Here’s a glimpse into the resilient economy of our future. It’s a chance to get a feel for the kind of economy our kids will participate in, if we are successful at building resilient communities today.
What is it? It’s a business called Seven Cycles. The kind of place that is a joy to work at.
The type of business where every worker makes a good living and loyalty runs both ways. A work environment where the effort is passionate and has meaning. A business that is successful in today’s world and will continue to be successful, well into the future.
Best of all: it’s local. A business that makes things locally and sells them globally.
I believe this type of business is an antidote to local economic failure (see “Here’s the Future of America” for more) and finding, helping and building businesses like these should be a priority for nearly every resilient community.
To find out more, I sent a resilient communities research team down to Watertown, Massachusetts to get a tour of the Seven Cycles facility and interview Rob Vandermark, a founder and President of the company (pictured to the right).
Here’s what they found.
Seven Cycles
Seven Cycles is an artisanal business that makes bicycles (a $77 billion global industry). That means they make high quality and often unique items by hand using a process that combines art and technical skill.
To create an artisanal business, you need to find a niche market. A small, but passionate, market that the big manufacturers building low-cost, high-volume products don’t find profitable.
Rob and his co-founders found a niche market in building Titanium frames. Titanium is a material that is in high demand from racers (small but passionate market) due to its durability, but it is very difficult (expensive and labor intensive) to work with. This means it is perfect for an artisanal business.
So, the Seven founding team developed some methods and techniques for building Titanium frames successfully (see inset part) and launched Seven Cycles in 1997. It’s been successful since then and now has nearly thirty employees.
How did Seven become so successful? Rob provided us some insight he thought other artisanal businesses could use to become successful:
- Build relationships with your customers by providing high quality customization. Seven’s bikes are sold through channel partners (retail bike shops that know their customers well). Each bike frame is made to order for each customer, to fit their measurements, riding style, and expectations.
- Structure your company to be resilient over the long-term. Stay small and grow slowly through organic growth in your niche.
- Don’t be in a rush to expand or move into new areas. However, stay nimble enough to keep ahead of any competition and new technologies that emerge in your niche.
- Avoid debt like the plague and avoid holding too much inventory (speed isn’t as important as survival).
- NEVER compete on price.
- Hire people slowly. Focus of the hiring process on evaluating whether the prospect will thrive in the environment rather than on any specific skill. Seven trains most new employees from scratch to become skilled artisans.
- Include employees in how the business works. Seven keeps transparent books.
- Share success. Seven’s philosophy: every employee should be able to buy a house.
- Hire locally. Long commutes are dysfunctional. Community and proximity is very important.
- Go global. Going global allows you to aggregate all of the demand in your niche, which allows you to generate enough revenue to support a company and prevents competition from forming. Seven sold its products to global customers within a year of launch.
Thanks so much to Rob and his great company for sharing this insight with us at Resilient Communities.
The Artisanal Revolution and What it Means to Us
So, why is Seven Cycles and companies like it exciting? It’s part of how resilient communities that produce the food, energy, and water they need locally can become prosperous as well. I particularly like it as a way for resilient communities to interact with the global marketplace and each other as equals, rather than as a dependents or isolated targets.
Three reasons that I will expand on in the future:
- Artisanal businesses bring in external income to a community. That’s important today and it will be important tomorrow.
- These businesses support the development of skill sets and promote a group loyalty that the community will find valuable in a myriad of ways.
- This is how to turn the rapid improvements we are seeing in manufacturing technology (3D printing and local fabrication) into a long-term win. Our challenge, helping makers learn how to turn what they do into a viable business.
Artisanal businesses are part of a successful formula for resilient communities. These business are lean enough and nimble enough to survive levels of economic turbulence that can easily sink big companies. Also, unlike retail establishments that are dependent on external sources of product and local demand, these companies create new income.
So, any community that can find and nurture three or four artisanal businesses, where the owners and employees (or owners/employees if a Co-op) both live and work locally, has a great shot at being successful long-term.
Your guide to a prosperous future,
JOHN ROBB
