This year the company will sell 2,200 of its $500 bikes. It expects to more than double that with revenues of $2.8 million next year and to ramp up to $40 million by 1993. Certainly the market is hot enough: the mountain-bike rage that started in the early 1980s is still in high gear, with 2.5 million of the fat-wheeled bikes sold last year alone. According to one industry observer, West Coast bike dealers are doing 80% of their business in the all-terrain variety.
"We're going slow now," the 26-year-old company president says. "We didn't have word of mouth initially. It takes some time."
The company has, however, been an international distributor almost from the start: Montague sells bikes in Canada, Europe, and Japan and has a joint-marketing deal with Raleigh, in Great Britain. The company also is talking with several large Japanese corporations about a distribution arrangement there, where it predicts the market for smaller bikes will be huge. Foreign sales, in fact, are likely to make up at least half of next year's total sales.
Those are big plans for a little company. Montague Corp. has only five employees, with manufacturing done in Taipei and selling handled by independent reps. Although Montague says maintaining quality control from abroad will be his continual challenge, right up there with getting more U.S. dealers signed on, he's also confident that broad distribution will be a boon. "We're selling technology, and we can sell it everywhere," he says. "Even if the U.S. dollar goes down, we'll still be getting yen, Deutsche marks, and pounds. It evens out our business."
Concept: $500 full-size all-terrain folding bicycles
Founders: Harry Montague, architect, and David Montague, his 26-year-old son
Financing: $300,000 of family funds
Source of Idea: Harry was tripping over too many bicycles in his house
Critical Hurdles: Convincing dealers to carry a new product and maintaining quality control with foreign manufacturers
Projections: $2.8 million in 1990; $40 million in 1993
ECOVA
Superbugs
It's hard to imagine an industry better positioned for modern times than bioremediation. What bioremediation companies do is develop microbes -- "bugs" -- that speed up nature's decomposition process and eat the refuse of humankind, such as spilled oil and toxic chemicals. Done right, bioremediation has the potential to join and even surpass landfills and incinerators as the way to tackle many environment-threatening wastes.
One of the hottest companies in the young industry is Ecova Corp., which in its third full year of operation expects to do $7.5 million in business. It already has a successfully demonstrated proprietary technology for breaking down trichloroethylene (TCE), a degreasing solvent and common groundwater contaminant.
"Actual cleanup has yet to really take off; it's been slowed by regulations and liability concerns and court fights over who's at fault," says John Cioffa, Ecova's vice-president of corporate development. "But it's starting to go now, and we intend to be a big part of it."
It won't be alone.
HOT INDUSTRY: CLEARVUE RESOURCE MANAGEMENT
All in the Timing
A business plan won't help Doug Wadsworth plot the course of Clearvue Resource Management Ltd. What he really needs is a stopwatch. "The window of opportunity is closing," says Wadsworth, cofounder and president of the Troy, N.Y.-based plastic-recycling company. "We're not the only people looking at this as a business opportunity."
Wadsworth plans to elude his competitors by quickly moving his company through three steps: from a service business that collects and brokers plastic, to a maker of refined recycled plastic, to a manufacturer of goods made of recycled plastic. "This has all been thought out very, very carefully," he says.
So far Clearvue has enlisted about 50 municipalities, all within a 200-mile radius of its headquarters, to sign on to its turnkey recycling program. Wisely, Wadsworth has focused on communities where newspaper recycling has been popular and landfills are overflowing. "The problem may be magnified here," says Linda Dillon, recycling coordinator for Albany, N.Y., "but it is going to be a nationwide concern."
Currently Clearvue is taking in roughly 50,000 pounds of plastic a month and doesn't do much other than clean it, sort it, and broker it to companies that use it to make such items as drainage pipes. But Wadsworth is trying to raise $250,000 to buy machinery that will blend and pelletize the plastic into a virgin-plastic substitute, raising his gross margins from a thin 20% to 30%. "We'll open ourselves to a much wider market," he says. The substitute will cost about half as much as virgin plastic, yet manufacturers will be able to mold it into parts for products such as flowerpots or chemical containers.
Step three is only a couple of years away. Then Wadsworth plans to raise another $500,000 -- "from anyone but venture capitalists," because he wants to stay in control -- to buy machinery that could make such high-margin items as toy components or trash barrels. The company plans to franchise its plastic-collection business in as many parts of the country as possible. "This is a race," Wadsworth says, "to see who the leader in plastics recycling is going to be."
Indeed, it is. Big manufacturing concerns, Wadsworth fears, are going to feel political pressure to start recycling plastic; they may link up with other giants that specialize in recycling. "At any moment the big companies in this industry could go into this area full tilt," says Wadsworth, whose company's revenues should hit $100,000 this year. "That's something we're very cognizant of."
