Serotta lays off 40% of workforce, planning shutdown

[oldpotatoe]

Originally Posted by jr59

Price and customer service. That and to much overhead at Serotta.

Or to put it even more bluntly, poor management by Serotta.
You can cut it any way you wish, but it all comes down to this.

yep, both to the end user and the dealer network.

[sitzmark]

Unless one has access to the company's historical financial statements, the reason for the "failure" is neither simple nor obvious.

Under capitalization/resourcing (overhead) can kill a growth plan as easily as the opposite if market response and demand is overwhelming and the ability to deliver isn't. It can be good management to resource allocate to traditionally accepted norms for growth, even if unforeseeable market conditions develop and business "failure" occurs. The "right" plan can require more than organic capitalization. Non-organic capitalization comes with its own set of risks and complexities. If operating a business was easy, all would succeed and everyone would be doing it.

It is telling that on a Serotta-borne forum, there is seemingly a lack of allure and intrigue captivating the forum for the company's current products. Doesn't seem to be the case for historical products, which are coveted. Company's with "cult-like" followings tap into something - a "magic" - that must be perpetuated or the candle burns out. Effective marketing and market communications is critical to maintaining the relationship with the existing customer base that turns them into the evangelists who in turn keep the flame alive.

Bad management is not necessarily making mistakes, but not learning from mistakes. Some things can be anticipated and some things not. No one in business has a perfect track record.

Speculating without real correlative market/financial data makes for lively discussion, but is folly when it comes to Serotta's actual plan for moving the business forward (or not).

[Mark McM]

Originally Posted by Peter P.

Because, as I have read, it is AN AMERICAN PRACTICE to spend the energy on finding fault. That is how we solve problems.

The Japanese manufacturing culture does it differently; they focus on SOLVING THE PROBLEM.

How you can solve a problem if you don't know the root cause (i.e. the fault)? If you don't know the root cause, then you can't know if a proposed solution actually fixes the problem, or merely masks a symptom.

Finding a fault is not the same as blaming.

[SamIAm]

Over the past year I have been approached about becoming financially involved in all 3 of the companies mentioned here. Part of me really wanted to make the leap from hobby to business, bad idea. I know a bit about how to turn a company around operationally, but restoring a brand is outside of my realm.

Still for the right person, I think the Serotta brand has tremendous appeal.

[SamIAm]

Originally Posted by Mark McM

How you can solve a problem if you don't know the root cause (i.e. the fault)? If you don't know the root cause, then you can't know if a proposed solution actually fixes the problem, or merely masks a symptom.

Finding a fault is not the same as blaming.

Correct. Interestingly, the Toyota way to problem solving starts by "Going to the Gemba", in this context, Gemba, means "the place where it happens", where the work is done. Observing it with the intent to either improve the process and/or identify root cause by using techniques like the 5 whys, but identifying root cause could not be more Japanese in origin.

Additionally, police detectives refer to crime scenes as Gemba, and there are some failed businesses that more resemble that usage.

[sjbraun]

But heck, this is an internet forum.

I've never wanted a Serotta. Not that I think there has ever been anything wrong with them, its just that their vibe always struck me as sort of BMWish. Both great products, but a Serotta badge always seemed more like a statement of of one's coolness to other cyclists (like a BMW or Lexus says, "Look what I can afford.")

It's not like I don't own nice bikes, but somehow the Serotta mystique never clicked for me. Sad to think how much marketing can affect everyone's perceptions, mine included.

[CNY rider]

Originally Posted by SamIAm

Over the past year I have been approached about becoming financially involved in all 3 of the companies mentioned here. Part of me really wanted to make the leap from hobby to business, bad idea. I know a bit about how to turn a company around operationally, but restoring a brand is outside of my realm.

Still for the right person, I think the Serotta brand has tremendous appeal.

Wise move.
I've found that the best way to destroy enjoyment of a hobby is to turn it into a job.

[Joachim]

Originally Posted by SamIAm

Over the past year I have been approached about becoming financially involved

In that case I have this once-in-a-lifetime opportunity for you.....

[Charles M]

I can tell you that I stayed away from payment in the industry for quite a while for pretty much that reason (spoiling the fun).

But frankly that was because I wasnt good enough to fully earn a living just running tech reviews. If I could support my family inside cycling the way I do outside, I would be in...

[Highpowernut]

Originally Posted by shovelhd

Why does it always have to be about blame?

I bought my first good bike this year, a serotta hsg aero. (At a discount price)
I tried almost every other tt bike out there, this fit and road the best.
I had never heard of serotta before walking in to that store.
I did know the most common names in triathlon( cervelo, specialized, felt, etc)
I actually believe my bike rides better than the others, everyone that asks about it is surprised. Almost nobody evens knows the name serotta.

I wish serotta the best of luck, and I would buy the same bike again if I had to do it all over.


Wayne

[1centaur]

Originally Posted by sjbraun

a Serotta badge always seemed more like a statement of of one's coolness to other cyclists (like a BMW or Lexus says, "Look what I can afford.")

This is an interesting side note to the thread, because I think Serotta IS a lot like BMW or Lexus in that some people focus on the status aspect and some focus on the reality of the object. BMW puts a ton of effort (some see it as overengineering) into making cars with very specific driving characteristics that they view as superior. Lexus tries for incredible build quality and flawless service. They both attract people who want just what they're offering. And maybe some others who think they're status symbols. That sounds like Serotta to me.

[Doug Fattic]

I have no emotional connection to Serotta bicycles so whether they get bigger or smaller doesn't matter to me. Both Ben and I went to Europe to learn how to build frames and we competed for some of the same top US racers to ride our bicycles back in the 70's (for me it was only Midwestern riders) when it was a niche sport. I wish him well. I have often thought about what completely different trajectories we have gone since we were one and two man shops (i still am). What does interest me is how the choices of those of us that started making frames during the 70's bike boom have played out. Their business model sells more bicycles by going through bike shops. The bike shop does the interviewing and fitting and someone somewhere designs the frame from those numbers and the factory makes a frame just for them. The good news is that one can go to a fairly local store to get fitted and they don't have to wait forever to get their bicycle because of factory efficiencies. The bad news is that the bike store people may not get it right and something could be off a bit. And there are added costs in all those layers.

With my knowledge there is no way I would ever want to buy a new Serotta. I'd want to find a good local builder (David Wages is within reasonable driving distance) where I would talk to and be fit by the master himself. I believe this way I would get a superior product at a somewhat cheaper price. This doesn't mean I think getting a Serotta is a bad choice for someone else, it just would never be my choice (if I wasn't a framebuilder already). Besides the kind of custom steel bicycles most people are buying now is nothing like the ones we were making 30 years ago. And there is nothing in the Serotta line that looks like the kind of custom steel bicycles the majority are wanting today.

[victoryfactory]

.....

[CunegoFan]

Originally Posted by sjbraun

I've never wanted a Serotta. Not that I think there has ever been anything wrong with them, its just that their vibe always struck me as sort of BMWish. Both great products, but a Serotta badge always seemed more like a statement of of one's coolness to other cyclists (like a BMW or Lexus says, "Look what I can afford.")

Serotta went from BMW to Ferrari. They went from an aspirational product that lots of enthusiasts (and people who wanted to look like enthusiasts) could afford (even if they had to stretch a bit financially) to a product that was insanely expensive (when comparison shopped against similar products) and beyond the reach of most people. The fake-it-till-you-make-it market is much much larger than the made-it market.

[Ken Robb]

Originally Posted by CunegoFan

Serotta went from BMW to Ferrari. They went from an aspirational product that lots of enthusiasts (and people who wanted to look like enthusiasts) could afford (even if they had to stretch a bit financially) to a product that was insanely expensive (when comparison shopped against similar products) and beyond the reach of most people. The fake-it-till-you-make-it market is much much larger than the made-it market.

This is a good short description of a large part of the problem.