Posts
4394
Joined
6/26/2009
Location
Boise, ID
US
Fantasy
35th
Edited Date/Time
7/18/2022 2:36pm
via some tweets, came across this website
https://zone5ventures.com/#what_we_do
says - "Zone 5 Ventures is an early-stage investor with Specialized as our sole limited partner..."
https://zone5ventures.com/#portfolio
scroll down the page and Outside is in their portfolio. Outside (formerly Pocket) now owns PB and Beta among other things.
https://zone5ventures.com/#contact_us
on the contact page is this address, which is specialized HQ
MORGAN HILL
15130 Concord Cir
Morgan Hill, CA 95037
https://zone5ventures.com/#what_we_do
says - "Zone 5 Ventures is an early-stage investor with Specialized as our sole limited partner..."
https://zone5ventures.com/#portfolio
scroll down the page and Outside is in their portfolio. Outside (formerly Pocket) now owns PB and Beta among other things.
https://zone5ventures.com/#contact_us
on the contact page is this address, which is specialized HQ
MORGAN HILL
15130 Concord Cir
Morgan Hill, CA 95037
They own or have at worst case a very large share of Outside media.....
Wow.... can't imagine there isn't any influence there at all....
So guess we will have to keep tabs to see what those reviews are like throughout any of the Outside Media sites are for any specialized product. also...what are they paying for advertising on the sites? or are they?
Def seems a little conflict of interest....
How can we sell more bikes AND make sure our competitors don’t get favorable media time? 🤔 I know! We buy as many media outlets at once!
Curly, you are making some huge generalizations here. Companies commonly invest in other companies, this is just a "creative" way to do that (using the VC LP/GP structure). Plus, VC is all the rage right now. I see advantages to doing it this way.
One other thing we have zero insights to - what their investment into Outside, Zwift, Pom etc look like. You can acquire a very small stake in a company, and depending on the structure you may have a 100% passive stake (non voting shares etc). Looking at the valuations some of these companies are getting (insane), I'd bet this fund isn't acquiring controlling stakes in any of these brands.
Finally, there are lots of instances where brands silo off editorial from investment. You see this in banking (wall between IB and sell side research) and even places like Vital/PB (where editors are walled off from sales people).
Regardless, crazy times to see how far an investor is willing to go to 'find yield'. When Outside is receiving $150M in fundraising from Tier 1 VCs...well....
In other words, the poster is just making huge generalizations that I wouldn't waste any time on.
The privacy policy link on the Zone 5 website even simply links out to Spec's privacy policy
Also looks like they're 1:4 of the investors in Outside Media, https://www.crunchbase.com/search/principal.investors/field/funding_rou…
"Disclosure: One of the investors in Outside Inc. — the parent company of CyclingTips — is Zone 5 Ventures, which supposedly isn’t technically owned by Specialized, but Specialized is the “sole limited partner” and is at least partially run by current and/or former Specialized employees (it’s complicated, and we have no idea how any of this works). Zone 5 Ventures has no influence on our editorial coverage at CyclingTips, but the optics are ugly, so we thought you should know."
So yeah, Specialized effectively now pays the Pinkbike editors wages, which certainly explains a lot of things.
Pinkbike and Beta MTB have been extremely positive and enthusiastic about a lot of Specialized products lately. They've put out raving reviews, even when the product in reality was less than exciting. Obvious conflict of interest and a huge red flag.
It honestly makes Pinkbike's chief-editor Brian Park, who likes to take a hard anti-corporate stance, seem like a huge hypocrit and a d*ckhead.
-Their headquarter is in a Specialized building.
-Zone5 owns 25% of Outside.
-PB's sister publication CyclingTips is actually disclaiming the connection. They do however claim that "Zone 5 Ventures has no influence on our editorial coverage at CyclingTips", but that is exactly what they would say, isn't it?
Just because a bike company is large does not make them bad.
Regardless this whole "conflict of interest" thing is hilarious to me. You all do realize we're talking about bike reviews, right? The conflict of interest has been there from the get go, investor or not. Most of the time, to get a product featured/reviewed/etc you have to be an advertiser on the site. EG, you pay the company for an ad package, they'll also review the product. The media company knows if they write a shit review, the company likely won't be super into reupping their ad spend. This is how it works for basically every adventure sport media company in existence. However, there is a siloing off of editorial staff from sales staff to deal with this problem. You'll find the same in a number of other industries fyi ("walling off" groups).
Don't like it? You'll need to find someone like Paul Aston, buying his stuff for full retail, living in the sticks and doing super uber long form reviews on it. Its a difficult model, though "most honest".
Specialized builds good product. They are investing profits back into the space they operate. That's not a crazy way to do business, nor is it as nefarious as you are pretending. I highly doubt there is some action passed down from the board room to always "pump up those Specialized reviews". Again, they make great products. You won't see a bad review from there because its highly unlikely Specialized puts out a bad product anytime soon.
Its not like the CEO of Outside is going onto twitter, pumping shitty Specialized product which he also has a vested interest, then somehow profits like a certain billionaire who owns a car company and pumps crypto (he often has a massive stake in) whenever he needs a nice bonus...
I am not making any claims, assumptions, etc, nor do I know outsides value, but I did find a page with those 3 rounds that added up to just below 170m, so perhaps thats where "full send" is making the 25% connection? Who knows.
I do find the whole thing interesting though. Definitely goes to show how big specialized is. I would’ve assumed their fuck you money was in the tens rather than hundreds of millions of dollars.
Bulletbass man, as I just implied, we don't know the amount they are throwing around. It might be north of $100M, but I'd guess its in the tens of millions.
I know all this is kinda complicated, and visibility into this world a bit opaque.
:D
Dun Dun Dunnnnnnnnn
Of course the Outside CEO is not going to go hype Specialized blatantly - that would be ridiculous and citing that as the litmus test for acceptability is rather Trumpian. Subtle things can also shift the needle. Im not saying it's happening, but it's not that far fetched. Even little bias' matter when it comes to truth in media and reporting.
Answer: Zone5 has a seat on the Outside board. I never said anything about the CEO. But thanks for labeling me "Trumpian".
"Subtle things can also shift the needle. Im not saying it's happening, but it's not that far fetched. Even little bias' matter when it comes to truth in media and reporting."
Answer: You don't seem to be grasping how far companies go to "shift the needle" when it comes to product reviews (all companies). Most companies make sure media types have one *hell* of a time when launching something big (like a bike). Trips to exotic places. Open bars. Access to WC level mechanics/tuning. Hanging out with cool pros. The list goes on. Obviously certain people will be more swayed by this sort of schmoozing than others, but this idea that all this review stuff is happening in some sort of scientific laboratory is TOTAL SHIT. There is so much bias in reviews its insane. (right on down to "what the rider thought was cool when he was a kid"). Plus, most reviews read like AI wrote them. I swear I could look at a bike's geometry, intended use, and travel, pay close attention to the cool buzzwords of the year and write 80% of the reviews without ever having ridden the bike. "but what about durability testing". Yeah, what about it? No magazine is riding a bike for 2 years to really suss that out. Sometimes testers can break stuff, but its hardly a representation of "real world".
These are gear reviews. This is not geopolitical conflict reporting. Not some deep dive into a politician's campaign history. Realize the space you are playing.
Final point, Specialized investing in these companies has a much bigger goal (unless they are stupid). ***build a sustainable profitable company***. That's the only way they see a return that is worth the investment. If they were really looking for control of voice, they'd be much better off just spending more on their media launches.
Not everything is a conspiracy
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