It is hard to believe that the Cervélo brand is barely more than 20 years old, such is the impact that it has already made at the highest levels of cycling. In To make riders faster, Anna Dopico covers the history of Cervélo as an independent business, from its creation though to eventual sale – and the highs and lows along the way. It is essential reading for fans of the brand – but will also appeal to anyone who wants to know a bit more about how the cycle industry works.
- Pros: An unparalleled insight into a ground-breaking company
- Cons: Nothing other than price, though it's frustrating to see how easily things could have been so different…
I have spent all of my working life in the cycle industry, and have an interest in books about the brands I know and use. There are several of them on my bookshelf, and most are largely corporate 'puff pieces' from names such as Shimano, SRAM, Specialized, Campagnolo, Colnago, and Cinelli. They are mainly about brand and image, and it is likely that the marketing departments were heavily involved in them.
Sometimes brand-specific cycling books do cover the business side of a company, and when there are some useful lessons to be learned then the broader academic and business worlds would class them as 'case studies'; those of us with an interest in the products are just happy that such books provide more of an understanding of our favourite brands.
Perhaps the closest I have to a 'warts and all' history of a cycling business is Tony Hadland's one about Raleigh, where there were plenty of ultimately fatal errors to offset against the undoubted success stories. I now have another book to rival it: To make riders faster.
I was interested in the book partly because I own a Cervélo and respect the brand, but also because I worked for the company that distributed the bikes in the UK for a few years, and had experienced some of the story from further along the distribution chain. I wondered if the book would try to gloss over some of the difficulties within the company that I had observed (and which many of you will have endured as a customer): in short, it doesn't. In fact, it is remarkable just how open and honest Dopico has been.
Throughout the book one is reminded of how little can separate success or failure: with different decisions, luck, or timing, the Cervélo story could have been very different. It is no surprise that it was cash flow issues that finally proved to be insurmountable for the company, as is so often the case in business, but it was revealing to see how much this affected the business throughout its life.
Taking a look at some of the things that Cervélo undoubtedly got right, the main one has to be the importance attached to a frame's aerodynamic performance – bearing in mind that this was back in the mid-90s, long before it became the dominant theme that it is for the industry today. Wind tunnels played a major part in product development, which 'distinguished the company at the outset from the rest of the industry, which ignored aerodynamics and typically used wind-tunnel testing primarily for marketing purposes'.
The fact that Cervélo is now equally well respected for its road bikes is largely down to a brave decision to sponsor the CSC-Tiscali team for 2003. For sure it raised the profile of the brand, but it also stretched many areas of the business, from production capacity to (inevitably) cash flow. You may even have suffered from the decision that 'as soon as bikes are made, they'll have to go to the team. Retailers will have to wait. That's going to piss them off'.
Another bold choice was to increase its involvement in professional road cycling by running a male and female Cervélo TestTeam for 2009, with the teams owned and run by the business for the benefit of the brand; even the largest companies in the industry would struggle to justify the level of investment required, and the chance of finding a suitable co-sponsor was much reduced by the developing global financial meltdown.
As well as limiting stock availability, this also led to some product failures and even a recall – initially on the R2.5, which will have affected many of the 'early adopters' of Cervélo's road bikes (and is still active). The later Wolf SL fork recall affected even more people, but is a rare example of a brand taking responsibility even if the original manufacturer has declined to provide support.
The P4 seemed to consolidate many of the problems that Cervélo had experienced into one bike, and capped it all off with an unexpected issue: the name. Apparently, 'in Cantonese and Mandarin, the number four is considered unlucky because it is nearly homophonous with the word death'; perhaps that explains why we have not seen an R4, S4, or C4.
When your quest is 'to make riders faster', then you need to look beyond the orthodox and try new things; the associated risk is that you might not get it right every time. However, the continued demand for the bikes showed that the customers appreciated the results of Cervélo's advanced engineering, and it appears that the engineers continue to push the boundaries to this day
As you might expect, the brand's success eventually attracted attention, and potential buyers began to approach Cervélo to 'negotiate acquisition'. However, as is often the case with entrepreneurs, 'Phil and Gerard were not ready to sell. They felt they had more to accomplish.' With the benefit of hindsight they might have taken a different view.
Once it became clear that Cervélo was no longer viable as an independent business, Vroomen and White took the decision to sell the company to Pon Holdings before they lost everything that they had worked for during the previous 16 years.
I can imagine that it would have been emotionally challenging for Dopico to revisit those days, because even though 'we'd escaped personal ruin while providing Cervélo with a future, I hadn't yet come to terms with the experience and felt a tremendous amount of guilt.' I hope she realises that fans of the brand will be very pleased to have such a good record of the first phase of Cervélo's history – and that it will have wider appeal as a case-study on business success and failure.
The highs and lows of a unique brand and the business behind it, told from an informed perspective.