Detroit Bike Entrepreneur Buys 50,000 Square Foot Factory On City's West Side

**begingri** · July-14-12, 09:25 PM

Zak Pashak had heard a lot of negative stories about Detroit. Still, for some reason, the Canadian entrepreneur felt compelled to check out the city for himself. And after he visited in October 2010, Pashak realized that he really liked this place -- so much so that he picked up and moved from Calgary the following July.

And once he got here and bought a home in Boston Edison, his next challenge was even more radical -- opening a bicycle manufacturing plant in the city.

Now his business, Detroit Bikes, is poised to become more than an idea. On Monday Pashak closed a deal for a 50,000 square foot factory on the city's west side. He's put $500,000 of his own money into the venture and is excited about getting to work."

I definitely want to get started as soon as possible," Pashak told The Huffington Post. "We're going to be making 50 bikes in the next month or so and giving them out to local Detroiters. They'll be testing them and giving out feedback."

Pashak's background is in the music industry, not manufacturing. He ran music venues in Vancouver and his hometown of Calgary and began Canada's popular Sled Island Music Festival. His interest in bicycling began when he ran for Calgary's City Council, when Pashak began investigating how alternatives to cars could benefit the city.

Ultimately, Pashak decided to start making bicycles because he couldn't find the type of bicycle he wanted -- one built for casual city use at a reasonable price.

His target customers are people who aren't hardcore cyclists but are still interested in bikes.The model he plans on producing in Detroit will be a lightweight steel three-speed with a tire that's thicker than those used for racing bikes. The bike will come in one color -- black-- and sell for a little under $500.

http://www.huffingtonpost.com/2012/0...l#slide=915837

**mikefmich** · July-15-12, 12:40 AM

That's a bright note. Now if Detroit could just find another couple hundred like him.

**brizee** · July-15-12, 02:47 PM

Great great story. That's the second premium bicycle shop to be announced here recently, along with that shop that also makes watches in New Center.

**Cincinnati_Kid** · July-15-12, 01:53 AM

He won't find many people spending $500.00 or more for a bike in Detroit. I can just about guarantee that.

**corktownyuppie** · July-15-12, 11:13 AM

Originally Posted by Cincinnati_Kid

He won't find many people spending $500.00 or more for a bike in Detroit. I can just about guarantee that.

I'm not sure if you're implying that Detroit is his target market. I agree that Detroiters won't be spending $500 on a bike anytime soon. The business model is to sell the bikes to people regionally and then nationally.

Having Detroit-based businesses build stuff and sell them outside of Michigan is a good way to improve our economy and bring much needed money from outside our own local coffers. If we don't sell a single one in Detroit, that's not a bad thing.

**Pickford-Bentler** · July-15-12, 11:43 AM

True. How many Chevy Volts are sold to those who reside in the city limits of Detroit?

Like the Volt, this product appears to target a niche market.

I use a mountian bike for urban commuting. However, a rugged 3 speed with a decent seating position would also work for me. In an urban setting, a cyclist spend a lot of time standing on the pedals so the fumbling through six or seven torque multiplications is obviated by just applying more leverage.

The DC Metro area has a rather large cycling community serviced by a decent and growing set of trails and bike lanes.

I am sure some of them would be interested in an "imported from Detroit" product.

**DetroitPlanner** · July-15-12, 11:53 AM

If I had a $500 bike riding the streets of Detroit as a kid, I know for sure it would have been stolen. A big kid would have told me "let me riide your biiike". My first bike was a used garage sale special... $5!

Note that this is the second bike manufacturer locating in Detroit in the last several months. If this continues we will have supplier jobs!

**313WX** · July-15-12, 12:01 PM

I think he meant no consumer is going to buy a $500 bike just because it's made in Detroit when they can buy them at your average department store for roughly half the price.

I'm not sure that'll be the case though. It depends on what type of bike he's trying to sell and to who.

**Pickford-Bentler** · July-15-12, 12:20 PM

His target customers are people who aren't hardcore cyclists but are still interested in bikes.The model he plans on producing in Detroit will be a lightweight steel three-speed with a tire that's thicker than those used for racing bikes. The bike will come in one color -- black-- and sell for a little under $500.

A $2000 road bike does not, by default, make one "hardcore". Urban settings are rife with thugs, potholes, curbs etc... that can beat the crap out of a bike or rider.

Besides, I lost count of the thousands of Lance Armstrong wanabbes I have passed on graded trails with my mountian bike. They forget that the most important component of a bike is the engine that applies torque to the pedals - the rider.

I also submit that urban riding has elements that are just as "hardcore" as road cycling. One finds a gear that they did not think they had when a loose Doberman gives chase.

Yea.. I had just about every one of my bikes stolen when I lived in Detroit. For that city, a cheap garage sale special was the way to save money. My last bike to get stolen had about ten spokes broken from hard riding. I figured [[wrongly) that no one would steal that out of our yard. I mourned its loss [[or early trash collection) and bought another for $10 from a garage sale.

Is this product worth $500?

Not enough details to make that call.

**wolverine** · July-15-12, 01:08 PM

So do you all buy cars from yard sales for $20 since those get stolen too?

**DetroitPlanner** · July-15-12, 01:18 PM

Originally Posted by wolverine

So do you all buy cars from yard sales for $20 since those get stolen too?

Bikes are a lot easier to steal than cars are. Not too many bikes with locking doors, ignition keys or alarms.

**wolverine** · July-15-12, 02:24 PM

Originally Posted by DetroitPlanner

Bikes are a lot easier to steal than cars are. Not too many bikes with locking doors, ignition keys or alarms.

But cars can be stolen.....but they do makes cars in the Detroit area. So if bikes get stolen as well....that still means they can probably make bikes in the Detroit area.

I'm just pointing out the ridiculousness of this forum in case you haven't noticed DP.

Someone posts an article about new manufacturing and people start complaining about bike theft. Not about jobs, not about improving a property, not about a new source of tax revenue for the city.

**DetroitPlanner** · July-15-12, 04:02 PM

Originally Posted by wolverine

I'm just pointing out the ridiculousness of this forum in case you haven't noticed DP.

Someone posts an article about new manufacturing and people start complaining about bike theft. Not about jobs, not about improving a property, not about a new source of tax revenue for the city.

Who the heck cares about economic development crap?

Wait, my original post tends to paint me as one!

**stasu1213** · July-15-12, 01:08 PM

He would sell more if the price of the bikes were much lower around the $200 to 300 mark. He should study the history of Henry Ford's concept of the Model T; make it affordable for the average worker and consumer. The sales will accumilate after

**313WX** · July-16-12, 12:15 AM

Originally Posted by stasu1213

He would sell more if the price of the bikes were much lower around the $200 to 300 mark. He should study the history of Henry Ford's concept of the Model T; make it affordable for the average worker and consumer. The sales will accumilate after

That was only half of Henry Ford's concept.

He also paid his workers a fair wage so they could afford to buy his cars, in addition to them meeting their basic needs. He paid his workers the equivalent of $14-$15/hr today, without all of the taxes we have today taking away from that wage. That's exactly why people were flocking to Detroit in droves in the first place during the roaring 20s.

So I can understand the higher prices if he's going to use that to pay the Detroiters [[and not illegal immigrants) he hires a fair wage to manufacture them.

**Hermod** · July-16-12, 08:18 AM

Originally Posted by 313WX

That was only half of Henry Ford's concept.

He also paid his workers a fair wage so they could afford to buy his cars, in addition to them meeting their basic needs. He paid his workers the equivalent of $14-$15/hr today, without all of the taxes we have today taking away from that wage. That's exactly why people were flocking to Detroit in droves in the first place during the roaring 20s.

So I can understand the higher prices if he's going to use that to pay the Detroiters [[and not illegal immigrants) he hires a fair wage to manufacture them.

The problem got to be that the median wage and benefits package for Detroit auto workers and Pittsburgh steel workers got to be double the median wage and benefits package for other industrial workers in the United States. Since people were enslaved to their cars in most of the US, they just had to grit their teeth and pay the price.

Volkswagen and the Japanese cars in the 1960s and 1970s were significantly cheaper alternatives. Which is why the cry "buy American" registered so hollow with folks outside the Detroit area. As a Japanese auto executive noted, "It is hard for people making $10 an hour to buy a car made by people making $20 an hour".

**Detroitnerd** · July-16-12, 09:09 AM

This thread is funny. I love the naysayers' remarks, especially.

"Now, personally, I don't know much about bikes, or marketing, or what bikes cost, or who rides them, or what the differences are between different kinds of bikes. In fact, I haven't ridden a bike since I was 16 years old. Don't like 'em, in fact. But let me tell you, this business is bound to fail. Now, I haven't seen the business plan and I'm totally unfamiliar with the kind of business we're talking about, but ... it seems to me that ..."

**Detroitej72** · July-16-12, 09:46 AM

Originally Posted by stasu1213

He should study the history of Henry Ford's concept of the Model T; make it affordable for the average worker and consumer.

At least he studied the part about the consumer can have it in any color they like, so long as it's black!

**detmsp** · July-15-12, 02:14 PM

So much negative energy. $500 is NOT expensive for a nice bike. Just because you buy crappy cheap bikes doesn't mean there isn't a market for nicer bikes. Just because the factory is located here doesn't mean the product will be sold locally. Just because you wouldn't buy the product doesn't mean no one will.

It must be exhausting for you all to spend that much energy complaining, bitching and moaning about everything.

**stasu1213** · July-15-12, 03:31 PM

Originally Posted by detmsp

So much negative energy. $500 is NOT expensive for a nice bike. Just because you buy crappy cheap bikes doesn't mean there isn't a market for nicer bikes. Just because the factory is located here doesn't mean the product will be sold locally. Just because you wouldn't buy the product doesn't mean no one will.

It must be exhausting for you all to spend that much energy complaining, bitching and moaning about everything.

I agree that $500 is not expensive for a nice bicycle. Serious cyclists pay that much and more for one. A cyclist who just want to get from point A to point B may just want to pay no more than $300. Hell, many average cyclist usually shop at Target, Walmart or buy a used Schwinn 3spd from bike shops that sells them. I had purchased a good used Schwinn mountain bike from Eastside Bikes on Van Dyke and 696 a couple of years ago and it is still in good condition

**Lowell** · July-15-12, 08:32 PM

Originally Posted by detmsp

So much negative energy. $500 is NOT expensive for a nice bike. Just because you buy crappy cheap bikes doesn't mean there isn't a market for nicer bikes. Just because the factory is located here doesn't mean the product will be sold locally. Just because you wouldn't buy the product doesn't mean no one will.

Thank you. Amazing how some take positive news and then find a way to use it bash Detroit.

$500 for a bike is not an extreme price by any means. It's only 10 fill ups of gas after all.

**mikefmich** · July-15-12, 03:15 PM

Arguing who in Detroit is gonna buy bikes is silly shit. How many successful auto manufacturers pver the years were mostly dependent on Detroit sales?

Answer: None

The key....it's putting property on the tax rolls and creating jobs. That's the only thing that matters.

**old guy** · July-15-12, 03:42 PM

Trek bicycles in Wisconsin sells their mid range bikes from about $400 to $750 and are doing extremely well nationwide. $500 seems pricey, until you buy a cheap bike and the gears go to hell within a month. If it's a decent bike, my guess is they might do well. There's a growing market.