How Nerio Alessandri started Technogym, worth $2.4 billion, in his garage in Italy

Technogym founder Nerio Alessandri with actor Sylvester Stallone

You may never have heard of Nerio Alessandri, but you may well have used the gym equipment he designed.

Alessandri is the founder of Technogym, one of the most popular gym equipment brands in the world, with 50 million users globally across 100 countries. Founded in 1983, the company now makes products ranging from free weights to rowing machines.

It has already supplied exercise bikes, treadmills and more for several Olympic Games and will this year provide equipment for the event in Tokyo. It has also sponsored Formula 1 and soccer teams including A.C. Milan.

The business is now worth around €2.2 billion ($2.4 billion) and since it went public on the Milan Stock Exchange in May 2016 has seen its share price increase by 156%.

Speaking to CNBC, Alessandri said being self-funded helped the company to grow sustainably in the early days. He maintained a steady cashflow by getting customers to pay half of the equipment price upfront and then the other half upon delivery.

In fact, he says that it was only 12 years ago — some 25 years after the company was founded — that Technogym took on private equity investment.

He attributes part of the business' success to “sustainable” and “profitable” growth.

Humble beginnings

Before Alessandri hit the big time and started rubbing shoulders with the likes of Bill Gates, Arnold Schwarzenegger and Sylvester Stallone, he began by designing the first prototypes of his fitness equipment in his family's garage, near Cesena, Italy.

Born into a farming family, Alessandri describes in his book “Born to Move” how he was brought up by parents “who didn't have much money but who did have a great deal of dignity and humility.”

He says that he “quickly caught on that money was a problem” for his family and so, at age 10, started helping out his parents by taking an afternoon job packing fruit at his grandfather's warehouse.

At age 12, he realized he could make extra money using his passion for technical and mechanical design.

He tells how a wealthy friend at school asked him for advice on the best model of portable stereo to buy, which were “all the rage” in Italy in the 1970s. Alessandri then bought it off his friend for a half the price after he got bored with it, refurbished and sold it on for a profit.

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Alessandri did the same with a Caballero scooter and Volkswagen Golf car: buying, improving and selling them on for more money.

The Alessandri family garage where Technogym was launched near Cesena, Italy.

How Technogym got started

Not long after graduating from high school, Alessandri got restless and wanted to build a business of his own. Initially, he revisited his childhood dream of becoming a fashion designer and sent a letter to legendary Italian designer Giorgio Armani, who was opening a store in the region.

Alessandri never did hear back from Armani, but while continuing at his day job he became interested in the world of fitness after visiting a local gym and seeing that it only offered very basic equipment.

Seeing an opportunity to put his design skills to good use, he started designing equipment in his father's garage and, in 1983 aged 22, he founded Technogym.

As orders for his gym equipment started rolling in, Alessandri quit his day job and when Technogym outgrew the garage, he moved his burgeoning business into an old mattress factory.

The importance of culture

Alessandri said another factor behind Technogym's success is its focus on culture.

He told CNBC that his goal was to “leave a legacy for the next generation” which would be made possible by having a strong culture.

Part of this comes down to maintaining a “curiosity” and “passion” for the business, he said, which fuels “continuous improvement,” and he also emphasized the importance of being honest and transparent.

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