Building Bikes in the Motor City

This article and video is part of a series on Detroit entrepreneurs. See the rest at www.mackinac.org/Detroit.

Detroit Bikes is a new company charting a challenging course.

“The bike industry is very competitive. There are some really big companies that are very dominant. They have a lot of control,” says company founder, Zak Pashak.

Not that he’s intimidated.

Pashak had run successful ventures in the Canadian cities of Vancouver, British Columbia and Calgary, Alberta. But then, he was creating music festivals and concert venues. So what would compel him to make a product in a competitive industry, 1,900 miles away from Calgary, in Detroit, a city emerging from bankruptcy?

“Starting a business obviously has a ton of risk. I think the reason entrepreneurs start is that they have a vision they want to see succeed.” He added, “If you’re afraid of losing some money, you’re not going to be an entrepreneur.”

Pashak thought hard about what could be his next winning ticket. His vision was to create Detroit Bikes, a company specializing in bicycles for people in cities.

“Bikes are just a really great way of getting around,” Pashak said. “They’re very efficient. They’re very affordable. They take up very little space. They’re environmentally friendly.” He added that they have been around for 200 years.

Pashak opened his factory in a vacant factory in a rundown Detroit neighborhood.

“It wasn’t so much of what pulled me from Calgary but what pushed me to Detroit. I think Detroit is on a bit of a frontier, trying to reframe urban development,” said Pashak.

He is delighted that he could staff his factory with skilled and willing workers.

The company is called Detroit Bikes, he said, because “the people who live here are the people making this company. People show up, they’re ready to work, they’re excited about what they’re doing and care about it and they care about manufacturing.”

Henry Ford, whose grandfather was named after the industrial icon, has been working at Detroit Bikes since it opened in 2013. Ford has had his bout with unemployment and is grateful to be working again, even when the stability of the company is not assured.

“That’s always a concern with a new business,” he said, but he thinks the company is helping the city by bringing manufacturing back.

The bicycle industry has its own risks. Bikes are really an assembly of parts made all over the world. To stand out, Detroit Bikes has aimed to be the “American Bike” because its main part, the frame, is made in the Detroit factory.

At a price range of $550 to $800, his bikes fall between inexpensive models sold by mass retailers and high-end models with features that may not be important in an urban setting.

“So what we’re trying to do is find that intersection of quality and affordability, so not ever going too far on quality where we lose out on affordability but not going so far on affordability that the quality falls apart,” said Pashak.

Sales have been slow but steady.

Pashak thought the market was desperate for a bike made in the U.S. “I thought this was going to blow up,” he said. That didn’t happen, however.

The company started to question what it was doing. It listened to the market and added more gears to its bikes and more colors. Pashak said the city of Detroit could help new businesses such as his by lowering taxes instead of handing out tax credits or subsidies.

“To me, it’s a little weird that you would tax business, take that money, and then redistribute it to certain businesses.” He added that one option would be “maybe don’t take that money in the first place.”

Meanwhile, Detroit Bikes is on the lookout for all opportunities. Recently, it found one in assembling bikes for the bike-share market that is exploding in many urban communities. There is now a section of the factory devoted to that work, with its own staff.

Pashak has big visions for Detroit Bikes. He sees another factory being built and thinks the Detroit name could be a big draw for customers and even tourists who might be interested in seeing a U.S. bike factory.

“Like a brewery in Dublin,” said Pashak.

Customers and tourists can get a taste of the Detroit Bikes brand at the company’s store in downtown Detroit, which opened in 2015. Decorated with Victorian wallpaper and retro features, is stands out as a different kind of bicycle store.

Can it attract new customers?

John Yelinek is a millennial who lives in Detroit and bikes to work.

“Almost everybody I work with, who’s within a few years of my age, bikes to work if they live within a few miles,” said Yelinek.

But he says the Detroit area is not developed enough for him to forego his car.

“It’s kind of bare, with stores and necessities that I need for my day to day life. I have to drive 5 to 6 miles to a big grocery store,” said Yelinek. While he’s not in the market for a new bike, he says he’d be open to purchasing a Detroit Bikes model because it’s local.

Pashak, in the meantime, is putting his all into the business.

“The journey is really the enjoyable thing,” he said. Though starting a business is tiring, “this is what I want to do,” he said, adding, “I enjoy the creativity of this.”