Startup puts an elliptical spin on the bicycle

Elliptical training is about to hit San Diego roads -- literally, and on a commercial scale.

If all goes as planned, a cross between an elliptical trainer and a road bike will start being distributed locally as early as this year.

The elliptical bicycle, formally known as the Elliptigo, is the brainchild of Bryan Pate and Brent Teal, the co-founders of local startup PT Motionworks.

Pate, an avid athlete and former Marine, had initially turned to the elliptical trainer after running and cycling had taken their toll.

However, the native San Diegan soon missed being outdoors. After searching fruitlessly online for an elliptical bicycle, he asked his friend and former colleague Teal, an engineering design consultant, to build one.

Within two months, Teal had scrounged together the materials and fiddled with the mechanics to create a rough version of what would become PT Motionworks’ flagship product.

“I really saw a need for a product like that,” said Teal, also an endurance athlete.

For injured runners “looking for some nonimpact way to get a similar motion … the elliptical is the best for that, but (with the Elliptigo) you can do it outside,” he added.

And thus, the Elliptigo -- or, at least, its humble beginnings -- was born on a picnic table in 2005, complete with chromoly parts and wood pedals.

Almost four years later, Teal and Pate are showing off a fourth-generation Elliptigo to some visitors.

The glide bike is now made of aluminum, with design input from premier bike frame designer Tony Ellsworth. The handlebars and stride length can be adjusted for each rider.

The first Elliptigo to touch customer hands will be a sleeker fifth-generation model, retailing for somewhere between $1,500 and $2,500.

PT Motionworks will start taking deposits in April, and a container of Elliptigos will arrive in San Diego within the next year for pickup.

Pate and Teal hope to sell 1,700 units between 2009 and 2010 before scaling to 5,000 in 2011 and 20,000 in 2012.

“We’re starting small,” Pate said. “Our investors hammer us because they think our projections are too conservative.”

Eventually, he and Teal plan to sell the business. They note that most companies currently are steering clear of product development and anticipate that when the recession ends, buyers will line up for the rights to sell a new product.

Indeed, the economy has been kind to PT Motionworks.

The costs of materials, travel and labor have declined. Any potential competition is hunkering down or going out of business. Quality partnerships are easier to come by.

For example, “we’re getting five new prototypes made at a really premier production facility in Portland,” Pate said in a phone conversation earlier this month, “and the reason they could do it is that they’re not running to capacity right now.”

And, after bootstrapping for three-and-a-half years, Pate and Teal are finally on a paycheck after the company closed its first round of financing in January.

A second round of financing, which opened Wednesday, is expected to close in April.

Pate and Teal admit it’s been a whirlwind journey.

The two started PT Motionworks in 2007 after exercise equipment and bicycle companies expressed some interest in the Elliptigo but weren’t ready to sublicense.

For the first year or so, they spent the majority of their time working on securing intellectual property rights, an area Pate stresses in his advice to fellow entrepreneurs.

The Elliptigo is covered by a Taiwan patent and has patents pending in the United States and in other countries. Pate and Teal also obtained an exclusive sublicense from the designer of the elliptical trainer.

However, things didn’t really start to pick up speed until last April. While riding an Elliptigo down the street, Pate was stopped by a man who suggested they take the product to the Cool Product Expo in Stanford.

Pate and Teal threw together a Web site, printed up business cards and officially christened their product “Elliptigo;” it had remained nameless until then.

Pate describes wheeling a second-generation bike into the expo and watching people leave their booths to follow them to their booth.

“We’ve been pretty much sprinting since,” Pate said.

Within the last year, the Elliptigo has gotten the attention of three-time Tour de France winner Greg LeMond and a series of other investors and interested buyers.

Teal and Pate got involved with Connect’s program Springboard, which helped the two make key contacts within the sporting goods industry.

Pate, who left a full-time consulting position at McKinsey & Co. late last year to focus on the Elliptigo, describes their success as a combination of hard work and luck: He and Teal did careful research and planning, but also happened to be in the right place at the right time.

In the end, Pate says, he had no choice -- and he likes it that way.

“Get pulled into the industry,” he advises fellow entrepreneurs. “Don’t get pushed. There needs to be so much demand where you’re stupid for not doing it.”

Thursday, March 12, 2009

http://m.sddt.com/article.cfm?SourceCode=20090312czl

by REBECCA GO, The Daily Transcript

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