Earlier today, the editor of First Stage Investor publication (EarlyInvesting.com), a leading site on startup investing, released a Q&A that they've done with me a couple of weeks ago.
I wanted to share it with you to provide a bit more background on our company, our industry and myself.
As always, I welcome questions and feedback! Please don't hesitate to reach out.
The full interview is below:
"We Have No More Excuses NOT to Ride a Bike"
Editor's Note: We recommended EVELO to you on December 26, 2016. (Here is our original recommendation.) I'm also including the deal details below.
Minimum investment: $1,000
Security type: Preferred shares
Valuation: $7.5 million
Price per share: $1.32042
Industry: Transportation, fitness
Raising up to: $1 million
Below is a Q&A between EVELO founder and CEO Boris Mordkovich and me.
I'm big on cycling, and you'd think this connection with EVELO would have made me particularly enthusiastic about its endeavor. But, as you'll see below, it was the opposite - at least, that's how we started out...
Andy: I log around 300 miles on my bike every week. And this is what I think. You have concocted an evil plot to keep people from getting meaningful exercise on their bikes. Go ahead, tell me I'm wrong.
Boris: Well, pleased to meet you too, Andy. It's certainly not the first time I've heard this concern, but I think I can make a case for the exact opposite - that the electric bike user will end up exercising more and riding their bike more frequently than a non-electric bike user.
Moreover, over the last few years, we've seen that electric bikes hold tremendous potential at getting a much larger segment of the population onto bikes by removing the barriers that keep people from biking, such as hills, fitness levels, distance, age or other reasons.
Andy: Go on.
Boris: We've actually designed our bikes specifically for people who aren't riders or did ride at one point and quit. Sometimes these people live in really hilly areas, sometimes age or their fitness level is getting in the way of enjoying all of the bike's benefits. Sometimes they just aren't able to keep up with their spouse or riding partner, so they avoid getting on the bike altogether.
What electric bikes do is make it possible for people to go anywhere they want while having the control to decide how much effort they want or are able to put into it.
Take hills, for example. In the past, I've heard countless stories of people becoming so discouraged when they try biking because they have to bike up a steep hill and actually need to walk the bike up each time. As a result, it's not fun or enjoyable for them, so they give up after a few times.
With our bikes, they always have access to power on demand, which gives them the ability to pedal as hard or easily as they want and still tackle any terrain. It's a very empowering feeling.
We've removed the big reasons NOT to jump on a bike.
Andy: Let me get this straight. You're saying your bikes are better suited for non-bikers like my wife and that I should stick to my traditional 18-gear roadster?
Boris: Before I answer, Andy, how much luck have you had in getting your wife to bike with you?
Andy: Actually, none. She's simply not interested.
Boris: It's funny you bring up this particular example. My brother Yevgeniy loves riding bikes. But his wife didn't.
The way we got into this industry in the first place was he built his first electric bike so his wife would spend more time with him.
Andy: Did it work?
Boris: Absolutely! It did exactly what the intention was - which was to equalize their skill levels and make it easier for them to go ride together without worrying about distance or being able to keep up. She loved it!
Andy: Okay, I can see why a non-cyclist would take to an electric version of the traditional bike. You can calibrate how hard you want to exercise. At the same time, you're enjoying the outdoors and the urban or rural scenery as it whizzes by.
Boris: Exactly. That's what Yevgeniy thought too... that electric bikes could appeal to a much bigger base than traditional bikes. This idea began with him.
Andy: So I shouldn't take EVELO as a personal attack on my biking regime, huh? It's more for my wife than me?
Boris: It's for both of you. I think you'd have a blast on our electric bike. You'd probably stay away from the motor more than a lot of people, but that's fine. Think of it this way: Whatever distances you're doing now, you can double or triple them.
But on a more important note, it's important for all of us to be able to step out of our own shoes and see what sorts of reasons prevent other people from doing things like biking.
Even if you are the world's strongest cyclist, you can always come up with examples of people - a neighbor, a parent, a spouse, somebody at work - who aren't currently enjoying the benefits of cycling because of X, whatever X may be.
Andy: Sounds about right.
Boris: I think that we are living at a time when there are several macrotrends coming together that make the environment for electric bikes really fertile.
We're seeing bike infrastructure being built up in major cities all over the U.S., which improves safety and perceptions of cycling.
Personal car ownership is becoming less relevant each year with the advent of services such as Uber, Zipcar and many others.
Plus, there is a renewed emphasis on health and fitness among all segments of the population.
I think that the U.S. is at the early stages of a massive bike renaissance, and electric bikes will stand to benefit greatly from it.
Andy: How can you be sure?
Boris: I'll tell you a story. We started this venture back in 2011. To get the company off to the right start, a partner and I took our first models for a little 4,000-mile spin - from New York City to San Francisco. We wanted to test the bikes in action, but also better understand the cross section of our market.
I swear, every time we stopped to take a break, we drew a crowd. People were excited, interested and engaged. And after taking a short test ride, everyone would come back with a smile and a bunch of questions.
Andy: Hopefully questions like, "where can I buy one of these new-fangled contraptions?"
Boris: That among others. Like, "how does it work? How fast can it go?" Everybody was real curious because they could instantly relate to the product and imagine themselves or somebody they knew on it.
Andy: Sounds like a great trip!
Boris: It was. By the end, I pretty much knew we were going to be able to lure people away from cars to electric bikes. There's a reason why electric bikes are the world's most popular electric vehicle category AND the fastest-growing bicycle category.
Andy: Okay, let's back up a bit. What were you doing before EVELO?
Boris: Good question! My brother and I actually worked together for almost a decade prior to launching EVELO, during which we co-founded and sold two other companies. Both revolved around e-commerce. It's how we picked up our knowledge of online marketing.
Andy: What kinds of companies, exactly?
Boris: One was a print magazine that helped educate small- to mid-sized businesses on how to properly position themselves online and attract new customers through digital marketing. Another was a software-as-a-service company that helped businesses properly manage and run their online advertising. We even wrote a book on the subject.
Andy: So you learned a lot about what made e-commerce click. How about running a company?
Boris: With both of these companies, we started with just an idea, limited capital and a market that was just beginning to develop.
We were able to recruit a strong team, develop a profitable business model early on, and thrive to the point where both companies were eventually acquired.
While EVELO is in a different market, of course, many of the lessons we've picked up from the previous businesses still apply.
Andy: What does your team look like right now?
Boris: Our team is actually fairly spread out - between Seattle, Boston, New York and a few other cities. This allows us to attract better talent regardless of where they are while also staying lean and efficient. Combined, we bring experience from the traditional bike industry, retail and e-commerce - making for a perfect combination.
As a matter of fact, in early December, we wrapped up our team retreat in Seattle where we planned for the year ahead.
Andy: Any big takeaways you want to reveal?
Boris: Absolutely. We are working to continue to bring innovative new products to market in 2017, 2018 and beyond that can accommodate more different use-cases. We're also working on ways to drive down the cost of production at the same time.
We are working on ways to make electric bikes more accessible to people who are more price-sensitive - in other words, how to make electric bikes more affordable.
And finally, we are looking at eventually expanding beyond the U.S. market as well.
Andy: That's ambitious.
Boris: That's the nature of a young company. We want to challenge the existing industry that's been set in its ways for decades, and we got a lot of work ahead of us, so we can't lose time. That said, I believe we have a team that can get all of this done.
Andy: It won't be easy. But you and Yevgeniy are very capable guys, and you've done a great job so far. If I felt otherwise, I wouldn't have recommended EVELO. I wish you the best of luck.
Boris: Thanks. I appreciate the support and look forward to getting to know some of your members one of these days.
Andy: Speaking of our First Stage Investor members, do you have any requests? Anything they can do to help you out besides invest in the company?
For the members who invest, if they're interested in getting a bike for themselves or a loved one, we'd love to offer a special investor pricing if they would also be willing to become one of our ambassadors - which will allow us to connect them with potential customers looking for a test ride. This way, they'll also be able to make money every time they do a test ride, and it would tremendously help the company grow.
Andy: Consider it done.
Invest early and well,
Founder, First Stage Investor
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