Specialized Bikes/Dyson Vacuums

The cycling industry was impacted when Specialized Founder Mike Sinyard announced that he would be moving forward into a the new role of Chief Rider Advocate. Mike will be the keeper of the vision. Specialized announced that Mike's replacement would be Scott Maguire. Scott was the COO at Dyson Ltd. Yup, the vacuum company, the meme and gif possibilities are endless. I'm sure there will be many knee slappers coming from the team over at cat3memes on the gram. That's the quick and dirty, what does this forecast, what are the possibilities, and where is the brand headed? I'll take some guesses. These are guesses, a more accurate prediction could easily come from a magic 8-ball. In 2019 I published Is Mike Sinyard Retiring?? on LinkedIn. In hindsight it wasn't hard to forecast that an older CEO would want to retire. None the less it's available for your reference.

My first stop is going to be at Dyson. What have they been up to? Scott has been working for Dyson for around 18 years. For the first half of Scott's time at Dyson the company was focussed on making great vacuums. That was 85% of their business. Then the switch was flipped and the majority of their business was supported by non-vacuum products. It's as if they viewed their company as the makers of the best sucker-upper and then decided that they were going to redefine the company as one that helps humanity live more comfortably and cleaner. They started making appliances, blow dryers (the exact opposite wind direction), developed battery tech, embraced new challenges, robots, Electric Vehicles, medical ventilators, and more. As the COO, Scott had an impact on those advancements. It seems like he's been involved in the development and growth of an organization that is no stranger to innovation. I think there's even speculation of an IPO.

Now onto Specialized Bicycles, they've been around since the mid 70's and are one of the big 3 bicycle manufacturers. For comparison, the cycling industry is less than 15% of the appliance industry. Although bikes are big, vacuums are even bigger business. Ok, back to Specialized. They're in a dog fight. They're fighting for production space, shipping, distribution, and customers. It's a fight for their life and it could go either way. They've built their brand on the idea that either we innovate or we die. Mike's son, Anthony, gave me a book recommendation about a year ago, Who Moved My Cheese? It's a book that presents the idea of changing market conditions and their impact on those willing to adapt vs those that will settle for the status quo. Did the world move Mike's cheese? The pandemic has forced Mike to accelerate plans to capture and maintain their last mile of delivery. It's shined a spotlight on consumer buying habits that are not destined to change any time soon. The rise of e-bikes and the surge of new buyers have also contributed to this change.

Any time you begin a new role you will bring your past experiences with you. My guess is that your employer hired you for the very skills and experience that you have cultivated. What skills should Scott bring with him?

1. The ability to drive innovation
2. The idea that you're not limited by a niche in your industry
3. The successful implementation of a direct to consumer model

I think Scott has demonstrated #1 by helping to deliver one of the most innovative vacuums to date. The stunning Dyson Ball was brought to market shortly after he joined the organization. Engineering is at his core. I don't have a list of all of the projects that he's impacted and I assume that there were many. Innovation is one of the core tenets at Specialized. Whether they're busy pushing the boundaries of suspension, aerodynamics, or delivering some of the best contact points that a bicycle has ever seen, they're constantly delivering innovations. A category I think Scott can help Specialized with is their battery tech as it applies to the EV market. In his time at Dyson Scott saw the Dyson EV come to life. Imagine a 600 mile range EV with 536hp! Sh!t, that's a dream come true. Sadly it was scrapped due to the projected selling price. We're talking $198k USD just to break even. However, with battery tech advancing and the desire to advance the EV market I imagine that within the next 5 years we'll see the Dyson EV reappear.

That brings us to #2 and this wholey serves Scott's past brand experiences. If Scott only saw the Dyson products as efficient sucking devices his career would've been shorter. The same has to be true for every organization, no not the sucking part, the ability to see your company as greater than any single niche. Is Specialized a bicycle company or do they spend their efforts in ways that deliver human beings from point A to B and beyond. Specialized is a transportation company. If they approach their business with the idea that they move humanity forward, they won't be limited by 2 wheels. With this mindset, 100 years from now we could know a Specialized that is responsible for intergalactic travel. It sounds crazy and so did the idea of the PC. Crazy and impossible didn't stop Steve Jobs from democratizing the PC. And what's become of that computer company? They're one of the largest cellphone manufacturers on the planet. Did Steve see that coming when he was managing a soldering operation from his parents garage? Did Mike see an EV in his future when he was pedalling tires around the bay area?

And finally #3 it's not the best for last, it's the scariest for the first. LOL, I'm talking in circles. A Direct to Consumer business model scares the majority of the Specialized retailer network. They recently made a D2C announcement that caused some retailers to recoil and restrict business. Some long time partners were purchased by manufacturing rivals too. Faced with a new challenge to control a rapidly eroding last mile of delivery, they went all in on their D2C intentions. We can explore their selling platforms in another piece, for now let's say they're available through Independent Retailers, Partnership Retailers, Corporate Stores, and a D2C Delivery Service. The good news for Specialized is that Dyson is a pioneer in the D2C space. Scott is likely to see D2C as par for the course. This bodes well for both as they enter a post pandemic world.

So, Mike controls and delivers the vision, Scott guides the company into the future, the retailers are still trying to discover where they fit in, and the riders get bikes. You can see why retailers are nervous. Because I see Specialized expanding beyond the horizon of cycling and into the EV space, I think Specialty Bicycle Retailers will continue to slide down the list of their valued partners. At least until they develop stronger commitments within EV distribution channels. I'm going to punt on whether or not I think Specialized has aspirations of ever going public and it should be noted that Dyson experienced massive growth throughout Scott's time with them. They went from $450M in 2004 to $19B in 2021. Remember, this is my perspective; take it with a grain of salt.

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