Veteran-Turned-Entrepreneur Navigates Young And Evolving Electric Bike Industry

At Propel Bikes in Brooklyn, New York, owner Chris Nolte sells electric pedal-assist bikes for a variety of uses—from mountain biking to urban commuting to kid-carrying. They add a motorized boost as riders cycle, requiring less physical exertion than traditional bikes.

Propel Bikes

After returning from Iraq in 2003 as a disabled veteran, Chris Nolte took up electric bicycling as an alternative outlet for exercise and recreation.

Nolte grew up biking for exercise, but when he returned from military service in Iraq in 2003 with a deflated spirit and a debilitating back injury, physical activity daunted him. His lifestyle became increasingly sedentary.

Hunting for an alternative to traditional cycling, he learned about electric pedal-assist bikes and was intrigued by their technology and lighter physical demand. On an e-bike, he could ride alongside his friends despite his injury. “This is interesting, this is new,” he thought. “Maybe this is something that will improve my life.”

Nolte had a hunch that e-bikes could ignite even wider appeal: sweat-shy commuters, people with injuries like his or the exercise-avoidant might find biking more accessible if it were just a little easier.

He started riding and researching—and with the help of a $20,000 loan, Nolte sold his first batch of e-bikes in 2011. He reached $1 million in sales within three years and opened Propel’s neighborhood storefront in 2015.

Nolte explains that the e-bike industry is still young and evolving, which presents challenges as he aims to educate and serve “New York’s trendsetting cycling community.”

In this edited and condensed interview, Nolte shares the challenges of operating a small business in a new industry.

Kara Stiles: You started riding electric bikes after returning from Iraq and feeling limited by your injury. What was your inspiration for selling e-bikes and opening Propel?

Chris Nolte: I wanted to become more active, found out about electric bikes and kind of built one up for myself. And I found it to be really interesting and really exciting. It was kind of strange to me that it wasn’t a bigger thing already. There weren’t many retailers selling them. I had a lot of experience in retail and specifically e-commerce so I saw it as an opportunity to do something. I started an online business selling electric bikes where I had a small show room on Long Island and I built it up over time.

Stiles: The electric bike industry is still relatively new and changing quickly. Who are the consumers opting for e-bikes over regular bikes?

Nolte: A lot of people say, “Well, I would like to bike to work but I can’t because I don’t have a shower at work and I don’t feel like changing and I don’t want to get too sweaty.” Or “The commute is too long.” Or “I want to ride with my spouse, but I don’t have the same ability as them.”

Electric bikes address that because it helps you to maintain a little bit of a higher speed using a little less energy. As cities like New York improve bike infrastructure and make it more of a viable option for people, electric helps the rest of the community—those not into all the challenges of a non-electric bike—get out there.

Stiles: Your business is situated in New York City, where electric bikes are a somewhat controversial topic. Can you explain New York’s e-bike legal landscape?

Nolte: Electric bikes with throttles, similar to what a motorcycle or a scooter has, are explicitly illegal in New York City. We actually don’t sell any bikes with throttles because of this law and we try to really separate ourselves and focus specifically on bikes that use technology called pedal-assist.

The main difference is that with a pedal-assisted electric bike you’re required to pedal and it only amplifies your input. So it retains all the principals of a bicycle and is still effectively considered to be a bicycle. There are a lot of other retailers out there that sell throttle-activated bikes and that’s kind of challenging. It’s also cheaper to make a throttle-activated bike. But, we’ve held fast to our stance and I think we’ve gotten a lot of respect for that.

Stiles: How has this lack of clarity surrounding e-bikes impacted your business? Have you needed to adapt in any way?

Nolte: The confusion between throttle and pedal-assist bikes has caused a lot trouble for our business. There are many stigmas associated with electric bikes as a result of the proliferation of throttle-based e-bikes in New York City. It’s been challenging, but our strategy has been largely successful.

We’ve gained support from organizations and agencies that were previously very much against e-bikes. We’ve studied other successful cities similar to New York City and devised a plan to implement electric bikes safely into our city. We’re working with the city and other partners on ways to utilize the benefits of electric bikes while avoiding many of the safety hazards which can result from poor planning and a lack of guidelines. I feel that taking the more sustainable approach of selling bikes that are safe and legal will help us to build a business that has the power to help improve our city rather than capitalize on its weaknesses.

Stiles: What else besides the e-bike controversy has been most difficult for you as a small business owner in this space?

Nolte: I think one of my big challenges is just having access to capital, particularly being a new small business. When we decided we’re going to open this retail store, it was a calculated risk. I learned from that experience, we should’ve had a better plan. But when you’re talking about a totally new industry, that doesn’t really have much to go off of, it’s very challenging to formulate plans. You have to go off of other similar industries, other similar types of businesses, and you have to guess and do a lot of research.

Stiles: Based on that struggle, what’s your advice for starting a new business with limited financial resources?

Nolte: I try to focus on the areas where we’re strong, like our product knowledge, passion for quality products, going above and beyond with customer service and our ability to serve areas of the market which have been otherwise underserved. We have also built partnerships with brands that share our vision. We’ve had to rethink the normal retail experience, by focusing on optimizing our supply chain. Predictive analytics, just-in-time inventory and strong logistic partners have given us the ability to give our customers what they want when they want it without tying up too much capital.

Stiles: How do you address the difficulties of operating within an emerging industry?

Nolte: A lot of big changes can happen quickly, so I really try to focus on eliminating risk. One of the big risks for retailers can be their inventory. I think of us as selling technology more than selling bicycles, and because technology is changing so quickly, we really have to be careful. We’ve been hurt in the past when we’ve had a bunch of inventory and then all of a sudden new technology is released and what we had becomes a lot less valuable.

With a new industry, there can be a lot of volatility. I think for anybody in a new industry, it’s really in your interest to be very informed about future developments, new technologies, new ideas. That’s a large percentage of my time, just doing research. And it’s not just as it applies to me in this moment. I just know that at some point, this information is probably going to be useful.

[“Source-CNBC”]