If you've looked around your neighborhood or college campus, you may have noticed more bicycles—and the increased popularity of custom-designed bicycles. A recent report indicates that 34% of Americans ages 3 or older rode a bike at least once in a recent year.

Communities throughout the United States have promoted programs to ride bicycles on a daily basis, for commuting, recreation, and exercise. In some urban cities, bicycle ridership has recently doubled from the previous year.

Alex Chou, who grew up and attended design school in Los Angeles, is a bicycle designer and owner of start-up GoChic Bicycle, a shop he set up in an abandoned factory in Taiwan. Chou chose Taiwan, home of Giant Manufacturing Company, which is the world's largest bicycle manufacturer, because he believes it has the most sophisticated worldwide supply chain for bicycles.

It was during a visit to Taiwan, his parents' homeland, that Chou discovered excellent manufacturing technology for bikes and the small but growing biking culture triggered by a Taiwanese government push to get people out of their cars. It takes half the time to produce a bicycle in Taiwan as it does in the United States, and the initial cost to develop and bring to market new products is far lower, too. Chou soon became aware of the potential of his bicycle in the high-end, hand-built, niche market that has taken off in the United States—and he thought it was ideal to bring his idea to Taiwan.

Priced between $1,200 and $1,800, Chou's bicycles are sleek with Gates carbon belt drives in place of traditional, clunky chains for a smoother, grease-free ride. As a start-up owner, Chou believes that choosing to locate in a global bicycle manufacturing hub like Taiwan has great advantages. And because Chou's bikes are beautifully and meticulously designed, customers are often confused about whether they're rideable—or works of art.

Questions for Critical Thinking

1. What are some other types of small businesses and industries that could benefit from the decision to be close to a worldwide supply chain for their products?

2. What advantage does Alex Chou have to make his business a success in Taiwan?