Continuing the Entrepreneur Series of the Be Epic podcast, Matt sits down with Drew Medlock, CEO of Allied Cycleworks. During the episode they discuss Drew’s 20 years of experience in the cycling industry along with what distinguishes Allied from other manufacturers. Allied focuses on creating upper end performance bikes with carbon fiber frames that are made in the US and painted to order. They finish the episode by discussing the growth of gravel biking as a sport and the future of Allied and their foray into mountain biking.

We build bikes that we think are going to be fun to ride and deliver the best performance we can make.

Excellence, professionalism, innovation and collegiality. These are the values the Sam M. Walton College of Business explores in education, business and the lives of people we meet every day. I'm Matt Waller, Dean of the Walton College and welcome to the Be Epic podcast. I have with me today, Drew Medlock, Chief Executive Officer at Allied Cycleworks thank you so much for joining me today, Drew.

Absolutely. I'm stoked to be here. Thanks for having me on.

Now, Drew almost all of your career over the past 20 years has been focused on cycling. But you started as a math teacher, I believe. Is that correct?

Yeah, that was right. For a very short time.

Have you been a cyclist most of your life?

Oh, yeah. I would say I'm a cyclist that was a math teacher for a little bit.

Oh is that right?

Yeah, my passion has always been with bikes since I was a kid and I rode BMX when I was a kid, and then got into mountain bike racing. When I was in college, that was always my kind of primary hobby. And I always had a dream of owning my own bike shop or working in the industry.

Where did you grow up?

I grew up in Texas, primarily in the panhandle of Texas, around Amarillo.

Are there good places to mountain bike there?

Palo Duro Canyon State Park, outside of Amarillo is an absolutely beautiful place to ride. And this is one of my favorite places to go to hike and camp out when I was a kid. And now it has a really nice network of mountain bike trails and a really good local following and support system. And it's a really beautiful and neat place that not that many people know about.

So you've been CEO of Allied Cycleworks for a couple of years now. And as I mentioned, I have an able allied cycle. But I'm wondering, would you mind telling us a little bit about what distinguishes Allied from other manufacturers?

Yeah, well, I think one thing with Allied as a brand is we're very focused on upper end performance bikes, we don't make bikes to try to hit a price point or to drive a value play we really make the bikes that we believe can be used for the highest level of performance, and are competitive or better than the highest end bikes out there in the world. And that's really been our goal since day one. And uniquely, we achieved getting there by making them in the United States, where most of our competitors at the high end performance make all their bikes in Asia primarily in China and Taiwan.

When I went to your factory for a tour up in Rogers, Arkansas, you have a machine that will produce these sheets of carbon fiber, one way you can't tear it the other direction, you can tear it easily. And you layer those carbon fiber layers, several deep before you form it. What do you call that process?

Yeah, so that's what we call our cut and camp process. Basically, a carbon fiber frame is not like as you mentioned, it's not just one piece or it's not just squished together, what it is, is actually a stack of tons and tons of small shapes to build up the performance characteristics we want of each part of the bike. So it's kind of like each frame is literally like hundreds and hundreds of Lego bricks of different sizes. And each of those bricks is basically not only there to create a volume structure, but actually to create a performance characteristic. And that depending on which way we orient the fibers, some directions, it can be really rigid and stiff. Some ways it can be more pliable. So every part of the bike is basically tuned for the characteristic we want. Be it stiffness, compliance, or actual just strength from impact.

I remember seeing a really amazing paint shop in your factory where you can make just about any color of paint. You want.

Yeah, so for all of our bike orders, I think that's another thing that's you know, a little bit different. So when somebody orders a bike like an Able from us, we will literally paint it in any color the customer wants, and every bike is painted to order. We have a menu of colors that we really like like you're able is a beautiful cavalry blue, which is one of our favorite colors. But customers can pick whatever they want. And since we make the bikes one at a time, it's easy for us just to build that frame for the customer and then paint it and whatever they like. I was just at a SBTV gravel weekend before last and we had so many customers out there riding Ables and Echoes. It was really cool that I don't think I saw two that were the same. So it's cool. It's cool.

I actually had never heard of gravel biking until just a few years ago.

Yeah and pretty new still.

How is the market doing? Is it growing?

Gravel biking continues to grow, like, for example, the big event in Steamboat we were at couple of weekends ago. I mean, that event continues to draw more and more consumers to it. I think that gravel has really hit kind of a sweet spot. For a lot of, you know, people that want to do endurance activities, I think it's a little less intimidating than road racing. And also mountain biking. It's kind of like sweet spot in between those two sports where it's not as technical as mountain biking, but it's not as snooty and pretentious as road racing. A lot of the promoters are also really, you know, trying to focus on an inclusive environment that's more about fun and the experience and the accomplishment than it is about winning or what a cyclist typically looks like or does. So I think that's been a really awesome thing for the sport. I've been riding gravel bikes, I mean, I've always worked on dirt roads. So even before it was called gravel biking, but I remember when I was doing one of my local loops early on in the pandemic, and where I used to only see other racers out there, you know, a riders, you know, trading on that loop, all of a sudden, I saw people riding on that dirt road loop in all kinds of different clothes, and we're wearing mountain bike clothes, and were were just wearing normal shorts and shirt and you know, very, very casual to, you know, all the way dressed up. And I knew that that's the point where like, we're hitting a new audience with the sport where a lot of people want to participate, not just your folks that the typical cycling culture.

Many manufacturers have been faced with dealing with shortages of all kinds of inputs.

Yeah.

Have you all experienced that as well?

Yeah, the supply chain challenges through the pandemic are real, and still, for the parts that we don't manufacture ourselves very sharp, and really unprecedented. And, you know, the over 20 years I've been doing this, I think the cool thing is, is that the stuff that we manufacture here, which are our frames, you know, we source carbon fiber primarily from a company called Mitsubishi, which is a Japanese company, but they actually make all of their raw carbon fiber that we use the fibers and the resin that makes that product in the United States. So they've actually been a really consistent supplier for us. So they're lead times have stretched a little bit, but we've been able to manage through that. And within our own factory, we've been able to grow our capacity at a similar level that demands increase over these last two years. So our lead times are still hovering around eight to 10 weeks for bikes, even though we've been able to over double our capacity over the last two years. So that's been super cool. The other side of it's a little bit more tricky getting parts from Shimano and SRAM has really been massive struggle, their supply chains have really blown up over this last couple of years. And you know, we have lead times on new orders still, you know, anywhere from one year to two and a half years, depending on on the part we're ordering. So as a small supply or small company, you can imagine how tough that is to manage for ourselves and our customers.

I can imagine. So what is your vision for the future? You focus primarily on gravel. But will you get into mountain biking at some point?

Yeah, absolutely. We actually just launched a mountain bike called the BC 40. In July, the BC 40 is named after the back 40 trail system in Bella Vista, just north of Bentonville. And really making a performance again, mountain bike, but also something that's a little bit more designed around having fun and going fast, kind of similar to what the Able is to gravel. So going into mountain biking space was a huge step for us. And then we'll continue to be focused on the road and gravel space in the future for sure.

Do you think you're going to continue to be make-to-order?

We're always going to be made to order. I think as we've come out of pandemic and demand starts to get more normal, which is very up and down. We will build frames because we are a factory. And once we build up the capacity, we can't let it drop. So capacity has to stay stable. If we want to grow capacity, we have to incrementally increase a little bit by little bit every single month. But demand doesn't always work that way. So whenever demand is low, we will build stock frame so you could see from us to have like, hey, we got some bikes in stock every once a while. But that's more of an exception, than then our primary business focus for sure.

You think about marketing, what are your primary channels for marketing?

Oh, gosh, all of them. Number one, we communicate about our product through our website. And so focusing on having a nice website with good content and good product information is really the forefront or the basis for everything. Then we communicate you know with our customers through every other kind of channel that we can engage in with, so social media obviously also still with some traditional ad placement on bicycling outlets online, nothing in print. Also through doing typical PR like bike reviews, that kind of stuff, managing our email channel, so build an email channel with your consumers. And then also going out to key events. So like, like I mentioned, SPT Gravel, Leadville 100, Unbound Gravel in Emporia, Kansas, those are places where our targeted customers are out, you know, having experiences and riding our bikes. And so we try to be out there as well to engage with them in person. And then I don't want to forget about the bike shops out there. So we sell direct, we also sell to select dealers. So we have some really nice dealers all over the country that are really specialize in selling high end bikes. And that's an awesome place to bring brand awareness to consumers because they become an advocate for our brands and help us sell the story to places where we don't have the presence.

How did Allied start, what are the origins?

Yeah, so we're about six years old now. Allied was actually founded in Little Rock, Arkansas. And it was kind of a unique situation where the founder, bought some frame man manufacturing equipment from a company called Guru from Montreal, Canada, Guru went bankrupt, and basically had materials or equipment to make carbon fiber frames. And so those were purchased from them on a bankruptcy at a great deal, driven down by one of our friends to Little Rock, and they set up and basically try to recreate what Guru was doing. They did that for a little while, and then hired an engineer from Specialized named Sam Pickman. And Sam really took that concept of US frames to another level, basically taking his knowledge of manufacturing and design from Specialized, which is done currently in Taiwan and China, and trying to recreate that in the United States. And that's where we develop like, like the Able and really came up with our own brand and kind of created our own identity.

So Sam Pickman, he came with a lot of experience, it looks like I see that he worked for Specialized, he was an engineering manager for R&D there.

Yeah, he was one of the key people that pushed us forward in terms of product design, and kind of the vision for how to do this with his experience with Specialized. But that being said, I don't think there's probably only one person or team that had really a background of actually manufacturing carbon frames, in person. So the rest of us have worked for a manufacturing company to make different types of frames, like out of metal in the United States, or working for companies that like Specialized or Canyon that designed bikes and then sourced them from Asia. And so we were really trying to put that information together to come up with a path for Allied to manufacture our own frame. So it's been a little bit of a discovery process. And every model we develop, we get better at it.

You know, a lot of bike companies look at various market segments and targets. And they go through a formal process for figuring out what their next product would be. And as I mentioned, I have an Allied gravel bike, and I'm curious, how did you come up with the idea to develop the Able, for example?

Sure, yeah, our process is probably a lot more simple than say Specialized is, and then we're small, we don't necessarily have to sell a bike in every single category. So for a bike like a Able, we really just built a bike that we were inspired to ride based on the terrain that we ride in every day. So the Able was really an output of us riding the gravel roads here in Northwest Arkansas, Southern Missouri and figuring out like, okay, what would make the ultimate gravel bike that we would be excited about riding on? And it was pretty much that simple. I mean, we do look at the data and know where the trends are at. But you know, at the end of the day, we build bikes that we think are going to be fun to ride and deliver the best performance we can make.

Well Drew, thank you so much for taking time to visit with me today. I really appreciate it.

Absolutely. It's been really fun.