Greg LeMond. If you don’t remember him, you’re not the only one. After challenging the legitimacy of Lance Armstrong’s seven consecutive Tour de France victories, LeMond was ostracized by the cycling community and largely forgotten.
But that began to change in 2012, when the U.S. anti-doping agency revealed Armstrong’s doping and he admitted his victories were tainted by the use of illegal performance-enhancing drugs, and LeMond once again became America’s only legitimate Tour de France winner. Today, he’s not only back for cycling fans, he’s back in business.
The retired cyclist has been in commerce much of his adult life. He owned a restaurant in Edina and bought into a bagel chain that flopped. He eventually realized his expertise lay in what he knew best: cycling. In past ventures. racing distracted him, and later he was relegated to a figurehead role by companies he did business with. This time around, he is eager to be more hands-on, which he relishes. “It’s the design side that I enjoy,” says LeMond, who lives in Medina. “Now that I only ride recreationally, I am much more in touch with what the average recreational rider needs and wants.”
LeMond LLC is really two businesses, based in Northeast Minneapolis. One, LeMond Fitness Revolution, has released an improved version of his indoor bike trainer, the LeMond Revolution. It is the company’s cash cow, generating most of overall revenues, with sales volume in the thousands. The other, LeMond Bicycles, turned out limited-edition models of the bikes he rode to win three Tours de France; this past fall the company introduced the Washoe, the first of a new line of bikes that LeMond hopes will eventually become a force in cycling. For now, though, LeMond Bicycles is a business more focused on product development, with annual sales under 1,000 bikes.
Trainer bike, $400 to $1,400
66% of overall revenues
Sales in “seven figures”
Washoe road bike,
$2,350 to $8,300
Sales under 1,000 to date
Tour de France bikes,
Limited production of 300 (nearly sold out)
The Washoe might be just what you would expect from LeMond, an unconventional product. It’s a high-end steel frame competing in a world of carbon-fiber frames (the pros and most of their fans all ride carbon). It’s a road bike at a time when national road bike sales have been flat.
LeMond chose steel for reasons both sentimental and practical. “My first bike was steel, the first bike my company made was steel,” he says, “and I wanted a bike I could travel with.”
The Washoe has received wide praise in online chat rooms and in bike reviews. “The Washoe had us drooling,” Men’s Journal gushed. “I love the way this bike looks and the way it rides,” says Gene Oberpriller, a former pro mountain-bike racer who owns One On One Bicycle Studio in Minneapolis. “For him to stick with something classic says something about his conviction. He could have very easily slapped his name on someone else’s carbon frame, but I think he took the right path by not following the trend.”
LeMond Bicycles sold out of its first run of 100 Washoe bikes within three months—on target with projections. Through February, sales have increased each month, with the majority of bikes sold in the U.S. LeMond completed a second run of 150 bikes and is producing another 150. He says the company is profitable, though he is not yet drawing a salary. The new bike reflects the unconventional spirit that defined his cycling career and fuels his business pursuits, but its success will depend on whether he can tame that spirit in order to bring the focus required to build a business.
“The bike business is like a restaurant—there’s a super-high failure rate,” Oberpriller says. Yet he likes LeMond’s chances. “This is the best effort we’ve seen from him so far.”
The LeMond of today does not look like the LeMond who last won a Tour de France in 1990. He’s 53. His hair’s gone silver. He’s at least 50 pounds heavier. But a closer look finds the smile’s the same–that wide, lopsided, boyish grin. His ice-blue eyes still sparkle. And he can still draw you into his orbit with his charisma.
Ask a question, and you’ll get an extended monologue skipping from one tangent to another. Although he dropped out of high school to race in Europe, LeMond is knowledgeable about a wide variety of subjects—many of which he has studied obsessively, ranging from mitochondria to metallurgy. “The best word I can use to describe him is brilliant,” says Doug Knox, a former cyclist who has known LeMond since the 1970s and done business with him. “But he’s not a make-it-happen kind of guy.”
LeMond thrives on new ideas, but that can also be a liability. By his own admission, he has ADHD. He can barely blurt out one idea before he conceives another.
“He’s the typical entrepreneur,” says his son, Scott, 28,who has been working with him on product design and implementation. “Every month there’s a new idea. I’m like, ‘Dad, focus.’ ”
The upside of these traits has allowed LeMond to seek new and better methods that contributed to his success and revolutionized cycling. He was an early adopter of hard-shell helmets, clipless pedals, sunglasses, computers, mountain-bike suspension and carbon frames. Most famously, in the 1989 Tour he became the first rider to use aerodynamic triathlon bars that helped him win by eight seconds, the narrowest margin of victory in Tour history.
“The sport was steeped in its history and traditions,” LeMond says. “Riders and coaches shared these mystiques about what was the right way to train, what you should eat, when you should sleep. Everything was regimented, but not on a modern scientific basis.”
LeMond brings that same thinking to business. “He challenges convention,” says Tim O’Brien, who has worked with LeMond on product design over the past four years. “He’s never satisfied with the way things are being done and is always thinking of a better way to do it.”
LeMond figured out early how to turn his cycling accomplishments into profits. In 1986, the year he won his first Tour, he marketed his own Team LeMond brand of clothing and accessories. He licensed a display to bike shops to place alongside his line of LeMond bicycles. He licensed LeMond bikes to Trek Bicycles in 1995, the year after he retired from pro cycling.
But his primary source of income evaporated in 2008 when Trek stood by Armstrong, who had become the face of the company, and stopped distribution of LeMond’s line, which had yielded $100 million in revenues for Trek and $5 million for LeMond, according to media reports confirmed by LeMond. Legal battles cost him most of his earnings from Trek.
Along with his line of road bikes, he developed a stationary bicycle called the LeMond Revmaster—unique for the way it measured power output—that he licensed to Life Time Fitness. He developed the Revolution—an indoor trainer that closely resembles the feel of actually riding on the road. He marketed and sold the machines through his company then known as LeMond Fitness.
In 2012, he sold LeMond Fitness to Hoist Fitness, based in San Diego, but retained the rights to the Revolution. He redesigned the trainer, adding the “WattBox,” a small attachment that feeds speed and power data to the rider’s GPS or other personal monitoring device. He relaunched the Revolution in late 2013.
Trek and LeMond settled their lawsuit in 2010 under confidential terms—LeMond says only that the settlement was pennies on the dollar, though he regained the rights to his bicycle line. After that, TIME Sport International in France approached him about producing a limited-edition series of the three carbon-frame bikes he rode in his Tour-winning years of 1986, 1989 and 1990. Sales began in 2013.
At the same time, he considered designing his own carbon-frame bicycle and buying TIME’s manufacturing operation to produce it. For this venture, he partnered with Brian McGann, an Irish business consultant.
The timing seemed like it couldn’t have been better. Armstrong’s drug use became public in October 2012; his fall revived LeMond’s image and brand.
The European TV sports network Eurosport signed LeMond to provide daily commentary on last year’s major stage races. LeMond on Tour proved so popular, attracting 17.6 million viewers during the Tour’s three weeks (by comparison, NBC had 3.8 million U.S. viewers of its coverage) that Eurosport renewed the contract for 2015. The network also gave him a monthly television show that airs in 56 countries (though not the U.S.), giving him access to the world’s largest cycling audience. “And they’re all [potential] customers,” he says. The LeMond name is most notable abroad, where he enjoyed his cycling success. “They never lost the fire for LeMond there,” says Gene Lew, who knows LeMond and worked in the industry. “There’s a lot of viability in the LeMond brand in Europe.”
LeMond’s relationship with TIME spawned a deal with its American subsidiary TIME Sport USA that allowed LeMond exclusive rights to distribute TIME handlebars, frames and stems, along with shared rights to sell its pedals in the United States. He expected the arrangement to provide a valuable and necessary revenue stream.
But sales lagged and LeMond and Doug Knox, president of TIME Sport USA, disagreed on basic strategy; Knox cancelled the partnership in February 2014.
With little product to sell other than the Revolution and his limited-edition bikes, LeMond laid off his customer sales staff of two selling TIME products out of his Minneapolis office. About the same time, TIME Sport International was found to be financially unable to spin off its manufacturing operations. McGann pulled out.
LeMond had to change course. He had designed a steel-frame bike and decided to manufacture it in the U.S. He introduced the Washoe — hand-built in Portland, Ore., custom-painted in Roseville and assembled at LeMond’s facility in Minneapolis — this past September.
An unconventional model
On a February afternoon, Scott LeMond shores up a wall between the company’s offices and what will be the production floor. LeMond’s companies moved to the Thorp Building in Northeast Minneapolis from more expensive offices in the Warehouse District just the week before. Everything is in disarray. Power tools are scattered across the floor. Employees have to step over extension cords and around boxes to reach desks pushed against the far wall. In the other room, there are no bike frames, just boxes of trainers stacked to one side. It looks every bit like a company trying to remake itself.
Most notably, Greg LeMond is not here. He is in Europe, attending a bike show in London, then headed to Spain to film spots for Eurosport. Over the past two years, he has been in high demand. Being pulled in many directions further taxes his ability to stay on task and threatens his bike business’ already tenuous focus.
Kathy LeMond, Greg’s wife, who describes herself as responsible for the family’s executive functioning, has taken on a greater role, monitoring company finances and vetting business decisions. Scott has assumed the majority of design and production oversight. A software engineer, a web guru, an accountant, a customer sales rep and a marketing rep in France round out the skeleton staff of eight.
At present, the three LeMonds own the businesses outright, but LeMond knows he needs to raise capital and plans for several more key hires, including someone to manage daily operations. Right now, almost all decisions go through Greg. “I do not want to be running the company day to day,” he says. “I like the creative side and the marketing, developing new ideas.”
Perhaps LeMond’s most innovative—and riskiest—stratagem is his sales model. While he plans to sell through a few select independent bike dealers, he is banking on reaching customers directly online. His experience selling TIME products through dealers reinforced his conviction that the traditional sales model does not work. “It made me realize there’s a part of the business I can’t follow, selling into the independent dealer market,” he says. “You spend all of your time servicing dealers.”
Selling directly to consumers yields higher margins, cuts out the middleman and eliminates the need to front product to dealers. With the exception of Canyon, a German concern selling almost exclusively online to European customers, bike manufacturers have not used the Internet as the primary means to sell product in volume. “It’s the only industry that doesn’t sell direct to the consumer,” LeMond says. “Right now less than 1 percent of all bikes sales are done online. There’s a huge opportunity in the direct-to-consumer market. No other brand can do that because they’re tied into their relationships with dealers. That’s a competitive advantage for us.”
While LeMond sees the direct-to-consumer model as the future, it may not be so easy to convert U.S. customers. Many people want to test-ride a bicycle before purchasing it. They also rely on a dealer to help get the right fit. And, as with a car, they like having a dealer who knows their particular brand to service it.
“He’s pushing the envelope—that’s been his history—but I’m not sure it will work here,” Lew says. “In Europe, consumers are more responsible for their purchases. In the U.S., people figure, ‘If I don’t like this, I’ll just take it back.’ I don’t think the amount of sales completion will be as high online. Consumers can ride a bike once and send it back.” In 2014, Revolution revenue hit seven figures; LeMond would not be more specific, but it is clearly the tail that wags LeMond LLC’s dog. The trainer, which starts at $630 (add another $250 for the WattBox) accounted for about two-thirds of the company’s overall revenue; bikes and accessories made up the other third. The limited-edition series initially sold better than expected, but there is little inventory left, and no more will be built. Even with several new products scheduled for release this year, LeMond expects the revenue mix to remain the same, though bikes will eventually generate a larger share as more models are released.
But he suggests LeMond LLC will not experience significant financial growth for another two to three years. “We’re not focused on sales right now,” he says. “We’re looking at development, on designing new products and building our infrastructure.”
Next in line is the LeMonster, which LeMond expects to launch this spring, a go-anywhere, aluminum-frame bike that combines the geometry of a road bike with oversized (29-inch) wheels and the ruggedness of a mountain bike.
He envisions a steel-frame cyclocross bike hitting the market this summer. He’s working on a full line of carbon-frame bikes—road, triathlon, cyclocross—manufactured in the U.S., which he hopes to launch next spring. The triathlon bike holds special appeal because his creativity is not crimped by cycling’s governing body restrictions that apply to road racing bikes. “The tri bike is the most exciting for me because I’m working with a design that allows you to go faster,” he says. “Part of the fun of riding a bike is when you go faster. That’s what gets people hooked.”
He is also exploring electric-assist bikes. “I see an opportunity to bring cycling to more people,” he says. “It’s the fastest-growing market in transportation in the world. But right now I’m focused on my core expertise: road-related performance bikes.”
He has already redesigned the Revolution trainer to make it compatible with any type of bike (road, mountain, cross) and by fall hopes to have two additional models on the market. One will be compact, easier for travel, and sell for about $400. The other will be a higher-end, programmable electronic bike priced around $1,400.
It’s a lot for a small company to go after. LeMond obviously likes to think big, with far-reaching plans. “He’s got a lot of different ideas,” Tim O’Brien says. “He needs a solid team to implement that.”
John Rosengren is an award-winning journalist and one-time amateur cyclist.
This article is reprinted in partnership with Twin Cities Business.