The Charitable Bike Brand that’s on Track to 7-Figure Sales — Podcasts (2021)

The Bike Project is a community that intakes used bikes, restores and resells them while donating bikes to refugees. The organization allows newcomers to have a more cost-effective and active way to commute while adjusting to life in the UK. In this episode of Shopify Masters, we speak to founder Jem Stein on how the community was inspired by a friendship and it scaled while maintaining impact goals as well as profitability.

For the full transcript of this episode, click here.

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Show Notes

The friendship that inspired a charitable organization 

Shuang: Tell us what inspired you to start The Bike Project?

Jem: I was a student at the London School of Economics in London, obviously, and I joined a befriending scheme for unaccompanied refugees who were then asylum seekers, and through that, I met a boy called Adam. He was an asylum seeker from Darfur. Adam arrived with literally just the clothes on his back and he was fleeing the fighting in Sudan. And he arrived and he said, “I’m a refugee and I want to apply for asylum.” And in the UK, that means you’re given just £35 a week to live off and you’re not allowed to work. And that limbo can last many years whilst your claim is being processed, it takes a very long time. And one of the big costs there is actually the cost of public transport. So a bus pass by itself is £21 a week, and that doesn’t even include the tube or trains or anything. And if you’ve ever been to London, getting around London on buses alone is not that straightforward. So one of the first things I did for him was getting him a bike and that allowed us to do activities together. So take him to do some sport or take him to the cinema, and it meant that he could access resources, facilities, and all sorts of services that he wouldn’t be able to afford to access if he didn’t have access to a bike. And then when I graduated from university, I got thinking a bit and set up The Bike Project in my spare time. We kind of collected old bikes, fixed them up, donated them to refugees, locally. I ended up quitting my job and setting up as an independent charity, and we launched in March 2013.

Jem Stein along with volunteer Silla in the workshop of The Bike Project.
Jem Stein along with volunteer Silla in the workshop of The Bike Project.  Bike Project

Shuang: I want to ask about this crossroads you were after. How did you make the decision to not take job offers and start something of your own?

Jem: I think the thing to bear in mind is I was very young and very stupid. People often say to me that, “Oh, you are brave to start The Bike Project when you didn’t have any money.” And the truth is, I really didn’t understand what I was getting myself into. I pulled it off, but I can pretend that it was a calculated risk and that these are the factors I weighed up, but really I kind of didn’t really understand what I was getting myself in for. But I think in terms of the upside, I felt like I’d done my research about the impact it could have and I felt that it could be really big.There are 30,000 asylum seekers arriving in the UK every year, and there are lots of bikes abandoned in London. Around 27,000 bikes are abandoned every year in London. So you have a huge amount of bikes, you’ve got a huge amount of people that need them, so my vision simply was to match the two. In terms of logistics and business model and business plan, I kind of figured that all out as I went, rather than having some kind of grand plan when I left my last job.

Shuang: How did you move outside of your friend circle and your volunteer circle to start scaling this idea and actually deal with the logistics of turning this into a full blown business?

Jem: The first step is you have to have a business model. Initially when I looked at it I felt like we could raise money through fundraising. But quite quickly I realized we were getting bikes donated to us, right? So we collect all bikes, refurbish them, and donate them to refugees and asylum seekers. What I realized quite quickly is we were getting quite nice bikes that were new and quite valuable, people were actually not just donating us old rubbish, rusty bikes that would have not worth much. And the other thing that was happening is there was at that point and to an extent still is a big trend towards vintage bikes. Vintage bikes became very fashionable in London for a long period of time. So we’re getting these really valuable resources and also it was not that great to be donating them because refugees didn’t have a secure place to store them. So, if you donated those bikes they’re more likely to be stolen than the bikes that would be more appropriate to refugees.

So we started selling initially through eBay. We started sending bikes through there, refurbished them on a small scale. And quickly we realized that actually that had potential, the bikes were selling quite quickly, we were getting quite a lot of demand. But we wanted to scale that quite quickly. So around 2016 we raised some investment into the Bike Project to build a website and also to build up our capacity to refurbish the bikes essentially. And we launched our shop on Shopify in early 2016, which was really exciting and what that meant is that we could build more of a brand than on eBay. 

It meant we could use our Google Ad Grants. So as a nonprofit, we get a grant from Google every month in credits on Google. And it meant also that we could upsell so we could sell other bikes, we could sell accessories. And through that we’ve built business over the years. So in our first year, I think we only sold about £20,000 through the website and that was maybe 2016, our first full year of trading. And in 2020, we did about £520,000 through the website. So in four years, we ramped up quite relatively quickly, helped in part by the boom in cycling around the pandemic. So at the heart of it, it was the business model that’s allowed us to grow and that in itself also allowed us to raise more charitable donations off the back of it. So yeah, that’s allowed us to do that.

Switching gears: How to adjust the business model as you scale 

Shuang: How did you come to terms with pivoting and adjusting your business model to include new bikes?

Jem: I think initially when we were doing a handful of bikes, it didn’t feel like such a big deal. Today it’s around 50-50, and we made that decision consciously about a couple of years ago that we were going to increase the percentage of bikes that we were selling. And that felt like a big deal because in some ways it feels like, well, actually these are bikes that could be going to refugees, but really the resource, the bike really is a helpful asset. But we get lots and lots of bikes, right? There are lots more bikes that we could get in and refurbish, what we really need is more money to pay mechanics to refurbish the bikes to donate, right? So for every bike we sell, we can donate around three bikes to refugees. So when you look at that kind of return on investment, it’s kind of a no-brainer.But we still get questions today, “Why do so many bikes get sold?” People feel if they donate their bike to us or a bike’s donated to us, they’d like to see it go to a refugee, and so we kind of have to explain to them that, by selling it, we’ll be able to fund three bikes for refugees. So it is still a bit of a tension in the model, but it’s something we’re constantly dealing with and constantly addressing and actually constantly adjusting as well.

  A few cyclists gather outside of The Bike Project for an event.
Incorporating new bikes allowed The Bike Project to reach new customers and have a constant supply of bikes. Bike Project

Shuang: Tell us more about balancing the business and charity sides of The Bike Project? 

Jem: Fundraising is a whole other department. So we have a team of fundraisers that raise money for us, I help as well. Then we have a trading arm as well, so it’s a bit different, but running a nonprofit is like having two businesses, there’s the business where you’re delivering the service that creates an impact and there’s the business where you’re raising the money to fund that service. It’s almost like in a private business you might have two income streams, two completely separate businesses, one makes a loss, one makes a profit and the profit subsidizes the loss. 

Shuang: Tell us a little bit about the different teams and the different individuals involved. 

Jem: At the core of what we do are bike mechanics, so they refurbish the old bikes. And we employ about 16 bike mechanics across London and Birmingham, where we also have a base. We also have a fundraising and marketing team kind of together, they work together, and also we have an operations team to support the collection of bikes, maintenance of the workshops and delivery of bikes. We also deliver a couple of other programs around donating bikes. So kind of our core work is donating bikes to refugees. And since 2013, we’ve donated almost 8,000 bikes. Every bike comes with a lock, a helmet, and a short cycle training course.We also run a project called Pedal Power, and we employ a couple of staff to deliver that. Through that we teach refugee women who’ve never cycled before to cycle for the first time. And then the reason we do that is, in our experience many women that we come across who are asylum seekers refugees have never cycled before because they come from countries where it’s not socially acceptable for women to cycle. And so we teach them from scratch, they can benefit in the same way. Then we have a person that runs a project called Bike Buddies, where we match refugees with volunteers to go on rides together and try and build more of a community and support them with that personal development as well as giving them the bike.

Shuang: How’s the journey of letting go of responsibilities, expanding the team and in a sense building out this whole group of individuals to carry out this vision that you had?

Jem: It’s been really challenging if I’m honest. Letting go of responsibility, I think emotionally is not something that I struggled with. I like delegating, I like hiring someone that’s really good at something that I’m not that good at that I’ve been kind of making do . We’ve had a marketing manager who knows a lot more about marketing than me, for example. But piecing it all together, building the team, developing the team and managing the infrastructure, it has been a real challenge, particularly because I was pretty inexperienced when I started and I’ve had to kind of learn as I go. It’s been hugely challenging and I’m still learning. And the last 12 months of the pandemic has definitely really pushed us hard in terms of how’d you keep an operation going and a team motivated through several lockdowns, which we’ve had here, through hundreds of thousands of deaths? Everyone knows someone that’s died from COVID and it’s been a really challenging period.

Tuning up logistics in the wake of a pandemic-borne demand

Shuang:  It seems like everyone wanted a bike during COVID and you’re faced with logistics restrictions. Tell us about managing those two aspects of business. 

Jem: Hard is the very short answer to your question. I quote him really loosely here, but I think, so Jeff Bezos a few years ago wrote a summary to investors where he talks about maintaining the values of a startup, the benefits to start up as you scale, and I think one of the things that we’ve done well, that he talks about is what he calls high velocity decision-making. And that also means me not having to sign off on every decision, and I think what we have managed to maintain as we’ve grown, so with 30 staff members now, we’re still an amateur compared to Amazon. It’s a comparison very loosely, but I think one of the things that we tried to do is maintain that. So there’s not seven committees that you have to go through to make a decision, and that did allow us to pivot really quickly in the face of the pandemic and react both to new opportunities but also to new challenges around logistics. But it’s been hugely challenging and for the first period was hard, but at least it was summer so people could be out and about. We had a really nice summer last year. 

When the new lock down was introduced in December of 2020 then it didn’t really ease till March 31st. To have a full lockdown for that period was definitely the toughest three months of my life, in terms of keeping the team motivated through a gray, horrible English winter. And with huge logistical difficulties around COVID, it was challenging because our mechanics were going in but our office staff weren’t. And so we wanted to keep our mechanics safe, but continue to leverage our impact by donating bikes and still generate revenue to cover that cost by selling bikes and to keep the mechanics stay safe and supporting them adequately with a team that was suddenly all working remotely was hugely challenging. And hopefully we’ll never have to go through that again, but it was very hard.

 The Bike Project’s workshop filled with customers, volunteers, and mechanics.
IDemand from shoppers and refugees was at an all time high during COVID-19, where it outpaced supply by over ten folds. Bike Project

Shuang: Was there any point where it seemed like the demand was too high that you didn’t have enough time or the logistics in place to meet that ever through COVID?

Jem: Through most of COVID, the demand in both senses from refugees and from customers outstrips supply. Normally we aim for a conversion rate of for sales, this is about 3% to 4%. Last summer, our conversion rate was about 9% because we just couldn’t keep up with the demand. We were selling more bikes than ever, we were refurbishing more bikes than ever for the website, but we just couldn’t keep up with our traffic that was coming to the website, that was the difference. So it was pretty mad, but also from refugees because all of a sudden, the challenge of London is not just that public transport is expensive, but the public transport is dangerous in the sense that you’re more likely to catch COVID. So huge demand from refugees and that’s been really, really challenging managing people. We have nowhere near meeting that demand, I think at peak we had about 1200 people on our waiting list and to put that in context we give away about 120 bikes a month, so you can do the math in terms of how long that was going to take us to get to people. So it’s been very challenging and it’s been hard to manage the expectations of refugees that it’s going to take us a long time to get them a bike and that’s been tough. But look, we’ve ramped up and we’re really fortunate that cycling is one of those things that’s done well and we’ve massively expanded and reached more refugees than ever before. So we’re really grateful that we’ve had the opportunity to do more because cycling has been so much.

Shuang: Did you make any changes to the online store in any way to anticipate or assist with the higher traffic? And did you change your ads during that period as well?

Jem: Our ads kind of remained the same, we introduced a few more products and added ads for those. So we started selling new bikes for the first time, which went well last summer and we introduced a greater range of accessories for people to buy with their bikes. We also used a few different cross-selling and upselling apps and features of Shopify. And we introduced the tipping function that I think was introduced last summer. We also used apps that give discounts on accessories when you added it to the basket, the tipping function and then also post checkout as well. So just giving people lots of opportunities to get involved, to support us in a way that we probably wouldn’t have got away with. Having that kind of user journey pre-COVID, people would have been put off by having so many different distractions on the way to the checkout, but because of the extra demand it massively increased the average basket size. Probably about 17%, which is big for us.

Cycling into new territory

Shuang: Speaking of new bikes, how was the decision process of that pivot? 

Jem: I think we were capitalizing on the demand, but also if you go on our shop page and it would be pretty bad, there’d be a handful of second hand bikes there. So what new bikes did was allow the whole thing to feel like there were more options for customers. Even if they weren’t buying a new bike. So new bikes allowed the second hand bikes as well to feel more attractive, I think in that way, but also were in their own right a good option and we sold lots of them. Ecommerce is much easier if you buy a product line and then you just sell it through them, right? Whereas with our bike, our second hand bikes, every bike’s unique, so every bike needs its own listing, and that in itself is an effort both in terms of, gathering the details, photography, all of that stuff. Whereas with new bikes, it’s just, you list it once and then you list the product once with the size varied for highest and kind of variance if there are them and then that’s it, until they’ve all sold out and then you just order some more. So that’s much easier from a store management perspective, than… We’ve got the process down in terms of listing second hand bikes, but it’s still time, effort and money. 

Shuang: How long is the average process of receiving a donated bike to appear online? 

Jem: We have a triaging system. So as the bike comes, it’s basically based on how much work the bike needs. So at the fastest, it will take maybe 10 days to go through the system and be out, from the point it’s donated to online, at the slowest it can be four to five weeks if it’s a bike that maybe needs more work. It’s a whole process and the bike has to be assessed, it has to be worked on, it has to then be assessed to check if it’s safe, photographed, added to the website and then described and the features listed.

Shuang: What are some other programs and avenues you are planning to expand into?

Jem: One of the things that we tried over the last year is in choosing bike servicing and allowing people to book through the website. And that has been really effective and we are looking to scale up. We are also looking into trial cross-sell opportunities when people book in for bike servicing. And that’s something, we’re using our Google Grants to drive traffic to those pages and trying to ramp that up. And that’s been a real success story this year, we’re investing in more capacity there. We’re investing in a new range of small merchandise. So we’ve got a new range of bike jerseys. The other thing that we’re doing is that we’ve added a donation as a product. So one of the products that you cross-sell is the ability to donate a bike to a refugee or donate accessories, we have different levels that you can donate at with different prices. And that’s been probably the most effective thing in terms of raising donations through the website, because it’s easy for people just to add on £20. And if they’re buying a bike they can easily empathize with the need for a refugee to have accessories or have a whole bike or whatever product level that they pick out. And that’s worked quite well for us.

Selling bikes—and a cause

Shuang: Is it the right assumption to think is, you are not necessarily competing against the normal bike shop, but your marketing is more just about awareness and allowing people to discover your organization and knowing about your initiatives?

Jem: So in terms of bikes, most people buy a bike from us having clicked on an ad about second hand bikes or cheap bikes or something around eBay or another brand that sells cheap bikes. We have different elements to our marketing, different income streams and different marketing strategies. Definitely our fundraising is more about awareness raising and content and generating interest, but with our sales the initial step is that people click on our ad around bikes and then on our website, we try to sell them on the cause. So you’re not just buying a bike, you’re buying bikes for refugees, so this is supporting a refugee. Although what piques their attention is the price and the value that they’re getting for the bike, what helps aid the conversion is the coolest stuff, that’s kind of how we approach it.

 A Mechanic and cyclist greet each other outside of the shop of The Bike Project.
Incorporating The Bike Project’s story and mission throughout the sales funnel is fundamental for awareness and sales. Bike Project

Shuang: Is there anything particular that you do with the sales funnel or steps within the purchasing journey to incorporate details about the mission of The Bike Project? 

Jem: There’s definitely more we can do, but one of the things that we do is, when you click on a product page, you know how with most products you’d have a list of features, the top of the list of features is, “This bike will pay for X amount of refugees to get bikes” So you’re kind of integrating it into where people are going to look anyway to make sure the story comes up. And then yeah, we have blogs along the bottom of product pages and making sure that the product page really interweaves the stories. I think that’s a really important bit in terms of upselling the cause. And when they add it to their basket, we then give them the opportunity either to buy an accessory or to buy a bike for a refugee, so essentially a donation but you kind of pitch it as, “Why don’t you purchase a bike for a refugee?” And then that way you kind of also interweave the story. Then finally, there’s our signing up for our mailing lists. So people have to choose to sign up for our mailing list, and we grow our mailing list fairly quickly through people signing up and wanting to hear more about us. 

Shuang: What are some things that you feel like people should know before they start a social impact business?

Jem: I meet a lot of social entrepreneurs that start an organization purely because they’re passionate about our cause. And actually, that’s generally not a good reason to start an organization depending on the model. So one of the first things I did when I went full-time was I trained as a bike mechanic, and I was a rubbish bike mechanic, I’m still a rubbish bike mechanic, I’m a joke in the workshop, a running joke about how bad a bike mechanic I am. And actually, that was one of the best things that happened to me because I realized I wasn’t very good and where I add value and where I should be is not working as a mechanic. It shouldn’t be me who’s spending time fixing bikes, it should be the founder that is leading the organization and running the organization.

And I see in other organizations that I’m involved with, or when I mentor other CEOs, there’s often a tension because the founder or founding CEO or managing direct think that the best way to pursue their cause is to found an organization and they think they’ll be on the frontline that way. But actually when you run an organization, you’re doing things like business plans, managing people, looking at finance, spreadsheets, HR, all of that stuff. Whereas a lot of people I think have a bit of a crisis when they realize actually where they should be spending their time is not where they want to be spending their time, and then you realize that once they started the organization. So that’s usually the advice I give to people, is it’s a little different if you’re just running it in your spare time as a voluntary organization, but if you want to run it as a full-time business and you want to scale it, think about what you want your role to be and how you enjoy spending your time. Because it may be that if you really enjoy working on a cause you should work in an organization, go get a job in an organization which allows you to do that and let someone else worry about the stuff that entrepreneurs need to worry about.

Being realistic about financial sustainability as a foundation 

Shuang: What do you think about the two balancing sides and kind of the tension that exists within this business?

Jem: I think that all charities need to make money basically. There is a tension to an extent, and in all charities there is a little bit of a push and pull between the two wings, but fundamentally everyone on the kind of operation service delivery side understands that someone has to pay their salaries. And ultimately nothing else can happen if you’re not a solvent organization, if you’re not a financially sustainable organization, no one gets a bike, that’s kind of how it is. Financial sustainability is not just a factor that you weigh up against other factors, financial sustainability is the foundation of your organization. If you don’t have foundations, nothing happens. So I think our team by and large get that, and I’m not saying there’s never a conflict, there’s never a tension or push and pull between it, but I think fundamentally we’ve managed to get people to understand how important that is. 

Shuang: What do you think that made you decide to pursue this beyond a volunteering experience?

Jem:  I never saw myself as an entrepreneur. I’m not one of those people who grew up thinking, “I’m going to start a business one day, I just need to find the right business to start,” that was never me, I absolutely never thought I would go down this path. So that kind of begs the question, how did I end up on it? And I think, I suppose a mixture of factors, I think definitely my experience with Adam, the refugee that I mentored and befriended through the scheme was definitely pivotal in getting me there. I think I always had a lot of empathy with the refugee cause. My parents are South African, they’re not refugees but they moved to the UK from apartheid, South Africa, and talk often about the challenges that they faced as migrants moving to the UK in the ’70s. And I’m Jewish, and I think in the Jewish experience and history, the refugee cause and empathy towards refugees is huge because of the Jewish experience of being refugees. I always felt an affinity to the cause, and I suppose that combined with my experience with Adam and seeing the impact that it had made me curious to kind of explore what more impact I could have through that. And here I am, more than eight years later I’m still pursuing it.

 A mechanic fixing up a bike in The Bike Project’s workshop.
Scaling a charitable business also means stepping back from the frontlines to ensure logistically the organization runs smoothly. Bike Project

As I said initially there was no grand plan, it was, “Let’s give this a world and see how it goes,” and then obviously I had to develop a plan as I went. But yeah, I think those are kind of the main reasons. I say I never saw myself as an entrepreneur, but there were a lot of people from LSE, “Go work in the city of London, go work in finance or banking or law.” That never really appealed to me, I always wanted to work somewhere where I felt like I was having an impact. Probably, I didn’t think about this, but that was always the path I think I was on.

Shuang: What did your friends and family feel about this decision? And how did you feel in those initial days and years of setting this up?

Jem: So my parents have always been really supportive, and I was able to take a risk at the beginning, from my personal financial perspective. And they didn’t need to bail me out, but I knew that if it all went very badly wrong, I wasn’t going to be homeless. And that my parents would support me, and that means you can take the kind of risks that I took. And that I think it’s really good for entrepreneurs to be honest about those things. I think a lot of entrepreneurs tell stories about rags to riches, “Oh, I started my business in my bathroom with just a piece of paper and a pen and look where I am now.” But I had really great support from my parents initially, in terms of being that safety net and allowing me to take risks. And so they’ve always been hugely supportive thankfully. My friends, they’re all hugely supportive. I imagine some of them thought I was a bit crazy, but everyone kind of kept their counsel to themselves initially. I had a brilliant mentor in my last job who had left his job as a CEO, and left his job and set up an organization which is now fantastically successful. And his influence, not necessarily deliberately, but seeing what he’d done and seeing him be successful definitely allowed me to think that it was possible.

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