In June of 2002, the two partners behind Cervélo Cycles were in their office, staring at a document that could take their boutique brand to explosive success, or simply blow up in their faces. Gerard Vroomen and Phil White, a pair of engineers turned entrepreneurs, had nurtured their company to indie buzz on the strength of a reputation for superior technology and performance. Now they had a shot at the equivalent of a major-label deal: a contract to become the official supplier of racing frames to Team CSC, an up-and-coming Danish outfit with the potential to dominate the Tour de France. Sign the deal and Cervélo would be elevated to cycling's world stage. But was the tiny, seven-year-old upstart ready? Were its bikes? "We had an idea the deal would change the company; we just didn't know if it would be for better or worse," says Vroomen. "We thought it would be great, or it would kill us."
They signed. And things blew up—in a good way, at first. Team CSC soon rose to No. 1, putting Cervélo before millions of the world's most discerning bike buyers, who watched as CSC riders jostled with superstar Lance Armstrong at the front of the pack on the 2003 Tour. Cervélo's revenues grew fivefold as its bikes became status symbols for weekend road warriors from Silicon Valley to the Rhine Valley. Then came a second explosion: a series of blood-doping scandals embroiling the sport's biggest names, Team CSC riders among them. By last summer, the 94-year-old event on which Cervélo had bet its brand was so tarnished, some questioned its viability as viewers switched off and sponsors threatened to close their wallets. As for Cervélo's marketing strategy, things looked grim there, too. How do you make the case that it's all about the bikes when headlines scream it's really about the
medicine cabinet?
When I visit the company's head office in Toronto's Liberty Village, the sexy-cool address for dozens of new-media and design companies, the drama of the Tour de France and drug scandals seems far away. In fact, I'm greeted by the sight of plumber's butt on a fiftysomething guy who's trying to attach castors to the bottom of an office chair. He's introduced as a member of the much-lauded Cervélo engineering team. White is sitting at a desk in an office furnished with nothing but a filing cabinet and some framed pictures of Porsches. A couple of bike frames are lying around on the floor. This is the Canadian cycling success story? Where an engineer puzzles over an office chair?
In fairness, the company only recently expanded into this space, but White and Vroomen come by their apparent belief in substance over cool honestly. The story of Cervélo—a mash-up of the Italian word for brain and French for bicycle—began in an engineering lab, after all. In the mid-1990s, Vroomen, born in the Netherlands and today based at the company's European office in Neuchâtel, Switzerland, was tinkering on a bike design for time trials—short solo races against the clock—while studying at McGill University, and White, an American raised in Southern Ontario, agreed to pitch in. Though neither was an elite cyclist, they were—and are—bike snobs, combining a fascination for the practical efficiency of a well-designed machine with a passion for sleek and pricey toys.
The pair initially focused on triathletes and time-trial specialists—riders seeking any speed advantage and indifferent to aesthetics. Their break came when rising Canadian star Eric Wohlberg rode a Cervélo at the 1996 Olympics time-trial event. That first bike, White admits, was "butt ugly," but with its aeronautically inspired tubing, it gave riders an edge. White and Vroomen humped it around North America, showing up at bike races. Their first year, sales amounted to a paltry $25,000.
From the beginning, the two partners took an approach to marketing that made perfect sense to a pair of engineers: build lighter, more durable and more aerodynamic bikes, and savvy cyclists will gladly fork out $2,000 to $7,000 for the boost in performance. Not only was it the obvious strategy to them, but it had the advantage of being the cheapest. They bootstrapped their growth, and what money they made they reinvested in R&D, including $1,000-an-hour wind-tunnel sessions to seek ways of reducing drag. They drew inspiration from brands like Porsche, with its reputation for uncompromising engineering and a limited product line. A photograph in White's office of the iconic 911 (he drives a 911 GT3) is accompanied by a quote from the company's founder, Ferdinand Porsche, himself an engineer: "It is easy to have something new, but very difficult to have something better." Just as Porsche delivers race-proven technology to the autobahn, White and Vroomen intended to supply ordinary joes with the same bikes used by professional racers. "People will say, 'Hey, you're the Ferraris of bikes,'" says White. "And we go, 'No, no, no, we're not Ferrari. We're not trying to sell very few of something at an extremely high price.' Obviously we're a premium-priced brand, but you're getting value for it, and we're trying to get it out to as many people as possible."
