World Changing Events by the Light of Day

Chicago, US

Welcome to the latest instalment of transcripts from our influencers!  podcasts, talking to people making a major difference to cycling or micromobility in Australia and around the world. 

This issue we explore the history and inspirations behind global components giant SRAM, by talking to co-founder FK Day.

FK opens up about SRAM’s origins and optimist goals but also about the assorted philanthropic initiatives by FK and his brother, co-founder Stan, to foster cycling and assist communities around the world.

Micromobility Report: We’re going to cover two areas you’re involved in with cycling. The first is a little company called SRAM, but let’s just go right back to the start. What were you doing before SRAM began?

FK: You started with a hard question. That was so many years ago that– I’m not exactly sure. I was trying to get another company or two up and running, but Stan and I had always dreamed of going into business together. We had thought of a bunch of different ideas we wanted to start.

He was a weekend triathlete and I was a weekend mountain biker and we were living together. He came back from a ride one day and goes: “FK, God, I am going to get killed out there on the Chicago roads, if I keep practicing out there and I have to reach down to the down tube to shift my gears. We need to figure out a way to put the shifting right up on the handlebars.” That was the seed of the idea that became GripShift. From that came a lot of shifters and derailleurs and brakes and all that.

MR: I’ve had the privilege of visiting your factories in Taiwan a few times over the years. Somewhere along the line, I saw a photo of you and Stan stripped down to your shorts and no shirts, building a factory or building workshop benches. Can you tell me about that?

FK: Stan moved over to Taiwan from the US to start our very first factory. I was starting our European operations and he would be working around the clock down in Taiwan. I would fly in periodically to help him. We were doing everything by the seat of the pants. We’d all had some experience in manufacturing but we had to invent it all from scratch. We made a lot of silly mistakes and we made some pretty good strides forward. We were thirsty learners and we learned a lot, and finally got it up and running.

SRAM was nothing when we started. We had to invent it from scratch but we did have the benefit of Stan being an MBA. He got his business degree from Northwestern University here, the Kellogg School. He knew how to write a business plan. His business plan was called ‘coming up with this product, we’d sell like 100,000 units our very first year, 300,000 by our second year, and then we’d go live on the beach somewhere’.

Our first year we actually only sold about 824 units, a little short of the business plan. We thought we were onto something really, really important. That kept us driving forward through some of the despair, so to speak, of missing our budgets.

MR: There’s been 1,001 startup bike component companies over the past 40 years, but very few have reached the heights of SRAM. What do you think your secret might be? If you had one or two key tips for beginners, what would you say?

FK: I think always working off a bedrock of integrity and commitment to each other, support and openness, listening, really listening hard. We both come from parents who taught us the importance of humility. I think with humility can come great listening. It was really from that, that we learned how to iterate our products and keep bringing on superstar players. We slowly built up out of the bedrock, a company that feels pretty darn good to work in.

MR: Can you just paint a broad-brush picture of the business now?

FK: I think we’re 4,000 people and it’s a blend of fossils, like myself and my brother and some of our original team, and so many young, passionate, energised employees. The best we can do is ensure we’ve got a culture that supports them and then get out of the way, so we don’t have boot marks running over our backs.

MR: COVID has placed unprecedented demand on bicycle components. How stressful has the last two years been for you and how are you coping with all of that? What’s it meant for you guys?

FK: As it all opens back up, it feels so nourishing to be back face-to-face with team members. It’s rough sledding when everything’s just two-dimensional and Zoom meetings around the clock. It did put a lot of stress on people. We hired a lot of new people during COVID and they didn’t have the benefit really of growing up in a system so well supported by culture.

Now we have to ensure they get steeped in what is the culture of SRAM. It is about integrity. It is about humility and passion and ensuring we can transfer that sense of belonging over to them.

“The bike industry is a small industry but, holding the key to transportation, it is so powerful.”

MR: One final thing I’d like to talk about with SRAM, is the SRAM Cycling Fund. You’ve mentioned the word humility, so you’re probably not going to say it. I’ll say it for you. The SRAM Cycling Fund has donated many millions of dollars to cycling advocacy over the years. What would be one or two projects you were most proud to have partnered with over the years?

FK: We’re one among many great, great organisations. Though we’ve contributed a lot of time and money and hopefully leadership into some really good projects, many other companies are doing it well. It’s not just SRAM. I think the bike industry is so passionate about what we do as an industry.

The bike industry is a small industry but, holding the key to transportation, it is so powerful. That could be transportation in the city to reduce emissions, to improve health, to reduce congestion, all the way to transportation in developing countries so people can overcome very long distances.

Our industry holds that really unique key. It’s not the oil industry, which is a zillion times bigger, or anything like that. It’s the bike industry that holds this really unique key. There’s not a day I don’t wake up thankful to be working in this industry.

MR: That is a perfect point for us to pivot to World Bicycle Relief, which you started with the Indonesian tsunami. Just talk us through how World Bicycle Relief came into being.

FK: Immediately following the Indian Ocean tsunami, we were like, “God, this is just horrible, such tragedy”. We were really aching inside and we felt, ‘Maybe we can galvanise the organisation and raise money and send it to Red Cross, or maybe we can do something more impactful, leveraging our industry’s greatest capabilities and provide transportation to those people who had lost so much’.

The oddity is that we called around to most of the leading relief organisations and we proposed doing a large-scale bicycle program. All of them said: “No, just send us your money.”

I’m scratching my head going, “God, this doesn’t seem right.” Stan just turns to me and says, “You better get on an airplane and go find out.”

My wife and I flew over to Indonesia and Sri Lanka and began to ask the same question on the ground, “would a large-scale bicycle program be impactful?” The answer was completely flipped, it was like: “You can do a large-scale bicycle program? That would be amazing!”

We partnered with organisations on the ground and we delivered 24,000 bikes and measured the impact. It was off the charts in three key areas: education, health care, and economic development. That’s how we stumbled into it. We had an idea, we went and tested it and it proved to be powerful.

MR: Now let’s talk about the Buffalo Bike and the development of that over time. We’re talking now about 15, 16, 17 years of development of that bike. What are the key features of your Buffalo Bikes? What has been their development story?

FK: When we first got into Sri Lanka, we thought: “We’re going to source bikes locally and that way there’s an installed base of spare parts. People will know how to ride them, repair them and all that stuff.” We were able to do that in Sri Lanka.

When we moved to scale up the programs in Africa, we couldn’t find local suppliers and, quite frankly, the supply chain of bikes available was terrible. The producers had become completely detached from the end users. As a result, the bikes were just breaking. The producers didn’t know that. We had to go tip to tail to strengthen that bike until we got a bike that would be worthwhile for us to put in the field in support of some complicated project, like a health care initiative or an education program or in support of rural farmers.

It’s been a long process but it’s been so important for what we do. I think we now have other organisations copying us. That will give our industry the ability to really take this to scale and make a dent in the transportation needs at the bottom of the market.

“This year we’ll end up doing about 75,000 bikes through five, six, seven countries.”

MR: You don’t just donate bikes. You provide employment and a local manufacturer. Can you talk a little bit about that?

FK: We bring in what’s called CKDs (completely knocked down) – completely disassembled bikes. We set up assembly facilities that have between 15 to 20 people and we can build 80 bikes a day. The beauty is our quality goes up and our costs go down by doing it this way. It gives us the ability to really track the response in the field to either a new design or how the bike being used so we can respond.

It’s a huge part of what we do. I’m glad we’re providing safe employment. They’re paid a very fair wage. Again, our quality goes up and the cost goes down. That’s the primary driver, but I’m super glad we’re creating employment.

We also train field mechanics. If we train a field mechanic, equip them, put them in the field to maintain and repair these bikes, then as we expand our assembly facilities, we have this treasure trove of outstanding workers that know everything about the bike. We have a constant supply of highly experienced people.

On top of that, we started setting up bicycle shops that sell spare parts and bikes. The beauty is these guys become experts in the assembly facility. We then can migrate them in to manage a shop. We have this outstanding funnel where we get great talent and we move them up through the system. I wish I could tell you it was entirely planned from the very beginning, but we discovered it by listening and watching, and supporting what goes on in the field.

“In a way we’re creating a new language for the UN, the World Bank, a lot of these organisations that are trying to make a big difference in poverty and development.”

MR: How many bikes approximately have you distributed so far and at what rate per year? Has that been affected by COVID?

FK: I think we’re up over 600,000 bicycles distributed, and this year I think we might even be close to 700,000. This year we’ll end up doing about 75,000 bikes through five, six, seven countries. That’s a record for us. Last year, since we do a lot of bikes through the school systems and the schools were closed because of COVID, there was a lull. Last year we might have done 45,000 to 50,000 bikes, but this year we’re going to really jump up and really make an impact.

MR: It’s been about 17 years now. What motivates you to keep going in the challenging times?

FK: It’s the raw impact. We measure everything we do very carefully and we publish the results. I would say it’s the impact we’re creating that gets me up on fire in the mornings and carries us through. I just love what we do. It’s never been done to this scale before, and the impact is deep, immediate, measurable, and it’s new.

In a way we’re creating a new language for the UN, the World Bank, a lot of these organisations that are trying to make a big difference in poverty and development. We’re providing them data that can help them do it better. Bikes are pretty darn impactful, and what we’re doing is really releasing the power of bicycles into these areas that are so desperate for quality transportation.

MR: I had the privilege of spending a week or so in Zambia with yourself and Leah many years ago. At that time, which was very early in the program, you were just considering starting what became the BEEP program. That is a program I think is particularly worth trumpeting. Could you explain what does BEEP stand for? What is the impact of that particular program?

FK: In Sri Lanka, we found there was deep and immediate impact in three different critical areas: education, health care and basic development. We thought: “What we’re going to do is isolate each of these projects or each one of these categories and start running programs just for those.”

What does BEEP stand for? Bicycles for Education Empowerment Program. That program is all about connecting rural students to distant schools, prioritising girl students.

We’ll distribute bikes to 70% girl students and the rest to boys. Attendance goes up, performance at school goes up, tardiness goes down, and the empowerment of a girl student in their own home is measurable … and it’s pretty impressive.

I think we’ve done 200,000 bikes into education programs like that, and they are so moving and so impactful. There’s no way you can walk away from something like that without being deeply moved to the core.

“A bicycle in the hands of a schoolgirl fighting for her education is the most inspiring thing I’ve ever seen.”

MR: That’s been going for well over a decade now. Do you ever hear any individual stories from those ladies?

FK: All the time. Leah is so good as a storyteller and gathering stories from the field. She gathered this series of stories about girls that had to leave school because they lived too far away. When the school principal heard we were going to do a bicycle program for them, that school principal specifically went and found those girls and said: “You guys have got to come back to school. You’ll get a bike. It’ll make your transportation earlier.” Those girls began returning to school.

The alternative if they had not gotten that bike, if they had not gone back to school, would be this nasty little spiral as they descend deeper into poverty. Leah’s got beautiful stories about this occurring again and again and again. There’s no silver bullets in the world, but I’ll tell you a bicycle in the hands of a schoolgirl fighting for her education is the most inspiring thing I’ve ever seen.

I remember one quote from a girl, I think it was in Zambia or Zimbabwe: “Mobilise me and I will change my world.” That’s a big deal. That’s the power of bicycles. That’s why I’m inspired and get up on fire. You were inspired. I remember being there with you.

It’s the industry we know and love. Most of our experiences are at the top of the market: Tour de France, the Olympics, the World Cup, all that jazz. But right at the very bottom of the market, in the deepest poverty, it makes a difference that changes lives.

MR: Two final questions. Scientists say climate change is going to have the greatest effect in sub-Saharan Africa, some of those countries where you are most active. How would you respond to people who say that problem’s just too big, there’s nothing you could do to make a significant difference?

FK: I would say a bicycle improves the resilience of a community. If we can put bikes into a community, that community can begin to overcome the impacts of these climate tragedies. In the height of the dry season, if it rains on your soybeans, you lose your protein. It’s devastating. The speed of climate change is going to really impact these communities, but a bicycle can help the resilience in so many great ways.

The more people we can get into school, the more girls we can get into school, the more powerful it’s going to be for the next generation.

MR: Have you got a few more years left in you FK or what’s the future for World Bicycle Relief?

FK: I’m aging Phil and it’s not graceful. I think we’ve got an outstanding team. If I got plinked by the proverbial bus, our team would just keep sailing right along. Where I really believe we’re going to go, is doing a million bikes a year. Maybe not three years from now, maybe not five years but, if we do our jobs, we will get up to a million bikes a year.

That won’t make a big dent in transportation, but we will have demonstrated the power of bicycles and the impact of basic transportation at the very bottom of the market. That will cause tens of millions of bikes to go into the market and that’s where the biggest change comes from.

MR: FK, you’ve always been a visionary. Thank you very much for being an influencer!