Did you know Mike Sinyard dropped out of high school? Didn’t stop him from starting Specialized Bicycles and growing it into one of the largest and most influential bicycle brands in the world. Curious how he did it? Here’s a quote that sums up quite a bit of his philosophy:
“One of the things, in starting a business or doing anything, business and life is an open book test. Anything you’re doing, if you’re looking, you can find a lot of information and input on how to do it. The thing is, a lot of people don’t like to do that. They just wanna do it the way they want to do it. That doesn’t mean take the input and follow it blindly, but it’s part of the process.”
So, what’s stopping you from launching something great? Mike did it just like everyone else, one small step at a time…
- 01:45 – How did Mike start Specialized, and why?
- 05:20 – Why start making his own parts?
- 08:40 – Adding bike frames to the mix.
- 12:20 – Why do they make so many of the parts on a bike?
- 14:05 – What were the first things Mike delegated? Why does he think smaller is better?
- 17:45 – Did you know Specialized sold bikes to Wal-mart?
- 22:50 – Merida buys a stake to give them growth capital.
- 24:50 – How and why they spread their manufacturing across multiple factories.
- 25:40 – What are the challenges now that they’re a big, global brand?
- 28:30 – What’s his current role in the company?
- 30:50 – Building a strong culture means it’s not for everyone.
- 35:50 – Why aren’t his kids involved in the business? Is there a succession plan?
- 38:00 – Their retail strategy, offline and on.
- 49:50 – How do they handle PR nightmares?
- 52:30 – And what about counterfeit frames?
- 57:45 – Mike’s advice for entrepreneurs.
POST GAME ANALYSIS
Like so many other companies and their founders, Specialized scratched an itch for Mike. He wanted better bike parts, so he started importing them. Then he wanted better clincher tires, so he made them. I’ve long believed that if there’s something I want, there’s a pretty good chance there’s plenty of other people that want it, too. Mike did this and turned it into one of the world’s largest bicycle brands in the world by focusing on making the best bikes and parts possible for riders…like him. Just make sure you’re filling a genuine need, not chasing just dollars. More on that in a minute…
Their retail strategy acknowledges that the landscape is changing. Mike says there are good retailers and not so good ones, and they’re in the business of supporting the good ones, with perhaps a little extra help for those that more closely align with Specialized’s products. Like it or not, big companies (Coke and Pepsi made it virtually impossible for me to get my energy drink into convenience store chains) can provide pricing and other incentives to make it less attractive to carry competing products. Depending on which side of that table you sit on, think about what strategies can work around what your competition is doing.
It’s crazy to think that a company like Specialized is funneling all of its profits back into the company. After 4+ decades, you’d think Mike would be taking a little extra in, but they really do put a ton into research and development. A good example is e-bikes, which are growing in popularity world wide. Where most of his major competitors are using bolt-on motor and battery designs, they created a full integrated and custom solution that builds unique electronics and power source directly into the frame. The result is a much better looking bike with features other brands can’t offer. So, are you building something truly incredible to fuel long term growth, or just doing the bare minimum so you can maximize short term profits? Maybe the right mix is something along that continuum.
If you’re a cyclist, chances are good you’ve heard some negative press about Specialized, too. One of the more recent issues involved them suing a small bike shop over a trademark issue because the shop’s name was similar to one of their bike’s model name. In reality, it was a matter of overzealous trademark protection efforts with no oversight, but it caused a firestorm of negative press and damning social media posts. Which is just the way things work these days, unfortunately. Their solution has been to own it, defend their position or admit fault when necessary, and learn from the event so it won’t happen again in the future.
Mike’s closing advice “don’t start a company because you think you can make a lot of money” has rung true for me. The energy drink business had insane margins, which is why a million people got into it, but few of them actually cared about the product. When you follow a passion, like Mike did and continues to do, it’s a lot easier to follow the long path of starting a company. He refers to the Chinese symbol for crisis, which is made up of danger and opportunity. How you view it shapes your action, and that’s so often the stumbling block we face when first starting a company. If we’re passionate about what we’re doing, we’re more likely to focus on the opportunity (but should still pay attention to the “danger” so we don’t make stupid mistakes).
LINKS & RESOURCES
- Specialized Foundation
- Find them on Facebook, Twitter, Instagram, Pinterest and YouTube
- Bikerumor’s tour of Specialized HQ and museum
- Prototype and concept bikes from Specialized’s lead designer Robert Egger – Parts One, Two and Three
Above, the video for the Specialized Foundation’s Outride ADHD school program aimed at getting more kids on bikes. They provide mountain bikes to select schools for use in PE and other programs.