Photo By JOEL TURNER Mike Sinyard, the founder of Specialized Bicycle Components, stands in the museum of the company's Morgan Hill headquarters with a 1981 Stump Jumper, the first mountain bike to be sold in bicycle shops around the world.

How a VW turned into a bicycle empire
Specialized bicycles started when Mike Sinyard found his niche

By JOHN BAGLEY
Pinnacle Staff Writer
    Perhaps the company slogan that runs down the sides of the 1966 Cadillac Hearse in front of Specialized Bicycle Components in Morgan Hill says it best: “Innovate or Die.”
    It’s a philosophy that Mike Sinyard, the company’s Founder and Chief Executive Officer, has taken to heart since the day he launched his company in 1974 out of a trailer park in San Jose near the intersection of Curtner and Monterey roads.
    It’s a philosophy he needed in order to survive on the initial $1,500 he had to his name after selling his old Volkswagen Bus—the only seed money he ever raised to launch his company.
    “I like to think of it as adventure capital, not venture capital,” said Sinyard, whose company now does more than $200 million annually in sales all over the world.
    A longtime bicycle enthusiast who rode everyday for fun, Sinyard graduated from San Jose State University with a degree in Business Administration in 1972.
    “When I got out of San Jose State, I tried to get jobs but I was never good at selling myself or working at a Memorex-type company,” said Sinyard, who sought a more relaxed environment.
    So after a year of working odd jobs, fixing old bicycles and reselling them on the side, he decided to fund a bike tour through Europe.
    It was a trip that would change his life.
    To fund the trip, Sinyard, 23 at the time, took the $1,500 from selling his vehicle and headed to Europe. He rode through Northern and Southern Europe over the two-month tour.
    During the stint, he began forging contacts that would eventually pave the way for his company.
    By day, he would head to factories and bicycle companies that manufactured the best high-end parts of the day to see if he could buy their products and import them to the states.
    At night, he would camp or spend the evening at youth hostiles.
    “I spent $100 a month,” said the 53-year-old Sinyard, who lives in Morgan Hill with his wife and family. “I used $1,200 of it to buy components when I left. It was the contacts that I made in Italy that really got the whole thing going.”
    That key contact came one afternoon while he was staying at a youth hostile in Italy. There, Sinyard met a woman who had connections with the highly regarded component maker, Cino Cinelli. Sinyard convinced the woman to arrange a meeting, then “splurged” on an Italian business suit.
    Sinyard met with Cinelli and persuaded him to let him import his Italian components to the USA. Sinyard says he couldn’t sell himself at job interviews, so the ability to get a world-renowned component maker to sell to an unknown bicycle importer from America was perhaps his greatest feat to date.
    In the early 1970s, European bicycles were far superior to the mass-produced ones that were made in the U.S.
    Being a rider himself, Sinyard knew that the top riders in the states were frustrated over the lack of quality components available in the states and took advantage of the opportunity.
    “Back then the best components weren’t available. There were only a few places in the states that sold them at all. People who had bikes that were upgraded with the best components used to call them ‘specialized’ and that’s how I decided on the name.”
    With connections for getting the best equipment money could buy, Sinyard forged on.
    Upon returning to California from Europe he rode to various bike shops throughout the Bay Area, collecting orders for the Italian components.
    “I had no money, so every order had to be paid up front,” recalls Sinyard, who used a hand-written catalogue to list his products.
    In the early years, he would buy everything from cranks to pedals overseas and sell them out of a trailer that he pulled behind his bicycle to shops in the area.
    “After I came back from Europe, I went four years with just a bicycle,” said Sinyard.
    Some of the parts that he purchased from his Italian supplier would be installed on old standard 10 speeds and resold at local flea markets.
    “I’d buy them for about $10 and put about $30 into them and then sell them for $100 at the Berryessa Flea Market,” said Sinyard.
    By the end of the first year, Sinyard’s newly formed company made $64,000.
    The following year, 1975, sales quadrupled and Sinyard was no longer operating from his trailer. He opened his first warehouse in Campbell. Ironically, his small warehouse was right down the street from Fox Racing—another company that was launched in similar fashion and ultimately settled in Morgan Hill.
    “I’ve known them (Fox brothers) for years,” said Sinyard as he points to one of his models that uses bike shocks that were manufactured by Fox Racing.
    By 1976 things really started to take off.
    That year, through the insight he received from shop owners who would tell him what their customers wanted – along with his own passion for cycling performance, Sinyard recognized the need for better tires than those that were being developed in Europe.
    He went on to create the first Specialized Touring tire to meet those needs.
    “That was the product that really got us going,” said Sinyard. “The Italian companies made great parts, but the tires were often crooked.”
    Initially, he created several tire models and sent them with a friend who was cycling from Panama to Portland, Oregon. During the 5,000-mile trek, Sinyard would get feedback until he found the perfect one.
    “They didn’t have e-mail back then, so we’d write each other back and forth,” he said.
    Specialized’s new high-pressure tire rolled well and didn’t wear out as fast as the European ones. The result was a dramatic increase in sales revenues.
    Over the years, Specialized has been credited with several innovative designs, including the first FDA-approved water bottles, as well as the first composite wheel.
    But arguably the company’s greatest achievement came in 1981 with the introduction of the Stump Jumper—the first mountain bike to be offered in bicycle shops throughout the world. Although the frame looked similar to a typical road bike, the first mountain bike had a beefed up suspension and more rugged tires.
    Today, mountain bikes account for the majority of sales in the U.S., while road bikes are still the biggest sellers to Specialized European customers.
    Over the years, the company slogan of “innovate or die” has led to constant product upgrades, the ongoing search for the lightest, most-durable frames and has even attracted the best riders in the sport to use its product.
    The world’s No. 1 road cyclist, Mario Cipollini, uses Specialized components. And Filip Meirhaeghe, the top mountain biker in the world, also rides a Specialized bike.
    “In this business, we are considered the high end,” said Sinyard. “We are not the biggest and we don’t even try to be. We just want to be the best. The people who want our bikes are the people who want something really nice. We try to provide an advantage to our cyclists.”
    Specialized bicycles start out at about $300 and can run upwards of $5,000 depending on the model. The company manufactures road and mountain bikes for men and women, as well as BMX bikes for children.
    However, not every part on a Specialized was manufactured by Specialized. Some of the components that are used still come from other top-notch manufacturers.
    “Whatever is the best, that is what we use,” said Sinyard. “Most things nowadays get thrown out when they break, like a VCR. Products today aren’t made to last, but we have a lifetime warranty on our bikes. Tires and chains are the only things our riders replace.”
    At the company headquarters in Morgan Hill, that pursuit to be the best can be seen throughout every department. There are machines for testing components, design rooms, meeting rooms—just about everything imaginable to build the best bikes in the world.
    “It’s not about growth here, it’s about doing things better,” said Sinyard, who now employs more than 300 people. “A lot of times when you grow too quickly you do things worse. This company is run super flat. I want to keep everyone at the same level so that everyone has a say and input.”
    While the mission to be the best is clear, Sinyard also has a little fun too.
    In the company’s research and development area, several prototypes can be seen that were clearly made for fun.
    There’s a Big Wheel that adults can ride. There’s a bike that looks like something the Flintstones would have owned—even a bike that looks like a 1800s old-time bicycle that was built using modern components.
    “Some of this stuff does make it to the retail store,” said Sinyard. “A lot of it is just for fun.”
    And it’s his emphasis on keeping things fun that has helped the company grow. All of Specialized employees are avid bike riders.
    Sinyard is still hard at work everyday. He puts in about 55 hours a week and still has his hand in every aspect of the business.
    Everyday, he and a large group of employees take a ride during the lunch hour. It’s a tradition that has endured since day one at the company.
    “It’s amazing how fast and how far some of the guys go at lunch,” said Specialized Global Marketer Carmella Livorsi. “Some of them go 30 mph.”
    On Tuesday, Sinyard and a small group of employees were going to take a ride from the company headquarters near Tennant Avenue in Morgan Hill up around Uvas Reservoir.
    “We usually go 20 miles or so each way,” said Sinyard, who still has the body of a cyclist in his 20s.
    On weekends, Sinyard enjoys riding from his home in Morgan Hill to Henry Coe State Park or over to Watsonville and Santa Cruz.
    “I love riding,” said Sinyard. “I ride everyday. I’ve also got a lot of ideas when I’m out riding and I get ideas from the people I meet too.”
    Obviously, he’s put those ideas to work.