Short of money and employees, Renovo calls for an end
The race for Renovo Hardwood Bicycles is over.
The website is gone. Nobody answers emails. The building at SE 8th and Ash which has housed its factory since 2008 is for rent. And there’s a lien notice posted on the front door.
According to the notice, Kenneth Wheeler of Renovo Designs LLC owes $ 34,864.53 in rent which has not been paid since May.
It’s a sad end for a company that was once one of the shining stars of the bicycle industry.
Roller launched Renovo at the North American Handmade Bicycle Show 2008 (NAHBS) in Portland. With experience and success in making hardwood light fixtures and airplanes, Wheeler figured out how to make bicycle frames with a CNC machine. When I first visited his shop in February 2008, he proudly watched his CNC machine at work and said it would be done with the frame in five minutes. Not only did the frames look good and relatively easy to produce (at least so it seemed), Wheeler said they were tested to be stronger than high-grade aluminum.
He was clearly on to something.
After NAHBS, the Renovo brand grew rapidly. Three years later, Wheeler had signed a partnership with the German car manufacturer Audi; open a showroom in the tony town of Sausalito, California; and honored titles in the whole world.
Unsurprisingly, orders have arrived.
“When I got there we had about 85-90 bikes in the queue and no cash. We had a lot of unhappy customers, then cash tight. This stuff tends to snowball.
– Tyler Robertson, former employee
Sales peaked in 2012. Unfortunately, this was also when things started to go wrong due to a combination of production issues and the challenge of meeting customer demands.
Tyler Robertson, a former marketing employee who worked for the company in the summer of 2014, recalled in an interview today that they were facing “massive production delays.” While the CNC building method seems quick and easy (Wheeler told me in 2008 that his CNC process, “Lends itself to high volume production”), the truth was much more complicated. “It was a very practical and meticulous process,” said Robertson. In addition to the problem, customers were frustrated with longer than expected delays. Robertson says they were promised a bike in six to eight weeks; but some of the people on the list had been waiting for two years. As the delay propagates (there are several very negative Yelp reviews during this period), many customers canceled their orders.
Renovo relied on these orders to meet salaries and other expenses. As orders dried up, their main source of income also dried up.
“When I got there we had about 85 to 90 bikes in the queue and no cash,” recalls Robertson. “We had a lot of unhappy customers, then cash flow tight. This stuff tends to snowball.
“It’s a complicated mess.”
– Ken Wheeler, Company Founder
The backlog was not just due to demand. Production issues began to emerge as early as 2012, according to a former employee I spoke with today who asked to remain anonymous. The appeal of Renovo’s production model was that you could just put the wood into the CNC machine, press a few buttons, and a bicycle frame would come out. But wood is a “delicate material,” the former employee told me today. “The problem with CNC lumber is that, especially with multi-laminate, it’s extremely difficult to machine the lumber consistently with the tolerances needed for a bike. “
Each frame was made to order both in terms of size and wood selection. Add the fact that they were built as two separate halves that had to be assembled with precision and you have a very complicated process.
None of the production difficulties were insurmountable, but each step involved more hands-on work to ensure quality, which in turn led to more delays.
Reached by phone today, Wheeler said offering custom bikes was “a stupid idea.” He said it was complicated to keep track of 20 to 40 custom bikes on the production floor at all times. Managing customer needs was also difficult. “Our record was 128 emails from a single customer about their bike.” He told another story of the wife of a customer who threatened to sue Renovo for fraud after taking so long to deliver a bicycle.
Hoping to stem the tide and increase production, Wheeler decided to stop selling custom frames in 2014. In a company press release, Wheeler joked about the backlog: “The struggle to control this unruly beast has kept Advil profitable. “
Unfortunately, this change did not solve the production problems of the Renovo.
Like every new “ready to roll”Was published, the company would publish six different sizes on its website. “Out of those six,” the employee told me today, “only 2-3 of the sizes were fully programmed into the CNC machine. There would be programming errors. If the CNC job didn’t wasn’t perfect, the two halves of the frames wouldn’t line up perfectly, increasing the risk of misalignment and adding even more production time to getting it right.
“Things came to a head when production staff felt their safety concerns were not being heard. “
– a former employee
By 2015, the company had reached a breaking point. Wheeler shared with me today that he was so stressed out that he had a heart attack. He feels he has done all he can to increase production and increase sales. They hired an outside PR firm, added staff, and continued to receive rave reviews for the bikes in major magazines. Despite these efforts, Wheeler said sales never returned to their 2012 level.
“If you don’t have the sales,” he said. “Nothing else matters.”
In 2016, Wheeler met Al Spinks, a Renovo client who was also a wealthy fifth-generation farmer from Texas who loved to cycle. Spinks offered to invest in Renovo to help them overcome the hurdle. Wheeler eagerly agreed. He used the money to increase production, do more marketing, research and development, launch new models, and hire an engineer who previously worked at Shimano. (Bike retailer and industry news review wrote about Spinks’ investment in March 2018.)
But according to a former employee, the massive injection of money led to a new problem: the pressure to meet production quotas which led to a difficult work environment.
After his heart attack in 2016, Wheeler took his first real Christmas vacation in 2017 and realized he didn’t want to go back to the stress Renovo had caused him. His partner Al Spinks was interested in taking over the business, but some of his other investments did not go well. Ultimately, “the money stopped coming from him,” Wheeler said.
Last spring, a former employee told me, “Things came to a head when the production staff felt their safety concerns [both in terms of their personal safety and their ability to ensure a safe product] were not heard. In March of this year, seven members of the production team came out. “After that,” the employee explained, “the place was on life support.”
Tensions between the remaining employees and the property continued in April when the three engineering staff left the company. From a staff that once numbered 12, there were only three left to make a final sales push at the big Sea Otter Classic event in April. “We went to Sea Otter and nothing came of it,” Wheeler said on the phone today. “And that was the end.” By May, all the remaining employees had left. Wheeler continued to negotiate an exit with Spinks. Then, on July 2, Spinks, just 53, had a surprise heart attack and deceased.
Looking back on the past 11 years, Wheeler said today that he felt he had done everything he could to make Renovo a success. What I have shared in this story is only part of the drama and difficulty this business has faced. There was the broken CNC machine and the parts needed to fix it that never seemed to arrive, the difficulty of hiring machinists, disagreements between Wheeler and his employees, a persistent decline in sales, etc. “It’s a complicated mess,” is how Wheeler described it today.
“My only consolation is that I … we – do our best to make it work. I didn’t want to disappoint our customers; but I couldn’t solve it. It just didn’t work… It’s not totally unusual in the business world. Especially in today’s cycling world. Just a year ago, Renovo was a subject of an Oregon business history who chronicled the harsh climate for bike builders in Oregon.
What about the bikes themselves? Everyone I spoke to about this story had nothing but great things to say about them. Wheeler seemed to take comfort in the fact that, despite all the ups and downs, everyone loved bikes. Even the guy whose wife threatened to sue. “We finally shipped the bike to him and he posted pictures of it on our Facebook page! Wheeler beamed.
UPDATE, 11:03 am on 10/05: Several former employees shared Ken Wheeler’s scathing allegations of misconduct on the company review site Glassdoor.
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