Alumni Entrepreneurs: Pure Fix Cycles
By: Mark Crawford
Austin Stoffers (BBA '11) and Michael Fishman (BBA '11) founded Pure Fix Cycles in 2010, when they were still seniors at the Wisconsin School of Business. They teamed up with co-founders Jordan Schau and fellow student Zach Schau (B.A. '09) to create an affordable single-speed, fixed-gear bike.
Made popular by bike messengers in New York City, fixed-gear bicycles are known for functional simplicity, low maintenance, and good looks. With this simple design and a comprehensive business plan, the students won $7,000 in the WSB's G. Steven Burrill Business Plan Competition in 2011, which they invested back into the company. In 2012, the company reported $4 million in sales. Today Pure Fix Cycles employs 24 people at its headquarters in Burbank, California. The company recently established a warehouse in Europe and plans to open a facility in Shanghai this year.
Update caught up with the busy entrepreneurs to see how things are going.
Q: What have been the biggest challenges as a startup?
Austin: The demand for our bikes has grown, and with that we've had to learn to forecast an inventory that can match demand. Lead times are two to four months depending on the season, meaning we can't get inventory at the drop of a hat. As a startup, we are careful with financial forecasts, and ordering an accurate inventory has much to do with this forecasting. You can't sell bikes if you don't have any bikes to sell.
Michael: We also offer a large number of SKUs (stock-keeping units), which is certainly one of the reasons we've been so successful. We offer nearly every color scheme of bike, wheel, and accessory you can think of, and more than seven frame sizes. While this is great for customer satisfaction, it makes inventory forecasting challenging.
Q: What's been the biggest surprise about your business venture so far?
Zach: I think we would all agree that it's the sheer amount of work and dedication that is required to run a company the right way. This includes taxes, human resources, employment laws, insurance, and legal paperwork, such as company organization, operating agreement, and reseller number. It all has to be done the right way.
Q: What have you relied on the most from your WSB education?
Michael: The WSB gave each of us a well-rounded business education. The tactical skillsets we learned in accounting classes and entrepreneurial finance class have been especially valuable. The lessons on reading a financial statement also stand out.
Austin: Chad Navis's class taught us how to write a business plan. He showed us the importance of being extremely organized and thinking through every possible scenario to ensure you are well prepared for the things that you can actually control.
Q: How is that business plan holding up?
Austin: We were pretty conservative with our original projections in 2011. We said we'd hit a certain sales goal in the fourth year of business—we actually hit that projection before our fifteenth month in business.
2011 Founders win $7,000 in WSB’s G. Steven Burrill Business Plan Competition
2012 Pure Fix Cycles reports $4 million in sales
2014 Adds warehouse in Europe and facility in Shanghai
Q: Do you stay in touch with your professors?
Austin: Absolutely! We speak to our entrepreneurship professor, Chad Navis, all the time. We recently Skyped with his classroom of students for an open Q&A.
Q: How do you continue to improve your operation?
Zach: We hire smart, experienced people, travel to trade shows and meet new customers, and develop our own new products. We are able to hire and retain incredibly talented people because we empower them to make their own decisions. Everyone in the company can provide feedback on anything, and it's that collaboration that makes our company successful.
Q: How is the future looking?
Michael: The future looks awesome. We have great new bike models on the horizon that will continue to expand on our current lifestyle offering. We are passionate about getting more people on bikes—not just for the health and environmental benefits, but because it is just pure fun to ride a bike.
Are you a WSB alumnus with a successful business?
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