Interview with Markus Flossmann, CEO of YT Industries – Boys just wanna have fun!
Within a decade, YT Industries have gone from a backyard garage brand to one of cycling’s most prominent names within the trail, enduro and downhill market. The man behind the young brand’s rise is CEO Markus Flossman, who chats openly with us about the past ten years.
Hi Markus, how’s it going? Can you start by giving us a quick rundown of who you are?
My name is Markus Flossmann, I’m 42 years old and I’m the founder and CEO of YT Industries here in Forchheim, Oberfranken. At the end of the 90s, I had to quit my weight-lifting career due to injuries and that’s when I really started riding mountain bikes. I haven’t looked back since then, and I get out riding at every opportunity. When I set up YT ten years ago, part of my motivation was that most high-end mountain bikes were just too expensive, excluding a huge chunk of potential riders – particularly young ones.
That’s interesting. What else led to the launch of YT and how long did it take until you had the first YT bike in front of you?
I met two teenagers at our local dirt track in Forchheim; they must have been about 15 years old and they were really gunning it on the jumps. It was impressive – even more so when I realised what cheap, supermarket bikes they were riding. I asked them if they’d considered buying a dirt jump bike and their response was pretty straight forward. A decent dirt jump bike cost over €1,000 back then, which just wasn’t a feasible sum for the guys. Back then, you really just got a steel frame, a basic fork and one rear brake. No shifters, no other expensive parts, nothing at all. This started the avalanche for me and I was so pissed off at the thought that these kids might be excluded from doing what they could potentially make as their career just because they could not afford the equipment. I knew there had to be a way to make it more affordable. This prompted me to start a side project, and through a friend I was able to find a contact in Taiwan to produce 150 dirt jump bikes. I didn’t have a lot of spare cash at the time, but I ploughed in every penny I had. Once I had the 150 frames I built them up in my garage with choice components. My objective was simple: sell the bikes directly on a website. This would cut out any middlemen and the price benefits would go straight to the customer. Basically, within a year, I’d created a competition-worthy bike that sold for €499.
I then headed to the offices of FREERIDE magazine in Munich, ready to introduce them to the first bike that I’d assembled and tested. It was immediately entered into a group test against all the biggest names, and within four weeks the Dirt Love came out victorious, being declared as the best value for money. Within 10 days all of those 150 bikes had sold out.
This meant that I quit my job and went all-in for YT, which even today I don’t regret in the slightest.
Wow, that’s mad. What were you doing before YT kicked off?
I’m actually from the weight lifting scene and qualified as a coach for fitness, nutrition and sports rehab. I’ve also studied marketing and kept on the pulse about the success stories of various brands. I worked for a while as head of marketing at Germany’s biggest fitness chain as well.
At the end of the day it’s about what we’re able to deliver and that everyone has a good time.
YT’s own success story is impressive these days and your bikes are everywhere we look. What do you think it is that makes the brand stand-out from the competition?
I don’t follow what the competition are doing, so all I can talk about with any authority is what we do. There’s no special secret or anything. We’re all mountain bikers and we just develop bikes from the heart. We love the crazy stories that we create around the bikes and there are absolutely no egos. We say it how it is – even if that rubs some people up the wrong way. At the end of the day it’s about what we’re able to deliver and that everyone has a good time. Nothing more, nothing less. I think a lot of other brands focus really well on this, but perhaps there is something we’re doing that’s just a tiny bit better in some regards.
Surely it can’t all have been plain sailing in the past ten years though? Can you tell us about some of the highs and lows?
It was anything but easy, you’re right. There have been moments when I’ve asked myself why I’m doing it and why on earth I’d thought quitting my well-paid job was the right thing to do. At the beginning, we had very little cash flow and the chronic lack of financing was a worry. As you can imagine, it isn’t easy to get financed as a start-up – especially when you haven’t got a lot of prior experience in the industry. But sometimes you just have to take risks. If you want to sell bikes you’ve just got to suck it up, buy the parts and pay for them in advance. It was tough and there were some setbacks but we kept on fighting.
There were also suppliers who wouldn’t sell product to us because of fears that we’d ruin the market with our concept.
There were also suppliers who wouldn’t sell product to us because of fears that we’d ruin the market with our concept. One competitor even threatened parts manufacturers not to work with us otherwise they wouldn’t place any more orders with them. Some of them actually complied with that request too.
There was no real let-up in the first few years but there were positive moments that balanced it all out. That moment when we won the first group test, the response to our first CAPRA, the first victory at a World Cup, as well as those rides with friends where we were all out on YT bikes; these are moments that business woes can’t even dilute.
Your experience in other industries must make you see cycling in a different light. What have you noticed about how it runs? Is there anything that really gets under your skin?
When I worked in the fitness industry I was always shocked at how unprofessional it was at times. But once I’d started working in cycling I realised that it isn’t that dissimilar. It’s no bad thing, but sometimes it’d be a benefit to see more professionalism and structure that you perhaps find in the automobile industry. It’d be useful in certain areas for sure. But then it’s also just astounding how quickly and straightforward it is to create, realise and drive innovations in cycling. In other industries it would be a lot tougher.
Bikes from direct selling brands used to suffer a reputation for simply being built around mass-produced, cheap frames. But you guys have managed to shake this off and deliver a performance that often obliterates many more established brands. How have you managed this?
We’re just doing our job. In the beginning, we faced this prejudice a lot and it used to really piss me off. The way we develop frames and complete bikes is absolutely no different to the brands who are going to use regular distribution methods. Those who make an effort will be rewarded with a good product at the end. Seriously, what does the distribution model have to do with the quality of a product? It makes no difference to the bike’s performance if I distribute the bikes directly to consumers or via a retailer.
Of course, there are brands that just use so-called open model frames from Asia, then they mount some parts and sell them. It isn’t a bad method per se, but unfortunately this does mean that there’s little tuning of the suspension so it’s not optimised for the frame, and the geometry and kinematics aren’t likely to be on their A-game. However, it’s an easy route and it gets you onto the market quickly and without excessive costs. The downside is that there’s no longevity if you ask me. Right from the gun, we’ve opted for the more arduous route and all of our frames are developed by us.
The company’s outgoings must be huge considering the amount you plough into bike development and the sponsorships you support, like Aaron Gwin. Surely this will lead to extortionately expensive bikes?
This is a question that I hear time and time again and I always just say: no. Naturally, our developments, sponsorships and marketing campaigns don’t come cheap, but that doesn’t automatically require us to raise the price of the bikes. We calculate it like this: the less well-known you are, the fewer bikes you’ll sell. The development costs, in that case, need to be broken down per piece, and the consumer is likely to end up with a high sum to pay. Either your product is expensive or you just accept a minimal profit. However, when you’ve got a good reputation and can sell more bikes, this leads to more affordable options for sales and you’ll also be able to lower the manufacturing costs per bike. Everything we put into development and marketing helps us to grow the brand image and increase awareness.
Our bikes have got more expensive over the course of the years, but it’s unrelated to our marketing activations. Take a closer look and you’ll notice how our bikes have just taken on more and more quality through better and more expensive parts. For companies that buy products in US dollars, the biggest driver for prices is the exchange rate. In that regard, the past few years have been turbulent to say the least.
I hear you. So let’s talk about your athletes now. Bryan Regnier and Ace Hayden are two of the nicest and most style-savvy enduro riders around, but you haven’t yet signed a hardcore EWS racer. Why’s that?
Character is key when it comes to signing new athletes and the rider’s image is important. Our athletes don’t just ride a YT bike – they become part of the family so everything has to ‘click’. Our current collective is a really good reflection of the brand’s core values. The competitive enduro scene is definitely an interesting area for us, but we haven’t had the opportunity to create a team yet. Let’s just say it isn’t something that we’ve ruled out.
What do you think is needed to make mountain biking more accessible for more people – producing more affordable bikes?
Fundamentally that’s it, and that’s what we’ve always striven to do. But there’s a limit: you can only go so low with your costs before risking unsuitability when it comes to making sure the parts are up to the job. That’s already past our limit and we’ll never create such low-priced bikes that would jeopardise performance. It’s important that even an affordable bike in our collection is still wholly capable of its purpose – one criterion it has to meet is that it’s so good I’d like to ride it.
These days the bike industry is all het up about eMTBs. What’s your stance on them? Does the YT motto of ‘Good Times’ chime with eMTBs too, and if so are we ever likely to see one?
Riding eMTBs is great fun and they have cemented their category within mountain biking. Naturally, there are some prerequisites the bike has to satisfy and I think we’d be absolute amateurs if we didn’t take a closer look at the developments. However, if and when there might be an eMTB from YT remains undetermined.
Mysterious. Let’s talk about long-term goals to end the chat. Where would you like to see YT in five or ten years?
10 years seems like a hell of a way away, but if you stop and think about it, it’ll actually come quite quickly. This year marks our 10-year anniversary but it still feels just like we’re a start-up and only yesterday when I set up the company. My personal goals for YT in the next 5–10 years are simple: keep building the best bikes, keep being the sickest and boldest mountain bike brand in the world, and keep having a lot of fun! Cheers!
Cheers!
