Leaders Podcast

Scratch Your Own Itch

Pedego Electric Bikes CEO Don DiCostanzo

Show notes

$20 Million In Revenue

On this episode of LEADERS James talks to Don DiCostanzo, he’s the Founder and CEO of Pedego Electric Bikes. Pedego has over 100 stores nationwide and does $20 million in revenue. Don is one of those entrepreneurs who try to scratch his own itch and then turns that idea into a successful business. That’s how Pedego got started. Don would ride his bike downhill to the beach but wasn’t a fan of going back up. Don wants to turn Pedego into the Apple or Starbucks of electric bikes, and he is well on his way. Warning: after you listen to this interview you might want to buy a Pedego Electric Bike! We’ll let Don tell you about it. Here’s our interview with DiCostanzo.

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Episode Transcript

Quick disclaimer: these transcripts are auto-generated. They are best used in addition to the Podcast audio not instead of. We cannot guarantee 100% accuracy.

James Fratzke: [00:00:00] Don welcome to the show. How are you today?

 

Don DiCostanzo: [00:00:02] I'm great. Thank you for asking.

 

James Fratzke: [00:00:04] In other interviews I've seen you say that you ask people when you meet him for the first time. Are you looking for fun or are you looking for trouble so I will ask you in this interview are you looking for fun or are you looking for trouble?

 

Don DiCostanzo: [00:00:16] I'm absolutely looking for fun. The trouble. We ran out of trouble a long time ago at my age I decided that it's much better to experience fun than it is to look for trouble.

 

James Fratzke: [00:00:26] So you spent 30 years in the automotive industry. You founded Pedego in your 50s. So you started the company after 50 last years. Pedego did 20 million dollars in revenue. How did you first get started? Well you know I've heard the story you used to live on top of the hill. You'd ride your bike down it was a lot harder to ride back up. Tell us a little bit about that story.

 

Don DiCostanzo: [00:00:48] Well you know when I was a kid I rode a bike all the time and I never worried about hills and if I hit a hill I just you know worked my way up that even if I had to get off and walk it. But as I get older I lived at the top of a hill and I love to ride my bike down to the beach but I hit it right back up the hill. So consequently my bike sat in the garage and I never wrote home because I went in the garage and I looked at the bike I looked at the car and I decided you know what I don't want to ride back up that hill so I jump in my car and down to the beach. I would go but then I discovered electric bike and I would have some really good ideas so I bought one online. They shipped it to my house. It was a terrible piece of junk. It took me three months to get it operating. The company had bought it from was terrible but I was determined and I finally got it to operate. I finally got a take out for a ride. And oh my god he got me up the hill and that's when I had the aha moment and said Oh my God if somebody would do this right. This could be a real bell ringer. And that's how Pedego began. But I didn't start by just opening Pedego. I started by opening a retail store in Newport Beach California next to the crab {Cooper} restaurant and opened up a store selling electric cars electric bikes electric skateboards anything I could find electric and electric golf carts and I discovered very quickly in the one year that I owned the store that the big hot button was the electric bike. And after a year of doing that I decided to sell the store and concentrate my efforts in building the best brand of electric bikes that I could.

 

James Fratzke: [00:02:18] I love that story Don because it's the classic entrepreneurial I have an itch. So I'm gonna scratch it. But before he started Pedego you actually spent 30 years in the corporate world if you could do it over again would you've kind of skipped the corporate world and jumped directly to being an entrepreneur.

 

Don DiCostanzo: [00:02:39] Well the first thing I would have done differently is I would have figured out something that I was passionate about. And I found once I had passion for electric bikes. My success rate grew {Teson on} the idea that you would love what you do it no longer becomes work. So I really enjoyed my time in the automotive space but I was working in a chemical environment. I was I was in the car wash business. I was providing chemicals to car washes and products to car dealerships services. And it wasn't that exciting. I enjoyed it but I didn't love it. And so if I had a do over again I probably would have found something that I love to do sooner than waiting. And it was working in the corporate world was great. Every time I had an attempted entrepreneurship it got snapped up. The last company I owned before I owned Pedego I started it within a year of being in business. My biggest customer acquired me so ended up working for for a big company again and I found it I really am an entrepreneur and spending time in the entrepreneurial world is far more exciting and rewarding risky but rewarding than working in the corporate world. So my only advice to other people or if you think you're an entrepreneur go out and try it and it's never too young to try. The other piece of advice I have iih. It's never about failures or making mistakes it's all about learning experiences so we don't have any failures at pedagogy of learning experiences things we did right. We continue to do better things we get wrong we could be correct and move on to doing them correctly.

 

James Fratzke: [00:04:09] So you're a college graduate and now you've had all this great life experience and one of the popular thought processes right now is that you know young people should skip college and just start getting that life experience. Would you have done it any differently or are you glad you went to college?

 

Don DiCostanzo: [00:04:25] Well no I don't regret going to college. College was a fabulous experience getting a degree I think this is a measure of accomplishment. I think that's an important attribute today. Before your degrees the minimum requirement. Like maybe in our grandfather's day getting a high school diploma was minimum acceptable. Today I think a four year degree is minimally acceptable. I probably would have become an entrepreneur sooner but I did dabble in our dependence in my early days. I got sucked into the corporate world and I like traveling and expense accounts and the trappings of the corporate world and only because I didn't know any better.

 

James Fratzke: [00:05:01] Let's unpack that a little bit. I think there are so many examples of CEOs and leaders who back in middle school were like the candy cane pens they were they were the guys you'd go to if you want candy. Or they were selling something it really doesn't matter what it is. Do you have any examples of that from your childhood?

 

Don DiCostanzo: [00:05:19] Oh yeah I've long given we could chat about what my first experience was. I began selling seeds door to door. I saw an ad in the back of a catalog I was probably 8 or 9 years old. You can make money by selling seeds so I bought a box of seeds and I went door to door offering seeds and I quickly discovered that not everybody wanted to plant a garden or grow watermelons or petunias and the next magazine I got was one of these and come opportunity magazines that I devoured. And I thought that the light bulb went off literally and there was a company called Revere light bulbs and saw light bulbs. I thought to myself Well everybody needs lightbulbs so I would buy these packs for ten dollars 10 a box of ten for ten dollars. I think it was four packs of light bulbs and I would go to Gore and sell them for two dollars. And I liked that I learned about margins I learned while I like 50 percent I like investing a dollar and sending it to selling for two dollars. I didn't like buying the seeds for 15 cents and selling for twenty-five cents because we made a sale you only made 10 cents. So I let it turn very important lessons. So higher ticket items and sell items that people actually need. And I was very successful selling light bulbs and for several years that's how I had all my pocket money.

 

James Fratzke: [00:06:32] I want to talk about Pedego but before I do I came across a interview that you did with Inc.com where you talked about young people should you work for somebody else and learn on their dime learn and get experience before they start their own business. Can you tell me a little bit more about that?

 

Don DiCostanzo: [00:06:51] Sure well in my business world I got a job as a salesman and an entrepreneurial minded company and I got a sales job. And during that process I learned quite a bit and the company paid me to learn it. So I while I was productive for the organization I worked for it was also very instrumental in iii teaching me the ways of running a business. And I got involved in all different aspects of it and I became curious and I understood it and that was somebody else's expense. The risk of becoming an entrepreneur is much greater if you don't have any knowledge and lack of knowledge can kill you. The end of the day the reason the only reason businesses fail is they run out of money. Well if you're starting up with a startup you don't have a whole lot of knowledge. You don't have a lot of money. You better be darn good at what you're doing. Especially in our experience because if you don't have a lot of money. Those those mistakes and to come are expensive. So my advice is to learn at somebody else's dime be productive learn and then when you're ready and understand a specific product or market then you become an entrepreneur.

 

James Fratzke: [00:07:56] You know don you've said before that people that start a company in their 50s and 60s have a higher probability of running a successful company one that's not going to fail. Why do you think that is?

 

Don DiCostanzo: [00:08:09] Well I think it's because they've got experience and knowledge and most importantly wisdom. And they understand what to do right and what to do wrong. And I think also they recognize that they don't have as much time on their hands and they don't have the luxury of making too many mistakes. Most of our dealers are in their 60s and 70s and they are second career people sometimes third career. Some of them have got displaced by the corporate world and really don't have any other choice for becoming an entrepreneur because they can't find a job. And so we offer all the tools to help them be successful. But if you are going to start a business at any age you didn't make sure whatever company that you represent or sell or offer that they have a support structure to help you. Our company specifically has been geared to make sure that we give all the tools necessary to people who don't necessarily understand all the things that they have to get involved with and give them the resources to be successful and cost. We have a close to 0 percent failure rate.

 

James Fratzke: [00:09:09] Well that's pretty amazing. I mean close to zero and I'd say that's unheard of. Let's talk a little bit about the growth of Pedego. So you had a dealership where you sold lots of different electric type vehicles skateboards go carts cars bikes but then you decided to pivot and go all in on bikes. Can you think of what that aha moment was for you when you said OK I need to stop doing these other things I need to focus on my intention on this take their opportunity?

 

Don DiCostanzo: [00:09:39] Well I'm not so sure that was a moment it was a process. It was a process when customers are a lot of our customers would tell us how much they loved their electric bike it was a process when my friends and family wanted to buy the bikes. The frustrating part was that the suppliers that I were I was buying my products from were terrible and I felt that it was necessary to provide an outstanding customer experience. And I was not allowed to do that because my suppliers wouldn't back me. So over the course of the year that I had the store. I learned skateboards were kids and they were electric skateboards and they're expensive. Most of these kids didn't have six or eight hundred dollars to buy an electric skateboard they wanted one and they couldn't buy one. I also learned on the golf cart side and the car side that they were very expensive very limited market and more importantly it was no margin in it for the electric bikes was sort of the sweet spot where the customers loved them they loved the ride and they told their friends about and they sent their friends in to buy. And they were good it was good healthy margins on them and most importantly the customers were delighted. And I saw that that was a huge opportunity for 75 million aging baby boomers and 60 million seniors to get out again and ride a bicycle an electric bicycle afforded them the ability to do that.

 

James Fratzke: [00:11:00] Originally when you tried to bring the Pedego bikes to market your strategy was to go to the traditional bike dealers and have them carry the bikes. You were met with a lot of opposition. The the traditional bike sellers kind of thought that was sacrilegious. Can you walk us through that situation?

 

Don DiCostanzo: [00:11:19] Well I did back in the early days and we still do today. And fundamentally the the site the hardcourt most of the bike shops are run by cyclists and cyclists think that electric bike is wrong and they think it's wrong for wrong reasons but nonetheless they think it's wrong. And the reality of the situation was if the bike shops didn't have that attitude and more importantly the bicycle companies that make bikes didn't have that attitude. Pedego wouldn't exist. They left a gaping hole in the market place for a company like Pedego to come over and be the number one brand of electric bikes and we outsell the big bike brand names track Cannondale specialized all put together don't sell as many electric bikes as Pedego does. And the reason is they're not committed to it and they do it and it's a product line it's not something they're very excited about. The people who work in these companies that work in the electric bike division I say eat lunch alone. It's sort of persona non grata. I would anybody want to have an electric bike. You know that defeats the purpose of a bike. We hear it over and over again and I think there's countless examples ever in history and other businesses that have experienced that. The one that comes to mind right away is of course Apple. Nobody wanted to buy Apple products. You had to go to the apple store. You know you had to go to the to the to the different store to get the Apple products and so they opened their own stores. And that's when they became an instant success. The same thing is true with Tesla you know Tesla couldn't even consider getting the automobile industry. Nobody would open up a Tesla dealership. So they opened up their own stores that Tesla has become ubiquitous electric bikes electric cars. And you know you can think about if you think about an electric car you think Tesla if you think about going you don't say I'm going to go to the coffee shop. He said I'm going to go to Starbucks. So who else where else can you buy a $4 coffee surely you go to Dunkin Donuts and get a cup of coffee for a $1 7-Eleven. But why is Starbucks such a raving success. Mainly because it's focused on doing something really well and that is deliver a great experience to somebody who wants to get a cup of coffee Tessa's done the same thing with cars. Apple's done the same thing with computers. There are just countless examples. The best one I love was the Harley Davidson story. Davidson is 56 percent market share and hardly has an interesting model. They have no known competitors. I mean have you ever heard of BMW or Yamaha Suzuki (Porsche} course you have well that. Those are all their competitors and all combine those companies along with other motorcycle problems combined don't sell as many motorcycles as Harley does. This hardly makes the best motorcycle. You could argue that they don't. What is hardly have hardly has the best experience they have the best customer loyalty because they focus at all the Harley Davidson does and some motorcycles in the bicycle industry. The bicycle industry tries to sell mountain bikes road bikes kids bikes go down the list all those Vogelman and they're not really good at any of those things. Some are focused in certain areas and then they end up finding out that they have to expand it. I mean they're the most successful companies in the bike business are the mountain o bike brands like Santa Cruz. They concentrate on selling nothing but mountain bikes. They don't sell bikes so they sure don't sell electric mountain bikes because that would go against the grain so they are successful in the case of Pedego. We only sell Pedego electric bikes. We don't sell anything else we don't sell regular bikes we don't sell all the different types we sell nothing but electric bikes and I think the message here is focusing is critical especially in today's world. You better be excellent at what you do and in order to do that you've got to concentrate on just that one product.

 

James Fratzke: [00:15:02] What is your I mean you look at Pedego and you think of 20 million {cells}. It's one of those instances where it's almost like this 10 year overnight success. Now you guys are one of the top ranked if not the top ranked electric bikes in the space. What's your vision for the future. How do you see this playing out five or ten years down the road.

 

Don DiCostanzo: [00:15:24] Well I think we're just in the first inning of a ninth inning game and I think we're the top ending the first inning and we're going to win. And the reason we're going to win is because we're playing an excellent game now but the opportunities are huge I see a blue sky. I mean in this country we sold less than 200 thousand dollar. I'm sorry we sold less than 200000 electric bikes to a market that is 75 million baby boomers and 16 million seniors. So it's a huge opportunity. So I think that you know another 10 years down the road instead of being a 20-million-dollar company I think we'll be a 200 million dollar company and that's if we just do OK. R. If we can do better than we're doing now we could even be larger than that. So it does take a long time to build a company. I've learned that you need a couple of things. Number one you need to be passionate about it. Number two you've got to have sufficient capital resources. We started this time that we have over over 2 million dollars invested most of our competitors that are started by the way. We started we had six competitors today we have 106 competitors and people would say oh my god isn't that terrible. Well actually it's the best thing that happened to us because it's gained much awareness and the customers do their research online. They go and google electric bike or electric bicycle. And we're going to come up and they read our reviews and they find out was the biggest and we're also get the best reputation. So they're going to find us even if they don't buy our product they may buy our product in their second or third generation. A lot of our customers start out buying a crappy bike online for less money and then they learn that oh my God I should have spent the money and I should have gotten a Pedego. So you know quality is a key ingredient. The most important thing we learned is we can't just satisfy our customers. We have to delight our customers as long as we delight our customers. We can become a billion dollar a year company. Do

 

James Fratzke: [00:17:16] you think too many companies today can lose sight of the focus of customer service and delighting their customers.

 

Don DiCostanzo: [00:17:23] oh absolutely and I love the idea that my competitors think that this business just let's just sell bikes. How many bikes can we sell. Pedego is not in the business of selling bikes. We sell {some} and the good news is we don't have to try very hard and we don't have to sell it. Our customers buy and there's a big distinction. Our job is to educate the customer show on the bike let them try to bike let them test ride the bike. If they test ride the bike and they try they're going to Want it. like a hundred percent are going to want it. Then they have to rationalize should I spend the money to buy one. Is it going to give me enough joy. If you're going to give me enough read utilitarian value most of the people who buy electric bikes today in this country particularly don't buy in for transportation they buy them for recreation. They buy him to have some fun to go riding with their friends to be able to get up that hill by their house and one of our real secrets to success is setting up most of our dealers as tour operators or rental operators as well so that people can take a taste. If you're good at Costco or any place where they let you sample something you might taste that wheat bread some good butter on and say Yum Yum I think I'll buy that and go to the to the case and buy one. The same thing is true today everyone is looking for an experience. Porcher has an experience center you can go there. Pay fifteen hundred dollars and go drive a Porsche for a few hours on a test track and that money is applicable toward the purchase price. That's the same thing we do with all of our stores that we are and having the customer have that favorable experience of going out on a tour or renting one of our bikes predisposes them to want to buy one. Same thing when you go to an Apple store you sit there at the counter and you get to play with the different devices they had. Wow I really need that iPhone. Look how cool it is. It recognizes my face go down the list. You go to Starbucks you have an enjoyable experience you're going to go back to the next day or the next time you want to meet your friends. You're going to just say let's meet at Starbucks so it's interesting though there's ubiquitous there's brands are ubiquitous which specific products. You know if you need if you said Ay look I'm going to go get a ride share service you're going to say that you're going to get an Uber. Now you may not you may use Lyft but you're going to say I think I've taken over that that's become the brand for a ride share and go down the list of a lot of companies have that same thing. That's what Pedego is focused on is saying I'm not going to go run my electric bike today I'm going to go ride my Pedego today. We've got very successful in getting that done.

 

James Fratzke: [00:19:51] Let's shift gears a little bit so to speak. And that was a bike joke. So how about the funny puns. But let's talk about you personally what do you consider a success in your own life. What is what is your guiding light?

 

Don DiCostanzo: [00:20:07] Well success is measured by a lot of different factors that I think success and happiness are synonymous and happiness usually comes with satisfaction whether it's job satisfaction career jobs the same thing career satisfaction your personal life satisfaction are you happy with your you know your social interactions with your friends with your family. Those are all in my estimation those are all key ingredients of what that ultimate success is so and ultimately successful person is good in their social life. They've got friends they've got balance of family and they have good balance of career and throw a little bit of fun in there and it's got a high degree of satisfaction. I feel I've achieved that is Pedego has helped me achieve that because every day I get to talk about talk to delighted customers. Sometimes I get to talk to not so delighted customers but I make them delighted and I think that's a focus a lot of customers are a lot of companies have lost. They're not out to delight the customer they think they do satisfy all the long as they don't complain I'm okay. Our approach is entirely. There are approaches they should be delighted and if something goes wrong with their bike then they need some service on it. They better have a delightful experience to get it fixed. If not they're not going to be loyal customers and they're not going to recommend this to their friends.

 

James Fratzke: [00:21:27] are their one or two habits that you practice every day that you think helped make you more successful or happier?

 

Don DiCostanzo: [00:21:36] I was several but I think the most important one is to be instantly responsive. You know when I wake up in the morning the first thing I do is I check emails and if I find any customer complaints I'm all over it. If I look on our Facebook page and I find somebody who's not happy I'm all over it. I want to do everything and it disturbs me to find anybody that is not happy with their experience because if they're not somebody in the system is falling down because I've empowered them to do whatever they can to delight the customer. At the risk of being taken advantage of which happens on occasion as well. But I'd rather be taken advantage of the n one legitimate customer or not be delighted with their experience with Pedego not only when they buy the bike that even five years later when they own the bike I want to make sure that they're delighted. So I think that's probably the most important attribute I have but at the same time I spend most of my time talking to customers and talking to our dealers and the number one question that I asked all of our dealers whenever I visit them is what can we do to help you. I never ask him for an order I never ask him Do you know why don't you buy some more of our product. I always ask them what can I do to help you. And that's been a magical formula for us.

 

James Fratzke: [00:22:46] Well I think that takes an approach that so much different I think when salespeople have cells breath so to speak you can smell it on them and you can put your hands up and say I don't want buy anything today but if you genuinely come from a perspective of saying I just want to help let me know how I can do that all of a sudden that kind of leads to the sale anyway right. Like OK if you can help me figure out a b and c then I'm going to go ahead and want to buy D because you help show me the way so to speak on how I can do that successfully.

 

Don DiCostanzo: [00:23:18] There's no question in my mind that education is the new marketing. If we can educate a customer they will make a decision. There's way too many resources out there for them to explore and discover. So our job is to educate them and give them the tools they need to make an educated decision about "a" whether or not I want to buy an electric bike and B which branch should I buy. And I think we excel in both of those categories which I think is probably a key ingredient to our successful.

 

James Fratzke: [00:23:44] From growing up through your career Don. Did you have a mentor or somebody that you looked up to that kind of help. Help you kind of sift through some of the noise as you were going through your life.

 

Don DiCostanzo: [00:23:57] Absolutely positively the most influential person in my life was my Uncle Jim. Interesting enough to interest you. That's my middle name and that's your answer. Yeah my Uncle Jim was a very successful car dealership in New England. He had ten franchises. I always looked up to him since I was a kid. I said I want to have a life lived in a nice house with a beautiful wife a nice family thoroughbred race horses he had fast cars boats. He was one of these stereotypical successful entrepreneur and I was looking for guidance and advice and you know my uncle Jim now was 80 years old. I still talk to him and chat with him about different things we're doing. I had lunch with him just a few months ago. He's retired now and lives on Cape Cod. He was a huge influence in my life and continues to be.

 

James Fratzke: [00:24:48] Can you think of any moments with your Uncle Jim that were like gut check moments where he said to you hey you know you could be doing this thing differently.

 

James Fratzke: [00:24:57] Oh well there's multiple occasions where that happened but I think the most instrumental was when I went I decided that I wanted to start my own business. He said I'm surprised it took me that long. And he thought I'd be an entrepreneur a lot sooner than I did. So I think his confidence in me is probably the single most important attribute that absolutely you can be successful entrepreneur and that you shouldn't take the leap and do it.

 

James Fratzke: [00:25:25] Do you have any kids.

 

Don DiCostanzo: [00:25:27] I have two girls they're 32 and 28 and both entrepreneurial spirit i.

 

James Fratzke: [00:25:32] So what has what does that experience been like for you. I mean what kind of wisdom did you try to install in them as they were growing up.

 

Don DiCostanzo: [00:25:41] Well first of all that you had to do everything whatever you did you did well. And if you did couldn't do it well don't do it at all. The second thing is is I encourage him to work for companies and learn before they became entrepreneurs. And both of them have done that. My oldest daughter worked at UG and understood the powerful branding and was in their marketing department and named {booze} form and did other things. My other daughter got involved in that and in the high tech business and has worked for a couple of different sassed forms and is working for one now and both of them excelled in what they do.

 

James Fratzke: [00:26:16] Let's talk about millennials. Your business isn't necessarily geared towards the millennial is it.

 

Don DiCostanzo: [00:26:22] No we don't. We don't chase that market at all. Our customer is a 59-year-old male a 58 year old female and the youngest our customers are in their 40s and the oldest of our customers are in their 80s. We actually have some a few in the 90s.

 

James Fratzke: [00:26:36] With that being said do you employ millennials in your business. And if so. What are those things that you have to do differently with them that maybe you wouldn't have to do with the older generation?

 

James Fratzke: [00:26:47] But we have a lot of millennials that work in our company here and you have to manage them differently. There are a lot more demanding and what they expect from a company. So we provide a great work environment. We provide fun. We had a costume party with rewards. We have a quarterly luncheon where we update them on the progress of the company. We were rewarded with cash bonuses. We do different things for the Millennials that work here. As far as the customers are concerned we don't really have any we. Most of our dealers start at age 40 and go up and the average dealer we have is in their 60s. So millennials are our focus. However the millennials will become what we call today a baby boomer they will progress and we think they're going to be more predisposed to wanting electric bikes and perhaps our gender of the Baby Boomer and senior generation is today because they didn't really have a lot of experience on bicycling. The bicycle industry failing right now are on the decline because they're not generating new cycle riders. You know the people grew up today the kids today and the kids that are in their 20s now most have never been really to bike when they're growing up and that's a tragedy for the business. The electric bikes are getting people back and realize hey I don't have to pedal up the hill. This is fun. I can get some outdoor recreation. I can be social. A bicycle creates all that.

 

Don DiCostanzo: [00:28:06] The barriers the fact that there are a lot of work to pedal unless of course you get an electric one.

 

James Fratzke: [00:28:11] Now Mike Tyson once said that everybody's got a plan until they get punched in the face. Did you ever. It's true. Did you ever have a moment in life where you had a plan and you got punched in the face metaphorically not physically. And you had to adapt. If you did have a moment like that can you kind of unpack what you did to kind of end up on that situation on the positive side.

 

Don DiCostanzo: [00:28:38] Absolutely. So it's happened a couple of times. The most the one that comes to mind first was I worked my way up through the corporate world. I got a job as an entry level sales guy became president of the company worldwide company 220 million dollars in sales. Got the corner office. Everything was there I was in my late 40s. Everything was rosy until one day the company was acquired by a larger company the larger company didn't have the same entrepreneurial spirit. And we were like a great company but it was like oil and vinegar. I didn't get along with them and they didn't get along with me. And but when they took over the company I signed a two year agreement to stay there. I realized about a week after I signed that agreement it was a huge mistake that this company and I weren't going to go it alone. And I spent two years trying to get fired because if I got fired they had to pay me my state bonus if I didn't get fired if I quit then I'd forfeited a lot of money. And that was good money which I watch to become an entrepreneur. So I stuck it out for about a year and I wore them out and they wrote me the check before the time was up and I became an entrepreneur. And that was really disheartening when you work your whole way up the corporate ladder you get to the top you've got everything you've got the corner office but then it's taken away from you and not from anything that you did only because there was a change in circumstances. The second time it happened when I sold my first company that I acquired that I bought and built the owner the company decided that he was moving all operations to Dallas and if I wanted a job I need to move to Dallas and I didn't want to move to Dallas. So that was the second time. But I'm thankful for both of those experience because it led to me led me to where I am here today with having Pedego and having my own company where nobody can do that to me anymore.

 

James Fratzke: [00:30:22] What if someone came to you and maybe it's one of your daughters or we can depersonalize it a little bit and say it's just a random person that looks up to you and they're going through a situation where similar to you. Things aren't going as expected. What would be those one or two things that maybe you would say to them in a pep talk to put them back on the right path.

 

Don DiCostanzo: [00:30:45] Well the first thing is I always say that every cloud has a silver lining and when one opportunity closes another one opens as they say one door closes window opens and that's been true in my life and you have to just look for that opening so that everybody goes through trials and tribulations I don't know anybody who just lose lives a perfect life where there's never any trials and tribulations aygthh And the secret to success is to knowing what to deal with but more importantly I would say that everything in life has a beginning a middle and an end. And if you can figure out where you are in that continuum you can manage to end a career as a perfect example you have a job at a company and you bet you know it's a great beginning and it's a great middle. There might be an end and if you're coming to the end you need to be aware of the need to plan for it and I think I've been successful in my life and doing those things. Sensing that there's an end. When I work for a big company acquired by even a bigger company I knew pretty quick that there was an end. And so I immediately began planning for what that end was going to look like and what I would do next.

 

James Fratzke: [00:31:50] As far as planning goes do you do any life planning or goal planning. Has that been consistent. I mean for someone like you who has risen through the corporate ladder who has started this very successful company I understand you've started other successful companies. I would assume that it's important to write some things down and to kind of track your goals. Are there any tactics that you use in life that help you stay true to what you're reaching for.

 

James Fratzke: [00:32:18] Well one of the biggest influences in my life was when I was in my 20s a motivational speaker named Jim Rome and Jim always taught. The thing is you pretty much are what you think. And if you spend your mind thinking on and being successful and having some nice cars and having a nice watch living in a big house then you it's a self-fulfilling prophecy and live in that world. Don't complain about the taxes being too high. We'll complain about the economic environment being big. Just think about the positives and that's what I do in my life every day. I do set goals for the business. We have a planning process. That was my corporate training. We have a budgeting process and a planning process. And we understand what our goals are. And last year we had a goal to grow the business by 30 percent to set a goal last year to grow the business by 30. We put together a whole program called 30 go to grow Pedego and we printed coffee mugs for every wedding we had launch meetings. We're all excited we said bonus plan programs based on 30 go and growing the business by 30 percent. Unfortunately, it didn't work.

 

Don DiCostanzo: [00:33:24] We grew by 40 percent. So we thought that was a tough goal. The challenge of course is what are we going to do next year. So we're debating that right now we're trying to set that top line number to say what can we grow. We think we grow at 50 percent next year. So I think our 30 go programs can become 50 go.

 

James Fratzke: [00:33:45] I love that you know there are so many different when somebody is telling a story and you're a good storyteller Don. So I'm just listening and you're expecting this outcome to be. Well you know we wanted to hit 30 but we only did 20. But you know we really picked ourselves up from our bootstraps but no Don you came with the over achievement. And so that was that was pretty good. I loved that

 

Don DiCostanzo: [00:34:07] there was you know if we'd only done 20 I wouldn't consider it a failure. I just said we failed to achieve our goal. But we didn't fail. And getting to 40 is very rewarding and that's probably it's probably been the most rewarding year I've ever been in business because we've got more competition than we've ever had. And we've grown at the fastest rate we ever had more competition. So it's competition is good it's going to go away. You've got a good viable business. Of course you can attract competitors. But if you look back to the computer industry in the 90s and it's kind of reassuring to me. Turns out there were over a hundred competitors in the computer business. Everybody from Samsung to Toshiba other lots of no brand names along with AST and go to A-Z they were over 100 of them. Today there's only five left. You know HP Dell Lenovo which used to be IBM aces and probably left one out oh and probably Apple will be left out. So you know it's comforting to me that you can be as you know you can be in a very competitive business with 106 competitors in the computer business the same way that only effused and upstanding and I think the same thing is going to happen the electric bike business 10 years from now will probably only be five or six of us and I'm 100 percent confident we'll be one of thoes.

 

James Fratzke: [00:35:26] Let me let me ask this question a little bit different but you seem like a naturally curious guy. Is there a topic out there and today's ever evolving world that just kind of have that you're naturally curious about it's something that you're very interested in it just kind of mind blowing to you when you put it in perspective from today versus maybe 20 years ago.

 

Don DiCostanzo: [00:35:49] Absolutely. Is solar energy. We have we have we. If I were going to go into a different business today other than this, it would have to be the solar energy business because it's such so much energy is now able to be captured and the technology is getting so much better. My house is solar powered. I drive an electric car. My electric car is powered by the solar in my age due to my house. My next step is to put battery pack in so that at night time I'm running off to solar or generally during the day. Right now the excess energy I generate during the day I sell back to Southern California Edison and then I buy it back at night at a cheaper rate. So I have no electricity bill because I'm harnessing the power of the sun. We're getting a quote to put solar panels on our entire roof here and run our whole facility and save three or four thousand dollars a month in energy costs. And it's renewable it's i unlimited particularly if you live in a Sunbelt area and we've barely tapped the surface. If I look at all the buildings out in front of me from my office that I can see the roof I don't see any solar panels and I think that's a huge opportunity for generating energy for the future rather than burning fossil fuels.

 

James Fratzke: [00:37:00] You know I think a lot of people after hearing that and knowing the business that you're an electric bikes would say that you're kind of like Elon Musk. I mean I do do a lot of people make that comparison.

 

Don DiCostanzo: [00:37:12] Well I'd be the highest compliment anybody could pay for me to compare me to elon musk you. . but I have nowhere near the IQ to him I have no desire to go to Mars. I am a big fan of his. I'm on my third Tesla. I've met him I've had dinner with him personally. I have a high degree of respect and He has four goes Pedego’s in his garage. I found out recently and they rented seven more to go to Burning Man with them. So he took a 11 with him and his entourage when he went to Burning Man he took 7 - 11 Pedegos with them. So I'm flattered by that. But I think we're in similar spaces. He's you know he's trying to get people to buy electric cars which make all the sense in the world. And I'm trying to get more people to buy electric bikes so on a smaller scale it'd be a great complement to somebody compared to me to Elon MUSK.

 

James Fratzke: [00:37:58] That's cool to hear that he owns 4 Pedego bikes so there seems to be a mutual admiration so to speak.

 

Don DiCostanzo: [00:38:05] I hope that's true. I certainly have admiration for him.

 

James Fratzke: [00:38:08] All right let's move on to a rapid fire question around some of us ask some questions and just give me your first response if you could write a postcard to anybody past or present whether it's an icon that you really look up to you or somebody in your personal life who would you write that postcard to you and what would it saying.

 

Don DiCostanzo: [00:38:28] Well I wouldn't write a postcard to my dad who passed away a year and a half ago and I would thank you. One more time for instilling me in the values that I have today.

 

James Fratzke: [00:38:39] Well let's unpack that what are those top three four values that your dad instilled in you.

 

Don DiCostanzo: [00:38:44] Well the first thing is doing it right or don't do it at all. That that's critical to everything. I mean they're there's no point in wasting any time. The other thing was his persistence. Stay persistent even if you don't get it right the first time just keep trying and try and try it again. And then the other thing is to be fiscally responsible with money and make sure that you don't spend more money than you. You and you take in. And that's true. My personal life and it's certainly true in the business. You know we became a profitable company and just two years after we started 2011 because we are concerned about we stand in the only time we spend what I would consider to be extra money is when we've got a good marketing program to go out to get more people aware of our product line.

 

James Fratzke: [00:39:29] What is your advice to the young entrepreneur when it comes to starting a business and being fiscally responsible.

 

Don DiCostanzo: [00:39:37] Well there is no free lunch. And I say people should not start our company with borrowed money. I haven't started any business with borrowed money. It was my money that I saved and in earned and invested in and bought a business that that's not to say I've never borrowed any money and my business wants it up and running. There's capital requirements that you need and then you may have to borrow money on a short term basis. But I say that if you're going to start a business and save your money to do it don't try to go to mom and dad to ask them for the money to start a business or your friends and relatives save up and start once you get it established. There's three levels in business development. There's concept there's proof of concept and there's scaling in the concept idea that's when you just have an idea. That's absolutely your own money. When you get to the proof of concept are people going to buy it. Is this a viable business model should still be your own money? It isn't until you get to the scaling stage where you should ask people for money outside money to people to invest. And that way the risk is minimized because that's the easiest part is the scaling part. If you've got a proven business model. So my advice is to understand the concept. Research the concept. I'm a trade show junkie. If I walk into a hotel you're going I'm going to find a way to get into because I always learn something and trade shows. I'm a master going to them I'd probably go to more than I should but I always learn something when I go even about industries I know nothing about. I encourage anybody thinking about this is to master to understand it. In my case I wanted to get an electric bike business I opened a retail store first because I wanted to understand the customer. And I think that's a critical thing to understand the buying habits the motivations of a customer turned out to be the single smartest decision I ever made. Sad that retail experience because then I can relate to all of our dealers that are out there about their retail experiences and the people that work here that I recruit at work here that help our dealers be successful. They have retail backgrounds as well so they can understand and relate and assist our dealers in being successful.

 

James Fratzke: [00:41:39] Well I think that's a good takeaway is if you don't have the skill set yourself. Check your ego at the door and find some people that are really good at that and invite them to be part of your company. Do you like to read Don.

 

James Fratzke: [00:41:53] You know I used to read all the time and then I got audible and I've become lazy and now I listen to books because it's a lot easier. But I can also do it when I'm driving or when I'm in an airport. {When you get stopped so easy to read}. So I am a a very addicted audible customer now and I listen to alternate between business books and fiction books. So what are some of your favorite audio books.

 

Don DiCostanzo: [00:42:22] So my mind is probably my favorite book has been the Phil Knight story she got which is how he built the Nike brand fabulous book recommended. Anybody who wants to be an entrepreneur the trials and tribulations that he lists in that book are things that I've experienced almost a every one of them. So that's been great. The Elon Musk story written by Ashley somebody or other which is the only authorized biography Elon Musk is absolutely fabulous read as well or listened to as you might have to say today.

 

James Fratzke: [00:42:56] While I love that I mean you sir are someone that adapts with the times. Get the electric bike get the electric car get the solar panels and listen to your books. Who's got time for actually reading these days right.

 

Don DiCostanzo: [00:43:09] The best part about it is none of its work because it stimulates me intellectually and that that has its own rewards.

 

James Fratzke: [00:43:17] As we wrap up this interview I want to give you an opportunity is there just one thing that we haven't covered today that you want to share with our audience.

 

Don DiCostanzo: [00:43:23] Yes. So first of all not everybody is an entrepreneur and not everybody has the DNA to be an entrepreneur. If you are one you probably know it. You may not have fully explored it if you're not it's so key to work in a different environment. If you if you think you have an entrepreneurial streak in you then go to work for an entrepreneurial company. I was very fortunate in the first 20 some odd years of my career. The company I worked for was very entrepreneurial and that I benefited tremendously from that. So we think you're an entrepreneur and you're not quite ready to become one and work in an entrepreneurial environment where you can learn from the WHO's ever involved in the company about being an entrepreneur.

 

James Fratzke: [00:44:06] I absolutely love that and I can say personally that I have been on an Pedego bike and I think I've seen you in different interviews status before and it's so true you really don't know how you get on it and you start writing it. So I would highly recommend. There's over 100 stores nationwide that our listeners go and actually try to find a Pedego dealership or a franchise store I don't know the right nomenclature but just test it out because they are a lot of fun.

 

Don DiCostanzo: [00:44:37] Well thank you I appreciate that. You know the thing people don't know what they did. What they want Steve Jobs said it hanging in my office is Think different. And Steve Jobs certainly thought differently and you know when they first came out with the iPad I thought to myself there's no way I'm ever going to want to live that. That's the most ridiculous thing in the world. I have a notebook PC I have a desktop PC and a phone. The last thing is I need another device. You want to know something today. It's my favorite device. I spend more time on it than any of those other three combined because it gives me all the information I'll add even though I want to go on until I got one. And once I got one I realize I don't know how I live without it. I think the cruise to the electric bike. Go try one. Don't buy one go someplace where you can rent one and try one and invest fifty dollars and take one out for half a day or a day and then have that experience and then decide if it's right for you. I can almost guarantee you you're going to want one after you do that.

 

James Fratzke: [00:45:30] Don what's the best way for people to stay connected with you online.

 

Don DiCostanzo: [00:45:34] Well I'm on LinkedIn. I like length and I'm also on Facebook. We have Pedego on Facebook I'm active on that I'm probably most active on LinkedIn. So we just look for Don DiCostanzo on LinkedIn I'm there and then they certainly can send me an e-mail to don at Pedego.com. Very simple.

 

James Fratzke: [00:45:52] Wow you just gave out your e-mail. I love that. I love that. Well Don thank you so much for your time today. Really appreciate it. It was awesome to dig into your life story to Pedego life story. There were so many great pieces of wisdom and nuggets for our audience today. So thank you.

 

Don DiCostanzo: [00:46:10] Well thank you. {And anybody who tries to hide.

 

James Fratzke: [00:46:13] Thanks Don. Have a good one.

 

Don DiCostanzo: [00:46:14] All right. Thank you.