mottram: Yeah And if you want to establish a brand, you’ve kind of got to, that’s your platform, surely for cyclists. So I said “Right, we’ve got six months to build a website, create all the products from scratch,” I mean, we’d done sketches and stuff, we had no proper designs.
Simon Mottram: Yeah.
CT: Nothing physical?
Simon Mottram: No prototype. Probably why we didn’t raise much money. I hadn’t invested in prototypes. Ah, there you go. Oops. But we had six months to do it. So it was a mad journey to get there. And what I realized was that I didn’t want to just launch it as here’s a website and here’s a product for sale. Which actually now, you put it on Instagram or Facebook and off you go and frankly, you don’t have to do all the stuff that I spent years doing. You can create a brand out of nothing and if you’ve got enough to spend on social media and digital marketing, you can get there with one product. But it’s not really a brand, It’s just, to me, it’s just a drop in the ocean frankly. Anyway, that’s a different point.
I want to talk about that later, yeah.
But to do what I wanted to do, which is all about experience and all about, the thing itself, which is cycling. We had to launch it with an experience and it couldn’t just be digital.
We had to launch a new experience. It couldn’t just be digital. So we did this one month-long exhibition called Kings of Pain and I went off and found loads of vintage product, found lots of collectors who I borrowed products from and we celebrated six of the heroes of the sport, the glory years of the sport. So there’s Jacques Anquetil, Bernardino, Eddie Merckx, Fausto Coppi, Tom Simpson and Poulidor, that’s six, isn’t it? I don’t know. It’s probably those. And we’ve had this big gallery space and in each area we had a massive blowup of the person. I got Graeme Fife to write stuff about their history. We had all these palmeras and then we had these tables with this amazing stuff. It was like a beautiful exhibition in a gallery or a museum.
And then in the corner was this little rack of, well not really a rack of clothes. There’s one jersey and some tee shirts and some caps. This is our stuff, but we’re about this. We’re not about the product itself, we’re about the why, the bigger thing. And I’d bought lots of vintage stuff as well.
A leap backwards to what you were just saying, like Instagram brands.
Totally. But I think to break in, would I do the same thing now? Probably not. It’s probably hard to imagine somebody going to those efforts to try and break into something and now it’s all been done, so much of cycling has been done and those brands have come and gone. So it probably would be a bit weird to do it now. But then no one knew about cycling.
It was kind of like you had to honor it and you had to say, look guys, this is an amazing thing. We bought a Citroen H Van and we put a broom on the back and parked it outside. We had parties every night and we illegally showed the Tour projected on the wall every day and said, listen, if you’re a cyclist, I don’t know how we got the word out because there was no social media. So we probably got it out through our networks and put a couple of ads in local newspapers and said, if you’re a cyclist, come and watch the Tour, we’d love to see you. And that was it. And to be honest, if you go into a clubhouse now, apart from all the Rapha products, it’s not a dissimilar experience and it shouldn’t be.
Had you seen this done before or was this complete, like with other luxury brands, other brands period, or is this something you just thought that this was the right thing to do?
It’s the right thing to do? I don’t think I’d seen it before. Sometimes you don’t know where these things come from and I doubt it came out of absolutely nowhere. But no, all the way through the journey, it’s trying to do what is right for the sport and the brand and try and move it forward. It was a brilliant thing to do. As you imagine, it’s such good fun to have your, this space doing all the things that you love, showing all this stuff to people and their wide eyes going, Oh. Or, if they’re old roadies, they come in and go, Oh thank God somebody gets this. I remember that race or him. It was really nice.
And so the capital you raised would have been spent on that and then at some point it would had to been spent on creating some product.
Yeah, most of it was on products because that whole event probably cost me 15 grand, I should think out of the 140 but the week before the launch was going to happen I booked all this stuff. I got a call from the factory saying that they wouldn’t, I probably told you this before years ago, that they wouldn’t deliver the first jerseys. So the classic jersey, which is still in our top five best sellers, not so much in Adelaide. This is black …
Black with the white iron armband.
made in sport wool. Rapha performance Merino as it now is because we’ve got our own blend. It was partly Merino, partly polyester and it had a very sleek look and Bill Strickland from Bicycling picked it up and he championed it and that was wonderful. But that was our product and I spent so much time trying to create that iconic product. But I tried to make it in the UK and this a factory in Nottingham and the guy called me up and said, I’m not going to send them tomorrow. And I said, well, why not? He said, well, because you’ve done 15 prototypes and it’s never right and you won’t accept it. It’s got to fit. I’m not going to get to the sort of quality you want. I’m not going to risk running my machines through the night and using the raw materials and paying for them for you to say no.
I said, well, listen mate, I’ve just invested a huge amount of money in a launch or for me it was a huge amount of money. If they don’t have sleeves, I don’t care. You know, just I need to have products. And he just said no. So I walked downstairs to this little room we had where Luke and Claire were and I said, I’ve got a bit of a problem guys. We’re not going to have the classic jersey for the launch. But as it happened, it didn’t matter. We’d done enough to establish the brand. I went to Paris and bought lots of vintage stuff to sell instead and we sold some of that. And you know, you’re hustling …
Were you online at the time or were you physically …?
We had a catalog online in the most rudimentary way. I remember we used to write the … we had a code for each item. I’ve still got some of them in my office because they didn’t all sell. It was so pony. It was terrible.
Just you three working at the backend of this website?
Yeah, totally. We built a website from scratch as well. It wasn’t off the shelf, we’d done it, built it all ourselves bespoke. So it was interesting and very brand-focused. It was quite beautiful. But it wasn’t very good at e-commerce.
Did you have a lot of the assets like photography and stories and copy?
Yeah, there’s a friend of mine called Ben Ingham and who I’d met around that time and I knew that I had to really nail photography because all the reference materials were beautiful photography from the 60s and 70s, basically, and the 50s. I wanted to recreate that feeling …
Ah yes…The book for Forcats de la route.
The Kings of Pain. Yeah. We’ve republished it. It’s all that stuff. So I knew that and my sister-in-law who invested in one of the friends and family, she was a fashion director and she said, listen, you’ve got to use really good photographers. You can’t half ass this. You’ve got to get really good people. And she connected me to two or three different really accomplished fashion and reportage photographers. And one of them was Ben and we totally hit it off. And, and I showed him this book An Intimate Portrait of the Tour de France with all those old photographs and said, listen, I want to capture this but with contemporary bikes and clothing for a contemporary moment but it’s got to have that emotional resonance. So we went off and did a shoot in April and that’s what we launched with.
Where was the shoot?
The shoot was in … it all has a reason. So the shoot was in the Sevein, there’s the scene of the Rider. For many years we were the biggest seller of the Rider in the UK until Amazon went and took off somehow. I don’t know how that business did so well, but anyway. We sold hundreds of copies a year. I mean we still give it to every member of staff who joins Rapha. They get a reading list and they’re given a copy of the Rider because I think pretty much all of road racing is in that book. So I had to do it there. There was no question. No one did shoots in those sort of places. No one did sort of shoots in relevant landscapes. People did it in studios, they’d get really close to a guy sort of cornering and nailing it and they close in on his brakes or something. They were terrible.
They have no emotional value. So we had to go somewhere that was relevant and that it just was beautiful and we could tell stories about. So I took my friend Dominique, he’s a little bit older than me anyway, he’s an ex-racer and a messenger who I met in London and we took him to the Sevein and we did the route of the Rider and shot it there. Still one of the best shoots we’ve done.
The thing that occurs to me is the depth of something like that, which only a few people would actually know the depths you went to get that right. Did it not occur to you that it could have been done a lot cheaper? You only had 140,000 pounds and gone to the back roads of London?
No, not at all. No. And there is a thing that goes on in my head and I think it plays out every season, which is that, yes, you can shortchange, there’s always a shorter route to something. But I always think cycling deserves better than that. Just because you can do it really badly and get away with it and it kind of works, there’s no ambition there. There’s, there’s still not enough ambition in the sport. And so I was just more ambitious to do it better. And why not? If you’re going to go and spend two weeks or whatever it was, a week in the Sevein, make sure the people are perfect, every detail has to be … I know I sound a bit stupid and a bit obsessive. I am. But it has to be right because the sport deserves it, not because Rapha needed it to be a good business, more because I love the sport and it should look perfect.
So we gave Dominique a Globe-Trotter suitcase and I asked him to bring photographs of his kids and his wife and him in his race gear when he was racing to put inside the Globe-Trotter suitcase because that’s what the old Tour riders would do.
Yeah. I remember those photos.
They used to have tour-issue suitcases and they’d put their photos of their family because they’re away for three or four weeks. So we had that and we’d have that in the background and all the details, his watch he was wearing, obviously the bike and everything. It all had to be chosen just right or what I thought was right at a time. And if we shot him in a cafe, it had to be as you’d do it as a cyclist and he’d have to have his cap on and now it seems so obvious, but then nobody did it.
It was great. You had to ride really hard so they had to push themselves and ride all day. It wasn’t just do that climb 15 times and we’ll take it again and again until you look really cool. It was like, go off and ride and we’ll find you in a couple of hours and then we will just keep following you and jumping on the side of the road and shooting you as you go past. He was drained and unfortunately the messenger guy wasn’t very fit. He was a lovely guy but Dominique was really strong and he just put this guy to the sword.
It was quite funny because you’ve got quite good suffering shots of him, but we went to the … I’m such a geek. We went to the Col de Peyresourde because that was in the Rider but also it’s where Roger Riviere crashed and broke his back and he was a San Rafael rider and so I made them all go and look at the monument and see the place where he’d been pulled out of the bushes. Then we met the guy whose father had pulled out the bushes in the bar the next day and so he shot Dominique talking to him. It was a dream. It was perfect. I loved it. I still love doing things like that.
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So, not long after, from what I understand, you helped launch Rouleur. What was your involvement in Rouleur and why did you think that was important? And it was very closely connected with Rapha but not a Rapha-branded publication. What was, what was the purpose behind that?
So, Rouleur, another brand name, which sometimes gets mispronounced … like,
Like I just did actually.
No, no, you’re pretty good. Rouleur was started by Guy Andrews and we basically were partners in it. Originally, I’d met him when I was doing the business plan and he’d told me not to do it. Guy was a cycling journalist and sort of amateur racer, knew everything about bikes and bike racing and still does and still tells me everything I need to know. I’d met him and talked to him about the plan and then he’d become one of my press contacts because he set up Road Cycling UK, which one of the first websites in the UK covering cycling.
So he’d come around every few months and I’d show him the kit and we talk and then we’d get onto bike mags. We know about bike mags at this table. And at the time they were really pretty bad. In fact, they were terrible. And we’d just sit there just moaning and moaning. And eventually I said, Tim, listen, we’d love to do a magazine. Why don’t you do it and we’ll back it and we’ll be super hands-off because it’s not about stamping Rapha everywhere. We’ll publish it and we’ll be the publisher. But it’s yours to do in all the ways that we’ve just talked about. And so that’s where the idea came from. And that late 2005 and it was totally groundbreaking. Just as passionate as Rapha was, approached things in the same way. It’s all about total authenticity and sophistication and intelligence. And you’re not just doing it to sell mags, doing it for the sport and for the art, I suppose. And it was brilliant.
Was it a good business to be in?
It wasn’t a good business for us to be in because we were super sort of hands-off and we let them, because eventually Guy built a little team and they were looking for advertising and we always had a double page spread ad at the beginning. That was our token free thing as the owner of the thing. And we didn’t push it any more than that. No editorial. Yeah, we were so pure. It was ridiculous. You’d laugh. You should’ve probably told us how to do it, but it wasn’t a good business for us because all our competent competitors started putting ads in there. So I suppose we were making money from the competition a little bit, but Rouleur wasn’t making much money. So it just felt like we were promoting their brands. Although I’m very pure, I didn’t feel that was a … I don’t want be that pure.
Eventually we sold it for partly those reasons. We didn’t really want to put money into it because it was just going to be used for that. And so we sold, three, four years in.
Media is a weird, weird business when you think about it. Magazines, so when I think back, were probably a half decent business model. If you didn’t have competing interests because people paid for them, but right now giving away your stuff for free, spending thousands of dollars doing it.
Yeah. It’s pretty tough to sell.
It’s a strange business to make work.
There have been lots of bike magazines, Cycling magazines in the last 10 years and there are fewer now I’d say than there probably were five years ago. People went in thinking it must be a great business and it’s hard. It’s really hard.
And then not long after the Rapha Condor cycling team. Very iconic I think in the Rapha brand and I think that gave you a huge amount of authenticity in the scene, the hardcore race scene. How did that start and what was your thinking behind it and its purpose?
Yeah, so it was 2006 I think was the first team. Dominique, who is this chap who was our model, our sort of main model is just a racer and he races around London and he was pretty successful in the vets and he’s also rode a Condor and Condor were friends of mine and they stocked Rapha early on because we went into a few shops just to show that we were sort of legitimate. So I knew them quite well and he said you’ve got to do a team, Simon, you’ve got to do a team. You can’t be a cycling brand without having a team.
And actually that connection with pro racing back to the enthusiast is quite interesting. It’s been a constant struggle because while most of the sport thinks you’ve got to be a pro racer to have any relevance and I don’t agree with that. To have nothing to do with pro racing doesn’t feel right either. So it was quite an interesting thing. Anyway, Dominique was just beating me up about you go to a team and of course I desperately wanted to because I just love cycling. And he eventually said, listen, Grant will do it too, Grant who owns Condor. He’s up to doing it with you. And he hadn’t spoken to Grant at all, I don’t think. I think he’s just basically made it up. I think he hoodwinked when saying that Simon was going to do it.
And so eventually we formed this team together and the first team was Dominique, Guy Andrews from Rouleur, Matt Seaton, who used to write in the Guardian newspaper, now is in the New York Times or he moved to New York and still writes about cycling periodically and a few sort of gentleman like …
So those are the people racing?
This is the racing team. They were sort of, they were generally first Cat level. They weren’t elites but in those days you could race against the elites fairly frequently.
How old would all these these people have been, like thirties?
No, Dominique was already 47 or 48 but still winning because he’s just hardcore. He’s fantastic. Matt was probably late thirties. Guy was same age as me, later thirties. It was a masters team and it was brilliant and they were just so into it. Dominique was quite ambitious and he sort of ran the team. A breakthrough moment was he said, listen, he called me up and said Simon, we can get Dean Downing and Dean Downing for those who don’t know UK racing was a really successful UK racer.
He was riding for Belgium team at the time and wants to come home and we could get him for virtually nothing. And Dean’s from Rotheram where I’m from and I was always a big fan of Dean. I mean Richie Porte now is my Dean Downing of 2006. That probably is not good for either of them. He said we can get Dean, Dean will come and ride for us. So we hired Dean Downing and we hired a few more young sort of junior pros around him and created an elite team. And then the gentleman sort of took a back seat. So we had this rudimentary elite team wearing sport wool jerseys to start with and just went from there.
All class. They looked amazing. It was so different.
It was so cool. We toned it right down. It was black with big white Rapha Condor and that was kind of it. White stripe, logos. That was all the logos. Everybody could see them a mile off. And it led to a 10-year journey into black kit, which was still front of Unpick. They won races. The first year Dean won the Lincoln Grand Prix, which was the most important UK race. And he came over the line in tears.
How did that feel seeing your friend come across, victory salute?
That’s one of my top 10 moments.
Is that right?
Yeah, totally. Like seeing Geraint Thomas coming up corkscrew in 2013 in the lead in our kit and our first world tour squad. That was pretty, those things, you don’t get those, you don’t regret those. Amazing.
So was business going well from a financial perspective that you were able to invest in this team? Because even if we’re getting riders cheap, it is expensive and both from a resource perspective and money … was business going well at this time?
Yeah, it went like a rocket. We grew by 50 to 100 percent for the first number of years.
More than you expected? Or was it … on target?
It was about on target, but it wasn’t, I had enough money, we had two or three little capital rounds, not much, but just enough to keep us going. And we were pushing and pushing and pushing and I had enough to keep pushing and the shareholders were, they’re like, wow, this is great. You’ve actually launched and not gone bust. Brilliant. And then, oh, you’ve made a profit in year four or whatever. Amazing. Yes, we’ll keep supporting you. So we had enough and it was more about all the opportunities than it was kind of … I’m an accountant but I’m not really very commercial in that way. We had to do as much as we could. I suppose it was a bit of a land grab. There was so much opportunity in cycling at the time and no one was doing anything. So yes, you go and do all these crazy product categories and you do a team and you start magazines and start a travel business and you do all that stuff because you can, because nobody’s done it well. So go and do it. And the business is doing …
Nobody’s done it well. So go and do it. And the business is doing well and yeah, it was making money and it was growing like topsy.
In 2007, you came back to Paul Smith and were able to do a collaboration with him. What was the purpose of that and how did that come about?
So even though he said he couldn’t help, he couldn’t invest, he said he’d help. So we kept in touch and every six months we’d have a coffee and, he’s like me, he’s completely mad about the sport. And yeah, he collect so much stuff. And we eventually, we just said, “well, the tour’s coming to the UK to London, we should do a jersey, shouldn’t we?” So we did a jersey and some caps and he designed the graphics on the jersey, but we designed a fit and everything and it was made a sport wool. So it was designed on a sort of 50s style with a big collar and we only made 300 and they sold out. It was one of those classic ones that which you’re trying to achieve all the time. It sold out in a week and within a few months they were on eBay for hundreds and hundreds of pounds.
But it was lovely. It was a real storytelling piece and really good for both brands. He loved it because it connected him to the sport without him saying, “Hey it’s Paul Smith being a cyclist.” He liked it being both of us. And that led to two or three collaborations since. Periodically we’ll do one just because we enjoy doing it and he likes it too.
So where did the idea come from with putting stories inside every product. And they were not even 50 words, but they say so much more than that. And you’ve written a lot of those yourself?
I used to write them. Yeah. I haven’t written one for fortunately for many, many years. I wrote all the copy for the website the first couple of years. So it’s good that that’s disappeared. But it’s the same thing. Every opportunity that we have. I don’t know. It probably sounds a bit over the top, but I think every option, every moment, everything you do is an opportunity to connect to the sport and the customer.
So you know, we talk about the why and it’s its all very consultancy. But the reason we’re doing all this is the thing, it is about the sport. It’s not about making a nicer jersey for the sake of a nicer jersey. It’s making a better jersey to make the riding experience better and to drag to sport forward and to celebrate it.
So doing stories was just, I wanted to have something that was discoverable and it would help build that sort of richer experience and the richer relationship with us. So we just started doing them on the back of the jerseys and just went crazy. We’ve done I don’t know 1500 story labels by now.
It’s a very long view.
It’s not commercial, is it.
And in starting your career as an accountant and then.
You don’t want to keep reminding me of that way.
I find it fascinating and I think that’s a really good business skill to have. Just understanding how to read a balance sheet and a P&L and it’s just good business.
Yeah. You can ask friends of mine who are accountants who I trained with. I never really was an accountant. I mean I could do some of those things to an okay level but my instincts are much more about strategy and creative, really, than they are about making everything work in a balance sheet. The balance sheet’s like a sort of checkpoint for me, not a driving force.
And so businesses blooming in the UK. When did you you decide you want to span outside of the UK?
Oh we’d already expanded loads.
Just the sake of being online. People were buying on site.
The reason I went online is because I’d traveled around a lot and seen people a bit like me in lots of markets. So I knew they were in New York and Tokyo and Barcelona and LA. And because I travel a lot with work and I used every opportunity to sort of do my research. So I knew there were people like me in places, but you wanted to be able to reach them online and you could reach them online the first time ever.
You didn’t have to send them catalogs or open shops or sell through shops. You’d go direct to them and have this relationship because they loved it too. And we could talk like peers about the thing that we both love. So it was always international. The second customer was in New York, amazingly.
Just second customer.
Yeah. So I’d found lists of people and I’d grabbed as many names as I could. And one of them were in financing, they’d work in New York and one of them made a purchase. So we’d always sold to the U.S., we sold very quickly into Australia, very quickly into Scandinavia. And yeah, these sort of early adopter markets where it was a sort of a certain kind of person who had a bit of money so they could afford to buy a nice jersey but loves cycling and they were looking for a brand that reminded them why love cycling.
Oh the direct to consumer model. That’s something that you’ve stood by for a long time. And why was that important to you?
For the reasons I just said. I didn’t want anybody else to get in the way of me having a relationship with a customer. Because I didn’t want to just, the point wasn’t to sell product. The point was to build cycling. So if you find somebody who loves it like you do, like with your listeners, you want to have a relationship with them and keep talking to them and bring them in a little bit. And you can obviously sell them more stuff over time. So being direct was really important to me. And it doesn’t mean there were always 100% direct and we were for a while and we’re now probably 95% direct. We went down to 70% at one point. But it was always the driver of the business is to be direct.
Because it’s often the easy way to get into a new market is going through a distributor and letting them do all that heavy lifting for you.
Yeah. But cycling is not about the easy road, is it Wade? But it isn’t.
It’s a good analogy.
But I waffle on about this stuff quite a lot. But yeah, my analogy would be you can go down, you can come back to town down the Gorge road and you know there’s a couple of rollers, but you basically big ring it the whole way and it’ll be fine. But there’s that little left turn to this place called Corkscrew that you’ve heard about and it’s like, “Oh yeah, but that sounds really good”. You don’t know if you’re going to make it, you don’t know what it’s going to be like, but you know that you’ve got to go and have a look because it could be really, it could be so much better. And of course, when you go and do Corkscrew and then come down Montacute. Sorry, this is very, very Adelaide folk.
We are in Adelaide at the moment. [crosstalk 00:06:35].
I’m trying to be very relevant but only to this table, which is probably stupid. But we would always, I think Rapha will, well while I’m around and alive, Rapha will always take that harder road because you will suffer more but you get more out of it. And so that’s why we go direct. That’s why we do what’s right. Not what’s easiest.
I think too that might speak to having a successful business model that lets you be profitable and allows you to do that versus always being behind the eight ball. Or have you felt like you’re always behind the eight ball, but this is still the way?
What does behind the eight ball means?
Sorry. It’s like on the back foot. Like always just maybe a little bit behind your target.
No, I think we’ve always been ahead until a couple of years ago. I think the thing, the one thing that hasn’t worked or that got away from us a bit was the amount of discounting that we did as a business. And that’s a very common thing. And I now realize that. But you’re growing at such a high rate and you’re buying more and more stock and it’s difficult being direct to consumer then made that even more risky because you have to sell the stock. You’ve got no way out. So you end up promoting a bit and then promoting a bit more and that really works. So then the next year you’ve got that as your comp. So you do it again. And so a couple of years ago we realized that that got too far and said, so that’s made us a bit sort of not behind the eight ball or behind the eight ball. I don’t know whether.
It’s behind the eight ball.
Made us behind the eight ball.
It’s a pool term.
We’ll go play.
I’m so bad at pool.
I’ll be behind the eight ball.
It must be a business that’s tough with managing cash flow. Is that something that’s, does your accounting come in handy with that or is that something that you’ve had good people working with that?
Yeah, we’ve always had good finance people. I’ve always had a good FD, good CFO. But it is really hard. We buy everything we sell and we make commitments ahead of selling it. And it’s a bit of a bet. However smart your merchandising is and your analytics and everything else, when you’re doing so many innovative things and you’re pushing so hard, you don’t know if it’s going to work.
So you do end up with things that don’t sell and that’s the cash hole and you can’t survive with cash holes for too long. So that’s been an interesting journey. I’m not particularly great with cashflow. As a business we are much more sophisticated than we were 10 years ago, but 10 years ago you didn’t need to because you kind of. Well, sorry, I take that back. That’s not fair. I did what I had to do to do what was right. So I borrowed 23 grand from a friend to get the first jackets we made out of this factory so I could sell them. And I paid him back two weeks later or whatever. When we’ve got them in the warehouse, we start selling them. But you know, you do the things to get the cash in to make it work.
And now we’re much more sophisticated about, so we don’t have to do that. I don’t have to borrow from my friends anymore. Yeah.
Yeah. I mean I think a lot of people realize that you can literally go broke while making money with cashflow issues. It seems to me that like holding stock and especially the amount of variants of sizes and colors and all that. Yeah, totally. It’d be tricky.
I think that’s so true. And the rougher experience certainly for the first 10 years, 12, 13 years was just about untrammeled sort of ambition and just doing everything because that’s what I am. That’s what I do because I ran it. Because I do run it, I could just go and do it. So we created this sprawling monster with so many tentacles and some of them made money, some of them didn’t. But we were growing. So you kind of keep going. Then you have to keep feeding the beast. And so we don’t want to be quite as spread as that. Our product range doesn’t need to be 1500 products. It needs to be options. It needs to be like a thousand options or maybe even less. I don’t want it to be one option, like an Instagram brand because that’s so depressing. But it doesn’t need to be a thousand.
Yeah, right. So when you’re going into the U.S. market, I imagine that was a big move and you, you hired Slate Olson. How did Slate come into your life and in the business and what impact did he have on the business?
I forgot you know Slate.
I know Slate. Slate’s awesome.
Slate is awesome.
[inaudible 00:53:03] does as well.
We had a couple of false attempts before Slate. And then I tried a couple of people and I was like no I’m going to have to do this properly. So I drew up a job spec and I sent it. The first thing I did was send it out to all my mates and I hired a head hunter in Portland because I thought they might well come from Portland because that’s where lots of outdoor brands were. And we very quickly we ran a good process but I very quickly got in four or five different recommendations, this guy called Slate Olson. And there are so many people in America with bizarre names, they always sound like rock stars. They’re such cool names.
CT: is pretty good, you’ve got that alliteration thing going. But Slate also is like wow. And one of my investors who’s a Nike guy had heard about him, the head hunter got him in, somebody else recommended him to me, and my investor sent it to me, sent me his CV, this guy Slate Olson. And there’s a picture of him riding, racing cross and he’s finished it by saying, yeah, his name’s only fucking Slate Olson. You’ve got to hire this guy. So I went out and did the all the final round, but I think I decided it was Slate when I first met him. So yeah. Yeah. So he built the brand effectively with me or for me in the U.S.
Was it hard having someone who alongside you who was another marketing person and had ideas that really pushed the brand and or?
No, no, it was brilliant. It was brilliant because he’s a Nike guy. If he’d come from, I don’t know, I don’t want to pick the wrong brand. If you come from a sort of packaged goods, supermarket branding, marketing, maybe he wouldn’t have been right. Became from Nike, which wrote the rules of lots of this stuff. So all about content, all about experience, all about sort emotion and getting that across. Yeah. Brilliant brand builder. And so he got it. There’s a reason he got the job because he totally got it. And in fact, when I was interviewing the candidates, one of the questions on my, I don’t know why I’m saying this actually, but anyway, one of the questions that we used internally to mark the candidates was would they pass the Bill Strickland test? So Bill was editor of Bicycling magazine.
What was the test?
That was the question. Basically if he met Bill Strickland, would Bill think he was authentic and cool and would he like him? Because if he didn’t because then it’s like he won’t represent our brand very well. Probably embarrass Bill if he ever heard that. And Slate totally passed the, they became firm friends, so yeah. Yeah, he was totally it. And yeah, did the Rapha continental series of films, which.
A huge innovation at the time.
I don’t know what role they had in the rise of Gravel. I’m not sure if I heard it on the Cycling Tips podcast. I was thinking I didn’t, because I said I don’t agree with it, but somebody said that, Oh you know the whole gravel scene was started by disc brakes, which I just, I think he’s bollix actually. But anyway, but it was held by disc brakes but we were doing gravel way before then or adventure or cyclocross or whatever. And Slate was a cross rider already and there was this group of them. In fact it wasn’t his idea, it was somebody else’s idea. But he picked it up and ran with it. And they just wanted to go and you didn’t need to be pro riders. You need to be badass but just go and ride amazing rides, on and off road. Just because it was gravel or dirt didn’t matter. You’re still going to do it.
It was completely inappropriate at the time for the bikes.
Oh totally. Yeah. The steel, generally steel racing bikes with strand force and they just nailed it. And all the bikes were black with little pink decals and the guys were cool and the content was really cool. That was hugely important for us.
So jumping ahead to the Team Sky sponsorship, that was a huge step for you, I guess from probably a financial perspective from a statement and all that. How did that go and was it what you expected your pro cycling entrance?
It probably was as expected. How did it start or how did it [crosstalk 00:57:15].
How did it start? How did that become, because it was not long after Team Sky. Yeah they were with it Adidas, weren’t they?
They were with Adidas for the first two years. Two years or three years. 2010, 20… first three years. Because they won in the third year, didn’t they, won the tour? Yeah I’d met Brailsford before Team Sky. So David Miller’s sister Fran Miller used to run our Nocturnes, her company worked with us to run our Rapha Nocturnes, which she used to do in Smithfield and did a few abroad. And she was an events person, but also was heavily involved in racing. And she met Dave Brelsford after the Olympics in Beijing and started talking to him. He talked to her to get some help to try and set up a team, a British professional team to try and win the tour.
And they came to see me as part of it cause Rapha had got going and I knew Fran and I’m a brand guy and a marketing guy. So I worked with him a little bit about the setup of the team and what it should be like and just giving some advice. And so we knew we couldn’t possibly do it then, that was 2009 conversations. And we were Rapha Condor at that point.
Rapha Condor Sharp.
We probably were Rapha Condor Sharp by then. Yeah.
It was quite clever, I remember just the way you guys got around that three sponsors with UCI rules.
That’s so right because Rapha Condor was connected, wasn’t it.
You used Rapha Condor as one name and there was only two sponsors allowed. I remember you telling me that story. That is so genius. [Crosstalk 00:58:51].
They’ve got so many stupid rules on that. Yes we were in that world at the time and we weren’t ready. And obviously Dave wanted to win with the best kit. So he got Adidas, which, you know, why not. So we kept in touch, I went to the launch and everything and then sort of after. So at the beginning of 2012 we started talking properly because yeah, Adidas is a big company, not very focused on cycling. And they felt they wanted somebody who was much more committed and totally focus on their mission and their sports. So we did a deal, which was pretty amazing to have done that because we weren’t that big. I think we were maybe 10 or 12 million pounds turnover at the time. So yeah, it’s a big commitment to take on.
Yeah. Yeah. And you’ve done a really good job with EF with creating content and stories and all that. Was that the expectation with Sky or did they draw boundaries early that you knew that weren’t going to be crossed? Or did that get muddled? Or how did it come from a sponsor perspective?
We probably didn’t talk about it enough, I think is the truth. We definitely, they knew that what we did well was kit that was quite good and look good and yeah. So performance was okay, that we’ve ticked the box there, but they also liked the fact that we could make nice content and connect with their fans and create fans for them.
So it was definitely part of the mix, but they didn’t really understand how we did that. And yeah, they are massively controlling because that’s how they win and it’s just right for them. It’s totally the right thing. But we didn’t sort of sit down and go, “so doing the content means we want this, this and this.” And we were also finding our way, how do you do content about a protein? Because we’d had the Savella test team already, they’d done that just sort of sitting on the bus doing stuff. And the basic stories had been done quite well I think in those times. So we had to try and bring a different angle to it. Some of it worked, some of it was quite good. Some of the sort of product detailed stuff that’s really good. Some stuff with Bradley was good. But we never quite got there I don’t think. Whereas with the kit we totally sort of blew the doors off and did way too much. Learned a hell of a lot. Yeah.
It was all a good learning experience. Team Sky [crosstalk 01:01:17].
Oh it was massive.
To get to where you are now.
There were some dark moments because they are unbelievably demanding and that’s why they’re successful. And we’d done Rapha Condor Sharp. So we thought we knew protein kit but.
Was it a big shock to you?
It’s like we had done and Androni or somebody. This is different, this is now the big boys. No they don’t want any errors at all. It’s got to be absolutely perfect and they’re constantly pushing to find things to fix. It was a big shock. Yeah. It was a big shop. And we over committed, we did 800 pieces per rider and it was all custom and because I’m enthusiastic and why shouldn’t they have custom fuzzy socks? Surely that makes a difference. So we did 23 riders worth of custom for the socks.
I mean crazy.
Did it put big stress on the business that you didn’t expect or was it good for the business?
Oh it’s good for the business. It was good for the business because we sold quite a lot of stuff. And I think we’ve certainly done, I’m sure it’s true that we’ve done better in selling pro kit than any other brand has done. Because we’re direct to consumer as well, that helps. But we did really well with sales and it brought lots of new eyeballs to our brand and it just keeps us on really well. Yeah.
So how long, we’re coming up to the [sale ares at sea 00:20:34] timeline. How long were you looking for someone to acquire the business for the investors to exit? And how long did that process start before you actually got onto [ares at sea 00:20:43] and speaking seriously with them?
Well, the whole process from deciding to do a process to completing the transaction was seven months.
Yeah, it’s really fast. Really fast. Maybe eight months actually, because I remember just around Christmas, the year before we did it, saying to the board, I thought it was a good idea. We should look to do something.
Saying to the board, I thought it was a good idea. We should look to do something.
And then we hired a bank and we ran a really tough process.
Yeah, yeah. And then you came into contact with them and it happened quite quickly? They were aligned with what you wanted it to do next?
They were the first people I spoke to, yeah. You have… Well you’ve done this, you have these fireside chats. You’re never at the fireside. In fact, one of mine was at a fireside. It was quite funny because you were sitting there with a glass of whiskey. It’s like, “Oh, fireside chat.” Actually, they’re normally in a conference room or over lunch or something. So we must’ve met, I don’t know, 25, 30 different potential parties. And we were very interesting to people because we’d done quite well and the brand reached way beyond the business.
So we weren’t short of potential suitors. And the first people I sat down for lunch with were Tom and Steuart Walton and it was like, “Wow, okay. So you guys, you’re from Arkansas and you ride mountain bikes and you’re building all these trails and you really love cycling.” And wow. They weren’t your usual Bain Capital or one of these private equity firms that buys companies and, “Oh, and you want to buy it for 25 years or forever. Interesting.” So there’s a real-
They don’t do these [crosstalk 01:04:24] five to seven year flip business.
Yeah. They’ve got no interest in that. They don’t need to do that. They’re interested in building things for long term and also trying to build things that can help their ambitions for where they live. And Aceville Rapha is a really useful thing for both those ambitions. So they were the first ones and they were kind of like the outliers in a way, because they weren’t like everybody else. And then I saw everybody else and we’d go through a process and they ended up being the final one. So, yeah. And actually they’ve been brilliant, really brilliant.
And around that time you had announced I think in a Christmas newsletter about the ambitions for travel for a hundred clubhouses, for Rapha media, for more for RCC and-
Had I? Yes, I probably had.
And yeah. And it was like, whoa. It was wow. Huge ambitions. And then it wasn’t too long later where you had to make some tough decisions. And what went on at that time? And why did these decisions I guess come to fruition? And how did that feel going through that? Because it was a lot of pushback from your community.
Oh God yeah, yeah. No, we learned. We made some big mistakes and learned quite a lot. And it was absolutely the right thing to do, but it was pretty painful. I think it’s a whole lot of things. I was talking earlier about you get on this promotional drug and it sort of inflates everything and it’s not very cash generative and it puts strain on your business. So that had been going on and that had stretched us far too far. So the core business wasn’t strong enough to be able to support all the things we were doing. And that became apparent probably six months after the acquisition where I’d been at the business for a long time, and we’ve been focused on the future and the shareholders and what we’re going to do.
And then you go back into business and go, “Oh, maybe things aren’t working quite as well as we thought they were and maybe we need to make some corrections.” So that’s kind of where it came from. And we have this sprawling empire of things and it was even more sprawling. And so some of the things we just have to bring them back. So travel was one of those. It’s a lovely thing and it’s very close to my heart, but I basically I had to kill some of my children. That was probably a terrible analogy but it does feel like that when you do it. Yeah, you can imagine it’s really painful.
I remember hotels being talked about as a vision.
Oh and… But most of the things on that list, so a hundred clubhouses, we may well get there. The RCC is 15,000 members. It can get to 100,000 members or 50,000 members. It’d definitely work.
We’re doing content. We’re doing it slightly differently and we’re working with partners to make sure it’s seen and distribution of content is going to have to be a bit different than us just being a channel. But we still absolutely committed to media and content. And from a product point of view, the ambitions are probably still pretty similar. So we’re not miles away. We just had to make some corrections first and it was painful. It was really painful.
Yeah. What did it feel like with your customers, these people you have a really, really close connection with? They were legitimately angry, which was… I mean on one hand it’s like wow, these people care. That’s fantastic.
I think the hardest thing and the point where customers became angry… It wasn’t so much travel because I think travel customers understood. Yeah, they’re generally quite sophisticated. To be able to afford a travel trip, you’ve got to be doing quite well. They kind of understood, I think. The Sydney club house was the one was the lightning rod actually for most-
It was the worst.
For the most for the most anxiety because we built a community and yeah you do the same thing. You have VeloClub and you’re in a different game and it’s the right game to be in. We have to be building amazing communities. It’s what we do really well I think. But what you forget is that people aren’t going to your clubhouse as customers of a shop anymore. They feel total commitment to it. And because we were doing all sorts of changes, we didn’t handle the Sydney one with anything like enough care and attention. Didn’t communicate enough. Didn’t put in place alternatives. Just it was done.
Yeah. [Crosstalk 01:08:43] What was it like-
We’ll never do that again. We’ll never do that.
Being in a storm.
It was pretty horrible. I remember standing up in front of the company and reading as a statement because I couldn’t just… I normally talk just off the cuff, but I couldn’t cause it was too serious and it was… Yeah, something breaks at that point. When you’ve had 12, 13 years of total success and you still doing it for the right… Yeah, it’s still part of the successful journey, but it’s the first sign that, “Oh, something didn’t work.”
Would that be pretty safe to say one of the first things that didn’t work in your lead up in the whole business?
Oh, I think lots of things didn’t work.
The first jersey?
Yeah, totally. All through the journey is… And some people say we’re really lucky. We’ve surfed this wave that came along. There’s something in that but I think it’s a little bit unfair. We’ve made so many mistakes because we’ve tried. We’ve honestly tried a hundred times more things than any other company in the sport. I’m sure. Because I’m a maniac.
So, we have done all that stuff and lots of those fail. You have to accept the thing’s going to fail. Lots of our products weren’t right. Lots of the fit wasn’t right. The first year of Team Sky, the product wasn’t right. By the last year, it was brilliant. You learn along the way and the first time you close a club house, you do it badly. You never do it again. That only happens because we’re trying all these things.
We could just sit in our office and make 15 nice products and did it in a nice iteration each year. A bit more improvement, new colors, say in a really simple way through a website. But why would I want to do that? It’s just… Probably make more money, actually.
Do you feel like you’re living on the edge a bit with the way you do this? I know I would.
Yeah but I don’t because I’m not you. It’s just what you made for, isn’t it? No I don’t because we’ve got a decent business that makes money. So, we’re not really… It’s just money, isn’t it? And we’ve done so many things that have been brilliant and we’ve created a lot of value.
Do you see this time and moment we’re in right now as a transition for Rapha of where the business is going and it’s shedding some of the things that weren’t the right decisions?
Not particularly about the sheddings, no. That was that moment in 2018 I think that was a correction. We’re adding a load of stuff at the moment. Including we’re starting to go into MTB so that’s not the easy game. That’s turning up the Corkscrew. That’s not going down the Gorge Road.
It’s going right in the bush.
Exactly. We don’t have to take the road.
Perfect. So I think we’re still doing a huge amount of stuff. Perhaps we’re still doing too many things, to be honest. That’s my learning for myself as I am always prone to doing everything and trying to do everything brilliantly. But we’re doing quite a lot of new stuff.
And I got to hand it to you, the way you guys have learned from Team Sky now to EF and the storytelling and the alternative calendar and I don’t… I get lots of content across my desk every day and this is stuff that I really get excited about and actually like watching Lachy do GBDuro, Leadville at Three Peaks. It’s not the pro racing stuff.
I love pro racing, but the stuff that he’s doing and the stuff that you guys are pushing there is I think pure genius. I think it’s really good. To do something different is extremely difficult. So I guess there is… The question just occurred to me, James Fairbank has been another very huge influential part of the business from marketing direction and brand and that, and he’s just left. How did, yeah…? That’s got to be a big-
Yeah. That’s hard personally cause he’s a really good friend of mine so on a personal level, I’d never want him to leave.
But he’s been there for so long.
Yeah, If you cut James… Well hopefully he’ll always bleed Rapha but certainly until now he would bleed Rapha to the core and totally get it. But I think things move on. The business is now so much bigger than when he arrived.
It’s a different beast and he’s got his own career to think about. He’s just turned 40 and he needs to do some things and he could work at Rapha for the rest of his life. But is that really going to give him the most satisfaction? I don’t know. Possibly not.
It’s a NASA part of your employee life cycles unfortunately.
I think so. He was with us for over 10 years.
Yeah, that’s not [inaudible 01:13:19].
That’s a good inning. Yeah. I think most people, if you can get them for more than five years, that’s pretty amazing. Or a mistake. You just got to choose the ones that are amazing. So yeah, James is a loss personally. He really is. But we’ve got amazing people in the company and yeah, I’m very conscious of that.
There are people in their early thirties now who are in our sort of management level who are so bright and so talented and they can do stuff that I just can’t do. And they see things I don’t see. And they’ll be better at so many things. And then most of us are older and we’ve just got to let them come up. I could strangle it so easily. I really could. And so that’s my watch growth. I’ve got to not do that.
Yeah, I remember you saying to me once you have to release control, otherwise it will never grow. But you’ve said earlier, you’re a very controlling, want every detail type of person. What do you attribute that patience and that release of control to?
Because if it’s not a natural part of your personality, but you know you have to do it?
You have to bake it in, don’t you? There’s a book called The Founder’s Mentality. Have you read that?
As a founder, you should read it because you’ll… I read it on a plane a couple of years ago and I then gave it to all my leadership team because it’s basically me. This guy has sort of decoded what founders do and why it’s good and why it’s bad and how you scale that without the founder being there or without the founder strangling it. So my job is to bake those things into the company. So part of it is culture.
So much of what I spend my time doing now is making sure that the people who are in their thirties or twenties are getting the benefit of the history. But are not being sort of ground down by it. So they’ve got to totally understand the values and the behaviors that we use as a company and what the brand is built on and then be given the freedom to go and do it. So I spend a huge amount of time with that and with creative people, giving them support to go and try things so that’s really important.
Customer focus is probably the most important one. We’ve worked to conceive a business but it’s very easy to forget the customer and I’m… My favorite times are being places like this, riding with customers and I’ll always choose to be with a customer over anything else. Balance sheet or spreadsheet or anything. I’m sure you’re the same. Much rather be talking to people and I’ve just got to keep promoting that internally so you can bake these things in I think. And then let them use me for what is helpful for them rather than me being the sort of, the autocrat. I can’t be that.
Another quality that I think is really unique that you have is your patience is quite incredible. And you have your son, Oscar is… You hadn’t had four hours of sleep a night, you told me once for years taking care of him and all that. How has that affected your drive, your patience with people in the business and all that?
Yeah, I think you’re right. Some of that does come from having that experience. It puts everything in perspective so starkly. Yeah, he’s massively dependent and vulnerable but very happy and lives a lovely life. And he’s very important for us. But it’s been a 20-year terrible journey in many ways. And committing to that and making it work just makes everything else seem so much easier and less worrying.
You miss a week sales target or a product isn’t quite what you thought it was going to be. Or the guy at the factory tells you you’re not going to get your products for your launch. That was maybe one that got away. But most things I can cope with quite well. And then the more that Rapha has succeeded… I’ve got a brilliant job that I love doing and the brand is very successful and the company’s very successful and my son’s happy and being looked after. It’s kind of… Why would I get worried about stuff?
I’m lucky to be able to think like that, but I think the experience of Oscar has taught me that. Yeah. Sort of beats it into you and lots of parents don’t make it because they give up and my wife is incredibly strong. And we’ve managed to come through it and it just makes you stronger.
Yeah. And the Ambitious about Autism fundraiser ride. So you’ve raised over a million pounds?
Towards that every September. As long as you can see, this is going to continue?
Well, you know this year we’re not going to do one in 2020 because we need to… We’re going to do some things to raise money for the charity, but it won’t be a Manchester to London Smash Fest. Because, basically the numbers of people doing it. It peaks at about 250 and then it’s gradually come down. And I made the mistake last year of deciding that we needed to make it harder to get more people. So we started at midnight and went from London to Manchester with prevailing headwinds the whole way and finishing with a 30-kilometer climb over the Pennines. Really good move, Simon.
Over where? Sorry.
The Pennines. The hills in the north of England. To finish with climbing after doing 15 hours or something in the saddle?
So we had to take a raincheck. What are we going to do? We don’t want to not raise enough money for the charity. We’ve got to rethink it. So this year we’re going to offer some places in some sport tees which charities can get places for with Ambitious and the money will go to them. And we’re also going to do one sort of interesting banner event, which will be an off-road challenge in the north of England, which you might want to come and do, actually.
When is it?
It might fit with when you and I will be coming to do GBDuro.
Please. I might follow him with a GoPro or something on an eBike.
I could be a support. But yeah, we’ll do it in the summer sometime. But I want to keep raising money for that course cause it’s so important.
And then we had the Rapha foundation now, which is the other philanthropic thing that we’re so excited to be able to do. And in fact this is a useful platform for me to be able to call for suggestions because last year we put money into five amazing organizations in the U.S. from Nika to the MudFund to Star Track Cascade, various different people. And this year we’re about to announce a whole load of people in the UK and Europe, some very well known names. But we’ve struggled to get much traction outside of there. Some recommendations of charitable organizations that help kids and disadvantaged people get into racing.
And I need some help, more recommendations to give us a way in. So I would imagine in Australia for example and Asian markets, there will be more organizations that can do it. And the U.S. will definitely one more as well. So, it could be kids. It could be young women. It could be cross or road or mountain bike. It’s not just road. And they have to be charitable and they have to help people get on the ladder basically.
So we do this photo competition every year and a very small part of it that we don’t promote nearly enough, but is a young cyclist award where we give out chunks of $1,000 to applicants. And we get dozens and it’s absolutely heartbreaking and inspiring reading every single one of these and everyone deserves it, right? And everyone’s put so much effort into the application and there’s so many deserving people out there and yeah. So I think it’s fantastic.
Yeah, it’s good. It goes back to that point about pro racing and amateur cycling or leisure cycling that I do. The connection is really important. Making pro racing more interesting and exciting would help, but also connecting people to it will help. And we just want to do all of that. That’s what Rapha is here to do. It’s not just to sell more jerseys today.
Again, taking the long view isn’t it?
It’s the long view. Yeah. Our purpose, it’ll take us a hundred years probably or 50 years.
Yeah. I know. Last question, what keeps you awake at night these days? What’s on your mind?
I sleep really well. I’ve always slept really well, which I know is a cop out, but I do. I mean I can sleep now if you said you’ve got five minutes to have-
It’s an expression like behind the 8-Ball.
Yeah. Exactly. And that is an Oscar thing. That’s due to my son and not having enough sleep. And now I love sleep, so I don’t stay awake at night worrying. I worry. What do I worry about? It’s execution, probably. I worry about us getting the details right. I worry about supporting people who are low down the organization to be brave enough to do the right things, Because it’s very easy to… As you get bigger, you slow down and decision-making gets more difficult and people don’t want to mess up something that’s so good. I totally get it. But you kind of have to encourage them to take those risks.
So I worry about that, but I don’t worry too much.
How many people in the company now?
Including retail, just over 500, 550. Yeah.
No, I didn’t expect it to be that big. Of course not.
Would you do it again, knowing what you’re getting into?
Ah. It’s brilliant. Oh God. It’s the best thing-
You’d encourage anyone to?
Apart from my family obviously, it’s the greatest thing I could ever have done. I have no ambition beyond what we’re doing. And I don’t regret a minute and yeah, totally. It’s the most rewarding thing I could possibly have done. Yeah. So no regrets at all. I definitely wouldn’t have done something else. Definitely not and I don’t want to do anything else either, so yeah.
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