C
Craig Calfee
Guest
Yes, it is true that Freddy and I have parted ways. I am saddened by this turn of events and wish it
did not happen. I had high hopes for our collaboration.
Last year, Freddy came to me with the idea to have Calfee produce a carbon LWB recumbent based on
the Easy Racers Gold Rush design. Freddy said if I can build it, he can sell it. I said that sounds
like a great idea but I don't have much time to manage the project. I could do the design work and
finance the project, but I would need someone to do the footwork. Freddy agreed to be that person
and would be compensated on an hourly basis. We both saw Freddy's main value in the selling of these
bikes. The real payback for him would come when we were in production and he would make a decent
commission on every sale. The amount of that commission would be determined later, when we had an
idea of what it was going to cost to make the bikes. Freddy had a certain figure in mind at the
beginning. I said that I really hope that the profit margin would allow for such an amount. There
was no agreement about the specific amount, just the idea that he would be paid on commission basis.
I designed the bike using the Gold Rush seating position to start with. Freddy's contribution to the
Stiletto design was to suggest Gardner Martin's classic seating position. I designed the new
steering arrangement, the frame construction technique, the fiber orientation, the passive
suspension, the fairing mount method, the modified aero fork and 80 mm spacing on the Phil hub, the
production tooling and the handlebar arrangements. Freddy test rode the bike and declared it good.
Just prior to Interbike in October, when we had to determine a price, Freddy and I sat down to
negotiate the commission. We had most of the costs except labor figured out. It looke like we would
have to raise the price of the bikes substantially if either of us was going to make any money. Even
with a serious price increase, Freddy's commission was not looking like what he had hoped for at the
beginning. He said he hoped to be able to at least make $X per year, which was a reasonable number.
We continued to refine the production and supply issues and in January, shipped the first bikes. We
had a good enough estimate as to the labor costs. In early February, we sat down again to negotiate
a commission arrangement. Freddy insisted on his original amount and I proposed a lesser amount
based on what a top level independant sales rep would make (but we would still pay his expenses,
unlike real independant reps). That wasn't good enough, so I offered significant profit sharing of
the whole business (not just in recumbents). Based on Freddy's own estimates of what he believed he
could sell, my proposed deal was well in excess of the $X per year minimum figure he had in mind
just before Interbike. If there was going to be any growth in sales, Freddy would get even more. He
would be the most highly paid person at Calfee Design. But that wasn't good enough.
Freddy walked out of my office and I assumed he was going to think about it. But instead, he decided
to quit and take the tooling with him. Under threat of having him arrested, he brought the tooling
back. To me, this demonstrated poor judgement and emotional instability on Freddy's part and I could
not tolerate that in my business. As had been his pattern at other jobs, Freddy asked to come back
and try to work things out. I decided against it.
In prior times, I might have overlooked this behavior and figured something out. But I need to lift
my business to a more professional level and not demonstrate to the rest of my employees that a
person can behave like this and still remained employed here.
There is a chance that Freddy and I can come to some agreement on an endorsement level, but I am not
very optimistic about it at this point.
We will continue with the Stiletto and eventually a SWB bike (which is why couldn't continue to sell
components to Karl Swanson). We will continue to make the frames at the highest quality and with a
full warranty. I am personally very excited about the Stiletto and it has replaced my Dragonfly as
my favorite bike to ride.
I have no personal animosity towards Freddy and wish him the best in whatever he strives for. I wish
I could have managed his expectations better or somehow convinced him of the practicalities of this
low profit margin business. This is a lesson I will not forget.
Craig Calfee
did not happen. I had high hopes for our collaboration.
Last year, Freddy came to me with the idea to have Calfee produce a carbon LWB recumbent based on
the Easy Racers Gold Rush design. Freddy said if I can build it, he can sell it. I said that sounds
like a great idea but I don't have much time to manage the project. I could do the design work and
finance the project, but I would need someone to do the footwork. Freddy agreed to be that person
and would be compensated on an hourly basis. We both saw Freddy's main value in the selling of these
bikes. The real payback for him would come when we were in production and he would make a decent
commission on every sale. The amount of that commission would be determined later, when we had an
idea of what it was going to cost to make the bikes. Freddy had a certain figure in mind at the
beginning. I said that I really hope that the profit margin would allow for such an amount. There
was no agreement about the specific amount, just the idea that he would be paid on commission basis.
I designed the bike using the Gold Rush seating position to start with. Freddy's contribution to the
Stiletto design was to suggest Gardner Martin's classic seating position. I designed the new
steering arrangement, the frame construction technique, the fiber orientation, the passive
suspension, the fairing mount method, the modified aero fork and 80 mm spacing on the Phil hub, the
production tooling and the handlebar arrangements. Freddy test rode the bike and declared it good.
Just prior to Interbike in October, when we had to determine a price, Freddy and I sat down to
negotiate the commission. We had most of the costs except labor figured out. It looke like we would
have to raise the price of the bikes substantially if either of us was going to make any money. Even
with a serious price increase, Freddy's commission was not looking like what he had hoped for at the
beginning. He said he hoped to be able to at least make $X per year, which was a reasonable number.
We continued to refine the production and supply issues and in January, shipped the first bikes. We
had a good enough estimate as to the labor costs. In early February, we sat down again to negotiate
a commission arrangement. Freddy insisted on his original amount and I proposed a lesser amount
based on what a top level independant sales rep would make (but we would still pay his expenses,
unlike real independant reps). That wasn't good enough, so I offered significant profit sharing of
the whole business (not just in recumbents). Based on Freddy's own estimates of what he believed he
could sell, my proposed deal was well in excess of the $X per year minimum figure he had in mind
just before Interbike. If there was going to be any growth in sales, Freddy would get even more. He
would be the most highly paid person at Calfee Design. But that wasn't good enough.
Freddy walked out of my office and I assumed he was going to think about it. But instead, he decided
to quit and take the tooling with him. Under threat of having him arrested, he brought the tooling
back. To me, this demonstrated poor judgement and emotional instability on Freddy's part and I could
not tolerate that in my business. As had been his pattern at other jobs, Freddy asked to come back
and try to work things out. I decided against it.
In prior times, I might have overlooked this behavior and figured something out. But I need to lift
my business to a more professional level and not demonstrate to the rest of my employees that a
person can behave like this and still remained employed here.
There is a chance that Freddy and I can come to some agreement on an endorsement level, but I am not
very optimistic about it at this point.
We will continue with the Stiletto and eventually a SWB bike (which is why couldn't continue to sell
components to Karl Swanson). We will continue to make the frames at the highest quality and with a
full warranty. I am personally very excited about the Stiletto and it has replaced my Dragonfly as
my favorite bike to ride.
I have no personal animosity towards Freddy and wish him the best in whatever he strives for. I wish
I could have managed his expectations better or somehow convinced him of the practicalities of this
low profit margin business. This is a lesson I will not forget.
Craig Calfee