CASE STUDY 5

A sea change in sales of bicycles across North America and Europe has taken place over the last 20 years. This change has seen consumers switch from road bikes to mountain bikes. Introduced into the UK the late 1980s, mountain bikes quickly caught the imagination not only of the emerging "yuppic" culture, but commuters as well, attracted to this stylish but sturdy new type of bicycle (Rosen, 2002: p133). The introduction of this new type of bike led to a new boom in the bicycle industry and the emergence of a new dominant design. This was the biggest change in bicycle design since the so-called "safety bicycle" challenged the "penny farthing" back in the 1890s (Berto, 1999: p n). Just how big an impact mountain bikes had on the bicycle can be gauged by sales figures for the UK market. In 1988 sales of mountain bikes, made up just 15 per cent of the 2.2-million-unit UK market. Two years later sales of mountain bikes had not only risen dramatically to 50-60 per cent of the bikes sold in the UK, they had helped to push the overall market to 2.8million units (Rosen, 2002:p133).

Among the changes brought in by the new mountain bikes were a switch to fat "balloon" tyres instead of thin ones, the adoption of an erect riding position instead of a crouched one, the substitution of flat handlebars for dropped ones, the use of front and rear derailleur gears to provide at least 15 speeds, cantilever brakes and thumb operated gear shifters (Berto, 1999:p20). Dramatic though the change was; its origins lie not with the big bicycle manufacturers but with riders themselves. The particular riders all came from Marin County, California on the pacific coast of the US.

Marin County is located to the north of the Golden Gate Bridge in San Francisco, California. It is quite literally on the opposite side of San Francisco bay to Silicon Valley. Marin County is a hilly area comprising dense woodland. These woodland areas cover the slopes of Mount Tamalpais, and the early 1970s a group of young cyclist, mostly men in their teens and twenties, made up of high school and college students, firemen, bike-shop mechanics and members of the general public, began to use them for off-road racing. They particularly liked the rough fire roads that run through the forests. These dirt tracks were steep and ideal for downhill racing. One run in particular was the infamous "repack run" a steep decent down Mount Tamalpais that dropped 1,300 feet in less than 2 miles. Riders would make the ascent in the back of a truck and then race each other down. The ride got its name from the effect it had on the bikes taking part.

The bikes were single speed models with old fashioned coaster brakes which would overheat with the excessive use to which they were subjected, forcing the rider to repack the hub with grease before making another descent (Rosen, 2002: p135). Existing commercial road bikes were not suited to the rough conditions (Luthje et al., 2005). Hence the young downhill racers turned instead to older more robust models. Among the bikes used for downhill racing were old Schwinn models with fat "balloon" tyres. Particularly prized was the Schwinn Excelsior, the classic "newsboy" bike of the 1030s and 1940s. Though the frames of these bikes were heavy, they were sturdy enough to withstand the rough treatment meted out in downhill racing and the extra strength more than compensated for the extra weight. The use of old-fashioned models like the Schwinn, bought second-hand from backyards for no more than a few dollars, led to the bikes being nicknamed "clunkers".

Though the early clunkers were comparatively unsophisticated, their riders gradually found ways of adding features to improve a "clunker" bike's performance for downhill racing. Among the modern components added as part of the "standard Marin County conversion" (Rosen, 2002: p135) were, derailleur gears, front and rear drum brakes, motorcycles gear levers, wide motocross handlebars, handlebar mounted gear shift levers, and big balloon tyres with knobbly tread patterns. As downhill racing became more popular in Marin County, so riders added modern components to their clunker bikes in order to enhance performance.

A cottage industry (Luthje et al., 2005: p 954) developed in Marin County as clunker riders built bikes not only for themselves but for friends and even fellow riders. By the late 1970s half a dozen small assemblers existed in Marin County. However, the core of each bike was still an Old Schwinn frame. Unfortunately the supply of old Schwinn was limited and newer Schwinn models were of no use because they were lighter and not as strong. Riders scoured the state of California for old Schwinn bikes that they could convert in to clunkers. Old fashioned cycle repair businesses proved to be a valuable source of supply. When they found a cycle repair business that had old Schwinn models, usually piled up as scrap, riders would buy them up and take them back to Marin County.

Such was the interest generated by clunker bikes that in time the supply of old Schwinn models began to dry up. Some riders then began to build their own frames. These frames improved on the Schwinn design and provided the additional components as standard. Among the first riders to build his own frame was a rider called Joe Breeze (Berto, 1999: p34). Not only was Breeze an experienced downhill racer he was also an experienced frame-builder. His frame was lighter and stronger than the original Schwinn design. Although Joe Breeze only built a handful of frames, the custom-build bikes that he built using his frame were widely seen and much admired. They came to be known as "Breezers" and they were the first modern mountain bikes (Bento, 1999: p45). They quickly acquired a reputation. The Breezers began to expand the market beyond Marin County.

Breeze only produced a very small number of custom-built mountain bikes and there were very soon other riders building frames, though always in very small quantities for downhill racing in and around Marin Country. However, in 1979 it wasn't long before two riders, Gary Fisher and Charlie Kelly teamed to form a company that would produce and sell mountain bikes on a commercial basis. They called their company MountainBikes (Rosen, 2002:p136). Fisher and Kelly needed someone who could build frames, not on a custom basis 'but in quantity' and they teamed up with frame-builder Tom Richey who was based in Palo Alto in Silicon Valley on the other side of San Francisco Bay. Using frames produced by Richey (and occasionally other local frame-builders), MountainBikes built, equipped and marketed the first commercial mountain bikes. Within a couple of years there were more than a dozen firms making mountain bikes, but in each case the quantities produced were relatively small, and the market for mountain bikes was generally confined to the West Coast of the US.

At the same time as the first commercial mountain bikes were appearing on the market, cycle-component manufacturers such as Shimano and Sun Tour began producing and distributing components such as derailleurs, crank sets, tyres and handlebars that were specially designed for off-road use (Luthje et al., 2005: p954). Not only that, companies like Shimano continued to develop componentry that helped to make cycling, particularly using mounting bikes, more "user friendly". Shimano' developed index shifting (for gear changing), integrated gearing and improved braking systems that not only enhanced performance but also improved functionality and reliability (Rosen, 2002: p138), making the use of mountain bikes more straightforward and less problematic for inexperienced users. In 1982, another Californian cycle company, Specialized, a bike- and bike-parts importer that supplied Marin County bike assemblers, took the next step and brought out the first mass-produced mountain bike (Berto, 1999). They had a Fisher-Kelly-Ritchie design mass produced in Japan. Marketed as the "Stumpjumper" it represented the general public's introduction to the mountain bike. Major cycle manufacturers soon followed with similar designs which were retailed through conventional cycle outlets first across the US and then across Europe.

By the end of the 1980s the mountain bike was fully integrated into the mainstream cycle market. By 2000 total retail sales of cycles in the US amounted to $5.89 billion, of which some 65 per cent were sales of mountain bikes. However, the process of innovation didn't stop here. As mountain biking dramatically increased in popularity so mountain biking enthusiasts found new uses for their machines and the demand for improvements in performance continued. This demand was met by a steady flow of innovations derived from riders.

CASE STUDY 5

QUESTIONS:

1. Who were the innovators in this case?

2. From which of the sources of innovation, did the innovation of mountain bikes come?

3. Which model of the innovation process best describes the way in which mountain bikes were developed?

4. Draw a diagram to describe the innovation process and the various parties involved in this instance.

5. What do you understand by the term "cottage" industry, and why were the early producers of "clunkers" thus described?

6. What do you consider is the significance of mountain biking having originated in a narrowly defined geographical area, i.e. Marin County?

7. Which academic writer has been a leading proponent of the notion of user-innovators?

8. Why, according to Christens en, are incumbent firms often relatively slow to innovate?

9. Why were incumbent cycle manufacturers relatively slow to introduce mountain bikes?

10. Which of the four theories of innovation gives prominence to "outsiders" in initiating innovation?