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Cool Companies: from the Ground Up

01 February 2004

Unlimited Magazine

Ground Effect's three founders don't just sell their cycling gear - they wear it too.

The shabby wooden front door to Ground Effect's headquarters isn't quite what you expect of a brand that's built a cult following among Kiwi mountain bikers. Inside the once-derelict industrial building that's home to the hottest clothing on two wheels, the ambience is more akin to a student flat than a multimillion-dollar export business. The sofas in the lunch room adjacent to Ground Effect's rustic open plan office could do with some fresh upholstery, and the tired kitchen bench is piled up with coffee cups. But the swish espresso machine in the corner (purchased after exhaustive research) is a subtle indication the entrepreneurs behind this company are clear about their priorities.

When Ground Effect's three founders, Guy Wynn-Williams, Steve van Dorsser and Fraser McLachlan, decided to risk their friendship by going into business together back in 1994, they drew up a founding document spelling out what they wanted from the enterprise. "We felt self-employment should be about freedom, not about being enslaved to the business," says McLachlan.

Nine years on, not only has the trio stuck rigidly to that ideal - they work four-day weeks and aim to take three months off a year to go mountain biking and adventuring - but the business has taken off at the pace of a biker on a downhill run. Within three years of its launch Ground Effect was selling into Australia. These days half the company's output is exported (30% to Australia and 20% to the UK). Until two years ago it was powering ahead at 40-50% annual growth - so rapid the owners realised if they didn't put the brakes on they'd run into capacity problems. They now aim to hold annual growth at 20%, although the high dollar has caused revenue to plateau in the last year.

Back in 1994 the founders picked there was a market for casual, baggy and comfortable cycling clothes that offered an alternative to the traditional tight, shiny gear worn by road cyclists - clothes that would serve as well in a cafe as on a muddy hill track. And they figured they had the skills and experience to deliver on the idea: at the time, Wynn-Williams worked in marketing for outdoor equipment manufacturer Macpac, McLachlan was a product development manager for Macpac, and van Dorsser was a Telecom engineer.

What's more, all three were crazy about mountain biking, and their hometown, Christchurch, was one of the top spots in the country for the sport, providing the ideal environment to test-drive their designs.

From the outset they eschewed retailers, opting to sell only by direct marketing via their slick mail order catalogue. Brand recognition was built by word of mouth, with the trio attending and sponsoring cycling events and even launching a new one, the Cyclic Saga.

"One thing we hadn't figured on was how slow it would be to build that brand from the ground up - we were horribly optimistic," says McLachlan. A decade on, it's clear the strategy worked. Ground Effect is the most popular brand of clothing among New Zealand mountain bikers, says Jonathan Kennett, co-author of Classic New Zealand Mountain Bike Rides. "The only way that word-of-mouth-style marketing can work is if you have a good product. It's really well thought out, it's sophisticated, and they use top-of-the-line materials."

The founding trio have also remained plugged into their core market. They and their seven staff all wear the gear, everyone is into mountain biking, and the company has done its bit for the grass roots of the sport - it donates money for track development, Wynn-Williams has been a key protagonist in the fight to open the Heaphy Track to mountain bikers, and van Dorsser works with a Christchurch civic group dedicated to promoting commuter cycling.

As the saying goes, these guys eat their own cooking.

Rebecca Macfie