As an avid mountain biker, who in his day earned provincial colours in cross country and downhill racing, Victor Momsen always dreamt of starting his own bicycle brand.
In 2007, he founded Two Wheels Trading, and two years later founded Momsen Bikes, a brand he specifically designed to meet the unique challenges associated with South Africa’s rugged and diverse mountain biking terrain.
Since 2013, between 1% and 4% of Absa Cape Epic participants were riding a Momsen. It was the seventh most-popular brand in this year’s KAP Sani2C, with nearly 5% of the event’s more than 4 000 participants riding one.
The stats might sound unimpressive, but a large portion of Cape Epic participants are foreigners and unfamiliar with brands sold only locally.
The brand is competing with international giants, such as Specialized, which was the most popular brand (26.47%) at this year’s Sani2C.
In 2013, Momsen launched the Muna kids’ brand, after his children, Mia (8) and Ethan (4) made him aware of a gap in the market for quality, affordable children’s bikes.
What did you do before starting your own business?
I’ve always been a bike geek and started working part-time at BeachBreak, to my knowledge SA’s first real mountain biking shop, when I was 16. After school, besides cycling a lot, I went to Taiwan – the real heart of the global cycling business – to do in-service training for a diploma in mechanical engineering and ended up working there for almost three years.
On my return, I worked for Probike as product manager and later product director.
While there, I helped to breathe new life into Raleigh, which at the time had developed a reputation for being “cheap and nasty”.
Why did you decide to start your own business?
It was a combination of reasons. Most importantly I always wanted to design and have my own bike brand. Working at a factory in Taiwan that manufactured its own brand, which was quite rare at the time, gave me a bird’s-eye view of what the business entailed and helped me foster valuable connections in the industry.
My experience at Probike also boosted my confidence – I thought if I could do it for someone else, I could do it for myself. And one can only go that far when working for someone else.
I seemed to have reached the top of that ladder.
Where did you get start-up capital?
I saved up over the years. My wife and I also bought two adjoining plots in Port Elizabeth that we managed to sell for a really fair price in 2008. To keep costs low, I started small.
We moved from a townhouse complex to a house in the suburbs where I turned the garage into a small warehouse and office.
How was the first year of business?
It was terrible. I fell off my off-road motorbike three months after starting the company and broke my leg, leaving me out of action for almost six months.
Up until then it was a one-man-show. I was designer, marketing manager, sales assistant, receptionist, tea lady... Now I needed someone I could trust to go on the road and market my products.
We are based in Port Elizabeth. While the company has always had a small following here, I knew that I had to grow the business in other parts of the country to make it.
I therefore booked a stand at a bike expo in Johannesburg. But at the time I was unable to travel. I could do administrative tasks and sit and design new products, but these tasks weren’t bringing in any money.
The situation forced me to hire help a little earlier than I wanted to.
When did you decide to develop your own brands?
The timing for the Momsen brand was perfect. It was launched around the same time that 29-inch wheels became sought-after. Almost everybody was riding 26-inch wheels at the time.
Only a couple of 29er brands were available and all were from overseas. Most people were sceptical or sitting on the fence waiting to see if the 29ers would take off.
We embraced the change and developed a 29er frame kit. This allowed mountain bikers to upgrade without it costing an arm and a leg, as they were able to reuse 80% of the parts on their old bikes.
The Muna brand was developed after I became disillusioned with the children’s bicycles available in the market.
I found the majority of these bikes to be mere toys and not really rider friendly. I developed a good-quality balance bike, which allows children to progress to a real bike with or without side-wheels much quicker than if they used toy tricycles.
We also developed ordinary pedal bikes aimed at children aged four to around 10. The brake sets, wheels and other specs are much better than those of some of the other bikes on the market; something that parents who cycle really appreciate.
We also have a range of very high-end juvenile models in the Momsen range. We invest a lot into these bikes, because we believe we are raising a future generation of Momsen riders.
How many employees do you have today?
We used to do a lot of work in-house, but this became very expensive especially if you want to use the best in the industry. With the help of digital technology, we are therefore now making use of quite a few freelancers who may be situated anywhere in the world.
The company also employs 13 full-time employees and have appointed a general manager in July, which will give me more space to focus on my passion – product development and design.
What was competition like when you entered the industry?
There were about 76 mountain bike brands in the country when I started out and the number has probably tripled since then. There has been a tremendous increase in the number of bike shops and outlets.
Almost anybody who rides a bike and has some spare capital thinks they can run a great cycling business.
The situation has become unsustainable, especially in the light of the recession and poor value of the rand against major import currencies. I foresee the number of brands to possibly halve over the next few years.
This will result in a rough ride for those who stay, as companies usually dump stock at cost price when realising they are not going to make it.
Consumers don’t always realise that this has a negative impact on them – bikes have become very specialised, so specific parts are required for specific bikes.
This makes it difficult to source parts when something goes wrong and a brand is no longer available in the country.
How do you stay ahead of the game?
The bicycle industry is extremely fashion- driven. Big companies will push new ideas just for the sake of it. We don’t have the money to do this.
We focus on developing high-quality bikes and then fine-tune these as much as possible for the local market.
The company has a very open relationship with many riders and bike retailers, who share a lot of feedback on what riders are looking for.
We are extremely excited about the new trailbike we released in July – the model represents the style of bike and riding that many local mountain bikers are looking for.
What are your plans for the future?
We are ready to start exporting bikes to other destinations, like Australia and Europe, and believe the weakness of the rand will help to establish our brands in these markets.
Events that attract international bikers, such as the Cape Epic and Sani2C, have made many foreigners more aware of the brand and they are generally impressed with the good quality of the bikes.
What is the best advice you have ever received as an entrepreneur?
Your first loss is your best loss – meaning that if something does not work just get rid of it.
Don’t invest time and energy or compromise on things that do not work; rather focus on that which is working well and find ways to improve it.
Do you have any advice for other entrepreneurs?
With the economy as it is, you have to work smarter and harder to survive. People who tell you that you will survive by just working smarter do not know what they are talking about.
This article originally appeared in the 10 August edition of finweek. Buy and download the magazine here.