88 Alexandra Rico-Lloyd – the Bike Club

Interview Transcript

Provided by AI – add 2:25  mins for the finished episode

Catherine Weetman  00:00

Alexandra, welcome to the circular economy podcast.

Alexandra Rico-Lloyd  00:03

Thank you very much for having me.

Catherine Weetman  00:06

I’m really keen to understand more about the backstory behind the bike club and all the developments along the way. But maybe we could start with what sparked the idea in the first place, and why you thought it could work.

Alexandra Rico-Lloyd  00:20

Ah, yes. So, I guess it was really born out of a lot of cycling. So myself and my co founder were really keen cyclists. And we wanted to get more children’s cycling. And then obviously, lightweight bikes are very important. But they’re also very expensive. And so for a parent that makes cycling or good quality cycling, quite inaccessible. My co founders working in consumer finance. And so I guess he in a way we bought those, we managed to apply consumer finance to kids bikes, and, and so comes Bike Club, where you pay monthly in exchange as they grow.

Catherine Weetman  01:09

And just to make it clear about lightweight bikes. For those people who perhaps haven’t had to buy kids bikes, we’re not talking about super lightweight racing bikes – what’s that cycling phrase? Strong, light, cheap, pick any two. So as bikes have become cheaper, they still need to be strong, but they’ve just become really heavy, because that’s, that’s a lot cheaper to do. And I’ve picked up kids bikes before, and thought, I wouldn’t fancy paddle pedalling this up a hill. So I don’t know how I sort of, you know, six, seven year olds going to do it?

Alexandra Rico-Lloyd  02:03

Yes, exactly. Like if, if an adult struggles to pick a bike up, how would you expect the child to enjoy? Why didn’t that piece

Catherine Weetman  02:11

of equipment? Exactly. So it’s all about kind of making it enjoyable and giving them something that’s fit for purpose. So when we talked before, you were telling me how you kind of got going with a minimum viable product? So could you unpack that a bit for for people, because I think it’s really interesting, the, you know, often starting a new business can seem absolutely overwhelming. So how do you do that without suddenly having to find hundreds of 1000s of pounds in capital, and so on.

Alexandra Rico-Lloyd  02:43

So I capital wires, we started with some savings. And we bought a few bikes. I think the first batch we bought 10, bikes, and listed them on the websites or obviously built a website as well listed them on the website. And slowly, they all sold, or they all got rented. And at that point, we then bought like a bike every time someone ordered. So we just grew the fleet like that. We took out loans, we re mortgaged anything we could do to find a bit more money to buy some more kids bikes. I think everyone thought that we were crazy. At one point we had, like 30 children’s bikes stacked up in our two bed flat, three floors up in an attic. And I don’t like thinking back. I don’t think we realise we truly realised what we were building. But it was exciting. And it was fun. And and it grew. And that’s really cool.

Catherine Weetman  03:59

Did it grow mainly through word of mouth? Or were you doing lots of marketing?

Alexandra Rico-Lloyd  04:05

We were doing quite a bit of digital marketing. So we were targeting people through Facebook. And then I think obviously, word of mouth helped an awful lot. That we’re all kind of first, our first customers. They were early adopters, to kind of new business models generally. But they were also really keen cyclists. And they really understood the loop. I guess in a way they understood what we were trying to do. They understood the importance of the lightweight bike and they were interested in the environment and sustainability as well. And so those like some of those early members of us, they are our biggest fans today. And actually one of our first 10 members is an investor in in Bike Club and yeah, that they’re their fans. And then Now, I guess what once we kind of slowly started moving away from that quite niche customer, that’s when we were able to really make an impact on families that wouldn’t get cycling otherwise. But we wouldn’t have been able to target those customers or members we call them unless, unless we’d grown the bike club and we grew the bike club through those, those fans and those those people that kind of really, really understand the model.

Catherine Weetman  05:34

Yeah, that’s interesting that you kind of started with people who, perhaps were almost already on board and just looking for something that would fill that gap. But now you’re moving into the more mainstream market. So maybe you could talk a little bit about what the offer includes, you know, what, what are the age ranges of bikes that you that you provide? How does it work from a customer point of view.

Alexandra Rico-Lloyd  06:03

So, we we offer bikes, from note, but I mean, no one gets the baby cycling the bike, but you can theoretically put a child on a balanced bike as soon as they can walk. And it’s actually really useful just to have them kind of hanging around, so that they get familiar with, with the bike. And it’s not such a daunting piece of equipment, when they do come to ride it. And they kind of naturally play around with it, they look at the handlebars, they might try and get in on it and and that’s that’s how they get started. That’s that’s the kind of, that’s the best way to teach a child to ride by making it fun for them. So we accommodate naught of 11 to 13. Kind of when when they go through that massive growth spurt and become an adult. That’s that’s when they move on to the the bigger bikes, but we do have like teen bikes, so to speak.

Catherine Weetman  07:06

Right? So you’ve got those as well. And then you you lease them or rent them to customers. How does how does that work?

Alexandra Rico-Lloyd  07:13

Yeah, so as a as a parents, you know, your bike for your child. And you know that they’re going to grow, but you don’t know exactly when they’re going to grow. I think that’s the biggest pain points sometimes for parents is that, yes, they might have just gone through a growth spurt, but there might be an arm around the corner. And so you come to bite club, because you want to get a bike for them. And you go on the website and you order a bike, we’ve got a nice bike finder. So you can input their details, and we’re telling you the perfect bike for them. And a few days later, you’ll have a bike turn up at your door. So we deliver, you don’t need to come and collect, we will deliver to you. And you enjoy the bike and you’ll pay monthly and then when you come to exchange, you’re basically go through that same process, input, the details will tell you what bike to exchange do. And then they get a new bike to the door and we take the Courier takes away the old one, it’s it’s really it’s really as simple as that doorstep exchange?

Catherine Weetman  08:28

And did the bikes come back in reasonable condition? You know, as you would expect, if somebody owned the bike and sold it or, you know, is that a bit of a risk for you?

Alexandra Rico-Lloyd  08:41

So if you go back to the start, and I know a lot of the conversations you have are around how people get into the circular economy. I think that’s one of the biggest fears that people have. What condition is it going to come back in? Is it going to you know, is it going to be ruined? Is this actually a viable business model? And we have the same concerns, I guess, when we started. But what we found, after a period of time is that the bikes came back in relatively good condition. Yes, there’s fair wear and tear. But there’s nothing that’s nothing that our mechanics can’t fix. And what what is really nice is that because those bikes come back to us fairly often and fairly regularly, and they’re fully serviced by our mechanics. Those bikes are actually been really well looked after. And as a result, their lifespan increases because they’re not sat for years rotting away in a shed. They’re actually kind of being well used, well looked after, and well refurbished. It’s also a bit of a concern for customers themselves. So members will regularly be a bit worried like, you’re going to charge me for this. And as much as we tell them look, don’t worry, we don’t usually charge much. It’s fine. We it’s that normal wear and tear, it’s it’s still, it is still a concern for a lot of families that they might get charged, there will be, it’s too good to be true, there’ll be some hidden fees somewhere. And so what we do offer is we offer Bike Club plus, which is insurance to give you peace of mind. And it’s an extra kind of small payment per month, I think it’s two pounds per month. And that just gives you peace of mind that all charges or all fees will be kind of covered. When you return the bike to us. There are some bikes that come back particularly damaged. I actually love it when a bike comes back really dirty, because you can tell that they’ve had a lot of fun. But the funniest, the funniest damage story, I guess, of mine is when a bike came back and the saddle had clearly been eaten by a dog. So yes, obviously we do still get damage. But it’s not it’s not that often.

Catherine Weetman  11:02

Yeah, I guess people have gotten got the car rental stories in mind that you read in the weekend papers about, you know how somebody didn’t take didn’t take photographs of every single inch of of the car, and then got billed with something that they’re certain wasn’t damaged when they sent it back. So what else is different about the bike club versus buying a bike?

Alexandra Rico-Lloyd  11:30

I think so one thing that I mean I care quite passionately about is the fact that we’ve really moved into this family cycling space that was never really never really kind of looked at before. And so as a parent, if you go to get your child a bike, you will either go to a local bike shop, or you will end up at Whole Foods. And then you will end up talking to either a bike enthusiast who actually doesn’t really care that much about children’s bikes, he cares about the adult bikes that he’s riding on the weekends. So you’ll end up talking to the bike enthusiast, or you’ll end up and that’s quite intimidating. Or you’ll end up talking to someone who’s got that as a Saturday job. And actually, they don’t have a clue about biking, they probably can’t ride one themselves. And so that’s either really intimidating, or really useless. And as a parent, what you really need is you need someone that understands kids bikes, understands family cycling, and is able to give you a little bit of advice on the kind of increase in their confidence or how to get started. How often are they going to need a new bike, all the all those all these questions that you have, specifically as a parent. And that’s what we found, we were able to offer, we weren’t just offering bikes on subscription, we were able to offer like a real service to our members. Because that’s all that’s all we do. And so everyone that works for us, everyone that you talk to cares about getting children and families cycling in and outdoors. And that’s been really special that we’ve been able to offer that to people.

Catherine Weetman  13:25

Yeah, that sounds like a really good way to get people over those those hurdles. And, yeah, I can imagine that that is a real bonus for people and, you know, particularly helps the kids to get something that’s going to work for them as well. So you’ve grown relatively quickly. And then came a big development with John Lewis.

Alexandra Rico-Lloyd  14:21

Yes, so that’s probably a year ago now. Actually, we took a took some space in John Lewis for Christmas last year. So that was a three month trial for the festive season. And John Lewis, I think what they’re doing with the circular economy is is really is really nice and really interesting that they’re really supporting businesses like ours, and they want to make business more sustainable, I guess. And so they’re really looking for opportunities to partner with others. businesses. But what they were also doing is they had kind of redone the Stratford store. And they were looking to kind of make it a little bit more experiential. And that’s where putting bikes in the stores that’s quite attractive. And I really, I really liked that idea that our members are now able to go into a store and touch and feel a bike and the children is able, the child is able to kind of just get on that bike and just pedal on rollers. And that’s, that’s really fun, like seeing that in action is really, really fun. And I love that. I love that we’ve kind of put cycling into a new space. Children’s bikes were not in department stores before, but they are now. And I think it really makes sense. Because as a parent, when you go to get a cot or a pram for your newborn baby, you will more often than not go to John Lewis, you’ll go to the nursery department because you’re you know that you’re going to find someone that is able to give you a lot of advice on what cost or what car seat is going to be best for you. And so it makes sense that the natural next step is when your child is slightly older, you go into John Lewis to get advice on how to get them cycling.

Catherine Weetman  16:27

Yeah, it’s definitely seen as a place where you can get lots of useful advice, that’s not all about selling either. The next thing. So I think those kind of, you know, the the ethos of, of the, of the store, and the company is it fits really well doesn’t it with circular economy and doing things in in different ways that offer more value to customers? And so, you know, has that really fueled growth in subscriptions and so on being being in John Lewis, and what’s happened since then have you had to kind of scale to another level?

Alexandra Rico-Lloyd  17:13

That’s a really interesting question that because I guess, in a way, that was always that was part of our marketing plan, right? So it wasn’t it, it wasn’t this kind of overnight success thing with suddenly loads and loads of orders, like Domino’s never did that for us. But for us, it was it. It’s revolutionary to have kids bikes in department stores. And so there was obviously an element of that it wasn’t pure marketing. It wasn’t a pure marketing ploy for us, like it made a lot of sense. But also, it’s really increased awareness and credibility, just by partnering with John Lewis, and have had to have that recognition. It makes us a lot more trustworthy and a lot more credible to families. And so whereas it hasn’t, you know, I wouldn’t, I wouldn’t say that, being in John Lewis or being on John Lewis’s website, which is what happened more recently, has drastically increased sales, but it had it has made us really grow up as a business, I guess.

Catherine Weetman  18:29

And I guess that credibility translates across to potential suppliers as well, as it made a difference there in terms of bike brands taking you more seriously and that kind of thing.

Alexandra Rico-Lloyd  18:43

I guess we were quite a, we’re in high demand. Yeah, I, we’ve we’ve expanded our we’ve expanded our range of brands as well. That’s a nice thing that scale has enabled us to do, because at the beginning, we really wanted to only really offer one brand so that it was easier for us when they came through our warehouse. And now that we are a little bit more grown up and we’ve got proper facilities, we’re able to offer more brands, which is kind of a good way to offer priority to the consumer. But we really, if we tried doing that from the beginning, I think it would have just been disastrous, because it would have been too too heavy on the operations. You’ve kind of got to kind of got to tackle one problem at once. And obviously when you’re when you’re building a business, there’s loads loads of problems, but it I think being streamlined in the beginning was was very beneficial to our growth.

Catherine Weetman  19:53

Yeah, it sounds like you’ve got some really sensible strategies for you know what Before you run and so on, I was trying to find a bike analogy there, but wasn’t, wasn’t coming up. But, you know, are you providing feedback to your suppliers in terms of the kinds of components that are wearing well on what’s what’s not working? How does that pan out?

Alexandra Rico-Lloyd  20:20

Yes. And that’s the fact that we are now doing that is really nice, because I guess that’s, that’s the true circular economy, right? Where you actually learn from, you learn from what’s going on, and you’re able to make the changes. So as an example, we are we kind of learned from when bikes come back to us like what elements or what components of the bike get more wear and tear. And we’re able to kind of feedback that feed back that to our suppliers. And they are able to then know that either they need to work on making that particular component more sustainable, or make it more durable, so that it lasts longer. And obviously, this, again, is not going to be an overnight change. But we are also working with one supplier in particular to build a bike club, bike. And so that it has, it is like the the ultimate Bike Club biking away. And it’s it is really nice that we are now at a scale where we’re able to do that.

Catherine Weetman  21:41

That sounds like it could be transformational. So look forward to seeing more about that when it when it emerges. And Alexandra, in the process of building the business so far sounds like you’ve had lots of challenges to overcome and so on. What have you struggled with? And what surprised you in the process of doing that?

Alexandra Rico-Lloyd  22:03

So many, so many challenges. I’ve I’ve always really, really cared about our members. And so I think some of the biggest some of the biggest challenges to me, were, I guess, more mental challenges when I realised that we weren’t quite offering the product that they wanted, or we didn’t offer the service, or we miss delivery for someone’s birthday. And you, I guess, you might think that that doesn’t actually affect or no one, no one really cares, right? When you complain to a company, no one cares. But it that that really wasn’t the case for us. Up until a year ago, I read every single message that came in to us on live chat, just to kind of get so that I always had an overview and I knew what was going on. And so yes, I did hear about kids birthdays being missed. And because the delivery didn’t happen, how it was meant to. And that that hurts because there’s there’s a failure that’s happened somewhere in there for that to happen. I guess that’s a really kind of simple example. But there’s so many other examples where we haven’t, we haven’t quite hit the mark. And, and that’s been, that’s just been quite challenging for me. But what is nice is that our our team also really care. And so they work late if they need to over Christmas periods, and they will log in on Christmas day just to check that everything’s going okay. And that I guess that that really shows that they really care about what we’re doing as well.

Catherine Weetman  24:04

Yeah, that sounds sounds really kind of encouraging, you know, as you’re going through those tough times and thinking, Well, you know, how how can we sort this this particular issue out so it never goes wrong again, but to know that your team are really wanting to help the business succeed and going the extra mile is sounds really encouraging. And if you were talking to a another business thinking about going circular, or starting something circular, what would be the top tip that you’d share with them what would be that your number one piece of advice.

Alexandra Rico-Lloyd  24:42

This is probably going to sound really cliche, but think big, but start small, because you need to to be able to make big changes you need to get there and you’re not, you’re not going to get there without kind of starting small by making small changes and adjustments to the way that you’re doing things, listen to feedback as well. A lot of where we’re at today is not because we’re fantastic of business, it’s because we listen to our members and actually, our members in a way new, new new what product the world needed. We didn’t define that and say, This is what we’re going to go out with. And we’re going to go big, and we just started small and humble and listened, listen to feedback as we went along.

Catherine Weetman  25:39

That’s really interesting that, you know, your customers, the members kind of already knew what they what they needed. And I wonder how many other elements of of you know, business and consumer goods and so on, that applies to where there are big groups of people who want things to change, but don’t have any way of getting what they want, you know, what we’re seeing similar things with packaging, and so on that people don’t value plastic in packaging, and want something different one reusable packaging, you know, what better packaging and a frustrated by the lack of options. So I think that’s, that’s really interesting feedback. And, and could be very useful for lots of existing businesses, not just startups.

Alexandra Rico-Lloyd  26:28

And it’s, it’s, um, I guess that’s one of the benefits of being a startup, right? You, you don’t have all the red tape and bureaucracy that stops you from innovating. And you can be agile and flexible and respond to the demands from the consumer. And bigger companies struggle with that, because they do have red tape, and they do have processes, set processes. And that’s why we need new companies. That’s why we need more people in the circular economy, we need more people thinking about reusable packaging and and that’s how we can really make a big difference.

Catherine Weetman  27:19

Yeah, it’s surprising, isn’t it? How many big companies say that they want innovation, but actually what they end up going for is incremental change. And what we need now more than ever, is different ways of thinking, isn’t it? So Alexandra, who would you recommend as a future guests for the programme? What’s impressed you in the world of the circular economy?

Alexandra Rico-Lloyd  27:41

So I’d recommend Georgie who founded retiro, they are luxury fashion rental service, and George’s George’s really cool. And she’s doing fantastic things in the in the rental clothing industry.

Catherine Weetman  27:59

Great, well catch up with you afterwards to get George’s details. That sounds sounds like an interesting interview. And if you could make wave a magic wand and change one thing to help create a better world overnight, what would that be? And why?

Alexandra Rico-Lloyd  28:17

Wow, that is that is a big question. If if you could wave a magic wand I I’d make I’d make flying more eco friendly. Because I I love I love the world. I love different cultures. I love experience in different cultures, I think, you know, having a global economy is really beneficial. And we need to travel. But travelling is just not very eco friendly. So I yeah, I love to be able to travel in a sustainable way.

Catherine Weetman  28:57

Yeah, good one. Thank you. And how can people find out more and get in touch with you and the bike club.

Alexandra Rico-Lloyd  29:05

So the bike club is you can find it bike club.com Very nice and simple. And myself. I am on. I’m on LinkedIn. I’m fairly active on LinkedIn. I’m Alexandra Rico, Lloyd.

Catherine Weetman  29:19

Great. And we’ll put those links in the show notes so people can find you afterwards. Thank you very much, Alexandra, that was really interesting. And I’m fascinated to see what’s going to happen next with the bike club and, you know, start seeing it going going mainstream all around the country and and changing the way that people think about kids bikes as well. I think it’s just a much more sensible way to go than buying all those cheap heavy bikes that put people off cycling instead of encouraging them to, you know, gain their independence and be able to cycle off to their friend’s house and so on. So thank you very much and good luck with the next phase.

Alexandra Rico-Lloyd  30:00

Thank you Catherine Thank you