SPEAKER: Please join me in
a massive round of applause,
welcoming Will Butler-Adams.
[APPLAUSE]
WILL BUTLER-ADAMS: Thank
you very much, everybody.
You don't need to cheer
me unless you want to.
So I'm going to tell you a
little bit about our business.
Thank you very much for turning
up and sort of turning down
our very short-lived summer.
So that's the bike
that I've taken out
of our reception, which has
got a dodgy light on it,
which doesn't seem
to want to turn off.
This is one that we've
made which we are-- we just
need to get some of you guys
away from your computers
and obsessed with
your little tablets
and on a fucking bicycle.
So in the interests of the
importance of branding,
we made one to show you.
But basically we make a bike
that makes life in cities
a little bit more enjoyable.
It doesn't mean that your
children are well behaved.
It doesn't mean that your
boyfriend or girlfriend is fit.
It doesn't mean that you
look like you're worth it
on an advertising campaign.
None of that.
It just makes life
a little bit better.
We've been making them
in London since 1980,
and I'm going to tell you a
little bit about the journey
that the company's been on
from when Andrew, the inventor,
started through to where we
are today and some of the plans
we have to try and grow
our little business.
So it started because
of Andrew, who's
looking pretty knackered
in that photograph.
And that was in about
1982, I suspect.
He started-- he
went to Cambridge,
studied engineering, and was
far too intelligent to work
for anybody else.
If you've met
hyperintelligent people,
they find it extremely difficult
to work for anyone else,
because they know
they're just so much
cleverer than the person they're
supposed to be working for.
So he was never going to
work for somebody else.
He was always going
to work for himself.
That started off with an
entrepreneurial cutting-edge
flower business, which he
got his friends to invest on
in early sort of
crowd-source funding.
They shoved their money
in, he got a little van,
and he did these sort
of hanging baskets
in Burlington Arcade and
other places around London.
And he had winch mechanisms
and gear mechanisms
and automated watering systems.
And within two years,
the business went bust.
So his first adventure into
the entrepreneurial world
of "I'm going to make it"
went a bit pear shaped.
Things carried on, and he
did a bit of contract work
but didn't really find his feet.
And his dad at this stage
is starting to worry,
because his friends
are off on their--
this is in the '70s-- off
on their graduate trainee
programs, and they've all
become captains of industry.
And he's still fiddling
around wondering
what he's going to do.
And his dad had been in
touch with a business
called Bickerton.
Ever heard of Bickerton?
Very, very cool bike.
And the strap line
was Bag a Bickerton.
It was a folding bike.
The son I know quite well today.
Really cool design but rode
like of blancmange, made out
of aluminum with
wiggly handlebars
and rode a bit weird.
Anyway, Andrew's dad,
who was an accountant,
knew that they were
looking for some support so
got-- well, shoved-- encouraged
Andrew to go along and meet
them, because he
thought he might have
a role with them, which he did.
He went there, and
then he came back,
and his dad's like,
so how did it go?
Maybe a job?
Maybe a 9 to 5 normal job.
Was it exciting?
And Andrew's like, yes.
This was awesome.
It was so interesting, but
they've got it all wrong.
And I've got a much better idea.
And his dad's like, oh, my god.
Here we go again.
Another bloody disaster.
So Andrew set off, coming up
with his design for a better
folding bike.
And he at the time rented a flat
on the Cromwell Road, which he
rented when he left Cambridge.
He still rents at 67 the same
flat just on the Cromwell Road,
and he designed
his bike, and he's
pretty modest,
hyperintelligent, and decided
to call it the Brompton, because
his flat overlooks the Brompton
Oratory, which is a Catholic
church just damp from the V&A.
And he had a brilliant idea,
and the idea was principally
that the bike folded
around the rear wheel,
and you encapsulated all the
grubby bits in the middle.
That was the basic idea.
And he never wanted to make it.
He wanted somebody
else to make it.
He just came up with
a brilliant idea.
He knew he was brilliant.
He knew it was brilliant.
It was all brilliant,
except that nobody else
thought it was brilliant.
So when he wrote
letters to Raleigh,
who were making a million
bikes a year at the time,
they turned him down.
Everyone else he went
to, they turned him down.
And after five years of
turn-downs for someone else
to make it, he thought he
better make it himself,
which is what he's doing
here with a guy called Paddy.
And in two years, they made 400
bikes, and they sold them all.
And after two years,
Andrew got around
to worrying about the
actual P&L and discovered
he made no money, because
his tooling was-- well,
it didn't exist.
He was fiddling around,
filing bits of plastic,
but the bikes worked, the
customers liked the bikes,
and he knew if he could
just get a bit of money
to pay for tooling so he could
buy an injection mold tool
rather than having to file
and mill plastic, then he
could sell it for the same
price and make a profit.
He needed 40 grand in
1982, which isn't actually
a huge amount of money.
So he went to Barclays Bank.
He went to NatWest Bank.
He went to all the VCs.
He went to the government help
you get your business going.
All of them turned him down.
And finally, six years after
he'd stopped production in '82,
it was one of his customers that
was so frustrated they couldn't
buy more of these bikes that
he stepped in-- a chap called
Julian Vereker-- and if
you're into your music,
there's a fantastic British
maker of audio called Naim
Audio, and Julian founded Naim.
And he put the money in
and got Andrew going.
So it took Andrew 13
years to get this business
off the ground.
And to be perfectly
honest, you have
to be slightly barking to
be so obsessed by a product
that for 13 years, when
everybody else tells you
it's not going to work,
you still go at it.
And that's not 13
years, to the point
where he's now a great success.
That's 13 years just to get
the flipping thing started.
And there were plenty
of years after that
where it was nip and tuck.
We make the bike in London,
and make means make.
Often people think make
means remove from box
with made in China, take out
of box, turn little screw,
stick on Union Jack, made in UK.
So we take metal,
we bend it, form it,
crop it, braze it,
make the frame parts,
and make it in London.
Andrew is extraordinarily
determined,
and the whole business is
based upon the product.
In the early days,
he found customers
a complete pain in the ass.
He was obsessed with the bike.
There were things that
were wrong with it,
and he had all these
annoying customers trying
to get more of his bikes.
And he hadn't finished
perfecting the bike.
So they were just distracting
him and annoying him,
and they bugged him.
And then he had
annoying customers
from Holland wanting to
fiddle around with his bike
and he was going to have to
spend more time translating
a brochure.
But that was a waste of time,
because he was getting trouble
with his indicator chain.
He was perfecting
his chain tensioner.
And the business only
got off the ground,
because it was one
of his customers
who was so frustrated that they
sorted him out with the dosh.
So not listening
to what people say
is one thing we
believe strongly in.
Two, all you need to really
care about is your customer,
and that is so overused
and so rarely implemented.
I started by saying
this will not
mean you have a fit boyfriend
or girlfriend nor will
it mean you look
like some poster that
isn't even real, because most
of what we see is bullshit.
It's over-rated, over-told,
over-promised untruths.
And yet we all march around
buying into this stuff
and then discover that half the
stuff we bought is total trash.
We wonder why we even bought it.
If we do buy it, we
wonder was it worth it?
Did it deliver what it said
it was going to deliver?
So it's simple.
We just deliver a
bike that makes life
just a little bit better.
And if we can deliver
that and deliver it
not for the first
six months when
you've just had the elixir of
spending a grand on a bicycle
and you flipping love
it, if after six years
you genuinely think
it's added some value,
then we've achieved something,
because few products do that.
Again, the bike
hasn't really changed.
The design hasn't
really changed,
but the bike is
changing all the time.
The bike industry is funny.
If you take-- in fact, we'll
come on to that in a bit,
but I'll save that for later.
But the design hasn't
changed, but the bike's
changing all the time.
So I reckon I've
been there 14 years,
with the exception of one
part, which has dogged us,
and no one's wanted it.
It's been like a hot potato,
which is finally being fixed.
Pretty much every part has
probably changed two or three
times over that period.
You can't see it,
but they've changed.
And also our jigs
and fixtures have
changed, because
in the early days,
we were using feeler
gauges, verniers, now we're
using CMM machines.
So our glasses have got
rather more binocular,
and we can see more.
We couldn't see before.
And also FEA didn't exist.
We couldn't afford
the computers.
Now we can see it.
So all the bicycle
is doing is trying
to get as close to nature.
That's what physics is.
Physics is just mother nature.
And you try and get
as close as you can
and make it as light as
possible, as stiff as possible,
as compact as possible,
and occasionally it
tells you zzzt--
it can't do that.
But the more you understand
about nature and FEA,
finite element analysis,
and some of the tools
that we have today that
we didn't have before,
have allowed us to get closer.
Now it has allowed
us, funnily enough,
to make the bike
stronger, more efficient.
We haven't made it that
much lighter in the last two
or three years.
In the last 10 years, we
made it a lot lighter,
but more recently we're
finding our customers are
more like you guys and
actually you're a real pain.
We like customers who are--
we don't mind customers
who are quite heavy but
don't do many miles,
because you can get
that in America.
You get someone who's quite
large and they look at you
and go, you know, is it
going to be all right?
I'm like, it's fine.
No trouble at all.
As you get thinner,
you will do more.
It's a sort of
self-regulating prophecy.
But the problem is
when you find a sort
of 28-year-old
rugger-bugger who rocks up,
and he weighs 17 stone
and does 10 miles each way
and bounces off every
curb, and those guys
are an absolute nightmare,
because they try and break
our bike.
And we've become more
trendy, and so suddenly we've
had to make the whole
thing quite a lot stronger.
But you don't know that, but
we've been worrying about that
quite a bit.
So I'm slightly
obsessed with this thing
about how you communicate
who you are, what you are.
And my perception
is, I mean, you
can tell I don't care
too much about fashion.
That's not where I'm
spending my time.
But Andrew doesn't realize the
extent to which he is embedded
in our business, but he is.
And he thinks we're all useless
and everything we're doing
is crap, because
he's a perfectionist,
and he knows better
than everyone else,
and we're all pretty useless.
But he was obsessed
by the product
and allowed the product
to do the talking.
And the product, a
brand, is not a logo.
It's not something you
pay an agency for that
spend millions of pounds
fiddling around and coming up
with.
A brand isn't even
what you sell.
A brand is an experience that
you have over a period of time.
It is something that
is built up over trust
and over genuine
value that you add.
So we have been lucky.
That's all we've cared about.
We don't spend our
money on marketing.
I don't think we're one of
the biggest Google customers
for AdWords or other words or
other bits or other things,
and I'm lost already, because
if I spent-- like a Gillette
razor, you're not buying
a flipping Gillette razor.
The razor cost is this much.
Most of it's going
on crap-- some tennis
player or some other thing.
You're not getting
what you paid for.
You're being ripped off.
I don't mind spending
some of my profit
on R&D, because I feel that
my customers will think, well,
you're making it better
for the next generation.
But to spend it
on naff billboards
and sort of overrated
stuff is a bit not my bag.
But we have been
lucky, and you are
in some respects part of that.
Andrew's philosophy was
always word of mouth.
And the thing that's luck is
that we've hit word of mouth
at a time where word
of mouth has changed,
has moved from word of
mouth to being global blogs.
The word of mouth has been
augmented by the internet.
And honesty and integrity
is what people look for,
and the internet has given that.
And your reach, through
that word of mouth,
has become global.
And so we're very
lucky at a time when
we were relying on
physical word of mouth
that at the same time--
and to be fair, it was just
when I happened to
arrive, so it looks
like I've done an amazing
job, but actually I've
just turned up at
the right time--
and that has allowed
that word of mouth
to become more widespread.
And as a result, we've
become quite international.
We now export 80% of our bikes.
We're making about between
45,000 and 50,000 bikes a year.
We've made about half a
million bikes to date.
We're exporting about 80% to
44 countries around the world.
But we haven't gone
out there and started
wandering around
waving our flag,
saying who wants
to sell our bike?
People have come to us and said
I've got a friend in London,
was in London for two years,
bought one of these cool bikes.
He's taking it back
to wherever he's gone,
showing it to his friends.
They got a few more.
Can I become the distributor?
And that's how we've started
to sell and increasingly
sell abroad.
And in the early
days, I remember
I went to Taiwan,
which is ironic really,
because most of the bikes
that people buy in the UK
are made in Taiwan.
It's quite nice to sell
them the other way.
But I was in Taiwan,
and I was with a guy,
sadly, Sturmey
Archer, who make hubs.
They got screwed over
in the UK, and then they
were basically bought
out of receivership
and went to Taiwan.
And we helped that business
come back to life in Taiwan.
So our hubs come from Taiwan.
So I was with one of
our suppliers in Taiwan
and looking for a distributor.
There's this one guy.
He was an architecture student,
obsessed with bikes, never done
selling, never done
distribution, had a cool shop.
He was a one-man band.
So I met him.
He loved the Brompton, wanted
to become a distributor,
thought it was cool.
Then we went to dinner
with this other guy,
who was some massive
great distributor,
whole load of people.
We all got absolutely lashed
on whisky, which would
seem to be par for the course.
He showed us around
his massive warehouse.
We were all going
to be millionaires.
And we finished, and I was
sitting down with Pearce,
and I said now,
Pearce, which one
do you think we're going to
go with as a distributor?
He said, well, it's obvious.
You've got this big
massive company.
Yeah, but they
don't give a shit.
They don't care about us.
They just see us
as the latest fad.
So instead we went
with Thomas, who
didn't know the first
thing about anything,
to do a distribution but cared
deeply about our product.
Thomas has grown our
distribution in Taiwan.
We've now set up a
partnership with him in China.
He's a complete legend.
He's now had three children.
He's a bit of a panicker, but
he cares about our business.
And in the long run, that
is what your brand is about.
It's not just about--
it's everything.
It's just honesty.
So anyway, so the
business has got bigger.
And we're making a bit
more money-- I mean,
compared to you
guys, really tiddly.
But we have a simple
aim, which is just
to make living in cities
a little bit better.
That's what we want to do.
There are about 90,000
Bromptons in London.
And we have had an
effect on London.
We have changed London,
only a little bit,
but it has had a real
effect on the city.
And that's something
to be very proud of.
If we're going to do
what we need to do,
and we've got all
these ideas, and we
don't want to go to a bank,
and we don't want to go to VCs.
We want to self-fund it, then
we need to make a profit.
And that's nothing to
be embarrassed about.
We need to make a profit
to invest in new ideas
and enable to
business to be better.
And so it's growing,
getting there,
and I'll talk a little
bit later about where
we are at the moment, because
we were doing brilliantly,
and we were sitting
back and making money,
and then we just kicked all
that into the long grass.
But we'll come onto that.
I was going to say
our prime minister,
but I haven't got to
raise him there yet,
so we'll have to
just do this bloke.
It's really weird.
People get quite
uppity about politics.
But I'm quite into
politics, because I've
met quite a few politicians.
Don't care who they are.
Just care who's in
power, who makes
change, who affects the
lives that we live in.
And the problem
with politicians is,
I knew who they were
when I was at university.
And basically they
were pretty boring.
They were the debating society.
I was getting lashed or
doing some engineering.
There they were.
They had it written all over
them when I was at university.
They've not done work.
They've been
perfecting their sort
of not answering the
question and doing
other funny political stuff.
They're all professional
politicians.
The intent is solid.
I haven't met a politician
who doesn't care,
but their knowledge, their
experience, their understanding
of the real world
that we are in is
pretty much piddly and small.
So therefore we have
to engage with them,
because they don't have a clue.
We have to tell them what's
what in our own little industry,
because if we don't tell
them, they won't know.
And really, in my industry,
the problem is infrastructure.
The thing works.
We only have to look in
Copenhagen or Amsterdam
and those things
haven't happened.
People talk about culture.
Gosh, Amsterdam was no
different to London in 1972.
It's been a political
change that has enabled
it to become a cycling city.
So I always think you
shouldn't be afraid.
You should get stuck in and
accept that they don't know.
And as long as you
know they don't know,
and they know they don't know,
then you can make a difference.
The other thing.
I'm going to be slightly
contentious here.
So at the moment
in the business,
things are tough
in our business.
We just moved factory.
Now, what happened was the
factory was this amazing thing.
We just moved
factories, all amazing.
We worked our socks off.
We ran out of money
in moving factory
so we haven't got
anything left so we
can't make it funky and
nice, and it's pretty tough.
And actually people
are pretty down,
but that's the reality
of where we are.
People go up and get down.
You can't make people
happy by telling them
they must be happy.
You make people happy
because they are happy.
They are interested,
engaged, and so you
have good times and bad times.
And if there are bad times,
don't pretend it's not bad.
It is bad, and you work
together and get it better.
But actually things
are exciting,
but it's tough at the moment.
But that's of our own making.
But, again, it's
quit the bullshit.
There's so much fun to be had.
This is an example of
us having a bit of fun,
and I'll touch on it afterwards.
So can I ask in this room how
many of you are world athletes?
Have any of you competed in the
Brompton World Championships?
Yes.
I knew you looked
like an athlete.
That is a world athlete in
your presence, everybody.
We'll just have to give him
a round of applause, yeah.
Well done.
I am actually one too.
So that is a laugh.
It was started in 2004 with
our Spanish distributor,
because he got hacked off with
our potential customers going,
yeah but, I mean, it's
got funny little wheels.
It's not going to go very fast.
He's like, oh, god, here we go.
So maybe I'll race it.
So he started racing, had 60
people racing, then 140 people
racing.
Then it got too big for
him, so we took it over.
Now we have 16 heats
around the world.
The male and female winners from
those heats around the world
are flown to London to race
in the World Championships.
It is on the mall.
There are 750 elite athletes.
It is a Le Mans start.
You're not allowed
to wear Lycra,
and you have to wear
a jacket and tie.
And it's a bloody good laugh.
And you know what?
That entire global event
pretty much costs us nothing.
No cost.
It's just having fun.
Our customers pay.
No, we don't rip them off.
We don't want to make any money.
In fact, we make a small
loss, but very small.
And we have a bloody good laugh.
Our staff have a good laugh.
Our customers have a good laugh.
They nearly clog up
your flipping system,
there's so much tweeting and
recording and thingamajigging,
and it's all going vvvvv.
And that's fine
for me, because I
don't spend too much money on
it, and it's bloody good fun.
It's good fun for our
customers, it raises awareness,
it makes you just laugh.
And there's not
enough time for that.
And you can pretend
you're laughing,
but you're not laughing,
and so it's got to be real.
And I think if it just feels
not real, I mean it's so corny
but it isn't, and I
think that's the question
you need to ask yourself
when you're doing stuff.
Is it corny?
Is it a little bit pretendy?
Is it made up, then it
probably is, in which case
I'd give it a wide berth.
So what are we looking at in
this little world of ours?
And I know this is what
people in California in Google
are spending millions and
millions of pounds on,
we're spending thousands
and thousands of pounds on.
But basically it's interesting.
We're becoming urbanites.
We're becoming urban.
There's net migration to
cities all over the world,
and it's happening in
the East, in the West,
and wherever you
like to look at it.
Then you think, OK, so
we're moving into cities.
So what's happening in cities?
We're all basically
not that happy.
So in cities, we
stuff in these things
called buses and these things
called taxis, so we belch out
the worst air pollution.
So we stuff everybody
in the place
where the air is the crappiest.
So we're all sucking
that up for starters.
So that makes us
not that healthy.
Then what we do is, if you're
not wandering along Oxford
Street, munching your way
through the exhaust fumes,
you're normally getting out
of bed half asleep and slight
[MUMBLE], you pot along,
and you get your coffee.
You're still half asleep,
then you potter out the door,
and then you poot along.
And then you go to a
thing called a Tube.
This is something you
actually pay for, amazingly.
Then you cram into this thing,
you bounce across other people.
You don't actually do
it, but sort of say
fuck off because they're
half asleep as well,
and they're bouncing along, and
they're feeling a bit ropey.
Then you go down this
hole in the ground,
and you're bouncing along,
and all these other people
are all looking pretty grumpy.
And then you sort of stand
in a queue all half asleep
and things whoosh past you, and
you shuffle along a bit closer.
Another one whooshes past,
and then eventually someone
pushes you in.
And if you're not six
foot four like me,
you're probably up somebody's
armpit or somebody's
splattering on you.
They're all looking
grumpy and no one's
speaking to each other.
Then you jingle along
down this funny tube
thing under the ground, then
you do the same thing up,
and then you sit in front
of a computer all day.
And then you do that every day.
Just that's what they do,
thousands and thousands
and thousands of them.
There they are, in
and out every day.
And they go mad.
We have mental health problems
that are going stratospheric,
and it's not just
the UK, it's global.
And guess what?
We have obesity problems.
Obesity is up 60%.
So diabetes is up 60%
in the last 10 years.
It's cost the UK
economy about 9 billion.
But then the average distance
in cities to work is four miles.
So it's like, hold on.
What are we missing here?
We have a city with
cool architecture,
with parks, with
canals, with a river,
and we're all going down a
little hole in the ground
to squish through a tube.
And most people are doing
about four to five Tube stops.
In many cases,
you could walk it.
Forget cycling.
So something has to change.
And it's not driven by some
toe-sandaled, you know,
hardcore-- it's
just urban living
and what can society afford?
And we need to change
how we live in cities.
And I'm not pretending a
bicycle is the solver of all
of our problems.
But it is definitely part of it.
And we know it's part of it,
because we look in cities where
cycling isn't at 4%,
which is where London is
as a city-- it's at 25%, 35%.
All the measures
demonstrate the value.
So the next 25 years are
going to be interesting.
So we're trying to innovate
and, interestingly, innovation
is getting cheaper.
When I was at uni,
Ford had a tier system.
Unless you were some
massive conglomerate,
you couldn't afford a computer.
Took up the most of this room.
The idea that anyone
had a 3D printer
when I started only 14 years
ago, which we had bits of ply,
and we filed them all down,
and then when we made tools.
We had to basically make
it up, all done on 2D.
Now we can design something
in 3D, print it out,
and we can make it 2.5%
bigger because that's
the shrinkage of the metal, 2.5%
for the tool, which is made out
of aluminum, and 3.5% for
the white-hot malleable iron.
So we do 2 and 1/2
times 3 and 1/2
and it's perfect
when it comes out.
Just everything
is getting easier.
Then you do FEA, so you don't
have to do so many prototypes.
What that means is innovation
is being disrupted.
If you weren't massive,
you couldn't compete,
and that's changing.
Whether we're big
enough, I don't know,
but we're going to give it a go.
We spent 10 years
on this project.
It's a flipping joke.
Trying to make an electric bike,
and we spent two years just
farting around and
just trying to learn.
Then we decided we thought
we knew what we were doing,
and we went to a
company in Taiwan
who were a motor company.
We tried to go with
some guys in Wales,
and they were just too greedy.
Anyway, we went with
the guys in Taiwan,
and we spent nearly
four years there.
We spent three years and
doing quite a lot of work,
and we made some progress,
but we hit a dead end.
We had a technical problem
we just could not solve,
and it was to do with
the epicyclic gear train.
And we just couldn't solve
it, and it was beyond them,
and it was beyond us.
And it was like bugger,
because with an electric bike,
there are lots of
them as it happens.
The market in 10 years has
gone from pretty much nothing
to 1.2 billion in Germany.
So that's quite a big market.
The market is expected
to be 24 billion globally
by 2025, E-bikes.
So you can kiss goodbye
to a normal bicycle.
So basically this is old tack
what I'm showing you here.
But that's fine.
I'll still sell it to you.
But we ended up
hitting a brick wall.
So then I thought, oh, crumbs.
We've got it.
We need somebody who's
a bit more techie,
and we need somebody
who's closer.
So I ran out one
of our customers,
because that's what we
always rely on when we're
in trouble is our customers.
A chap called Patrick Head.
He ran Williams for 25 years,
the F1 fast car people,
and I asked him for
advice to who to go to.
And then he said,
well, we have been
putting these electric motors
in our cars for about six years.
It's called a KERS system, a
kinetic energy recovery system.
It's got a light efficient
dynamo that turns into a motor,
and all has a battery pack.
And we've also developed
Williams Advanced Engineering,
which is like a
spin off vehicle.
Maybe we could help you.
I was thinking, you're
far too expensive.
Anyway, it was jolly expensive.
We got a bit of help from
the Technology Strategy
Board, which is now
Innovate UK, and we
spent the last three years
developing an electric drive.
And we're quite close to
having something pretty cool.
And we cracked the
problem with the hub gear,
and it's a
combination of design.
So we've got very clever
injection-molded design,
which enables us to get
four-tooth engagement rather
than three.
So we're putting the
load over a larger area.
And we're using a material which
is a pretty weird material.
The design of the gears comes
from one company in America,
for which we have an
exclusivity agreement,
and the material is
only made in the UK.
We put the two together, and
we've solved that problem,
and it came out of
the UAV industry,
because that's where
they were using it.
It's not being used in our
electric drive industry.
So we're hoping
to have something.
And, again, you start thinking
about materials science
and what's happening
with materials science,
and it's going to interesting.
And actually, I'm
rushing along and jumping
about, but if you think an
airplane, 1916 airplane.
Got it?
It's made out of
cotton and wood.
2016 airplane, just
unbelievable killing machine.
Mach 2.5 and all
sorts of whiz gizmos.
Massive change.
So then you go 1916 bicycle,
two wheels, double A-frame.
2016 bicycle, plenty of
bullshit, lots of marketing,
two wheels, double A-frame.
Hard tail, soft tail,
fat tire, thin tire,
but basically it hasn't changed.
I mean, it's gone nowhere.
But that is about to
change, because now suddenly
we're putting technology
into a bicycle.
That means the average
sale price in Germany
is 2,500 euros.
That delivers more
revenue for the industry,
more opportunity to
develop material science.
I think bikes are going
to change, particularly
if you think of them from
an urban perspective.
Do you rent this building?
You do.
You rent it.
How many staff in the building?
AUDIENCE: 1,000.
WILL BUTLER-ADAMS: 1,000.
AUDIENCE: Yeah.
WILL BUTLER-ADAMS:
How many cycle?
200 with bike passes.
AUDIENCE: Yeah, probably.
WILL BUTLER-ADAMS:
That's better.
That's better.
You're back pedaling now.
OK, good.
So the problem is,
cyclists cycling in cities
is selling to cyclists.
So they're selling
to people who cycle.
And in the male brigade, that
involves wearing funny clothes
and shaving your legs
and, in some cases,
forgetting to get the
six-pack before you
put the funny clothes on, which
makes the whole thing less
delightful on the eye.
But then if you look at
countries where people cycle,
they're not cyclists.
They're just normal people.
They just get on
a bike and pedal.
They don't have
to do weird stuff.
So we are trying to
make cycling normal.
And lots of people,
nearly everybody,
learned to ride a bike.
And that sense of
freedom and simplicity
you get with riding a
bike is so delightful.
It never leaves you.
So we created basically
a bike dispenser.
That's our Brompton Dock.
We have 50 of those in
24 cities across the UK.
Use a smartphone, you walk
up, you type in a code,
the door pips open out,
out comes a Brompton
and off you go.
Average hire is 4 and 1/2 days.
So you don't take it back.
You can take it anywhere.
You can take it to France,
you can take it over
to US for a week.
It's 2 pounds 50 a day.
And you can drop it
back whenever you like.
That should be
outside your building,
and it should have
these inside it
so your staff can go
wherever they like.
It's a no-flipping-brainer.
And it means that somebody who
is a cyclist has a bicycle,
and they're going somewhere.
They'll just say, we'll
go take one of the bikes.
Let's go.
Hop on a bike.
Whiz off, fold it up,
no trouble at all.
Someone's at the
weekend again, they're
going with their children
or they're going on holiday.
Take two bikes, go with
your children and have fun.
No-brainer.
Cycling needs a catalyst
to get more people cycling.
You can't just rely on people.
You've got to give them a
really little barrier to entry
and let them try it.
Once you try it, you love
it, but you haven't tried it
for so long because it
suddenly became uncool,
and you've got to drive
a car because then you've
got loads of money and you're
going to get the chicks and all
that stuff.
But actually, that's just nuts,
and the bike is super cool,
but you've just
forgotten about it.
It's quite innovative.
In businesses, so you've
got 1,000 people here.
You've got other
people in other office.
People talk about businesses
as being hundreds of thousands
of people.
Businesses aren't hundreds
of thousands of people,
they're just groups of
maybe 80 to 100 people.
They're like lots of
little businesses.
You have a culture
within a department.
You have a culture within
different part of the business.
It's not a complete business.
And at Brompton,
we've had-- well, I
used to work for ICI and
DuPont and these big companies,
and I was involved in
project management.
So we did project
management, and we used
to sort of do these projects.
And we had to have a
three-year payback.
So guess what?
We wrote this great
business plan.
We had to have a three-year
payback, a three-year payback,
two and 1/2 year payback.
Then we had a little piece of
paper that had to go around,
and everyone had to sign it.
And that's basically ass
covering, that piece of paper.
And as long as enough
people have signed it,
everyone saw that somebody
else has signed it,
and then it's all fine, because
no one's taking responsibility,
because they've all signed it.
So it's fine.
And it says less than
three-year payback.
So that's all fine.
It's all going to be great.
But the problem is, if
you have enough experience
of these types of projects,
they never add up,
because they're
based on something
called an assumption that's
deep in the guts of a project.
And the assumption is basically
just a sort of educated guess,
and it spins out
certain effects.
And, of course, I
loved my projects,
and I wasn't going to have
somebody else get the money
that I wanted for my project so
of course my assumptions were
maybe a little bit on
the optimistic side.
That's the nature of the beast.
So we have a part of
our business, which
is where we do far less
research and development,
far less endless
justification for investment,
and we look at the downside.
So in your business, rather
than always assuming the upside,
give yourself more
flexibility, less bureaucracy,
and say to yourself at the
beginning of the year-- so
in our case, we don't
have it at the moment,
because we're so full of
projects we've got to deliver,
there is no fuck-it fund.
But for a long time,
we did have it.
And basically, we had a fund
that's basically fuck it.
It's the fuck-it fund.
Started at 5 grand, and
we had a 5-grand pot,
and we decided to just give
it a go, try something.
And that justification
was not the upside.
That justification
is the downside.
So in a project, if
everything goes wrong,
what are you in for?
That is a much more exact
amount in terms of reputation,
in terms of cost.
You can measure that.
And if you can measure that and
you know you can afford that,
then just do it.
Don't go through endless
analysis and tons
of market research.
It costs you a fortune.
Give it a try and find out.
Now, if you try it, and
it's a complete disaster,
you stick a sign up and say
do not go down this alley,
because it does not work.
So you've got
something out of it.
If you try it, and you think,
hey, that was pretty cool.
Maybe there's more to do here.
Then you do more research,
and you justify your research,
and you understand and you
go after that business.
The business, the
electric bike, the E-bike.
Our first store.
We're all sodded,
bugger it, you know.
Who cares?
Just do it.
But do it with a
controlled downside.
And I think if you take
a certain amount of funds
and write them off
at the beginning
of the year-- write
them off-- there is
no return on
investment required.
They're written off, but
you can play with them,
and you give them to
different departments,
it will allow more innovation.
Retail.
Like I said earlier,
we've gone into retail,
not because we're
interested in retailers,
because our retailers don't
speak to our customers.
They speak to blokey techie
weird people with shops
full of people with their
jeans halfway around their bum
and talking about the
2-speed-- 16-speed Shimano
dung-dung-dung.
We don't want that.
We just want a nice
color, get on it, works.
Like it.
And so we've created stores.
We've now got 11 stores.
We started with one store in
Kobe in the South of Japan.
We've now got them in Amsterdam,
Shanghai, Beijing, Milan,
all over the shop, and growing.
And it started by just doing it.
We started with three
stores, just give it a go.
Now we've got brand guidelines
and all the other stuff.
That came later.
I'm wittering on.
I've been told I've
got two minutes.
I've now got about 45 seconds.
In summary, businesses,
we are growing.
We're still little.
We're 32 million.
We've grown while
I've been there
from 24 staff to 240 staff.
We've gone through various
transitions over that time.
We've had to introduce
processes and procedures
because you can't rely
on speaking to people.
But my job is to disrupt.
My job is to agitate and
to not be too serious
and to not start worrying too
much about what might or might
not happen and to
continue to be different.
And I've been there 14 years.
In theory, I should be stale.
I'm frustrated we
haven't even got
started with the
amount of stuff we
should be doing
with this business.
And I think that-- and remain--
my ambition for the business,
and I hope similarly
for our staff is not
how much dosh I can have.
When you meet an
80-year-old, they
don't give a stuff how
much dosh they've got,
and all that crap
they've accumulated
over their life,
most of it's rubbish.
What they care about
is what they've
delivered to society, what their
legacy is, what effect they've
had on this little
planet of ours.
And in this business,
in every business,
that is the opportunity.
And if you can deliver
on that, then you've
delivered something worthwhile.
Thank you.
[APPLAUSE]
AUDIENCE: Hello.
First of all, I've bought
one of these about year ago
and I absolutely adore it.
So thank you very much.
Second thing is, you I believe
let your patents lapse.
WILL BUTLER-ADAMS: Yes.
Well, we didn't let it
lapse, because a patent only
lasts 21 years.
AUDIENCE: OK.
But you didn't renew the--
could you talk a little bit more
about that and the kind
of rationale behind it.
WILL BUTLER-ADAMS: IP.
So in our world-- bike
world-- most people
just assemble bikes.
Actually, most people
don't even assemble them,
but those that do make
them assemble them.
Assembling is easy.
The value in a bike-- anyway,
in my opinion-- is the frame.
That's the clever bit.
And the way we make
our frame is weird.
It's anal.
It has a tolerance of about
plus or minus 0.2 of a mil
versus a normal bike
plus or minus 2 mil.
We use CMM machines.
We braze it.
We do weird stuff,
because it demands it,
because it's already a
compromise, because it folds.
So everything else must
not be a compromise.
There is far more IP in
the manufacturing process
than there is in the product.
So we have a 200-grand
auto-braze machine.
It's got thermographic cameras.
It's PRC controlled.
Its hydraulic system is
designed and made in house.
We've got oodles of weird stuff.
So if we got someone
else to make it,
we'd have to teach
them how to make
the machines to make the bike.
And we have to teach them how
to maintain the machines and all
the proactive stuff.
And therefore, that's fine.
They could do it.
Anyone can do it.
It's not that difficult.
We'd have to teach them.
It would take three
or four years.
So if that happened and we went
to the most sensible place,
which would be
Taichung in Taiwan,
where most of the good-quality
bikes in the world are made,
someone could work
for us for five years,
understand our
process, then they
could work for a competitor
and not even move house
or take their children
out of school.
That just means that
your knowledge just
seeps out of the business
to the competition.
We are the only bonkers
people making bikes in London.
So therefore our
knowledge is quite safe
unless our staff decide they
want to emigrate to Asia.
So actually being
manufactured in London
wasn't a conscious
decision, but it
has been an important
part in protecting
our intellectual property.
People think bikes are simple.
They are to a point because,
remember, someone rides this.
You will ride your bike
for the next 15 years
every day, potentially.
What happens if it breaks?
You're next to a bus.
That is not a funny outcome.
So the implications of
getting the quality right
and having a product that's
robust is really important.
And so you can make
something look like this but,
personally, I would be
wary about jumping on it.
It might be fine for
the first six months,
but you're whizzing down a
hill and the thing snaps,
it's an unfunny outcome.
SPEAKER: Nick.
AUDIENCE: Hi.
I had my first Brompton
for about 10 years
and I've had my second
one for about another two.
When I was replacing
it, I seriously
considered-- I
looked at the cost,
and it was about 1,000 pounds.
It lasted me about 10 years.
You can get a cheap bike
for about 100 pounds.
So I was looking at,
hmm, I could get myself
a new cheap bike every year.
Does that sort of
economics worry you,
and how can you deal with that?
WILL BUTLER-ADAMS: So just
to put it into context,
the material cost, which is
a commodity, of this bike
is about three times the
cost of your 100-pound bike.
AUDIENCE: [INAUDIBLE].
WILL BUTLER-ADAMS:
Yeah, if you bought one.
It is so shit, you
shouldn't get on it.
If you were saying a
400 or 500-pound bike,
that's fair enough.
But if it's a
100-pound bike, it's
a flipping death trap,
because the stuff that they've
made it with is rubbish.
But there is absolutely
an argument to say,
and if we could make
something-- we're not greedy.
We make about 40% gross margin.
We make about 10% net profit.
As it happens, our net
profit at the moment
has gone south, because we're
investing in the future.
But we're not all wandering
around in Ferraris.
We're riding little bicycles.
But I think it's-- the labor
cost in our bike is currently
about 25% is the labor cost, out
of the total cost of the bike--
direct cost.
People would think it's
much more because you're
in London, labor cost.
We reckon we can get
that down to about 15%.
Now, you may be able to get
that down from 15% to 4%
if you went to Taiwan or China.
But then what's the value
proposition between it being
15 down to 4 and the
value of protecting it
and the value of having our
profits to be able to invest
in more innovation?
And there is value.
We've got somebody from
the Royal College of Art,
a student in for six months.
He did mechanical
engineering at Imperial.
Now he's at Royal
College of Art.
Awesome.
Coming up with ideas.
See, there's real value
in being in London.
So it is a risk but, ultimately,
if we are giving good value,
if we are obsessed with
giving good value, then that's
the proposition-- value--
not absolute cost on the day
you buy it.
It's value.
And brand is a reflection,
in my opinion, of value,
but that takes time.
And then maybe products will
come along and look great,
and they might
have their moment,
but the real test is
whether they're still there
after five years and
whether they've really
delivered that value.
AUDIENCE: Do you feel
you'll get enough support
from the government to
continue production in the UK?
WILL BUTLER-ADAMS: I
think any business that
replies on any government
for their well-being
needs to have their heads
inspected, because you
can't rely on the
government for anything.
The fact is governments
come and go.
Like we were saying earlier,
they mean their best.
If there are little bits
that help us along our way,
I'll scoop them up,
and they've been great.
What we got from the
Technology Strategy Board
was awesome, because
it-- my board were always
a bit worried.
And the fact that somebody
from the government
had said it's a good idea
and given us 200 grand,
they're like, oh well, we can't
say no to that then, can we?
And R&D tax credits, thank you
very much, we'll have those.
They genuinely
make a difference.
Patent box, that genuinely
makes a difference.
But if you took everything
away, if the business can't
stand on its own two
feet in its own world,
then you are in trouble.
Personally, I'd feel very
uncomfortable with that.
So there's far more the
government could do.
The most important thing
the government could do
is stop spending
tens of billions
of pounds on
digging more tunnels
and putting in infrastructure
before they spent
2 billion pounds making
cycle lanes across cities,
because that is so
much better value.
And it would make our
cities a better place.
But that's coming.
It's just taking
rather a long time.
AUDIENCE: So I've not
heard of the rental boxes.
WILL BUTLER-ADAMS: Yeah.
AUDIENCE: I'm totally
going to try that now.
But what is preventing
the larger rollout?
WILL BUTLER-ADAMS: Cash.
AUDIENCE: Right.
It costs you.
WILL BUTLER-ADAMS: Well,
it costs somebody else.
So we sell the dock
and we sell the bikes.
So we have to sell
it to somebody.
We are not funding it, but
we sell it to somebody,
they put it in place, and
then they get bike hire,
and it costs them nothing.
At the moment, the
Boris scheme is about 25
grand a bike to put on
the streets of London.
And then it's costing
GLA 12 million a year.
And the outer boroughs
that are funding it
are not getting any bike hire.
And you couldn't put
that bike hire scheme
into greater London, because it
would make even bigger losses,
and it would cost more money.
So it's not viable.
It's fine for capital
wealthy cities,
but it's not viable for
Leeds, for Sheffield,
for other cities.
So we've created something
and also if you go back,
start to get quite
cool, but this scheme
has retrofitability
of electric bikes,
because everybody else is trying
to charge the electric bike
in the docking station.
And all urban cycling
is going to go electric,
but that's a big
mistake, because then it
makes the docking station--
you have to put more power in.
This is solar powered.
You just drop it on the street,
half an hour, it's live.
Theirs, you have to dig up the
street, planning commission
lawyers, ripoff, and with
electric bike it's even worse.
But in ours, the electric
drive, the power pack
is in your luggage.
So if you're an electric user,
you would get sent luggage.
And then all that
would happen is
a door would open
with the solar power,
and then you just
click your power on,
and you'd be in
control your power.
So there's all
sorts of cool stuff.
But I suppose we're
not VC backed,
we're a privately owned
company, and we've only
got so much money.
And probably we're
taking on too much.
At the moment, it's costing
us about 30 grand a month,
that project.
We've invested probably
[INAUDIBLE] about a million
quid in that project
so far funding it.
And it's so awesome,
but it's flipping hard,
and also sticking out across
the country is quite difficult.
Anyone else?
SPEAKER: [INAUDIBLE].
AUDIENCE: Yeah.
I wonder what you think
of other companies that
are sort of disrupting
travel a little bit,
in particular Tesla--
WILL BUTLER-ADAMS: Yes.
AUDIENCE: --the
electric car people.
They seem similar, albeit
much newer than you.
WILL BUTLER-ADAMS: He's
getting a bit more help
from the government than I am.
I just think it's
interesting times.
The average age of the
people getting a driving
license in the US has
moved from 17.4 to 19.2
in the last 10 years.
So people are not needing to
have that driving license.
So things are shifting.
The question is, can we remain
private and have enough revenue
to innovate at the speed
that we need to to retain
a viable competitive product?
And that's debatable.
The next three or four
years will be interesting.
The interesting thing
about the car industry
is they keep just trying
to make more cars.
They don't sort
of realize they're
in the transport industry,
and they pretend they are.
They talk about mobility.
They keep making cars,
and they're big boxes,
and they're quite heavy, and
they're not that efficient.
This thing, our electric
bike weighs 11, 12 kilos,
and it carries me.
A car that's electric
weighs 1,000 kilos.
It's flipping nuts.
It's inefficient.
You're carrying all that weight.
So it's going to be interesting.
And I don't know the outcome.
AUDIENCE: But I guess they're
interesting because they're
cars but not so much
like other ones.
And your--
WILL BUTLER-ADAMS: The
interesting thing--
AUDIENCE: And yours are
bikes but they're not
so much like other one.
WILL BUTLER-ADAMS:
The thing about Tesla
is, the barrier to entry for
developing an electric engine
is far less than an
internal combustion engine.
So, again, the point is,
the internal combustion
engine required
massive industry,
massive collaboration.
Electric engines are
pretty easy to make.
So that is going to open up
that industry quite a bit.
But if you look at his accounts,
there's been-- basically,
the US government
has given up on GM
and just shifted their enormous
great subsidies into Tesla,
but it's good.
At least he's doing
some innovative stuff.
I think it's great.
And the one I really like
is his vacuum rail thing,
because that's flipping cool.
If you can stick a train down a
vacuum, that would be awesome.
AUDIENCE: And you could
probably carry a Brompton on it.
WILL BUTLER-ADAMS:
Yeah, of course.
And that's there.
End-to-end end journey.
SPEAKER: With that,
we'll leave it there.
Please join me in a
massive round of applause
for Will Butler-Adams.
[APPLAUSE]
