Gerard Vroomen: The future is for small companies. Electric on bikes? A nonsense.
article by Claudia Vianino of Cycling Industry News
Ex-Cérvelo co-founder, co-owner of 3T and co-owner of the Open Cycle Company exclusively talks to CyclingIndustryNews.com about his market vision, the trends, the future of the bike industry and new ideas.
Many think he’s genius, others consider him as one of the most “enlightened” entrepreneurs in the bike panorama, some other simply hate him for being always very direct and frank. We sat down with Gerard Vroomen on the occasion of his last project launch: the Exploro gravel frame, a project that he designed together with 3T’s R&D department.
Born 1971 Vroomen entered the bike market after having knocked door to door to propose the graduation project he had designed and subsequently built alongside Phil White, at the time a university student. The idea behind it was a TT bike, (for Gianni Bugno) but none of the big companies at the time gave the young engineers a chance. So Vroomen and White founded Cervélo, which today is probably the largest triathlon bike manufacturer in the world. Vroomen left the operational side of Cervélo in 2011 and a short time after, together with Andy Kessler, former CEO at BMC, he founded the Open Cycle company. In 2015, he bought a majority stake in 3T and the new Exploro frame he is launching, together with the Revo aero bar, is one of the Dutch engineer’s first offspring, designed for the Italian based company.
How did you happen to buy into 3T?
3T is a great brand to me, one of the top three brands in the cycling world. When René Wiertz relaunched it, we at Cervélo were their first OEM customer. I’ve always thought it was a beautiful brand. René did and is doing a really good job of restoring it, bringing it back to its rich history and the old glamour. Also, I thought there was space for new ideas: not much has happened in the cockpit market in the last twenty years or so. Why not better it, or make it more appealing, usable or interesting? Plus, 3T has a wide range of products: the future will never be boring. 3t
Rumor has it that Cervélo was a former investor in 3T, is there any truth in that?
That’s not true. Or better, it’s true that there’s that rumour. I think that rumour started because of some competitors of 3T: they figured out that by spreading that rumour other bike brands probably wouldn’t buy the 3T products. But if you see the story for 3T, BMC was and is their biggest OE customer. Cervélo was the first customer.
Why a gravel bike for 3T and not a road racing bike?
The history of road racing is gravel. I mean, one hundred years ago all road racing went on gravel so if you’re talking about true road racing, that’s gravel. The core, the essence of road racing is not paved roads, is gravel.
So will a road racing bike be a next step for 3T?
No, 3T’s next product will not be a road racing bike.
How do you position Open and 3T now? Aren’t they going to be competitors?
I don’t think so. “A rising tide lifts all boats” as they say. Gravel is a pretty big movement, but within it there’s space for everybody with new ideas. Once people ride on gravel they ask for bigger and bigger tires. So the ability to put these mountain bike tires on, is a big advantage for these bikes. Open has a bike like that and 3T has a bike like that, but I don’t think that the market is full until there are one hundred bikes like that. People are curious to know what these Gravel Plus bike can do and when they try them they want them. The only thing that’s holding back the growth of Gravel Plus bikes is the number of people who’ve tried them, so if we can get more people in, because there are more offerings, that will grow the market as a whole. Also, the characteristics of the Open bike and the 3T one are quite different: 3T’s Exploro is more aggressive and racier for example, while the Open U.P. offers more luggage carrying capabilities and it’s more suitable for very long distance trips. Again, those are little nuances: you can do a short cyclo-cross with the Open bike and a two months trip with the 3T’s!
Why did you originally choose to enter the gravel market?
Because it’s fun! I have worked on road bikes for a long time so I thought it was nice to try something different. I like to ride gravel bikes and tend to think that the way I like to ride is not unique and other people might like it too. I think gravel is the future. It is an area where there’s a lot of movement and interesting things going on. You can really do something unique, new or better, while the road bike field is already pretty good as it is and much harder to come up with something original. So, well, I started working on a gravel project just to suit the part of cycling that I liked.
In truth, gravel is the trend of the moment. In the USA, as well as in Europe, and it looks like it is going to last. What are the reasons behind this success?
I think there are a lot of different reasons. One is that sense of freedom that gravel can grant. You can go anywhere. You are riding on a piece of asphalt and then you see a little trail and wonder where that goes and… there you go! And no worries about punctures or a little bit of mud choking up the clearance of your frame. In the end, the adult world we live is pretty serious, so if your hobby can be a little more playful, the better. It’s like when you were young and took a bike and went around: you knew where you lived and where you had to come back and that was all.
Plus, roads are not always very safe and when you ride on gravel you don’t have that many cars set on your way. Gravel gives you that sense of adventure, much more than asphalt. Asphalt is like prepackaged food in the supermarket, gravel is like going into the butcher and choosing the best piece of meat, then visit the vegetables store, or getting your organic food.
For many, many reasons, I see mixed-surface as the main trend for the coming years, hence the introduction of the OPEN U.P., 3T Exploro and XPDTN3.club. Gravel is more unpredictable, but it is fun.
Touching quickly on European trends and trade; what are your thoughts on how Britain’s exit from the EU may affect trading conditions across the bike business?
I see a lot of drama in the media with events like this, but in the end the effects will be smaller. Yes the stock markets dove sharply, but half of that was because they rose the week before due to the idea that Remain would win. And so it goes with many things, the net effect is smaller than the “worse case scenarios”. This is not to diminish the situation, and I would think the GBP will stay lower for longer, but I think we have little to fear “but fear itself”. If Europe wants to talk itself into a depression, it can. Companies will delay investment, there will be uncertainty, some more people will be negatively affected than in an average year, but maybe it’s not so bad to take stock of what we have in life and what we really want every now and then, and this seems to be an excellent opportunity to do so.
Given the situation, people may not immediately buy a new bike, but eventually, when things normalize, they will. In that sense, Brexit is another push for the “gravel” or “mixed surface” riding movement, an extra desire to escape everyday life and have some old-school fun.
The situation is worse for large bike companies producing me-too products on wafer-thin margins. If they don’t grow, they’re in trouble. And the situation will also be worse on the other end, for IBDs who don’t have strong relationships with their customers and don’t set themselves apart from their competition. If your bike shop is not much more than a local distribution point for the bike companies, you cannot command a good margin and stay in business. If you, as a shop, are the brand in town, and the brands you carry are secondary (maybe with the exception of some unique brands that really can drive a special customer and special margin), you’ll be fine. It reminds me of a Hugh McLeod saying: “Innovate or die”. It’s another way in which Brexit can be a wake-up call, this time for our industry. Not that it will have much lasting effect, I’m afraid.
But on a positive note for bike shops, fewer sales often means more service. So be sure to charge an appropriate hourly rate for your service.
What will the bicycle of the future look like when it comes to both transportation and pro cycling?
You can register to my newsletter on the website and I will let you know as I go on… Just joking of course, but, to be honest, if I knew that answer, I would have built that bike already.
How big a role do you think electrics will play in bicycle design and do you have plans to work on any such project in the future?
Electric plays no role in bicycle design. Once you put an electric motor on it, it is not a bicycle anymore (laugh). Well, to be nicer, I think e-bikes can play a big role in transportation and a very positive one. You start seeing people going from cars to electric bikes: that’s a good improvement, but as to real cycling…
The e-MTB to me is just a very stupid idea and one that will be banned pretty soon by laws anyway. It’s already quite difficult in a lot of areas in the world to keep the trails open for mountain bikes. There’s a big push to close trails to the bikes to save them for the hikers and now you can go on those same trails bombing along at eighty kilometers an hour with your e-MTB! So then, all that’s left for e-mountain bikes will be the bike parks, which again is the prepackaged food supermarket idea of actual cycling. Of course, the e-market will grow bigger and bigger because we are growing lazier and lazier, but for those who just love sports for the purity of it, e-bikes are nonsense.
So you don’t see any future in it?
Speaking of new e-trends, road bikes with a small electric motor can have a future in amateur riding. I mean, they can have some sort of social impact: if you go ride with a group and maybe you’re riding with different generations there could be some unpleasant performance differences. On the flats you go well, but on the climbs you are slow and maybe you don’t want to keep people waiting for you at the top of the climb. So, well, you add another hundred watts from an electric motor and there you go. If it helps you have a better social experience I’m all for that, but winning a cyclo-cross race because you have an electric motor is a bit less interesting to me. Also, it is okay to turn a mountain bike into a motocross bike. Less gasoline in the air, as a first thing. I mean I have nothing against e-bikes, I just don’t see the future because of sport ethics, regulations and so on.
Tell us more about the inspiration behind the Open U.P. design. Who’s this bike for and what features lie beneath the paint?
Easy: the U.P. is for me. That’s all it is. I decided for myself. That is the bike I wanted so I designed it for myself and then we went to see if somebody else wanted to buy it too. The truth? At the beginning I didn’t really care if anybody wanted it. Well, of course I had the feeling that other people would like it too, but if nobody had liked it…oops! That’s why we started with size “Large” as the first size: at least I had my own bike.
Of course, now in the retrospect it’s easy to see that there has always been a good possibility of success, but when we started it we had no idea. People could have said “A road geometry bike with mountain bike tires? That’s the dumbest thing we’ve ever heard!”. It was entirely possible that people would react that way, but they didn’t. We did no market research, focus groups or those kind of things. In that sense it’s a little bit true what Steve Jobs said, that you can’t ask people about something that doesn’t exist yet, because it’s hard to imagine what that really means if it doesn’t exist yet. So you can only ask them about things that already exist. I just had to build that bike and see if there were people that would like to have it.
In how many countries is now Open available and are you still looking for new dealers?
We have no distributors, we go dealer or consumer direct and we are well covered in all the major countries. There’s a couple of missing ones, like in South America where we’re not visible, or some areas in Africa and Asia. We’re sold in every country through just a couple of dealers, which is all what we want. We don’t want too many and we don’t want to be too big: we try to keep life relatively simple so we also have time to ride a bike. vroomen
How is the bike industry changing at present in terms of consolidation, road to market changes, other movements. Is it perhaps time to adapt?
People are trying to adapt all the time but I’m not sure they know how to do it. Of course, there’s a trend to consolidation but then as quickly as companies are consolidating new companies are popping up, so the overall number of companies isn’t really decreasing.
We have now a couple companies that are a billion dollars or bigger: we didn’t have that, to the same scale, ten years ago. Today you also see some companies getting bigger and bigger and start putting an enormous pressure on the dealer network by trying to squeeze out other brands.
To me, those are really the tactics of the 80’s: I don’t think that really works in this century anymore, maybe in the short term, but if that’s where the growth has to come from, then eventually it goes wrong. By the way, you see it goes wrong: all those brands, or most of them, are down twenty percent this year.
By the way, you see it goes wrong: all those brands, or most of them, are down twenty percent a year because that growth is not really there. All these big brands make bikes that are very similar one to the other and there’s not a huge rush for people to go out and buy a bike, so when there’s no excitement their sales suffer.
Dealers lives are getting more complicated day by day too, how will they fare?
The point is that people don’t want to change. They want to keep on doing things as they always did, but in the present times this is no longer possible. Everybody has to change. Those dealers that are really focused on service rather than on sales are generally doing very well. The companies that are focused on doing something different are doing very well. Those that are complaining because of the lows in sales due to big internet based companies will have to change too. Better be allied than enemies, I mean. If you can, why don’t you ask if you can become their official Service Center? They need your help.
Think out of the box. See what’s happening in other markets and import those ideas. In North America there are very successful companies like Velofix: they have a van with a mechanic and they go door to door and solve people’s bike related problems. It is not a bike shop that came up with that idea, is someone from the outside that saw the opportunity. There is a lot of business to be made in service: people have less time and they want things fixed so instead of crying because Canyon is entering your market why don’t you ask yourself “what can I do? How can I react?”. If I’m focused on service, who cares where my customers got the bike from? Or you do a combination of both, but I mean, if you keep on doing things the way you have always done and think the problems will go away by themselves that thing won’t work.
What does the future of the bike business look like according to you?
The future is for the small brands, not because they will have a huge part of the market, but because when you’re small and you don’t strive to survive, you are more flexible, you adapt and sales are there for you, you will always find a customer. We saw that at Open: we have a small core of very dedicated customers who understand the brand, who know the people behind the brand and really identify with it, whereas if you look at the big companies that need the mass volume you’ll notice that mass market doesn’t has a strong affection for them. Next year they might buy something else.
Being big is quite challenging in this particular industry which is really based on the passion and excitement of the consumers. In the long run it’s hard to be very passionate about the bike that your neighbor owns as well. People like to have something more unique. In the lower end it is not like that, but there it is also hard to make a living. To me the best way to stay competitive and to survive is to be small.
Any new products for Open at the Eurobike 2016?
I honestly don’t know because we introduce things when they’re ready so I have no idea of what we will show and if we will show something. I know the show is in two months, but if have something finished we’ll show it. It is the honest answer.
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