The Bicycle Academy, an innovative plan to train people to build bike frames whilst providing bikes to the developing world, used crowdfunding to generate the funds it needed to set up. The campaign was one of the most successful reward based campaigns raising £40,000 in just a few days.
I had the chance to speak to Andrew Denham, the founder of Bicycle Academy at the very end of 2011. In this interview Andrew:
TW: Andrew, thanks very much for taking the time to speak to us. Why don’t you start by telling us a little more about the Bicycle Academy?
AD: The Bicycle Academy is a place to learn how to make bikes, so it’s a frame building school. It has a bit of a twist on normal frame building schools in that the first frame you build you don’t actually get to keep. So you are taught how to make a bicycle frame by way of brazing, which is like welding, but rather than getting to keep that you give it away and it goes to charities, it goes to help people in Africa who really need bikes to get through their everyday lives.
TW: So what gave you that idea?
AD: Well, it’s a bit silly really. I run a bicycle event in my home town called the Cobble Wobble. It’s a bicycle race up a really steep cobbled hill, and I thought it would be really funny to try and build a custom bike that would look a bit like a funicular train going up hill. So, it would have a tiny front wheel and a big rear wheel so it would look level as it ascended the hill, and I started looking at frame building course and first of all they are very expensive. And secondly, you couldn’t really build something silly like that for a couple of reasons.
One because you probably would not want to spend all that money on doing so, and two they are really geared up toward more touring frames or mountain bike frames so it wasn’t an option to build a Frankenbike. So, I was thinking about that and at the same time I was also trying to do some work to help some bicycle charities and one who distributes bikes in Africa. It was apparent that there was a distinct shortage of certain types of bikes, so adult male bikes, so a gents bikes really. And not only that but some of the bikes that were sent out were sent with the best of intentions but in many ways they take an awful lot work to keep these bikes going. You may or may not know that there are 31 different types of seat post on a bicycle, in terms of the diameter of the post so imagine that across all of the other components on a bicycle and all these bikes being sent out to Africa, just imagine how difficult it is to keep those bikes running when things go wrong or break?
So, I had the idea, and it’s not a new idea, wouldn’t it be great if there was a standardised bike and I was thinking how could I help to make that happen? And so the two things got married together in my head and I said what if you went on a frame building course and the first frame you built was this standard bike and that got given away. For that to work, people would only be willing to do that if there was a bit of a trade off so let’s make it a bit cheaper than other frame building schools and let’s allow people to come back and build their own frame as and when they want to. So they can make use of the workshop as a hack space to build their own bikes. So it all started to balance out and things seemed to make sense. There was a nice philanthropic thread to it which gave it heart and soul but it was also democratising frame building so that people could do so that otherwise perhaps wouldn’t have been able to afford to do so.
TW : I guess these are also skills that are disappearing as well as these days a lot of frames are carbon fibre, so frame building is a declining skill probably.
AD: It is, yes; and we are going focus on steel frames for two reasons. Firstly it’s far more accessible. Brazing is an accessible method of joining two metal tubes together. So, we are going to specialise on steel and you can do an awful lot with it. It’s cheap and it makes an awful lot of sense, but you are right these are skills that are fading, there was a time when every town had a bicycle frame builder and now there are very few and there are only two places in the UK now that offer frame building courses and they are quite expensive. They are very good training providers but most people can’t afford it.
TW: So you are setting up the Bicycle Academy, people can go learn how to build a frame, first frame goes out to Africa then they can come back and use the facilities again. To do that from scratch takes significant capital investment and the way you decided to do that was using Crowdfunding. So what made you want to use Crowdfunding as a method for raising funds for this particular scheme?
AD: I think it was a number of things. First of all Crowdfunding is a really romantic way of funding a business, and that is a deliberate choice of words. I think there is something lovely about people rallying together to make something happen that they believe in, and the Bicycle Academy is something I certainly believe in and a lot of people who have joined us along the way certainly do as well. And so it made sense that this was a way of funding that might work.
But if I was being objective about it, I wasn’t hugely keen to go to the banks or an investor because it can be really expensive and it can mean you have this horrible thing looming over your head, which can add a lot of pressure. But that is not to say you don’t have a responsibility to the people that back you during crowdfunding– you absolutely do but it’s different. The mentality is different, they are not simply in it to make money. In fact, typically crowdfunding is not equity-based, it is reward-based. So, someone will contribute money to your project in exchange for something.
So, for the bicycle academy we offered a number of rewards. £20 would get a lovely T-Shirt and bits an pieces. £50 got a T-shirt and bespoke bag; right up to £1000 for a one-to-one course at the Bicycle Academy. And so what it has allowed me to do is effectively pre-sell almost a year’s worth of course places and put that profit from those courses straight back into the bicycle academy which pays for the start-up costs before we have delivered any courses. So, it’s a sort of backwards way of operating in any ways but it’s what makes it so attractive because I have the money up front and I can invest in the set-up costs and tooling I need and know I have people coming on the courses.
TW: It’s an interesting point because this is one of the great propositions about crowdfunding, particularly for a product-based enterprise in that you are essentially selling pre-sales and it’s quite a nice way of getting into commercial operation. So did you know much about crowdfunding before you started the campaign?
AD: I had seen some of the almost fairytale success stories on Kickstarter, the Lunatik watch amongst others so I was aware of it. But I think when I came up with the idea of the Bicycle Academy it wasn’t something that I thought of as something I wanted to pursue as a business venture per se, it was just something that I want to see if I could just make happen and potentially set up as a not for profit. But it evolved and is something that has a lot of potential and so I am committed to making a business of it.
But crowdfunding seems to fit quite early on and after coming up with the idea in November 2010, I did a lot of research into crowdfunding over the following six to eight months looking at other projects and basically seeing what worked and didn’t work and to look at other brands as well as I think there are brands that if they were to crowdfund almost anything they would succeed just because they have the right sort of following. People who really believe in the brand or products. I think if you want to succeed in crowdfunding, unless you have some ground breaking product that people don’t want to know where it came from or about you they just want the thing, you need to have a connection with your audience so you have these evangelists customers if you are already trading or people that just know what you are trying to do and are supporters.
TW: So they have been exposed to the theme and idea of what you are trying to to?
AD:Yes so over that period I had been blogging and updating people, and from the first point that I starting telling people I had this idea that’s is pretty cool and it could be a really good thing, people started following and it picked up some momentum. And the people that were following it really believed in it and I was fortunate to have those kind of supporters I guess so it really fitted that crowdfunding would work for Bicycle Academy.
TW: So before you began the process of raising money you had built up a rapport with followers you had primed them to exactly what the academy was about, got them enthused about it before you had even begun to raise the prospect of starting a crowdfunding campaign.
AD: Yes absolutely, and the next stage was to explain that the crowdfunding was going to come. In June I announced that we were going to crowdfunding and June to November (when the crowdfunding began) is a considerable time to be building up anticipation about it. I had a countdown on my website and people were really excited to the extent that when we actually did launch people were falling over themselves to back the project, they were so eager to do it. In fact Peoplefund.it , the platform we used, launched on November 1st but the actual site was visible a couple of days before and people were so eager they found the website and we had put a couple of test pledges on it just to check the functionality but people thought that the site had gone live and were really worried that they were likely to miss out and before it had launched we had already secured £6000 in pledges. A couple of people had seen it and another couple saw it that others were pledging and I started to get all these emails saying “I thought it hadn’t launched yet” which was brilliant.
TW: And you were using blogging tools, so were you using any other social media tools to build that rapport and that relationship?
AD: Absolutely, it started with a posterous blog and then a Facebook page, and I stress page rather than account because people often set up a personal account and that is the wrong thing to do for a number of reasons. One it’s not what is designed for and it’s not fair in terms of people’s privacy because you can see a lot more about them that is reasonable if you’re an organisation but pages also offer a lot of insights in terms of visitors which is really beneficial so it was a page and not an account. We also had twitter and a website. Now I am not someone that is an expert in these things but what I have learned, and I still do it, I refer to “we” as opposed to “I” because it is something bigger than you, it’s an organisation and people often speak of we even when it is just themselves that are doing something and makes them feel good and gives the whole thing credibility but I don’t think it does and one of the lessons I have learned other the past few months is just say “I” and sign of with your name because ultimately it is you that’s doing it and it’s important to create that connection.
TW: You mentioned that you used the platform Peoplefund.it What made you choose that particular platform?
AD: It was quite exciting really. I was approached by somebody involved in the project in June at the Bespoked Bristol – the hand made bicycle show. I spoke to them about the Bicycle Academy and they said they were starting this crowdfunding platform and that it would be ideal for me to crowdfund on their platform. So I learned a bit more about it. Peoplefund.it has been created by Keo Digital – which is part of the River Cottage Group, so it’s something that Hugh Fearnley-Whittingstall is involved with running and they are responsible for River Cottage, Fish Fight, Energy Share Landshare.
TW: So to put this in context for an international audience, these are very high profile organisations in the UK. Certainly Hugh Fearnley-Whitingstall a very well-known television personality within the UK.
AD : Yes absolutely and they have a hell of a lot of credibility and rightly so. They are very accomplished. There are a number of other crowdfunding platforms in the UK. It should be said you aren’t able to start a Kickstarter project from the UK unless you have a US bank account so that immediately closed that off but I believe that is something that is likely to change in the next year or so. So there are a limited number of platforms but crowdfunding is relatively young in the UK. There are not that many projects that have been started, not that many that have been successful and also of those that have been there are not many that have raised the amount of money that I needed. So it wasn’t as if there was an obvious choice in the UK and Peoplefund.it were new and they were launching and Bicycle Academy was selected as one of their 12 launch projects, so that was all very exciting. It was a bit of a gamble I guess, but everything felt right, and I believe in what they do outside of Peopelfund.it and so I thought it was a good fit.
TW: Great. And to cut a long story short, yours was a rip roaring success wasn’t it?
AD: Yes – I think we were 66% funded within 24 hours. We needed to raise £40,000 and we would have been 100% funded in three days but I ran out of course places. I had put a cap on the number of course places we offered, just because I wanted to see what happened really. We might have sold lots of the smaller pledges, but I got so many phone calls and emails begging me to release more than I did and we were 100% funded in five and a half days. So it was the first ever Peoplefund.it project to be funded, it’s the most funded UK reward-based crowdfunding project and I believe it is the fastest funded of projects over £1000, but I am sure that is changing all the time, so those claims may have changed by now, but certainly it was only a month or so ago.
TW: Well it certainly attracted a good deal of attention hence us speaking to you about it because it is such a recognised and successful campaign. You said that you did quite a lot of preamble and preparation work and that you feel this was useful in making your project a success. Are there any other factors do you think that helped make this a particularly good and successful campaign?
AD: I think there is two things really. You have to have something that people believe in. What I am trying to do with the Bicycle Academy are quite noble things to be doing and that’s not me being unreasonable. I am trying to generate bikes for people that really need them and I am doing that at cost and donating. I am taking far less money than I could for the courses to make them more accessible to a wider range of people. I am not personally going to be drawing any money from the project for the first year because I have planned it such that there will not be enough money to do that because what money there is goes straight back into it. But it is a profit making business, it’s not just a charity and I think that is important as well because for it to work in the long run it has to sustain my involvement. That means I have to generate some way of living from that. And I think people respect that and those kind of values resonated with people. We are making a wonderful skill accessible to people who would otherwise just not get a chance to do it and whilst doing so we are doing something really good for someone else and that completes a nice circle where everyone gets something from the process . So we generate bikes for people that need them, people learned skills themselves and they create an opportunity for themselves and they can go on to continue to build frames and if we do a good job then I get to make a living from it.
TW: But you also had quite a range of rewards available didn’t you?
AD: Yes and you have got to appreciate I was asking £500 for a course and whilst that is very reasonable for a frame building course it is also a lot of money and there are lots of people who support the Bicycle Academy but simply can’t take a course. So it was important to offer a broad range and so I offered pledges from £20, £50, £150, £300, £500, £1000 and £2000 and the only pledge tier that was not taken was the £2000, but every other pledge tier was used. We sold out of the £1000, £500, a large number of £300, £150 and scores of the smaller pledges as well.
TW: So there is a real diversity so that people with different tastes, different requirements, some people will want to build a frame some won’t, but you had something for all.
AD: Yes and it’s important to understand that whilst I have talked about the noble aspects of the Bicycle Academy, the people that back it, not everyone does it for purely philanthropic reasons, most people are doing it because they want something in return. It’s an exchange. So just as an equity investor would expect equity, you would expect that the vast majority that invest in this want something in return. Of course it has to be said that some don’t, so there was an option when someone backed the project, well there were two there was an option for people when they pledged to not take a reward, and an option for people to pledge more money than the reward value, so you could pledge £60 for a £50 reward, and it was really heart warming that there were a reasonable number of people who actually did that.
TW: So you had tangible and intangible returns really?
AD: Absolutely yes.
TW: So how much work was it? I know it was all over in six days but how much work was it if you take into account the setting up of the project the running it through the course of the six days? Was it straightforward, did it take more than you thought or less than you thought?
AD: It’s incredibly intensive. I can’t overstate how much work was involved simply dealing with people wanting to contact me during that period of time. Backers, various media outlets that had picked up the story being published by other outlets and gaining a lot of interest. And of course you want to, and it’s absolutely crucial that you, speak to everybody, that email and reply to everybody because crowdfunding is done over a finite period of time so you don’t get a second chance, so you need to take every opportunity. So I had a day job and still do and I did a very bad job during that week. So I had to retrospectively sign off a lot of my time to holiday and grovel to my boss and apologise for the impact that it had. But leading up to it, this is going to sound a bit silly but it’s absolutely true. I was working a five day week condensed into 4 so I would get to work for 9 and leave at between 8 and 8:15 and then I would get home from work and I would work almost every evening till 3 or 3:30 in the morning and be back at work at 9 the next day. And that was time spent doing everything from promoting, conceiving the idea. Obviously conception starts very early but you need for it to evolve into something that is tangibly viable and that takes an awful lot of time because you are planning a business. It’s important to state that crowdfunding isn’t something that you do once you have had a great idea and you say I have these people that know me or follow me and you just give it a go, because even if you succeed with the crowdfunding you are very unlikely to succeed with business unless you have though tit through fully because you might have overcommitted yourself. So it took a lot of time to understand how much money I needed to raise to be able to have a known amount of money to be able to set up the Bicycle Academy. So I guess from June through till November I was working at least 30 hours a week at the very least up to sometimes 40 to 50 hours a week on the Bicycle Academy. And lots of that isn’t just sat in front of your computer, you are speaking to people meeting people, but it’s time not doing other things.
TW: So would you advise anyone else to use crowdfunding? Do you think it’s a sensible method?
AD: Yes I think so it’s a wonderful way of realising a project. The fact that you generate the backers who become evangelists for your project ad your potential new business, that is something that some brands never have. And if you do it right you can get them straight away. But it’s really important to realise that none of it can be contrived. You can’t fake passion for something and you can’t fake the things that resonates with people. You can try and you may get away with it to a certain degree but it will quickly become apparent. I don’t think crowdfunding is right for every business. If you have a very straightforward profit making business that is focused on profit and not much else and it sells a thing or you distributes a thing that you buy and don’t really have much to do with, those sorts of businesses are fine and are a means to that end, but I don’t think they would work well with crowdfunding. I think crowdfunding works well if you have something that is special, be it a unique product or service or something that you are trying to achieve that is greater than that, then it’s ideal.
TW: And if somebody is going to run a crowdfunding campaign, given that you were a great success and I think we have identified some of the factors in that, if you were going to advise somebody who was taking up a crowdfunding project what would you advise them to avoid doing?
AD: Don’t overcommit. Be very realistic. So you might have the best of intentions to deliver upon the rewards that people have pledged for by a certain amount of time but add a really healthy buffer. That’s the first thing. Otherwise their first real experience of your project will be one of disappointment as they get their reward far later than expected. You can do that by being vague or giving yourself a lot of room. Be completely honest. You are not going to benefit in the slightest by trying to tow a corporate line, be open. So, if you don’t know how to do something, for example with the Bicycle Academy you got the idea for most things but you don’t know how where to get your frame building jigs from – that might have been the case, say “I know about this but I don’t know about this but I am going to learn” or “I could do with some help”. I have had over 300 man hours pledged to the Bicycle Academy from backers a lot of which is skilled advice. So Health and Safety advice for running a workshop and all sorts of things that are incredibly valuable to the project, because I was open about it and said look I could do with some help. And finally, consider the whole thing as an exchange. Don’t see it as something that backers are going to do for purely altruistic or philanthropic reasons. So asses if the reward you are offering is really fair and it should be something that is better than they could achieve outside of the crowdfunding project. So if you have a product, for example our course would normally be £600, which is still significantly cheaper than our competitors I guess, but I was offering them for £500 with a number of other rewards in addition so it makes it very attractive and encourages people to back the project.
TW: Fantastic. That is really interesting and very helpful and I am sure lots of people that listen to this or read this will see this as an inspiration to go out and do their own crowdfunding project and hopefully draw on some of the lessons you have shared there. Would you do it again Andrew?
AD: Yes I will, and it’s I will as opposed to I would. I can see that there will be a phase in the Bicycle Academy’s future where it would benefit again from crowdfunding. I have a lot of right ingredients, this wonderful group of people who really believe in the Bicycle Academy who have already backed it and as long as I can deliver on everything I promised I can’t see any reason why they wouldn’t be open to doing the whole thing again, at the right time. So there are times in its future then I can see it happening again for sure.
TW: Great. Well thanks for taking the time to speak with us today Andrew and we wish you well with the Bicycle Academy and hopefully if you are running some more crowdfunding projects in the future we can hear more about those and more about your success. So if anyone wants to find out more about the Bicycle Academy where do they go?
TW: Brilliant. Thanks for speaking to us.
Tim Wright is a Director at twintangibles, a Glasgow based business advisory and research firm that helps organisations generate value from social media and the mindset that underpins its use
twintangibles will be presenting a session on crowdfunding as part of Social Media Week London – for event event details go here