How Ecosystem Thinking and Entrepreneurial Execution Revolutionize Cycling: Insights from SRAM’s AXS Strategy

Introduction

In today’s rapidly evolving business landscape, traditional growth models are no longer enough. Companies must look beyond their core offerings and embrace ecosystem thinking to unlock new opportunities. In a recent episode of the BeyondCore podcast, James Meyer, Chief of Product Development at SRAM, shared how the company built its AXS ecosystem and revolutionized the cycling industry. This conversation is packed with insights for corporate leaders on how to develop, scale, and sustain an ecosystem strategy.

1. The Origins of SRAM’s Ecosystem Strategy

SRAM, a leading manufacturer of high-performance bicycle components, does not build bikes but focuses on creating cutting-edge drivetrains, suspension systems, and electronic shifting technologies. James Meyer’s journey started with Quarq Powermeter, a company he founded in 2006, which was later acquired by SRAM in 2011. This acquisition marked the beginning of his role in shaping SRAM’s AXS ecosystem.

At the time, bicycle shifting systems were primarily mechanical. However, SRAM identified an opportunity in wireless electronic shifting and developed eTap, a breakthrough product that replaced traditional cable-driven shifting with a simple button press. This technological shift laid the foundation for a fully integrated digital ecosystem.

2. Building Product-Market Fit: Finding the First Killer Application

A key lesson from SRAM’s journey was the importance of starting with a single, highly compelling product feature. Before expanding the ecosystem, the company focused on making eTap an industry success. The transition from mechanical to electronic shifting simplified user experience and eliminated common issues like cable wear and inconsistent shifting.

For corporate leaders, the key takeaway is clear: before building an ecosystem, identify a compelling product or service that solves a real user problem and creates immediate value.

3. Scaling the Ecosystem: From One Product to a Seamless Experience

Once eTap gained traction, SRAM expanded its product line and integrated more components into its ecosystem. The AXS ecosystem now includes:

• Electronic shifting (eTap & Eagle AXS) – providing a seamless, wireless gear-shifting experience.

• Suspension (Flight Attendant) – automatic real-time suspension adjustment based on rider input and terrain.

• Seatposts (Reverb AXS) – electronically controlled dropper posts for mountain bikes.

• Power meters (Quarq) – tracking rider performance with precision.

• AXS Mobile App – enabling riders to customize settings, monitor performance, and update firmware wirelessly.

This integrated ecosystem approach allowed SRAM to create a frictionless experience for cyclists, setting a new industry standard.

4. Open vs. Closed Ecosystems: The Universal Derailleur Hanger (UDH)

One of SRAM’s boldest moves was introducing the Universal Derailleur Hanger (UDH), a standardized component that eliminates the need for hundreds of different derailleur hangers across bicycle brands. Instead of keeping this proprietary, SRAM made UDH an open standard, allowing other manufacturers, including competitors, to adopt it.

This move illustrates the strategic balance between openness and control in an ecosystem. While some parts of SRAM’s AXS ecosystem remain proprietary, others—like UDH—enhance the entire industry and drive mass adoption of their core technology.

5. Expanding Through Partnerships and Acquisitions

SRAM’s growth has been fueled not only by internal innovation but also by strategic acquisitions and partnerships. The company has:

• Acquired Hammerhead, a GPS cycling computer brand, to enhance its data intelligence layer.

• Integrated with Strava and Zwift, ensuring its ecosystem remains interconnected with major digital cycling platforms.

• Leveraged startups, such as acquiring a Kickstarter project for electronic suspension tuning.

This approach mirrors strategies used in corporate innovation, where partnering with startups or acquiring emerging technologies accelerates ecosystem development.

“The power of an ecosystem lies not just in what you build internally, but in how you integrate with others. Our partnerships with Strava, Zwift, and Hammerhead allow us to create a seamless experience that extends beyond SRAM’s own products.”

6. The Future of SRAM’s AXS Ecosystem

Looking ahead, SRAM envisions a future where bicycles become even simpler, smarter, and more intuitive. Key focus areas include:

• Advancements in AI and data intelligence to optimize ride performance.

• Expansion into e-bikes, as electrification reshapes the cycling industry.

• Further integration with third-party platforms, enhancing cross-industry collaboration.

For corporate leaders, SRAM’s journey highlights how ecosystem thinking can future-proof a business and unlock long-term growth opportunities.

Key Takeaways for Business Leaders

🔹 Start with a strong core product – Find a killer application that solves a real user problem before scaling the ecosystem.

🔹 Balance openness and control – Standardizing key components (like UDH) can accelerate adoption, while keeping strategic aspects proprietary preserves differentiation.

🔹 Leverage partnerships and acquisitions – Collaborate with startups, integrate with existing platforms, and acquire technologies to accelerate ecosystem growth.

🔹 Prioritize user experience – The best ecosystems make life simpler, not more complex, for the end user.

🔹 Think long-term – Ecosystems are built over time. Companies must be willing to invest, iterate, and evolve.

Conclusion

SRAM’s AXS ecosystem is a powerful case study in how ecosystem thinking and entrepreneurial execution can drive business innovation. By focusing on user needs, embracing strategic partnerships, and balancing open and proprietary elements, SRAM has set a benchmark for scalable, industry-wide innovation.

For corporate leaders, the message is clear: thinking beyond the core and embracing ecosystems is key to unlocking the next wave of growth.