Actual prototype in audience! It looks cool.
We take the romance and efficiency of a motorcycle and put that on a car.
Building a car is hard. I’m the only founder with an actual track record of building vehicles (video!) If you want to start a car company, you have to be a car builder. (If you want to start a web company, you better be a web developer.)
This project led me to ask, how to cut the car in half? Most people drive alone. We’re building the ford model T of the 21st century. Creating a sustainable mode of transportation that’s affordable (like model T for masses).
Lots of risks. but if you do it right, huge returns for 90-100 years.
What we’ve done for $800k: major risk reduction.
Remember Segway? What WE did is – not focus on engineering first. 80% of our financing showed that there was a market. reduced our market liability. proved that there’s a business case to devleop technology.
We built our own showroom in our lab. We started to de-risk the market. We brought in 54 people: baby boomer motorcyclists and younger professionals.
15.7% of everyone who came into this simulated dealership experience put money down on the spot. That’s 30 times what we actually need to have a viable company. Most investors will take the number you feed them and divide by 10. Every time I spend a buck, I want 10 extra return. We killed six birds with one stone. (engineer, design, media…)
We started taking preorders. First prototype: built it by hand. Saved 2.8 million dollars because we built a unibody chassis by hand. It takes six iterations to get to a beta.
After 3 months, we had a driving full scale prototype. This led to killing another six birds with one stone: we had an accurate bill of materials, and weight (needed for manufacturing). Also wecreated huge amount of media attention and increased preorders. We are half sold out of first production run, we proved to investors that we can build it.
Two wheeler that doesn’t fall over (even when pulled by another vehicle)
Iku who rides a motorcycle says: “it can back up!!!!!” (Sarah, drives a car, didn’t even notice!) They totally nailed target audience with their video :)
“We derisked all of our hardware. we have a prototype. now we just have to work on the code. We all know how expensive that can be.”
Read more: Lean Startup Conference 2012