Headquarters Tour: Crank Brothers – Company Profile, Inside Look & Original Prototypes!
Crank Brothers started in 1997 with the Speed Lever, a card table and a trip to Interbike’s basement.
Well, actually, it started out with the notion of designing products, patenting them and then licensing the designs. It worked once, with a hydration system that was licensed to Bell Sports and became Hydrapak.
The story is their friends constantly got cofounders’ Carl Winefordner and Frank Hermansen names mixed up, so they combined them and just called them “crank”. Hence the first part of the brand name. They met while working for a scuba diving products company. They enjoyed working together and eventually both tired of the corporate culture at a large company. They quit and did freelance snorkel and related product design for a while, but cycling was the passion. Frank is the designer, Carl’s the engineer.
The Speed Lever was inspired by the tools used for car tires, and the idea was born during a night ride when they had to change a tire. Like all of their products, they start out as a solution to a problem they encountered and couldn’t solve with existing products.
At that 1997 Interbike, they handed out 4,000 Speed Levers and a brand was born. It was never envisioned as the high design, global company they are today, and it certainly wasn’t overnight. After the lever, they designed a high/low pressure switch for a mini pump. It was called the Power Pump, and it came out in 1998 along with a couple mini tools.
In 2001, they introduced the Eggbeater pedals, and that’s when things got interesting…
Growth that first year was something like 600%. All of a sudden, they had the resources to hire a real marketing team, a real sales team and more. And that was a good thing, because it was just the two of them with phones ringing off the hook, most of the time with irate customers wondering where their shipments were.
“It actually stopped being fun, and we thought about walking away,” said Frank. “We were just two guys that made something and liked riding our bikes, and all of a sudden everyone was angry with us!”
That’s when they talked to Andrew Herrick. Herrick founded Pedros while still in college, sold that, went to work for GT Bicycles and has had various other jobs in the cycling industry. The Crank Brothers idea intrigued him, so he came on board as Crank Brothers’ CEO and an equal partner in the company. His experience allowed the “Cranks” to focus on the products while Herricks handled the business side of things.
It was growing, but it was also 100% financed by themselves. About six years ago, they sold the company to Selle Royal, which gave them more resources and further freed them up to focus on the parts of the company they loved. Frank and Carl remain on board, but Herrick departed early in 2013.
All design is done in house. Everyone’s free to develop ideas, but most of the new products still come from the “Cranks.” The only outside idea they brought in was the Joplin, which was licensed from Paul Turner and Frank Vogel, who called it the Speedball. That’s since been replaced by the Kronolog.
Product manager Chad Peterson oversees the rest of the crew. He came from Patagonia and designed the new hydration packs. Above is Eric Hermawan, who’s in charge of wheels.
Jeremy Pedroza (above) develops the pedals, tools and accessories like pumps, etc. He helped with cockpit parts before they hired another guy to oversee those. Yet another person works on the owners manuals and tech documents.
In the middle of the design room is their 3D printer, which lets them prototype parts for shape, fitment and aesthetics approval. The very large Eggbeater pedal took about a week to print and is an oft used trophy for office games. An equally oversized cleat holds a placard that’s printed for each “winner” and clipped into place. Yes, those giant plastic springs really work!
More often it’s used to mock up small parts, like these grips, that can sometimes even be ridden. These only take a few hours to print.
On the other end of the building is the marketing team. Bill Freeman is the sports marketing coordinator taking care of their teams and athletes. He also serves as their house photographer and has been shooting for them for years as a contractor. Next to his desk is where Global Marketing Manager (and our usual PR point of contact), Amanda Schaper, sits.
They even carved out little space devoted to sister company Fizik to do their US business. Hi Adam!
Between the two halves of the building is a small foyer with bike storage, foosball table and a big fridge for cold beverages. Adjacent is their conference room, which uses a ping pong table for a centerpiece and miniature shuffleboard table on the back wall. Good times.
Upstairs are the sales and finance folks as well as the kitchen, which was crafted inside the original elevator shaft. Fortunately, the architecture firm that occupied the space before them left the sliding wood gates in place. To the right are larger bathrooms with showers…many of the employees live within riding and walking distance.
The second floor is also where you’ll find their new CEO, Andy Palmer. His office is shown bottom left. He brings some outside-the-bike-industry experience from working with Animal (surf/snow/athletic lifestyle clothing), Dragon (sunglasses and goggles), Ocean Minded (sandals and shoes) and others before taking this job about six months ago. The challenge, he admits, is overcoming some past quality issues:
“When you try to do something different, that can be a stumbling block in that you have to deal with the consequences of being different.
“I think some of the perception is that we still have poor quality, people still have the bitter taste of having something of ours in the past and it breaking. And we need to be responsible for that. But we’ve successfully changed the quality, and now we have less than a 1% return rate across all our product lines.”
“When you have products that look so differently, and we think beautifully, and you have some well known failures, you run the risk of having people think we put all our effort into just making pretty products and not into engineering. That’s simply not true. We’re always going to make beautiful products, but we take the technical details very seriously, and we’re all very passionate about it.”
One of the examples they used is the wheels, which have some new products being announced soon (you can get a sneak peek from our Eurobike coverage). The original models had arguably poor hubs, which illustrates some of the early problems they faced.
Andy: “When you’re a small company, you can’t get into the production cycles of the ‘A’ quality manufacturers…they’re simply looking for volumes that we couldn’t do when we were young. So we had to use ‘B’ quality manufacturers, which resulted in some quality issues. But as we’ve grown, we’ve been able to get into the better manufacturing plants and our products’ quality reflects that. That’s not to say a small company is allowed to produce a product that’s not equal to, say Shimano, in quality. It means every small company has to raise their game and find ways to match that quality. People don’t want to spend their money on something that won’t last, and we don’t take that lightly. When we read something less than favorable about our products on the forums, it pains us.”
Along those lines, Frank and Carl chimed in, too:
Frank: “It can be a love/hate relationship. We do things that look different, but we make things different because there’s got to be something about a new product that adds to the category, that justifies its existence. That means that over the years, we have accumulated many folks that love our products, and many haters. I understand this is a passion industry, and people have strong opinions on how a bicycle should be. And we all have different needs, but if you’re a true cyclist, you accept that everyone has different needs. What we’re doing comes from passion, so sometimes I’m just surprised at the hate we get. I mean, if a customer called and said they were going to be in the area and wanted to know where to ride, more than likely one of us -probably me- would head out for a ride with them.”
Carl: “I think it’s just the anonymous nature of the forums and the response a snarky comment gets. It’s not like people call us up and rant.”
And for what it’s worth, about half the office headed out for rides with us on both Tuesday and Wednesday while we visited, including Frank and Carl, and everyone there really was (is) pumped on bikes. That includes the young lady at the front desk…I overheard her completely geeking out about the new Fox forks. That passion made for a very fun visit, and everything I rode worked flawlessly. Even the Kronolog.
Where are they headed?
“My business philosphy is to focus on products and opportunities where we can be world class,” says Andy. “Just because we can, doesn’t mean we should, so it needs to fit into three parameters: What are we passionate about, what can we be world class at and what’s going to drive our economics.”
Could that include road bike parts?
“There’s no conversation today about branching out into road, and not just because Selle Royal owns Fizik (who makes cockpit parts), it’s just not on the table. Successful brands really understand who they are and try to execute on that. Right now, that’s mountain biking. We’re not yet market leaders in the things we’re already doing, so we need to focus on that.”
To put that into perspective, Andy said Shimano is about 84% of the MTB clipless pedal market, Crank Brothers is 13%, and the rest make up the remaining 3%. So, they’re a solid second, but also a distant second. It shows both their strength and their opportunity, particularly with Shimano’s recent distribution strategy change in North America.
Frank: “Whether I’m working on a pedal or a saddle or any other part, I’m just as happy. As long as it goes on a bike.”
Carl: “I don’t think there’s any product category we’re afraid of entering, but there are certainly categories that you can’t do piece meal, like drivetrains. And we won’t ever make a frame. From a design standpoint, we’d love to do all that stuff, even a frame, but however we branch out, it has to make sense and stay true to our brand.
It’s so satisfying seeing something you make out of the trails, and being able to design something and have it out on the market quickly.
Carl: “We try to start from scratch with developing a new product. Take the Eggbeater for example. We wanted something that cleared mud quickly, was easy to use and easy to assemble. We didn’t look at the Shimano 747 and think ‘how can we make this design better’, we just started with a blank page and figured out the best way to make it do what we wanted to do.”
Andy says about 50% of their business is from the US and Canada. They have global distribution and recognition, but he thinks there’s a ton of opportunity for growth outside the US.
Carl: “Everyone here is into bikes. Whether it’s mountain biking or cyclocross or whatever, that love of bikes is a large part of why they’re here.”
That’s why we’re here, too. Big thanks to Amanda and the rest of the CB crew for the hospitality and rides!
MORE FUN PICS
The very first prototypes of the Eggbeater pedal. It was originally conceived as a three-pronged design (right), but adding the fourth clip made balancing the springs much easier. Chronological progression goes right to left, with the final original design in the back.
Remember when this was their logo?
The original bite valve prototypes. Carl said if they “had only had 3D printers back then”…then looked off wistfully.