Kind Bicycles LLC Business Plan 4/1/09
Contact: Wayne Thompson - info@kindbike.com
www.kindbike.com
The Opportunity
Kind Bicycles is a new brand focusing on affordable and easy to buy, ride and maintain bicycles in the
fastest growing cycling category, the urban market with a commitment to sustainable social and
environmental business practices.
Kind Bicycles offers bike shop quality bikes that are simple, versatile, affordable, functional and
competitively priced delivered to your door. Selling bikes online has created obstacles in the past but Kind
eliminates them by offering free delivery, fully assembled bikes (just attach the front wheel and minor
adjustments to the seat and handlebars and you are ready to go) and a simple fitting system that fits a
large range of body types.
Kind is seeking $80,000 in capital for the final assembly, shipment and delivery for our current order of
300 bikes from Asia to the U.S. We anticipate being cash flow positive from the outset and have a 128
unit breakeven point with a forecast of 175 units sold in the first 90 days based on interest in the current
model. Kind will pay a dividend of 8% annually and pay back the $80,000 in equal installments in years
three to five, leaving the investors with a total of 40% equity in the company after the payback.
After the initial investment and selling through the first order, Kind retains sufficient cash-on-hand that
allows for a healthy growth every year through year five without the need for additional capital. Our
detailed business plan is posted on slideshare for anyone to see.

TABLE OF CONTENTS
SUMMARY 3
THE INDUSTRY 6
THE ONLINE MARKET 9
THE URBAN/CITY CATEGORY 10
THE BICYCLE CONSUMER 11
KIND BICYCLES STRATEGY 11
KIND CUSTOMERS 14
KIND’S PRICING MODEL 15
MARKETING 15
PHILANTHROPY 16
GROWTH OPPORTUNITIES 16
OPERATIONS 17
ADVANTAGES, RISKS AND CONTINGENCIES 19
OUR NUMBERS 21
2

Summary
Does the world need another bike brand? Only if that brand focuses on improving the poor social and
environmental sustainability practices the industry-at-large engages in. It also needs brands that are
focused on bringing value driven bicycles to everyone rather than focusing on only 10 percent of bike
buying customers.
In 2007, after nine years at the executive level with the largest bicycle importer in the US, Wayne
Thompson founded Madison, WI based Kind Bicycles in response to untapped opportunities in the bicycle
market not being leveraged by the 380+ brands and to change the way the industry and consumers
accept the conditions in which 90% of the world’s bicycles are made. Kind will focus on all three aspects
of the triple bottom line: people, planet, profit.
The industry has been slow in responding to trends in general consumer preferences: new models of
distribution, demand for sustainable business practices and value driven pricing. Established brands are
encumbered by business models that make it difficult to capitalize on these trends concurrently or
actively choose to continue to market, price and deliver in the same way, despite slow to negative growth
at a time when bike sales should be increasing.
The bicycle is a massive change agent. It has the ability to transform how people get around, positively
affects people’s health and improves livability in congested and dense urban areas. Kind wants to make
bicycles accessible to as many people as possible, produce a bike that does less harm in the
manufacturing process from a social and environmental perspective and lasts a long time in both
durability and functionality.
To get there, Kind plans to follow these five strategies:
1. Enter the category where bike sales are increasing and expected to increase long term
2. Take advantage of distribution opportunities the industry has not sought, but consumers want
3. Bring value, function and affordability to the market where there is none currently
4. Offer durable, easy to buy, ride and maintain bicycles made in a sustainable manner
5. Create and maintain a focused, efficient and sustainable supply chain
Kind Bicycles developed for the urban environment delivered to the home at affordable and competitive
prices ($150-$600) target adult cycling enthusiasts and casual riders who will recognize the value and
simplicity of our bikes. We also want to make it easier for the current 120 million non-cyclists to jump
into cycling who may not want to invest a large amount time, research and money once they do choose
to buy a bicycle.
3

Kind removes obstacles that are cited as reasons for bikes not enjoying overall online sales growth by
offering a branded site that is informational and sells its products along with free shipping and easy
assembly. Our functional bikes that fit most people philosophy mirrors that of European and Japanese
brands that are sold in cycling centric cultures, as does our sourcing of simple, durable and reliable
components that require easy, if any, maintenance.
The first bike we plan to bring to market is in a proven category where growth still exists, our
singlespeed/fixed gear road bike:
While focusing exclusively on the enthusiast market initially, this will allow us to sell immediately and
create enough cash flow to expand our offerings to the value driven enthusiast and non-enthusiast
markets.
Kind focuses on fair wages, safe working conditions and environmentally responsible practices throughout
its supply chain. We bring the process full circle by giving back to the people and places where our bikes
are produced and purchased. One percent of sales will be donated to local cycling, social and
environmental advocacy organizations.
After finding, and losing, two rounds of investment sources, we have scaled back the initial funding
request to an amount that allows Kind to be cash flow positive and profitable from the outset while not
relying on outside funds but still attain steady growth.
With a capital infusion of $80,000, Kind’s current plan is to grow from 900 to 10,000 units in 5 years, or
just under 4% of total online bike sales. If demand dictates that faster growth is needed, Kind is well
positioned from a capacity and distribution standpoint to take on additional growth capital. An $80,000
investment with Kind earns 8% interest on the capital-to-be-repaid balance and 40% of the company
once paid back in full after year five.
The initial investment covers the purchase of our first order, liability insurance, operational costs and
completion of our e-commerce website. Specific costs and a monthly cash flow projections are found in
“Our Numbers” section. Our Cash Flow Projection for the first 5 years is as follows:
4

2009 2010 2011 2012 2013
Sales (In Units) 795 2,205 3,150 4,725 9,113
Sales Amounts $304,725 $657,675 $940,050 $1,410,075 $2,617,988
INFLOW
Revenues Collected 304,725 657,675 940,050 1,410,075 2,617,988
Capital Contribution 80,000
Loans 0 0 0
TOTAL FUNDS IN 384,725 657,675 940,050 1,410,075 2,617,988
OPERATING OUTFLOW
Cost of Goods Produced 125,100 226,500 339,750 509,625 943,313
Ocean Shipping 10,800 25,200 37,800 56,700 109,350
Duty 15,012 27,180 40,770 61,155 113,198
Warehouse Costs 13,500 31,500 47,250 70,875 136,688
SG&A 30,970 135,485 139,669 183,160 191,368
Advocacy 3,357 6,267 9,401 14,101 26,180
Shipping 39,750 110,250 157,500 236,250 455,625
Warranty 1,877 5,036 5,096 7,644 14,150
Transaction Costs 12,189 26,307 37,602 56,403 104,720
Interest Expense 0 0 0 0 0
Corporate Taxes 18,260 22,383 43,824 74,957 183,189
TOTAL FUNDS OUT 270,814 616,107 858,662 1,270,870 2,277,779
NON OPERATING
OUTFLOWS
Capital Repayment 0 0 26,667 26,667 26,667
Dividends 6,400 6,400 6,400 4,267 2,133
TOTAL NON-OP OUTFLOWS 6,400 6,400 33,067 30,934 28,800
Net Cash Flow 120,311 47,968 114,455 170,139 369,009
Plus: Beginning Cash Balance 0 120,311 168,279 282,734 452,873
Ending Cash Balance 120,311 168,279 282,734 452,873 821,881
Pre-Tax Net Income 52,171 63,951 125,212 214,162 523,398
Net Income After Tax 33,911 41,568 81,388 139,205 340,209
After paying back investor dividends and principal, all income is retained and leaves Kind with a healthy
cash-on-hand position allowing for funding of company operations and growth with no need for additional
capital. After year five, an option for a buyout by the founder of Kind can be put in place, but is not
compulsory.
If being involved in a cash-flow positive business that makes a healthy return on investment that is
committed to social and environmental sustainability and spurs change in an industry where legacy
business practices are prevalent, then please continue reading on how Kind is going to succeed in its
chosen market.
5

The Industry
The Numbers
In 2008, 18.1 million bicycles were sold in the US for a retail value of approximately $3.5 billion. The
industry as a whole (bikes, parts, accessories, etc.) is marked at approximately $6 billion. Bicycles are
sold in four primary channels of distribution and are broken down as follows:
Market Share Summary
Channel Dollars % Units %
Mass Merchants 37 75
Independent Bicycle Dealers
(IBD) 49 17
Big Box Sporting Goods Stores 7 3
Other (Catalog, Hardware
stores,) 7 5
Source: NBDA.com
Since 1998 sales have held around 17-18 million units (Appendix 1) and participation hovered between
30 - 42 million people annually according to outdoorfoundation.org. Sales peaked in 1977 with 22 million
units and participation peaked in 1992 with 53 million people riding at least once per week. Total sales
and participation are both expected to hold steady or decline slightly over the next 5 years according to
industry experts.
In the past year, gains have been seen in comfort/hybrid/commuter (urban) type bikes in the mid-range
price point of $250 - $700 at bike shops. This was mostly seen as a response to high gas prices,
individual concerns over climate change and leading healthier lifestyles. High-end road and mountain bike
sales ($1000+) sales appear to be dropping. There was a slight deterioration in the low range mass
market mountain bikes (<$200) and sales of urban bikes in the mass increased slightly but are not
prevalent in availability.
With 380 bicycle brands in the US market, according to the Jay Townley a bike trade consultant, the
industry is highly fragmented, homogenized and highly competitive in price, specification, design and
technology. A small concentration of brands dominate both each sales channel and offer all price points
and categories relative to their channel. Brands outside the top 10 in units and dollars make up 16% of
the market. These brands are highly specialized and cater to the many niche categories that make up the
industry. The following chart shows the top 10 brands in both units and dollars from 2006 (2007 data is
inconsistent across all of our sources and 2008 data is not yet available).
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Unit Share Dollar Share
Company Share% Company Share%
Pacific Cycle 35.0 Pacific Cycle 22.7
Huffy 26.6 Trek 19.0
Dynacraft 11.7 Huffy 11.2
Trek 5.4 Specialized 6.2
Derby 2.6 Giant 5.7
Giant 2.2 Derby 5.0
Specialized 1.7 Dynacraft 4.5
Kent 1.3 Cannondale 4.5
Licensed Product 1.2 Litespeed 3.2
Radio Flyer 1.1 Fuji 1.4
Rank 10 – 20 4.8 Rank 10 – 20 8.3
Other 7.4 Other 8.3
Pacific - Schwinn, Mongoose, Roadmaster, GT, Acquired Cannondale in Feb ’08;
Derby – Raleigh, Diamondback; Huffy - Huffy, Royce, Disney;
Trek - Trek, Gary Fisher, Klein; Dynacraft - Magna, Next, Barbie, Fischer Price,
Hot Wheels *Source BMRI (2006 Numbers)
*Reluctance of suppliers to share data and the lack of specific classifications can
result in slight margins of error in reported numbers.
Trek, Specialized and Giant dominate the service and customer experience driven Independent Bicycle
Dealer (IBD) channel with ~31% of sales. 350+ brands make up the remainder of this channel. Prices
range from $200 into the thousands, the average sales price is ~$440 and 90% of all industry units sell
for less than $750.
The price and volume driven mass channel, led by Pacific Cycle, Dynacraft, Huffy and Kent sell bikes from
$20 - $250 with an average price of $77 (due to low cost children’s bikes). These and approximately ten
other companies sourcing in-house brands and licensed product make up the mass channel. Sporting
goods stores and “Other” category are a mix of high and low-end product with some crossover of bike
shop brands at lower prices and usually max out around $500 with an average sales price of $202.
Ninety-eight percent of bicycles sold in the US are imported, mainly from China and Taiwan. Global
bicycle production is approximately 110 million units annually. China accounts for 70% percent of global
production with more being migrated every year as its capacity is 100 million units/year. India is second
with approximately 10% (sold mostly in its own domestic market), followed by Taiwan (8%), Europe
(5%) and Japan. US and Canada account for less than 1% of global units.
Industry Challenges
The industry at large focuses on the IBD channel, higher price points and the already engaged enthusiast
as is evidenced at Interbike, the annual industry trade show, where high-end innovation reigns and 51%
of the dollars and 90% of all cyclists go largely ignored.
7

The industry does see an opportunity selling to non-cyclists in the North American market where bike
culture is mostly a counter-culture in most categories. IBD brands that have reached out to non-
enthusiasts/non-cyclists have not made the connection mainly due to ill-suited product, high retail price
or distribution issues. IBD’s generally offer a handful of brands anchored by one of the top three
suppliers. Add in high prices due to operating costs and that most non-cyclists see IBD’s intimidating
places to shop, potential customers are driven to the mass market for their needs. The mass market is
dominated by brands and retailers using their scale to drive down prices and are focused on gaining
existing market share rather than growing cycling as an activity.
Within the past three years the customer, particularly the non-enthusiast, has been exposed to bikes sold
in non-traditional outlets like the Gap, Paul Frank and on-line stores like Amazon and Backcountry.com.
The shrinking of the IBD channel, which comprised of 4,400 retailers in 2007 down from 6,200 in 2000 (a
30% reduction), signals that the bike shop model that evolved with Schwinn in the 50’s is changing
rapidly.
The anticipated correlation between increasing gas prices and bike sales growth did not happen in the
summer of 2008. In fact, while bicycle use did go up, bicycle sales in the IBD dropped significantly during
that period according to an article in the February 2009 issue of Bicycle Retailer and Industry News.
Service related sales did increase in the IBD during the same period. Mass merchant bicycle sales were
also off significantly in 2008 Q4 leaving large inventory positions for many suppliers.
With global over-capacity, lead times are long and the IBD product development process begins 2 years
ahead of actual model year and is typically finished 6 -12 months in advance of the model year.
Commitments from dealers are required up to 8 months before delivery. While mass development and
lead times are generally about half, the entire industry is often plagued with holding unreleased and
obsolete product concurrently after the primary spring/summer selling season ends and the new one
begins. Sales are generally seasonal (spring/early summer for all bikes and Christmas for children’s
bikes).
First to market technology, style, innovation or price point advantage is quickly erased in the bike
industry. A low barrier of entry, existing fast followers and a quick trickle down effect for technology at
lower prices affect all brands. Curiously, there are two exceptions to this rule. Brands selling direct to
consumer and bikes suited to the urban market are not gaining as much momentum even though
industry media and influencers state that this is an area of tremendous growth. We explore why in the
following two sections.
8

The Online Market
According to Forrester Research, total online retail sales increased to $204 Billion in 2008, up from $175
Billion in 2007 which was a 21% increase from ’06. During that time, online bicycle sales have been
stagnant at approximately 1.5% of units sold, though hard numbers are hard to qualify. While online
sales growth is expected to be flat in 2009, sales of sporting goods is expected to triple over the next 5
years from $1.7 Billion to more than $6 Billion. We have not found any industry-wide forecasts for
bicycles specifically and valid forecasts are not available.
There is no brand in the top 50 in sales and dollars offering bikes consumer direct online. The closest is
REI, just outside the top 50, who along with mainstream brands sells their house brand through all of
their channels (store, catalog, outlet, online). There are a handful of direct to consumer companies
catering to experienced racers, enthusiasts and other small niche markets (Appendix 2).
While all brands in the specialty market have a large online presence through their own informational
sites, their retailers and marketing platforms, none sell direct (outside of company stores), nor do they
allow dealers to sell current model year online and in some cases, no online sales at all. Currently, a
majority of cycling brands selling through bike shops rely only on brick and mortar sales with some
smaller mid-high end brands sold through established catalogs/on-line retailers (Excel Sports, Colorado
Cyclist, BikeNashbar, Competitive Cyclist, Amazon.com, Backcountry.com). One exception is Cannondale
Sports Group which sells limited models through Performance Bicycles catalog and online store.
In the mass market, all suppliers sell through their retail partner websites but selection is limited and
often web exclusive. No on-line information is offered for mass bikes for the sake of information,
marketing or price comparison unless actually sold on-line leaving a large informational gap to the
consumer. The sporting goods channel (Dicks, LL Bean, REI) sells a mix of mass market and higher end
$400 - $1000+ bikes (REI). Online presence mirrors that of the mass channel. Obsolete and gray market
product can be found through auction and other clearing house sites.
Why hasn’t the industry jumped into e-commerce?
Reasons are numerous and differ by company and channel, though the main points are:
• Loyalty to the independent dealer base that helped build the brand
• The infrastructure investment (large sales teams, multiple warehouses) most companies have in
place to support geographically dispersed dealers
• Reluctance to step away from a business model that has served its purpose for the last 60 years.
• Fear of alienating specialty and mass/big box retailers and potentially losing brick and mortar
sales
• The feeling of loss of personal customer service and attention in the sales process
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• The perception that all bikes have to be tried out and fitted in person to be sold.
• Shipping cost is prohibitive for customer or brand.
• Assumed warranty and service related issues after sale.
The Urban/City Category
What was initially comprised of 700c bikes – a wheel size shared by hybrid, comfort, road, commuter,
singlespeed/fixed gear bikes – has now developed into its own category sporting utilitarian features like
racks, fenders and lighting systems (Appendix 3). The size of this market in the IBD is ~35% of units
sold and ~15% of mass units for a total of 4 million units or 22% or the current bike market. Still,
functionality and utility are not found in great numbers, especially in the sub $1000 range.
Bicycles that fit the urban setting are seen as the growth area for the industry due to rising transportation
costs, traffic congestion and health concerns. Better suited, functional, durable and affordable product
and continued infrastructure improvement will be the key drivers for getting current bike owners,
enthusiasts and non-cyclists using bikes more. With flat sales, some growth will come at the expense of
other categories, specifically the mountain bike, but growth should also come from current cyclists
replacing old models with better suited ones. This should translate into long term sales growth for this
category.
Urban specific designs are growing in the mid-high end range of the market but brands are following old
principles of selling to those that already own bikes, rather than catering to the large customer base
outside of this channel. Established European brands are also entering this market with price points
starting $1000+. New models offered are going up in price at a time when sales of bikes over $750 are
dropping. Price points in line with what non-enthusiasts demand and where a majority (85%+) of bikes
are sold are being largely ignored. Why? The pressure to support the brand and dealer’s margin is the
most likely explanation.
In the mass market, mountain bike sales are dropping slightly but are still the prevalent category with
urban bikes lagging far behind with a single digit share. By selling bikes that are better suited to how the
mass consumers use them, Kind believes that sales would increase across all price points. Why this has
not happened yet is unclear, but is likely due to brands not offering these bikes based on what corporate
buyers are dictating their price points need to be –in other words - urban bikes and components have not
come down sufficiently in price (due to lower scale production) to hit current low-end price points.
10

The Bicycle Consumer
The cycling market is made up of many sub-categories and cultures. Generally, those that shop at IBD’s
tend to have the following characteristics:
Age 37.7
Male 66%
Female 34%
Avg. Household $ 85,000
Income
Homeowner 75%
College 62%
Each sub-culture rider demographic varies from this standard, i.e. road riders are slightly older and more
affluent, BMX riders are significantly lower in age and income. Mass and sporting goods customers fall
into categories that line up with their preferred stores demographics.
Eighty-five to ninety percent of bikes sold in the US are bought by value driven, non-enthusiasts. A non-
enthusiast can be defined as someone who uses a bike as a simple means of transportation or
occasionally uses for recreation. Based on USA Cycling racing license holders, racing cyclists represent
less than .5% of all bicycle riding participants. Those that participate in cycling as a sport, lifestyle or
consistent recreational activity account for ~10-15% of the riders. A majority of the marketing and sales
efforts are focused in the IBD channel in bike specific media focusing on technical information, ride
quality and sometimes price. Marketing spend in the mass and sporting goods market is mainly in the
form of ad-allowances for the retailer’s weekly sales promotion attracting customers looking for value.
Kind Bicycles Strategy
With single digit increases in units and dollars, flat to declining overall participation over the past decade,
homogenization of product and brands and heavy competition, it can be said that the bike industry is not
an attractive one to enter. Porter’s theory of industrial organization economics states that you either find
an attractive industry in which to compete, or adopt strategies that will make the industry you are in
attractive. This is where Kind plans to capitalize and enter the market by focusing on strategies that the
industry has largely ignored and ones we are passionate about:
1. Enter the category where bike sales are increasing
2. Take advantage of new distribution opportunities the industry has not sought
3. Bring value, function and affordability to the market where there is none currently
4. Offer durable, easy to buy, ride and maintain bicycles produced with sustainable processes
5. Create and maintain a focused, efficient and sustainable supply chain
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The Urban/City Category and Kind’s Bikes
Mountain bikes, the current leading category in units, are not as well suited where current cycling
infrastructure exists and federal transportation budget allocations are increasing. Informal surveys
suggest 90 percent of all mountain bikes never go off road, most mass model are not built to handle true
off-road riding. By creating urban bikes in the $150 to $600 range we cover the price points of 75% of
the bikes sold in the US and a bike that is well suited for a majority of riding conditions.
We see urban bikes being similar to the introduction of the mountain bike and the resurgence of the
cruiser in the early part of this decade with fast growth and long term viability in the product cycle. This
style of bike will not be limited to hardcore cyclists or regions but rather appeal to a broader range of
consumers because of the utilitarian features and a product that can handle most riding situations.
Models currently in development will be introduced at a price points of $225 and $295 to take advantage
of an untapped market; specialty shop specification and durable, useful, utilitarian quality urban bikes at
mass market prices delivered direct to consumer.
For some, the urban trend is as much about style and lifestyle as it is the bike. While we expect to benefit
in the short term, we are not focusing on producing bikes to follow trends and believe in the long term
viability of practical and affordable bicycles for the urban market.
Kind initially developed 5 bikes for the IBD channel. All five can be seen on our site:
http://kindbike.com/index.php/bikes/all/
The current plan is to import the SingleSpeed/Fixie, the model that has received the most attention based
on hits and email inquiries, as we are confident this will sell through based on interest and value alone
(Appendix 4). Once this bike has sold out, we will continue to offer a bike at the $600 price point based
on the other models in the line and shift our focus down market to offer value priced bikes loosely based
on the neighborhood model. Initially we will offer bikes at $225 and $295 and plan to introduce a bike at
$159 to truly compete with all adult mass models.
New Distribution Opportunities
With overall online sales increasing 20% annually, this channel is untapped for bicycles in general and
untouched in the affordable urban category and was always part of how we wanted to bring our bikes to
market. Online sales of bikes (shops, mass merchants, custom builders) represent about 1.5% of total
bike sales (in dollars). No major brands have taken steps to create an online sales presence. Smaller
niche brands are through online retailers typically in the high end road and mountain bike markets.
Kind avoids the barriers that traditional bicycle distribution creates for selling online. Kind can sell direct
to consumer without fear of alienating an existing dealer base. The presumption that a bike needs to be
12

purchased in person is one we believe is becoming less of an issue for an increasing number of wired
consumers. Kind also provides a place where our bikes can be researched and bought online – a majority
of brands do not offer this feature.
Selling direct allows Kind to control its marketing message and does not have to rely on (or train) a
dealer base that is typically focused on selling their anchor brand and other top partners.
We are aware that by initially limiting distribution to on-line sales we are potentially giving up
opportunities to grow our brand at a faster rate. In the IBD channel, gross margin expectations by
dealers allowed us to sell comparable bikes at comparable prices. This was not in line with our goal of
bringing the best product to market at an affordable price. We offered dealers an on-line and brick/motor
program with lower gross margins showing our order and delivery system allows for higher net margins
than industry average. While our initial bikes received rave reviews and a value compared to similar bikes
in the market, we could not convince dealers to take margins lower than the industry standard. Not
wanting to be just another brand selling for the same price and our differentiators valued by customers
but not dealers, this was the first step in deciding to go direct to customer from the outset.
Value and Affordability
Selling direct allows Kind to shorten the supply chain and eliminates the largest cost component in the
supply chain – the Independent Bicycle Dealer’s gross margin, which is minimally 40 percent of the retail
price. This allows Kind to appeal to a broader market creating value for customers and investors by
selling a higher quality bike at competitive and affordable prices while maintaining a sustainable margin
for long term viability.
Easy to buy, ride and maintain
• Easy to buy – Our functional website embodies our commitment to keep things simple. Our bike
line will be focused and naming convention descriptive and intuitive –i.e. “commuter” or
“neighborhood”. Kind delivers to the customer’s door almost completely assembled.
• Easy to ride – comfortable riding positions, just throw a leg over and go, no out of tune gears to
worry about, larger wheel sizes are more comfortable and stable for city riding.
• Easy to maintain – brakes can be adjusted by hand, single speed and internal hubs go ten’s of
thousands of miles with only minimal lubing.
Supply Chain
Founder Wayne Thompson’s strong relationships with logistics providers and general expertise in the
bicycle supply chain ensure Kind’s business requirements are met with competitive rates and best in class
service. Favorable terms from suppliers and immediate payment when a bike sells give Kind an
advantage over other brands that extend their retailers terms as long as 90 days.
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Kind will engage in focused perpetual product development for the following reasons:
• We will refine our models if better suited components/materials/designs become available.
• Eliminates model year obsolescence that plagues the industry.
• Will stay away from introducing new models and price points that are not core to our mission.
• Specify components with low lead times assuring complete product speed to market.
This process will ensure our customers get the best value and technology currently available, eliminate
obsolescence and maintain the integrity of the retail price. The simple line saves on development costs as
will offering our bikes in limited standard colors.
Our ordering process will be based on our market intelligence on what the market will bear and when.
This further reduces the need for extensive warehousing by not waiting for model years to be released
and the traditional build up of stock.
Bikes delivered to Kind will not be in a traditional bike box. Our bikes will be condensed in shipping boxes
that will allow up to 25% more bikes per container. When an order is placed, the bike will go through
final assembly and same day tuning and placed in an “AirCaddy” box for final delivery to customer.
Minimal warehousing and assembly space will be needed. Staging and shipping will be done in available
free space in the Madison, WI area and will expand out to a known low cost third party provider in
Chicago, IL when volumes increase to 600+ units stored.
Kind Customers
Our line targets 99.7% of active adult cycling participants as well as 120 million non-participants. With
on-line sales untapped in this category and the industry at large, we feel the market will be big enough to
support our business model. Kind is leveraging the growth trend in the urban market by targeting the
following customer base:
1. Anyone that is looking for a bike that is: affordable, versatile, easy to buy/ride/maintain and
values improving sustainability issues.
2. People upgrading from a non-specific urban bike (e.g. mountain bike) to something that is more
practical.
3. Non-cyclists looking for alternative transportation or something practical to start riding on.
4. Enthusiasts who own one or more category-specific bikes and are looking for a bike to ride for
transportation.
5. Customers who want the convenience of ordering online and having a bicycle delivered to their
home or local shop (we will also offer IBD delivery for assembly, paid by customer if requested
by the customer and cleared by the IBD).
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The evolving nature of the urban category is migrating towards “bikes that fit most people” and sizes
limited to 2 per model. In this category precise fit is not as important as in the racing and enthusiast
markets. For the non-enthusiast and experienced bicycle consumer, an in-person purchase is not critical
with proper information and customer service available online at time of purchase.
Kind’s Pricing Model
Kind’s bikes will be priced competitively with all major and niche brands in their category. Most IBD’s
require a bike sold off their floor have at least a 40% gross margin. Mass Merchants can require up to a
35% Gross Margin. By selling direct, we can allocate the profit margin given up to retailers by offering
the customer a better value, ensuring long term viability and profitability for Kind and control our
marketing spend to specific target markets. Below is a break down of the costs of each bike sold.
Model SSR SSC NbrHd1 Nbrhd2
MSRP 599 599 225 295
Product Costs
FOB Port 227.00 225.00 75.00 115.00
Ocean Fr 12.00 12.00 12.00 12.00
Duty 27.24 27.00 9.00 13.80
Total Intl Logistics Cost 39.24 39.00 21.00 25.80
ELC 266.24 264.00 96.00 140.80
Logistics costs
Handling in/out 10.00 10.00 10.00 10.00
Storage 4.00 4.00 4.00 4.00
Total Domestic Warehouse Costs 14.00 14.00 14.00 14.00
COGS/bike 280.24 278.00 110.00 154.80
Retail Price 599.00 599.00 225.00 295.00
Markup ($) 318.76 321.00 115.00 140.20
Markup (%) 114 115 105 91
Kind GM (%) 53% 54% 51% 48%
Post-COGS costs
Advocacy 5.99 5.99 2.25 2.95
Warranty 3.41 3.38 1.13 1.73
Shipping 50.00 50.00 50.00 50.00
CC Process 23.96 23.96 9.00 11.80
Total 83.36 83.33 62.38 66.48
Net Margin $ 235.41 237.68 52.63 73.73
NM % (Before SGA/Taxes) 46% 46% 32% 32%
Marketing
Kind will target enthusiasts and non-enthusiasts in places that they seek information about purchasing
bicycles and related information online. We will also target non-cyclists focusing our efforts on social and
traditional media dedicated to urban living. Kind’s brand will be built and sustained through a grass-roots
approach consisting of social marketing, SEO and minimal paid advertising. Interactive media – social
networking sites, online publications, blogs, etc. – have played and will play an important role in getting
the word out about Kind.
15

Social and environmental sustainability is an important part of who we are but we do not intend to ride
the “green” wave. Kind will communicate who we are, by what we do. Making a bicycle is a toxic, low
cost process. Our intent is to raise the sustainability bar across the industry and make it less toxic and
raise the wage expectation in low cost regions. Our longer-term differentiators – direct to consumer
model, clean and simple lines of affordable, durable and versatile urban bikes – will be the focus of our
promotional efforts.
Philanthropy
While Kind’s differentiation includes setting and living by increased sustainability standards, we will have
failed in our mission if the industry does not follow suit. Kind will contribute one percent of all sales to
support social and environmental programs that benefit the people and places where Kind bikes are
produced and purchased.
Kind supports all facets of advocacy in the bike industry but believes that the current philanthropic
approach leaves a gap by failing to include the people and places where the majority of the world’s bikes
are made. Kind’s philanthropy program will pioneer this approach. We will start our program through 1%
for the Planet and expand our advocacy as we encounter reliable agencies supporting local change.
Growth Opportunities
In addition to organic growth of current models sold through our website, we will attempt to sell through
online retailers. Long term customer targets would be established ecommerce stores, mass merchants
and sporting goods stores and select IBD’s that would sell both on-line and in-store. Kind envisions
setting up a drop-ship program for these customers eliminating additional shipping costs. While this does
put some added inventory pressure on Kind, a drop ship program will allow Kind to be paid when the sale
happens rather than extending terms to a retailer. It also allows Kind to control purchasing, reducing the
risk for overstock situations. Models will not be exclusive and will allow Kind to sell available inventory to
any customer anywhere in the world.
While some models are still in development, we are incorporating successful designs from the European
and Japanese markets along with those on higher priced bikes in the US and bringing them into our line.
While it is Kind’s intention to keep the line narrow and focused, there may be opportunities to further
develop bikes at price points higher and lower than current planned models with distinct differentiation. It
will be possible to expand and still keep the line focused. Canada and Western Europe will be added to
our marketing efforts in mid 2010.
16

Operations
Management
Founder Wayne Thompson spent nine years with Pacific Cycle Inc, the largest importer of bicycles to the
US and a $400 million division of publicly traded Dorel Industries. His last role at Pacific was VP of e-
Business, leading the charge to start this new division and aggressively grow sales in previously unproven
and unsupported channel. For eight years prior, Thompson ran Pacific’s logistics and distribution network,
at approximately 6 million units/year it was the largest bicycle supply chain in the US. In May 2007, he
earned an executive MBA at the University of Wisconsin – Madison.
Thompson has assembled a team of knowledgeable bicycle professionals to guide him through the
startup of Kind. Advisors experience and expertise include:
• Graphic Design – 15 years of senior level experience in the cycling indusrty.
• Sales – 10 years of senior level sales and product development experience in sporting goods
industry.
• Product Development – 10 years of customer service, product development and purchasing
experience in cycling industry.
• Marketing – 15 years of marketing experience at the executive level in a number of
industries.
Staffing
Run by Thompson from the outset, the following positions may be required when sales levels reach 1000
units per year:
• Customer Service – This position will take service calls from consumers and assist in the
product development and scheduling process.
• Assembly – final assembly and tune up before shipment to consumer. This position is
expected to be part-time contract only and accounted for in the handing in/out cost of the
bicycle.
Sourcing, Suppliers and Manufacturing
In keeping with our mission to spur change across the industry, Kind has produced its first bikes in China.
China represents the largest opportunity to drive positive change by working within the system and
influencing change through purchasing power. Every bicycle factory we have visited in China has
demonstrated non-compliant processes even when stacking it up against local regulations. Poor working
conditions such as workers in paint booths without masks, welding with no goggles, masks or protective
clothing, lack of eye protection or protective clothing around chemicals, etc. is prevalent in most low cost
regions.
17

Kind’s bikes are assembled in the one Chinese factory we were able to find that passes numerous social
compliance audits from major US recreational product and bike brands and agreed to compliance audits
by Kind before production started. Shenzhen Bo-An Bike Company is located in Bo-An, Shenzhen City,
China. In 2001 the factory was fined and put on a human rights violations watchdog list for issues
concerning workers rights. Since, Bo-An has stepped up its compliance and instituted policies that have
seen it become the leader in social sustainability within the bike industry.
While most bike and component brands sourcing in China are not maliciously taking advantage of lax
enforcement of social and environmental rules, focus on all three facets of sustainability - people, planet
and profit - are not always weighed equally. Until our efforts to instill these standards across the industry
are successful, we will require our suppliers to at least demonstrate a deep sense of philanthropy that is
core to their business. It’s not perfect, but it is a start and we think with an increased presence, we will
be able to influence those that we work with to strive to sustainable practices.
Kind has engaged a factory in the Netherlands that will potentially assemble our lower priced models
composed of components from Asia with the same focus on sustainability.
Vendor Compliance
Kind will have an auditor present for the duration of our production at the assembly factory ensuring that
our guidelines are being followed. Our approach to social and environmental responsibility will be
transparent and we will post our efforts and guidelines on our website to ensure our message is not
misinterpreted. The three areas of compliance are:
Social
• Employees are given access to, and required to wear proper protective clothing and
equipment when producing Kind bicycles
• Pay at least government minimum wage and paid overtime
• Limit workday/week hours according to local regulation
• of legal working age
Environmental
• Effluent is not dumped directly into sewer system or disposed of in an unsafe manner
• Start recycling program for all factory waste
• Engage vendor to install air exchange systems to capture toxic fumes from manufacturing
process
• Educate and encourage vendors to switch over to clean burning generator fuel
Quality
• Ensure product is being installed per Kind specification and component requirements
• Product to be independently tested by accredited testing facility
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Warranty and Customer Service
Kind’s warranty will be industry standard lifetime on frames and one year on components. Frame maker
guarantees frame for 5 years and component manufacturer guarantee for 1 year.
Kind places all financial responsibility on the assembly factory, frame maker or component supplier for
any issues resulting in defective product.
The assembly factory is required to carry $3 million in liability insurance themselves. As a supplement to
Kind’s suppliers insurance, Kind will have product liability insurance for $1 million with an additional $1
million in our umbrella policy.
Customer Service will be staffed by one full time employee solving issues on the phone and online,
supplemented with web based FAQ information pages detailing assembly and maintenance. A
comprehensive owner’s manual will be included with the bicycle and available online.
An industry standard return policy will be put in place with free returns on bikes damaged/wrong product
out of the box. Kind will make returns easy for other issues but will require the customer pay for shipping
if returning and not exchanging and a restocking fee if the bike has been ridden.
Advantages, Risks and Contingencies
Kind’s identity and philosophy are built by creating a broad set of competitive advantages along the entire value
chain. Below we map out some of our advantages and address critical risks to the long term success and viability of
our business as well as the contingencies we have in place.
Competitive Advantages
Online direct to consumer The only company in this market and price range to offer bikes for sale
online, no dealer network to alienate, existing infrastructure to overhaul.
Affordability Taking out the highest cost component (dealer gross margin) allows Kind
to sell for a lower retail price while maintaining a higher margin for itself
to reinvest back into the company
Focused, simple and versatile Focused line takes confusion out of purchasing experience, simple bikes
product make riding easier by decreasing maintenance issues Bikes can be used
for multiple purposes and can be customized by consumer.
Conscious, sustainable First to select suppliers, design, manufacture, ship and sell bicycles based
on sustainability principles
Simple business processes Kind keeps development and design simple by not subscribing to model
year issues that plague the industry, we sell in established markets and
offer for sale where others do not.
Use of “AirCaddy” box Allows Kind to ship fully assembled and tuned bikes (except for front
wheel) requiring less set-up time and encourages direct-to-consumer sales
by eliminating assembly issues
Philanthropy By donating a portion of our revenue to communities where bikes and
components are manufactured, we allow the consumer a connection to
improving the lives of people that made the product they use.
19

Risk Contingency Plans
Kind is positioned well based on our model of offering simple, affordable
Bicycle sales continue to be flat or utilitarian bikes. Bike sales have remained steady and expect to remain flat
decline due to worsening economy. through the current downturn. If sales to drop, we feel Kind will be in a
position to gain market share due to our value based pricing.
Urban cycling may be a fad and sales Population growth in urban areas will increase demand for alternative
peak within the next few years. transport. Certain elements of the market may slow down but Kind does not
intend to chase specific trends i.e. we are not producing a specific
messenger bike.
Consumers may not buy into sustainable Our goal is to continue pushing the sustainability envelope regardless of
philosophy initially or after current trend and spur the industry to adopt. Our long term differentiator is to
“sustainable” wave passes. Other provide affordable, simple, easy to buy, ride and maintain bikes. This is a
companies adopt. combination of features that our direct competitors can not easily replicate.
RMB value increases/ US$ devalues This is currently happening, all suppliers run the same risk so our value
against all currencies. compared to other brands will not diminish.
Quality problem with a Kind product. Kind will adhere to strict production monitoring and quality assurance
programs. If a recall is necessary, Kind would facilitate a return program or
send affected part to owner.
Factory is found to be ignoring Kind’s Kind will be present at all production runs. If a violation occurs, Kind will
social and environmental requirements immediately halt production and will resume when compliant. If
and/or breaks Chinese law. compliance can not be guaranteed, vendor would be penalized by Kind
pending degree of infraction and production be moved to another factory.
Instability in China resulting from Move production to Taiwan or Europe. Kind has identified factories in both
quality, social, political or other issues. regions as a contingency. If production had to move during order process
this may result in an increase in production costs of approximately 4%. A
lead time delay would result.
Major lawsuit due to injury on Kind Kind will take steps to ensure a quality product by specifying quality name
product. brand components and using material that is suited for its intended use.
Kind’s factory carries $3 Million of product liability and Kind will carry
another $1Million with up to another million under our umbrella policy.
Distribution costs increase due to All brands will be under the same operating conditions so price increases
capacity or higher oil prices. will be market wide, Kind will still be well positioned given our pricing
model.
Consumers react to fuel process by The urban cycling market continues to grow and Kind’s model should
driving more when process are low or allow to grow with it and take existing market share.
stop discretionary spending when prices
are high.
Kind misses out on an e-bike boom or Kind has no plans to enter the e-bike category until the technology and
another trend outside of the urban design allow for easy ownership. Our focus is the urban market believing
bicycle market. this is where the next sustained duration of growth will be.
Direct-to-consumer model does not work Kind recognizes the value of touching and feeling a product before you
because people want to try out bike first. purchase. We feel that this is becoming less of an issue. Sizing
recommendations based on height and inseams will be part of the
purchasing process, giving the customer confidence in getting the right size.
Our sizing offers frame sizes that will fit adults from 4’10” thru 6’6” or
98% of the adult population.
20

Our Numbers
Income Statement Forecast.
2009 2010 2011 2012 2013 5 yr
Units Sold 795 2,205 3,150 4,725 9,113 19,988
Revenue $304,725 $657,675 $940,050 $1,410,075 $2,617,988 $5,930,513
COGS $164,412 $310,380 $465,570 $698,355 $1,302,548 $2,941,265
Gross Margin $140,313 $347,295 $474,480 $711,720 $1,315,440 $2,989,248
SG&A $30,970 $135,868 $140,052 $183,542 $191,751 $682,182
Advocacy $3,357 $6,267 $9,401 $14,101 $26,180 $59,305
Shipping $39,750 $110,250 $157,500 $236,250 $455,625 $999,375
Warranty $1,877 $5,036 $5,096 $7,644 $14,150 $33,802
Transaction Costs $12,189 $26,307 $37,602 $56,403 $104,720 $237,221
Total Operating Expenses $88,143 $283,727 $349,650 $497,941 $792,425 $2,011,885
EBIT $52,171 $63,568 $124,830 $213,779 $523,015 $977,363
Interest Expense $0 $0 $0 $0 $0 $0
Pre Tax income $52,171 $63,568 $124,830 $213,779 $523,015 $977,363
Tax Expense $18,260 $22,249 $43,690 $74,823 $183,055 $342,077
Net Income After Tax $33,911 $41,319 $81,139 $138,957 $339,960 $635,286
Annual Budget, SG&A.
Description 2009 2010 2011 2012 2013 Details
Headcount 1 2 2 3 3
Admin
Communication 2,000 7,000 7,000 7,000 7,000
Hardware 500 2,000 2,000 2,000 2,000
Software 500 250 1,000 1,000 1,000
Legal, Accounting
Professional Services 2,000 5,000 5,000 5,000 5,000
Health Insurance 0 12,000 12,840 18,000 19,260
Liability Insurance 5,000 5,000 5,000 5,000 5,000
Box License 10,000
Wages
GM 45,000 45,000 45,000 45,000
Customer Service add 1 in 2010, add 1 more
0 35,000 35,000 70,000 73,000 in 2012
FICA 0 2,678 2,678 5,355 5,585
Travel
Product
Development/Compliance 2,970 5,940 6,534 7,187 7,906
Marketing
Website 5,000 2,000 2,000 2,000 2,000 Maintenance of Website
Digital Marketing 1,000 10,000 12,000 12,000 15,000
1,000 3,000 3,000 3,000 3,000 Production Samples
Samples + Freight
1,000 1,000 1,000 1,000 1,000
Graphic/Photo
Total Operations $30,970 $135,868 $140,052 $183,542 $191,751
21

Cash Flow Projection, 2009.
Cash Flow Projection
2009
Production Rate 0.54 0.00 0.18 0.00 0.28 0.00 0.00 0.00 0.00
Sales Rate
April May June July August September October November December Total
Production Units 300 0 300 0 300 0 0 0 0 900
Sales – Units 0 40 60 100 145 135 65 65 185 795
Sales Amounts $0 $23,960 $35,940 $50,550 $56,815 $43,225 $23,505 $20,115 $50,615 $304,725
INFLOW 0
Collections 0 23,960 35,940 50,550 56,815 43,225 23,505 20,115 50,615 304,725
Capital Contribution 80,000 0 0 0 0 0 0 0 0 80,000
Loans 0
TOTAL FUNDS IN 80,000 23,960 35,940 50,550 56,815 43,225 23,505 20,115 50,615 384,725
OPERATING OUTFLOW
Cost of Goods Produced 68,100 0 22,500 0 34,500 0 0 0 0 125,100
Ocean Shipping 0 3,600 0 3,600 0 3,600 0 0 0 10,800
Duty 0 8,172 0 2,700 0 4,140 0 0 0 15,012
Warehouse Costs 0 4500 0 4500 0 4500 0 0 0 13,500
SG&A 3,441 3,441 3,441 3,441 3,441 3,441 3,441 3,441 3,441 30,970
Advocacy 3,357 3,357
Shipping 0 2,000 3,000 5,000 7,250 6,750 3,250 3,250 9,250 39,750
Warranty 1,877 1,877
Transaction Costs 958 1,438 2,022 2,273 1,729 940 805 2,025 12,189
Interest Expense 0 0 0 0 0 0 0 0 0 0
Corporate Taxes 0 0 0 0 0 0 0 0 18,260 18,260
TOTAL OPERATING
OUTFLOWS 71,541 22,672 30,379 21,263 47,464 24,160 7,631 7,496 38,209 270,814
NON OPERATING
OUTFLOWS
Loan Repayments 0 0 0 0 0 0 0 0 0 0
Capital Repayment 0
Dividends 0 0 0 0 0 0 0 0 6,400 6,400
TOTAL NON-OPERATING
OUTFLOWS 0 0 0 0 0 0 0 0 6,400 6,400
Net Cash Flow 8,459 1,288 5,561 29,287 9,351 19,065 15,874 12,619 6,006 120,311
Plus: Beginning Cash Balance 0 8,459 9,747 15,309 44,596 53,947 73,012 88,885 101,505 101,505
Ending Cash Balance $8,459 $9,747 $15,309 $44,596 $53,947 $73,012 $88,885 $101,505 $107,511 $107,511
Loan Balance 0 0 0 0 0 0 0 0 0 0
Pre-Tax Net Income - monthly (71,541) 1,288 5,561 29,287 9,351 19,065 15,874 12,619 30,666 52,171
Pre-Tax Net Income –
cumulative (71,541) (70,253) (64,691) (35,404) (26,053) (6,988) 8,885 21,505 52,171
22

Sales Forecast, 2009.
Model Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Productio
n
SSR 300 300
CitySingle 0
Hood 300 300
Hood2 300 300
Total 300 0 300 0 300 0 0 0 0 900
Sales
SSR 40 60 75 60 25 20 10 10 300
SSC 0
Hood 25 60 60 25 30 100 300
hood2 25 50 20 25 75 195
Total 0 40 60 100 145 135 65 65 185 795
$23,96 $35,94 $50,55 $56,81 $43,22 $23,50 $20,11 $50,61
Total Revenue $0 0 0 0 5 5 5 5 5 $304,725
Sales Forecast, 2010.
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Production
SSR 0
SSC 150 150 300
Hood 150 150 150 150 300 300 1,200
hood2 150 150 300 600
Total 300 0 300 300 300 300 300 300 0 0 0 0 2100
Sales
SSR 0
SSM 50 75 100 50 25 300
Hood 25 50 75 100 150 150 125 150 125 75 55 120 1200
Hood2 10 15 30 50 80 100 80 100 80 25 35 100 705
Total 35 65 105 200 305 350 255 275 205 100 90 220 2205
Total Revenue $8,575 $15,675 $25,725 $67,200 $102,275 $123,150 $81,675 $78,225 $51,725 $24,250 $22,700 $56,500 $657,675
23

Appendix 1
All Sizes Units
Year Sold (millions
2006 18.0
2005 17.7
2004 16.7
2003 17.0
2002 17.1
2001 17.5
2000 17.4
1999 18.5
1998 18.3
1997 17.1
1996 16.4
1995 18.0
1994 19.0
1993 16.0
1992 17.3
...1977 22.0
Appendix 2
Brands Customer Price
VeloVie, Neuvation Racing $800 - $5000
Jorg & Olif City, Urban, Hip, 25 - $1000+
40+
BikesDirect – In house Racing/Enthusiast $400 - $2000
brands
Swobo (Dual Channel – Early 20's, young, hip $200 - $1000
online and thru IBD) inner city. Cycling is
lifestyle out of
necessity or fashion
Custom Builders. 30+ have disposable $1000 - $2000
i.e. Sycip, Sweatpea, ANT income, ranges from frame only
BMW owner to no car,
often newcomers that
want the “best”
Gruppo Bici City/Town bikes $1100+
Day6, citizenbike.com, Niche markets, folding, 200+
missionbikes.com track, recumbents
24

Appendix 3
Brands Features Customer Price
Small Brand Urban/City Bikes
Breezer Comfortable, Older 35 - 40+. Making $600 - $2000
utilitarian, mid - high a conscious choice to
price point commute
Spot, Civia Cycles Simple, ride-able art, Hip, 25 - 40+ $1000 - $3100
high price points
Electra Hip, all ages, $400 - 1500
Flat foot design
relaxed geometry,
casual ride, not for
speed
Surly, Swobo, S.E., IRO Edgy, affordable Early 20's, young, hip $200 - $1000
lower prices inner city. Cycling is
lifestyle out of
necessity or fashion
Large Brand Urban/City Bikes
Specialized, Trek, Giant, Many choices, cover Entire cycling $300 - $1500
Schwinn, Raleigh, price range spectrum demographic
Cannondale, Fuji
Imported Brands
Velorbis, Batavus, Atala, Authentic European 35+ have disposable $1200 - $3000
Carraro, Dutch style,very high price income, ranges from
Workcycles (Oma, Opa), point BMW owner to no car,
Bakfiets (cargo bikes) often newcomers that
want the “best”
Kind
Affordable, value Wired, concerned $150 - $600
priced urban/city about sustainable
bikes, selling direct issues, want a
to consumer. Made functional bike for
with less evil transportation
Appendix 4
Brand Bike Price Simple Versatile Advocacy Sustainable Price/Value
Kind SS/Fix $ 599.00     
Schwinn Madison $ 629.00  
Giant Bowery $ 650.00
SWOBO Sanchez $ 739.00
IRO $ 629.00
Surly Steamroller $ 665.00   
Specialized Langster $ 799.00
Trek District $ 929.00
25