Along with Marin County local Fred Wolfe, Kelly founded Repack, the first downhill time-trial race, on October 21st, 1976 in Fairfax, California.

When the band broke up in 1977, Kelly turned his attention to his passion for bicycling and "klunker" bikes he and his friends were constructing from old frames and taking off-road.

[citation needed] In 1972 Kelly was a founding member and later president of Velo-Club Tamalpais, a bicycle club whose membership included most of the early Marin County mountain bike pioneers.

In connection with his downhill racing efforts, he commissioned custom off-road bicycle frames from builders Craig Mitchell and Joe Breeze.

[citation needed] In 1979 Kelly joined his former roommate Gary Fisher and framebuilder Tom Ritchey in a business venture called MountainBikes,[5] the first place in the world people could buy a complete mountain bicycle, rather than putting it together themselves.