Bike-Component Maker Is Speedy Success

KENT

There's no single element that gives Control Tech Inc. its laid-back corporate culture.

It's the two Labradors wandering the hallways, the employees dressed in colorful T- shirts and jams, and other departures from stuffed-shirt business traditions. Take, for example, the company's Planet Sales Director: Wick. No last name, just Wick, who worked as a bartender before joining Control Tech.

But this casual environment belies a hot new success story in the bicycle industry.

In just two years, the maker of high-end bike components has gone from selling its first 10 parts to a Seattle bike shop, to a multi-million-dollar company selling in 23 countries. With its innovative, quality designs, Control Tech is taking market share from its competitors and is winning contracts to supply big-time bike manufacturers, like Trek Bicycle Corp.

"Two years ago, Control Tech was nothing," says Brad Wagner, Trek senior project engineer. "For a company like Trek to use their parts is quite a catch."

"It seems like they've done everything right," he says.

Control Tech is the brainchild of two brothers who are self-taught machinists and designers, Jeff and Bob Samac. Making components of steel, aluminum and titanium, the Samacs are riding the wave of popularity for mountain bikes. Sales are growing so fast, the company can barely keep up.

"We've gotten such a fantastic name in such a short period, it's hard to comprehend," says Bob, the older of the brothers and company president. "If we play our cards right, we will become the premiere American bike-component manufacturer."

Control Tech just moved from Des Moines to a new factory and headquarters, in Van Doren's Landing, to accommodate its growth. In its first year making bike parts, 1990, the company had $330,000 in sales. This year, Bob Samac projects upwards of $5 million in sales.

Some of its 56 employees work on computer-driven machine tools, churning out parts such as wheel hubs, handlebar extensions and seat posts. Mountain bikes are undergoing extensive innovations to increase performance and rider comfort, while shaving weight and complexity from assembly and operation.

Control Tech's emphasis is on parts that are lighter-weight, higher-performing and simpler to install and operate than many competing designs.

"We're trying to redesign bike components that have been entrenched for years," says Bob Samac.

Samac likes to show off his company's attention to quality, and seems particularly proud of his welders. Control Tech's parts are more expensive than bike parts made in Asian countries, which means they are used by manufacturers of top-end bikes, costing $1,200 and more. The parts are also available individually, in stores.

"They're quite a bit more expensive than overseas vendors, but their quality is definitely higher," says Trek's Wagner. "They have good machining capability and good welders."

Trek is featuring Control Tech parts for the first time, on its 1993 models.

The Samacs became such successful iconoclasts almost by accident.

For years, the brothers worked for their father, who owned a heavy-construction company, which included a rock-crushing operation, in Seattle. The brothers eventually went out on their own, forming Control Tech in 1988, to design and build rock-crusher controls.

Self-taught machinists, the Samacs also began making parts for subcontractors to The Boeing Co., and for airline-food-service companies. But work was hard to get, until several months later, when they got an idea for making mountain-bike handlebar extensions.

On a cold call, the Samac's friend, Wick, sold the first 10 parts to Gregg's Greenlake Cycle, in Seattle. That was in the spring of 1990. With the money, the Samacs made more extensions. Wick drove his old van to Oregon and sold them to bike shops.

That summer, they ran an ad in a bike magazine and got orders from a distributor in Belgium. In September, they picked up $100,000 in orders at a California trade show.

Business has been on a roll ever since.

Sustaining such growth, while staying organized, is Control Tech's big challenge now. A business consultant, Peggy Flynn, was hired to develop a business plan. The Samacs ended up hiring her as chief executive officer.

Flynn helped Control Tech land its first loan to finance its move and growth, a $400,000 guaranteed loan from the U.S. Small Business Administration. And the company also got a $200,000 credit line with U.S. Bank of Washington.

The bank, says Flynn, was impressed with Control Tech's 22.8 percent, pre-tax profitability.

Wagner says Control Tech will continue to grow, as more contracts come in from both large and small bicycle companies. When business levels off, its sales will mainly be dictated by the overall market for mountain bikes, he says.