HIll-Climber bicycle history




The Marketplace in 1903

The Competitive Marketplace for Transportation
xxxBy 1903, many of the firms that sold bicycles were already anticipating the change to motorized bicycles and automobiles. These firms were using bicycles to attract consumers who were interested in transportation or recreation. Their advertisements were aimed at customers who were buying not only bicycles, but buggies, carriages, motor bicycles and even automobiles. The best and most aggressive firms had all of these products for sale as a hedge against what they could see were the trends. Many had gotten into the motorized auto or carriage business as insurance against what they could see coming as demand from the public. These firms were not averse to creating the demand either. Even so, several other circumstances worked against their marketing.	People began to see the reality and future of functional motor powered transportation at the turn of the century.
Impact of Municipal Transportation Systemsxxx
xxxIn large cities such as Chicago, the streets were not yet engineered for auto traffic which competed with horse drawn traffic and streetcars, both electric and horse drawn. Rail and streetcar systems were an important competitive factor and the support of municipal governments for new transportation ventures in the large city markets would have been an important reason for locating the manufacture and distribution in Chicago. A large, well-to-do upper middle class was also located in the suburbs of Chicago. This class of consumer had begun moving North, West and South of Chicago as early as 1870 and by 1900 was completely situated in suburbs such as Aurora, Wheaton, Downers Grove, Oak Lawn, Franklin Park, Schaumburg and Des Plaines, to name just a few.	Chicago at the turn of the century - no place for a bicycle?
xxxRail lines and transportation as far away as one hour’s travel were developed early in response to this flight from the city. The populations in these areas commuted to the inner city but retreated to their comfortable homes and surroundings at day’s end because they could afford to do so. This was so even as the rural roads in most places across the country and Illinois were so poor that auto traffic could not be supported very far outside of the city limits. Finally, the appetite of the consumer in anticipating the benefits of the auto was huge, even if that appetite could not be measured accurately.This appetite was aimed at and influencing all transportation markets. It is not clear how much the Hill-Climber Bicycle venture intended to rely on this market or whether the market was clearly understood. It should have been anticipated in their pricing plan.

Uses of Intellectual Property in the Era
xxxThe pattern and intent of many business ventures, from the development of the prototype Seldon automobile patent in 1879 through 1905 was to carefully control the market through the acquisition of patent rights, inventions, and suppliers. The market in this regard was ruthless and the case law that would open markets to competition had yet to be fully litigated. Industrial espionage or the more polite form of it using competitive intelligence was also a feature of the era and many firms engaged in all of the practices, good and bad. xxxIn the 1880s, Albert A. Pope, controlled the Pope Manufacturing Co, and the Columbia Bicycle Co which was one of the largest bicycle manufacturing companies and important in this regard. His business practice was a model of every other monopolistic enterprise of the era. By purchasing the rights to as many patents as he could and then reselling the rights on a “per piece” basis to prospective vendors and manufacturers, he exercised a fanatical stranglehold on the market for	In 1902, President Theodore Roosevelt rode in a Pope-made electric automobile. Surrounding him are policmen on chainless bicycles. Albert Pope bet on electrics as the vehicle engine of the future, and lost.
almost 20 years. By owning the key suppliers in a market segment and by integrating his operations vertically, he managed to squeeze competition as well as make entry into the market difficult. Pope Mfg also built some of the early automobiles and used its control of technology advancement through patent law to stifle competition. Only the landmark case, Overman Wheel Co vs. Pope Manufacturing Co began in 1891 and not settled until 1894, managed to break up this business practice. xxxGeorge Selden, in his development of the internal combustion engine power plant and its application to self propelled motor vehicles, managed to hold back the automobile market for 17 years, by claiming exclusive rights to his inventions and modifications. Meanwhile other auto builders ignored him and proceeded with their own developments and changes by building prototypes and saleable products, and by putting real producta on the streets. When Seldon finally tangled with Ford Motor Co and C.A. Duerr & Co in October, 1903, the industry had already passed him by and the lawsuits ultimately failed partly because Selden had never taken his inventions and ideas and applied them to real, viable products. The Selden patent case actually consisted of five different suits in equity which all commenced in 1903 and 1904. Even though the final judicial opinions were not rendered until 1909 and 1911, the industry marched onward leaving Selden far behind. xxxSelden is important because there were hundreds if not thousands of garages, bicycle shops, inventors and tinkerers who were never fully capitalized and who never brought a product to market or probably intended to do so. In many respects there was a brisk market above and
underground among these entrepreneurs, to develop something that was patentable and then sell the rights to any one of hundreds of larger firms who had the distribution and production channels. In this way, some worthwhile inventions and a larger number of unusable inventions were held off the market, or never saw the light of day or else appeared as features of newly manufactured products known as automobiles and motor bicycles.
Market Segmentation and Decline
xxxThe other driving force in the bicycle market, aside from the adoption of motorized vehicles was a market for bicycles that had changed dramatically since the 1880s. The first bicycles were purchased and used by well-to-do sportsmen who wanted to be seen riding their pleasure craft. This market did not include women or children. xxxThe second market was the advent of the safety bicycle. The Pope owned Columbia Co was aggressive in marketing its safety bicycles to women and soon one third of their bicycle sales were to women. By the mid-1890s, due to the introduction of pneumatic tires and hand brakes, and the employment of mass-production manufactufing, demand and availability was at an historically high level. Mom and the kids now clamored for these more comfortable and affordable models, creating amarket which was broader and deeper than the high end sportsmen’s’ products which the Hill-Climber seems to be aimed at.	Pope bet on the market for women’s bicycles in the 1890s and won.
This new market was highly price sensitive, and it was not a market where anyone considered spending $65, $70 and $80 dollars for a bicycle. In 1903 this market was fully developed and in decline. The Hill-Climber, on the other hand, was destined for a different and by now, niche market or certainly one that was rapidly disappearing due to an oversupply in the lower-end market. The advent of the automobile only hastened the decline of the Hill-Climber market. xxxThe bicycle business in the United States actually started falling in 1897, when A. H. Overmann sold his Overmann Wheel company outright. The American Bicycle Company (ABC) was formed in 1899 by the remaining heavies as a bicycle market trust, in order to gain manufacturing clout. Industry leaders, including Albert A. Pope actually all sold their individual companies, including equipment and factories, to the new ABC. In fact, ABC was trying to prop up the price by refusing to sell to any wholesaler who wouldn’t guarantee some volume at the price they wanted. They assumed the product demand could be maintained, they could squeeze the pipeline and keep the profits high, according to David Herlihey, in Bicycle: The History, [p. 292-294] xxxWhat ABC failed to do was invest in product development, and reach the next level of consumer demand, which was for a better product – one with a freewheel hub and a multiple-speed gear arrangement to make riding more user friendly. This was where Peter J. Scharbach may have been hoping to enter the market. ABC needed to take the bike from a pleasure craft to a working vehicle, which was all along what most consumers really wanted – something to replace the horse as a mode of daily transportation. xxxThe ABC Company failed in 1902. Albert Pope then bought back his own plant in 1903, so there was probably still a market, but it was fading rapidly. This should not have gone unnoticed by someone investing in a start-up bicycle business in 1903 in San Francisco and Chicago. If you already had a big plant and a saleable product, you might make it. As a start-up competitor without a fully financed operation, hope and dreams were all you realistically had on your side.

Financial vs. Operational Solvency
xxxIn 1903, the market for bicycles and especially high end bicycles, those selling for $50 and more, such as the Hill-Climber, was not large. The market for such bicycle sales actually started declining by 1897 and continued to do so steadily up through 1903. By 1903, bicycles could be bought from a Sears or other company for as little as $15 and $20. Price competition was important. Having an established distribution channel of agents was equally as important. Even though Hill-Climber was capitalized for $150,000, this was not enough if the Sales channel was not developed sufficiently to generate sales revenue. In 1903, their letterhead only shows two Sales Agents, one in Portland, Oregon and the other in San Francisco. Manufacturing costs and distribution costs would be rising rapidly. This trend would have been noticed by the principal investors, who may have been tempted to withdraw their funds putting		When the ABC conglomerate was formed in 1899, they still had a lot of bicycles to sell and were not opposed to “re-labeling” to anyone who would agree to keep prices high. The 1901 bicyles (at left) could have come from any one of several original manufacturers.
further pressure on the venture to succeed. This is one scenario for the failure of the venture.

Notes on Competitors
xxxThe Hill-Climber had competition from already established, available and similar models of chainless bicycles. There was the Pierce Pan American, also known as the Pierce Chainless Bicycle, which had a similar drive shaft and gear arrangement to the Hill-Climber. It was first manufactured in 1898 by the Pierce Cycle Company and continued to be made and sold for several years after 1903. It was single speed and also used a single shock absorber between the seat and the rear strut (the Hill-Climber proposed for 1904 also offered this option). It was an attractive bicycle that could also be fitted with a carbide head lamp and sold for probably the same price as the Hill-Climber. George Pierce took these ideas and replicated them in his Pierce Arrow automobiles. The Pierce Cycle Company was related to the Pierce Auto firm, but the bicycles were sold as a separate line of products.	Pope started the chainless bicycle era in 1898 with the Columbia Blue Streak but the bicycle boom era had already burst.
xxxThere was also the Columbia Model 86 S.F. Tribune Blue Streak Chainless, made by the Columbia Manufacturing Co and sold by the conglomerate American Bicycle Company, of which Albert Pope was a member. This model, which sold for $75, was similar to the Pierce Pan American Chainless and to the Hill-Climber. It used a bevel drive gear design which was also featured in the Hill-Climber Bicycle. As the largest manufacture, the American Bicycle Company sold many “private label” bicycles at the turn of the century to anyone with the cash for a minimum order. The Hill-Climber began its life as a Columbia frame bicycle, and featured many of the same off-the-shelf parts used on Columbia brands detailed for 1903.
xxxIn 1904, Pope was pushing the latest developments – two speeds and freewheeling hub with a coaster brake. The Hill-Climber scheduled for production this year had three speeds and promised “the celebrated Corbin Duplex Coaster Brake on all models where a brake is desired, which will be appreciated by riders and dealers alike.” Following each other blindly over the edge, many still engaged in making bicycles in 1904 were pursuing dreams while mis-reading the desires of the consumer for cheap, basic transportation. xxxIn the final analysis, the entire scheme—the Hill-Climber Bicycle Company along with Independent Cycle as a manufacturing arm and sales outlet in Chicago—looks like it may all have been very hopeful and well-intentioned but never had much of a chance by design and circumstance. The transportation of the future was about to become automobiles, and though it seems Peter J. Scharbach recognized this as well, he was also just one of thousand of blacksmith/inventor/bicycle craftsmen who failed by opportunity or motivation to make good on their dreams.

The Marketplace in 1903

The Competitive Marketplace for Transportation

xxxBy 1903, many of the firms that sold bicycles were already anticipating the change to motorized bicycles and automobiles. These firms were using bicycles to attract consumers who were interested in transportation or recreation. Their advertisements were aimed at customers who were buying not only bicycles, but buggies, carriages, motor bicycles and even automobiles. The best and most aggressive firms had all of these products for sale as a hedge against what they could see were the trends. Many had gotten into the motorized auto or carriage business as insurance against what they could see coming as demand from the public. These firms were not averse to creating the demand either. Even so, several other circumstances worked against their marketing.

thomasmotorbikes
People began to see the reality and future of functional motor
powered transportation at the turn of the century.

Impact of Municipal Transportation Systemsxxx

xxxIn large cities such as Chicago, the streets were not yet engineered for auto traffic which competed with horse drawn traffic and streetcars, both electric and horse drawn. Rail and streetcar systems were an important competitive factor and the support of municipal governments for new transportation ventures in the large city markets would have been an important reason for locating the manufacture and distribution in Chicago. A large, well-to-do upper middle class was also located in the suburbs of Chicago. This class of consumer had begun moving North, West and South of Chicago as early as 1870 and by 1900 was completely situated in suburbs such as Aurora, Wheaton, Downers Grove, Oak Lawn, Franklin Park, Schaumburg and Des Plaines, to name just a few.

Chicago at the turn of the century - no place for a bicycle?

xxxRail lines and transportation as far away as one hour’s travel were developed early in response to this flight from the city. The populations in these areas commuted to the inner city but retreated to their comfortable homes and surroundings at day’s end because they could afford to do so. This was so even as the rural roads in most places across the country and Illinois were so poor that auto traffic could not be supported very far outside of the city limits. Finally, the appetite of the consumer in anticipating the benefits of the auto was huge, even if that appetite could not be measured accurately.This appetite was aimed at and influencing all transportation markets. It is not clear how much the Hill-Climber Bicycle venture intended to rely on this market or whether the market was clearly understood. It should have been anticipated in their pricing plan.

Uses of Intellectual Property in the Era

xxxThe pattern and intent of many business ventures, from the development of the prototype Seldon automobile patent in 1879 through 1905 was to carefully control the market through the acquisition of patent rights, inventions, and suppliers. The market in this regard was ruthless and the case law that would open markets to competition had yet to be fully litigated. Industrial espionage or the more polite form of it using competitive intelligence was also a feature of the era and many firms engaged in all of the practices, good and bad.

xxxIn the 1880s, Albert A. Pope, controlled the Pope Manufacturing Co, and the Columbia Bicycle Co which was one of the largest bicycle manufacturing companies and important in this regard. His business practice was a model of every other monopolistic enterprise of the era. By purchasing the rights to as many patents as he could and then reselling the rights on a “per piece” basis to prospective vendors and manufacturers, he exercised a fanatical stranglehold on the market for

popeand roosevelt
In 1902, President Theodore Roosevelt rode in a Pope-made electric
automobile. Surrounding him are policmen on chainless bicycles.
Albert Pope bet on electrics as the vehicle engine of the future, and lost.

almost 20 years. By owning the key suppliers in a market segment and by integrating his operations vertically, he managed to squeeze competition as well as make entry into the market difficult. Pope Mfg also built some of the early automobiles and used its control of technology advancement through patent law to stifle competition. Only the landmark case, Overman Wheel Co vs. Pope Manufacturing Co began in 1891 and not settled until 1894, managed to break up this business practice.

xxxGeorge Selden, in his development of the internal combustion engine power plant and its application to self propelled motor vehicles, managed to hold back the automobile market for 17 years, by claiming exclusive rights to his inventions and modifications. Meanwhile other auto builders ignored him and proceeded with their own developments and changes by building prototypes and saleable products, and by putting real producta on the streets. When Seldon finally tangled with Ford Motor Co and C.A. Duerr & Co in October, 1903, the industry had already passed him by and the lawsuits ultimately failed partly because Selden had never taken his inventions and ideas and applied them to real, viable products. The Selden patent case actually consisted of five different suits in equity which all commenced in 1903 and 1904. Even though the final judicial opinions were not rendered until 1909 and 1911, the industry marched onward leaving Selden far behind.

xxxSelden is important because there were hundreds if not thousands of garages, bicycle shops, inventors and tinkerers who were never fully capitalized and who never brought a product to market or probably intended to do so. In many respects there was a brisk market above and

underground among these entrepreneurs, to develop something that was patentable and then sell the rights to any one of hundreds of larger firms who had the distribution and production channels. In this way, some worthwhile inventions and a larger number of unusable inventions were held off the market, or never saw the light of day or else appeared as features of newly manufactured products known as automobiles and motor bicycles.

Market Segmentation and Decline

xxxThe other driving force in the bicycle market, aside from the adoption of motorized vehicles was a market for bicycles that had changed dramatically since the 1880s. The first bicycles were purchased and used by well-to-do sportsmen who wanted to be seen riding their pleasure craft. This market did not include women or children.

xxxThe second market was the advent of the safety bicycle. The Pope owned Columbia Co was aggressive in marketing its safety bicycles to women and soon one third of their bicycle sales were to women. By the mid-1890s, due to the introduction of pneumatic tires and hand brakes, and the employment of mass-production manufactufing, demand and availability was at an historically high level. Mom and the kids now clamored for these more comfortable and affordable models, creating amarket which was broader and deeper than the high end sportsmen’s’ products which the Hill-Climber seems to be aimed at.

Pope bet on the market for women’s bicycles in the 1890s and won.

This new market was highly price sensitive, and it was not a market where anyone considered spending $65, $70 and $80 dollars for a bicycle. In 1903 this market was fully developed and in decline. The Hill-Climber, on the other hand, was destined for a different and by now, niche market or certainly one that was rapidly disappearing due to an oversupply in the lower-end market. The advent of the automobile only hastened the decline of the Hill-Climber market.

xxxThe bicycle business in the United States actually started falling in 1897, when A. H. Overmann sold his Overmann Wheel company outright. The American Bicycle Company (ABC) was formed in 1899 by the remaining heavies as a bicycle market trust, in order to gain manufacturing clout. Industry leaders, including Albert A. Pope actually all sold their individual companies, including equipment and factories, to the new ABC. In fact, ABC was trying to prop up the price by refusing to sell to any wholesaler who wouldn’t guarantee some volume at the price they wanted. They assumed the product demand could be maintained, they could squeeze the pipeline and keep the profits high, according to David Herlihey, in Bicycle: The History, [p. 292-294]

xxxWhat ABC failed to do was invest in product development, and reach the next level of consumer demand, which was for a better product – one with a freewheel hub and a multiple-speed gear arrangement to make riding more user friendly. This was where Peter J. Scharbach may have been hoping to enter the market. ABC needed to take the bike from a pleasure craft to a working vehicle, which was all along what most consumers really wanted – something to replace the horse as a mode of daily transportation.

xxxThe ABC Company failed in 1902. Albert Pope then bought back his own plant in 1903, so there was probably still a market, but it was fading rapidly. This should not have gone unnoticed by someone investing in a start-up bicycle business in 1903 in San Francisco and Chicago. If you already had a big plant and a saleable product, you might make it. As a start-up competitor without a fully financed operation, hope and dreams were all you realistically had on your side.

Financial vs. Operational Solvency

xxxIn 1903, the market for bicycles and especially high end bicycles, those selling for $50 and more, such as the Hill-Climber, was not large. The market for such bicycle sales actually started declining by 1897 and continued to do so steadily up through 1903. By 1903, bicycles could be bought from a Sears or other company for as little as $15 and $20. Price competition was important. Having an established distribution channel of agents was equally as important. Even though Hill-Climber was capitalized for $150,000, this was not enough if the Sales channel was not developed sufficiently to generate sales revenue. In 1903, their letterhead only shows two Sales Agents, one in Portland, Oregon and the other in San Francisco.
Manufacturing costs and distribution costs would be rising rapidly. This trend would have been noticed by the principal investors, who may have been tempted to withdraw their funds putting

When the ABC conglomerate was formed in 1899, they still had a lot of bicycles to sell and were not opposed to “re-labeling” to anyone who would agree to keep prices high. The 1901 bicyles (at left) could have come from any one of several original manufacturers.

further pressure on the venture to succeed. This is one scenario for the failure of the venture.

Notes on Competitors

xxxThe Hill-Climber had competition from already established, available and similar models of chainless bicycles. There was the Pierce Pan American, also known as the Pierce Chainless Bicycle, which had a similar drive shaft and gear arrangement to the Hill-Climber. It was first manufactured in 1898 by the Pierce Cycle Company and continued to be made and sold for several years after 1903. It was single speed and also used a single shock absorber between the seat and the rear strut (the Hill-Climber proposed for 1904 also offered this option). It was an attractive bicycle that could also be fitted with a carbide head lamp and sold for probably the same price as the Hill-Climber. George Pierce took these ideas and replicated them in his Pierce Arrow automobiles. The Pierce Cycle Company was related to the Pierce Auto firm, but the bicycles were sold as a separate line of products.

Pope started the chainless bicycle era in 1898 with the Columbia Blue Streak
but the bicycle boom era had already burst.

xxxThere was also the Columbia Model 86 S.F. Tribune Blue Streak Chainless, made by the Columbia Manufacturing Co and sold by the conglomerate American Bicycle Company, of which Albert Pope was a member. This model, which sold for $75, was similar to the Pierce Pan American Chainless and to the Hill-Climber. It used a bevel drive gear design which was also featured in the Hill-Climber Bicycle. As the largest manufacture, the American Bicycle Company sold many “private label” bicycles at the turn of the century to anyone with the cash for a minimum order. The Hill-Climber began its life as a Columbia frame bicycle, and featured many of the same off-the-shelf parts used on Columbia brands detailed for 1903.

xxxIn 1904, Pope was pushing the latest developments – two speeds and freewheeling hub with a coaster brake. The Hill-Climber scheduled for production this year had three speeds and promised “the celebrated Corbin Duplex Coaster Brake on all models where a brake is desired, which will be appreciated by riders and dealers alike.” Following each other blindly over the edge, many still engaged in making bicycles in 1904 were pursuing dreams while mis-reading the desires of the consumer for cheap, basic transportation.

xxxIn the final analysis, the entire scheme—the Hill-Climber Bicycle Company along with Independent Cycle as a manufacturing arm and sales outlet in Chicago—looks like it may all have been very hopeful and well-intentioned but never had much of a chance by design and circumstance. The transportation of the future was about to become automobiles, and though it seems Peter J. Scharbach recognized this as well, he was also just one of thousand of blacksmith/inventor/bicycle craftsmen who failed by opportunity or motivation to make good on their dreams.