King of the mountain bike

Mike Sinyard built Specialized into a top bike brand by listening to what serious cyclists wanted.

When Mike Sinyard started importing Italian bike parts in 1974, his toughest challenge was finding space to store them inside his eight- by 30-foot trailer.

That turned out to be the least of his problems. Over the next 30 year he battled bankruptcy and monster competitors and competed for customers among finicky, demanding cyclists. Today Specialized, whose products sell in 1,200 of the nation’s high-end bike shops, is a profitable $500-million-a-year company that will relaunch 150 of its models by the end of the year, including one designed specifically for women.

Sinyard’s secret? Specialized has fostered a culture of innovation that has generated a long line of bike industry firsts - its 1981 Stumpjumper is enshrined in the Smithsonian Institution as the first mass-produced mountain bike. From the shop floor at his headquarters in Morgan Hill, Calif., Sinyard, 58, tells his story.

I have always loved bikes. My dad was a machinist, and we worked on them together when I was a kid. Later on I used to ride my bike seven or eight miles a day to campus when I was taking classes at San Jose State University . To support myself, I bought old bikes at flea markets and fixed them up, then put ads in the paper to sell them.

I started out as an aviation major but quit soon after I realized I was a terrible pilot. I decided to enroll in business school. I thought there might be an opportunity importing high-end bike parts from Europe. Back in those days I had to search high and low for well-made components for my own bike, and I knew my friends wanted them too. While quality bikes were huge in Europe, over here most folks were riding basic Huffys . But there was a small contingent piecing together cool Italian bikes.

After graduation in 1972, I decided to take a bike tour through Europe. To finance the trip, I sold my old Volkswagen bus for $1,500. Three months into the tour, after riding from Amsterdam to Milan, I met a Swiss woman at a hostel and started talking to her about biking. She knew a few Italian cyclists and said she would help me land a meeting with key staff at Campagnolo and Cinelli , two big Italian bicycle manufacturers. Up to that point, I had been traveling in a pair of jeans and a sweater I hadn’t washed in a couple of months, so I spent some of my remaining money on a suit so I wouldn’t look like a bum.

Plug in that bike

Sitting with legendary component maker Cino Cinelli, I exaggerated a little and told him I was connected with all the top riders in the U.S. He seemed taken with my appreciation and enthusiasm for his products, and I used my remaining $1,200 to buy as many handlebars and stems as I could - exotic parts not readily available in the U.S. When I returned to San Jose I had no money left. I stored the products under my trailer so they wouldn’t get wet.

In Italy the artisans who craft lugs, frames, and tubing are considered specialists. I named the company Specialized Bicycle Components after them because I wanted to have a connection to that European passion and quality, something that would distinguish my products from the mainstream bikes popular at the time.

I didn’t have a car, so I came up with an efficient way to market the components: I outfitted my bike with the parts and rode to nearby stores. The first few dealers were skeptical; they had no idea who I was and didn’t know if they could trust me to deliver additional inventory. But they bought the products and waited to see if I could deliver more.

I sold out the first shipment but didn’t make money. My bank wouldn’t give me a loan, so I tried another tactic: I went to the bike shops and told them that if they gave me a cash advance for additional parts, I’d sell to them at a lower price than if they insisted on buying from my inventory. For the shops that agreed, I used a markup price of about 15% more than what I paid wholesale. For stores that waited until they saw products, I’d tack on an additional 10%. That is how I financed the company for the next year and a half.

It wasn’t always easy. I insisted that the stores pay COD, because I didn’t have extra money. One time a $1,000 check from a store near San Francisco bounced. When I called the owner about it, he gave me some big story about how he’d eventually get around to paying it. I knew he was lying, and he refused to return the merchandise. I sent my roommate up there with a check to buy the shipment I had just sold to the store and then had him cancel my check. I called the owner and said, "That great sale you made? Well, that was my roommate, and now my check has the same value as the one you gave me."

The first ‘green’ off-road bike

At that time I was selling to about 25 bike shops, most of them in the Bay Area. In exchange for the pink slip to my trailer, the bank finally gave me my first loan, for $1,500. When I paid that back a few months later, they gave me an additional $10,000.

I lived without a car for five years after I started Specialized, which gave me a lot of time to think and observe how folks ride bikes . I was selling parts to a lot of independent bike-frame builders on the West Coast, and I started to notice their dissatisfaction with tires. The ones we were importing from Italy weren’t very good. They’d have bubbles along the treads and didn’t last. I remember calling the factory to tell them about it, but they told me I was crazy.

One of my friends, Jim Merz, was a framemaker based in Portland, Ore., who cycled from Oregon to Panama every year. I started researching rubber compounds so that I could develop my own tires. When I finally had something that worked for me, I sent it to Merz to test; he must have worn through about 40 tires.

After a year of experimenting, I launched our first product: the Specialized Touring Tire. At first only a couple of my most loyal bike shops bought them. But eventually the tires hit a chord with our customers - they told us the tires rode better than the imported ones. The tire was a breakthrough for us, brandwise. Suddenly we were more than just importers. We were innovators.

Our next big turning point came a few years later, in 1981. I was selling a lot of crank sets and tubing to Marin County framemakers such as Tom Richey, and I noticed that these guys were building bikes that were equipped to handle the rugged trails of Northern California’s foothills. I had never seen anything like them. Intuitively, I knew this mountain bike was going to be the next big thing, a product of a West Coast culture not unlike surfing. Old folks and young kids who watched men ride these bikes had the same reaction - they wanted to try it.

We designed a bike with features that could withstand off-road trails. We named it the Stumpjumper, and it was the first mountain cycle that you could buy in bike stores. It turned out to be a niche-oriented product. Only about five or six of our stores wanted anything to do with it. The rest asked us, "What are you doing with this big kid’s BMX bike? Customers will get hurt on that thing." Sales were slow until mountain biking finally took off in the mid-1980s.

We continued to launch new tires and bikes . In the early 1990s we had 115 employees and were selling to some 1,500 stores nationwide. But I remember thinking how I didn’t really know what I was doing. I had never had another job and figured the time had come to hire a boss , someone from outside the cycling world who could lead us into the future.

Bamboo bikes give athletes a lift

I hired three full-time executives, experts with excellent track records in the consumer products industry. They told me that selling bicycles was no different from marketing basketballs or toothpaste. Rather than focusing on our core customers, Specialized started slapping its name on anything - hastily made bike helmets, water bottles, etc. We spun off a cheaper brand called Full Force, which sold at places such as Costco (COST , Fortune 500 ). It felt as if we were becoming more of a distributor than a group of artisans.

This sent a horrible message to our customers. By the end of 1996 we had lost about 30% of the bike store business and came within a few hundred dollars of declaring bankruptcy. The new executives left as things got worse, and I was stuck writing mea culpa letters to all the bike dealers, telling them how badly we blew it and outlining the steps we would take to fix our problems. It took about three years to get back on track and regain the business we had lost.

Sales started to stall again a few years later, so I approached someone within the industry whom I admired - Peter Moore, the former creative director at Nike (NKE , Fortune 500 ) and CEO of Adidas . He was an amateur cyclist, so I mailed him a bike helmet and asked if we could meet.

I flew to Portland, and he told me that I shouldn’t run my company as a salesman. He advised me to compile a small book emphasizing Specialized’s mission and pass it out to each employee. Of all the things I’ve done in my 33 years at the company, this has been the most valuable. I feel that if I got run over while riding my bike tomorrow, the company would continue in a clear direction.

For example, in 2003 we created a line of suspension bikes that sold for about $5,000 each. We heard that two or three of the frames had cracked when customers were riding them in extreme conditions. We could have dealt with the cases one by one, but instead, I recalled the entire line, about 1,500 bikes, because they didn’t meet our standards as defined by the brand book.

We’re still trying to be the best cycling brand in the world. I love what I do, and I will run this company as long as I am able. I want Specialized to be here forever, and we have a plan to accomplish that. 

Some Lessons to be learnt from Mike’s Experience

I lived without a car for five years after I started Specialized, which gave me a lot of time to think and observe how folks ride bikes .

This guy has revealed one major secret of success for many successful entrepreneurs which is; staying closer to the customer, learning and researching all about the turf on which you play. As an entrepreneur you must eat, sleep and dream your business, if there’s a new discovery in the field in which you operate you should be the second to know (never mind the guys that sponsored the research will be the first to know)

and I started to notice their dissatisfaction with tires. The ones we were importing from Italy weren’t very good. They’d have bubbles along the treads and didn’t last. I remember calling the factory to tell them about it, but they told me I was crazy.

Been close the customer allowed him to get the complaint of the customer and this eventually led to the innovation that leapfrogged him. Also the losers that made the tires sat in their ivory tower while Mike was planning out their coup (fellow entrepreneurs never get this slothful).After this he kept experimenting until he made the Specialize Touring Tire which is a paradigm shift for a company that imported all its components from abroad, however small your enterprise is part of the profit made is for research. If you don’t learn and innovate, you die; it’s a simple as that.

." Sales were slow until mountain biking finally took off in the mid-1980s.

Sometimes, patience will do it’s good work!

We continued to launch new tires and bikes.

The smart Entrepreneur keeps innovating in avoidance of been stale, this is what I call the Nokia Marketing Model ( Phone companies make us buy a new phone every six months when we don’t really need it). Have you ever noticed that there has been no real change in the automobile industry till Prius came along, yet every year they made us feel like if we don’t get this new model of the same thing we’d be losers.

Please, always re-tool your product line to look fresher and newer!

Hope you got something out of Mike’s story. See you next time .

Compulsively Entrepreneurial,

Akinfolarin O.A

Regrettably, we have to postpone plans for our Top30Under30 Inaugural Awards billed for October 2008 in Abuja, Nigeria. We have been delaying this announcement in the hope that one or two avenues would change things, but unfortunately they haven’t and so it’s time to face reality.

Unfortunately we weren’t able to raise enough funds through sponsorship to cover the costs needed to make the awards hold in October, which effectively means no conference this year. We are currently looking at more innovative ways to get the financing we need for 2009.

*** Please spread the word ***

As you may know, we sought to launch this event as a pan-African initiative. But after reviewing progress, we have agreed that, this is not going to be achievable in the available time. Our team did all they could to deliver on an ambitious plan, and I commend their efforts.

We apologize to those of you who are disappointed or inconvenienced. We will not relent in our efforts to celebrate the best of Africa’s young entrepreneurs, and launch a movement of next-generation world-class entrepreneurs on the continent. Top30Under30 remains fully committed to continuing to serve its growing and passionate African and global community. We are considering a number of options, including holding the event in 2009, and expect to make a further announcement soon.

If you have any specific questions or concerns, please write to me deji@top30under30.com. Meanwhile we will continue to promote the ideals of Top30Under30 in providing enterprise development to Under 30’s in Africa. Please be in touch via our website - www.top30under30.com - we will be launching new features and initiatives as we build up to the Inaugural Awards.

Thank you for your continual interest.

Yours truly,

Ayodeji Adewunmi
Curator
Top30Under30

I equally have a dream, a dream for the continent of Africa, a dream which is a direct antithesis of the status quo, a gigantic dream fuelled by sheer optimism, passion, uncommon zeal and a belief in the capability of Africans to raise their game and take on the world. It’s a dream in which an economic revolution for good, birthed by sheer entrepreneurial wizardry will herald a dawn of prosperity for the continent. This might look far-fetched, given the endemic poverty levels and various socio-economic maladies bedevilling the continent.

For mother Africa to break loose from the shackles and manacles of poverty and underdevelopment, the essence and spirit of entrepreneurship must be embraced by all and sundry, especially by young people who represent the vibrancy and energy of Africa. Gone are the days where  tailor-made employment will await fresh graduates, as the public sector is grappling with an over bloated civil service and its attendant maladies. Even in the private sector, survival is hinged on being entrepreneurial in nature.

Top30under30 is an initiative by Thoughtworks, which seeks to ignite, fan and cause a conflagration of the flame of entrepreneurship among young people in Africa under the age of 30.it is more than just an initiative it seeks to redefine entrepreneurship in Africa through the creation of an entrepreneurship ecosystem which comprises of The top30under30 awards, the innovative entrepreneurs exhibition and the business innovation hubs. With the overall focus being to give birth to African brands that will take on the world.

These three components represent a paradigm shift concerning the concept of entrepreneurship. the Top30under30 awards seeks to recognise, reward  and showcase existing young entrepreneurs, who have defied the status quo, taking their destiny in their hands, in a bid to be economic change agents. Three key criteria will be assessed viz: the spirit of enterprise, growth potential and social returns. Being mega rich is not the driving force for the awards; rather the social impact of the venture carries a lot of weight. Nominations are being accepted via the top30under30 website www.Top30under30.com and via sms.

The innovative entrepreneurs’ exhibition (IN-EX) is platform for potential entrepreneurs to turn their ideas into reality. it has been aptly tagged “ideas meet capital”.20  African entrepreneurs with innovative, cutting-edge and socially responsible ideas will have the opportunity to pitch to an audience of venture capitalists, angel investors, banks and other financial institutions from around the world. it will be a mind blowing, eye opening and history making occasion, as dreams will literarily come true.

The business innovation hubs (I-HUB) will be located on selected African universities. History has proved that universities are a fertile ground for entrepreneurs. Just think about Microsoft, dell, google e.t.c. The I-HUB will serve as an incubator for budding businesses, to guide and ensure their transformation and maturation into flourishing brands. The Top30under30 team together with technical partners which include multilateral institutions and outstanding bodies in the organized private sector will provide “hard” and “soft” support services such as business advisory services, information technology infrastructure, mentoring, all in bid to ensure the surivial, success and eventual significance of the business.

All these components are intricately interrelated and will encourage more young people to venture into new endeavours, increase the survival rate of new businesses and eventually there will be a critical mass of entrepreneurial young people who will cause an economic revolution on the continent. Africa has the potential of becoming great and prosperous and actualizing that greatness is not dependent alone on harnessing natural or physical resources, rather the development of human capital coupled with an uncommon zeal to be fiercely entrepreneurial is key to achieving this greatness. Young people, who are the future must tap into this, make the best use of it and be part of a movement where dreams come true.

This particular entrepreneur’s story has become even more relevant for me today as I think about what model of entrepreneurship I plan to pursue. It is evident that one has to find a way to develop a unique competitive advantage. A melding of the unique knowledge and understanding of the US and Africa Markets. Kase was able to leverage both worlds to build a global business. The US gave him access to low cost financing and technical expertise. Africa gave him access to rich resources. He couldn’t do one without the other. I know everyone’s story is different and things may have changed but this model is definitely worth considering.

It’s also useful to consider whether one needs to leverage one more world - China. Today, as an African entrepreneur, China offers the lowest cost of financing and technical expertise. Africa is also considered important. No one is laughing when you could call to pitch an African investment idea.

The warning signs of a need for greater courage are emotionality and resistance in response to challenging information. The paths toward greater courage are hope that a rational process will lead to the best outcome, appropriate emotional distance from the decision outcomes, and process orientation.

The warning signs of a need for greater creativity are coming up with no more ideas or coming up with the same ideas over and over again. The paths toward greater creativity are stimulus variation to vary ideas and force fit to turn the resulting new ideas into truly creative ones.

The warning signs of a need for more balanced judgment are a feeling of information overload, simplistic thinking, and vacillation. The paths toward more balanced judgment are external memory and priming as supplements to working memory and educated guesses and analysis into subproblems to simplify the problem in ways that eliminate the unimportant and retain the important.

Let’s make ourselves better. See you at the top!

Happy Reading!!

1. Accept change. Business leaders who treat change like the enemy will fail at their jobs. Change Is the one constant, and successful business leaders must be able to read the ever-changing business environment.
2. Let your employees know that change never ends. Teach your colleagues to see change as an opportunity— a challenge that can be met through hard work and smarts.
3. Be ready to rewrite your agenda. Welch always encouraged his managers and employees to be prepared to reexamine their agenda and to make changes when necessary.
4. Face reality. Business leaders who avoid reality are doomed to failure.
5. Act on reality quickly! Those who truly face reality can’t stop there. They must adapt their business strategies to reflect that reality, and they must do so quickly.
6. Turn your business around. Stick your head in the sand, says Welch, and you will fail. Face reality, and you may turn a bad situation into a great one.
7. Manage less. Teach your managers to manage less, even though their training may be to manage more.
8. Instill confidence. Treat employees with respect and build their confidence.
9. Get out of the way. Employees do not need constant supervision. Let them do their jobs. You will be surprised at the results.
10. Emphasize vision, not supervision. Managing less lets managers think big thoughts and come up with new ideas to benefit the business.

Human Resources

If you are the sole proprietor of your business, then you obviously need to protect yourself and your customers from possible injury in the event a disaster occurs. In small and mid-sized businesses, you need to protect your employees and customers from injury on your premises. You also have to consider the possible impact a disaster will have on your employees’ ability to return to work and how your customers can reach you or receive your goods and/or services.

Physical Resources

Whether you own or rent the building where your business is, you and/or your building manager should inspect the physical plant(s) and assess the impact a natural disaster would have on your facilities. The property protection checklist can serve as a guide for that inspection.

If your business operates in an older building, consider having it evaluated by a professional engineer. An engineer’s recommendations will help you safeguard your building from potential hazards. Keep in mind that an ideal time to make improvements is during a major addition or renovation.

Whether you are planning to remodel or build an entirely new facility, make sure your plans conform to local building code requirements. These codes reflect the lessons experts have learned from past catastrophes. Contact your local building code official to find out what is required for your project.

If you do not own the building your business is housed in, this is still important information for you to keep in mind if you are relocating to a new facility or expanding your business operations. The building’s physical condition and how it will survive a natural disaster could have an impact on your ability to keep your business open following an incident.

Business Continuity

Even if your business escapes a disaster unharmed and your employees are unhurt, there is still a risk that the business will suffer significant losses. These can be broken down into two types of losses:

• Upstream

• Downstream

When some local businesses fail, there is a chain reaction because of the negative impact on the local economy. This guide will outline the steps you can take to assess risk and protect your business’ assets from these disturbing possibilities.

From the book, Open for Business by the Institute of Business and Home Safety.

THE ENTREPRENEUR

The entrepreneurial personality turns the most trivial condition into an exceptional opportunity. The Entrepreneur is the visionary in us. The dreamer. He lives in the future, never in the past, rarely in the present. He’s happiest when left free to construct images of “what if ” and “if when”. He is our own creative personality; always at its best dealing with the unknown, prodding the future, creating probabilities out of possibilities. Every strong entrepreneurial personality has an extraordinary need for control. Living as he does in the world to concentrate on his dreams. Given his need for change, he creates a great deal of havoc around himself, which is predictably unsettling for those he enlists in his many projects. This then becomes his world-view: a world made up of both an over-abundance of opportunities and dragging feet.

THE MANAGER

The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability. He lives in the past. He craves order. He compulsively clings to the status quo. He sees problems. He creates neat, orderly rows. Without The Manager, there would be no business.

THE TECHNICIAN

The Technician is the doer. “If you want it done right, do it yourself” is the Technician’s credo. He loves to tinker. Things aren’t supposed to be dreamed about, they’re supposed to be done. He lives in the present. He loves the feel of things and the fact that things can get done. He’s happy when he’s working. To him thinking is unproductive unless it’s thinking about work that needs to be done. He’s not interested in ideas; he’s interested in how-to-do-it. All ideas need to be reduced to the methodology if they are to be of any value.

Put another way, The Entrepreneur dreams, The Manager frets, and The Technician ruminates. To The Manager, then, The Technician becomes a problem to be managed. To The Technician, The Manager becomes a meddler to be avoided. To both of them, The Entrepreneur is the one who got them into trouble in the first place.

The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we’d be describing an incredibly competent individual. The Entrepreneur would be free to forge ahead into new areas of interest; The Manager would be solidifying the base of the operations; The Technician would be doing the technical work. Unfortunately, the typical small business owner is only 10% Entrepreneur, 20% Manager and 70% Technician.

The Entrepreneur wakes up with a vision. The Manager screams “Oh, no!” And while the two are battling it out, The Technician seizes the opportunity to go into business for himself! To The technician it’s a dream come true. But to the business it’s a disaster, because the wrong person is at the helm.

Culled from the CEO Report: E-Myth worldwide.

Basil Enwegbara

Culled from Tech-IT

When most African countries became independent during the 1960s, joining the political class was more appealing and rewarding than going into the private sector. So highly educated Africans did not hesitate to go to where the money and the prestige were. It was only those who could not be part of the ruling class that had to make do with being entrepreneurs and capitalists. Even then, it was recognized as the gateway to the political class. In other words, most Africans who moved into the private sector did so with some sense of reluctance, and wanted to join the political class as soon as they could.

It’s no wonder that most African entrepreneurs lacked the understanding of what it would take to be successful entrepreneurs, lacking the necessary technical and management skills and the independence and confidence. They lacked consistent personal ambition and willingness to delegate authority for fear of sharing ownership, and failed to form partnerships to pool finance and managerial skills.

If the desire to financially support others is a valid impetus for establishing businesses, African entrepreneurs exaggerated it, as they used it for employing immediate family members and more distant kinsmen. This kind of personal preference for a paternalistic labor system brought severe problems, such as lack of cooperation, pilfering, and low productivity. Another element of African business philosophy that contributed to the failure of indigenous capitalism is the tendency to hand over the business to a son or a family member — even when the training, experience, and passion required were lacking.

The tendency for entrepreneurs to use business profits for luxury purchases — whether for fancy housing, cars, or expensive public donations to demonstrate wealth — caused not only financial problems related to the financing of day-to-day operations but also early collapses and exits from business. Capital shortages, low rates of return to investment, and poor capital accumulation served as a major barrier to the advancement of business.

Another blunder was the notion that by setting up several small-scale, relatively uncomplicated businesses, entrepreneurs could both expand their assets and still retain close personal control over all their activities. But by shutting out the benefits of growth through concentration, they in fact ended up with total assets of a lower net value than might otherwise have attained. Other obstructive tendencies associated with corruption, governmental hostility and indifference, and endless regulations and bureaucracy at all levels of government also limited the emergence of a strong African capitalist class.

This picture forces one to wonder if all hope is lost. Is there anything that could be done for African entrepreneurs to catch up with their counterparts elsewhere? Or can Africa compete in today’s global market without a proven army of entrepreneurs and capitalists? There is no doubt that the present situation is a great concern. But despite the widespread failures and difficulties, the African entrepreneur can emerge from the debris of his own ruin to reclaim his competitive edge in the new global race.

On the part of African governments, they, rather than viewing local entrepreneurs and capitalists as social threats and passive owners buffeted by external forces, should see them as potential creators of wealth as well as potential transformers of the same environment in which they struggle to survive. Governmental leaders who genuinely wish to encourage a productive local capitalistic economy should adopt national development strategies that could generate an investment climate conducive to long-term business activities. Only such an environment could attract a flow of much better educated professionals, administrators, and technicians into private businesses.

In addition, African entrepreneurs must set high standards of personal achievements and gain intrinsic satisfaction from striving to attain these standards. Not only should they exercise considerable ingenuity and skill and be prepared to take tremendous risks in experimenting with new ideas, but they should also be ready to move away from the present “profit-for-self-and-family” mentality to the “profit-for-business-growth” philosophy.

If African entrepreneurs are to have any hope of carving out a leading place in African economy, they must surmount three main hurdles. First, they must utilize higher levels of technology with proper training and specialization. Second, they must obtain greater degrees of organizational competence, and delegate authority and establish more impersonal systems of control. Third, they must establish wide-ranging market outlets based on an elaborate sales network and distribution system.

There seems no reason to doubt that one day a small class of able, determined and probably privileged capitalists will not emerge to impose their will on African economic life in the future. In the meantime, African entrepreneurs and capitalists can at least begin to take advantage of the present political and economic gains emerging from outgrown national limitations. Finally, the African capitalist should no longer be perceived as the bearer of an alien culture instrumental to destroying indigenous cultures. Rather, he should be embraced as a potential mediator and innovator in the process of adaptation.