The Financial State of the Bike Industry with Jeff Brines - The Inside Line

A big shout out goes to Maxis Tires, Jensen USA, and Foxhawks for supporting the Inside Line. Welcome Mountain Bikers. All right, check, you know what I'm good? Check, one, two Jeff Bryan's in the house. First and foremost, this is not financial advice. Welcome Mountain Bikers on the Inside Line. We're going to have a fun discussion today that expands on a highly popular Vital Forum post. Started by our guest, Jeff Bryan's. The post asks, "Will more companies be shutting down in the next 12 to 24 months?" That thread in about a month will be a year old. Still gets updated on the regular with industry news as it breaks. It has 106,000 views on it. 704 replies, which on Pinkbike maybe what you would see on like a C-collar review, but for Vital, pretty hyped on that. What you may be wondering is who Jeff Bryan is. I know Jeff Bryan is a Colorado downhill kid. To me, he's still a kid. Back in the early 2000s or so, he's the proud owner of a BCD handmade carbon bike, right? Downhill bike. You may know him as the sometimes prolific Vital Forum poster, but figured 106,000 views was worth a six hour drive, come see him in person and get to Easter night a hoe in the shadow of the grand tea ton. Talks in business. Again, not financial advice here, but there's going to be a lot of speculating some theory, but there's also data to be drilled down into. With that said, Jeff, let's learn more about who you are, why you wanted to discuss this. Also drop that little caveat you mentioned in your pre-show notes about the famous people get it wrong more than they get it right. Like that kind of idea. Let's dig into that. Who are you? What would you say you do here? In his pre-show notes, he sent a TPS report in a tech mug. Well, first of all, thank you, Spomer for having me. Obviously, I really enjoy the forums. I love Vital. I love mountain biking. It's a thrill to really get to do this. Going to the quick little side note here, but those that know Spomer may remember Spomer's old OG litter mag and back in the day, there used to be a piece that I believe was recurring that was the TPS report or something like that. I could be wrong, but I believe Matt Thompson wrote in that column, if you will, I could be wrong. I just have this very vivid memory of the old litter mag, which somebody out there, if you have it, I'd love to get my hands or just see a PDF copy of that. Maybe Spomer, you've got one kicking around. I might have one left. I would love to see it. But anyway, yeah, I just wanted to kind of kick this off by saying something that I think is really important, which is there are a lot of experts. I don't mean that in quotes. I mean that truly, like, professors, academics, people that have made giant sums of money that have a high amount of true expertise in the topics we're about to discuss. I'm not going to pretend to be of the caliber of many of these people. It's not to say I don't love this stuff. It's not to say I haven't studied it immensely, but I just want to be really clear that there's going to be times where I'm sure somebody that's in some vertical we're talking about could jump in and really expand a lot more thoroughly. Frankly, I could be wrong at times as well. I just want to be clear that this is not to be taken as a gospel. This is not some McKinsey presentation or whatever, but you know, that's my disclaimer right off the top here. Cool. Why should we talk to you about this stuff? Where do you come from? How'd you get to doing what you're doing? Sure. So I'll give a quick try to make it quick. My background as to how I ended up knowing what I know and into what I what I'm into. I think I kind of straddle a weird intersection between like tech, finance, obviously, I love bikes, business, trying to understand the world around me. I'm just a highly curious person. This is my second time on the on the the Inside Line podcast the first time was was talking about head injuries and I'd be amidst it like not not mention that. It was a part of my story and still is to a degree. I live in the tea times I love it here and you know, the business that brought me here was a startup in the finance and technology space, but in the background of me working there, yeah, I had to deal with the concussion you guys can go learn more about on a different podcast, but we'll link to that. But yeah, so so I think it's worth just talking briefly about the company I worked for. Companies called Street Account and effectively what they did in the finance world is very similar to what you know, Spomer and the crew do at vital for the bike industry and that you know, vital really aggregates all this, you know, media information, etc. to a broader audience so that you can just go to vital and get everything you need and really nothing you don't. And that's really what Street Account did. If you're a portfolio manager or you know, are some sort of person on Wall Street and you don't have time to go through the news as it pertains to your portfolio of equities or stocks, you can just you know, get a Street Account account and we will aggregate all that information, all that that's pertinent to your holdings to you on a day by day basis. So I learned the you know, kind of finance space on the qualitative end through that business and that company where I worked for oh, probably 10 years. Maybe even a little longer. There's a lot more to that story that I'll spare the audience from for now. But prior to that, you know, I went to the University of Colorado, got a degree in finance and that really became like the lens in which I was able to parse the world around me. And really what I mean by that is quantitatively I could look at something and try to understand like why is it valuable? You know, that was kind of the big question and that's really what you're trying to answer, you know, with a degree in finance. So is it the best tool? No, I don't think it's the best or the only, but it's a really cool lens and way to one way to try to understand what's around you. Okay. What prompted you to write the post on Vital about companies shutting down? Because you know, it was obviously the right time to repost like that. Yeah, sure. So it's a long-winded thing and I didn't answer the question as to why I should anybody listen to this. But, you know, which is a good question. I hope we can touch on some things that might be illustrative. You know, it's an orientation thing here. Like, where are we as an industry? Is kind of part of the question I want to answer. And like, well, I want to shine a light on some things that I think gets, you know, there's phrases like private equity that people like to say, look, myself included, like I had a very, you know, vague understanding of what private equity might do. And as I've learned more over the years and been around these firms, you kind of, you know, get a peek under the hood and go, oh, that's why they do what they do. That's maybe the good and the bad of these types of things. So, so really, I just want to illustrate or shine a light on some of these lesser-known parts of the finance world as it pertains to bikes. That's really kind of the idea here. There's more to it than that. But, you know, I think the question you just asked is, is going to illustrate this as well, which is what prompted me to write, you know, my first little post here. And there were a number of things, you know, that went into that. The first thing is, you know, I was working for a startup, you know, up until a few months before I posted it where the startup blew up. We were very cliche, Silicon Valley type of story, you know, it was a tech company in finance, and we blew up for, like I said, all the cliche reasons. And that was very fresh in my mind. You know, we did everything wrong in a way. On the finance side, despite me, you know, doing my best to try to get us on track in a more pragmatic sense. And when I read the kind of, I don't want to say rumour post, but they were kind of official kind of not from guerrilla gravity. I noticed that there were two words that really stuck out or phrases. The first was that there was an angel investor involved. And the second was that if that angel investor didn't come forward with more capital, they had to shut down operations. And you know, one thing I want to be clear about as well, I didn't get to say this the top the show is some of the what we're talking about here is really hard stuff in terms of like for the employees, for the people. Yeah, you know, I've been one of those guys and like I'm still dealing with it to be honest, like, having losing your job in a bad job market. I'm not going to say it's the worst thing that's ever happened to me, but it's not fun at all. So I don't want to, I can get really academic and make this kind of almost, quote unquote, fun to talk about, but there are people's livelihoods at stake. And that's not something that I want to take lightly is my point. I don't want to lose the humanity in that. So going back to the guerrilla gravity thing, I'm not trying to disparage anybody with with any of these comments, but there were, like I said, two things angel investor thing and the fact that they needed more capital. And I don't know if you guys remember, but the time guerrilla gravity had been around. I did some homework prior to the episode for 10 years. So what stood out is like, wow, a 10 year old company doesn't have the, you know, they're not what I called default alive. They're not making money in a way where whether an investor comes around or not, they stay alive. That was like shocking to me. And I thought, wow, that's actually something I was seeing a lot in the tech world where there's all these companies with, you know, maybe a good idea, but they weren't able to turn that idea into a business. They had a company they didn't have a business and by that I just mean they weren't making more money than they were spending. And I was like, man, if guerrilla gravity has this problem, they've been around for a fair amount of years now. How many other companies are going to go through the same thing? And how many other companies got a little out of their, their skis, if you will, and are going to need to restructure, bring in more financing, whatever. And that was really the impetus to me writing that, that post. And I wondered how many, how many investors had entered into the bike industry thinking it was more like the tech industry, which is a, you know, or any high growth industry, you know, because we'd just come [BLANK_AUDIO] the COVID boom. Where we saw growth, at least for me, I'd never seen like it. I'd never seen going into a bike shop. I've got a couple of buddies that own bike shops. It looked like like a zombie apocalypse. And the only cure to the zombie apocalypse was bikes or something. The shelves were empty. They had nothing. Because they sold through so hard. They sold through everything during COVID. So it was an incredible period for the industry. I don't know how many months or maybe like 18 months a year. I don't quite. I've got some data we can look at later, pertaining to Fox Factory because they're a publicly traded company. Everything's out there. But the point is they sold through a ton of stuff. And I think a lot of capital allocators, which capital allocators, a person that makes investments, look at the bike industry. It was like, "Ooh, maybe this is like a high growth thing where I can put up a couple hundred thousand dollars and it'll come back to me in the way of ten million dollars in the future." That's kind of the venture capital, angel investor type of model. And I think most people that's been around the bike industry for a long time would agree that's really never been the way the bike industry is worth. If we're getting ahead, you know, so be it like one of the questions I have is if all the experience bike industry people understand that. Like, "Hey, this is a blip. Am I not last long?" Or at least it never has never done this before. Why would these people with all the money not see that or investigate it? Would they just turn a blind eye? I'd be like, "Who cares?" Like the last month shows this, so we're going for it. Yeah, there's a bunch of reasons for that. And I'll probably have to go to my notes on this because it's a complex system with lots of moving parts. And one of the big things, I think, I think COVID was really unique in that for our sport. Because we saw all these people that all of a sudden jumped into the bike industry. And there was an argument to be made, which was this was going to be sticky in a way. Bikes are the new thing, and COVID's here to stay. We're never going to go to comedy shows again. We're all going to just go ride bikes in the woods or something like that. I just remember how disorienting that time was. It was weird living here because it was not that much different because we don't have. We don't have everything we would normally do camp in the woods ride bikes. So camp in the woods ride bikes. So I was like, "Wow, everybody's learning about that." And then there's this other part of me that was like, "Wow, technology had really improved where people that probably couldn't get into the sport easily." Now could, whether it was through e-bikes or just better bikes with better geometry, it's safer to ride a bike now. Then when I met you and literally was riding, I'm not knocking Alex Morgan at all. You built a carbon fiber downhill bike in his garage and sold it to me and it was awesome. But that was a different era. We were running a very ragged edge. We didn't know what worked and what didn't. David came up to myself for talking about how off-weep and break crank arms off bikes in that era. Now all of that's fixed. We have very, very, very good products. I was like, "Well, shoot, the bikes are good. They're safe. There's all these points of accessibility. The trails got a lot better." So maybe culturally things are changing. That was one part of it. The other part of it was from a capital allocation side of things. Don't forget interest rates were basically zero. In cases, they were net negative. Meaning inflation was higher than interest rates. At the end of the day, you were borrowing for zero or less than zero. If that's the case, that's a borrowing. On the lending end, it goes the same way. It was really difficult to get returns as an investor. It's just an easy way to put it. All of a sudden, it's like the traditional way. Traditionally, being like, if you're going to go invest in stock market, if you're going to go loan money in some way, shape, performance, buy bonds, whatever, it was very difficult to get a return. What we generally see in times like that is your capital allocators have to go further out what you'd call the risk curve to get a return. I have to take more risk to find a given amount of return period full stop. This is one of the things that Tech and Venture Capital had a lot of interest because it was like, "Yeah, well, we need to go take these risks in order to make money. If I burn a lot of it in the process, well, we're also going to go to find a return." The potential for the exact risk greater. Yeah. So again, rates being low encourages risk taking. Effectively. That's just an easy way to put it. You've got low rates. You've got this cultural thing happening in the bike world. You've also got a large amount of capital out there. You don't forget, we were printing money in a way. There was a high amount of stimulus as well. Ultimately, you got to do something with it. So you had these allocators going to what I'd call the fringes, looking for ideas in ways to maximize their returns. We can get into the structure of some of these funds and why they might. I mean, by the way, I'm not suggesting there's actually, I take that back. There are venture firms or there were in this space. Specialized had that firm. I don't know if you remember. Specialized had a venture firm, effectively. It was adjacent to specialized. I'll put it in the notes, but just to show you how crazy things got. There is actually this president that was never set before. But regardless, point is, when you have this much money chasing, the kind of thing that is really hard to come by, which is a high return, I think that set the stage for people to be a little punch drunk in a way. That's what allowed decision-making where you go, of course, this was going to go. It's always easy to say that in hindsight. Again, I think we forget how disorienting that time really was for a bit. Just to put a bow on this, you can go look at, I noted even in the thread, like, "Pelaton's a good example," where they're not a bike company, but there was this idea that Peloton was going to be like, everybody in their mom was going to have a Peloton, and everybody's going to be paying that subscription. It was going to go on and on and on and on. You go look at their stock rights. It's like $155 a share at the top, and it's like five now. They couldn't make enough bikes, and they had too many bikes. We'll talk about what happened in the bike industry on that. But there were all these analysts that thought, oh yeah, this is the new normal kind of thing. When you get these events where there's all this chaos, it's really hard to see through the fog of war. That's why I don't think you had these level-minded people. You did it in certain companies, like Shimano. Shimano said Shimano was in there. Yeah, they didn't get out over their skis at all. Again, we didn't really get into what happened with everybody trying to buy a bike and then nobody trying to buy a bike. Then there's this bullwhip effect that occurred. But Shimano specifically was in a really good position because they're taking more raw raw goods or raw inputs, if you will, and they're outputting a manufacturer thing. But they don't adhere to any sort of release schedule from what I've watched. Maybe you could comment on that. But it seems like model year 2022 is the same as model year 2023 as long as it's the same specific, they don't change on any given cadence. Whereas other companies do. We'll get to predictions later, but I think that's something that's going to change. I've got looking at more of I don't know if it's like the moral or ethical kind of thing around it. But you have a company like Shimano that seems disciplined. They've existed for forever. They're still here after all. COVID drama. Is it just greed and ego that brands want to grow a thousand percent, 500 percent, whatever we could we did this last year. Let's keep going. How come it seems like there's so few steady players that aren't as reactive? Yeah, this is really the bigger point with Shimano reminded me of a really disciplined investor. That's what I really want to say. And I've done this. I think if you're interested in investing or finance, it's hard not to get sucked into the hype. This is embarrassing to admit. But I invested in random crypto coins and invested is not the right word. It's gambled on random crypto stuff. During that period where it seemed like everybody literally everybody you talked to was making money doing this thing. You just felt like an idea for not participating. But usually that's the time you want to run the other direction. Again, it comes back to that idea of being a disciplined process oriented person or company or whatever. That's what I was trying to say about Shimano. They're very process driven. It seems. They just don't skew from that. They don't venture too far from that process or from those goals or from whatever they were trying to do in the first place. And I think that's why you'll see this over and over again. It's not just bikes. It's every industry where you're going to see people get on the hype train. It's really hard not to. I think one of the things I'm most fascinated about is the psychology that is underneath all of it. Yeah. Because we're people at the end of the day. We're emotional. I try to listen to the smartest people in the space to read their books or whatever. And even going back to my CU days, there were a number of academics that really were owning in on the behavioral finance part of it. And I think Daniel Kahneman has done an amazing job. I know he's not technically a finance person. But if anybody's interested, look into the loss of version type of stuff. People are way more scared to lose money than they are happier to make money in a roundabout way. They make totally different decisions around lost money than they do around the potential to make money. They value decisions completely differently. I think that goes into a lot of this. Just like I said, the psychology of all of this. And I think that's where you started to see this go off the rails if you will. The bike industry is booming. People are selling out of bikes. We can't keep things in stock. And so to some degree, everything is great because everyone's making money and selling through things. Then all of a sudden, oh, no one wants bikes anymore. Right. So there's two, there's a bunch of things that happen that I think, one of the things that's illustrated through this whole wild period of time is how incredibly impressive, frankly, the supply chain is in the bike industry. I don't think we give enough credit. We look at our bike. We're always, there's an old saying, a headwind is a lot easier to feel than a tailwind. And it's like because of the tailwind at a point, it generally just becomes like you go fast enough and then obviously any road bike renews this. So this idea was like, I think it's real easy to overlook just how amazing your bike is. There's so many countries involved. It's a truly global economy by the time you get that bike in your hands. And that's amazing. But what COVID really showed us is how fragile that really is. So as cool as it is, literally you have metal from one place and the manufacturing took place and another place and I'm talking in global scales. When it came time to, oh my God, there's all this demand. We need to ramp up supply. It was a long, long lever to pull on. And I think that's one of the most fascinating things I've also come to really respect is, but the economist's out there, even like maybe to talk a little bit about why is the federal reserve at all important or who is the most important man in the world right now and it's probably Jerome Powell. And the reason is he's got these levers to pull that have huge impacts in the global economy. But when that lever is pulled, it'd be a kind of like driving a car down the road and turning left and the car doesn't turn left for like a mile because it takes a long time for these changes to be felt throughout an ecosystem. So with the supply chain, that's kind of what happened is as companies put their orders in, but you've got this virus raging still around the world various, you know, all the different variants and it just kept going and going and going. And you think we're on the kind of getting out of the weeds on the COVID thing and then you hear like, oh, but China's like shut down all of a sudden. Right, yeah. And like, so all of a sudden, like whatever your lead times were became a lot longer. And that became a big, that created this situation where as the demand started to kind of go elsewhere as COVID did start coming off and it will talk about what really happened with the demand. I don't think it was truly an increase in demand. It was really just pulling future demand forward, which is a little nuanced. But end of the day, when all of a sudden the the the the inventories were back to what they thought they needed, the demand was gone. So as this double whammy is the point, it's like, you know, they didn't have the product when they wanted it. Now they have the product and the other side of it's gone. And that really set the stage for again, kind of the post that I made, which was like, you know, I just remember I right around then is when I bought at retail a bike, you know, from the specialized store or whatever. And it was, it's this, you know, snuffed up or evil or whatever, but like it had great parts, great bike. And I think I paid less for that bike at quote unquote retail and it was on sale. Then I could have if I had like some awesome pro form from, you know, from anybody. It was crazy cheap. And no, if they weren't selling it at a loss, it seemed like they were selling it close to whatever they're baseline cost for it. But the point of making is inventories were stacking up everywhere. Everybody had to blow this out or blow out whatever they had. So it became difficult to make money just, just like, you know, find any sort of profit at all. So it was, that's what I'm trying to say about this bull with the fact where it was like, you know, one side it was like, oh my god, we, we, we, we can't get enough stuff. And on the other side, it was, um, now we can't give it away, you know. And is, is the system set up, which is generally speaking to where, okay, let's say specialized crushes it, the height of COVID, they bank $100 million, whatever. And now sales are slow. Have they burned through that 100 million? Can they rest on it until things come back to normal? Like it seems like every story is like, we killed it. And now we can't sell bikes or we're going out of business. Why don't they sit on the money they burned? Yeah, well, do they? Well, that's a good question. Like, obviously, I can't speak to any specific company, but, but like the, the broader question is, um, you know, how, how does a company manage their balance sheet and what do they do as they make money? And, and like this kind of goes back to the, you know, I could even point to the 2010s as a whole. And there became this part of finance culture, if you will. And it was driven by tech where it was like, if you're making money, well, then you almost be smarter to take every dollar you made and deploy it back into growth, quote unquote growth. Because if you can, if you can take more of the market or whatever, then you're going to be worth more in the long run as a company. And, and, you know, you see this in tech at times, right? Like they'll, they'll be like, do opalies out there. You know, they'll be like, you know, the kind of this like wartime attitude where it's like, you know, Facebook destroyed every other social media company at the time or whatever. So by them putting every dollar they made back into growth, it made a lot of sense. And that's where like venture capital starts to make sense because you're just trying to grow at all costs, take the market, we'll winter takes all kind of mentality. Now, I'm not saying that's exactly what's happening in bikes at all. But I do think, you know, you have to balance this, this, this is what your finance management team, whatever has to do is like they're balancing how much do we put, you know, on to the, how much do we put in the bank effectively? And how much do we spend to go grow, grow our brand? And that's really tricky. And going back to Shimano, that's where they seem really disciplined, right? They did, you know, not only did they, they not kind of bite when everybody else bit, but they also seem to do a good job, you know, bolstering their balance sheet. We could look that up. I haven't actually looked at exactly what they did. Seems like Fox did a pretty good job with that, right? But, but this is, this is, you're right, that as to how much every company is going to put away for a rainier day, good question, you know, and that does come down to your, you know, financial strategy, frankly. I think the smaller companies are really who got burned there. I think they were the ones that saw more of a, you know, they saw opportunity to like really grow at a level that they never thought they'd grow at and take more of the, you know, that it'd be really hard in that situation to go, wait, is this COVID that's feeling this, or are we just really executing or both? And then it make, you know, decisions accordingly, like if all of a sudden you made a bunch of money one year and you want to grow your brand, it's like, well, why wouldn't you buy that new, you know, mill or why wouldn't you buy that, you know, spend a bunch of money on catbacks, move into that new building, hire some new employees like we're going to the moon. So I think that's where I, it's easy to sit here and think like in the bigger companies, like, yeah, how do you see it coming? I think the smaller companies are the ones are the medium sized ones where it's like, yeah, how do you know you didn't just take more of the market when this all happened, right? How do you know you didn't just become a little bigger player and you should grow and you should spend money on these things? And then when you realize, oh no, like, yeah, you just bought that new CNC machine, you just bought, I, whatever you're doing, right? You just spent a bunch of money on inventory and now you're like, uh oh, now I got a problem, right? Because again, those levers you're pulling on are not immediate. You know, you might have ordered that inventory six months ago and now it just shows up and now nobody wants to buy it. What do you do? Right. And I think we're still reeling from that. Not sure seems like it. Right. All the bikes that are still on sale and being blown out. Yeah. Yeah. And do you feel like COVID created this problem? Yeah. So that's something that I've talked offline with a couple of people like, are we sure that this was, you know, a COVID thing? And it's like, yeah, like to say it was just COVID would maybe be a misnomer. But, but like the best way we can look and kind of, well, let me back up for a second. One of the hardest parts about bikes in general, even getting ready for this podcast is like most of the bike industry is private, meaning it's not publicly traded. And there's no reason to share information that you don't have to share. So like some companies kind of do, but for the most part, it's very, very, you know, hush hush. And I get that. So it's really difficult to know what's like a rumor and what's real. And, you know, so thankfully we do have a couple of publicly traded companies. And I'm more personally familiar and comfortable analyzing the ones that trade on the US public markets because there's just different rules and I'm used to our currency and stuff like that. Right. So, so to me, like one of the best ones is Fox. You can just look at their, you know, quarterly earnings. Anybody can do it. They're pretty fun to look at. Obviously Fox has a product mix that goes well outside of bikes. Though I'd say there's some, you know, overlap there. Like if the power sports world is doing well, then probably the bike world's own well too. But they do break out bikes. I think they call it like the specialty bicycle groups, something like that. So you can look into their reports and you can actually pull the revenue numbers there. And there's no question that in the bike world specifically, you saw like a massive increase through COVID. There's a doubling of revenue through that period of time. You know, and they're still coming off of that. And you know, you can go look at their conference call from not that long ago and their management still talking about what are we going to do going forward? What's going to drive our growth into the future knowing that this has been a problem. And you know, they have their answer, which is frankly innovation and, you know, doing the customer right, which is a great answer, obviously, answer. But yeah, I think it's, it is, you know, going back to did COVID actually create this problem. Yes, it just created it in a lot of different ways. It was a virus that changed us from a cultural perspective. It changed the monetary policy drastically, you know, like I still don't think people really understand how big of a deal the interest rate hike has been. And we'll talk about that maybe a little more, you know, maybe a bit now. But like, yeah, like I think that's maybe the one of the biggest things that that really led to that was the lever that was pulled that led to this really happening on a company basis. meaning like the girl of gravity all of a sudden, like situation where I'm not saying they're angel investor, what a stuck around, but they're definitely less likely to stick around when interest rates go up. And it's like, well, what is, they're not taking a loan, why would that happen? Well, as I tried to imply earlier, it's like every capital allocator is going to make a decision as it pertains to where they put their money based on what else they can do with that money. So if interest rates are effectively zero and I go put money in a savings account, I get like 1%, or 3%, or something low, well then I might go take some risks to get some real return, especially if inflation's at high. If there's a period of time where putting money into a savings account is actually net negative, because it's not really good. Exactly, relative to inflation, right? So in that case, I need to go put money into something that's going to give me a return. Okay, well, how much of a return do I really want to take or make, of course, everybody wants the most, but then on a risk adjusted basis, how much is reasonable? Well, as interest rates come up, and the fed raised interest rates faster, then maybe ever but definitely since the vulgar area, which is the last time we had a lot of inflation, which was before I was born. At that point, when those rates came up, all of a sudden, you didn't have to go far to get a return. Put money into a checking account, or some money market account, and be like getting 6%, or higher than that even, right? And every other investment you're going to make is going to be based off that risk-free rate. So what I mean by that is, the more risky take, the more money you need to make to make that risk worth it. Well, all of a sudden, the bike world found themselves in a situation where the risks were relatively high. The numbers didn't look so good. And you're kind of uninvestable from a company, ownership perspective. So I'm not going to buy, why would I buy into this company that looks like they may or may not make it? And even if they do make it, they're not going to make the kind of money I could make by investing in XYZ other asset. Or even just putting it into savings. Correct, or something like that. So that's what I'm trying to say is, every capital allocation is driven by what else can you do with that money, right? And that's a lot of what finances is based around. It's like, how do you make a, how do you value a bike company in a way that allows you to look at it like a piece of real estate? There's all sorts of different quantitative ways to make something look like something else. And as you look at the bike companies, and as you start to parse their risks, it just started to become untenable. Which is why I think you saw, you know, at the levels they were at, either investors said, sorry, I'm not going to do it. Or what we also saw was companies going into to bankruptcy effectively, and then assets getting bought out of that, you know, because then it's like, you know, kind of an auction situation in a way. And right, so is that like a guerrilla gravity or like a Venus-Nuke proof and a signal and all that? - Yeah, it's more the latter. - Right, so the bummer about what I saw with guerrilla gravity is there wasn't, I know they tried to sell some of their IP and some of their stuff, you know, at auction or whatever, I don't know what ever came of that. But, you know, at a point, the value of the, you know, of continuing the business was not high enough to, you know, they had to go toward bankruptcy, obviously. And then at that point, it was, does anything here have value? You know, it's just like, if a restaurant goes bankrupt, well, the restaurant's gone, but does any of the equipment worth anything, that sort of thing? - In the case of like, you know, the new crew situation specifically, there was still like inventory, there's a brand, there's molds, there's all sorts of stuff. And what, do you know what happened as a result? - I have no idea. - I know, like a lot of that stuff still sitting around, not claim, but again, I don't know for sure at all. - Right, right, so, in those, you know, in certain situations, you're gonna get that in other situations, you know, by no means am I a bankruptcy expert at all, that is way outside my expertise, but the point I'm trying to make is these investments just become untenable. Some of the assets have value outside of the business, which is really what we're trying to say, and that's that, you know. - And okay, so in the case of a new proofedist, if mine served me correctly, like, they had like $150 million investment or something, there was, you know, there are articles on what happened there. - Right. - And then they're gone, like, they just walk away from all that money, like the people that put the money in, like who, obviously the employees, like the people on the ground, get host, like what happens to the person or company or people that put in money that big, and they're just walking away. - It's a great question, and, you know, I've only experienced this once, not as the investor, but in a company that went, you know, belly up effectively. And there is a pecking order, if you will, to who has rights to what, as this goes sideways, right? So generally, this is why, like, you know, the equity investors, that means those that are buying a stake in the company, generally are last on the list. And then there's even within that group, gonna be various levels of within the pecking order, like preferred, burst non-preferred, blah blah blah. As to like, who, and again, it's gonna be stipulated in the ownership docs or in how you invested in blah blah blah. Generally, the creditors are up first. You know, those are the banks up first. So when you go in alone, you're generally gonna have that loan underwritten against an asset in the business. So let's say like, you know, I'm a business owner, I buy a CNC machine, and, you know, the bank underwrite, gives me a loan on that, knowing that if I go bankrupt, they get to take that. And then they get to go sell it. They get the actual dollars from that. That's usually kind of how it goes. So going back to that example, there's a line, right, of people that have some preference there. And depending on where you sit in that line that depends on how much money you're gonna get out of that, or if any, right? And then it comes down how much money are you able to sell these things for, right? - Well, like so in this case of, let's just assume it's $150 million in the business, and they went bankrupt or, you know, whatever happened. Literally, they're getting pennies on the dollar, it's not much. - Yeah, yeah. That money's just gone blown. - Yeah, I mean, the equity, like, this is the case specifically for those that make these big bets on the company ownership side, right? Sitting, frankly, actually below, or next in line to the creditors, you're literally gonna burn, that money's burned, it's gone. You're generally speaking. You know, just a strange COVID story that illustrates how this can go right in a way would be the, the same bank been freed story. - Why am I, FTX? - Okay, okay. - Okay, so with FTX, like, you know, obviously this guy, there's, I would call fraud, all this stuff happened, they're in bankruptcy, but the irony is, a lot of the assets they held were, ended up being worth a lot more than when all this went down. So when everybody started getting paid back, most people were made whole, or a lot of people were. - Wow. - Right? Because again, there was enough money on the gain of the asset, which is very rare, you know? If you've got hidden, you know, in your company, coffers, gold bars, and gold goes crazy, and then when you gotta go pay everybody back, you take the, you know, the amount you made on the gold bars, you could in fact end up kind of made whole. That's a really unique situation, but that just illustrates how it usually goes. You know, and that's where you have these teams that come in in bankruptcy, and like, it's a whole profession, is what I'm trying to say. And like, by no means am I an expert there, even slightly, but that's usually what you're gonna, and like, you know, they have to figure out the legal packing order to how that's gonna go down. And that's what I think is, in the case of Newcproof, specifically, it's super sad, 'cause there's like a real brand and asset, company, like, people love the product, you know? I'd, to this day would love to ride one, like, you know, so like, maybe you'll see that emerge, like maybe somebody will pick that up for pennies on the dollar, frankly, and continue on with it. I don't know, you know? But that's definitely a distinct possibility. - Okay. And, I mean, is that a similar situation with, looks like Kona Troy lead a some degree. It's like, okay, they're investors, investors bounce, and then the owners buy it back, like, cheaper? - Yeah, so there's some really interesting stuff happening. And this is kind of where we're at now, you know, when we're kind of jumping all around, which is fine, but yeah, like, yeah, exactly, with timeline, but, you know, so there's always like a silver lining, right? Like, so the bummer is like, you know, again, I'm, to be one of these companies, to be a founder and to watch this happen, has to be the worst feeling in the world. So that's the bad side, obviously. The good side is, if you are, you know, or maybe we'll talk briefly now about what a family office is, versus private equity, versus all these different forms of capital, but if you are looking for a deal in the bike industry, or in any outdoor industry, maybe industry in general, now's not a bad time to go shopping, if you will. You know, like, it seems like we've bounced along the bottom long enough. It seems like we know, you know, who is, like, has the ability to survive, and obviously there's lots of strategy, and, you know, nuance and, you know, subjectiveness to that discussion. But in the case of like, you know, Kona or Troyley, slightly different, but ultimately, like, what happened was the firms that owned those companies decided they were no longer going to, you know, for various reasons own them. And I don't know about Kona. I know Troyley specifically was able to partner with a family office, it appeared. Family office is generally a very, very, very wealthy family. And they have very different expectations with an investment generally, then, you know, say a private fund would, and again, we'll chop that up here in a second. And, you know, but the good part is they were able to, invest in these companies in a meaningful enough way where they're going to continue into the future, which was questionable prior to that, right? I'm not sure about Troyley, but definitely in the case of Kona, right? And that's really a good thing, right? and this is it. This maybe is a good time to pivot toward the discussion about what are these various forms of capital and what does it mean? And I want to be clear again, there are real experts in each one of these that could jump in and do a TED talk on each one of these things. This is a whole conversation here by the way, just everybody understands that. We're kind of taking the 30,000 view approach, but specifically with, I think the contrast here would be like a private fund that jumps into a bike industry company and by private fund in this case, I mean private equity. And I, you just go on pink bike, for instance, and look, you know, the vitals are a little more civil with this, but like anytime you hear a private equity in bikes, you're going to see like, these are the worst people in the world, you know, they ruin companies, you know, they're corporate raiders, blah, blah. A lot of that sometimes is true. I'm not going to like say it's not. But I think it's, I think a better way to pass judgment on it is to understand like how these, these firms work and why there's kind of a misalignment of an, of incentive. So in private equity specifically, generally speaking, what that means is it is a, it is a private fund much like a, I'll use a really general example, like a mutual fund, which we've all been able to be familiar with. And in this case, it's only going to go invest in privately held companies, generally speaking. Now to be an investor in that fund, you need to be a wealthier person, generally in a credited investor, which means you have a certain amount of net worth and blah, blah, blah. And there's silly rules in place. I do think they're silly, but regardless, it doesn't matter. That's how you actually invest into most private equity firms as, as just a regular person, if you will, or you know, whatever. Now generally these private equity funds are going to go raise money from like, you know, bigger sources of capital, like a pension fund, an endowment, truly high net worth individuals, even family offices. This is where they get their money. Now they pull that and then they go buy these companies. Okay. But the one, I think the biggest problem with this structure is generally these funds have a, they're 10 year funds, meaning I'm going to go take this money. I'm going to go invest it in these companies. I'm going to do something to make them more valuable. And then I'm going to sell them and then return all the money back to my investors. Like sell the company and return. Exactly. Yep. That's absolutely essential for these funds to work. Now the problem with that is obvious to me anyway. You've got a 10 year period to go identify the companies, to go call the capital from your investors to go to deploy into the company, figure out how you're going to make the company better and then sell it to somebody else and then return this money. It sounds like a long time. It's really not. A lot of these companies, you may not even buy until you're three or four, right? It's not like you're going to, some of these, you know, private equity firms are good at, you know, deploying the capital really fast. But I'm not general, who knows? Like there's, it's all over the map, right? So the, like I said, the biggest problem here is you need to find that return fast. And usually that means I need to do things within that company that may not be good for the company. It might be good for the sale of the company, but it might not be good to the brand long-term. It's, it's what I'm really trying to articulate here is it puts a short-term emphasis on the investment relatively speaking. Family office, however, this is, we're talking about families that have over $100 million, you know, in underlying wealth and usually goes up from there. They don't have that stipulation. They can sell it whenever they want to sell it. They can hold it as long as they want to hold it. There's a lot of reasons they may want that company. Part of it's just hopefully generating cash to put in the bank for them, you know? It might be a very special company that protects wealth in a way that other companies don't. It might be a prestige. Maybe, maybe the, you know, family is really into bikes for some reason. And maybe they just want to support that, you know? Where I think we've really seen this in a big way in the last, you know, 10, 15 years as in sports teams, you know, you've seen family offices jump in and buy these sports teams with really no, they don't want to sell them. They might, but they might, you know, they want to see the team do well. It's kind of bragging rights to go into a party and be like, I own a sports team. I mean, it's crazy to think that. But regardless, that's, that's a totally different form of ins, it's a totally different underlying incentive than, like I said, this private equity firm. The other thing you're going to see a private equity firm do again, because they have to generate a return relatively fast. You're going to bring in like so-called experts to run the company or be a part of that oftentimes. Okay. And like, generally that's not going to be the case with the family office. You know, they might advise the company, but they're not going to like change management. They might, but like that's not what I've seen in the, you know, the times I've been around it, right? So, so, so that part specifically, I think, is where a lot of the, you know, it's harder to see the misalignment of incentives on a timeline basis. It's a lot easier to see, oh my God, you know, this company got bought, they cleaned house, they brought in a new management team, and these guys have no idea what they're doing. To be fair, I, when that happens, I think it's, they're generally right. Like, these, these managers often might be really great, you know, Harvard Business School type of people, but I think everybody listening to this would agree the bike industry is full of nuance that, you know, I've been around it for, since 25 years now, maybe longer. I don't, there's so much complexity that I do not understand, right? And, and, and so to like think I could just jump in and like grab the reins and do something that somebody's worked, you know, a decade to refine, I think is a little bit of a, a little bit arrogant, a little bit delusional. And I think that's where we go off the rails with a lot of these investments. And that's when you start to see, you know, sometimes they'll roll up multiple, try to like, you know, find quote unquote synergies between all these different assets and then sell them or, you know, whatever. And I, I can't think of a, of an example where that worked, you know, yeah. Now, I can think of an example is, you know, just to kind of steal man the other side here, where you as an owner of a company needs an exit. I like, I'm not saying it's like, it should be required, but like, I don't think it's a bad thing that if you go work 30 years to build a company that there, you know, is a way for you to, to sell your valuable thing to a, to an investor in a way that allows you to see a return for all your hard work. Sure. I think that's fine. And hopefully, you know, what I'd like to see is like employees have ownership too. Like, that should be part of the equation where it's like, okay, you work there long enough, you're, you know, you own shares in the company and when it gets sold, you make money too as an employee. I think that's the right way to do that. So you need ways to liquidate ownership. Private equities want to. Okay. Right. So people putting into the, the fund, do they have a decision on what great question? Great question. Yeah. It's a great question. So generally speaking, you're going to hear private equity players defined as either general partners or limited partners. General partners are usually the fund managers. Those are the ones making the decision. The limited partners generally don't have a say. It's actually a great scene that's very accurate from what I've read to accounts of it. So I think it is. And in the big short where Michael Burry, you guys may remember played by Christian Baal, is getting, he's feeling all these phone calls from investors in his private fund. It's a hedge fund, which only invests usually in stocks and, you know, things like that. In this case, he's investing in some derivative product that's very, very esoteric and his investors are very upset. They're limited partners though. They have no say. They can try to threaten legal action. They can try to, if they're like mad about what's happening. But generally speaking, again, it's, it's right there in the terms limited partner and they've committed their money for X amount of time. Yeah. So one of the things that shocked me as I started to learn about this is you're locked up for a certain period of time and private equity. You're basically locked up. Meaning once the investment happens, there's not a way to get that money out of the company, right? Like you got to sell the company to get the money back out of it. Ventures the same way. You know, I can compare and contrast it in a second. But like ultimately, once you make the investment into the company, you're, you're, you got a wait, man. And what's, like I said, what's wild to me is, is the way there's a great Warren Buffett bit out there. He's kind of against private equity for other reasons. Mostly the fees, which are crazy. But, but on that token, if I go raise a bunch of money for my private equity fund, I don't actually take that money and put it into a bank when I raise it. It's committed. But I don't do anything. I, you, you, you as the LP keeps that money until I find a target. So let's say I'm going to go buy you. I don't know, some DVO suspenders, I'm going to go buy it with my, with, it's an investment I'm going to make. And you can buy the whole company or you can buy a part of it. When, when I've identified that acquisition, it's ready to go. Then I call the capital, meaning I like basically ring up all my investors and say, Hey, I'm pulling the money for this. Now your stake is worth this bubble. You need to, you need to, you know, wire that to my account. But I'm charging fees on that money from the second I raised it. Because it's not even in my bank account, I'm not doing anything with it, but I'm charging 2% or whatever it is on that. So this is why like one of the things that I think is really interesting is how, how much finance is kind of this pie that everybody's trying to take a tiny teeny sliver and kind of tax you right through it. And it may not sound like much of the time. Like, oh, it's just 2%. It's like, no, that's not like, could be a lot. Yeah. And then, and then the other way the private equity firm is going to make it is, is, is on their performance. So however good the investment does, the fund manager, the, you know, the fund itself usually takes 20%. That's kind of the two on 20 normal, quote unquote, way that the private fund world works. So there's a reason why like some of the wealthiest people on the planet right now come from the quote, quote, quote, private fund world. This fee structure is crazy. And like I said, Warren Buffett has a really funny bit where he, he basically says, you know, the best way to make a lot of money in the finance world is to be a private fund salesman. You, you won't have to work your kid. Like, after you do it, you're not going to have to work your kids aren't going to work your grandkids aren't going to have to work because if you can go raise a couple billion dollars, you're going to make so much money just in the fees. So, so this, this goes back to the, the misalignment of incentive and then this trickling back to the bike world. It's like, wait, so what's good about that? You know, it's like, well, it, you can see how, how we're really not aiming on making the bike world great. We're, we're really aiming it. Max. maximizing our return for our limited partners back to what you said these people that really don't have a say in the fund Okay, right so that's really I think where the the a lot of the animosity toward private equity comes from and like I said I think it's real a lot of it's really fair Yeah, I'm not saying there are there. I've got friends that that you know run some of these funds and they're great people And they've done great work and they've put capital to work in places that was really needed but That's not always the case, you know, and you think this COVID time in this outdoor industry boom was People is jumping on it cuz yeah, it's that money again. It was well It was just like weird. Yeah, but it was also just like again It was like rates were low which makes it harder as a capital allocator to go find a return You know, and like this is where this is you know Just just for those wondering just maybe tie this all together So you have family offices doing one thing and again, what's really hard to understand there is not only can they just go Act on their own and buy companies and buy stocks and have their own they can also go invest in these private funds And they often do they're kind of doing everything in a way and every family office is gonna be its own thing and really like They've got a team of people working to preserve the family wealth and or grow it or whatever the goals are right so that's one side And then you've got the on the private fun side you've got we've covered private equity and there's venture capital I was was not gonna cover that at all until I remembered that yes Specialized did have an adjacent funnel remember the name of it, you know put it in the show notes But I don't know what they're doing now, but the difference in venture compared to to private equity generally speaking is a There's no leverage involved. They're not using debt meaning private equity smith will you know go find a company go raise debt and go You do like a leverage buy out or whatever Venture is gonna be more like hey, I've got a startup. I think it could work and I go pitch it to a venture firm And they might take a stake in that in my startup with the expectation that it either goes bankrupt or it becomes What you know they call like a unicorn or a billion dollar kind of thing right? It's worth a ton of money And is bankrupt okay totally it's expected like One out of nine or one out of ten companies are gonna make it Yeah, is in a good portfolio and the other eight or nine are gonna go completely bankrupt and frankly they're usually Not even happy if you're like a zombie company mean like you exist like you're even like making money But you're not going anyway, right like if you're an okay. Yeah, so yeah, the whole the whole yeah the whole portfolio Strategy is you need one of your companies to be like a hundred Xer. Yeah, you need like the the old like Peter Teal puts like $500,000 into Facebook and it's worth I forget the the hundred X kind of investment But he's so he's cool with a lot of investments going to zero and like it's it's totally different risk profile But it's all based on this like exponential growth logarithmic growth kind of curve for the companies that you do invest in that are worth you know Become worth a lot of money that you need that to make venture work Which is why I always that was in a weird way I kind of thought I was feeling that in the bike world I'm like there's no place for that here just because we don't have that like I don't know how many Companies that are doing a billion dollars in revenue or more are in the bike industry maybe a couple like you know Sram Shimano You know maybe specialist right I doubt it. I highly doubt that actually But like we don't we don't have even a you know on a revenue basis companies are gonna do that on a valuation basis There's they don't exist, you know like I again I Shimano and Sram aside. I just I don't see these these these bets being worthwhile Or relevant I should say so that was like shocking to me to when I saw that you know There was this cool little venture from out there and then I saw that they're investing in they I think they took a stake in Outside online I can't remember they there were a couple other smaller companies that were interesting kind of tech adjacent or Tech slash bike adjacent whatever do you want to talk about? Van move you have that yeah, okay good. Yeah, this is a good no. This is a good transition to to to talk about like how How I hate the word but like how frothy did did venture and bikes all get this is the best case I think it's bringing up I forgot about it, but So I this wasn't on my radar at all and like I think one thing that that's we can Kind of find ourselves in this our own little bubble of bite of mountain bikes because mountain bikes And you're obviously the coolest but like there's a whole other part of the bike industry that we don't even remotely touch Which is you know commuting urban? You know, I like I said getting ready for this pie. I looked at some data But it was like the bike industry as a whole is a $70 billion a year. That's a sales number industry every style bike Every style like you know and mountain bikes. I want to say we're about 10 billion nine billion somewhere in there Which actually shocked me? Yeah, you know, I consider really high to me, but but like that's that's what that's those were the numbers Just to put that into some some context the motorcycle industry is a hundred and thirty seven billion I think is what I saw you know that the the smartphone markets 500 billion I thought that would have been a lot bigger and kind of the biggest was the automotive it 3.5 trillion again sales numbers because you have a much higher you know dollar amount Yep, so just to kind of put all these devices and things in in context, okay So so going back to like like so it's there's this whole part of the industry that we don't pay attention to at all and that that being the commuting market and You know don't forget right around this period of time is where like the scooter trend was huge right like all these Electric scooter rental gonna be the next uber type of companies. Yeah, so you had this company Out of Europe called van move and I might be pronouncing it wrong and they took on an inordinate amount of Venture funding to be like the quote-unquote Tesla of the bike world, right and it was this company that was like selling these Kind of cool-ish-looking e-bikes, I guess I guess for commuting for a lot more money than maybe that an equivalent E-bike would go for without it coming from van move and they had things like I can't remember like they had a pretty crazy warranty They had like anti theft built into the bike and like you know GPS and all this they tried to build as much technology There's like an app that was built with it And they really tried hard to look like a real tech company in the bike world, right and Right right before the gorilla gravity thing happened This was probably a few months before is when they became unsolvent They were basically like, you know, and they they had raised I want to say I've got it in my nose I want to say it was a half your thing says 500 million yeah I'll double check the number, but it was it was hundreds of millions of dollars and what shocks me about this again is like And this is why I think anybody that's in the audience here will appreciate this is like first of all think about five hundred million dollars That is so much money Number one e-bikes do you have to sell just to get that back? Right, so that's alone like make the company and run and build the bikes Yeah, so that's the first thing It's just like again five hundred million dollars is not we're not talking five million or even fifteen million a lot It's a lot of money so five hundred million dollars and like I said we'll double check I know it was in the hundreds of millions Okay, so that's first thing the second thing is anybody that's lived or been in a city in their entire life knows a couple Just common sense driven things and this is maybe the toolkit that I hope people leave with is like common sense will prevail and And like in you know, we go to a city Yeah, you can go buy the coolest fancy a seat bike and That's sweet or you could just go buy like a hundred dollar clunker or whatever and it's gonna kind of do the same thing I get the e-bike thing is a little cooler or whatever go to go to New York City and look at what the like door dashers are using It's not fancy e-bikes they have like this like Amazon or Alibaba bolt on thing on these cruisers Yeah, or what I'm not even cruiser like these old mountain bikes and guess what the net is these things either way cheaper They are pretty fast relatively speaking. They're pretty much unregulated at a point and if they get stolen It's not the end of the world or if they break whatever So it's like in there in the case of like Tesla at the time I was like if you want any electric car for a while it was like we can buy a Tesla or that's it With a bicycle in a city there's a lot of options from non-ebike to e-bike to you know Frankenbike or whatever and for nobody in the room to raise their hand and go hey just a question How do we know that this is what the people are even gonna use like who are we sure this is gonna work on just a you know The common sense basis you like who was the hustler that sold exactly a trillion dollars on this exactly and then to your bigger point Which is like how many e-bikes you got a cell to get this back? Well, this is where it gets really interesting on evaluation basis and like I I I went on this long die tribe Kind of a kind of a my own social studies project Where I saw that Uber had raised $20 billion for the lifetime of the company would be yeah Would be and had returned you know in profit at the time it was like I don't know 400 million or something and the company was like you know at this point they've started in 2009 and it was Intense many of that and this was this I did this analysis like a few months ago So it was roughly 14 years 13 14 years and and the company's worth Way more than they've earned but they've returned only a fraction of this of this amount that they've raised right so So this is like well wait a minute explain this it's like so they've raised a lot of money They've burned a lot of money, you know, and they had a little bit in like their balance. She's not terrible or anything So it's not like they burn the whole everything they've raised But the big point that's just speaking generalities. They have you know $20 billion gone They've made 500 million let's say what's going on here? Why why does that make any sense and the argument that anybody would make that's pro Uber and you know Obviously there's a lot of them out there come. He's worth a lot of money right now on the stock market And the S&P 500 blah blah blah the answer and this would be the same answer that somebody's looking for in like the van move thing Is that what you're really doing is you're you're you're you're buying the company right now even though it's again it's burned all this money added discount relative to all the cash flows that it's going to throw off for the next hundred years or the next 50 years or the next X amount of years. Crazy that long. That's the idea, right? You're discounting the future back to now and then you're buying at a quote unquote discount to the future of that company, right? So, with the case of Uber, I could sit here and make an argument on both sides of this that yeah, it'll be around and it'll be a multi-generational company and you're able to buy now and yeah, you're not going to get, it's going to take a long time to pay off what you're buying into it for but over a long enough time you would get that back and oh, by the way, you can always sell it in the secondary market, right? In the case of Van Moof, there is never that, I mean, again, common sense is they don't have the moat, they don't have the thing to like keep that valuable enough in the future. Like it's not unique enough, basically, right? Yeah, and like that, you know, I've mentioned this in the thread but anybody really interested in this stuff, there's a great paper, I'm going to butcher the professors last name so that I'm going to try but it's called measuring the moat and it's really about like the value of a company is oftentimes driven by how protected is the cash flow of that company. So this goes back to the bike world where Van Moof specifically is like what was special about that company? Frankly, nothing, you know, at the end of the day is what we, you know, they had some ideas but like what would protect, why must you buy a Van Moof bike over any other bike in the world? And, you know, just like, well, why are you going to ride in Uber versus a taxi cab? Well, there were reasons, you know, and like, yeah, you got lift to Uber and now there's all these other players or whatever. But the point is, is like they had a moat or they might have a moat, right? They have something special, technology, whatever. The case of a lot of these companies, there is no moat and what happens there is you get kind of competed away. Either you're like an operational, you know, genius or you get competed away, right? And so like in the case, so that's why that company ended up bankrupting very, very obviously. But that was kind of another example of what I call like peak venture capital craziness, right? Of like that kind of investment. Yeah, and, you know, the companies that invested in that probably, you know, in their portfolio, I don't know how many had other companies that did well, but that's not like a shocking thing to a lot of these companies, right? And like I said, we'll double check the numbers. I'm guessing it was less than five million, but it was still a lot. So anyway, crazy. Yeah. And the threads of our 23 companies have either announced bankruptcy or restructuring. Like, is there, you know, you have written down, is there an untold number that was that quietly laid people off or scaled back? There's a reason for all this. But yeah, so like, I mean, I think it was cool that everybody jumped in and contributed so much. And by the way, I want to reiterate like how fun it's been to watch people, you know, help and kind of just pay attention to this. I didn't expect that. But, you know, so I'm being a little liberal with my accounting of this, you know, if you just announced that you were changing, like, you know, for instance, O'Lens is restructuring. You know, they're clearly not going out of business. O'Lens is going to be just fine. But that's included in that 23, you know, and so are the companies that aren't going to be around. So that's a pretty broad thing to be doing there. But again, this kind of goes back to like the bike industry and just outdoor industry as a whole being mostly private. So like, if you have to lay people off, there's nothing that says you have to, you know, if you're publicly traded, you got to, in its material, you got to disclose it. If you're privately held, you don't have to tell anybody that. So I'm frankly shocked. We know as much as we do. You know, like, for instance, when, you know, Hayes had the announcement that they were going to lay a percentage of their work for us, obviously, like that. And it wasn't like this massive, like, they're shuttering factories or something crazy. They're just like, you know, I'm shocked they disclose that information. You know, there's no, they don't have to do that. There's nothing legally that says they have to do anything. So with that really, the question I was asking myself is how many companies are actually letting people go or, you know, putting people, you know, like I said, I'm sitting here doing this podcast on a Monday and I'm not going to a job because I've been in this boat, right? So, like, I wonder how many, how much this is more, how much this is happening and not being disclosed. Yeah. How ubiquitous is this across the entire space? And probably, I would guess there's a lot of it, you know, that kind of, you know, I get, yeah, that that that was the main, you know, that's kind of in my main takeaway here is, is, is this was far more prolific than I kind of thought. I think at the end of the day. Yeah, for sure. Do you feel like we're at the place where we can talk about the state of things now? Yeah. And where we're going to go and how innovation is going to play into the state of the stream, things like that. So, yeah, like, you know, one of the one of the big drivers and I've, I've like, pinged a filmer here and there over the years and like, I'd say the last four years specifically where I just noticed that bikes specifically have, have seen like just the outdoor industry as a whole has gone through periods of this. But the bike industry specifically, mountain bikes have plateaued in performance in a, in a pretty big way. Time to million. Yeah, yeah. Yeah. It's, it's cool, right in a way. Yeah. Like, I don't feel this, I mean, I'm a total gear nerd and I love all the new technology, you know, and everything. But I'm way less likely to be like, oh man, it's, you know, it's 2025 now. I got to rush out and buy like a new bike. Like, I mean, I've talked about this extensively, but like, I loved the specialized in Dero, for instance, I'd still go buy that bike. I bought it twice. Like, you know, like, I never bought a bike twice in my life because it was like, well, the next bike got better, so you don't buy it again. Sure. So, things like change drastically. Yeah. So, so, so we've seen plateau, like a plateauing of the progression of technology, which is, you know, frankly, I think one of the ways we've been kind of rolled into this expectation of next year is always better, has been the semiconductor world. Like, I kind of grew up in that in a way where like, you know, the internet wasn't a thing and then it was a thing like computers were giant and, you know, in your parents office and now they're in your pocket. But like, every year things got better in the semiconductor world in a way that was like, whatever video game system you had when you were nine, by the time you were 10, you had you buy a new one or whatever. So, I just got used to like, you know, Moore's Law being a thing. And I think mountain bikes, I wouldn't say followed Moore's Law, but it seemed like the progression from, you know, the me riding a garage built BCD to, you know, what I would ride in 2017 was wild over that 17 years or whatever it was and 15 years. And it almost felt like it was going to be there forever. And you could even see it. I mean, I think it's been one of the big, you know, Achilles heels to the bike industry as a whole is we would move so fast. I think it became really difficult to amortize like a mold's cost across a long and a period of time to make that valuable. That would sure seem that way. It would sure would. And it seems like that would be half a degree head angle change or whatever. Yes. Right. So it was like, man, like, I think like we've been running on a pretty ragged kind of like, I said like our like our margin requirements had to be high enough to justify the just incredible pace of innovation we've had for a long, long time. And I think that's come off. I think that's notably come off before cove like 2019 to be the year I put is like the year where progression. I don't want to say stop. It's still getting better, but it definitely tapered way back. And again, if you look at every other industry outside of computing, that's normal. You know, like the diesel engine in my truck out front. Isn't it? Yes, it's notably better than the ones from the 1900s, like early 1900s, but it's not like the difference between it. I said like the computer you had in 1985 and the smartphone in your pocket. Nothing like that. You know, the airplane you fly on now is the same airplane your grandparents flew on effectively. Right. So I think I think innovation is like these really crazy periods of change followed by a long period of optimization. And I think we're in that long period of optimization. Now that the bummer of that is when we're in a situation like this where demand came off and now innovation is not driving, though like I must go buy a new one, then sales kind of slowed down. Right. And again, that kind of goes back to I think the underlying theme here is you need to run a business kind of like the old school way of running a business used to be like before all this madness and craziness. Like you got to you got to do the little things right now. Yeah. You can't expect from free money to be there forever. That's going to cost real money. You have to have a strong balance. You just got to do like the old school normal things that people used to talk about that were in business forever ago. Like that every normal business owner frankly has to deal with. But like that's I think the return we're going to see because of all these other things. So yeah. So like I think the silver lining to innovation slowing down is pricing should come down for all I think it's tough to tell because inflation has been kind of what it is been. But like we should be able to buy more bike for frankly less money because that's the way you're going to compete and you're not going to need I mean I think I think the big takeaway and we're already seeing it. You've definitely seen it with like companies are moving away from selling a new product every year or changing their model even though it's colors and it's like oh now you get to discount the 2023 because it's 2024 but it's the same bike. Like I think that's done and I think that should be done. I think the other way we'll see companies get smarter with their product line is just reducing the number of skews they offer. Right. So I think that will be a way that the new kind of like new normal is brought like that that's what we're going to see going forward. Just like let's say things say pretty status quo what they are right now. Does that over the course of five, ten years does that lower the actual value of a company based on sales. Great question. No it might they might still be strong companies but like company X is worth a hundred million today will be worth fifty million next year even though it's stronger. It's a great question or strong. Yeah no no it's a really good question. So generally speaking with interest rates coming up multiples go down. So, without getting really academic and impacting exactly why that is, you know, this is why you did, you know, see certain, I know one person that exited their company like during the height of COVID, right? And the value they got on the cash flows higher than they would get now even though he knows the business, he still owns a part of it. He knows that business is actually worth more now. Because it's making more money, but he would get less for that stake. So, this is kind of like one of the big themes that like took me forever to get and it's still boggles my mind, it's just how important the Federal Reserve is and everything. So, Jerome Powell has such an influence of everything, you know, so yeah, to your point, like, you know, I think the bigger question is, will interest rates come back to what they were in the 2010s, and if he answered that is no. Well, that's just a guess. But I think of a lot of reasons as they say no. There is an answer that would say yes, and that's because we, as a country, have a lot of debt and the only way we can survive is by lowering our interest rates to a point where we can make the payments, but there's other problems with that. So, I'm not going to, there's a lot of people arguing about what I just said. And I don't know who's right, obviously, or if I did, I'd, you know, we'd be doing this podcast in like some private jet or something sweet. You know, clearly I don't know what I'm talking about there. But the point, the overall point here is if things stay like they are now, yeah, your company is worth less. Then it was when rates were low. That's just the reality, right? But it doesn't mean you're not a strong company, just 100% of us. Yeah, and like, look, there's lots of reasons a company can be worth more. You know, maybe, you know, like just equalizing for all the same things. Yeah, your company would be worth less in a high rate environment than a low rate environment. Simple as that. I just think what's really interesting is like we're being, there's a number of people myself, I put myself in this group that got, that kind of came into adulthood business life, whatever, during a very strange period of time from like to the great financial crisis to frankly now. And rates are going to like what, what like all my peers say are high, but it's really just normal. It's nothing. There's nothing bad about this. It's like, so I think the bigger question is like, can the bike industry be just fine in this environment? The answer is 100%. Yes. And like, yeah, maybe some of the riffraff might not be there. But, and by that, I mean, just like some of the crazy risk taking might not be there. Like some of these ideas that like, you didn't really pan out, but like you saw, I'm kind of be there for a while, whatever. You might get less of that. You're going to see more pragmatism probably. But I think from a health perspective, it's, there's nothing wrong with this. Okay. That makes sense. I mean, on that note, is there any incentive to get into the bike industry now, whether it's, you know, making a component, you know, starting a bike company, doing a, being a four bar Chinese brand kind of right? Yeah, no, it's a good question. And I don't think David will be mad if I say this, but you know, those that know David can't, he's been a long time buddy. And we have started a small component company. So, you know, it's, it's in quote unquote stealth mode. Not sure you're going to see much from us for a number of months, but obviously I believe it's, you know, it's great time to build a company, you know, for a lot of reasons. Now, the question is going back to what you said, like, what kind of company are you going to build? I think what's really cool about the bike industry is you've got all sorts of different ideas and people that have built successful companies on those ideas, right? Like, there is no one formula. And only there's one formula to being a founder. Only there's one formula to running a business. And I do think there are some like foundational pillars you kind of have to adhere to and you probably have to adhere to those more now than you used to. You know, I personally probably wouldn't try to do like building a four bar Chinese company at the moment. Like, I think that's pretty saturated. But I mean, this is just an opinion. I think there's plenty of opportunity. And, you know, I think, I think by being, I think there's always, you know, there's an old Jeff Bezos quote, which is like, your margin is my opportunity or whatever. Like as long as there is money to be made in the space, yes, there's smart people out there that are willing to take the risk and do the thing. You know, I think that's maybe the one of the biggest headwinds that I mean this lovingly is there are so many smart people in the bike industry that absolutely love it. And they're willing to work for less money. You know, that's just my opinion. But like, as a result, like, I think that's where a lot of the, the, the moniker, like, what's the best way to make, you know, a million dollars in the bike industry start with two. And it's like just because there's so many people trying to do this because it's fun. Yeah. You know, bikes are fun. It's like way better to go, you know, work on a bike project than it is. I don't know. Some, some thing that you just don't really have any passion or care about. So as a result, I just think you end up with a lot of passionate smart people, which drives, you know, wages down, frankly, and, and it makes it more competitive. I mean, you know, I, I think guys like, you know, David or Darren from push or named the, named the smart engineer could go build rockets if they wanted to. I mean, actually David is. But like, this is my point where like you get a lot of, you get a lot of really smart people that could do a lot of things and you just, it's super competitive. So that's the downside of the upside is, you know, with, with a period like this, I think there's been like, I want to say like a cleaning of house, but like, you know, it kind of like resets the canvas for anybody who wants to jump in and, and you know, as long as you got the right team and right idea, I'm sure you can execute and build something sweet. Yeah. So for sure. Is there a goal for a size of a company like, understand like, okay, you could be a garage frame builder and make 20 a year and be psyched? Like, do you kind of have to have hit a certain mark for it to, to work? You know, I, I don't know the answer to that, but I do know that it's good to have that in your head as to what you really want to do or where you want to be and aim at that and build a strategy around that. And I also think there's no like, no, I've, I've worked for it, you know, for, for a small power sports aftermarket company for a long time. And I saw so much potential of this company. And the founder really just wanted to keep it what he had, like he wanted to live within his means pretty more than I did. I wanted to like find ways to grow this in ways that they probably, you know, probably could have done. Now, what's right and what's wrong? There is no, you know, he, he really thought it was cool. He was making so much money doing something that he never thought he'd make money doing. And I think that's really admirable and cool. You know, one of my other best buds, he owns a binding company here in, in, in this area. And you know, his idea is as to what success looks like is he's got, he's got huge ambitions, great engineer. But I think, you know, he doesn't, he's not looking to, to become a, a multi country conglomerate, right? He loves that he can build something, he can build a sustainable, durable cash flow for him into the future. Great goal. He's doing it. He's done it. So I think just being honest with who you're at, who you are, where you're at, and the level of risk you want to take. And then, yeah, being common sense around the product you've got. Certain products can go huge, right? Others can't. And I think knowing the differences is massively important to the decisions you make. You know, so yeah, I, I don't, again, there's no right answer there. Cool. Do, uh, I don't know, kind of wrap up. What do you think future looks like? Do you have any idea? Yeah, I mean, I've done this a lot in this pot already where I've overstepped my, my true expertise, right? So to answer that question would be, you know, like the, like the crystal ball that nobody has. And, um, okay, before you go too deep on that, I mean, I rubbed. There's always a crisis. Everything collapses. And, oh, money's free. Life's great. Right. I'm going to do whatever we want. Are we going to see the exact same thing 10 years from now? Like it hyped and then it takes a dump again. Like, yeah. So, so like one of the things that I've become more interested in as I've gotten older is just like looking at history in general, right? I mean, like, well, how does this compare to that? And, you know, I, I mean, I panicked during COVID straight up. Like, I was certain this, you know, and there's, there's, there's kind of like an, there's an old, I don't mean that old, but like, billber as this bit where you like, basically says like, don't worry about the thing until like it's a thing and then worry about it then. Like, you know, but there's no sense in worrying about it ahead of time. Like, just deal with it as it comes. And, and it will kind of the translation I made to that is like, look, if, if like, if it really is like what COVID we thought maybe was for a hot second there. And like it's zombie land and then where we're like, you know, it's like a poca-liptic. None of this matters. Of course. Sure. You know what I mean? So, what do you make decisions as if it's going, you're going to get to the other side of it, like history would suggest? And look, there's always that I guess chance that it goes really, really bad and it doesn't end up that way. And then it's like, well, then it's a whole weird world that is, you know, not even worth talking about. But, but the point I'm making is, yeah, these are pretty pattern driven things, you know, going back to, you know, so will it happen exactly like COVID? No. But will it happen like, you know, one of these things that, you know, it's the other funny part is like, how many, once in a lifetime crises, am I going to live through in the finance base in a 10 year period? I don't know. It's a lot, apparently, or 15 year period. And that's maybe the one of the weirdest things I've seen is how it seems like the rate of what, like at which these crises are happening is, it seems to be getting faster. Is that because of technology and how fast you can react and how fast things are reported? I, there's a really interesting website. I think like Mark Andries and one of the venture dudes, he's like the guy, that's the guy that founded Mosaic Netscape. He pointed out a website. a few years ago called WTF happened in 1971.com something like that. And it's like, the world was X before 1971 and it was Y after 1971. And there's all these graphs and charts and things and it's like, what happened there that created something kind of markedly different in the world? And like, to your question, is it because of one thing or another? I don't think it's one specific thing that created this weird world we now live in, but it definitely is a different, like, you know, the amount, like here's a good example. Before 1945 or '48 or whatever it was, like venture capital didn't exist, private equity didn't exist. I mean, it did in like the ship-bearing era, but it's like a totally different thing. You know, before 2000, whatever, like social media didn't exist. And when you combine all of these different technologies and, you know, ways to try to make money into one specific, you know, society, I think you just end up with like a level of chaos or entropy that is a little different than history is my point. So I think there's patterns to be picked up, but I don't think that we would like, you know, I think we'd be lying to ourselves to think that like we're in the same period now than we've always been. Yeah. I think it's a very unique time. And I know everybody says that for every era. So it could be wrong. Yeah. Yeah. This is, you know, this is the newbie me and I know he said like, oh, anyone can go look up Fox's earnings or word of watch things. Like, how does someone do that? That's a great question. Yeah, this is really good question. And so it's Fox kind of the only mountain bikey one. So I pulled a bunch. I'll actually maybe put up this silly presentation because it's kind of funny. Well, like you can include it. Yeah. Like so people can go through it. But to the question like, like there's a. Okay. So I'll be really honest. One of the easiest ways to figure out which bike companies are publicly traded and you can go grab financials for is just straight up use strategy BT for that. Okay. It'll give you a great list, right? And that's like a new way to do this. And then you can even converse with any of the better AI tools about the performance of the company and it's usually right. You sometimes you don't want to check it. If you were going to like turn in for a class report, I would definitely check it. But they do it. It does a pretty good job of that. Now the thing about every publicly traded company is they have a like on their website, on Fox's website, there's an investor section. And honestly, I think it's kind of like considering how frankly intellectual the vital audience is, I think a lot of people would enjoy listening to the quarterly conference call. You know, and you can jump on as anybody, frankly. Now, you could even try to ask a question, but they usually reserve that time for like the analysts at the banks that are writing research notes and they get to ask the questions. That's usually how it works. But you know, you can hear what the CEO, CFO, COO has to say about the health of the space, what's happened, what why it's happened, what's been good, what's been bad. Now, the average vital listener or user is going to be honestly more nuanced about the product offerings than like the management team, you know, like they, they, we live and breed the stuff in a way that is probably almost inappropriate. So it's like, you know, they, they have a little different lens, but it's, that's a really cool way to like at least get a feel for what's going on. So yeah, going that way is one, you know, or using the investor relations component of any of the public trade companies is a really good place to start. Okay. As to like private market news, that's like all over the map, or there's really not a great way to track that. And it's frankly like kind of a black box. It's like a lot of it is from, she thought of this. I was like, man, you know, as much as I love talking about this, like you're at, you know, you're at my house right now, like I don't own a bike shop. I don't own a bike brand. And I guess I, small startup you want, but like that doesn't count. Be maybe better if you just talk to people that like are in this, in the world that are, you know, doing this stuff, like you might get better insights. And then I thought like the problem there is you often get like very political answers on purpose. Like you, they need to do what they need to do. So like, like one of the best ways that you'll see people pull data out of private markets is by anonymous surveys. So like somebody will actually send a survey to 10 people and they know those 10 people in the industry and they, those 10 people know they're giving anonymous reports back. Now, there's no assurances they're not lying to you. But that gives like a little bit of a wall between, you know, the company and the person taking in the data and usually the incentive is you're going to get to look at this too. So when you like to know what your competitors think in, you know, so there's some, you know, gamesmanship there and poker playing. But that's one way that like those are hard to come by. You know, if I see anything like I do, I did find a kind of cool like M&A report for the bike industry. It was so M&A so merger and acquisition. So you know that's like, we didn't really talk about, but like that's like been a lot of the focal point, especially in the private equity kind of world is like, hey, if I buy this, so I'm acquiring a company, can I really like what's the, what's the health of that type of transaction? Like, what you don't want to do is go buy a company in a space where nobody's buying companies and then expect to sell it. Unless you have like some amazing insight that nobody else has, right? You want to see that there's some activity in the buying and selling of these things, right? So I found some like very esoteric report that had some pretty interesting insights, right? And then on the broader kind of like macro side to like learn, hey, what's the, how big is this thing? And, you know, what, how many participants, what's the growth rate, all of those things? You know, there's there are research agencies that's all they do. Sometimes it's pay for the report, sometimes you can find them for free. What I found in the bike industry is, is the data is very, there's a high standard deviation to the data. So who knows what's real, you know, yeah. Yeah. On that note, I think our audience survey is done and published on, there you go. VitalMediaNet.com will put it on the, on the site for sure, but I've always found that I'm pretty interesting considering the size. It's got to be so early back here. Well, I think on that note, when Fox went public, they cited your audience report in their perspectives and their S1. So like when it comes to those public, they have to like disclose all the relevant information to an audience. Okay. And I remember hitting terminate up, I mean like, dude, look, you guys are in the S1. I'll try to drum that up too because it's kind of like a cool piece of history. One question for you, did you see any changes? You know, I'm not asking for any sense of information, but like as a business, from a vi- from Vital's perspective over the last, you know, it from 2019 to now. So before COVID did now, do you feel like things that does what, do you feel like what we're talking about fits what you've seen from your perspective, from the media side? Or do you think it's, you're kind of in a little different bubble? As far as like traffic and sales. Yeah, COVID traffic, like we have our product guide, which hardcore vital people barely even know the product guide exists, but it's a massive piece of traffic for us from a search, like a research perspective. That was really good during COVID for sure, because I want to buy X, Y, or Z bike. We come up in the Google search suite. That's down for sure. Because I just don't think people are researching bikes the way they used to. Or they're not, not as many people are looking for bikes by just searching on Google. Yeah, it was, you guys had, you stuff great SEO with that. Like you type in a bike and you're going to be on for sure. For sure. Yeah, as far as regular editorial content, not a huge difference. Like maybe stuff went up a little bit, but the content we're putting out is for the hardcore mountain bike or the system. Yeah. Not the new person coming through and just getting on for the first time for the most part. So that's kind of the same kind of the same. Yeah, you know, I don't think it's COVID driven as much as it is where people are watching or consuming stuff. It's like, yeah, website is definitely slower than it was 10 years ago. Sure. Like YouTube channel still doing good Instagram doing well, but that's just kind of part for the course for anyone right now. I think, yeah, it's a similar trend felt throughout the space probably. Yeah. I just was I was really curious to see or to hear if, you know, the if you even heard from the brands themselves being like, Hey, you know, not interested advertising or the same or yeah, I think in the height of COVID, when no one had anything to sell, why do we need to advertise that's interesting now flip side. Interesting. So it's it might even be like a little bit opposite for us. That's really cool here. So it's just like, why do I need to promote a bike? I know I don't have and won't get for another year. And do you feel like you've noticed the model your things are going to change? Yeah, it seems like for sure. Like, yeah, he don't see the the MI 2025 attached to much stuff anymore, especially bikes. And it seems like and maybe this is YT leading the charge with it, but you know, do maybe there's the only ones doing it, but okay, they have a capra or whatever. The frames same, but they seem like let's say they made a thousand capras. I have no idea what their numbers are, but they launch the uncage for painted a certain way, spec to a certain way, and they only sell 100 and then they sell out. Well, they still have the frame. It's not the uncage six with new paint, new spec. And so it's a way to keep the same. It's like doing a drop. It is. It literally is. Yeah. Yeah. So that was my last question for you, which was, do you feel like, and this would be a better question for like stick or somebody that's in the soft goods world? The side of the outdoor industry that still seems really hung up on model years, or whatever you wanna call it, years, is a soft goods side. And this is what it seems like, I could be wrong. I pay attention to Patagonian other companies just being around here, but they always have a new offering for the year. And from my buddies at home, bike shops, that's a huge pain for them. Because bike pants don't generally change. Right, or like, you know, your gears not really change. The colors change, I guess. Right, like it's just what color is cool? Yeah, but it's like, they'll do a different cut, a different this, a different that, and like the shops around here specifically have to discount the crap out of their soft goods. And that's gotta be so hard, is my thought. So I don't know if we'll see that, trickle into that world or not, especially considering how seasonal what we do is relatively speaking, at least around here. But yeah, that was my only other kind of prediction. I don't know, maybe it's like an easier thing to do with shopping seasons. And it's easier to buy a Coder shirt for Christmas than it is, you know, a bike? I don't know. Yeah, I don't either. And I'm sure there's like, you know, it draws culturally from fashion, not from a sport. So it's a different thing all together. But I just was curious if that's been a thing you've been. For years, one thing, like I've never really been interested in like riding gear all that much. To the point where I pay a ton of attention to it, I want something to work well, but you know, you know, you'll hung the speak better, all that stuff. Right. Just keeping an eye on X, Y, or Z for sale. It's like, whoa, this shorts 90% off. It's Jersey, like it's specializing. Right. Massive discounts. And that seems like, it seems like the apparel, outdoor apparel industry got nuked by COVID. Yeah, and like we didn't talk about it, but I just, we kind of closed it. But like there is a, like one of the pro, one of the hangovers we're going to have to, like deal with is just the precedent that's now set. Yeah. I paid $3,500 or $3,600 for that bike. Totally. Which is now like, okay, it's wearing out or like I want to buy a new bike. Like I have to deal with the fact that I'm not, like I'm, it's something to be like, I'm looking for a deal again. Like for sure. But that's not actually how it's going to work. Like I should be, you know, like as the market stabilizes and it comes back to equilibrium, you're going to pay what you pay for a bike. You know, and you know, that's just, that is the way it goes. But yeah, the precedent component, like I'm not going to buy a pair of shorts unless they're crazy discounted. All of a sudden. Right. So it'll be a while before I feel like, oh, I'll pay full pop for those or whatever. For sure. Yeah, I like that, that term, like the hangover effect of it all because at one point, and again, I'll bring up YT, they had-- Right. And some super sick cap are for like $3,600. But the dope is stuff ever. Right. And Brand X comes out with their new bike, way less-- Right. You know, a dollar for the spec. Right. And I'm going to buy that. But it'll-- It'll pay itself out. I think that's really like the right word. You're right. Like it's hangover. And that's, you know, just like any animal for a ride. So it's going to go away. Yeah. And like that's really what I think we're seeing now. And like if I were to write another post now to the future, I mean, close it. But it's like, it would be that, you know, I think we're going to see these things always take longer than you think. Yeah. Right. And when the pain's there, it's easy to see. But then when things go back to normal, I just like I said, it's that tailwind thing. You just don't notice it as much. Yeah. And I think that's what we're going to probably enter into is a period of new normal. And nobody's going to talk about like, oh, the bike industry is back to normal. Nobody says those things like normal just as you're ever-- So the headlines are everything's shitting the back. Get out of here. Right. And when everything's fine. Exactly. It's like one of those things I learned about with the concussion thing along with how it goes, like, don't Google that stuff. Because normal people that have a concussion and feel better in three days, they don't go on the internet to write that. Just like if things are good or normal in the bike industry, if they're good, they're going to talk about it. Like crazy. They're going to maybe talk about it. Shelves are empty. They're going to talk about it. Can't sell any. But if it's just business as usual, that's nothing to talk about. That's not a headline. There's nothing to discuss. So that would be my expectation. Is that part of me at the end, right before you came, I was like, dude, I don't know if I'm going to do this. I think things are going to kind of just business as usual here pretty soon. That's really what I think. That's more than likely what's going to happen is just we're in a-- if you're a business owner, you're running a good business. You're going to have a great business. If you're running a bad business, if you're doing all the things you're not supposed to do, taking a lot of debt, blah, blah, blah, you're probably going to have a tough time. People don't like your product, whatever. I think it's pretty simple stuff. Go forward. Yeah. Awesome. All right. Before we close out, I'm in the Victor Idaho Jackson Wyoming area. I have an all-mountain trail bike and three hours to ride. Where do I go? Oh, good question. Three hours to ride. If you're going to go over Teton Pass, I think everybody would know the trail that I'm going to suggest, which is lithium. If you're around here and you want just more of a rock, kind of backcountry experience, and it's not like crazy backcountry, a trail that I think gets overlooked, I'll be honest. Would be Polkanian to Mike Sell. It's a very fun trail. Kind of has crest-to-beet vibes in a way. And then my all-time favorite trail and peeler game now that I'm going to say it, but I'm going to say it anyway. Dre Creek is just awesome. It's like a fall line. Nothing-- it's not hard to ride. It's hard to ride fast. OK. So fun trail. There you go. Awesome. Yeah. This has been a very fun, very educational and lightening. And yeah, it's fun that you don't have to type it all out. Yeah, I know it's all about it. I know I can get a little worried, say the least. But if anybody has any questions or wants to discuss this further, obviously I enjoy it. I think there's really something cool that happens in conversation or just in back and forth in writing where we can all learn and get something from it. And like I said, I've just been really-- one of the biggest takeaways that I really don't see often on the internet is how positive almost all the interactions on Vylar. You can go anywhere you want. If we were to try to have anything like this discussion in text or in audio, obviously you just want to want to do it different. But it goes off the rail so fast with people just wanting-- I did find it funny. Like, oh, we have a good old fashioned smart off here. And then this dude jumps in. It was like one of the things that made me laugh are this hell out. But that is kind of what's happening here in a way. It's like trying to think intelligently about this thing that we don't know what's going to happen. We have very opaque visibility into, right? It's kind of a foggy thing. But again, I just want to make it very clear how cool I think the interactions have been, how great the community is, how great the people are. It's just so rare, like I said. Go to X or Twitter or anywhere. And it just turns into a dumpster fire so fast. And you have-- it's been the opposite. So thank you to anybody listening or partaking. And like I said, if you guys ever want to chop it up, I'll always down. If you're ever in the area, I'll buy you beer. Awesome. There you go. Thank you. And yes, thank you, vital members, vital forum audience for keeping it civil. And all you've done over the years, because yeah, it is more not the biggest. But I feel like it's a great place to be. So thank you for that. Peace.