UP

niche industries

From businesses such as Nutcase Helmets to Bike Friday,

Oregon’s bike madness fuels a $150 million industry.

GEARED
Not to mention that there’s an organized bike ride every 27 minutes.

BY BEN JACKLET

L
ast summer, when gas prices were hovering around $4.50 a gal-
lon, the owners of Clever Cycles in Southeast Portland had a
business problem. Their new bike shop was proving so popular
that they couldn’t keep up with demand. They had to shut down
their business at the peak of the season to restock the family-
friendly utilitarian bicycles selling like crazy in bike-crazy Portland.
A few miles away, Sacha White of Vanilla Bicycles is faced with a simi-
lar challenge. Anyone hoping to order one of his hand-built bikes will
have to wait at least five years to get it.
It’s a familiar scenario for Jonathan Maus, the Portland-based en-
trepreneurial blogger who covers the local culture, sport, business and
politics of bicycling for his red-hot website, bikeportland.
From left: Ruben org. Maus has had to hire journalists to keep pace with all
Markstrom,AndrewFiore
the news as the bicycle culture evolves and the industry
andAaronBlanchardman
grows larger and more complex, in a metro region where
the shop at Bike Gallery in
downtown Portland. an organized bike ride takes place every 27 minutes on
average, where the wild mud-worshipping sport of cyclo-
cross has gone big-time, where bicycle documentaries sell out on opening
night, and where the legion of bike commuters includes Portland Mayor
Sam Adams, Congressman Earl Blumenauer and key members of the Met-
ro Council and the Oregonian editorial board.
The market for anything connected to bicycles in Portland runs rich and
deep, and entrepreneurs are sprinting to create new ways to tap into it. About
50 new bike-related businesses have sprung up over the past two years here, and
while some are destined to remain forever fringe if they survive the downturn at
all, others have tremendous potential.
Add up the revenues for retailers such as the Bike Gallery, manufacturers such as
Chris King Precision Components, organized rides such as Cycle Oregon and pro-

PHOTOS BY ANTHONY PIDGEON

36
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2009 january
JANUARY 2009• •Oregon
2009 Business •• 37
OregonBusiness 37
niche industries | geared up
fessional services firms such as Alta Plan-
ning and Design, and you get about $90
million in annual sales, in Portland alone.
That figure would likely grow to well over
$150 million statewide if you factor in bike
sales in Ashland, Sisters and Hood River;
repairs and rentals in mountain-bike-mad
Bend and Oakridge; the cyclical wanderings
of students and faculty in Corvallis; the cre-
ations of Eugene-based Bike Friday, Burley
Design and Co-Motion Cycles; and the far-
ranging economic impact of Cycle Oregon.
The jobs generated by all of this activ-
ity are unlikely to offset the thousands that
have been lost in Oregon’s motor vehicle
industry as dealerships close and RV manu-
38 • Oregon Business • JANUARY 2009
facturers hit the skids, but they do generate cle industry, it remains relatively small, sur-
excitement for yet another Oregon niche prisingly immature and deeply fragmented.
industry with a dreamy upside, in the tra- Even if statewide sales total $150 million,
dition of solar power, craft brewing and that is less than a quarter of the annual rev-
organic farming. Market share is tiny but enues of the Wisconsin-based Trek Bicycle
growing explosively. As big as biking has Corporation, which employs 1,200 people.
gotten here, for all of Portland’s accolades Despite the well-publicized proliferation
as the nation’s best city for cycling, only 8% of Oregon frame builders trained at the
of downtown workers commute by bicycle. United Bike Institute in Ashland and show-
That number can and no doubt will grow cased with a special exhibit at the Portland
much larger, sooner rather than later. It isn’t International Airport, the vast majority of
difficult to imagine an immediate future the bicycles sold in Oregon are built else-
where homegrown bike businesses out- where. So are the helmets, rain gear and ac-
number tech start-ups. cessories marketed by Oregon startups such
But let’s not get carried away. For all of as Nutcase Helmets, Showers Pass and Bike
the diversity and creativity of Oregon’s bicy- Buddies. The bike builders who benefited
the most from the crazy run on the Clever
Cycles shop in July were all European com-
panies. “If we could have found a viable
option locally, we would have gone for it,”
says Martina Fahrner, a co-owner of Clever
Cycles. “But no one could deliver bikes in
the volume that we sell them.”
Still, while the manufac-
MartinaandToddFahrner turing base for the nation’s
opened Clever Cycle in bicycle industry may not be
Portland with another in Oregon, the brain trust
family in June 2007. increasingly is, and so are the
riders. Five years ago it would
have been unusual to see an adult in work
clothes commuting to their job with a child
pedaling along in tandem. Today that sight
is as commonplace as the latest horde of
cyclists taking over the Hawthorne Bridge
and the East Bank Esplanade during the
morning commute.
Even the wet, dark months of Oregon
have not kept the wheels from spinning
because the cyclo-cross phenomenon has
encouraged demand for a whole new type
of $3,000 bike that gets beat up during each
race and requires expensive repairs and
upgrades. The bike craze accelerated as gas
prices rose, but it does not appear to have
abated as prices have plummeted. Bike-
crazy newcomers continue to pour into the
city, boasting car-free lifestyles with “zero
mpg” bumper stickers on their rides. They
spend the $5,000 or so that they might have
spent on cars each year on coffee, food, beer,
and anything that has to do with bicycles.
J
onathan Maus moved to Portland from
Santa Barbara to become a part of the
bike culture. Now he is at the center of
it and to a certain extent, its spokesman.
He started with a blog on oregonlive.com,
and then set out on his own to build bike-
portland.org, one of Oregon’s most suc-
cessful blogs.
“I could see the value of connecting all
these things going on in the community
and putting them together in one place,” he
says between sips of coffee at a cafe with a
bike-through window. “I was blown away
by the response, and by how much was go-
ing on, this outpouring of creativity that is
constantly evolving.”
The more rides, gatherings, policy plans,
police incidents and startup businesses
Maus covered, the more came to his atten-
tion. His blog started drawing huge reader
response, dozens of comments for each new
post, a constantly updated conversation that
extended well beyond rides and events and
into the future of transportation, energy use
and the American city. Advertisers from in-
side and outside of the industry, including
Oregon icons such as Powell’s Books and
New Seasons Market, recognized the value
of his site, and advertising revenue enabled
him to run his blog as a business and even
buck the trend by hiring journalists.
“It is certainly the best blog in Portland,”
says writer Jonathan Nicholas, a former col-
umnist for the Oregonian and founder of
Cycle Oregon. “It’s a textbook
case of how to build a blog.” Former bike messenger
It’s also a window into a Natalie Ramsland used
business world with enor- her wedding cash to help
mous potential. At last count startSweetPeaBicycles.
Maus’s site contained links
to 26 local frame-building companies, 42
bicycle shops and 40 Portland bike-related
businesses such as the Rose Pedals Pedicab
Company and SoupCycle, a company that
delivers soup by bicycle. Many of these busi-
nesses have made their debuts since Maus
first began blogging regularly in the spring
of 2005. Over that same period, 2005-2008,
bicycle traffic crossing Portland’s four bike-
friendly bridges has shot up from 10,192
trips per day to 16,711, a 64% increase.
Maus thinks the growth and evolution
of the bike culture will continue even as the
larger economy slows, due to a steady influx
of new talent moving into the scene, new
bike builders and designers opening shop
or joining established teams to feed the de-
mand.
“It’s all growing like crazy, and a lot of it
is within three miles of where we’re sitting,”
he says. “We’ve got 8% of downtown work-
ers commuting by bike. If this keeps up we
will see 25% and more businesses will keep Hopkins University, served as Portland’s land-based Alta Planning and Design, the
opening. We’re going to see equipment first bicycle coordinator. In collaboration nation’s largest bicycle planning firm. Alta
makers, roadside service stands. It’s going with then-City Commissioner Earl Blu- compiles bicycle and pedestrian plans for
to happen. This is not some weird phase. It menauer, she completed the city’s first bi- small Oregon communities such as Man-
will be sustained. Even in the winter.” cycle master plan in 1996 after a tour of 18 zanita and bustling global cities such as
European cities. At the height of the city’s Dubai.
A
bout a half mile away from Maus’s program she oversaw a staff of five and a Birk’s view is that the most cost-effective
bike-through cafe, Mia Birk has budget of $1.5 million, building a network investment a community can make toward
converted a historic building in of bike lanes, trails and boulevards that has a sustainable future is to build smart bicy-
Portland’s Central Eastside into a bicycle- grown to nearly 270 miles, setting the stage cling infrastructure. She also encourages
planning factory. Birk, who holds a degree for the bike explosion of the past decade. businesses to encourage bike commuting
in international economics from Johns Now she is doing similar work for Port- for physical and mental health — and to
JANUARY 2009 • Oregon Business • 39
niche industries | geared up
Thousands of bicyclists of all ages and sizes
participated in Portland’s 2008 Bridge Pedal.
AVERAGE COMBINED
DAILY BIKE TRAFFIC OVER
4 PORTLAND BRIDGES
(Burnside, Broadway, Hawthorne, Steel)
17500
15000
12500
10000
7500
5000
2500
0 says. “The other challenge is helping them
’00 ’01 ’02 ’03 ’04 ’05 ’06
SOURCE: Portland Office of Transportation
save money on health-care premiums. “The
bicycle is a simple solution to a whole host
of complex problems,” she argues, from
obesity to global warming to stress.
Birk says Portland’s bicycle industry has
been long underrated economically. Alta’s
most recent report, released in September,
found that the value of the industry grew
by 38% from 2006 to 2008 and expanded
from 95 to 143 businesses, including 12 new
small-scale bike builders. Another number
in the report seemed too large to be true,
so Birk and her team re-counted and cross-
checked before publishing: Portland holds
nearly 4,000 annual rides, races, events and
tours. That’s an average of one ride every 27
minutes.
Birk compares the bike industry to the
craft brewing industry in that it is part cul-
tural and part economic, with ideals play-
40 • Oregon Business • JANUARY 2009
ing a significant role. “In Oregon people
start up businesses based on what they love
to do,” she says, “and then they figure out a
way to make money off it.”
Some companies, such as Clever Cycles
and Vanilla Bicycles, have figured out the
business end quite quickly. Others have
flailed, partly because they lack the knowl-
edge necessary to run a business. Jennifer
Nolfi, creative services industry manager
for the Portland Development Commis-
sion, has worked closely with local frame
builders to encourage the industry to orga-
nize, grow and build jobs. “Getting them to
agree on anything can be a challenge,” she
’07 ’08
to learn the business side of things.”
PDC has sponsored cyclo-cross races,
a “bike manifesto” in the Pearl District, a
handmade bike exhibit at the Portland In-
ternational Airport and the North American
Handmade Bicycle Show. But when the city
organized classes to teach frame builders
the basics of bookkeeping, attendance was
so sparse that the program was canceled.
A
bout 120 of the 500 or 600 stu-
dents who go through the United
Bike Institute (UBI) of Ashland
each year study the art of frame building.
As the only school in the world with a pro-
gram dedicated to custom bike building, the
school cranks out a lively mix of graduates
eager to get their creations on the road.
One example is 32-year-old Natalie
Ramsland, who worked on and off as a
Portland bike messenger for about 10 years
before enrolling in a frame-building class at
UBI. Bringing her new skills back to Port-
land, she rented an inexpensive workspace
PHOTO BY DYLAN HOWLETT
and established Sweet Pea Bicycles. She and
her husband, Austin, took the cash gifts from
their wedding and bought welding tanks
and torches. He handled the marketing end
of the business, the blog and the website,
while she honed her craft. She started by
designing bikes for friends and family, im-
proving with practice and benefiting from
Portland mentors who taught her the fine
points of custom fitting and fabrication.
Ramsland honed in on the largely un-
tapped market for custom bikes for women,
studying a rider’s biomechanics and range
of motion and then designing a bike to fit
the individual. Orders grew steadily, and
then took off after Bicycling Magazine pro-
filed her as an accomplished woman bike
builder breaking into a field long dominat-
ed by males. Now her backlog of orders is
up to a year and a half. She is building cus-
tom bikes for customers from Boston and
California and thinking about expanding
into a larger workspace.
Her goal is not to crank out as many bikes
as possible, but to make the best. “We want
the Oregon bike to be like the Maine lobster
or the California avocado. We want to make
Portland the place to go if you want to buy
a custom bike.”
To a certain extent, that is already hap-
pening. So many independent frame build-
ers are migrating from the Ashland bike
school to the Portland bike scene that UBI
president Ron Sutphin is considering set-
ting up a satellite campus in Portland. He
has been working with the PDC to find a
good Portland location and was close to
pulling the trigger at press time.
Such a move would strengthen the con-
nection between the UBI and the Portland
bike scene. Sutphin also has high hopes
about improving cohesion and savviness
within the industry as a whole.
“Bicycles have been around for at least
100 years, but it is one of the most imma-
ture industries out there,” he says. “There
are no industry standards, no trade groups.
We are just way behind when it comes to
taking ourselves seriously enough to get to
the next level. One of the reasons is it has
been run by enthusiasts who have had a
hard time learning to be profitable and con-
sistent enough to actually employ people.”
Jerry Norquist agrees. Norquist is the ride
organizer for Cycle Oregon who has made
that annual ride legendary for its logistical
efficiency. He started his career working for
Trek in Wisconsin and worked his way up
to manager of bicycle brands before mov-
ing on to Specialized Bicycle Components
in California and then Cycle Oregon.
Norquist has been trying to build enthu-
siasm for his plan to redevelop the Memorial
Coliseum into the Portland Bike Box, with
headquarters for bicycle groups and busi-
nesses, frequent track and BMX races and
shared tools and resources for frame build-
ers. Norquist would like to see the industry
get to the next level. He acknowledges that
attracting a top-tier manufacturer such as
Trek or Cannondale to Oregon would be
a long shot. “They employ thousands of
people where they are, and they have social
obligations,” he says. “At the same time, the
next Trek is out there, and we have a good
opportunity to attract the next big thing,
with all that’s going on in Portland and in
Oregon.”
Portland already has attracted Chris King
Precision Components, a company legend-
ary for its well-designed, expensive parts.
Ever since the company moved from Cali-
fornia to Northwest Portland rumors have
circulated about its plans. The company has
grown to 75 employees and is hiring frame-
building experts, but has not announced
specific plans regarding its bike-building
future in Oregon.
Other medium-sized companies are also
prospering. The Bike Gallery has expanded
to six locations throughout Metro Portland.
In Eugene, the folding-bike experts at Bike
Friday and the tandem cycle specialists at
Co-Motion are both well positioned, and
while Burley Design LLC has downsized in
recent years, it saw demand for bike trailers
rise when gas prices spiked last summer.
While Cycle Oregon operates as a non-
profit rather than a business, its economic
reach is substantial, with $150,000 in an-
nual payments to the small towns that host
the rides, plus $100,000 in annual grants
BY THE NUMBERS
Oregon’s bike industry
1: Oregon’s rank among states, bike riders
per capita
100 billion: Decrease in miles driven by
Americans, 2007-2008
144%: Increase in bicycle use in Portland,
2000-2008
48: New bike businesses created in
Portland, 2006-2008
$90 million: Estimated value, Portland
bicycle industry
1,235,219 miles: Combined distance
logged, Bicycle Transportation
Association’s 2008 Bike Commute
Challenge
20%: Percentage of vehicles crossing the
Hawthorne Bridge that are bikes
270: Miles of bike paths, lanes and
boulevards in Portland
Sources: VeloNews, Alta Planning, BTA, Wall Street Journal,
Portland Office of Transportation
to build new sports facilities and gathering
places. “Then there’s all the money spent by
2,000 people tearing through Oregon on
bikes every year,” adds Nicholas. Economic
development and fun were the twin moti-
vators behind Cycle Oregon when Nicholas
wrote the newspaper column that spurred it
21 years ago. “We started with the idea that
50 people might show up,” Nicholas recalls.
Instead the ride drew more than 1,000 peo-
ple and has been a hit ever since.
A
similar show of enthusiasm has
propelled cyclo-cross from the
fringe to the main stage.
Brad Ross, who founded Cross Crusade
16 years ago, says it began as a side sport to
fill the gap between the summer bike rac-
ing season and the winter skiing season. The
sport evolved quickly into its own thing, with
specialized bikes and riders, and Portland
has been the epicenter from the beginning.
Participation is growing by 20% each year,
says Ross. The 2008 season featured eight
races and 10,000 participants, followed by
the season finale at Portland International
Raceway. Racers range from heavily spon-
sored elite specialists to C-category riders
looking to spin around in the mud and then
drink beer with their friends. “Our attitude
is all about inclusion and fun,” says Ross. “I
think that contributes to the bike culture as
a whole. The vibe from cyclo-cross has defi-
nitely rubbed off.”
The sport’s surge also has created a signif-
icant new source of income for bike shops.
“Cyclo-cross gives shops an excuse to stay
open for three months and make money
when they would have been sitting on their
thumbs in the winter,” Ross says.
It remains to be seen how well the discre-
tionary spending that fuels cyclo-cross will
hold up during a serious economic down-
turn. Another broader question involves
how prepared bike startups are for the com-
ing storm. Oregon’s bicycle industry is so
diversified that it may hold a stronger posi-
tion than other sectors. But to call bicycles
recession-proof would be a stretch.
“It’s a scary deal for everyone,” says Mi-
chael Morrow, a former creative director
at Nike who founded Nutcase Helmets in
2005. Nutcase has sold 20,000 bike hel-
mets in Denmark alone over the past 15
months, at 68 euro a pop. Morrow hopes
to sell 100,000 more next year globally, but
he’s keeping his forecast conservative due to
the financial crisis, hoping that bike helmets
aren’t something people will stop buying.
Other bike businesses are hoping the
same holds true for their products, whether
they are the stylish bike bags of Portland-
based Queen Bee Creations, the functional
bike racks of Eugene-based CETMA or the
custom frames of Grants Pass-based Keith
Anderson Cycles. It remains to be seen how
many niches the bike industry can support,
but for now the opportunities outweigh the
risks, especially in comparison to the econ-
omy as a whole. And while the ongoing col-
lapse of the nation’s auto industry is deliver-
ing a painful blow to the U.S. economy, it’s
not hurting the outlook for Oregon’s bicycle
industrial complex.
JANUARY 2009 • Oregon Business • 41