What is a high end bicycle, anyway?
The bicycle industry defines "high end" bikes as those which cost over $1,500. That said, KGS custom bicycles start at around $8,000 and range up to over $30,000. Why are they so much more expensive than the bicycle industry's definition?
I subscribe to Seth Godin's blog and one of his posts gave me the answer to the question. The answer lies in the difference between "luxury" and "premium". While I disagree with Seth that luxury is by definition "organized waste", I do think that the rewards of luxury are subjective. Some items are so expensive just because they are expensive, as the $20,000 wedding gown he mentions. Others, like exclusive autos, bicycles, stereos, cameras, etc., have more features and performance and an attention to aesthetic detail that people appreciate. An ultra exclusive wristwatch may not keep time as well as a $20 quartz electronic watch but some appreciate the hours of work put into a mechanical device that can at the same time be so accurate and so beautiful.
Bicycles seem to blend the Luxury and Premium definitions as one goes up the food chain from $1,500 to $30,000. Interestingly, there is more than one handoff from one to the other. For example, the differences between a $1,500 and a $4,500 bicycle are very significant regarding performance and longevity. The more expensive version is going to be lighter and the frame will last longer with a higher performance ride. The components will work better and last longer. When moving from a $4,500 stock bike to a $12,000 stock bike, the differences are not as apparent. The value of the brand becomes a bigger determinant of price and as such makes a high priced stock bike more of a luxury item than the less expensive counterpart. The law of diminishing returns comes into play and limits the premium value. This is why one sees very few stock bikes in the high priced lines other than those that are raced by high profile professionals. They are designed for the younger bicycle racer and are true high performance machines, but still remain mass produced commodities.
On the custom side, the value comes not from a combination of expensive components, although the expensive components are there. The three main premium components of a true custom bicycle are 1) the design of the bike around the owner, 2) the execution of the creation and building of the bicycle in the same manner that the high end watch is made and 3) the ability to create a one-off custom appearance that defines the bicycle as a world class art object still capable of high performance.
This explains why the owners of high end custom bicycles don't typically hang them as works of art but ride them as an enhancement to their workout time. The time one spends riding a bike is very selfish and expensive, when compared to time spent with family or making a living. As such, an improvement of the quality of that time and the results of the time spent is quite valuable. This is why so many people who get custom bicycles seem to ride them more. They enjoy riding more! They have learned that a bike ride without the pain, discomfort or negative handling characteristics of some stock bikes is life changing and can make cycling the basis of a healthy active lifestyle.
To quote Lance Armstrong's book title, "It's not about the bike", but the bike makes the experience worthwhile!