2014 Powersports Business Industry Leader – Tim Calhoun
May 19, 2014
Filed under Features
2014 Powersports Business Industry Leader
former CEO of LeoVince USA
Tim Calhoun hit a big crossroads last fall. Within a few months of his purchase of LeoVince USA, Sito Gruppo, the parent of his primary brand, placed itself on voluntary liquidation. That left Calhoun to decide, should he forge ahead without the brand he had sold for a decade, or should he close his business and move on.
Calhoun leaned on his nearly 30 years in this industry, ranging from a small motorcycle shop to Tucker Rocky to Indian Motorcycles to Western Power Sports, among others, and chose to re-strengthen his company, its employees and its manufacturing partners by forming a new, similar business venture.
Now Calhoun, formerly CEO of LeoVince USA, serves as CEO of his newly created SpeedMob, Inc., which he describes as a “boutique distributor of premium brands.” Calhoun, a 2014 Powersports Business Industry Leader, is looking forward to better servicing dealers not only in the powersports industry, but in automotive and bicycle as well in 2014 and beyond.
What has been the biggest challenge in your current position, and how have you dealt with it?
I think the biggest challenge for me is when I was a national sales manager, even managing 80-85 salespeople, they’re all cut from a similar cloth, and they’re all driven in a very similar manner, and they’re really easy to deal with, but when you’re in a small- to medium-sized company, and you have 15-25 people, you’ve got a lot of personalities to manage, and you’ve got to find ways to make people work together very well, and you have — especially in our business — some real generational gaps between an old guy like me and the 20-year-old working in the other room, and I think those are always the challenges that we all have.
What’s the biggest opportunity for the industry, and how can the industry take advantage of it?
If you’re a twin dealer, the H-D 500 and 750 are home runs. Talk about a youth market. For the metric side I’ve got to tell you I think the biggest opportunity for the motorcycle industry right now, if I’m a dealer — and some people may laugh at me, and that’s fine — but I think if I was a metric dealer right now, especially in urban areas, I’d be dedicating some of my floor space to bicycle. I think everybody who’s anybody in racing both club and pro, dirt and street or even track day riders, they’re out there riding a bicycle to train, and the commute market is rising fast. I feel these two-wheel sports go hand in hand, and I think dealers are absolutely missing the mark leaving all those dollars on the table to some bicycle dealer down the road when they could dedicate a very small area to some great brands of bicycle products. Nationally the bicycle work commute numbers continue to grow, and with the introduction of hybrid bikes that will increase. And when you’re looking at an average add-on sales for this level of bicycle riders, it’s ridiculous; it’s what we were in motorcycle industry back in the day, and it’s a great crossover market; two wheels are two wheels. Some people pedal, and some people ride, and many do both.
What is the best advice that you can give others in the industry?
Strengthen your financial knowledge; this was my Achilles tendon early on, and through many painful lessons it improved. If you’re in college, get the background. If you are older, there are many resources on the Internet or shotgun approaches to get up to speed. The truth is always in the numbers, and the better you understand how to read them, the healthier your business will be, if you have the strength to act on them. … Be decisive, and when you decide be bold and swift in your actions, there will be times when you need to do a “Crazy Ivan” to shake the competition off your tail or to forge forward into untapped markets. If you run the numbers, measure the potential for success and decide to go for it, then do. … Let the numbers dictate when you expand or contract, not your ego or the opinions of others or what other companies are doing; this has been the undoing of many companies. … Do not let your competition dictate your business, pay very close attention to them, learn from them, measure their successes and their losses, but ride your own race. … Find a purpose beyond what you do for a business, a reason beyond your job to help you get out of bed in the morning and get to work, and most importantly, care about what you do. For me this is knowing I have a responsibility to my team and the faith they place in my wife and I that we keep them employed and my brands relevant in this market. I know that success in my company will allow me to take care of my family, my employees and allow me the opportunity to give back to my industry and my community in a way that is larger than I could otherwise. … Believe in yourself, even in the darkest hours. Be solution minded, not problem reactive. Be honest with yourself and listen well to others, really listen. … Make the hardest calls first, own your mistakes and make sure you always honor anything you shake hands over.
Explain how SpeedMob, Inc. was formed this spring.
In 2004, LeoVince was looking to open an operation in the U.S., and I was looking for something, a new challenge, something that I could sink my teeth into, just kind of outright run, and we launched LeoVince USA, and that’s how I spent the last decade, almost 11 years now, and I then purchased it last July. Unfortunately due to some unforeseen things like [LeoVince in Italy] going into liquidation and some delayed vendor deliveries, it dramatically impacted our performance for our dealers through the late fall and winter until now. My wife and I run the company, and along with our team, we outlined the changes we needed to make in order to move forward as a company and better serve our customers. Part of it was my desire to have a little bit more of a forward-facing image than a traditional distributor. I didn’t want it to be Calhoun Distributing or Tim’s Incorporated, and I couldn’t become a Tucker or Parts or Western, which I don’t know if anybody will become again just because of the sheer size of those companies and the changing horizon in the industry. What I did know is I really enjoyed selling things I believed in and selling premium quality brands, and that’s kind of how we came out of the gate as we began to discuss a transition from LeoVince [USA]. I had trademarked the name SpeedMob, and I owned the name, so we just decided it’s time to incorporate it because really what we wanted to do is get back amongst our customers. We wanted SpeedMob to not just be a company, but we wanted to be out there at the races racing, not just out there vending. We want to be out at Bonneville Salt Flats with an entrant; I want to be back participating and rekindling the passion that got me into this industry. Turing 50 this year you kind of have a real feel for what you like and what you don’t, and what I miss is building bikes and being there racing and being involved, riding with other likeminded people on the highways and trails. I love running a company, and I love selling great products but not at the expense of leaving behind all the passionate things I really miss, and that’s kind of the “why” in the decision we made. The want is that we’d have a very open company. … Our Facebook is going to be about a day in the company, and when things go wrong, when things go good, we want to have a complete open conversation with our brand believers, and it gives us the chance to really come out and talk about the fact that we’re going to have an automotive arm, and we’re going to have a bicycle arm, and we’re going to have a powersports arm, and those are three markets that we have brands we’re currently selling like Airoh, USWE and BMC that we can go into those markets with. By simply expanding the current relationships we can take advantage of their product offerings in these additional markets. What drove us into those other markets more than wanting to go there was the fact that we already had these relationships and amazing products — through the brands we have — that allowed us to expand, and that was exciting, so it really defined that it was time to launch SpeedMod Inc & refocus the company and really get back to the basics. Like I said in the initial press release, I think we’ve all been working so hard since the market downturn that it’s all just become a job and a lot of hard work, and unfortunately for many of us we have forgotten that at the end of the day what we’re selling is a want, not a need, and if we’re not having fun, and we’re not selling fun, then what are we doing? And as much as that sounds silly to say, ‘We sell fun products and passionate products,’ that’s exactly what they are. Nobody needs a new exhaust system on their bike; but most riders want one, and nobody necessarily needs a $600 helmet; but they want one. It’s getting back to the basics of how I used to feel when I walked into a bike shop as a kid and saw a wall full of stuff and got excited; that’s what I want.
We talk to a lot of industry people who wish they rode more, so that seems to be an unfortunate trend.
I spent almost 10 years in this industry rarely riding a single motorcycle. I had watercraft at the time, but from 1991, I quit club racing, sold my bikes and just worked full time in sales. From ’91 to 2001 I rode a few borrowed bikes and a little bit at Indian, but I didn’t own one, I rode here and there at WPS but not much and not well. When I took over LeoVince, I went out and immediately bought a motorcycle, and I told myself I need to either get back into this industry and love what I do, or I need to go find a different job, and I started putting my head down, and I started riding and getting back in the dirt, and it was really what I needed to do to get back on touch with what I really loved about our business, and now my wife and I ride our bikes together.
What makes SpeedMob a great partner with dealers and the manufacturers for which it serves as a distributor?
I hate to be hemmed into the term distributor, even though in reality that’s what we are. But I think having spent as much time as we did as a manufacturing arm, as a company that was strictly representing a manufacturer, we know what it is to build and market brands, and we know what it’s like to go after market share, and we know what it’s like to try to integrate our brands into dealerships or with consumers and build the pull from the consumer level, so I think because of all of that experience out front, we’re something a little bit more than an average distributor because we deal with the end consumer quite a bit, and we manage all the warranties very well, my staff is very technical and educated on our brands and we do things manufacturers typically do but as a distributor, which isn’t always the case. A lot of the distributors don’t handle warranties; they hand them off to the manufacturer. We actually offer turnkey solutions for our manufacturers, we’ll manage every element of that warranty return or product issue, and we’ll put out that fire for them, and we’ll manage the marketing for them. We’ll put together a marketing plan; we’ll manage the trackside support for their brand if they need that as well, so we’re very full-service in that we don’t want to represent a lot of brands, but we do want to be very, very good at managing a few brands, and we understand what it’s like to manage all the needs of a brand because we’ve worn those shoes.
Is SpeedMob still on the same growth trajectory as LeoVince USA was, or are you going to slow the growth in terms of adding brands?
I think we’re going to narrow by a couple brands, so we’re going to get a little bit slimmer on the brands, but a little more focused on what we’re doing with the brands we have. … We're just looking for a few great brands that go together well and service a relatively broad market. I think next year we'll consider adding more, but for right now this years focus is going to on the five or six brands that are the most impactful for us, we want to represent these brands really well, and get our hands and minds completely around these brands, so we understand every aspect of them and every sales channel potential for them. We've got quite a few projects for this company as a whole, the most urgent of these projects are improving our vertical channels to better support our industry selling partners and to better drive our brand sales. If we can successfully complete these projects, then we'll worry about additional products. I have no lack of people beating down my door that want us to sell their stuff. What I need is to make sure that if we add one more thing to this mix, it is the right thing and it's not distracting from what we currently do well. I never wanted to be 50 brands or even 20; I'm really hoping to be five, six brands cornerstone brands, and you have to look no farther than a company like Motonation to see how he's done with Sidi, AGV Sport, Vemar and a couple ofadditional brands, and we've always been similar companies in some ways to what Bill [Berroth] is doing over there, and for me, I love the name “boutique distributor” because that's really what I care to be. I don't want to have 50 reps; I want to have some great guys working in a room here, and we want to call 200 dealers a day, and we want to answer the phone in three rings or less and make sure we put out fires and take care of people, and we want customers to feel confident that if they have a problem and they call us, we're going to pick up the phone, answer it and make that problem go away. Those are the things that I think we do better than anybody right now. I think our customer service is absolutely hands-down the best in powersports; I really mean that. Call here anytime; you're going to get the phone picked up in three rings. It's always been that way for 10 years, and people know that now. I hate calling up and getting voicemail or music or somebody saying, “Here's your extension.” I love picking up and hearing, “Hi, LeoVince USA,” or “Hi, SpeedMob, we're here to help you.” That is where we separate from many companies, and that's really where we differentiate is that if it comes down to me picking up the telephone to make that problem go away, I never have a problem doing that. I want to talk to that customer and make sure they leave satisfied. I love finding solutions and helping passionate people feel good about their purchase.
With SpeedMob’s expansion into automotive and bicycle, how dedicated does the company remain to the powersports industry?
I think our heart and soul is always going to be in powersports, just because it's what I love, but I think by putting up some outriggers like BMC in automotive, and the Airoh helmets in bicycle, along with USWE hydration systems, they're such solid markets in bicycle and automotive that it gives us the strength to really go forward a little more fearlessly in powersports, and it gives us the cash flow that allows us to remain steady in this market. Even as we hit the ebbs and flows that the powersports market has, we're going to be a lot more solid as a company to have these other divisions just going out there and running. And to some degree, automotive’s definitely more of a commodity-based market, even though we still have some very high-end products… we've got $5,000 carbon fiber airboxes for Ferrari’s, so that’s exciting. But I think if you were to look at even going back as far as 2007, we lost almost 60 percent of our market, bicycle lost little and quickly bounced back , and automotive aftermarket barely saw a blip, and that’s the difference is they’re just not as volatile as our industry is, and I think it allows us to feel like we have a much more solid foundation, and we can make bolder decisions on where we’re going to go in powersports.
How do you expect 2014 to shape up for SpeedMob?
I think the remainder of the year is going to be exciting because it’s a fresh face with a fresh launch and some fresh brands, and I think it’s nothing but upswing for us, and I think we’re going to solve some issues that have been existing in the last year or so for us as far as supply, and that’s going to make all the difference in the world. We can go back to these great dealers we’ve worked with and actually support them the way we’ve traditionally supported them again, and I think that’s what matters to me is to not let down those people that have come to rely on you and make sure you can support them in the way they expect.