Congrats to Armando Abarca '24 and Sean Lin '24 for Placing 5th at the 2020 MikesBikes World Champs Competition!
A total of 80 teams (mix of individual participants and teams) participated in the 2020 MikesBikes World Champs Competition, representing 28 universities around the globe, here is the full list. Three LSB teams made it to the championship and one team made it to the finals and placed 5th! Congratulations!
Lightning McBikes (Armando Abarca '24 and Sean Lin '24) advanced to the final round and placed 5th in the 2020 MikesBikes World Champs Competition! Here is the link to the final results. Matthew Habermann '22, the lead TA for the MikesBikes at LSB, commented on the team's accomplishment: "The worldwide competition is far more difficult than anything done in class, with so many teams competing around the world there are many more factors you have to take into account when planning each decision. It's truly astonishing how well they did. Armando and Sean should be very proud."
Additionally, two other LSB teams made it to the final qualifying rounds. PacificRIMS (Ian Maher, Rosie Huang, Matt Mayo and Sam Sica) placed 41st and Calvin Millers Bikes (Calvin Miller) placed 47th. Here is what Tanya Monsef, one of the BUSN 70 faculty, had to say about the Mikes Bikes competition: "This is a great example of the Leavey School of Business' commitment to educating business leaders with real life experiences and the pursuit of excellence. Proud of all three teams who participated in the Mikes Bikes World Championships this year with special congratulations to Armando Abarca and Sean Lin for placing 5th in the world! All of these students pursued this next level on their own as a way to continue learning more about business and competition."
We asked Armando and Sean a few questions about the competition and their experience in the finals. Here is what they had to say:
How do you go from Mike's Bikes simulation in BUSN 70 to entering WW competition?
Armando: The transition from MIke’s Bikes in BUSN 70 to WW competition was tedious since we competed with the basic version of Mike’s Bikes during class and had to learn the advanced version for WW competition. The advanced version included many more business aspects that needed consideration and it didn’t help that we were in the middle of finals week either. Let’s just say that it gave us a busy first few days, to say the least. Also, during the transition, Sean and I had to take on a larger workload since our team consisted of two other members during BUSN 70. However, Sean and I were able to work together to make adjustments and understand the process and, thankfully, it worked out in the end.
Sean: In BUSN 70, Professor Monsef incorporated Mike’s Bikes as part of the curriculum to help us understand some of the material we were learning in class through a more hands-on application. We first started off with the single-player version to get familiar with the content of the simulation. After we familiarized ourselves with the simulation, we then competed in multiplayer against others in the same class. Armando and I were placed in the same team and we did pretty well, eventually ranking first in our class. After winning the competition within our class, we received an email from SmartSims, inviting us to attend the 2020 MikesBikes World Championship as we were one of the “top performing teams for the semester.” However, the World Championship for MikesBikes was a different beast than the MikesBikes we worked with in class, since it was using the advanced, instead of the intro version. We had to learn a whole lot more and understand things like how batch sizes and worker salaries would affect our business model and plan. With the World Championship, we had to start off with the qualifying round, which we placed 3rd in. After the qualifying round, only the top 10 teams entered the final round, where we competed once again.
What did you learn from the competition? What were your take-aways for running your own company in the future? Did Mikes Bikes help with figuring out what major you might pursue at LSB?
Armando: Although I could write a decently-sized paragraph regarding my takeaways from a technical standpoint, I think my biggest takeaways were the importance of collaboration and delegation. I’ve always been the type of person to work alone, however, working with Sean during the WW competition really shined a light on how a collaborative environment can work for the betterment of everyone involved. In addition, delegating tasks for each other allowed us to work more efficiently and perform at a higher level. Mike’s Bikes didn’t necessarily give me a major to pursue at LSB. Instead, it broadened my scope regarding the many aspects of business that I can choose to pursue during my time at LSB. Not sure if that will make my decision regarding a major easier or harder down the line. Either way, Mike’s Bikes was a good experience.
Sean: MikesBikes was a great way for us to apply some of the concepts we learned in BUSN 70 to a more hands-on way of learning. For example, we were able to see in a more realistic manner how the product cycle worked. I learned that there are just so many different variables to running a business and that all aspects of running it are crucial to a thriving company. One key take-away for running my own company in the future is that it is a good idea to make sure that I will not over hire or over expand my company. It is typically better to not hire someone in the first place than to hire and then fire someone because it takes a toll on worker morale and will inadvertently hurt the company (especially if it is done on a large scale). Similarly, it is easier to not buy a plant in the first place or to not expand into a market if you do not have the production capabilities than to have to sell a plant or suffer the consequences of lost sales and unhappy customers. Overall, MikesBikes helped me confirm that I have an interest in pursuing a degree in business.
What was the most challenging part of the competition, what strategy did you use? How did you come up with your strategy?
Sean: The most challenging part of the competition was being able to predict what the other teams were going to do. Although we spent 3-5 hours every rollover running through calculations, conducting extensive research through reading the manual to understand the effects of our every decision, and referencing the single-player mode to ensure that we were making the right decisions, there were still elements that we could not control. For example, all the teams started with the same bike, but we were allowed to expand into other segments of the market. There was a variety to choose from: leisure bike, adventure bike, kids bike, racer bike, and commuter bike. We had to predict what segments the other teams would enter and account for it in our production. Unfortunately, we were extremely wrong with our first market expansion and it inevitably hurt our profitability down the road. Although this was extremely frustrating to us and affected the outcome of our performance, it was a necessary component of the simulation, as there are often unpredictable factors in business.
Overall, our strategy was to try to invest a lot more in the first few rollovers to capture the market share before turning a profit. By artificially stunting our profits in the beginning, we were also able to rebuy shares for a low price if we were in a high cash position (which would help increase our shareholder value in the end). It was also important for us to not pay our debt too early. Most successful companies will have to take out debt (as long as it's controlled and the returns are higher than the interest rate) in order to foster investments and growth.
Armando: I’m going to agree with Sean here - the most challenging part was determining what other teams would do. The impact that competitors have on a market and, consequently, the performance of one’s own firm can’t be understated. Incorrectly predicting our competitors proved to hurt us the most but I’m glad that we were able to learn that lesson. However, I just wish we didn’t have to learn it the hard way. In order to find a way to combat this challenge, we had to spend a lot of time running through predictions and scenarios that could happen during the following rollover. Emphasis on “a lot of time.” For the most part though, our predictions were fairly accurate.
What advice would you give to students that want to do well in Mikes Bikes competition?
Sean: Most people incorrectly view high profits or high shareholder values in the first few years as an indicator that the team is on a trajectory of victory. I would argue that this is not the case; small victories at the outset have little to no bearing on the ultimate degree of success. In fact, I would go as far as to hypothesize the complete opposite: teams that show promising results in the beginning typically start to slug behind after a few rollovers and do not perform as well as companies that initially appear to be “struggling”. This is because it is of the utmost importance to place money into investments. Idle cash is the poison that stunts a company from being successful. Not only must you immediately pay taxes on the money you take in as profit now, but while your opponents are spending a dollar that can bring them several more in the following years, you are holding onto cash that generates minimal interest. Although you may not be directly losing money in an accounting sense, you are losing money from the economic point of view. As you become less competitive in the marketplace, you will eventually be pushed out of the market if your investments are not comparative or superior to others.
I would advise others to not worry about low profits or even negative profits in the first few rollovers as long as the money is spent efficiently for long term growth. Realistically, it is quite unlikely for a company to succeed in the future if there is no money invested now for the growth. Even in real-life examples, if you look at the corporate giants of today, the vast majority of companies did not turn a profit in the first few years. It takes years and sometimes even decades for companies to start turning profits on their investments.
Armando: Much of what Sean touches upon regarding the perception of profit and high shareholder value is quite true. Many times, those who did the best seemed to fall short in the initial rollovers. This can be attributed to high spending. However, its long-term impact proves much more fruitful since it leads to a “domination” of the market, so to say. If students want to do well in Mike’s Bikes then I recommend utilizing sources such as the Mike’s Bikes simulation YouTube channel, the Mike’s Bikes pamphlet, and the Mike’s Bikes More Help section. However, the most important aspect to succeeding in Mike’s Bikes will come from direct engagement with the simulation and a good relationship with one’s team. These two things cannot be stressed enough and proved much to our benefit in the end. So, if you take anything away from what I’ve written, then just know that I recommend the previous two pieces of advice.
Anything else you want to share about the competition? Did you find working together as a team difficult in the virtual environment?
Armando: Working virtually gave us more flexibility but definitely was not ideal. I’m sure that we could’ve worked more efficiently in-person and I’m sure that we would’ve achieved better results. All in all, Mike’s Bikes, despite being demanding, was an enjoyable and thought-provoking experience. It pushed us to learn many new concepts about business and gave us many takeaways to think about. For as unforgiving the simulation itself can be, I admire that it rewards time and effort and that it provides challenging surprises. It’s a positive experience that, I believe, will provide satisfaction for any hard-working students that have an interest in aspects of business. In addition, if you ever have the chance to work with Sean in a Mike’s Bikes competition, then I highly recommend it. He’s very intelligent and a good person. Lastly, thank you to Professor Monsef for giving us this opportunity and shoutout Nassim and Alex. Lightning McBikes wouldn’t have made it this far without you guys.
Sean: Although it would have been ideal to work together in person, the virtual environment was accommodating to our needs, and at times, we were able to use it to our advantage. One advantage that the virtual environment offered was flexibility. Without having to meet physically, we could often rearrange the times of our meetings if something came up since rescheduling would hardly affect either of us. Overall, Armando and I were able to work successfully as a team. For the most part, we were in agreement with our overall strategy. However, sometimes we disagreed on things like the amount that we should produce, which ultimately worked to our advantage. Oftentimes, I would be too ambitious in predicting the amount we would sell while Armando would be more conservative with the estimates. It is with these differences and with compromises that we were able to hit the correct estimations most of the time.