February 22nd, 2011

Vertically Intergrated Business Models

The building industry, and bicycle industry, have gone way way down the path of horizontal integration. First buildings. A construction management company engages an architect and says, 'we're using "X" type windows, "Y" type wall panels, "Z" type decorative facade, but may yet swap all those for something cheaper, just give us drawings of a building that can cope with any and all such last minutes changes.' Long gone are the days when someone like Frank Lloyd Wright would spend years designing every light fitting, even your letter box, before calling tenders from builders. The new system saves time and money—for the builder, not so much the client—and all the world's buildings end up looking and feeling the same.

Now bikes. A company representing a band name, at once orders frames, drive trains, brakes, seats, lights, you name it, within a design framework characterized by standardization, lest all those bits not fit together. Within well trodden market niches—the mountain bike, the road bike, etc.—the system works well. The innovators are the ones for whom this system fails. Companies putting modern hub gears onto classic roadsters, for instance, find nasty interfaces between light cables, rear brakes, mud guard stays and the likes. Meanwhile, slapping a chain guard over triple chain rings spells cock-up par excellence.

As a connoisseur of fine design, how dearly I would love to see a bicycle manufacturer forge their own steel, design their own unique drive trains and brakes, integrate stands, mudguards and wiring, then sell to me via single-brand shops that they own as well. I believe Brompton approaches the vertically integrated ideal. I believe American Apparel is one such maker of clothing. Raleigh were that kind of bike maker, back in the day. Right now I think I might buy a house from late 1960s by someone—anyone—who wore a bow tie, and who designed the letter box and the bed I would sleep in, and I will ride an old Raleigh to work, one with the letter R on every bolt, and consider myself a true gentleman of some mythical era when the word quality was uttered as though lightning bolts accompanied its improper use.

p.s. with a future post, I might take all that back. No point stopping time, right! Maybe architects should be aiding standardization, and a mix and match approach. I recall The Smithsons admiting the Charles and Ray Eames house for the way it took off the shelf gear and had it assembled. Another post. Too tired right now.