From the Top: How Zipp Wheels was built podcast transcript

by CyclingTips


Listen to the full podcast episode here.

Andy Ording:
We rode bikes in South Africa because, like Australia, you can’t drive till you’re 18. So we lived on bikes, but bikes were transportation. I mean, we would ride bikes to the forestry station so that we could hike for the weekend, and then ride home after or ride an hour or something to go sailing, to a sailing competition and sail all day and then ride home. The whole concept of bikes for competition or bikes being the activity, no. No, that’s just transportation. In fact, we had, at high school, we had one guy that raced bikes and we all thought he was weird because he shaved his legs. He shaved his legs.

CyclingTips (Wade Wallace):
That’s crazy.

Andy Ording:
He even had a European name. I even remember it to this day. So funny, Andre [Melherber 00:00:47]. He could have been a Belgian, right? So his dad was a bike rider. He had a Peugeot 10-speed that weighed nothing, and with tubulars glued on the rim. So, mechanically, I’d look at this bike and just go, “Wow, it’s amazing. I think you’re crazy, but it’s amazing.” It was one, one guy, and I didn’t know anything about it, but it was pretty interesting.

Andy Ording:
For years later, I always laughed about the fact that I had this one guy, I could’ve learned a whole lot if I had just spent some time. If I’d known what was coming, I could have learned a tremendous amount just hanging around with Andre or going to these races.

CyclingTips (Wade Wallace):
Was it your job to know with launching Softride? Was it your job to know the market or were you at a different role within that?

Andy Ording:
Well, I think with Softride in the very early stages, I think later on, they started to figure out, okay, who do we think could benefit from this? But in the very beginning, we were not sure. There was lots of different schools of thought. Right? Okay. So this is going to be people that ride centuries and long rides and they want comfort. Oh no, this is going to be for folks that want aerodynamic bikes. Oh no… There was a little bit of everything. In the very early stages, no real clarification as to what we were going to do. Leigh happened to walk by. So the very first show was, I think, 1989, ’89 or ’90 maybe. He just happened to walk past the booth. I was on top of the-

CyclingTips (Wade Wallace):
Leigh Sargent?

Andy Ording:
Leigh Sargent. Yeah.

CyclingTips (Wade Wallace):
Leigh Sargent, right

Andy Ording:
I’m in the Allsop booth. We’re busy putting together the booth and I’m literally on top of the ladder screwing something in or something and I hear Australian accent walk past the booth. So, of course, I said something like, “Oh, you know us Australians, they’re all… anyway,” or something like that. And I got-

CyclingTips (Wade Wallace):
Very Aussie.

Andy Ording:
[crosstalk 00:02:42] “What the hell?” Of course, then you realize it’s right away it’s a South African and that’s what started it.

CyclingTips (Wade Wallace):
This is Interbike?

Andy Ording:
In the bike, yeah. In those days. So in Anaheim. Yeah. so that’s how it started. Anyway, we stayed in contact for a number of years. So what started to happen is he said to the Allsop boys, “You know what? I think I could build a bike” because we had some. We had two. We had two bikes there built out of steel with the down tube, the curved down tube, but these were the very first. We had a custom frame built these to house the beam, but that’s not what we were selling. What I had to go and sell was the retrofittable model, which went on a normal bike and you would take your seat and seat posts out and you would have this bracing system that attached to the doubt, I mean, it was a plumber’s nightmare, right? It just looked horrible. Conceptually, you can get people to try it like that, but they’re not going to buy it really like that unless they have an issue or a significant motivation to do so.

CyclingTips (Wade Wallace):
Sorry to interrupt. Just a bit of background on Leigh, why was Leigh at Interbike because Leigh was a former F1 engineer, from what I understand, and he was into the car industry. Why was Leigh there?

Andy Ording:
Yeah. Jolly, good. So Leigh went from Australia. So he was a pattern maker. So in the days before CAD and lofting and solid surfacing, they, they used pattern makers who were very skilled with their hands. He did an apprenticeship for a year in the UK where it’s like the UK was, much like Australia, South Africa, were old. The UK really taught us the creative artisan manufacturing capabilities, right. He’s a very skilled fabricator.

Andy Ording:
So he went to do his apprenticeship a year in the UK, did that and decided, oh, I’m here. I might just get a job, right? So he managed to get a job at Williams Formula 1. So he was working at Williams. I think he was there for a year or something and then decided, well, I think I’m going to go back to Australia, but I have this opportunity to go to work in America at an Indy car team. He came to Indy, which is how we’re based in Indy. Joined an Indy car team. Of course, within eight, nine months I think it was, they were out of money, which is completely normal. But he’d met a girl so he wanted to stay. So he started, it was timing wise very good for him.

Andy Ording:
He started a small… literally got like a three bay garage and started to do composite repairs because, at that point, composites were just… while they were in Formula 1 already, they were not in Indy car. Indy car at this stage were aluminum tubs with an aluminum monocoque and carbon and Kevlar parts attached. As that started to move to more and more structural carbon, there was nobody, certainly in Indianapolis, that understood how to repair a structural carbon part that’s been damaged. It’s not like steel or wood where you can see the damage and you can figure out how to repair it. With carbon, the damage may be a lot deeper. So you really have to sort of excavate into the structure, into the laminates and build back out.

CyclingTips (Wade Wallace):
Yeah, okay.

Andy Ording:
He was I think, perhaps, one of the few people in Indianapolis that had those sort of skills at that time. Perfect timing for him. Started to do that. So, again, another long story, sorry. So he was asked-

CyclingTips (Wade Wallace):
It’s all right.

Andy Ording:
So Invacare calls out of the blue. Invacare calls the carbon fiber… Invacare is the largest wheelchair manufacturer, certainly in America, but might be worldwide. They’re based in Cleveland. They call the carbon fiber guys. They go, “Hey, we’ve got this idea. We want the super fast marathon chair. We want to build that out of carbon, and we need you to help us.” The carbon guys are going “Well, that’s wonderful. We’ll sell you all the carbon, but we can’t manufacture it. But where are you?” “We’re in Cleveland.” “Oh I’ve got a guy in Indy. Would you like to talk to him? He’s a Formula 1 guy.” “Oh, yeah.” So that starts the Invacare and relationship then with Leigh Sargent begins.

Andy Ording:
So the guys at Invacare say, “Hey, you know what? We’re headed to the bike show in New York. Have you ever been to a bike show?” He went, “No, I’ve never been to a bike show.” They said, “Well right, why don’t you meet us there?” So he goes to the bike show, meets the Invacare guys. They start up the, okay, yes, we agree to proceed and he’s going to stop this project on a custom basis. But while he’s there, he’s walking around and he’s looking at disc wheels. Well all the disc wheels that… and he’s asking these guys, “Well, why would you be riding one of these?” They go, “Oh, they’re much stiffer, and they’re very aerodynamic” and having spent time in the wind tunnel at Williams and actually being part of the building of the wind tunnel at Williams, he was like, “I don’t think they’re that aerodynamic.”

Andy Ording:
So they didn’t really say anything because in the back of his mind he’s got an autoclave at his facility because you have to have an autoclave for Indy car repairs. He had this autoclave, which of course no bike manufacturer’s ever going to have an autoclave. All of the disc wheels at that time were lenticular. They all looked like a normal bicycle wheel. So they all had dish, right? So you have more dish on the non-drive side and less dish, and they built them exactly the same way, and he’s looking at this going, why do you do that? “Well, the cassettes there, and,” well they weren’t cassette. So they were free wheels. So they’re free wheel and it offsets it and you can’t be in the middle of the that doesn’t make any sense.

Andy Ording:
He came back, went to the local bike shop, happened to find in Indianapolis, just happened to find the guy that was a track specialist and JB’s in there going, “Oh. Oh yeah, no problem.” So Leigh orders like a half a dozen disc wheels. “Well, how does the tire fit on?” “Oh, we glue the tire on” “Oh hell. Well how the hell do you do that?” So give me the specs and he literally starts with nothing and no cycling background, which was probably to his advantage, right? There’s no preconceived ideas of what it is or should be, and sort of basically prototypes the wheel.

CyclingTips (Wade Wallace):
This is all to do the wheelchair wheels?

Andy Ording:
No, no. Nothing to do with wheelchair. Bicycle. [crosstalk 00:09:22] So the chair that Invacare wanted to build was actually the chair itself. They hadn’t even talked about wheels-

 

CyclingTips (Wade Wallace):
Got it.
Andy Ording:
Because wheels weren’t even in his imagination. It was after that meeting he walked around the bike show and realized, hey, these disc wheels, I think we could build a better disc wheel using an autoclave and a 19,20 millimeter profile. So he went back and prototyped this, two totally separate opportunities, and then decided, oh, we’ll prototype these and literally went to a bike… “Well, where’s the next bike show?” “Oh, it’s in Anaheim.” “Okay, great.” So he got a local guy that he’d been working with, Curtis, who’s still a top track racer. So Curtis and Leigh were over there with a table and about half a dozen wheels standing on the table. Then Leigh’s own words he would say to them, “Well, this is a disc wheel. If you can have it for this much money, would you buy one?” They were like, “Yeah, we’d probably buy one” because he took it and he had put it on the ground standing on its axle and he’d stand on it because he’d just show everybody the stiffness of a carbon structure.
Andy Ording:
The whole thing was only 19 millimeters wide, right. It’s a whole thing this totally flat disc, which didn’t exist. Completely foreign. Nobody in the industry had seen this, and he’d just stand on it and rock around on the axle. Then he’d make them stand on it. “Come on, get on it,” and they were just totally dumbfounded. It was a bit of Barnum Bailey. If you know Leigh, if you ever met Leigh, he’s a very serious guy. He’s not a showman. This is not normal, but it was just his way of saying this is so stiff that… you want stiffness, right? Yeah. Okay, well this is so stiff you can do this and people went oh my. Can you do that with any other disc wheel?” “Oh god, no. I wouldn’t touch it. I would never do that,” right.

Andy Ording:
So this is how it started and enough people said yes that he came back and started to figure out how to make disc wheels and that’s how Zipp began. I mean literally-

CyclingTips (Wade Wallace):
Wow.

Andy Ording:
And that would have been ’89.

CyclingTips (Wade Wallace):
’89. When did you guys cross paths that you started talking about you coming in?

Andy Ording:
That happened sort of that same year just by virtue of the shows. So what started to happen was he’s a brilliant fabricator, but didn’t have any idea on how the… Well, didn’t have any idea, that’s a bit harsh, but didn’t have much of an idea how to build a salesforce, how to do this, how do you sell these things, who do you find, et cetera.

Andy Ording:
Yeah, yeah. So the front of the building, right? So we started to talk and there was a mutual third party that said… and we weren’t really talking about working together. It was another person, a husband of one of the female athletes that we both happened to sponsor that said, “You know what? You two really should talk to each other because you do one thing and you do another thing and I think you should get… you guys should talk.” So we did. We did eventually say, well, okay, let’s do that. So I eventually moved there. In 1992, beginning of ’92 I moved to Indianapolis to basically take over the front end of the leading edge of the organization and Leigh was then going to work on more product development.

Andy Ording:
In the meantime, he had prototyped the bike. The first 2001 bike, he’d been prototyping that, the carbon version of that and with using a Softride beam. That very first year we had a carbon frame with Softride beam. We were the-

CyclingTips (Wade Wallace):
That’s how that intersects.

Andy Ording:
Yeah.

CyclingTips (Wade Wallace):
That makes sense now, okay.

Andy Ording:
So that was 1992. So that bike was out for one year only, 1992. I went to work with Leigh. Left Allsop, went to work with Leigh. In the meantime, the Allsops had made an interesting decision which you might recall is they developed their own RTM version of the Zipp bike with a very similar frame and with the integrated Softride, which they released at the shows in ’93. So we were sort of, I was stunned, right? I’m just like oh my word. You’ve got one OEM in the world manufacturing bikes for your product that you can’t really get people to do to make bikes for and you’ve knocked off the one OEM that you have. On top of that, they decided they wanted Greg Welch, right.

Andy Ording:
So we had Welchie because Australian connection and all the rest of it. So Welchie was in Sydney. Well, of course, Allsops went after they wanted to make the bike. Then when they got the bike done, they went and hired Greg. So-

CyclingTips (Wade Wallace):
Sorry for my ignorance. Greg is who?

Andy Ording:
Well Greg Welch is a top Australian triathlete. So top Australian-

CyclingTips (Wade Wallace):
Okay. Before my time.

Andy Ording:
Yeah. And he won Ironman. Oh, I couldn’t tell you the record, but Welch is a total character, right. So larger than life. Very funny bugger. Raced against Mark… Yeah, he was the Mark Allen, Dave Scott era. I think he came behind Mark if I remember right. He was after Mark, but was racing at that top level towards the end of the Scott/Allen era.CyclingTips (Wade Wallace):
So a huge endorsement for Zipp?

Andy Ording:
Yeah, it was. Yeah, it was. Well, of course, then Allsops decided, they hired him away. So we now had, after a year of selling that frame with that beam, we had realized that there some that not everybody wanted the degree of travel in the beam. They didn’t want that much movement. I don’t know how you personally felt about it, but, oh, excuse me, but there was also this lateral motion which was not anticipated initially in the product design, but it was an eventuality that as your pelvis and your legs are so strong as your pelvis rotates over the seat, you’re going to displace that. Even a normal bike moves sideways just because of the power of your legs and leverage and your pelvis rotating I think over the seat, right. So you rock the bike around, more pronounced with a beam. Bike stays stable but the beam is moving.

Andy Ording:
So we decided to build our own beam. So from ’93 through to ’97, we built our own design, limited travel, totally different idea. It was not Visco-Elastic. It had two little plungers that were inside of a hollow box structure. So yeah. So I went there in ’92 and we then started to figure out how to sell many more wheels and also how to sell frames. That’s how it [crosstalk 00:16:05]-

CyclingTips (Wade Wallace):
The triathlete market was what you were targeting or was road something that you guys had an ambition to get into? What was your market at the time?

Andy Ording:
So we definitely targeted triathletes because triathletes were so open. Most folks that came to triathlon were coming from running or from swimming or something. At that time anyway, there weren’t people that grew up saying I want to be a triathlete, very few. So they came from somewhere else. They were totally open minded. Almost none of them came from road biking. I mean I am a decent salesperson and I would go on the road with the Zipp range of product, the wheels and I would see four or five dealers every day for five days in a row and sell one or two wheels here and there because every bike shop, in those days, was really owned by an ex-roadie or a guy that was still a roadie.

CyclingTips (Wade Wallace):
Yeah. Yeah, yeah.

Andy Ording:
And/or the fledgling mountain bike thing, which was now maybe six, seven years old. So they were either mountain bike guys or road bike guys, but very few triathletes owned bike shops in those days. So it was extremely difficult to sell anything, but I would got to a triathlon, a race. Friday afternoon I’d end up at some triathlon somewhere and everybody there was fascinated. They all wanted to know about the technology. They all wanted to find out what does it do and aerodynamics and carbon and all of those things were words many of them didn’t even know what that was and why is it important and why do I need it and how will it benefit and all the rest of it. And we were speaking a different language, right.

Andy Ording:
So we weren’t just trying to sell wheels; we were trying to sell the concept of performance wheels and we had to convince the whole industry that this is really a thing. So I decided, hey, I’m not going to see another dealer because they don’t buy anything. They want the consumer to walk in. Let’s just go talk to the consumer. So there were many weekends where I’d be at one event and we’d have one or two people at other events. We worked two or three events every weekend. Developed a little post it card-

CyclingTips (Wade Wallace):
Wow.

Andy Ording:
Because folks couldn’t remember and they were, “Well, what do I ask for?” So we got a little card. I said, “Why don’t you bring us your bike? Let’s have a look at your bike.” Okay, so you want this, you want a 700c. You need a clincher. You need campy. You need 5-speed, 6-speed, 7-speed, whatever it is, blah, blah, blah. They could take this to your local bike shop. “Oh, he can just buy it?” Absolutely. We literally, the call would go like this. “Hi, this is Andy from Bob’s bikes, and I’ve a person here who’s got a card.” “Yes, that’s great. What does it say on the card?” And the dealer would say, “Ding a ding a, ding, ding,” and we go, “Uh-huh (affirmative), great. Yep, we’ve got those.” Hey, they’ve got those. Well-

CyclingTips (Wade Wallace):
Real scrappy, just hustling out there, right?

Andy Ording:
Totally yeah. Totally because we were nothing, right? We were nothing. And the-

CyclingTips (Wade Wallace):
Was it called Zipp at this point?

Andy Ording:
Zipp yeah.

CyclingTips (Wade Wallace):
Zipp was the-

Andy Ording:
Zipp, yeah. Zipp was the brand.

CyclingTips (Wade Wallace):
Where did the name come from?

Andy Ording:
Oh Zipp was I think it was Leigh’s wife or the two of them were talking about it. That predates me. Zipp, they wanted single syllable. They wanted something that sounded fast. They found Zipp. Another great story. So Leigh says oh, he loves Zipp. Zipp is great. They do a trademark search. We realize oh no, there’s somebody in the industry that’s using Zipp and it’s a… you know the recumbents? The sit down recumbent bikes?

CyclingTips (Wade Wallace):
Yeah.

Andy Ording:
A chappie up in Washington State I believe it was was making these really beautiful perspex, shaped perspex windshields called Zip Designs, I think it was. So Leigh called them up and said, “Hey, we love this name and we’d love to use it for wheels and we’ll add another P to it so that it looks different. Would you give us permission to use it,” and he was lovely. He said, “Oh yeah, just don’t make anything I’m making and that’ll be fine.” So that’s where the name came from-

CyclingTips (Wade Wallace):
Ah, so you never went into windshields?

Andy Ording:
No, thank god. We had more than enough trouble. Yeah.

CyclingTips (Wade Wallace):
Interesting.

Andy Ording:
Yeah, yeah. So yeah, that predated me. So what we did then once I got there, I started to really try and get the trademarks under control. Every time we tried to get something in Europe we realized, oh hell, that it’s owned in Europe. So Piaggio, the scooter company, so mopeds and scooters and bicycles are all in the same classification worldwide. So while we were using it in bicycle, they had a model called a Zip Express with one P, and they had registered it in all these European countries. I sat on a phone, I faxed them, I did everything to try and get somebody to respond. All I wanted to say was, “Hey, we’ll use it for wheels. We’ll never build a scooter. We’ll never compete with you. Would you say it’s okay?” Of course, they would never ever respond. Nothing.

Andy Ording:
So we added Speed Weaponry underneath. So it was Zipp Speed Weaponry, just in case somewhere down the road, after years of working to build the brand, somebody turns around and goes actually, legally, doesn’t matter how hard you tried you’re going to have to give it up or you can’t use it or you can’t-

CyclingTips (Wade Wallace):
So this gets you around that.

Andy Ording:
That’s right. So I would have negotiated. I would have said, “Okay, I’ll come out of Zipp. Give me two years and I’ll minimize Zipp and I’ll use Speed Weaponry and we’ll transition.” I would have tried to negotiate for that. Thank god, it never came down to it. Never had to do it. Never had the conversation, and after a while the statute of limitation runs out and they’ve had… at one point, I think, it was like 14 years or something that they had to do something about it and then they still had never done anything. You might have noticed now that once SRAM bought the organization, within a few years, they dropped Speed Weaponry. Or for now, it’s back to just Zipp on the wheel, which is ironic because that’s how it started, right. So that’s a funny little [crosstalk 00:22:18] years ago.

CyclingTips (Wade Wallace):
So it was just you and Leigh working at this time, early 90s, ’92. Had you bought into the business at this point or were you an employee or how did it work?

Andy Ording:
I went on the condition of buying in, and I bought a little bit when I first got there. Then over the next five years I bought a little bit more. So the next big stage, so Zipp has sort of got three lives. The first life is under Leigh’s leadership. I was a 20% owner of the organization when I bought him out. What prompted the buyout was in 1997, do you remember Spinergy?

CyclingTips (Wade Wallace):
Yeah, yeah. Had to Spinergies as well. Yeah.

Andy Ording:
So the story goes they had raised many millions of dollars from Dao Venture Capital and Dao had provided, I mean, millions to put into the manufacturing of the product and also then into the marketing. The lesson, what we really learned the hard way was we had tested their wheel. So this is now 1996. We are growing every year, and we grew from literally a disc wheel to three-spoke wheel. We had just developed the… this is now ’92, ’93, the first deep section wheel, 58 millimeters and we started to grow. So from then through to ’96, growing every year in as fast as we can make it, we’re able to sell it. Bikes-

CyclingTips (Wade Wallace):
In the triathlon market?

Andy Ording:
In mostly triathlon. Yeah, I’d say vast majority triathlon. Then in ’97, Spinergy comes along. They’ve now figured out how to manufacture their product. In ’97 they literally-
PART 1 OF 4 ENDS [00:24:04]

Andy Ording:
They’ve now figured out how to manufacture their product, and in’ 97 they literally flood the market. They’ve got marketing absolutely everywhere. Every publication has got ads. They sign up numerous pro teams, I can’t remember, but from memory it was five or six pro team. They went from nothing to four, or five, or six of these guys. They were everywhere. They were totally prevalent. They had so much supply, the manufacturing capacity that they built in, they could give the product to the dealers on consignment and essentially squeeze us out. And at this point, the wheels as a category was growing, but it wasn’t like it is today, an accepted part of high performance cycling. And so it devastated us. The first six months of 1997, we were 30% ahead of 1996, we were growing the same rate, or more so. And in July it suddenly turned off, and it stayed off the rest of the year. And it was mostly due to Spinergy.

Andy Ording:
And technically, we felt obviously, we were significantly superior. We’d tested their wheel, and we knew there was a handling issue with the wheels just because of the paired spoking design. The wheel had those four spokes that were paired, so there was one on each side, which by nature would appear to be a more svelte wheel. But in reality, it’s going to have a very abnormal handling characteristic because where the spokes join the rim, the rim was going to have much more stiffness, right. Your weakest point, especially in cornering, is going to be between the distance between the two spokes right in the middle. And of course you had this undulation in the wheel during cornering.

Andy Ording:
They tried to address it by putting … and you might remember this, but they put little blocks on the inside … They had two different things to do. They stiffened up the inside of the spoke with a insert that they molded in, and then they had a thing called spoke stiffness, which was literally a thing like this, and those two spokes, it went between those two spokes and stopped the spokes from being able to move independently, right. So joined them.

CyclingTips (Wade Wallace):
I remember that. Yeah.

Andy Ording:
So they did all these things to address this handling deficiency, but with so much product and so much marketing, anybody that was thinking about a wheel was literally buying a Spinergy, and it was literally Steve Hed of Hed Composites up in Minnesota, and us, we were the carbon wheel people. And so this really impacted both of us, talking to Steve many years later. We both really took it in the neck, nearly drove us out of business, it broke us, but fortuitously, and it’s a terrible reason, but it worked well for us,, is one of the pro team lads, the story goes, one of the guys fell, the wheel broke, he got in his leg and it lacerated his calf. And then UCI turned around and went, “They’re out.” And that was that.

Andy Ording:
And so the minute that story came out, it was like trying to drink from a fire hose, with what they had managed to do with the power of marketing, and the first time I really witnessed the power of marketing, all of the technical issues aside, we were saying, “But guys, the wheel’s got problems. Don’t do this.” Oh yeah, but everybody wants them. So the dealers were buying them, right. So dealers were getting them consignment, consumers were buying them. And when that happened, I can’t remember exactly when that was, I think it was ’97, ’98, and it absolutely devastated them, right. They couldn’t sell or give away a wheel after that without addressing this issue, but in the meantime though, we had lost a tremendous amount of money, for us. It was really, really scary times. But through that process, I still felt so strongly that we were on the right track, that the category could survive, and I asked Lee one day, if he would just let me buy his part of the organization. Would he allow me to do that? And he did.

Andy Ording:
And it took us a while. Of course, the minute money’s involved, it takes a while, but it took a while to get all of that stuff through, and we finally got that transaction finished. And so I bought him out towards the end of ’98. So this all happened in ’97. And then in ’98 we were just ticking over, trying to get this transaction done. In the meantime, Spinergy sort of coming off the market, we’re making enough product to keep going, but our ’98 financial year was less than a third of our ’96 financial year, and we’d been devastated.

CyclingTips (Wade Wallace):
Is that right?

Andy Ording:
Yeah.

CyclingTips (Wade Wallace):
And was Lee working in parallel with repairing carbon fiber from automotive?

Andy Ording:
Yeah.

CyclingTips (Wade Wallace):
Okay, so he still had a business that … You guys were in the same building too, weren’t you?

Andy Ording:
Same building. Yeah, we shared the building, and everything was copacetic for a while, until we decided to move out and buy the organization, and then it got a little bit testy, but at the end of the day it was great for his … Because he’s a brilliant fabricator, there’s no question about it, but his real skill, in my mind, is solving a technical problem once, and then he wants to move to the next challenge. “I want the next technical issue, and the next.”. And they can keep going up in complexity, and he is totally willing to address all of these things. And so he took his applied composites, his company, into all these other fields, like aeronautical repair, and not just automotive. It was aeronautics, and automation, and so really, really clever stuff.

Andy Ording:
I look at all of that and go I don’t know how to build that business. I’m not sure how that works. I want to make product, and I want to sell a lot of that product, and I want that scalability to be built in the company, and so I looked at it and said, “I don’t think we’ve maximized our position in the cycling industry.” And so I risked absolutely everything and took everything. I mean I sold everything to buy the company, and my wife and I just went back to basically nothing, lived in a tiny home with one car, and we started again with nothing.

CyclingTips (Wade Wallace):
How old would you have been at this point?

Andy Ording:
Well, that was ’98, I was born in ’59, so I was 39.

CyclingTips (Wade Wallace):
Yeah. Okay. So well into your career. This is not an ideal time to be taking such big risks.

Andy Ording:
No, two little girls. I had two little ones, and yeah. So yeah, but I just was so committed to it, and I just felt that this needed to be done properly, and there were so many things that I wanted to do that he decided not to do, or we couldn’t afford, or whatever, when I finally did buy the organization, I mean it was seven employees. There was just seven of us left. We were down to nothing.

CyclingTips (Wade Wallace):
Really? Okay. Still in the triathlon market?

Andy Ording:
Yep. Now in the meantime, we had built the 303s, which was the 38 millimeter road rim, right. So we knew that we had to grow out of triathlon. You can’t live solely in triathlon, so we knew, look, we have to penetrate this road racing market. We couldn’t get a European guy to talk to us, then the Spinergy thing happened, of course, now nobody’s talking to you because of the carbon wheel thing. So a couple of things happen. We worked with, you might recall the L.A. Sheriff Chevrolet team. They were a American team based in L.A. They were sponsored literally by the sheriff’s department and the local Chevrolet dealer group, and they were dominant. So from a road racing perspective, they won in Philadelphia, they won all these one day challenges all over the place, one day criteriums. And we worked with those guys. We said, “Listen, I’m building this rim, but you guys need to ride them all the time, because I need to learn. We need to see what happens to these things.”

Andy Ording:
And, of course, they started riding them in road races, and they just destroyed them. I mean the same structure that triathletes would be riding for two, three seasons, no trouble, we’d get stuff back from them going, “Nope. Did you hit this with a car? I mean what are you doing?” Oh gosh, so hard. So much harsher. Well you can’t see. You don’t see what you’re going to hit. You don’t even know that you hit it when you’re in race mode, the adrenaline is flowing, you’re in the group. You might hit something. It doesn’t necessarily flatten the tire. It transfers that load, does some damage, you look at the rim after race, going, “Oh geez, this thing’s bugged,”? Right. But you finished. And so, in the meantime, we’d been doing that. And so we were predominantly in triathlon, but we were selling what became the 303s, the 38 millimeter road racing rim. We had begun to do that to penetrate the other markets with.

CyclingTips (Wade Wallace):
Yeah. But this was a big learning experience for you at the same time.

Andy Ording:
Oh gosh, yeah. And then, of course, years later we started working with [CSC 00:09:25]. When we signed our CSC deal, we said, “You have to ride carbon wheels all the time,” because we knew, to get the legitimacy and for people to understand that these things are legitimate technology wise, we knew the boys had to ride them all the time. And in those days they absolutely didn’t do that. Not even triathletes. Triathletes had training wheels and race reels. And they had aluminium training wheels, and the roadies, they wouldn’t touch. “We train on aluminium.” We said, “Okay, you can train, training camps, or all the training mileage you can do on aluminium wheels, which we’ll provide, but every race has to be on carbon wheels. So it’s so hysterical. So anyway, the first team was not CSC. The first team we supplied was actually [Lotto 00:34:14]. And so Lotto, now this was-

CyclingTips (Wade Wallace):
That’s 1999.

Andy Ording:
’99. That’s exactly it. How do you know that? How do you know that?

CyclingTips (Wade Wallace):
Well, I’ve seen the bike. I’ve seen the bike and I saw the year on it in the [Zipp 00:34:27] Museum. So yes.

Andy Ording:
Okay, brilliant. Yeah.

CyclingTips (Wade Wallace):
Jacky Durand won on 404 wheels.

Andy Ording:
He did. It was so fantastic, right. So we were totally naive, but we think we know what we’re doing. And I get a call one day. Jeff Pierce, who used to ride for LA Sheriff. He’s a top pro. He rode for 7-Eleven, in fact. Or maybe it was Motorola. But anyway, for that team, for team, years before. He then finished out his career with LA Sheriff Chevrolet, so I knew him through that relationship. He calls one day, he says he’s with GT Bikes. Calls and says, “Hey, we’ve got this amazing opportunity. We’re taking over the Lotto team from [Vitus 00:35:09],” the French bike manufacturer. If you remember, they were bonded aluminium frames. Very clever, super light, but the bonds didn’t last, right. They got corroded and the frames would break.

Andy Ording:
So Jeff calls up and says, “Listen, we’re just going to buy aluminum wheels for these guys to ride. Would you be interested in just giving us the … Would you sponsor us with all the time trial wheels? Just disc wheels and a deep section on the front,” which will be a 404. And of course I’m like, “Absolutely.” We’ve been trying to get into Europe forever, and this is an opportunity. The phone literally just rang with this opportunity. We jumped on it. We get that started. That’s where Jacky, who’s on the squad, decides I really like these. I’d like to ride them all the time. So we get a question, on a fax or whatever it is, “Hey Jacky really likes these? Could you send more rear wheel 404s, because he’d like to ride them. And there’s some stages he’d like to do on them.” We went, “Of course.” So we do that, and that gets everybody talking. Right, now everybody’s watching, and he used to love to go on those flyers, right. He’d go for 200K.

CyclingTips (Wade Wallace):
Breakaway king.

Andy Ording:
Mad stuff, but he was doing it on 404s. And well, most of the folks were, “But we can’t see the name.” I went, “It doesn’t matter.” We need to sell the concept of carbon wheels in a Tour de France. We need everybody on them because then it becomes the way, the spec you need to have if you’re a proper roadie. So lucky.

CyclingTips (Wade Wallace):
This podcast is brought to you by Velo Club, Cycling Tips’ membership program that allows us to produce independent content that’s not driven by clicks, advertorials, page views and all the things that can make online content a race to the bottom. Because of our members, they enable us to create content with only our audience in mind, and it keeps it free for everybody. If you like this, and you want to see it continue, for less than a cup of coffee a week, we would love to see you become a member. You can find out more at cyclingtips.com/signup. Now back to the show.

CyclingTips (Wade Wallace):
So just backing up, maybe, I don’t know, a year, a few months, but from what I understand there was a patent on the toroidal shape that the 404s took on, and you guys, you couldn’t basically make the shape that you wanted to before that. How did that come about? And what was the patent dispute that you guys couldn’t do that? And how did you guys finally come to the 404?

Andy Ording:
Well done, that’s a great question. But there was a lot going on there, right. So Steve Hed, with another gentleman, had developed a patent on what they call a full toroidal shape. So if you can imagine, from the rim, the tire edge all the way around is toroidal, meaning the brake surface is also angled, it’s not flat. So we looked at that and said, “Well yeah, that might be good aerodynamically, but it’s not practical. I mean who’s going to sit their rim breaks up to do that?” Well, triathletes, hardly ever touch the brake. So that’ll probably work there, but roadies are never going to ride that. We have to have parallel breaking surface, and more so we have to have a parallel breaking surface that is the same, or very, very close to the wheels they’re going to train on because you can’t be adjusting brakes every single time you swap your wheels, right. It needs to be an in, out.

Andy Ording:
So we were committed to saying we need parallel. So if we’re going to have parallel breaking surface, we need to now maximize aerodynamics after that. And so that’s how we develop this shape with the Christmas tree light bulb thing, right, with a parallel breaking surface, and then the toroid that followed. We got a patent on that because that didn’t exist. Steve and his partner,

or associate, had got a patent on the full toroid. One day I’m trying to put together an OEM deal with Cannondale. They’re very interested. If you remember, this was years ago, they had a brand called CODA, which was the Cannondale official … So this was Cannondale before the motorcycle effort that they made. They were so dominant, right. They were powerful. Volvo was sponsoring. Remember the mountain bike team had and Volvo. And they had lovely sponsors, and really wicked product, and doing a really brilliant job. And they had developed out this CODA brand.

Andy Ording:
And so I wanted to sell wheels/rims to them, with that as a OEM private label. I’m talking with those chaps, and we were having this negotiation. The story goes Steve found out about the potential of this negotiation. All he did was call the guy that I was working with at Cannondale and say, “Hey, there’s a potential litigation here because that violates the patent,” which of course it never did. They were two completely standalone separate patents, but it was enough for Cannondale, being a corporate organization, to say, “Oh gosh, we don’t want to be in the middle of this. These literally two little minnows are going to now fight it out and catch us in the middle of all of this.” So I lost that whole deal, and I was so mad about it. I called my attorney, I called the patent attorney and said, “This is ridiculous. And I’ve never done that to anybody,” and blah, blah, blah, blah, blah.
Andy Ording:
And he said, “Listen, pal. You’re not Eli Lilly. You don’t sell a billion dollars worth of Prozac. You’re not going to spend 200 million to go after somebody, are you?” “No.” “Well, how much will you spend?” “Well, I won’t spend anything.” “Okay. Well okay. So you just want him to stop just to stop?” “Yes. That’s what I want.” “Okay, well that’s highly unlikely,” but Vic was fantastic. He said, “You know what? There’s another name on this patent. Why don’t you find this chap, and call him up, and buy him out?” I went, “Okay, well, I’ll try that.” I called inquiries. I said I need this gentleman’s name. They gave one, it was only one, they gave me the phone number. I called it and I said, “Is this Mister So-and-so, who owns half of the Hed Toroidal patent?” He said, “It is.” I said, “Would you be interested in selling it?” He said he would. And I flew up the next day, and we had a deal done in about a week.

CyclingTips (Wade Wallace):
And how did Steve Hed feel about this?

Andy Ording:
Oh, he was very sad, right. He had no idea, but there was obviously history there that I didn’t know about. I mean I didn’t know about it. I just took a flyer, and it happened to work. And then years later we did talk about it, Steve and Anne, they were fantastic people. Unfortunately Steve passed away, but I had so much respect for them. Lee didn’t like him very … Well, didn’t like him at all for some reason, but I had no issue with them. We competed. We saw each other at the races every weekend. Every weekend we saw each other, so this industry is so tiny. I don’t have a very good memory for bad stuff anyway. I don’t have a department for that. I just want to move on.

Andy Ording:
So yeah, he was very sad, and a bit shocked that his mate would do that, but it was what it was, and it just eliminated that whole thing. So there was never any issue with us selling our product because we had our own patent on our own design, but I think the media got ahold of the story, and it all got convoluted, but we had never built a toroidal wheel, and we had no intention of building a toroidal wheel at that time. Once we bought the patent, it’s like well, okay. Well let’s build it. Let’s see how that goes.

CyclingTips (Wade Wallace):
Okay. So the 404 had nothing to do with this shape and this patent. The 404 would have happened regardless. Okay.

Andy Ording:
The 404 was already not that shape. And we were already selling … And then we got a process patent. So there were a couple of … When you really look back on what builds an organization, there’s a couple of key … there’s just a handful of key events. One of the key things that we figured out, that the lads figured out was how to mold a welded aluminium hoop into a carbon structure. That was very difficult, took us a long time to figure out. We were making those rims initially post bonding that aluminium. And that doesn’t really work long term. It works, but it doesn’t work long term. And so welding the aluminium hoop, and then molding the carbon into it was a necessary development. And we did get it figured out. And then the post machining. So now we could deliver a carbon aerodynamic room with an aluminium breaking surface with wear indicators in it, just like all the aluminium rims, post machine to within a half a millimeter perfection. I mean it was just perfect to ride, your brakes were exactly the same, and it worked.

Andy Ording:
And we built the organization with that, and we got a process patent on it because it was hard to do. So we had a patent on that too, on the actual process, and so we could literally go to anybody, and especially the Asians, and say, “Well, if the body of your rim is wider than the break track on your rim, you violate the … The depth makes no difference. If you have a body that’s wider than the break track, you’re in violation. If you machine it post molding, you’re in violation.” So we had a number of blocks in the road for folks that they had to get over, some hurdles that were technically difficult, but then you had to out-market us, right. I mean Vic, our patent attorney, wonderful guy, he said to me, in that same conversation where he accused me of not wanting to spend any money accurately, and he said, “Andy, these patents don’t stop anything, right.”

Andy Ording:
Patents don’t stop anything. If you think about a cops and robber movie, and the bad guy, they always run down an alleyway, and there’s always a fence at the end of the alley, right. Every bad guy runs down the alley. Well as they run, they tip over those trash cans to slow down the cops so that they have time to get over the fence. He said, “If you think of your patents as those trash cans, you’re just knocking them down and slowing them so that you can clear the next technical hurdle. If you think of your patents like this, that’s a healthy way to proceed with patents. You’re never going to have a patent … In the industry that you’re in, you sell such slow volume. The reality is you’re never going to have a patent strong enough that you’re ready to say, “Oh, I am going to fight to protect this.”” And he was right. It was great advice.

CyclingTips (Wade Wallace):
So we’re up to the late ’90s. Jacky Durand had just done a 250 case solo breakaway on the 404s that put it on the map.,I imagine. Where are we at now? We’re coming up to Josh Poertner being quite a big influence in the company. How did you come to meet Josh in 2000?

Andy Ording:
Well also luck, but he actually interviewed for a job. So he was down in Nashville at university doing his engineering degree. Also a gearhead. Loves racing and racing technology. He came for an interview next door at a company called Riley, and Riley they were building like you’re racing, like sports cars, composite sports cars, and Bob Riley, the dad, was really brilliant man, and the reason for the great success of the organization.

Andy Ording:
Well, his son was the guy that interviewed Josh. They must’ve been looking for an engineer. He literally was there. He went for the interview. Didn’t like it. There was something said or whatever. He wasn’t very happy about it, but he got in his car and he drove … I mean he drove from this block to this block and saw the Zipp logo on the door, and literally pulled into the parking lot, walked in. Now he’d raced in Europe already, right. So he is a cycle. So he comes steeped in cycling law, comes in the front door, and he’s like, “Wait, is this Zipp as in bicycle wheel Zipp?” And-

Andy Ording:
… zip as in bicycle wheel zip, and Bill [Van 00:48:04] was in there and going, “Yeah, this is it.” “Wow, okay.” So they start chatting away and I’m at the back, I’m working with Todd. We’re up to our elbows in oil, we’re rebuilding something. I can’t remember, one of the presses had an issue and we’re working on it and Bill comes back and goes, “Andy, I know you’re busy, but there’s this young guy who walked in and I really think you should meet him.” I’m like, “Really, Bill? Really? I’m not even standing on the floor. I’m up on top of a press. Okay. I’ll come out.” So I clean up and I go and I sit down with them.

Andy Ording:
And of course we have a great conversation. But he’s a young chap, I mean, he hasn’t quite finished yet. This would have, I can’t remember the time of the year, but he hasn’t graduated yet but he’s well on his way. And I said, “Okay, what else have you done?” Oh, he started the SAE chapter. “Okay, well tell me about the SAE chapter. What did you do and what did you build?” And so we have this great conversation. I say, “I’ll tell you what. I like you. If you want a job here, I’ll hire you. So you call me.”

CyclingTips (Wade Wallace):
No position available, you just saw something there.

Andy Ording:
Yeah. Separate story, but I said to him, “I like you and if you really want a job here when you graduate, you call me and I’ll give you a job.” He said, “Okay.” And so that was that, right? And months go by and I’m thinking, “I don’t actually know if he’s going to call me or not. I might have to call him. And that’s terrible for negotiation, I can’t have that. I’m going to have to wait for him.”

CyclingTips (Wade Wallace):
But he obviously left an impression on you if you’re thinking about him months later.

Andy Ording:
Exactly. Well, he’s so articulate, right? You know him well. I mean he’s articulate, he speaks well, he’s interested, he wants to solve issues. We’re very similar in, I think, is that we really like big hairy difficult projects. I think we go about it completely different ways but we enjoy the challenge, right? It’s big and it’s gnarly.

Andy Ording:
And anyway, he called one day and said, “Remember, I was the guy that came for the meeting and you said you would offer me…” I went, “Absolutely. When can you get up here?” And so we picked a date and he packed up his VW and drove up and that was that, and he started there.

CyclingTips (Wade Wallace):
And what kind of job did you have him starting with? There’s no vacant role.

Andy Ording:
Well, engineering, in engineering. I forget exactly how many, we didn’t have many engineers at that time. But he was super young so like most young guys, they are wicked smart from a book perspective but not absolutely great from a practical perspective because they just haven’t had the opportunity, right? They just haven’t been able to build something. Universities don’t give them really that. Thank God he did this so he figured out how an engine works, how fuel injection works, how to weld metal. I mean he was better than most.

Andy Ording:
But it was great and so one of the first things I said to him was, “Listen, we need to post machine these rims. That clincher talking about, I want you to figure out how to do that.” “Okay, great.” So he starts working on this and he’s involved, typical Josh, he’s involved everywhere. He’s learning constantly. We build this machine or he builds this machine with Todd and a couple of the guys, and we get this the first post finishing machining center that’s going to do the breaking track.

Andy Ording:
And, oh, my goodness, and we’re all so excited and he runs it and it sort of kind of works but we have these machining marks in the breaking track and we’re struggling with it for days, weeks, whatever it is. We find we can do one side at a time quite well, but we can’t do both sides and too much chatter, as they call it. So one day one of our suppliers is in who’s an old machinist who’s been around machining forever and he looks and he went, “What the hell is that?” “Oh, we use that to post machine rims.” He went, “Oh, that’ll never work.” He hasn’t even seen the problem. “No, that’s never going to work.” “Well, why not?” “Well, there’s no mass.” “So what? Why do we need mass?” “Well, it’s harmonics. You need to absorb the vibration. That’s why all these machining centers have massive cast iron bases.”

Andy Ording:
Oh, well, none of us knew that, right? We’re not machinists, we didn’t even understand how they work. And so it’s just that and Josh, I can remember him being so crestfallen because he was so proud of this thing and this was his first project. And of course it didn’t go well but we learned a great deal in a very short time period. Engineers by nature are risk averse. I’m not, so I would tell them constantly, “Hey guys, you don’t need to get it right, because you’re not going to get it right in the CAD. You’re not going to get it right. Just get 80% and then we’ll just build it. Because we’re going to learn half of the last 20% like this, first product we make. So we’re now all of a sudden at 90 so now we just have to work on the last little piece.”

Andy Ording:
So it became a joke. Especially Mike who was super cautious, and I would say, “Okay, Mike. How far are you? How close are we?” “79.5.” And they got really good at using my own strategy against me but it was brilliant. Anyway, so Josh comes into the company. That was the first thing and of course, then we start to go on from one thing to the next and all the time, one of the things I learned through reading was that you cannot re-engineer and pioneer. You can’t fight a battle on five fronts, right? You have to be concentrated, you have to decide where you’re going to win.

Andy Ording:
And so for us, I had made this decision that, “Hey, the 404s is how we drive our organization. We need the fastest tubulars and the best performing fastest clinchers that we can get in this 58 millimeter deep section. And we need to reinvent those or rethink those every two to three seasons because everything else can filter off of that, the 303s, the 808s, the 6, they can all benefit from that over time. But you have to have a leading edge. You have to have something you’re driving with constantly and the 404s was that for us, so strategically that’s how we drove into the market.

Andy Ording:
And so that’s how all of these incredible innovations came from the boys just being really focused around how to make that co-molded rim, how to post machine it. It’s now been discontinued because all clinchers are carbon clinchers, but for maybe 10, 12 years, we were the only carbon wheel company that had wear indicators on their aluminum brake track. I mean, nobody did that, nobody did that.

CyclingTips (Wade Wallace):
So business was going well at this point? Sounds like you had, what, about a dozen people around the year 2000 or so?

Andy Ording:
Oh, no, no. We were growing rapidly. I mean, we grew from ’98 for 10 years or close to 10 years. Nine years we grew at 30% to 35% every single year.

CyclingTips (Wade Wallace):
Wow, fantastic. And the 404 was the driving force that everything sort of filtered down from.

Andy Ording:
That’s right. We drove off of that and that’s where the dimpling came from, it’s where the process came from, it’s where all of these different things. I mean, I think we might’ve told you that. Josh had this idea to turn it into like a golf ball. It’s like, “All right, we’re going to dimple these things.” Like, “How the heck are you going to do that? It’s hard to mold carbon.” And so I said to him, sort of half joking but not really, “If you can do it for a thousand bucks, let’s do it.”

Andy Ording:
And he said, “Okay,” and he went off and figured it out and the prototype, we actually figured out how to do it for less than a thousand bucks. And I was just, “Wow, that’s awesome.”

CyclingTips (Wade Wallace):
It’s been told to me before that you’re an amazing leader and you really know how to get people to want to do things for you by giving them this brave curiosity, as you’ve put it before. Talk about your philosophies about leadership and how you get the best out of people.

Andy Ording:
Well, thank you, but I always had a lot of fun, right? So for me, business, getting up in the morning to go into my company or to work was never hard. It was always exciting. Even in the very dark days and we had a number of times when it was bad, when we almost lost the organization, but in there, there were opportunities. And so we also used a thing called predictive index which is a personality, not profiling system, but a indicator of what the strengths of certain people are. So engineers have a certain couple of profiles and sales people have this kind of a profile.

Andy Ording:
I looked at that and my feeling was always, we are never going to settle so I would set these really ambitious goals for the organization, not just in sales achievement, which of course is the easy one to measure and everybody can gravitate towards that. But companies are not based on financial success, right? Companies aren’t balance sheets and PnLs. Companies are groups of people and people work for other people and with other people because we sell our product to people and people go ride the damn thing.

Andy Ording:
And we’re enthusiasts, it’s an enthusiast-based industry. So you could have the best technology in the world and not know how to deal with people or lead people to build more technology and the reality then is you’ve just got cool technology that nobody knows or cares. And I think what we were really lucky with, my wife was very involved in the organization. She’s fantastic with people and she worked on the HR side and things like that and so that was our sort of thing. I mean, we love people, we want to be around them, we like having them but we also want to succeed, right?

Andy Ording:
And anything you get for free you don’t attach any value to. Things you work for, things you had to work hard to get, I think you attach a significant amount of value to. And we were so lucky in that we used this PI system from the get go, try and find the right folks who are really well-suited personality-wise to the functions that they would need to perform in the organization. Be very clear what that needs to do, and then say, “Listen, I want you to do this to the best of your ability. And if that is good enough you’re going to be here for a long time.”

Andy Ording:

And we had incredibly low employee turnover. Obviously there’s folks you have to let go and there are folks that choose to go by themselves, but when you really looked at the numbers, our turnover was so low because people loved to be there. Not because we had cool technology, they didn’t care about that. I mean, people that worked in our factory were amazing folks with beautiful families and they wanted to bring their kids over.

Andy Ording:
I’d say every month we would, until the company got too big I couldn’t cook enough hamburgers for everybody quick enough, but we had everybody over. Every month we’d have a lunch and the guys would come back and I’d have them talk to everybody. We’d take two hours out of the day and try and talk about what we’ve done, why we’re doing it, what it looks like, how the races have gone, et cetera, et cetera.
Andy Ording:
And people just want to be part of a team and it’s up to the leader to create that team, right? It’s absolutely the leader’s responsibility, male or female, doesn’t matter. But if people are empowered to try, talk about product engineering and things like that, the best engineers out there are risk averse. Innovation comes from risk, right? So you have to eliminate that risk in order for the lads to have a go. “Let’s do it, let’s try it.”

Andy Ording:
And we had the same thing in manufacturing so just because we’re doing it this way there’s no sacred cows. Every idea is a good idea. Let’s look at them. We might do it, we might not do it. And I don’t know, I think you just develop your operating method, your personal operating method and it just takes time. I think the day that SRAM came in and bought the organization, I think I was still developing. I think I’m now developing differently, but I’ve never really stopped. I’m still learning.

Andy Ording:
Josh, for example, come in, he’s teaching me stuff every time we get together because organizations change. 10 years later it’s totally different. Now I’m working with companies and industries I knew very little about, but it creates this amazing working opportunity or learning opportunity that you can immerse yourself. I’m totally stimulated by things I don’t know.

CyclingTips (Wade Wallace):
So, we’re kind of at 2003 now, and one of the big things that happened then was you guys signed CSC as a sponsor.

Andy Ording:
True, that’s true.

CyclingTips (Wade Wallace):
And it was a high profile team, they were competitive in the Tour de France. There was Fabian Cancellara in the classics. Tell me about signing CSC and what you had to do, the hurdles you had to jump through, to first get there and then what you had to do to actually satisfy that commitment.

Andy Ording:
Well, like everything, we went in thinking we knew what was going on and we didn’t have a clue, so that’s life. But we were insistent so that was one, we were absolutely insistent. “Listen, guys, you’ve got to race on these things all of the time.” We had our own range of hubs. Josh had worked tremendously hard to get the hub thing figured out because they are a challenge. And the primary reason we were really able to sign that team is Bjarne Riis who was running the team, it was his team, Bjarne is very tech oriented.

Andy Ording:
So he loves technology, he wants to know about it, and so part of our relationship with that team was, “Hey, we’re going to go with Cervelo and us, we’ll go to the wind tunnel with you and you bring people and we’ll teach you as much as we can teach you. We’ll do everything we can.” Between Cervelo and we took them in the tunnel numerous times. We had Carlos Sastre who was a terrible time trialist but a wonderful guy, and got him in there and he improved. His time trialing got better and better and better.

Andy Ording:
And the year he won the Tour de France, he rode the time trial of his life. So it all starts like that. So traveling backwards and forwards and we get this deal done, but we wouldn’t have got the deal done if Bjarne was a standard team owner and with doing things the normal way, we would never been able to put that deal together because we really were a technology partner. And we worked really hard to say, “Listen, we’ll share everything with you because it’s in our best interest for you to succeed. And we understand that some of that information will go outside of the circle and that’s okay.”

Andy Ording:
And so that’s really how it was approached. And so in there, I can’t remember the details, but in there there was commitments to go to the wind tunnel, to work with the guys along with Cervelo. Of course, they were at that point also very well respected from a technology perspective. And so I think Bjarne was totally enamored with like, “Hey man, we’re going to have really, really excellent bikes and really good wheels, but more so we’re going to have two companies that are the leaders in their respective fields, or close to being leaders in their respective fields, really, really animated, really involved in our success. Really vested.”

Andy Ording:
So of course we get all of that stuff done. We send over more product, unbelievable how much product went over there. I was just shocked at how much product we sent. So then we get it all sorted, we get all the stuff done, and I don’t know if Josh has told you the story, we might’ve shared it, but I said, “You know, it’s pretty quiet over there.” Josh says, “I think we should go and check.” I said, “Well, listen, you just go.”

Andy Ording:
So he goes to, I think it was Paris-Nice or it as one of the early classics, right? It was either Paris-Nice or Dauphine or something [crosstalk 01:05:05]

CyclingTips (Wade Wallace):
Was it Paris-Roubaix?

Andy Ording:
No, no. It was very early-

CyclingTips (Wade Wallace):
It wasn’t Paris-Roubaix.

Andy Ording:
It was very early so we did Roubaix later but [crosstalk 01:05:12] no, this was very early. We’re new in the team. They would have got their wheels in December, January so this is early spring.

So he goes over there, he meets up with the team. He was just traveling alone because we’re a small team so, “You go, you figure it out, tell me what you need.” Right, so great. He goes over there, he finds the hotel. He goes to talk to the mechanics and the mechanics say, “Oh, well, you know, all those wheels up there in the front of the truck, they’re rubbish. We can’t use any of those.”

Andy Ording:
And Josh says, “Well, there’s a pile. There’s a pile of wheels up there.” He goes and takes the hub apart and he said it looks like somebody’s literally put coffee grounds inside the hub. He takes it apart and the stuff just falls out. The bearings are disintegrated. The braces because they’re steel have started to rust and it just comes out in this terrible goopy mess and he’s just absolutely horrified.

CyclingTips (Wade Wallace):
Oh, no.

Andy Ording:
It’s like how do you even do this, so we thought we knew about road racing because of the LA Sheriffs experience but they don’t ride in the conditions that these guys ride in. They ride every day and they ride hard, you know? And then, at least in those days, mechanics would just take diesel or some sort of degreaser and spray the hell out of it. Then take a water power washer and blast it and just push all of that water and all that degreaser into the bearings and through the seals, and such a nightmare.

Andy Ording:
Anyhow, he comes back and a gentleman at [Trek 01:06:48] had said to us, great advice, he said, “Listen, you get into the Pro Tour…” He said that any failure in the Tour de France, any failure of any kind on the Tour de France is the manufacturer’s fault. He said, “It doesn’t matter, so just remember that anything that goes wrong in the Pro Peloton, it’s your fault. It’s always going to be your fault.”

 

Andy Ording:
And we went, “Oh, my goodness. That’s pretty scary but wonderful advice.” So we take Nick, our wheel welder’s been with me, another one that’s been there for many, many, many years, and I sent Nick over to CSC after those spring classics. They get all the trucks back to the service course and go through absolutely everything so when they go to the Tour it’s about as perfect as it can be. You’re basically starting again with brand new everything.
Andy Ording:
So Nick goes over there and, of course, starts to tear apart these things and they are terrible, and in terrible condition and badly maintained. So it starts a series of education. We thought we were going to share information on aerodynamics, carbon structures, all of that which of course we did in time, but the first year I think we were absolutely floored at how hard they were on equipment and how much work had to be done and how much we had to pour into that.

Andy Ording:
Nick went over there and he called me, and, “You just won’t believe it.” So we’d made a huge list of spares, shipped all of that over. He went over and got there and went, “I will run out. I won’t have enough bearings. I won’t have enough this, I won’t have enough…” So we made another date for him to go so we got ready for that first tour, but he was back there later in the year with twice as much product. So by the time we were done with that first year, I think our product allocation for the team was easily triple what we thought we were going to do.

CyclingTips (Wade Wallace):
Wow. Was there strains with the team? Were they unhappy with the product or were you were servicing it such that they [crosstalk 01:09:00]

Andy Ording:
I think they loved riding the thing, right? So they knew it was quick. They knew they had a great bike and they knew they had good product and it was in our best interest to make them always stay like that. They definitely found it a little bit frustrating, but we invested then in the mechanics, I mean, heavily invested in the mechanics, like how do we help these guys? And Nick, not only has he built millions of wheels, but he’s a very calm personality so he will work with these chaps and train them and help them and guide them as much as they need, and built wonderful relationships. So they would call, they could talk to each other when he wasn’t there. And that doesn’t really exist. In some teams that’s not even allowed but they were, again, down to Bjarne.

Andy Ording:
They made some errors, the team made some errors and they did some stuff that was probably not great from a winning perspective, but from a attitude perspective they were great. They got mildly frustrated with us and we had to make it right but, I think, to answer your question, the reason it was acceptable is because they also knew they were pioneering, they were pioneering. And we said to them, “Listen, until such time as we can get wheels into Paris-Roubaix, we will keep working until we get there.”

Andy Ording:
And so that was a formative year for us. I mean, we learned. It cost a fortune but a wonderful experience because we just kept learning and kept learning and kept learning and kept learning and eliminated those issues.

CyclingTips (Wade Wallace):So this is early spring when you see these issues and then Paris-Roubaix comes and you’ve got a star like Fabian Cancellara. Did he win that year or was it [crosstalk 01:10:47]

Andy Ording:
He might have, I don’t know, but they had carved out Paris-Roubaix. So they said, “Paris-Roubaix, we’re not doing Paris-Roubaix on carbon wheels,” and they carved that out in our agreement. And we agreed because we just didn’t know really what that looked like. So I think the first couple of years-

CyclingTips (Wade Wallace):
It became-

Andy Ording:
… Paris-Roubaix was not in the program for us. And that was fine. We were fine with it because they ride these old school aluminum rims. You can’t even tell what they are. It’s not like they’re going to ride a competitor’s wheel. It’s not like they were riding Mavics and everybody goes, “Oh, they riding Mavics.” It’s just some aluminum rim with a big wide tire. It was nondescript so it was not a threat for us really, so we were lucky.

CyclingTips (Wade Wallace):
Did it put strain on the company at all with regards to resource and focus or a cash strain on the company, or were you guys quite profitable at that time to be able to deal with that?

Andy Ording:
We were growing and profitable and I realized that if we were going to do this kind of stuff at this kind of level, we’re going to have to sell a hell of a lot more. And so we really, really were driving the sales and we were lucky, right? The category inside our industry was welcoming and supportive-
PART 3 OF 4 ENDS [01:12:04]

Andy Ording:
Category inside our industry was welcoming and supportive and we were able to build distribution networks and do well with it. I think we were just, timing wise, that was incredibly fortuitous. I mean, that was incredible. You could count the carbon wheel manufacturers on two hands. You go to a trade show, there’s six, eight, nine people there. That was it. It put a tremendous amount of load on us, which we didn’t anticipate, personnel wise, timing wise, and so there was a massive financial component to that, but really the thing that we didn’t anticipate well at all, was time, right? How much time do I have to put into this? And how much time does Josh have to put into it and how much time did Nick have to put into it, and how much of this stuff?

Andy Ording:
That part of it, we totally underestimated. Having never done it, we did a shockingly bad job of it, but realized it quick and said, “Hey, we’re going to succeed at this, so what do we need to do in order to make that happen.” And lucky we had one team. They were our focus, complete focus. They were our people for road racing and we said, “We will do everything to make you win, help you win.”

CyclingTips (Wade Wallace):
Could you see a link between sales and sponsoring that team and what you did there?

Andy Ording:
Yes, yes.

CyclingTips (Wade Wallace):
You could? Yeah, wow.

Andy Ording:
You can definitely … It’s so early. And I think companies, you do lose that visibility in time, but the first year, that first year you’re in, things change, because now suddenly people are, the phone’s ringing, wait, I think those are so Zipp wheels. “Do you have Zipp wheels? Yeah, they do. Oh my word.” Well, suddenly you’re legitimacy just changes, right? It just changes. Automatically the power of legitimacy just is there. And suddenly they don’t know that you’ve got coffee grounds in your hubs, right. People that see you in Cycle News or VeloNews, they don’t know what your hubs look like.

Andy Ording:
So you’re very lucky and you have to be able to divorce all of that and say, “Okay, this is really working. This is doing, we need the power of legitimacy in our category and we need to be there. And that’s why we insisted that they have to ride these in every race. We need these things in every stage of every race and we’ll stand behind them, but we need to do it.”

Andy Ording:
And so our learning, the grade for the education, went like that, up into the right. We just went, “Oh, my word.” Because so much information, so many things were happening. And so much information flow that we couldn’t absorb it, or we were trying our best to absorb it. And we did, I think, a decent job having never done it before, of learning quickly, adapting, understanding, and then longterm, of course, playing those out. Like hubs, for example. So Josh would come back from those things and just go, “Right, what do we need to do with these hubs? What do we do here? What do we do now?”

Andy Ording:
We had a number of cyclists in the company. And so we could really talk. They could really talk intelligently about what they’re seeing and what’s going on. Because by this point, we have a group of excellent athletes that are working there, that have a lot of… I mean, Todd, for example, Todd was a top level cyclist and a super mechanical guy. So he’s a brilliant mechanic, but he’s also really totally brilliant rider. And so we had..

CyclingTips (Wade Wallace):
A good teammate.

Andy Ording:
Oh gosh, yeah. That poor guy, I held him up something horrible, for three races in a row. But he’s just such a nice chap he just goes and we were just riding whatever pace I was riding, wouldn’t say a word. He’s never said an angry word. He’s never tried to rush me. Never anything. He’s an amazing guy.

CyclingTips (Wade Wallace):
So the company is running well, you’re sponsoring world tour teams. You did Phonak after CSC.

Andy Ording:
Yes we did.

CyclingTips (Wade Wallace):
And you got into doing the handlebars and cranks and stems. What brought that on? What made you start to grow that? And I never actually thought to ask what made you ditch the frames?

Andy Ording:
Oh well, that was, great question. So the last year for frames was ’97. So, all of the frames, the issue we ran with is a distribution issue, right? So dealers that stock frames, or stock bikes, they get territorial protection with that. So they would look at this and then say, “Okay, I’m going to stock your bike. Which means you can’t go and hire this guy, or this guy, I’m going to be the bike guy.” And they just automatically assumed that that applied to wheels. And we’re like, “No. Wheels are non-exclusive. We will sell wheels to any dealer, because if a lady goes off and does a triathlon, and her favorite dealer is down the road from you, we’re not going to make her change her dealer. She can get her wheels from her favorite dealer, the guy she trusts.”

Andy Ording:
And so it became a bit of an issue, right? Because we would have to give some territorial protection on frames, but we didn’t on wheels and it just got quite complicated. Even though we sold, those frames were very difficult to manufacture. 24 to 28 hours of labor in every bike, made in America. The biggest year we had was ’96. I think we sold 350 in 1996, big year, massively hard, operationally, very difficult to do that, because of the intricacy of that. And we decided, listen, the conflict thing, the territorial thing, we need to concentrate on being a component company and not try and be a branded bike company. Because at some point it’s going to be a problem. At some point, this is not going to work out. It’s a little bit like, Campagnolo finally building wheels that were Shimano compatible, but they put the Campagnolo name on it.

Andy Ording:
But it work, right. It doesn’t work. People can’t put those two things together, and that would have happened to us. “Well, wait, you’ve got a Zipp bike with Zipp wheels, that makes sense, but this bike with Zipp wheels, that doesn’t make sense.” And so we wanted to avoid that. And so that’s how we made, “Hey, it’s components only, and this is what we’re going to do.” And that decision was one of the better ones we made.

Andy Ording:
And so that was, ’96 was our biggest year, ’97, we built 100 frames. I put the price up a thousand dollars. We had a limited edition, 100 bikes. And we put a, aluminum ownership plate that we glued onto the inside of the seat stay, if you wanted it, with your number on it, 005 of 100. And we sold every one of them. We never struggled to sell a bike, not once, in five years.

CyclingTips (Wade Wallace):
Wow.

Andy Ording:
Because we weren’t making that much. 150 bikes, if you can’t sell 150 bikes to triathletes who are absolutely hungry for technology, then you shouldn’t be in the game, honestly.

CyclingTips (Wade Wallace):
So, Zipp seems to have been an aftermarket brand, in the mid 2000s, and that. Was there a big OEM component? Was that a focus for you, or was it aftermarket?

Andy Ording:
Aftermarket always. So that was by far the vast majority, I wanted distributors that were aftermarket guys. I didn’t really like distributors that had bike lines, because that can sometimes, this territorial thing, you can have issues like that. So, no, we really wanted to focus on that and so we did.

CyclingTips (Wade Wallace):
But you did get into

Andy Ording:
Sorry, just to clarify, we did, of course get OEM business, but the OEMs wanted it and Nate, who still actually works here, Nate did a wonderful job and was eventually handling all the OEM sales. And I would say to Nate “Listen, I don’t mind if you sell them 10 wheels, all we want is that bike that has that wheels in their ad, or on their trade show booth, or at the expo.” And he did a wonderful job. So I said, “I’m not trying to sell hundreds and hundreds and hundreds of these things to these OEMs, but they are wonderful marketing partners and we need to develop a strategy, so build relationships and let’s help them out.” And we did. And it worked very, very well.

Andy Ording:
At that point, I know the Asian manufacturers were not, they were making some rims, but they didn’t have the performance capability. There were a couple of companies doing it, but not at the level that certainly OEMs would trust it. So specialized is not going to go get Revol at this time. They’re much off just buying 50 pairs of wheels from us, a hundred pairs of wheels from us, putting it on that bike, selling that bike for $2,500 higher than retail and maximizing their margin and selling them just like this.

Andy Ording:
And that’s the kind of business we wanted. So they did a wonderful job. Nate did a brilliant job of really establishing these relationships with lots of different companies and selling in the beginning, very little stuff. It was Nate that said to us, “You know what, I want to go to this little show, this handmade bike show. I want to go there because everybody that’s there, and I think maybe there was 20 people there in those days, they’re old…

CyclingTips (Wade Wallace):
This is NAHBS, right?

Andy Ording:
And so they build custom bikes, they’re building it for folks that have the money. And I’d like to get some budget to go to these things, so that we can deal with them. And in the first year or two, we might sell them two pairs of wheels, three pairs of wheels.” And I was very much in favor. It’s like, “Oh yes, absolutely.” And that was really Nate’s doing, and he did a wonderful job. And pretty soon we were the dominant wheel, when you go to NAHBS, we were the wheel. And we would do custom decals and we would put your name on the wheel. And we would do whatever we could to make every OEM feel like they had a relationship with us where we were invested in their success.

Andy Ording:
And if they bought six pairs of wheels, well, they bought six pairs of wheels, but we just want you to use it for the marketing. We were never driving thousands and thousands of units. And so as a result of it, because we felt we could control aftermarket far more successfully than we could the OEM business. And we felt that the OEM business was really a marketing angle. And we charged, the OEMs had to pay a lot of money for the wheels. So for smaller OEMs it worked great. They would get them, they would put them on, they’d sell that bike. We would work, they could take one pair at a time, they could take two pairs at a time. We made it quite easy for them. I think.

CyclingTips (Wade Wallace):
So the handlebar stems, seat posts, cranks, that wasn’t a OEM play. What was the business case behind that?

Andy Ording:
Well, at first it’s growth, right? We were looking for growth and, I’d said to Josh’s team, “All right, listen.” They’d come up with some ideas on what to do and where to go and I said to them, “Listen, find something significant we can hang our hat on, back to the 404, we need something we can hang our hat on. And then we can drive it out.” Because the argument now is, listen, we have distribution set up, we’ve spent years, 20 years building this distribution system. We have wonderful marketing partners now around the world. And we are in an enviable brand position. And it’s difficult to displace us. Because you don’t only have to outsell our salespeople, but your product has to outperform in the real world.

Andy Ording:
So you couldn’t just come in and take some business away from us, because if you did, it was generally short term. We were building a product that had the power of legitimacy that we stood behind a hundred percent. We never allowed any discounting. We fired customers who discounted the product, the map policy, that came into being while we were running this and that helped tremendously. So we were very, very disciplined because I was totally serious about your success. And if we can’t maintain pricing integrity, then you can’t succeed, you can’t make full margin. So the handlebars and that family of product, cranks and handlebars, were basically an extension of our product range, so that we could drop it into an existing distribution system. So we now have distributors that are motivated, that are turned on, that understand the product and the philosophy of the company. And now I’m going to offer them some more to sell.

Andy Ording:
And with all of that, through all of that, Josh designed the, I think it was Josh, or the boys came up with a brilliant in bar cable system where you could put the shifters on the front of the aero bars, but the cable ran inside and they had a collet system on the back to adjust the bars. That was not previously possible because the collet systems exist in CNC machines, but they don’t exist in cycling. And so it was an adaptation that we made. The lads figured out how to make that collet, design that collet and make it. And that allowed us to run the super clean shifting cables right through the aero bar and out the back, just straight out the back onto the bike and away and it just looked beautiful. And on the monocoque bikes, they just came out and went straight into the frame. So super elegant. Now we’ve got something we can hang our hat on. Now we can build out a range. We got something we can drive.

Andy Ording:
And so that’s how that happen. And that was painful. Some of the drop bars, of course we were making in Taiwan, because you really couldn’t do them in the United States effectively, price-wise. And that was, talk about a whole new lesson. You think you know how to make stuff, and then you start doing it somewhere else and you realize, “Oh, my word, why are they doing that?” It’s just incredibly hard when you’ve never really had so much dependence on a component, a finished component and coming from somebody else.

Andy Ording:
So suddenly we had to develop the systems to do that, which we had never done. Other than tires and bits and pieces like that. We sold a tremendous amount of tires but, all of those things, the reality is that was very simple, right? It’s something they already know how to make, we bring it in. We mark it, distribute it, sell it, et cetera, but getting something sourced to our specifications and making it, oh, it was a very difficult process. But we got through it. It was just another nice hairy learning opportunity.

CyclingTips (Wade Wallace):
Yeah. Yes. So 2007, you sold the company to SRAM. How did that come about? And what’s the story behind that?

Andy Ording:
Well, at some point, we were going to, in my mind, I’d always thought that we would probably, if we didn’t go to strategic acquire that we would go to probably some financial organization and

then grow it to the next level. Probably make a few acquisitions or something. Had some ideas.

CyclingTips (Wade Wallace):
So this was a growth move, you wanted to grow.

Andy Ording:
Yeah, we were looking at this saying, okay, we’ve either got to go with, and I’d known, of course, Stan and IFK, I knew them when they developed Gripshift. We were going to the same triathlons and they were selling Gripshifts for people to put on their bikes and I was flogging wheels and we’d see each other all the time.
CyclingTips (Wade Wallace):
You knew them, wow.

Andy Ording:
And no, but the decision came, I had to personally make a decision, we’re either going to take this thing and put some more horsepower behind it, and jump up to another level and potentially make some acquisitions to augment this. Because, as I said before, the same reason you do cranks and bars to expand your footprint, you would now try and do the same thing with another thing that you pulled in. Because there’s only a certain amount of wheels you’re going to sell. And we knew by now that the Asians were obviously making wheels and supplying to a lot of different people. So a lot of those OEM opportunities that specialized with folks like that, they’re going to go away.

Andy Ording:
And of course, because it must, it’s just a natural progression. And so it started off by saying, okay, let’s try and position the organization with my board. Let’s try and position this organization to make that step. And so we, in order for that to really work well, and to have the maximum amount of leverage, we had to time it such that the company was continually regrowing, had an excellent position in the market. And so when you really looked at it and said, “Okay, where are we at today ’07, for example, versus where would we be at in ’09?”

Andy Ording:
I looked and said, “Well, we’ll be bigger, but we’ll be selling more of the same stuff, but fundamentally we won’t have changed. We might be in a different facility, a bigger facility, but we’ll be doing the same thing.” And I think it’s crazy to imagine that your company is just going to grow because you want it to, right. That’s not a strategy. So it had to be either we go to the market now and find a partner that can take this and multiply it out, like a strategic person, like SRAM or Shimano or something like this. Or we find a very significant money supply investor and then we work with that angle. So we went after all of it, and we had options at the very end.

Andy Ording:
So we’re very fortunate, right. So the company had been growing and we were very profitable and we were still opening markets and releasing product. And of course, in the negotiations, because I do love a good negotiation. But in the negotiations, they were like, “Well, yeah, but just because you’ve grown 30, 35% a year for 10 years, you’re not going to do it again.” It’s like, “Okay, well, just come and see me in two years. You’re just going to pay more.” But yeah, we were so lucky, Wade, because so many things had gone our way. I had gone to from zero, to building, then back to zero. Actually the second time through was even lower than zero and then rebuilt it again.

Andy Ording:
And so I was very fortunate that the industry grew, that category in the industry was growing and continued to grow. We picked the right marketing opportunities in there. We, obviously made plenty of errors, but we fortunately did more right than we did wrong. And were rewarded with an organization that continued to grow and produce a profit. And so you can get a lot of people looking when you have a decent financial.

CyclingTips (Wade Wallace):
And so after SRAM acquired Zipp, how was it for you? You’d never really had a boss to report to and now I imagine you do. What was that like?

Andy Ording:
Oh, those guys were awesome. The senior management at SRAM at that point were a very good group of guys. And so they were very accommodating. Part of my deal was a two year, I had to work for two years to help the transition, which I did. And they did want me to stay on. They had a very specific thing they wanted me to drive for the organization. And I said to them “Listen, I can be very hard headed and I drive really hard and sometimes that does alienate people. And you have a jolly nice company here that I might alienate some people here. This might not go great. And so rather than do that and upset a bunch of folks, it’s probably time for me to move on. And I can run the company for me, I don’t need to run it for you and so, you carry on.”

CyclingTips (Wade Wallace):
Were you getting tired at this point? Was it like, “Wow, this has been a 15 year slog.” Or were you just as ambitious as ever.

Andy Ording:
No I was totally going after it still. I loved it. And in fact, a person in the industry who is still in the industry said to me, “You talked to me at a meeting at Interbike prior to the sale.” And he said, “You’re never going to get out. You’re way too passionate to get out.” We were negotiating. And I wouldn’t give an inch. He’s like, “What do you care? For Pete’s sake.” I was “No, this is not right, we’re not doing it like this. This is incorrect.” He just couldn’t believe it.

Andy Ording:
But no, I wasn’t tired. I was definitely still motivated, because we were having success. And nothing breeds success like success. And we were lucky to have the right team. We’d lost almost no key people in the organization for years. And, so a part of me was like, “Okay, if we get this financial injection, I have a plan for that. And if SRAM really comes through, and they want to do it, well, then that’s going to be a slightly different plan. And then my personal business plan would look different.” And so I was not a hundred percent committed to it and at the very end, there were three final bidders and the other two were financial organizations. So we were very fortunate. I am so fortunate to have been in that position.

CyclingTips (Wade Wallace):
Outro: That’s Andy Ording, the man at the helm of Zipp during its most formative years, Andy is now keeping busy by mentoring and investing in businesses he believes in and paying forward his years of experience. He’s certainly not out of the game. And as you’ve heard, he has as much energy as ever. Thanks for listening to the show. I’m Wade Wallace. And this is From the Top.
PART 4 OF 4 ENDS [01:34:35]

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