Photography by Cor Vos

Time is ticking: is Specialized-lululemon’s crowdfunding model sustainable?

More details emerge about plans for 2015

By Shane Stokes

Confirming that the squad will continue next year but that the budget and roster size will depend in part on this weeks’ final push for crowd-funding, the owner of the team currently called Specialized-lululemon, Kristy Scrymgeour, has said that she is hoping for a good response prior to Friday’s deadline.

The team has had a strong season and a superb run in recent weeks, winning the Open de Suède Vårgårda World Cup time trial plus the Open de Suède Vårgårda World Cup road race, and then this week taking stages in both the Holland Ladies’ Tour and the Tour de l’Ardeche.

Scrymgeour sees momentum building and hopes that her riders can take what would be their third consecutive team time trial gold at the world championships later this month.

Before then, though, she is calling on supporters of the team and women’s racing in general to get behind the squad and try to ensure that it has the best possible structure and foundation for 2015.

“We started this crowd funding idea because in July we didn’t have security for the following year,” she told CyclingTips, referring to the change in role for the title sponsors Specialized and lululemon. “We partly did it to raise some attention and to get it out there publicly and we partly did it because definitely we need the funds.

“It has created some good conversations and it has definitely opened up some avenues to talk to sponsors, both for next year and actually more so for the future. These sponsorship talks often take a long time. We also had some very good industry support.”

While Scrymgeour said that enough support has been raised to ensure the team will continue, she stated that there is still a shortfall that needs to be tackled. “The budget is not as a great as we really want it to be, which is why we really need to do one last big push with the crowd-funding. Every little bit helps for us to get the budget to where we need it to be able to run the programme.

“My feeling about women’s cycling is that there are hundreds of thousands of women out there who ride and who are potentially big cycling racing fans. If we can link those two together and build that community around a women’s team and build some excitement around it, it helps us and also helps to grow the sport as well. As a team we really want to bring that community in.”

Launched on July 25th and running until this Friday, the crowd-funding project offers a structure of benefits for those who pledge to support the team.

Called Project X and detailed here, the contribution levels laid out begin with club membership of the project for $10 USD. There is then an incremental scale of benefits, including team caps ($25), t-shirts ($50), ten minute Skype chats with team members ($75), baseball hats and t-shirt combos ($100), personalised race jerseys with supporters’ names on the sleeve ($250), personalised racing kit ($500) and more.

Those able to afford a more significant contribution can do brunch rides with five team members in New York City, a one day sprint clinic with former team member and top women’s sprinter Ina-Yoko Teutenberg, rides with former pro George Hincapie and current professional Bernie Eisel or receive a team bike, personalised kit and an invite to a four day team training camp in December.

$1.4 million goes into running a top global international women’s cycling team like Specialized-lululemon properly. In most cases, this is one fifteenth of what it takes to run a men’s pro-tour team. The funds cover the salaries of 11 riders and six staff, travel and logistics, insurance and fees for a full year.

Official sponsorship for brands is also available and come with a number of perks.

Thus far over $80,000 has been raised, but Scrymgeour is hoping that this continues to grow before the end of this week. “It has been great so far – the people who have contributed are really excited about being part of the team,” she said.

“People can contribute what they want. They can go and contribute a dollar if they want…that is okay. You don’t have to buy into one of the perks. But I think that it is a fun thing if you donate 50 dollars you get a t-shirt. So it makes you feel more a part of the team. If you donate 250 you get the team jersey.

“There are various things that people can buy into, including coming to team camp or doing rides with the team. Then some of the men’s peloton like Bernie Eisel and George Hincapie have donated their time as well, if people were interested in that kind of experience.

“So there are a lot of different options. But you can even just go there and contribute five dollars if you like.”

With some of the team’s budget to also come from other sources, Scrymgeour says that the final week of crowd-funding plus other talks will together determine how big the team and the programme will be next season.

“We would be happy if we raised more. Whatever we can get now is really just help us fill that shortfall. We know that we can run the team. We just need to keep topping up the funds in any way we can, and we are being inventive in how we do that.

“The team size is going to be about the same. We have got 11 riders now. We are thinking seriously about making it nine, but it will depend on what happens. With the conversations we have open with potential pro title sponsors, the budget could be brought up and therefore we would make the team twelve or thirteen riders. That would mean we could do a real double programme.

“But if we don’t find that budget, we will probably consolidate and make a nine rider team so everyone on the team could have a really good programme and we would still make sure that we did all the big races.”

Time is ticking

Aside from this weekend’s deadline for crowd funding, Scrymgeour said that conversations will continue with others who could end up backing the team. Fortunately she is in a position where she has been able to talk to her riders and staff and assure them that the team will exist in 2015.

“There are definitely talks that I am having that will continue over the next month or two, but the decision has been taken that the team will be here next season. What we have to do is to decide on the size of the team. My feeling is that if we decide now that the size of the team is going to be nine riders and plan accordingly, that we could bring more riders on the team at a later date if we do happen to bring on a big sponsor.

“Obviously most of the best riders in the world will have secured their teams, but there is always opportunity for other riders who don’t have teams yet.”

Scrymgeour didn’t want to give away what the 2015 roster would be, but she confirmed that many familiar faces would be on board.

“We are really happy with the riders that we have got on the team. We will make sure that we do our contracts with the current members first,” she said. “But we are definitely always interested in looking at new talent and we definitely want to look into a sprinter.

“We haven’t totally decided what the line-up will be. But we are definitely keen about the riders that we have and the core of the team will stay the same.”

For more about Project X and details of the crowdfunding, click here.

Tags: Kristy Scrymgeour, Project X, Specialized lululemon

jules

part of me wants crowd-sourcing to work, but another part wants the team to be self-sustainable. women’s cycling is on the rise. they are not as quick as the elite pro men, but then the men’s competition has descended into a farce on so many occasions that outright speed and power is not the key attraction for fans it may be assumed to be.

La Course this year was a riveting race - great, attacking riding. why can’t it be as popular as the men’s events? the fans have to do more than donate, they need to watch, attend. and it is watchable.
- http://www.cyclingTipsBlog.com cyclingTips
  
  We saw iTeam Nova in 2001 try the membership based team (granted, social media and crowdfunding wasn’t much of a concept then), and OGE is trying without much success now. It seems that cycling fans get behind individual riders more so than teams. Probably because of the quick changing nature of team sponsors every year. Aside for a few, there’s no continuity in team name or identity for people to get behind.
  - jules
    
    what makes sport is not performance alone - the visual spectacle of 48 vs. 44 km/h is mostly indistinguishable - but the personalities, the people, rivalries.
    
    cycling fans are fascinated by whether Froome can recover and win the Vuelta, beat Contador - how will Valverde and Quintana mesh as team-mates? (well, that’s been answered)
    
    women’s cycling is still too anonymous, it’s still too much a homogeneous commodity. i enjoyed Gracie Elvin’s home-made videos last year - a chance to see who the riders are, behind the sunglasses.
    - CC
      
      Nailed it jules. I suspect cycling in general is too niche a sport for the model.
      - Dave
        
        In addition, I think cycling has the extra problem of teams having a following of their own (like a soccer club, or Ferrari in Formula 1) being more the exception rather than the rule.
        
        Team Sky is probably the only current pro team that has a significant following (because it’s a de facto British national team) while OGE is a team in similar circumstances but without that support because we don’t need a national team when the champion of Australian road cycling rides for BMC.
        
        You see a lot of support for BMC at international races in Australia because of that, but within a year of Cadel Evans retiring, the “support” will evaporate and those jerseys, drink bottles and even many of the bikes will be gathering dust in the shed.
        
        echidna_sg
        
        The brits have sky and a couple of other riders on other squads - Aussie fans have riders and personalities across multiple teams - hansen, evans, a number on garmin, a few on both tinkov/saxo and OPQS, most of OGE… I would say I am more a fan of individual riders, of riding styles and of the sport as a whole, not so much team X. The fact that most teams are sponsored by brands that mean little or nothing to people outside of the country of origin is a quirk of the niche that road cycling is… what other sport has a local lottery,hardware or kitchen fittings company as a major, global sponsor? where are the samsung/mcdonalds/coke/pepsi/toyota/insert you global brand here guys??
  - Lee
    
    This is why I keep saying pro teams, at least domestic ones, should be geographically-based, like football teams. People feel a connection to their place of birth or the town/city they live in, hence the loyalty of football fans to a particular team. It could work for cycling. Who the hell feels a connection to some random sponsor they’ve never heard of, like Node 4?
  - Dave
    
    I’m not convinced that the OGE membership scheme is a direct fundraising program, but actually a scheme to add value for sponsors.
    
    Think about it, if you’re a company boss looking at various advertising options via sport, wouldn’t you consider the team which gets you a sophisticated data mining operation (i.e. OGE with their membership list and data from other promotions like TdF competitions) as being a better option than the team which offers you nothing more than a logo on a shirt?
Rolls

I know this has been said many times but the business model for cycling really needs to change. To be at the mercy of sponsors and/or fickle “saviors” every single year is simply sad for what claims to be a global sport. The fact that a top-level team like this struggles to find $1.4 million (which in the big scheme of things is not that much money) to fund it’s programme is evidence enough of the dismal state of affairs. Crowdfunding is great as a one-off measure but will not guarantee sustainability.
- Dave
  
  How do you think this change in the business model could work? Who will pay for it if it’s not sponsors?
  - http://www.cyclingTipsBlog.com cyclingTips
    
    If it became a professional league a lot of the problems could be solved. But a lot more problems would be created.
    
    We looked into what this might look like and the pros/cons a couple years back:
    
    http://cyclingtips.com.au/2011/03/what-a-new-cycling-league-might-look-like/
    - jules
      
      That was a good article. but at the end of the day, no matter what model you have - and some may be better than others - you need to have public/fan support to attract sponsors. there’s no shortcut to that.
      - http://www.cyclingTipsBlog.com cyclingTips
        
        Agreed. Especially in an environment where fans don’t pay for tickets.
- RacingCondor
  
  I agree. It’s a problem across cycling (HTC anyone) but it has been for decades. How many biographies have there been which have something along the lines of ‘we didn’t get paid for 3 months and then the sponsor pulled so I called a friend and got on their team. Next to no pay but at least I was racing’.
  There has to be some way to build a model of funding which will support teams struggling with sponsorship for a few months while they get things in order (other than philanthropy). Sucessful teams folding almost overnight because a big sponsorship deal falls through late in negotiations is a poor management model for the sport. Fans lose out (successful team gone), riders lose out (suddenly their contract is gone when the transfer season has almost ended). It’s not easy when most fans are loyal to a rider rather than a team but there has to be a way.
Arfy

With an operating budget of $1.4M, and 17 people constituting a payroll of 45% of the budget, that averages out to $37Kpa. That’s only just above the Australian minimum wage, and about half of the average Australian salary. It must be hard work to get a competitive team together and keep the motivation high in that environment.
- Dave
  
  That payroll will obviously be stacked towards the riders, with most of the other staff employed on just a casual/seasonal basis.
  
  There’s got to be enough people trying to get a foot in the door (with an eye on moving up to full-time work for a WorldTour team) that motivation for these other staff won’t be an issue even when they’re only casuals. Any of them who arc up and ask for better treatment will be out the door in seconds.
  - Arfy
    
    As true as that may be, you then have to factor in how much it costs to employ a big-name rider or two. There won’t be much in the kitty for the rest of the team.
- echidna_sg
  
  Swings and roundabouts, most pro team sport is like this at one step below the top rung.
http://robertcarrollmassage.com Robert Carroll

I am developing a new women’s elite/professional cycling team, SPARK Women’s Racing p/b pedal, in Littleton, Colorado. I have been following the crowd-sourcing/funding trend for a while. We are considering the possibility of putting a crowd-sourcing program in place, but I have also realized that to do this kind of program effectively, that also takes a certain amount of funding to be able to supply shirts, jerseys, kits, etc. that are being used as incentives.
There is still a lot of work to be done in discussing the future viability of women’s professional cycling, and women’s cycling programs, as a whole. But, I am determined to get that message across, in and out of the industry.

I am asked on a very constant basis; “Why do want to start a women’s cycling team?” My usual response; “Why wouldn’t I want to start a women’s cycling team?” A common heard reply; “Well, you’re a man.” “Why yes, I am and thank you for noticing!”

I believe men, that are outspoken and doers in their support of women’s cycling, can make a difference for the future. Let’s face it, the future is coming, and I strongly believe women’s cycling is going to be at the forefront of not just a change in sport, but women on bikes, on a global scale, is going to bring about massive social and economic change to improve the world we live in!

So, I hope all sources of funding for women’s cycling and racing take hold, and that we work together to make room in the good ‘ol boy’s club, for everyone!!

My .02
- Arfy
  
  Honestly, I wish you the best of luck and really hope it goes well. If you haven’t already, get some good people around you who are experts at developing successful new ventures and will give you real honest feedback. There are some good entrepreneur groups that have good mentoring programs. Sometimes you need this advice more than you need those who just pump you up. And I hope you get more out of it than 2 cents :)
  - http://robertcarrollmassage.com Robert Carroll
    
    Thank you Arfy! I do have some great people around me, and I am part of a business development group that is working with me. I am the one that does all the pumping up of others, I draw them in and have led the way for this project. I’m in the US, and I always like to hear what has worked or not for others. Definitely for more than .02!!
meezer

Thanks for posting this article. Part of my tax return went towards crowd funding Team Vanderkitten’s CX vanish for 2015 so another part can help this team. I hope crowd funding works as a model to help people feel feel closer to the teams and have that sense of being part of something.

Robert, all the very best with your venture.
- meezer
  
  Sorry for the typos - fat fingers on the mobile.
Abdu

Cycling is still stuck in a feudal world, where the King is the Armaury Family and everyone else is a serf working hand to mouth. The private family company ASO who own the Tour, Giro, half of Vuelta, Paris-Roubaix etc. don’t and won’t share any revenue with the riders and teams. The teams basically pay the King to work the land and survive while the King takes the profits and anything else he can get his hands on.
ASO stage the races sure, but in the same way the Romans staged events at the colosseum. The teams and riders kill themselves and some survive, most don’t, and the odd one or two prosper but not though anything but shafting the rest of the poor saps.
The Armaury family don’t release info about how much money they bleed from the sport, and they sure as hell do nothing to sustain it. All their expenditure is on staging the race for greater returns, not a cent on building the sport, supporting riders to come through, etc.
I struggle to say it, but the Australian Football (AFL) system is so well structured, with pathways and funding at all levels. Cycling is like some random cowboy universe.
Women’s racing is a subset of an already niche sport that is very flimsy in terms of funding. The smallest men’s teams in the Tour have budgets of 8m Euro, which make these women’s teams look fantastically efficient. Not for me though, I don’t have any interest in women’s racing though.
- touristeroutier
  
  Your comments are quite misguided.
  
  First ASO does not own the Giro; RCS does. ASO is not the only professional race organizer, thought they are the largest and most successful.
  
  All professional race organizers share revenue with the teams & riders. It is called prize money, housing, and travel stipends. Sometimes there are appearance fees paid to teams or individual riders. UCI races are not allowed to have entry fees, so no one is “paying” to participate in them.
  
  Race organizers have all of the risks and costs of organizing events, therefore they deserve to make the profits. However, much of the profits from Le Tour & the Giro respectively go to subsidize ASO & RCS’s other races, which are not profitable on their own.
  
  The revenue model for teams may be insufficient, but teams are paid by their sponsors to race. ASO etc. doesn’t bleed money from the sport, they create it/earn it, by developing platforms where the teams/racers can showcase their sponsors.
  - Abdu
    
    We’ve clearly got our own opinions, I don’t agree with your comment that I am misguided. You read Inner Ring too, but I don’t agree with all his assumptions though you clearly do. Ok, got the RCS fact wrong, it’s half of Vuelta though isn’t it?
    The ‘share’ of revenue is scraps off the table compared to the overall revenues made. 166m Euro for the group, I’d be more inclined to assume the revenues from the Tour alone are a large proportion of that (50%+). Teams literally do pay to race the Tour, so the hotels and maybe few hundred Euros prize money is chump change for all but one or two, and wouldn’t cover their costs I reckon. They are paying to race the Tour. How much prize money and appearance fees did Net App or Bretagne win in this year’s Tour?
    The winner of the Tour gets less than half a mill Euro then gives it all back to his whole team to share. Why? Because they’re not well paid and his sponsor/team pays him well (not the ASO). One of the biggest races in the world with lifelong acclaim and he gets as much as the women’s winner of the Aus Open tennis.
    I would suggest you are in fact misguided, on the basis that you may have your views clouded by being on the gravy train that needs the ASO as well. There is a long conga line of little fish who need the big shark to keep swimming and eating. Nothing wrong with that, but recognise it for what it is.
    The ASO are not some big friendly giant, some sort of benefactor handing out cash to the kids and making sure everyone gets to enjoy the sport. Neither are the multitude of businesses all feeding off them. It’s naiive to the extreme to say they create the sport and develop platforms to showcase their sponsors. The ‘platforms’ are just more ways to justify the fees charged, or are you suggesting they’re free offers? Nothing wrong with the pursuit of profits, we all depend on capitalism but be honest about it. It’s the same as a factory owner risking his own capital by employing hundreds of poorly paid workers. That’s just the way it is.
    Where does the ASO fund the growth of the sport? Where does it provide a pathway into the sport from juniors and other ‘leagues’? It’s a private family company making money out of the sport, simple. It aint no charity. It has never in a hundred years released proper information about funding the Tour.
    I’d argue the revenue model is sufficient, but just for ASO. Let’s compare that billionaire family making big returns year on year, against thousands of poor riders over the years and years. How many riders made decent money out of ASO direct?
    For example, doping in the sport was not an issue for the ASO when they let the Tour run on EPO for years. They never stepped in to clean it up. The only concern for them was the bad press, and that’s thinking of their bottom line. You can’t tell me they didn’t know early on Armstrong was doping? Like everyone else, he became too big to fail and they would never cut him at the expense of their cash cow. Keep the lie going and keep the cash rolling in. Pity it’s never to the teams and riders.
    - touristeroutier
      
      First let me apologize; I in no way meant to insult you. Yes we have a difference of opinion, which is what makes this world so interesting.
      
      My opinion is derived from being on the inside, working on the organization of a number of UCI races, as well as for some small professional teams over the years. I previously worked for RCS, not for the Giro, but on a project that Giro proceeds funded.
      
      INRNG’s post regarding Team Sky’s 2013 Financial Report http://inrng.com/2014/08/team-sky-accounts-2013-season/ show that the revenue received from race organizers (and other misl revenue) was 107K Euros above what their race travel expenses were. Is this applicable to all ProTour Teams? Probably not, but it should be close; teams know what to ask for when it comes to travel stipends.
      
      Revenue sharing is really an inappropriate term; a sustainable model would depend on profit sharing. But how does one determine profit, particularly when one event subsidizes others?
      
      You say that ASO does not help fund the growth of he sport, but they (as do RCS, and Flanders Classics) organize many races at different levels, giving opportunities for professional teams of different levels to compete. Do they provide or fund any racing opportunities for juniors; I don’t know, but they do organize U23 races, which is probably more appropriate for their business model.
      
      When I stated that they develop platforms for teams I meant that ASO, RCS, (and Flanders Classics) organize the events that draw the largest number of spectators, TV audiences and sponsors, and in the end profits, because of this. Without these races, top teams would have a harder time signing big money sponsors, as sponsors seek the exposure generated by these events, above all others. This is a major reason why many teams want guaranteed entry to these races.
      
      You claim ASO don’t release proper financial data, but they are a private company and are not obligated to, nor do they have any meaningful incentive to publish this. There is nothing dishonest in this practice. They don’t claim to be anything but a for profit company; there is no pretense about them being something else. RCS is slightly different, as they are a public company.
      
      Cycling is a fringe sport, without a solid financial or organizational foundation. Without any gate revenue, and with very little TV revenue (compared to other sports), there are giant holes in the funding model. Teams & riders are not the only parties on shaky ground; many races barely scrape by.
      
      This debate could go on and on, and this really isn’t the forum, as this
      was really an article about the sustainability of a crowd sourcing
      effort for a women’s team; one of the most successful and professional teams out there. It is a damn shame that they can’t secure the funding their efforts require through traditional means.
Dad

Crowd sourcing sounds so cool for the kids.

In my day it was borrowing off your mates.
Stuart

Seriously this is BS. A total cop out from a multi-million dollar company. Pathetic. And I would expect much more from Cycling Tips. Why aren’t you asking why women’s cycling funding is being withdrawn and putting pressure on those companies who are withdrawing and those who fail to sponsor at all? ? You are part of the problem.
- Dave
  
  Last I checked, companies were free to choose whether to advertise through sports and it wasn’t compulsory.
  
  The fact of the matter is that sponsorship of cycling is a poor investment compared to minor team sponsorships or individual athlete endorsements of top tier sports. It only really makes sense if you’re linked to the industry (bike companies), have so much money that you can afford to piss it away without expecting any return (Andy Rihs, Oleg Tinkov) or you’re an evil company that is so desperate for a little bit of nice PR you’ll pay anything (Orica, Rupert Murdoch via Sky).
  
  The solution to that is to provide a show that people will want to watch, do that and the sponsors will come. Call that the “carrot” approach.
  
  The “stick” approach of “putting pressure” on companies that “fail to sponsor” is not going to work. It would serve as a perfect way to ensure companies stay away from cycling if they can avoid it.
- http://www.cyclingTipsBlog.com cyclingTips
  
  Before you judge, you should wait to see what transpires. There’s lots going on behind the scenes that we cannot write. And did you donate to the crowdfunding effort Stuart? There’s still time if you haven’t.