In 1973, Mike Sinyard was a business school grad from San Jose State with a robust internal dissonance prodded by his countercultural lifestyle. He preferred cruising around SoCal in his Volks­wagen minibus, or on flea-market bikes that he would repair. He eventually sold the VW in 1973 so he could cycle around Europe.

At the trip's end in Italy, Sinyard had about $1,500 left from selling the VW. That's when the business student found his gear. He met a trilingual Swiss woman and took her to a bike-component manufacturer to translate a deal he'd hatched--exporting Cinelli bike parts to the U.S. for the growing number of serious cyclists like himself. He returned to San Jose, and soon, he was importing other com­ponents as well, asking local bike shops to pay up front to fund the orders.

Sinyard worked alone in a trailer he shared with assorted roommates, keeping tabs on orders without a computer. Nearby, Silicon Valley was doubling RAM capacity every 18 months, but Sinyard reached sales of $18 million by the fourth year while carrying the whole operation in a different kind of memory. "There was no transfer of knowledge," he says. "It was all in my head."

Specialized became Specialized when Sinyard decided to source thick, durable racing tires from Japan that he would sell under his own brand. He also created a mission: If Specialized was going to sell something, it would be the very best available in the States.

The mission inevitably led to complete bicycles--from fat-tire mountain bikes to custom-fitted racing vehicles. Its top-of-the-line road bikes sell for more than $10,000, but most models are more affordable.

Today, there's a shrine to Sinyard's VW in the company's office in Morgan Hill, California. The trailer has given way to a modern complex housing 400 employees. Sinyard, 69, remains at the helm of the 1,600-­­person, $1 billion company--one still driven by the impulse and intuition of its founder.

An executive close to Sinyard describes him as "crazy inspiring" and "brilliantly batshit crazy." "There are no analytics to tell you about something that hasn't been invented," Sinyard says. "We rely a lot on observing riders and seeing what they like. We want to make things that people haven't even dreamed of."

What this all amounts to is a highly functional breed of late-stage hippie capitalism. Sinyard intends to keep operating on instinct and soul--and retain the freedom to, say, sink money into a new innovation lab, even if the company already has three. He wants to continue giving employees yearly bonuses. He also wants to continue funding the Specialized Foundation, which works with researchers on the effects of bike-riding regimens on kids with ADHD--which afflicts his family.

Sinyard realizes a Specialized employee is indeed special--a mix of curiosity, drive, collaboration, and humility. "We all have an ego--that's OK. It's what drives us. But it can't be so large that it's all about you," he says. Just remember, says the boss, that "the rider is the boss."