Based out of Morrisville, Vermont, Concept2 is an American manufacturer of indoor gym (mostly rowing) exercise equipment. They spearheaded and popularized the indoor rowing machine and seem to have an incredibly loyal customer base. New York Times writer Seth Berkman awarded Concept2’s “RowERG” as the best rowing machine on the market. Customers are accustomed to great quality, durability, long-lifespan, low maintenance, responsive customer support, and the most accurate performance monitor, growing a cult-like following for the company and their products.
The owners of Concept2, brothers Dick and Pete Dreissigacker, founded the company in 1976. Given that they are about to hit their 50th anniversary and are approaching retirement age, they had to approach a succession plan for their customer base. Although they could have sold the company before “stepping away from day-to-day operations,” they transferred 100% of the ownership to the Concept2 Perpetual Purpose Trust (PPT) with support from Purpose Owned and Lumo Group.
Understanding a Perpetual Purpose Trust
A Perpetual Purpose Trust (PPT) is similar to a regular trust in that it manages assets according to a legally binding agreement. Unlike traditional trusts, which often distribute assets to beneficiaries after a set period, a PPT is designed to exist indefinitely and to serve a specific mission rather than individual owners or heirs.
For example, in 2022, Patagonia’s founder, Yvon Chouinard, transferred ownership of the company into a purpose trust to ensure that it would permanently prioritize environmental protection. Under this arrangement, Patagonia continues to operate as a for-profit business, but its majority profits are now legally required to be used for combating climate change and protecting natural ecosystems.
Concept2’s Purpose Trust
Concept2’s purpose that was put in its PPT is to “direct the management and operations of Concept2 in a manner that maintains continuity.” Rowing YouTuber Shane Farmer presented a great example of how the perpetual purpose trust reinforces their company’s methods and policies. Concept2 ensures that their performance monitors can function with any of their machines so users are not forced to purchase a new one. In addition, their software is continuously updating for the best customer experience. Concept2 breaks even on selling individual parts if something breaks. Protecting the customer’s best interests was important to the Dreissigacker brothers, and selling the company to a private equity firm was only going to lead to a focus on shareholder profits rather than long-term development. The implementation of a PPT prevents future leadership from selling the company or shifting its focus away from its operational continuity-based purpose.
A Growing Trend
Concept2 is just a small part of a growing trend of employee ownership in manufacturing firms. New Mexico-based Bicycle Technologies International is another PPT-owned sporting goods company. Other PPT-owned manufacturers include Optimax, ACP International, Shopbot Tools, and Breaking Ground, and ShopBot Tools.
Concept2 is based in Vermont, which has a long history of alternative ownership. Bernie Sanders initiated the Burlington Community Land Trust in 1984 to combat housing costs for citizens, and Vermont ranks among the top states for ESOPs per capita. Compared to the workers across the U.S., Vermont workers are more engaged with their work, happier due to increasing remote work, and have a low unemployment rate. Vermont also has a long history of worker cooperatives. A bill currently under consideration would create a framework for stewardship trusts. Embedding PPTs and employee ownership structures in companies like Concept2 ensures better outcomes for customers and employees while maintaining a legacy.
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I couldn't possibly count the millions of meters I've rowed on Concept2's over the year. I started at 15 and still get in 10,000 or so meters a week nearing 50.
Continuity as the legally binding purpose is the beautiful. They sell a product their customers love. Selling to strangers often looks rational on a spreadsheet and brittle for the town and the customers who depended on the parts policy.
Same question as worker ownership transitions: who holds the residual claim when the founders step back — and is that claim allowed to protect place, or only exit?