Passion Doesn’t Pay
Why loving what you do isn’t enough.
This is meant as an update for our Kickstarter backers, but it’s also a long story that’s been playing out for the last decade of my life, and I’ve been meaning to write it down for at least the last few months. I hope it doesn’t read like a sad tale, or worse, discourage anyone from doing what they love. If anything, I hope it does the opposite. I hope people can build a business, make a living, create a life for themselves and their family, while doing what they’re really really good at, and helping shape the future at the same time. No pressure though.
The old joke about the bike industry goes like this:
“How do you make a million dollars selling bicycles?”
“Start with two million dollars.”
The sad reality is bike shops are going out of business every year. The total number of bike shops in America remains steady because there are always new stores taking the place of their failed predecessors. Optimistic and enthusiastic (read: passionate) cyclists start these small businesses with the belief that their love for cycling will translate into business success. It usually doesn’t. It doesn’t sound fair. And I don’t want that to happen with Karmic Bikes.
We have to build this product.
I’ve actually had to get a day-job because it’s been over a year since I started Karmic and we still haven’t made a dime. We do have the funds from Kickstarter sitting in the bank, but that was always meant for buying parts, building bikes and paying shipping. It was never meant for us to use. The truth is that given our low-volume, and the baseline costs of bringing a new product to market, we may not have much left at the end of it all.
It certainly isn’t enough to pay rent for a year. So now I can only work on Karmic stuff after the kids have gone to bed. It’s been okay since most of our conversations have been with partners in Taiwan. I start my ‘night shift’ at 9pm and work until 2am. I’m not complaining, it’s just what needs to be done during this period. I’m motivated to keep going because our backers have trusted us to deliver a great product. The world needs Karmic, and I’m going to make damn sure it happens.
Great at building bikes
I’m pretty good at recruiting, so I can always find a company that needs help. I’m lucky the technology sector has kept growing and that recruiting is still one of the toughest challenges for any startup that’s trying to scale up.
I like to think I’m great at building bikes too. I’ve been doing it a lot longer, and I’ve had more ‘customers’ riding one of my bike builds. I still own a dozen bikes myself, despite my wife’s ongoing protests. I have been testing our prototypes for over a year. I know every detail and every nuance. I know what works well and what doesn’t. I know where we can use a standard part, and where it’s absolutely critical to get something custom made. The Koben has been in my head forever, and now it’s just about making it real.
We are so very close, but sometimes the last 10% takes just as long as the first 90%. Details matter and I won’t ship a product I’m not happy with. This is one area where passion does matter. Anyone can open a catalog and piece together an electric bike. Few can craft an experience that’s more than the sum of the parts. We welcome the copycats and future competition.
We need to make the business work
Having said that, we do have a finite amount of resources at our disposal. Our modest bank account only allows us to put in a small order. That means we’re always at the back of the line. Any other customer who’s willing to spend more seems to jump ahead of us in the queue. This has been extremely frustrating for me, but I know it will change when we’re the “big customer”. That means we will be able to manufacture better, faster, cheaper. The bike business is all about volume, and I have no interest in building a “small business”. The fun part is building prototypes and riding the bikes around town. The hard part is sweating over an Excel spreadsheet and tracking a shipment across the ocean. I’m learning about costs, margins, operations and logistics. None of it is complicated, but every part is critical to make sure the business works, and ensure it is a sustainable venture.
All I know is that we will deliver a great product to our Kickstarter backers. They’ve believed in Karmic since the beginning. I also know that this should be my last job. Intrinsic motivation is doing what you love, because in the process of doing the work, the tasks don’t feel like work anymore. That’s what a passion project looks like. VC’s like to dismiss this as a “lifestyle business”, and that’s their loss.
Sometimes you’ll find a niche that becomes a category, and develop a product that can create a market. Why can’t we build a meaningful company, that’s actually profitable, and create the life and future we want for ourselves and our children? How can we not give it our best effort to try?
I believe in Karmic.
Thank you for believing too.
Cheers,
Hong
