Welcome to the Hexlox Show Stefan. How are you doing?
I’m good. I’m happy to be at a bike show again.
So who is Stefan Vollbach?
CEO of Simplon Bikes is my official title, but mostly, when I meet new people I introduce myself as the housekeeper. The guy that's in charge. If something goes wrong, I’m the responsible guy. But the official title is CEO.I’ve been with Simplon for six years now. I got started there in 2015.
You come from a background in sports, is that correct?
Well, I used to be a lawyer actually, but I’ve been in the sporting goods industry since 1997. I guess that’s a pretty long time. I got started working in a sporting goods store to finance my studies. I also worked as a mountain bike guide and as a ski instructor in the winter. That’s how I got into this industry. I entered the ski industry, with Head Skis and I ran their global business for about 10 years. In 2015 I entered the bike scene, but i have a little bit of a triathlon background as well and i used to run a bike store for two years in my old days so i'm very familiar with the industry
Can you tell us some more about Simplon Bikes?
Well, right now, here at Eurobike, we're in the backyard of Simplon Bikes. I just drove 45 minutes from the factory at lake Constance. It's a perfect location at the foot of the Alps, in a very central place in Europe, right between 4 countries. Germany, Switzerland, Austria, and Liechtenstein. So we’re in a very central location that attracts active and outdoorsy people. It's really good for recruiting staff because we're right at the front of the mountain. We also celebrate our 60-year anniversary this year. Simplon was founded in 1961. We can't party because of the big C (Corona) but we will do it next year, hopefully under better circumstances.
At the center of Simplon are a couple of things… Quality, of course. Now, everybody says they stand for quality, but we don’t compromise at all on quality. That's a more intense approach than just saying - Yeah we like quality... What is also part of our DNA is our road racing pedigree. Simplon comes from a road racing background. This is where the company comes from. Later on, we added mountain bikes, city, and trekking bikes so now we have a full portfolio.
But what really makes us different is our relationship with our customers. When you order a bike at Simplon it's going to be built by hand in our factory. We only have one factory. That's where we develop and assemble all the products - by hand. One mechanic builds one bike. This really makes us proud. As a customer, when you get the bike, in the SAP system you can look up, which one of our guys or girls (we have many very good female mechanics) built the bike. They take pride in what they do. We don't want our people to be bio-robots. Then you better take a real robot. Our people can say: I built these three, four bikes today. I’m proud of them and they carry my handwriting and I did my very best work assembling them.
Yes, I have another story. I needed to have some welding done on my cargo bike and this turned into a very emotional experience. When I got the bike back I noticed that the person actually cared deeply about what they had done and I still get a lump in my throat talking about this. This person actually took took pride in their work.
It's an emotional thing! All our mechanics know that there's a passionate cyclist waiting for this one bike. They know that this bike is not going to be stocked in some warehouse somewhere. This bike is gonna be shipped the next day, or the same day, to someone eagerly waiting for their bike. That changes the attitude I think.
Of course, it's a complicated business because we are a small brand. Small brand means we make around 17.000-18.000 bikes per year. We are now 170 people at Simplon. It's complicated because we offer over 100.000 combinations of frames, parts, and different wheels so it's similar to the car industry. If you are interested in a new car you go to this configurator tool to check out the colors, the engine, the radio that radio, the color seats, what rims and tires, and all the bling-bling and the nice things.
You do this at Simplon as well! Of course, the main focus is on ergonomics. You want to pick the right frame size, the right stem length, the right saddle. This is what makes the bike Your Bike. Then in the Simplon city and trekking segment, you get a choice of four different light systems, different racks, or fenders, and together this makes over a hundred thousand different combinations of parts. So in some way, you could say each bike is a unique individual, perfectly tailored to what the customer wants.
I was about to get to that. This customer-first approach is really at the heart of Simplon, isn’t it? You have a very customer-centric approach to things, correct?
Yes, That's us. People say we make expensive bikes. I say yes, we make expensive bikes and if you make expensive buys you have to have something really valuable to offer. We do not compete with the middle-of-the-pack with our higher prices. This is part of the premium quality concept. We’re building the bikes in Austria and that makes a difference. Another thing that sets us apart is the customization possibilities that we offer. Maybe a rider was not 100% happy with another brand but now they're willing to spend a bit more to get the perfect bike that they're going to ride 6-10 or even more years. From a sustainability perspective, this is really important. We only build the bike when someone really wants it!
I’m not blaming anybody in the industry but I think some of the bigger brands just produce bikes because a dealer somewhere thinks he/she can sell them, stocking them without any concrete interest from anyone. So there are a lot of bikes produced that will not find their perfect owner. They end up being discounted. In the end, someone will buy them. But will that person be super happy? Probably not. We believe that if you really want a good bike you'd rather spend a little bit more money, but then be perfectly happy with it. We do not want to create a pile of bikes that you then have to look for customers for. So it's an inverted approach to the typical mass-production idea where you have no demand or a very general demand and then you look for the customer. We find the customer first, the person that wants that bike and then we make it for that particular person
Now we’re hopefully at the end of this pandemic. What were the challenges for Simplon?
We live and work in a pretty crazy, chaotic world, and even if I try to make the consumer aware of what the problems are, the reality is that the consumer experiences long lead times. Two years ago, if you ordered a bike, five to ten days later you had it in the store. That’s how quickly we could assemble. Now we're waiting for parts. So the world has changed dramatically and as a consumer, when you order your bike, it can be that you get it in a few weeks or it can be that you get it in half a year depending on whether we get the components or other parts.
What was a complicated business in the past is now, with the turmoil in the global supply chain, even more so. For example, right now Vietnam is in shutdown. We have one manufacturer that builds perfectly nice frames for us there. Their factory is closed. They tested 800 people there. Everybody was negative but the factory had to close.
(Vietnam has recently started to ease some of the restrictions and some manufacturers will be allowed to open production again)
Yes, people need to be safe and yes, the pandemic needs to be addressed but this is frustrating for us and the workers because they want to work. Also, there are lots of transportation problems and issues. Currently, you can't get hold of a container. And if you manage to get one it costs you eight to twelve times what it used to cost. So transportation costs have really gone through the roof. This is something that I try to make dealers and consumers understand. Our prices are not there because we want to buy a golden car. It is because things are very expensive right now, because of all the complications.
The latest thing was that Shanghai airport changed its rules for cargo workers. Just one week ago they have to go to general quarantine but now they have to go to individual quarantine. So they only work one week out of three. So the airport is only operating at thirty percent of the capacity. These are just a few examples that I would like to mention but basically the biggest challenge I believe is not that it's not the individual challenges it's the lack of predictability.
We just invested a couple of million euros into a new building that we purchased right next door to expand our capacity and double the production. We do this because we're seeing this huge demand. You make this investment because you believe in the growth of your brand.
We suffer from all this. It’s a combination of restrictions and increased demand.
Really interesting. Supply chain management is the hardest thing in the world. There are so many moving parts that need to work together. it's a huge challenge to everybody. Here at Hexlox, we don't have the same level of problems but there's a bit of a challenge for us as well.
I don't want to frustrate people out there by saying that they can't get a bike. We still make 85 bikes a day so it's not like we don't produce. But the times where you could order it and get it next week will not be possible for the foreseeable future. I would say for the next two to three years that's going to be a challenge. But people adapt. Some wait a year and then when I read on Facebook that “I waited a year but it was worth it” That's the best compliment you can get. All our staff loves this feedback because it shows people appreciate the product and yes, they had to wait but still it was the right choice. That's very nice to hear.
When we met the other evening we got into a conversation about the current polarized climate we find ourselves in. Not just in politics but even trickling down into bike culture or urban mobility discussions. You spoke about it with some passion. I would like to offer our viewers your take on this because I found it really interesting.
I can only offer what I feel. I mean, this is not it's not just an intellectual topic it's also a very emotional topic. Fundamentally it’s about how do we relate to other people. It's a fragmented industry - and world - especially when it comes to cars and bikes. To me, there's sometimes too much confrontation going on and this stems from the fact that there are some cyclists that just have their cycling view, which is valid, but they don't understand the challenges that a car driver has. I'm a passionate car driver but I’m also a passionate cyclist and because I do both I have very much understanding for both sides and I never have any problem with anybody. To me it's it looks like we're talking too much in black or white, as you just said. While the reality is in the grey zone. It's not about this or that, it's about how you bring it together. How do you respect the other? I mean, in a world where car drivers are not respecting car drivers it's a long way to make car drivers respect cyclists - and the other way around.
So that’s the bigger picture. People are stressed and they become aggressive. Especially in traffic. Any sort of aggressiveness you better leave at home, especially when you drive a car that weighs two tons.