DeAndre Harakas (00:00.43)
And in this episode, we sit down with Andy Orting, the former CEO of Zip Wheels that was acquired by SRAM in 2007. Andy is a serial entrepreneur, current co-founder of Fundraiser Capital based out of Europe and the U.S., specifically investing in micro mobility. In this conversation, we dive into all things micro mobility and also his startup journey in literally starting in Zambia and Africa and going on and coming over here to the States to start his first company that he exited. I think you guys are really going to enjoy this one. Andy, welcome to the show.

Thank you. Thanks for having me. Appreciate it.

Yeah, I know whenever Grant and I were first like thinking about guest dab on the show, he was like, man, it'd be really great to have the fundraiser team on here. So super excited to get this thing kicked off. And I thought maybe we could just start off with like your origin story with founding like zip, the zip story and so on.

Sure. Way back, came from born in Zambia, went to school in South Africa, moved to America 40 plus years ago. but originally came to be in the motorcycle industry. So was in motor sports and during that time there was a transition essentially. We were all started when mountain bikes came out. I'm old enough that they came out while I was alive, right? So.

We started riding mountain bikes for fitness and playing around and we really thought honestly they were terrible because there was no suspension and they were chromoly. You know, they were really bad. There was no technology. It was just a metal frame. But that that really created a shift. And growing up in South Africa, you all ride. Most of us ride bikes. It was 750 boys in high school and 500 of you came to school by bike. So bikes were transportation. Bikes were not really

Andy Ording (01:40.494)
something you competed in? No, no. There was a chap, there was one guy in the whole high school that raced bikes and even had a European name, Andre Mulherba. And Andre had this wicked 10 speed Peugeot. that was really, I suppose, my introduction to bicycle competition was really just alongside having a classmate that happened to ride bikes and shave his legs and do all the other weird stuff that

Yeah, they weren't sport.

Andy Ording (02:10.06)
you know, like let's do. But that was an introduction and you very quickly understand the difference between what you think a bicycle is and what they think a bicycle is. that, and that was, you know, inadvertent, but it happened. And so it was a good introduction. Anyway, in America, transition into the bike industry and then had an opportunity to get into Zip. I didn't found Zip, it was founded here in Indianapolis, which is what brought me here.

That's like, let's do that.

Andy Ording (02:39.502)
came out of the motor racing industry. So the gentleman that started was an F1 engineer and went from F1 to IndyCar and was based in Indianapolis. So this was the very early 80s, beginnings of composites in IndyCars. IndyCars at that point were all aluminium tubs, sheet metal, you know, and things like that. And they moved from aluminium tubs to carbon kevlar body panels. And if they hit the wall, had an accident, rubbed up against somebody, they didn't

There was very few people that knew how to repair those. But Lee had come from, of course, Formula One, and they repaired, had been repairing composites for a long time. So that's sort of how it started. He got into the bike business. I met him through trade shows, et cetera, and then came across to basically run the front end of the office. He was a technical engineer. He would run the back end, I'd run the front end. And then we built it together for about five or six years, and then opportunity came up. We had a really tough year.

Right.

Andy Ording (03:39.246)
nearly lost the company. We had a competitor, was one of my first, most prominent humbling experiences in business, of which I went on to have many more, but this was a pretty significant one. A competitor that was in the space had unbelievable money, had managed to find capital and deployed this capital in just basically growing the volume of their company.

And this is directly in the composite wheel space. And they were just able to basically compete on price because they're just trying to get efficiencies and economies of scale.

Yes, they had the rumor is that they got money from Dow Capital and Dow was also very instrumental in helping them productionize. Right. So at that point, there's two carbon wheel companies in America, basically almost in the world that are building structural carbon wheels. One in Minnesota and Indianapolis. This company comes along and they build production tooling with production presses and were able to crank out numbers.

cycle time way to the floor. They had heat and they had process. That's right.

with post assembly as opposed to, know, so we all had some post assembly, but their post assembly was a little more productionized. So of course they had volume and they could play. But what they, it was a little too early for the space. The carbon wheel business wasn't as a category, wasn't really fully baked out, you know? And so this is very early days.

Grant Chapman (05:07.788)
And what year is this just to kind of level set for me so I can know like when did this war of carbon starting to go mainstream?

So we, came to a head in 97. So in 97 we, so let's say, I don't know when, Spendigy was the name of the company and I'm not sure when they actually were founded, but they probably spent five or six years figuring out how to make it, how to productionize it, how to do the damage, right? And then once they come on the market, they really turned the heat up.

And is that on the OEMs that they're selling to the brands or they're selling direct to consumer?

Guys are putting it everywhere. They were consigning it in dealerships. We actually went from being able to sell people wheels on special order, because mostly in the sport of triathlon. And we went from being able to at least get product into dealerships to dealers just going, well, I have spinnage wheels on the wall. If somebody wants a carbon wheel, I'll just sell them that one. So there was not the brand at that point was not as strong as we had hoped. And we went on to

be much, much stronger so that that couldn't, well, of course it can happen, but very difficult to undermine, right? So it's always so much harder to take market away from somebody than it is to establish it first. And so we also, so 97 was a really tough year. They really put the kibosh on us and the other company. we had tested the wheel, we didn't like the wheel, it had an inconsistent handling issue. They got into the Tour de France already, which is,

Andy Ording (06:40.558)
Really early days, really early days. And there was an accident, which of course there always is. And with Carbon Spokes, the story goes one of their athletes or an athlete, whether it theirs or not, got their leg in the spoke and lacerated their calf. And so the UCI immediately turned around and banned them. So they went from having maybe three or four or five teams to zero. And we were able to then, us and the other company, we were all able to go to the deals and say, well,

We told you we were very concerned about the handling. We don't like the way they ride, cetera, et cetera. And there was a massive sort of undermining of confidence for that product, regardless of the price, because it was still significantly cheaper than ours. And we went then to really establish ourselves and productionize the product, which up until then, you would probably call us an advanced garage. Absolutely.

mean, a bath.

You

So you've got two or three presses and you're doing the best you can and you're, you know.

Grant Chapman (07:44.142)
and you're making all of your own tooling by hand and you have two guys that know how to do the whole layup the right way. That's right.

In one of our initial conversations, you mentioned that this one company you guys were competing against that had the issue in the Tour de France, were venture backed, it sounded like, and that you have a different approach on it, or least view on it at the time, whenever you were growing Zip.

Well, you I think we all assumed this is just part of your naivety in business, right? You just all assume that everybody you're going to compete with has to produce a profit stream, right? There's only three places a company can get money. You either get an investor, you get a bank, or you make a profit.

As a glassboard hero, we're all bootstrapped. We can do it properly from day one.

There are no other options. So you don't make a profit. You've got to go back to one and two and figure out how to get those. But of course, every one of those just creates more more leverage, higher expectation, you just actually exacerbates, could exacerbate the problem if the plan isn't really coherent. So when I had the opportunity, that what happened then in 97, it created an opportunity, like with any like any crisis. Right. Almost drove us out.

Andy Ording (08:55.718)
And we tried to sell, we thought, okay, maybe we can sell the company to a large bike company. They weren't really interested. The mountain bike thing had sort of come off the bloom. So I think a lot of the boys were sticking to their knitting and it wasn't really attractive. I got the idea to say, I think there is a future in carbon wheels. I think we need to stay the course.

And what gave you that instinct?

Well, it's just I'm the front end, right? So I'm talking to customers, I'm going to races, I'm at expos, I'm at triathlons all the time. Eventually there was two or three of us going to an event, sometimes on the same weekend. I we were evangelizing every weekend.

And you became always there. We're the usual suspects, as we say in the industry, at every event. That's right.

you go to a triathlon, we're going to probably be around, know, somebody from the company is going to be there. And so we, that, we did build a strong brand, there was strong brand recognition and we were able to do it. And so I just felt that, you know what, I think the sport of triathlon was still growing at that time. They were very open to technology, unlike old road racers.

Grant Chapman (10:05.171)
Like the Tour de France wasn't open new tech at the time.

No, I think the individuals in the tour teams are always open. Especially even today, right? Even today, they're looking for an edge. Everybody wants something.

My favorite part about the bike industry, engineers actually can do the, let's FEA two more grams out of this thing and they'll pay for it. That's right. Yeah. Yeah.

Well, mean, the Tour de France bikes today, I mean, it was a couple of years ago when they brought out the minimum weight that you could have for a bike, 15.5 pounds or whatever. The reality is you could buy, you and I could buy a lighter bike directly off the showroom floor than the pros were forced to. So that's how quickly the technology goes, right? Once you start to get, once carbon comes in,

and you start to understand laminates and where to put the strength and where to not have any weight, the maximization is just through the roof.

Grant Chapman (10:56.366)
And then you start having to maximize or minimize the weight maximize the strength the stress and strain in all parts like you're talking about the mount for a bike computer you're talking about you know the plastic and the housing of your bike computer and your handlebar wraps and you know how big are your hydraulic brake lines. Yeah right every gram starts to matter when they only weigh that much.

Yeah, and when disc brakes, right? So disc brakes in last 10 years, 10 disc brakes have gone from, that's only for mountain biking, it's way too heavy, roadies will never ride that. Well, guess what? They can because their frames are so light and the fork is so light and the saddle is so light and the handlebars are so light. They're tiny, right? They're tiny. They're tiny and very powerful. And they work, of course, like they do in every other app because they're better, right? They work better. So pretty soon you've got a fully equipped road bike.

And the discs are getting so light.

Andy Ording (11:43.278)
that they're adding weight to just make the minimum weight. And it's got disc brakes, it's got 12 speed, know, two by 12s, two by 13s. mean, it's just incredible gear ratios. And that's just technology.

to make

Grant Chapman (11:57.58)
And now all those electrically shifted, you know, computer controlled. they're tracking every metric in the bike. You know, what's the torque? What's my wattage? What's my power?

That's correct. And then can correlate, right? Now you've got all of this information available. You've got power, you've got heart rate, you've got sweat analysis, you've got gear ratios, you've got temperature, ambient pressure. I mean, this goes on.

We had the last podcast or an upcoming podcast, I should say, in the order we'll launch these. It's working on a sensor that can read your lactase through your skin. So you can actually like different, not just like VO2, like you can actually figure out are you in anaerobic or aerobic exercise and by how much. It's such a neat science that's coming up in the sport.

Fantastic.

So you, that's right. So 1997, happens. You are like, no, we're focusing on our true North. This is the the direction we're going. What's the rest of that story look like once you guys decide to keep going.

Andy Ording (12:44.398)
See, we got the.

Andy Ording (12:57.954)
That's great. Thanks for keeping us back on track. But so the original founder said, listen, I don't I he wasn't from the bike industry. He said, I don't understand it. And and he agreed to sell the organization to me. So I then had to go find money, right. So to put that deal together so I could leverage ratio, take I could leverage assets. I could take everything I had. Plus, I had to find a little bit more. Right.

And so I went off and found a couple of guys who were triathletes, that were interested in the future of the sport and would like to get involved. And that's where that capital came. So this was my first experience with raising money. I did it in a very naive way. But he called me, because he'd heard from the banker.

used it out of necessity.

Andy Ording (13:54.606)
There's a triathlete who's a entrepreneur that had sold, they had sold their company. They were racing. It was a local company. They thought, oh, I'll give them a shout. Get a phone call. And one of my longtime employee and good friend of mine still to this day lived across the road. And we were out mowing the lawn. It was one of these Sunday conversations. Hey, what's going on down there? well, there's a chap that's trying to buy in and blah, blah. Oh, OK. Well, should I call him? Yeah, think you maybe should call him. Oh, OK. That's how it went. He called me. We went.

Looking to play round two in the market.

Andy Ording (14:24.558)
Fridays for lunch and said, well, how much money you need? okay, I think I need this, but of course I didn't understand the proper way to value the company. How do you do that? So I had to learn how to do all of that in a very sort of rushed, very compressed window.

And you rode down on a napkin.

DeAndre Harakas (14:44.558)
I'm sure this is in a couple of weeks or maybe a month or so.

it seemed to be going coming at me. You you're drinking out of firehose. It's just typical entrepreneurship. You're just it's coming at you as fast as it can possibly come at you. And you're having to deal with some of it and some of it just you can't get to.

and somehow you find a way every time. That's right. That or you die trying. is every story. like, don't. No, and you don't, look back like, I don't know how we got all that done, but we managed. That's right. And it got all done. And everyone was mostly happy from what we can remember.

Sleep very much.

Andy Ording (15:13.518)
Exactly. think everybody, I have had and have had some amazing folks that worked alongside me and we've been so fortunate because, you know, actually, people like the battle. It's a little bit stressful, but they like the battle. We want to be in the battle.

no, the-

Grant Chapman (15:35.062)
And if it gets too boring, you'll actually lose those people and different people will like the new job when it gets stable and boring.

You dive in a little bit more into that because I agree.

Well, mean, we, you know, there was oftentimes once, you know, anyway, let's get this finished that so we can digress further. Anyway, got the deal done. These two gentlemen came in. They, set up a board. We were doing things in the company I didn't actually know how to do. They were brilliant at helping me do that. My attorney was amazing, who was very entrepreneurial. He helped me, stood alongside me for years, 20 plus years. And we got this thing going.

So now we found a location, this old bank building in Speedway. And with a couple of sawzalls, we whacked daylights out of it and turned it into a production facility. So that's sort of the origin. And then by the time we moved, there was only about seven of us left in the company. So seven or eight people.

from that original time.

Andy Ording (16:34.158)
So was very skinny. We moved all the equipment in and we started in the meantime, though we were hiring what we call preformers, so folks to work in the carbon and training them at the Speedway facility. So we set up a preform bench and a post-finishing bench and things like that. And then we were actually running training sessions. So we would recruit, find people that come in, we'd run them through training sessions so that when we moved in like the January of 99, we actually had folks that

had a semblance of knowledge. know how to. Right. So then but thank goodness we had everybody else. We'd been around the product a long time and it was very precarious for a long time. And I can remember sitting with my accountant numerous times. Are we going to have enough money Rick? And he'd say, well, you said you'd sell that if you can sell that we'll have enough money. OK.

to do.

Grant Chapman (17:24.376)
Yeah.

I'll go make that deal happen.

And if I can't make that one happen, I'll find one just like this that will magically come up the day we need it to.

There's a gentleman in Muncie, we were buying a piece of equipment in later years. And this old gentleman was amazing. We were looking for a particular kind of vertical lathe. so our machinist, we have a machinist up there that supplies us, he says, I know this chap, we'll go over there. He's got one in the back room. I'll see if we can talk him out of it. Okay, we go over there. This chap has got, I mean, thousands of pieces of equipment, not connected, not all have.

Candyland does

Andy Ording (17:59.316)
And all just standing there, it's got a full functioning machine shop over here, this whole warehouse next to it, full.

He just goes all the auctions and gets the good deals.

What do you machine? don't see, you often in a machine shop you can see the specialty, right? They're a lathe shop. So it's lots of round things or it's a five axis or it's a... Exactly, precisely. Or small, you know, small lathes between a Swiss and a Mori, for example. And he said, son, so what do you actually machine? I don't see any specialty. And he said, anything that'll turn green.

There's something.

DeAndre Harakas (18:38.286)
I'm back.

Well, okay, how do you do that exactly? Well, if we have a job and it needs one of these, we just pick it up, put it over there, run it. I'm like, wow, just, know, why that was such a foreign concept to me, I have no idea, but I'd never seen a machine shop operate like that.

We go. Wired up.

Grant Chapman (18:58.828)
you usually have to use the capital to pay for it, right? And it sounds like he was selling opportunity costs, not volume.

That's right. Well, I think he'd been running, I think perhaps was even second generation. So some of those things have been.

paid for through volume already.

And you can't get, as you know, you had peanuts for a used machine, right? So if you can afford the cost of that warehouse to hold onto it, it's really not expensive.

you can always sell it later for the same money you could sell it for today. After a certain point in depreciation, as long as it runs, it's good to go. That's right. That's right. that's awesome.

Andy Ording (19:30.498)
Yeah, so we were fortunate to find the right people and do that. then, of course, then the battle begins, right? So how are we going to build the company? Who's the customer? Where's the customer? How do we reach the customer? And let's build that out. And essentially, it was a very aggressive plan every year. And we did realize, you also have to realize your failings. And I think those are the hardest things for entrepreneurs, because people that are, and I speak of myself, people that are in the role.

seem to think you have to solve every problem yourself.

If you want it done right, have to do it yourself is a very common thread in our chain of work of starting something from nothing.

Right, but you wouldn't think of practicing law by yourself.

Some of us may be crazy.

Andy Ording (20:17.614)
I wouldn't. But there are certain things. So I think we had been building our own molding machines because we thought, well, nobody makes carbon wheels. mean, there's nobody you can call and say, I want a carbon bicycle wheeled molding machine. It can exist. But we realized we moved into Speedway within a year and a half or so. been trying to build. We immediately began another press, a fourth press.

doesn't press the list this together

Andy Ording (20:45.89)
double daylight fourth press and just could not get this thing to work. And we were using guys that had built presses successfully before, we just couldn't make it work. And in total frustration, I said to Todd, my good friend Todd, find us press manufacturers, get them to come in here, look at these things, tell us how, and then tell them they can build the thing. don't, we know how to make wheels, that's our core business. And it was a big

Tell us where it

Andy Ording (21:13.728)
It took me years, honestly, to get there. And it takes the rest of the team, as long as it takes you to explain it to them, they'll sort of believe you, but they need to see it. They need to see it. But if you say it's a good idea, then, okay, we'll try it. He found three companies. We went to see them all. Bottom line is we selected one in Northern Indiana. Very capable company. They came down two or three times. They're engineers. They timed the cycles. They watched everything. They knew the

They knew our machines actually better by the time they were done with that analysis than I think we fully comprehended because there's always something else to work on, right? Is it running? Great. All right. I'm off. Right now. So nobody's really focused. They come down, spend a week or four days just watching. Their knowledge is very deep, very quick. Right. And they were magnificent. And we said, right, we

That's another problem.

DeAndre Harakas (21:59.886)
Only looking at the words.

Andy Ording (22:11.288)
We need these two styles. There were two styles of wheels, clinches and tubulars, and we need one of each to start. And I can remember sitting, I couldn't pay the price they wanted. So I said, no, I'll pay you this for each of these. they just couldn't, nobody would, anyway, we were forced to go up to a meeting with the president there and all the rest of it up there. And we sat in there, I remember walking in the room and I'm not generally intimidated by that, but there must've been 20 people in this room. All around this massive conference.

sure of course

And the president's directly opposite. leave this, you know, it's a standard medieval setup, right? The king's over here and the lowest serf, that would be me, is at this end of the table and everybody else. I said, Tim, listen, here's what we've realized, that we don't know how to do this well. We've done it. It does work. We're building a company with the things that we made.

But that's not what we do. What we really do is know how to make carbon wheels. We know how to sell carbon wheels. We know who buys carbon wheels. We need somebody who can be our partner with presses. And I will tell you this, if you can hit this price, we will give you 100 % of our business. Whatever that is, you got to roll with us because I don't know what that is.

Without you hitting this, I'm not gonna make it. But if you help me make it, I will give you everything as we go. You're it. We're ride or die.

Andy Ording (23:35.502)
And they were, know, 75, they started, it's 75,000 bucks. And we'd had these two styles and there wasn't very little price difference between the two. And we eventually bought 22 presses from them. And they were amazing. They were amazing. And of course the price went up over time, but they so did the capability of the press. Sure. Because after a couple of years, they'd be like,

Wow. That's awesome.

Andy Ording (23:57.25)
we've noticed you've added this bump or you've added this and that we could just, you know, we could build that in. if you went to this controller, that would be a lot easier and you could see it on your computer. yeah. Okay. Well, let's do, know, so was a lot, a lot of, a lot of innovation that came from them, not from us. So then you, then you have a third entity, right? You have one party, two parties. The third entity is the combination, right? So now when everybody's working on the creation and the success of this, that's when things really start to happen.

Innovation long.

Grant Chapman (24:26.904)
Who are you selling to this time? Right, as you're scaling, are you still high-end triathletes, high, high-end prosumers? What is your marketing? Are you to use full D to C, going to events and meeting people where they're at? Or are you starting to build more business relationships?

That's a great question. I today you would be D to C, right? People would expect you to be D to C, but not then. everything had to go through dealers. And in the beginning, we only saw tubulars, which requires you to glue the tire onto the rim. And most triathletes are not. They're wonderful athletes, but they spend all of their time training and worrying about, no, not mechanic. They don't want to. And they're quite happy to pay a mechanic to do it. Right. So I think that was a boom.

to bicycle shops that embraced the triathletes because triathletes would pull up, take their bike off, out of the car, off the car, filthy. Hadn't even washed it. And that dealer, excuse me, that dealer could charge him 150 bucks to wash it before I even begin working on it. And the triathlete's like, well, yeah, of course, you know, of course. Average roadie's not gonna do it. I mean, I'm not gonna wash it, you wash it, you know? So it was, the sport of triathlon, to answer your question, was still growing.

What else?

Andy Ording (25:39.362)
was still actually coming along, but we knew we had to penetrate road racing because road racing, well, yes, because it feeds a group that never races, but rides all the same equipment.

was volume.

Grant Chapman (25:51.084)
weekend warriors. That's right. Yep. That's right.

And so to round out that story, so 1997, all that happens, you go into the joint venture and then eventually Zip gets acquired.

Well, I was the majority owner with two investors. then I built it for another nine years. then we sold it at the end of 2007. And SRAM was the acquirer.

That's fantastic. Again, congratulations there. the transition from that into, obviously, having exited a startup, you, I'm sure, have an affinity for founders and startups and things like that. Of course, fundraiser being an investor specifically in the micro-mobility space, what kept you in that sphere? Obviously, you have the domain expertise as well, but even on the e-mobility things as well, what drew you to fundraiser to be a partner with the firm?

Well, I think you do business with people, right? People are the most important thing, not your ideas, not your technologies. We've seen really brilliant technology go nowhere because you don't have the right people driving or building or augmenting.

Grant Chapman (26:56.558)
We've had really good people take terrible technology and make it work. That's right. That's right. my favorite game. Absolutely. People that can will a thing into existence that physics and business says you shouldn't be able to make work. That's right. And they generate demand. They generate a need for the thing that they believe in.

Well, and in many times you can see a niche or not sometimes not a niche, an opportunity in the market that nobody else can see. Abilities there for them, but not anyone else. So to answer your question, once I came, I had a couple of years left with SRAM and they were great, awesome organizations still to this day.

It's not obvious.

Andy Ording (27:32.782)
and we worked fine together, but I wanted, I was an entrepreneur, didn't really have a drive, I wasn't driving to try get back into a big company. So I, that point, one of my board members also was very entrepreneurial and invested in our company. But with him, I started to invest in other individual companies, but not through fundraiser because fundraiser didn't exist.

So you were like individually angeling this time?

Basically. basically. And concentrated on some things back in the in bike cycling, motorcycling and and then and tech. Of course, in Indianapolis, big tech community. so got into a couple of tech ventures here. And and so it was a very interesting about eight, nine years post sale. Sure. Sort of navigating how do I how do I help when you're in a board slash advisor role? How do I really help that CEO get there? Right.

How do you really help? I would love to get that perspective.

Well, what you think you should do to help and what they think you should do to help can sometimes be completely different. But I think you need to be willing to have the hard conversations because many times entrepreneurs, as we said earlier, have a pretty clear idea of what's going to work and what isn't going to work. And sometimes that's right. And sometimes it just isn't.

Grant Chapman (28:55.178)
The problem is they have the same reality distortion field they're looking through that their passion has to be right or why are we here? And it a lot of leverage to get them to look at the forest for the tree in front of them.

Well, and you can come up with technology or product or both, but in reality, the only scorecard that actually matters is the P &L. So you can talk about how good your product is, you can talk about the technology, ideas, the... All of that anecdotal stuff, that's all fascinating to a point. Does it work? Right? And it only works if people are prepared to pay you for it.

How much your customers love you.

Grant Chapman (29:29.07)
Does a cash flow?

DeAndre Harakas (29:34.434)
That's right.

If they can turn it green. Right.

That's brilliant.

Again, the graph has to go up and to the right. As long as we do that, we're all good.

Exactly. So I think you have, I certainly in my personal experience, I've had varying degrees of success. Some entrepreneurs are excellent students and listen and learn very quickly. Not that I have all the answers. I maybe just know what questions to ask along with other investors, angel investors. And others are just not quite so willing to learn. They're capable, they're just not willing.

Grant Chapman (30:13.43)
Yeah, the coachable miss isn't there. That's right.

That's right. And so you you the only way to know that is to get in, you know, you go to jump in the pool. Otherwise, you're never going to find out. And they'll all tell you they're dying for somebody to help them. And they want direction and they want you to ask them the hard questions and.

And then half of them don't return your phone calls. That's right.

I was going to ask if, as you're looking at investing in startups, you have your initial pitch, have follow-on, you have due diligence. Is there any sort of leading indicators that you can see that they could be saying one thing but really meaning another or maybe some indicators that they're maybe not the best to work with? Or does that really just happen over time that you can really hard to flesh that out in beginning?

Gosh, that's great. I think if you figure that out, you could help a lot of people. You know, I think that's very difficult. As I said earlier, it's all about people. So as Grant said, there have been people with very average technologies and products turning them to incredible businesses. Right. And the opposite is also true. And so I think it all comes down to the people. And how do I

Andy Ording (31:16.876)
determine that this particular entrepreneur with this particular pitch is the kind of person that's going to listen well, work hard, buckle down, run tight and hard and build something versus one that thinks they're doing that but really is doing their own thing.

There's there's like vision there's grit and there's like I'm gonna call like science or know-how or like the technical side and They all three matter and you for critically missing when you're screwed. That's right But if they're not balanced it also can get out of hand I've seen this before where you've got founders that have incredible grit, but don't know where to apply their their time effort energy I mean I suffer from this I have no problem working crazy hours, but I often need my teammates

point me in the right direction. Like, have you done that one really important thing versus the other seven side quests that you cooked up for yourself to get busy? Maybe not guys.

Yeah, well, and grits, grits massively important. And there's wonderful Ted talk, which you've probably seen, you know, about grit is that that's the one thing that that resides in all of these entrepreneurs that actually gone to do something is their ability to really grit or really bite down and make it out.

Even from the conversation so far, I've already heard it in that original story. like, oh, you talk about it in passing. Like, oh, yeah, we have this really, really hard year. Some people, break at that point. Something bad like that happens, and you guys persevere. And then fast forward, what was it, nine or 10 years later, you had that kind of outcome, which is fantastic. I think something else really cool that we've noticed as well on the Hard Tech podcast is a lot of these founders we have on that.

DeAndre Harakas (32:50.954)
It really is that story of like your ability to persevere through these really, really difficult times because it's in those really, really difficult times that you tend to find that opportunity that really catapults the organization. So yes, grit. Absolutely.

And you're right. those opportunities don't come unless you're looking, right? And you have to be, what do they say, opportunity favors the best prepared. Well, best prepared is sometimes just attitude. It's not having the most money. It's not having the biggest tool.

being present.

Grant Chapman (33:19.758)
Or the smartest CTO with the best technology that you've leveraged from some university. It really is a grit surviving to see the outcome. We always joke that there are no companies ever dead till the founder quits. Literally, you could have just the founder left in his basement after having 50 or 100 employees and shrinks back down to the founder. That company is not dead yet. And it might be the story of the comeback. Again, it sounds like Zip got pretty close to the sun, right?

It's dig.

Andy Ording (33:44.203)
yeah, very very tough.

And you know, most people would have said, hey, that company's not going to make it and you guys turned it into a thing and this is that crit story. But you, from the beginning, what I love to pull out here is you had that customer vision. You knew who bought your product. You knew why they bought your product. You were laser focused on why someone would give you money for a thing. And you knew you just to figure out how to make it at a scale they could afford.

That's right. And we were with those customers all the time. So we were never not present. So every triathlon, many triathlons, numerous triathlons, we were there talking to them. And it got to the point that the dealer base, as I said earlier, we skipped over it. But carbon wheels as a category didn't actually exist.

guys were the novelty thing, not the leader in the category.

Right. So now 5000 dealerships around the country, all basically mostly independently owned and run and operated, mostly ex road guys, perhaps a mountain bike rider. Nobody's really a triathlete. Right. So they don't they don't understand these triathletes. and we're we would literally go to these ex expos with a little study, you know, the flip card that you would do for your for your preschooler and work with. Exactly.

Andy Ording (35:02.126)
We take those along and we would give it to consumers and say, what do I, I want the wheels. How do I get them? Well, I'm going to bring me your bike. They bring them a bike. We'd say, right, you've got campy, you've got a campy 10 speed, you've got a two by 10, you've got this, this, this. You want the clincher tire, you want the tubular tire. Well, I'm going to race on these. need tubulars. Okay, so we're going to do this. You weigh this. So you're going to need this many spokes front and rear. We'd fill out the card for him. Take this card back to your local store. Well, he doesn't have them. No, no, I know.

Yep.

Andy Ording (35:31.694)
but that number at the bottom, just needs to call us. Read this to us. And then they would go, the call would literally go, hi, this is Andy from Bob's Bikes, and I have a gentleman here with a card. Okay, great, tell me what says on the card. Dinga, dinga, dinga, dinga, okay.

and bring those digits back.

It's brilliant.

Grant Chapman (35:50.43)
Here's your deal or price. Here's what we suggest you mark it up for.

He's going to pay you this, you're going to pay this,

It take five weeks to get them to you. Whatever.

Yeah, whatever it's going to take and you can give me a credit card. they were, well, nobody was taking credit at wholesale in America at that time in our business. Nobody took credit cards.

no one wanted to eat the one to four points, depending on what they were using.

Andy Ording (36:16.748)
Meaning I'm talking at the wholesale level.

That's what I'm like their customer. Of course they're paying the bike shop with a credit card. That's right. The bike shop now it will pay you on net 30. You got it. Free 30 day flow.

And it used to be, guys are young, right? But it used to be you would have to credit reference. So you'd take a piece of paper. They would have to supply you with three companies.

You call and be like, how is Bob's credit? Does pay on time? Is he usually 45 days out of his 30? Correct. yeah.

All of those, and I just said, no, that's not gonna work. We just need a card, because we need to conclude this. that customer's gone all the way there, and he's got that card, and Bob's Bikes is not a customer, he needs to become a customer.

Grant Chapman (36:50.018)
We're gonna get this done.

Grant Chapman (36:54.732)
Yeah. that's such a cool thing where you're able to eat that point, you four points or whatever to three points in credit card processing to make sure the sale closed.

Yeah, well, and the guy would say, well, I don't have a, I don't have a, we don't have a car. You own the shop, right? Yes. Well, then just refund yourself. You can just reimburse yourself. yeah, I could do that.

business card.

Grant Chapman (37:14.572)
And I can get my flight points for that. I can get status.

And that became a thing, that became a real thing.

It's just such an innovative story on go to market. Like taking that approach of, like you're going to go back to this bike store and you're going to have this, they're going to call us. And now you have a relationship with that dealer, which then you saw him more. that was really, was that like one of the key channels for you guys in terms of growth?

Well, yes, absolutely. Because triathletes, as I said, at that time were not mechanical. And even if they were, they don't want to do that. They'd rather go swim back, run, and then see their family. So it was in our best interest to help that dealer succeed. And in his own, he could make on those early days, he could make three or 400 bucks on a pair of wheels. And we'd tell him, now listen, this is what you do.

customer's gonna need tires. If it's tubeless, you're gonna glue them on, you're gonna charge him to glue them on. He's gonna need a spare, so you need to glue the third tire, fold it up for him, put it under his saddle, because that's how it used to be. He's gonna need a cog set, and he's gonna need quick releases. So you need to add tires at that point. GP Continentals are $100, $110 a piece, so there's $300, $330 maybe in rubber. There's a cog set, there's a...

Andy Ording (38:34.849)
Quick releases there's all that stuff gets

And then the assembly and the prep.

And the deal is just like, my word, right? In the beginning, that's, and then once, and then guys got it. Once they got it, then we're off to the races. Now it's a category, right? Now it becomes a thing.

You literally enabled that implementation layer of the dealers. You guys completely enabled it through the original customer. That's brilliant.

But a big part of our growth came from operational opportunities, right? Because you mentioned earlier, oh, it's going to take you five weeks or six weeks. Well, one thing Strathland don't do is plan. So they're racing Saturday, right? So you get a call Tuesday, hey, I'm racing Saturday. I qualified for this and this this race. Could you send me the wheels? No. And one of our great sales guys, Bill, used to say,

Grant Chapman (39:13.058)
or wait.

Andy Ording (39:28.65)
Well, do you want the truth or the comforting lie? People would just laugh, right? They'd just say, well, of course I want the truth. Really? Okay. You're five weeks out. it's a lie. I'll ship it tomorrow.

Brilliant

Grant Chapman (39:41.902)
So what's the comforting lie?

Andy Ording (39:46.35)
So at that point you can tell them anything, right? You already told them you're lying. Yeah, so we said, okay, we have to fix that. So we brought in an organization, found an organization, this would have been in early like 99, and lean manufacturing consultants. these guys came in, chatted to a couple of companies, the company we settled on, fabulous local guys. And they came in and they said, well, what do you want?

So

Grant Chapman (40:14.254)
I be able to ship to clients who don't have timelines.

You've got to do everything, right? Say, no, that's not going to work. We need to establish a metric that is really meaningful to the organization that we're going to measure every day, every week, every month. We need to...

to know.

Exactly. And so we came up with the objective of we want to be 90 % of our orders in 48 hours is what we want to ship domestically. And international, we want to be out in 10 days. So because you have to get this, get that, eight of these, 12 of those, you know, sometimes takes you have to drill them or maybe even to make them, you know, to get them in the box. Which for international guys, 10 days was still fabulous, you know. And so we spent

I like that.

Andy Ording (41:00.394)
Nine years chasing that those that objective operationally just driving it and driving it and measuring it and the best we ever did. And we were by far the best in the industry in fulfillment rate and speed. And we never got to 90 percent. 88 was the best we ever did. And as far as I can remember, I mean, it's you know, it was after a while, it's a machine all by itself. But in that

that noise.

Andy Ording (41:29.486)
process, you have to decide what your constraint is. And normally a constraint is something that is very capital expensive, like if you were doing heat treating. You're a metal plant and you have to heat treat. Well, your oven is a 24-hour cycle, 30-hour cycle, whatever you

Fill out as much as you can before you start it.

and when you take X, right? And once you've filled it with X, that is your production capability, because that's all you can ship 30 hours later, 24 hours later, 28 hours later. So generally, that is how you decide the constraint. If you don't have a massively cap, which we all thought, okay, our presses, right? By the time you take a 70, $80,000 press, you put $30,000 with a tooling, you're 100, 120,000 just to make the first rim. You think, okay, well that.

That's definitely, know, this must be our constraint. But at the end of the day, it really wasn't. We appointed a constraint. So we said, okay, we are now going to mold, we're going to buy enough presses to mold enough rims that we'll be in a position to convert them to whatever the customer wants. So a rim could be drilled 18, 22, 24, 28, 32 holes, the same room, because of the way we built them.

What was it? Was it labor?

Andy Ording (42:46.892)
So we decided to build drilling machines that had the capability and then we bought the first one and then a second one and a third one. So now our capacity is how many rooms can you drill?

We're the shelf now. That's right. I'm trying to figure out like where's your inventory? What's your custom and what's your timeline?

They're 100%, so we worked on whip, right? So how much whip do we have, do we have to have, free to feed three drill machines?

and then you're gonna finance where?

And then you have finance, which is now cost of capital. And this is my favorite, like, n variable equation that you had to balance just to hit 90 % in 48 hours.

Andy Ording (43:27.022)
Yeah, and so you're driving. I mean, you're always driving. So some days you might have one drilling machine running because that's the day demand. But the beauty of a Kanban system, I mean, it's so brilliant in its simplicity that if there was an order for a hundred rims, a couple hundred rims, the folks that did the drilling would go take, we put all the rims in bundles of 10 on a shelf. So you could just look straight down the shelf and you could look at them all and every one of them's in a bundle of 10.

if an every shelf took exactly the same amount of bundles. So you could say, there's one, two, three, there's four, there's four, four of these are empty. I need that many rooms to fill up my whip. That is the work order, right? They go back to the next step. They get that many rooms, fill up the work order. The drillers come out, they take them, exactly the same sequence. And so that is really where the growth accelerator was, because suddenly we changed the market expectations. So now-

We've got international guys faxing us or emailing, eventually email, but fax was the first thing on a Monday and we're shipping on Friday and it's hundreds of wheels, right? So that we could never have dreamed to do, you know, three years previous. So every year you get to get better if you commit to it. Absolutely commit to

you got better.

It isn't compound interest, a hell of a drug. It's my favorite thing. As you start growing, you're need to hire a person a quarter. And compound interest means in just a few years, I need to hire a person a month. And then I get to speak, can I hire two people this month? And that scale just starts to boggle the mind when you actually are going up into the right, committing to a North Star that just maintains you maintain a high growth rate over time. That's right. That's amazing.

Andy Ording (45:08.62)
Yeah. so the more competitors that came in, of course, the markets now proliferate. You know, it's just there's carbon wheels everywhere. Right. I think even before I sold the company, the guys at Mavic did a count. They went around Eurobike and did the count. It was 170 carbon wheel brands. Right. Ten, twelve years later. So because once the once the once the Chinese factories figure out how to make them. Now they can anybody can know you can have wheels, you can have wheels. That's right. Right. pretty soon you've got wheels coming out all over the place. So now.

dreaming's out of the bottle.

Andy Ording (45:38.616)
They have to displace you. If you do your marketing correctly and you've got the market position, people have to push you out of the market.

And that's the interesting thing again, back to cycling. It's not a price driven market. In so many things in the world, price is key. Like price is the only thing that leads to large volumes or brand loyalty or things like that. this is the best value.

I'd say you're right at the performance end.

That's what I'm where carbon wheels live. Even today, carbon wheels are still a performance aspect of a bicycle, right? They're not quite a standard fare.

That's right. And competition has made them come down. I mean, they're less expensive today than they were 10 years ago. But in reality, so is is everything. And the products also. So much.

DeAndre Harakas (46:18.84)
Yeah

But it's still this vanity performance thing that at the highest end it really is vanity. I have two grams less than the next closest person. In the middle, like I'll call weekend warrior category and cycling is my favorite, they will spend still a disproportionate amount of money to be in that top, we'll call it 10 % echelon of weight performance, brand, recognize. It's like fashion, right, for middle-aged men is my favorite thing. Like this is their fashion.

There's bandages and my dad's a road cyclist so can I can poke fun at this and then there's the what I'm gonna call entry-level performance Which price is starting to get pretty important? But it's still not rock-bottom and it's such a fascinating the industry where the consumer will spend real money out of their disposable income you know to have this luxury of Fashion or performance or any of these other aspects that doesn't exist in other sports golf is as close as I can get as from like golf and skiing

where it's weight and mass and brand recognition, but in basketball, in soccer, you know, insert all these other sports. It's the basketball, yeah, you you have your brands that are your stalwarts, right? Who's your basketball brand that would be like name brand?

Nike, Jordan, yeah.

Grant Chapman (47:32.216)
Yeah, and you'll pay for a logo, but it's not because it's poor performance. You're actually at that point just paying for the logo.

Well, then it's funny, we all assume as consumers that they're all going to perform well. Right. It's like a bike. buy a $5,000 bike, they're all good. Which bike, Jimmy? Anything you like, whatever one you like. If you're prepared to spend that kind of money, five grand, let's say, you're going to get a fabulous bike.

Yeah, right.

DeAndre Harakas (47:54.038)
That's right. I still just think that the delivery speed is maybe an area where you make that decision.

Well, it's an interesting bicycle industry is fascinating, right? You've got children's bikes at 59 bucks.

That's cost conscious. That's a race to the floor.

Absolutely, right. You get these at $15 and you've got these at $12,000. Right. So dad's riding this and his little one is going to ride this. And dad expects that to be cheap. He just expects that to be a cheap bike because, you know, they're going to grow out of it. it's this interest. It'd be like having the car industry where you have a hundred thousand dollars cars and then you have fifteen hundred dollars cars. Right. Brand new. that's right. There's no there's no other category like this. But in bike.

Doesn't exist today. Doesn't exist.

Andy Ording (48:39.092)
It is an expectation. It's a very unusual thing. mean, e-bike is a great example of how you escalate prices quickly.

Again, you do the same thing that everyone did to cycling and mountain biking. That's right. Again.

But I talk about this, it's very funny. To me, it's very funny. You be around the bike industry a long time, you have road bikes, you mountain bikes, then we have some gravel bikes, and we have full suspension, know, blah, blah, blah. We have commuters, we have beach cruisers, you know, we have categories. Somebody says, okay, well in Europe, you know, this e-bike thing is catching on, we need to build some e-bikes. Okay, let's build the e-bike. So we go off and find the components, we build the e-bike. But it's just a category, right? It's just in the family of product.

But that's not really what's happened now. That's why the bike industry is really part of the mobility movement because people and technology, I think we talked about this previously, all this technology is coming into mobility that didn't exist and doesn't come from the bike industry. It's coming from electrical engineering. It's coming from battery technology.

or automotive manufacturing like Bosch and how they cornered the market with drivetrains in the beginning because they're the only ones that knew how to robust drive systems at scale.

Andy Ording (49:54.37)
That's right. And it became very simple. So the bike industry, the way we operate is like, I need a motor. Let me chat to Bosch. okay, I just need to change my frame, blah, blah, blah. Get this motor in. Boom, I'm in the e-bike business.

Yep, I need a battery. Let's go call those guys that, you know, put those cells together and wrap it up for me.

Yeah, hey Bosch probably knows a guy with a bat, let's call that guy. We can boom boom boom, right? Now we got a e-bike. But that's not really how it's going now.

But

Well, there was the boom then of the, well, like I'm called the boutique e-bike drive system people were that's where I entered the e-bike space. One of my clients was building a boutique or e-bike drive train system here in Indianapolis. That's how I met my wife and father-in-law who's in the, that industry in Europe. And we were doing a mid drive all hidden in the frame of a mountain bike in like 2013 and 12. we were, you know, I was hand whining motors drew an hour building battery packs and we hand built the BMS's the motor controllers, the frame gearbox. It was nuts because none of the parts existed.

Andy Ording (50:38.092)
your front end.

Grant Chapman (50:47.822)
It wasn't like there is today. I can literally go to China and throw a stick and get one or 10 of every kind of component you'd ever want to do an e-bike. That's right. But there's still the brand recognition, the fashion side of the cycling industry, where there is that upper echelon of $15,000 electric mountain bikes that people are absolutely willing to pay for. And they might be driving a car that doesn't cost as much as their e-mountain bike. That's certainly happening in Europe.

I mean, that's absolutely there. They are replacing cars or have replaced cars.

Or won't upgrade their car, but will upgrade their e-bike. And it is so fascinating to see this cultural drive and shift towards this is a vehicle and they're buying it because they need a dealer network that can service it. This is no longer a piece of consumer electronics that I buy and throw away. You have to have repairability, dealer network, longevity, and that whole brand trust is what really moves bikes in that industry versus race to the floor in price or just because it's fancy. Yeah.

So it's fascinating what's happening. With fundraiser, we're discovering more and more and more technologies that have absolutely no history in the bike industry at all. And they are manifesting themselves in applications that have got something to do with mobility. they're fascinating stuff. have invested in a group out of Ireland, and they are forward and rearward looking cameras.

you share.

Andy Ording (52:09.504)
So that on an e-bike is going to going to become completely normal. Right. So it is the eight hours. Right. So it's it's a combination of can be a combination of radar, LIDAR and and and camera. And so you would use it for you see a way more car. Right. That's a self-driving car that's got LIDAR on it. Laser laser radar. It's got radar on it and it's got cameras and all it's really doing with the camera.

Self-Frightened Car.

Andy Ording (52:37.426)
and it's double checking and eliminating false positives. Right? So that's okay. No, wait, that is a truck. We shouldn't hit that. Right? And so because radar and LIDAR can see through fog, darkness, et cetera, cameras cannot. So you have to have this combination. Well, fast forward that to your point, people have that in their car. There is an expectation that I will have that. prox, the prox.

proximity parking, you know, things that make a noise when a car pulls up next to you and there's an indicator or a yellow light in your rear view mirrors. Completely normal, right? Now this becomes completely normal. You drive a car, it doesn't have that. That's right. mean, you're right. So unless you're a car guy, that becomes the norm. And so now I get on my other transportation device.

That becomes

Grant Chapman (53:18.146)
You feel like you're in the Stone Age again.

Andy Ording (53:30.41)
And I don't have any of that. I have to turn around and look behind me. I have to make sure there's nobody on my left. I can't believe that. Yeah, see. So now all of a sudden I need something to help me with that. And this is how this develops.

and your plane economy is of scale. The automotive industry took this thing that used to be really expensive and only on your S-class Mercedes or top end vehicles, and now it's in a Kia. We'll give it little bit more time. Now it's on a bike. That's right. Right? Absolutely. this whole democratization of the supply chain because automotive is just as brutal of an outside environment as cycliness. Yeah. Right? From the same, you know, waterproof, robustness, cost, weight, et cetera.

And now you see there's a bifurcation, right? So it used to be an electric, let's say about a couple of years ago, an e-bike and a road bike standing side by side. Yeah, you would notice one was an e-bike because it had a larger downtube or there's a big motor somewhere. But otherwise, it looks just like a bike. The drivetrain, the brakes, it's all bike components. Now, that is going to change.

because the screen no longer has to be this little tiny digital analog screen. It's not going to be that anymore. It's going to go to a tablet. It's going to be tablet size. You're to everything on it. You're going to change your music on it. You're going to have your maps on it. You're going to have incoming calls that you can click on. It's going to be connected to your earpiece. It's going to warn you of cars ahead, cars behind,

Yeah, black and white readout.

Grant Chapman (54:42.646)
And you're going to have GPS.

DeAndre Harakas (54:57.688)
So you're going to have Apple bike play.

Old coming. It's coming at a rapid rate.

Have you ridden the Garmin Varia radar?

I have written with people that haven't, but I can't stand the constant noise.

Yeah, if you're used to not writing in car traffic like very used to write in the country and you don't look over your shoulder my dad rides out in like cornfields We got him a Garmin and he loves it because he never gets knuck up on anymore. That's good And he's like, I don't know how it always works and I don't he doesn't get false positives and you can tell how many cars are coming and it's just this thing that was standard automotive that is now just oh Yeah, it's like under a hundred bucks. You can just go get it.

Andy Ording (55:35.096)
But I mean, that's interesting because if there was somebody riding with your dad and he came behind him, it would go off. So that's a sure way to drive everybody mad. If you're riding together and that thing's going off, it's gonna drive everybody bonkers. So they use the camera then to, it's a cyclist. I can look by the vector, the angle of approach, the speed. Actually, there's a recognition.

right in

Grant Chapman (55:52.887)
It's one of your buddies.

Grant Chapman (55:56.652)
the footprint how big the surface area is.

So Andy, my last question is, what's the next steps or the plans for fundraiser? What's next?

gosh. Well, we are in five organizations today that we have invested in and are on their boards and guide them and try and connect them with people that might make a difference to their future. But we're looking at others. We're doing our second closing just coming up within the next six weeks or so. We'll be at Eurobike next week, the big European bike show.

missing out this year.

And so we are part of the leadership night, which is the first night. Baird Capital will be there. Lots of... Yes. So we don't all speak that first night. think just René, our managing partner, is going to be speaking that night on our aspect. You know, we're very early stage, right? So a lot of the VC and the private equity that's looking into mobility is really the next level up, right? So secondary level, middle market type stuff. That's a big, big deal.

DeAndre Harakas (56:39.167)
Speaking as well, right?

Andy Ording (57:01.902)
compared to what we're doing. We are, in many cases, pre-revenue. Found a guy with a good idea, let's see what he's got. But to get to the five we have, we've gone through, I think, presentations. Not all of us, all the time. There is so much happening, it's just hard to put into words. But again, it comes down to how clever is the technology and who, who, we're back to people, right?

not selective at all.

Andy Ording (57:31.874)
Who's driving? How are they driving? Why are they driving? Where is it going? These are the important things. so Eurobike is next week. We're very excited about that. It'll be our second Eurobike. We are running a workshop on Thursday, I want to say, for venture capital in the mobility space. Just generally to teach people.

We all talking about something different. I'm talking about go to market. I Gerard is talking about having a position in the market, making sure that you wish. And he built Cervelo on a very unique bike designs, for example, when he built that company. It's really still known for that. And really, it's a 20 year old ideology is very clever. And Rene was one of the pioneers in gravel bike, which gravel, course, today is is front end, right? Gravel is very exciting category. Everybody wants to ride gravel and

Quite honestly, as you get older, a gravel bike's pretty comfortable. Bigger tires, little easier geometry, very comfortable. So yeah, we'll see how it goes. But the future of fundraiser, we think will go much the same as the last couple of years, where we were going to be looking at very entrepreneurial, very early stage, either pre-revenue or a little bit of revenue. We got involved in a, we have invested in, and actually are the lead investor on a group.

called Bluebrake, which I don't know we talked about that previously, but Bluebrake is anti-lock brakes for bikes.

More automotive technology coming right into the bike world.

Andy Ording (58:59.424)
And Bosch has anti-lock brakes and Bluebrake has anti-lock brakes. Nobody else. So there's a group of PhD engineers out of Italy. They came up with this idea a long time ago, long time ago, five years, which is like an eon in entrepreneurial years, right? But very clever stuff can be integrated into every bike. Bosch is now being required to open their, because they, typical in

the IP portfolio.

We do this all the time, right? Turn the bike industry. Shimano won't let you buy Shimano components. You can't buy SRAM brakes and you can't buy TruVative and you can't this and you can't that. Well, all of that through lawsuits that all went away. So if you want to spec a bike as an OEM bike manager, you can pick your components. Well, Bosch thought they could get away with it. They made blue brake, fight them. They sued them and won. So now people that have Bosch motors can have a blue brake braking system.

which was an absolute feather in their cap. And the system works very, very well. we had to put that, it was a very complicated deal and René was very involved in that. We were all involved in it, but René really had to drive it. because there was a bunch of seed capital to get this thing to the point that you had prototypes to even ride, right? So there was millions of euros already there.

and building the technology and then you had to go build the company.

Andy Ording (01:00:24.398)
That's right. And they didn't have the production figured out. They didn't quite know how to go to the market. So we had to step in and sort of just provide some guidance on how that could really work and then make a couple of connections on this is who we think you should be talking to and this is why. So yeah, that's a very exciting deal. We ended up in an unusual situation where we ended up with a tail. So we had a cup too.

financial organizations that decided that they wanted to be in, but wouldn't come in if we didn't go in. So we had a financial tale that was significantly bigger than our own fundraiser investment. we were like, well, okay, that's a little bit unusual, but we're not the lead investor because you guys are going to put in much more money. I said, no, no, that's fine. We need you to be the lead. We need you to be on the board because you will help with the due diligence from the IP and legal perspective.

guys.

Grant Chapman (01:01:20.622)
I just want to follow you in the darkness.

They're just like, hey, we've been in mobility things. We don't know how to help them. We don't want to go in without some guidance. And so this is, honestly, the original formulation of fundraiser is this for this specific thing. The three of us are from the industry, not from PE. So we're learning the PE side, but the product side and the industry side through 30 plus years osmotic absorption, you learn.

We say this driving by Braille. You learn how to drive by Braille over 30 years. That's right. guard rail enough, you now know how to stay in the center. That's right.

Exactly. GuyDrell's buggered.

Yeah, panels of the car don't worry about that. We're in the center now. That's right.

Andy Ording (01:02:03.918)
No, that's pretty much how it is.

Well, everybody, I'm looking forward to riding my Apple bike play. This is the Heart Tech podcast. I'm Deandre Herikos with Grant Chapman and Edie Orning. Thank you so much.

Thanks.

Thank you.