How to Amortize an Ebike, With Wombi CEO Dan Carr

Speaker A: It's another wonderful week for ZAG Talk. I'm joined, as always, by Greg and Sella. This week's guest guest is Daniel Carr, founder and CEO of wambi. But before that. Hey, gang.

Speaker B: Hey, Dan. Hello. Summer's finally here in the Northern hemisphere. Our season end approaches. How many have left?

Speaker A: There might only one be one left after this. So listeners, don't cry yet, but, uh, you know, summer break nears. But before we get to that, still all work, no play, because Sella's on the scene in Berlin. What's up, Sella?

Speaker C: Yes, I've just come back from Micromobility Europe. As of half an hour ago, just ran away from the arena.

Speaker A: You scooted away? Didn't run away, please.

Speaker C: Yeah, scooted away. But that was great. So that was going on for two days, yesterday and today. And, um, yeah, it was good. I know that you guys have gone to the America one before. I don't. I've not. I've never been to that one. But this one was. It was very operator focused. There was a big shared focus, more so than private. I think that's kind of the direction that things are going in for the conference. And it was just great, great to see so many new faces, so many old friends. We had on Monday our, uh, own event that we did with Urban Sharing, which was focused on the question of build versus buy. So should shared operators build everything in house through vertically integrated models, or should they outsource and buy the best through specialist partners? So that was really interesting. That conversation kind of carried on throughout the conference, but we had on that panel Forrest, based in London, Kultura, and a company called Bauer Media Outdoor. Do you know them?

Speaker A: No, but I can presume they do billboards out of home advertising.

Speaker C: Yeah, exactly. It's kind of. And then they have bike share that's integrated as part of this wider advertising network, which is really interesting, but it was a really good setup. We basically had some judges and an audience vote to kind of decide which is the strongest model. Although no one can really be labeled under one model. But it was the hybrid model that won that vote, which is kind of selectively choosing what to outsource and what to build in house, which is, I think, the predictable win. But it was really good.

Speaker A: That's great. Forest, uh, obviously just raised some fresh funds a few weeks back, so I'm sure they're in a ebullient mood. But also, I would think, top of my mind if I was at a micro mobility conference, Lime IPO on the horizon were people CHATTERING Was there buzz? Was there gossip or was everyone just respecting the quiet period?

Speaker C: There was, there was buzz, but it was unfulfilled buzz. I think everyone's being very quiet about it. We didn't get much extra information on stage. No one really. Everyone's saying, oh, it doesn't really change anything. Like voicing doesn't really change anything for them. So it was definitely like you couldn't ignore it, but didn't um, get much new information from it.

Speaker B: M. My question is whether there was a hot new exhibit when I was at south by in Austin in March, you know, we had to go stop by uh, Rivian to go see also there. I see sponsors, but. Yeah. Who had the cool new hardware.

Speaker C: Yeah, well we saw also. Which was good. That was great. They had all their bikes there. Who else saw Bosch not really exhibiting hardware such, but good to kind of see what they're doing. And then all the main operators bringing their latest models. The bike brand Navi Navy have come with their latest E bike, which was cool to see. It's kind of like uh, a. Yeah, it's much bigger than their past model. They're kind of targeting it more towards delivery and larger riders. Just filling a kind of gap there in markets. That was good. But yeah, there was a lot on the exhibition floor. And then I also we moderated a panel on fundraising and that was really interesting. So that was with fundraiser eit, Urban, uh, mobility and no such ventures. And that was kind of what we wanted it to be was basically what turns them off and what turns them on with pictures, pitch decks, what they looking for. So you can let me know what you think. So the lessons that we had from that, the main things, memorandums and of understanding, letters of intent. They don't care about it. It doesn't mean anything. They take away is basically they want to see commercial traction.

Speaker A: Show us the users. Show us the.

Speaker C: Yeah, yeah. But obviously even if it's, even if it's not a money generating company, there has to be something more than just vision there. So whether it's cold calling or just something different. That was kind of my takeaway. Basically signal that there is interest in you doing something different there and that you're going to execute on this.

Speaker B: That's exciting.

Speaker A: I'd say it sounds like bikes and scooters are back. Maybe not as frothy as it was five years ago, but uh, the market's uh, found its legs.

Speaker C: Yeah, definitely. I think every year. I think I said this last year as well. Bikes continue to take Focus, I think it's fair to say again, this year, more, much more of a bike focus and a scooter focus. But yeah, but really good.

Speaker B: But yeah, don't let us keep you on your way to the after party.

Speaker C: Yeah, sorry, I'm in between locations now. I have to run out of this apartment and into a new one. But I will leave you. Thank you so much guys and see you next time. See you next week.

Speaker A: All right, so it's me and Greg. Um, we're going to kind of bring you guys the rest of the news. I, uh, got a lot to get into and there's one story I feel like, Greg, I know I've been tracking this one, but I feel like you must find this intriguing too, because we just love watching the financial market process these companies. So the last week or so Uber has been trying to gobble up DeliveryHero. Um, but there's so much more backstory there. Right, so DeliveryHero, multinational Berlin based third party delivery platform. Always been one of the weaker players. Never quite achieved profitability. Been around for 15 years. For the longest time it was backed largely by Prosis, the sort of Dutch South African e commerce holding giant. But about a year ago, they basically decided to switch their horse to justeattakeway.com, another, another European delivery platform. And as part of that, you know, for the competition concerns, basically the EU made them sell down their Delivery Hero holdings. You can't own both because that would be anti competitive. So they've been slowly offloading Delivery Hero for the longest time. The main buyer was this hedge, uh, fund aspect. They basically wanted to then split the company up for parts. They could realize more money with the stronger markets on their own and just killing off the weak ones was the thinking. But then in the last week or so, both DoorDash and Uber started sort of circling the wagons. And it seems like Uber basically made the first move. They bought up a pretty sizable amount. I think at this point they're basically around 30%. And that changed everything. All of a sudden it's like, wait, wait, wait, wait, wait, maybe we don't want to sell it to you.

Speaker B: I was to say not so much circling the wagons, which would imply defensiveness, uh, but more like circling vultures in this particular case. But yeah, it is interesting to see. I mean, just to me it underscores like, uh, maybe the real business all along here was financial engineering, given the fact that we're seeing Uber swoop in to acquire, uh, you know, shares in the open market, get an End round around an end run around their rejected offer. And then it's hilarious that like yes, Process is now finally the sleeping giant is awoken and now they're figuring out how to extort as much cash as they possibly can out of Uber, which is probably the, the end game here. But yeah, it's, it's hilarious. They're taking these, you know, these uh, these bundles of assets and figuring out ways to now squeeze out any last dime out of them after never being profitable.

Speaker A: Yeah, yeah. And yeah, the last update I saw was basically they'd gotten permission from, you know, the right EU bodies to extend the holding period so they basically don't have to like fire sale it off over the next couple weeks so they can negotiate or with Uber or whoever else, which seems, seems like a fair compromise with the commission. But yeah, it'll be really interesting to see one, like what the final price is. Two, seems like it's going to be Ubers at some price. But could some other player swoop in? Could DoorDash make a sweeter bid? Who knows? But yeah, I guess eventually all those uh, people ordering delivery in Eastern Europe and the various delivery hero geographies you'll be doing on the Uber app.

Speaker B: There you go. Well, I have a loaded question for you, Jonah. So you know, uh, Process is trying to make the claim here that this will harm European technological sovereignty and competitiveness if Uber acquires it. Is that true?

Speaker A: Really harm Europe's tech sector? We love using the word sovereignty and all sorts of things now to make it seem like this is like a defensive.

Speaker B: I reside in Canada, man. All we do is think about a sovereignty these days for good reason.

Speaker A: I, you know, I haven't thought about the national security implications of who I'm getting my of delivery hero.

Speaker B: I know it's, it's fun to think

Speaker A: about out there, but yeah, uh, uh, thank goodness it's not a Chinese app. That's all I can say Anyways, so moving from uh, delivering food to delivering everything else, one thing that's also been picking up speed is literal speed of delivery. So both Walmart and Amazon launching 30 minute delivery in the last couple weeks. Amazon fired first. Basically they'd been testing half hour delivery in a couple markets and they took it to basically half the country last month. And now Walmart's match them 30, uh, three US markets, 19,000 zip codes, which is about half as many zip codes as there are half an hour or better. They both emphasize that it could be better. Amazon even has like a little live countdown timer on the site that says, oh, it's going to be 23 minutes. So yeah, I don't know. We've never gotten 15 minute delivery to work in the US like labor costs are too high and we're too sprawling. But half hour seems to be the kind of like fast enough sweet spot that we're honing in on.

Speaker B: Which is funny to me because that's both. Of course, 30 minutes is mark Keddy's constant. Like that's like the human heartbeat of movement. And then also it's Domino's Pizza promise from the 1980s. Like we're back to like basically, you know, 30 minutes of your pizza is free practically. So yeah, I guess we always knew this. I mean, to me the question about this is of course is this sort of the interesting punch counterpunch going on between Walmart and Amazon where Amazon as of late and Bloomberg did a great story and visualization on this is pushing hard into rural offerings and trying to basically extend their network to basically attack Walmart in its rear. And then this would appear to me on first blush at least, you know, given the markets of Austin, Dallas, Houston, you're, you know, you're sprawling Texas Triangle cities to start and Oklahoma City. Um, but yeah, you want to go back to urban areas. So like, you know, can you stage your sort of uh, your urban locations here to carry this out? So yeah, it's Oklahoma, basically.

Speaker A: North Dallas at this point.

Speaker B: Yes, well, yeah, which is, I mean, and if you can make it happen in North Dallas, you can make it happen anywhere. There's a reason the Metroplex is ground zero for drone delivery and everything else here. Like that is the American template of sprawl in the 2000s.

Speaker A: So yeah, yeah, yeah, I think, uh, to your point, yes. This used to be pizzas, now it's whatever skew your heart desires. I wonder eventually could I get, you know, a lot of Walmarts have like a Pizza Hut in the, in the forecourt. Could I have someone throw that greasy pizza in with my, uh, you know, toilet paper?

Speaker B: I'm sure you can. It goes back to like my whole ongoing thing here where like again north, North Dallas, like the, you know, the entire American tech industry is designed to keep you on your couch doom scrolling forever and then everything you need is going to be arriving at your doorstep there out in your cul de sac.

Speaker A: Well, they want you doom m scrolling. They also want you trading stocks. So new public offering Matternet drone delivery. They just raised $33 million as part of a reverse merger taking them public Obviously if this was a few years ago, this would have been a spac and Greg and I would be gleeful with all the details. But I think the fact that this was only $33 million shows you that uh, still not quite as frothy a mark as it once was for technological whiz bangery and that's not going to get them very far. Fighting gravity is expensive as we always say. And I have to suspect, especially if you look at who took them public, E Holdings, Montrose Capital Partners, there's going to be a lot more dilution to come. Basically they're going to keep selling down stock as far as they, to keep this thing afloat obviously going Greg, also

Speaker B: a cautionary tale, not quite, uh, living up to the saying of being too early is just as bad as being wrong. Uh, they're not quite wrong yet. But Matternet was the pioneer in this man the vision of multiple switching stations, of basically building a packet switching drone delivery network for the planet. Like the way you have tcp, ip, all that sort of stuff. And they really seeded the ground intellectually for a lot of stuff there. But this goes back to execution, product, market fit. All the other drone companies have gotten out there with their retail partners and doing delivery stuff. And Matternet, that's just really never gotten the same kind of traction at least here, certainly here in the States. I mean I know there were Swiss

Speaker A: people, they had that UPS pilot for a long time. Um, I did an interview with the CEO Andreas a couple months ago and yeah, he sort of talked about that. Yeah, that's why it's matter net like Internet, but for matter.

Speaker B: Mhm.

Speaker A: And I don't know, I mean when some of these other guys have raised hundreds of millions, probably this point, billions of dollars, um, I suppose sometimes you just need that special sauce as a founder that lets people just rain money on you, but.

Speaker B: Well that too. And like, you know Jonah, I can see a business model where it's like we're just going to basically assist Walmart in parachuting packages into people's backyards in northern Texas versus we're going to build a matter based Internet, I don't know, 33 million. Let's see how far they get there. We get a few routers going.

Speaker A: Good for a couple routers.

Speaker B: Yeah.

Speaker A: Well, speaking of money, uh, it's a little potential but we can't help ourselves. The two IPOs are sort of looming over the market now. One's at least transportation related sort of, right?

Speaker B: Uh, well yeah, I mean it's obviously referring to SpaceX and anthropic. Anthropic says they've confidentially filed paperwork. We haven't seen that as one yet, but yeah, SpaceX, uh, it's got me alarmed there, particularly what we're seeing now or what they're requiring there with from the s and P500 and index funds here, that the idea that my retirement accounts are now Elon's exit liquidity is uh, a bit of something to think about there.

Speaker A: He just needs a little bit more, more help. He's such a solid guy. He just found himself in a little pinch of trouble. Could you spare a dollar, brother bro?

Speaker B: One more state pension fund, I'll get to Mars, I promise. Um, but yeah, that's there. And then there's Anthropic of course, which just uh, finished its massive fundraising haul. And I think all the analysts pointing out here the Benedict Evans and Paul Kudrowski's the world and weighing in on their newsletters, I think, as Kadroski pointed out, that Anthropic alone would be greater than the total IPOs of every company in the dot com era from 95 to 2000. And I think it was Evans who pointed out that if you add AI's projected IPO into there, and please stop me if I'm being a broken record here, but like the sum total of all IPO money ever raised. So that's, that's really we're at here. We're like, we're like at the end M stage of the market's ability to even digest this stuff. But Elon's going to get his exit liquidity and then we're going to go to Mars.

Speaker A: Well, we will see where it takes us.

Speaker B: Well, someone pointed out also that the SpaceX, you know, IPO is going to make it, make a Tesla merger inevitable so he can get the kind of controlling interest he wants the sort of shares there to take back total control. So we'll see if that conspiracy theory plays true where in the end there is just Elon Musk, Elon Musk Enterprises, eme.

Speaker A: Just, just Elon Inc. I'll be very curious. Here in Southern California, there's obviously gonna be a bunch of newly minted millionaires of SpaceX employees tooling around in their Teslas. So watch out. Real estate market, I guess. And on um, the other side of the political spectrum. I thought this one was interesting. So Massachusetts just recognized the first official rideshare drivers union. So 70,000 drivers supposedly like the biggest group of new private sector workers to get union recognition since ford joined the UAW in the 40s, which is crazy. And so they can basically now collectively bargain with Uber and Lyft over wages and benefits and whatnot. Yeah. You know, obviously unionization in this country has not been going in that direction for quite a few decades. So. Interesting to see this happen. No surprise it's in a left state like Massachusetts, but curious if this sets a mold for other left leaning states.

Speaker B: Well, perhaps it will. It'll be interesting to see if California, given everything that's happened out there with the various referendums and things, uh, that the uh, various ride hailing companies have sponsored over the years. But also, I mean, does this also just basically add more of a tailwind to autonomy? One way to deal with those troublesome unionized drivers is to replace them with an algorithm.

Speaker A: Yeah, yeah, that'd be curious as a sort of like longer tail effect, you know. Now that there's this political body, does that mean there'll be more regulatory blockades towards autonomy in the, uh, Massachusetts state government?

Speaker B: No. Potentially. And then we can basically imagine how this plays out, right? Then we start hearing about, uh, captured markets and uh, all this sort of stuff here. Yeah, rentiers and regulator arbitrage and that sort of thing. Uh, but the flip side too, the notion of like, well, if you make better things possible, then capitalism will just find a way to cut you off at the knees kind of thing. So it'll be interesting to see if the unstoppable force of the immovable object holds up in this particular, particular case.

Speaker A: Greg, you're so optimistic.

Speaker B: It's, I've just, you know, Adam Smith would agree with me on this one.

Speaker A: Yeah. So speaking of optimism, uh, this one, I can't tell if I like this story or not. There's a little bit of pros, uh, and cons here, but Kansas City, not a, uh, town that we often talk about, but so they just expanded their streetcar, uh, about three quarters of a mile to the riverfront. Not a huge extension by any means. But what's interesting about this one, you know, there was this whole wave of Ray LaHood FTA era streetcars that are basically all boondoggles. Like no one rides them. Um, they don't go anywhere. Important cities sort of use them as like economic development tools. DC literally just ripped theirs out. And Kansas City has been sort of one of the rare success stories. Uh, it gets around 10,000 riders per day. The route's now 6.4 miles, has dedicated transit lanes, comes every 10, 15 minutes. It's no fair, you know, I'M not saying that's European or Asian level success, but for Middle of America transit project, not too shabby, right?

Speaker B: Yeah. Although, again, underscores, uh, I would say I was under the impression that a lot of those air projects were basically sort of driven by real estate interests. Of course, basically hood ornaments and sort of, uh, urban revitalization, gentrification efforts.

Speaker A: Yuppie, um, downtown condo thing.

Speaker B: Yeah. I mean, to me, the most cautionary tale of this sort of thing is always Detroit. They put in the core of Dan Gilbertville there in Woodward. They've got a streetcar which goes under the people mover, the previous generation of transit to nowhere kind of thing. So, I mean, good for them for further expansion. But yeah, I mean, but if it means. And I think that's the sort of second half of this. They're also pondering further cuts to their bus routes once the World cup rolls through. And, oh, I don't know, the less

Speaker A: said about that, the better. It's like we can fund the shiny thing, but not the thing that the people actually need. So the local public transit authority is looking at cutting a quarter of its bus routes and basically waiting until right after the World Cup. You know, we've got to look nice for the visitors, but then cutting a quarter of the transit network, which is already fairly anemic. And yeah, obviously there's sort of different funding streams for streetcar versus the, uh, transit. But, uh, yeah, again, it gets the question of, like, who is this for? What's the purpose of this? And.

Speaker B: And whose interests are being served by expanding the streetcar versus that sort of essential service? I mean, these ongoing, ongoing questions here about policy and who it's for. Uh, I just think it's funny, Jonah, that, like, how are we going to solve the World Cup's massive transportation challenges? Well, no one's going to go. That seems to be how we're going to fix it there. I did just see that. You know, going back to our earlier Item about the $98, you know, transit, uh, fare to the Meadowlands. Apparently it was.

Speaker A: Now, that's discounted from where it was going to be. From where it was going to be.

Speaker B: Only 6% of those tickets have pre sold. So I don't know, perhaps there'll be a groundswell once the matches start and everyone remembers how much they love the spectacle, but right now it's quite a damp squid.

Speaker A: Let's see, uh, T minus how many

Speaker B: days, I've lost track myself. I know Finland, Norway is on the 25th there. Holland versus embalming listeners chime in.

Speaker A: Tell us, when does the football start?

Speaker B: I was going to say, where is Athena here to lash into us for this?

Speaker A: Well, one thing that's happening before the World cup next week, I'm going to be in Detroit. Uh, any Michigan based listeners, come join us at the Urban Autonomy Summit. This particular edition focused really on owned or on demand. What's the kind of next wave of AVs going to look like? I think huge implications for not just the country as a whole in our cities, but Detroit in particular, auto manufacturing. If this is finally the moment where we start sharing vehicles versus everyone owning 1.8 cars, that could be pretty impactful on manufacturing. But the jury is still out. Every time we make, you know, some new form of cars, it seems just mean people buying more cars. So I wouldn't bet out personally owned autonomy quite yet.

Speaker B: I was going to say. Yeah, uh, none of the projections about ride hailing really eating into personal car ownership came true. Just sort of like piled up, increasing vehicle miles traveled on top of that. And we'll be curious Atomy I know David Zipper was just writing about this, uh, about the push to do privately owned, uh, AVs. And then my friend Julian Bleeker, foresight practitioner known for design fiction, just did a fun piece where he imagined basically, yeah, the equivalent of sort of informal AV taxis that people put out on GitHub. The software figure out the hardware and so, you know, you basically have sort of stealth black cabs or sort of, you know, the old school equivalent, this, of informal transport, uh, out there running a parallel taxi network out there. Like you know, sort of sneaky dollar

Speaker A: vans running on GitHub.

Speaker B: Yeah, it's basically, it's basically dollar vans on GitHub. It's a really good way of putting it. So. But yeah, I think we'll see some strange permutations versus just public or FL or private fleet.

Speaker A: Well, the future is always going to be strange. Greg, uh, meet you in Windsor on the other side of the river.

Speaker B: I don't know if I'll be there for that, but, uh, yeah, Jonathan, uh, if you're in the US Conference of Mayors, uh, meeting in Long beach this weekend, I will see you there. I'll be, uh, kicking off a session for Civic IO which is like sort of their urban tech. So perhaps I'll squeeze some of this in.

Speaker A: Very cool listeners. Let's tune in to hear from Dan and uh, Greg. See you soon. And we're back. I'm joined today by my friend Dan Carr, founder and CEO of Wambi Bikes Hey, Dan.

Speaker D: Hi, Jenna. How are you?

Speaker A: I'm great. So, uh, Dan and I have known each other for quite a few years now. Both, I'd say friends. Friends with shared dorky interest in mobility, but also over at Mobility vc, we've been working together for some time now. And so, yeah, excited to both talk about, you know, how bicycle companies can work with funds but also get into the sort of, you know, state of the market with you. So what's new, Dan?

Speaker D: Thanks, Jonah. Good to be here. Uh, well, what is new? Well, I think, you know, working with Mobility vc over the last six months, we've been putting together some funding for the company and for funding our growth both in Australia, um, in our Australian business and also over here in the U.S. uh, and I guess like most founders, it's nice to have a reasonably significant kind of capital raised behind us and putting that, you know, putting that to work now, particularly over the. Over the US Summer. So, yeah, news is that it's just been Bike Month. We've been really busy and we've been deploying new fleet over here. So, uh, yeah, it's good times.

Speaker A: That's good. That's great to be busy. Why don't we start with a little bit of a background story, uh, as an entrepreneur, how did you get here? Were you just born thinking about bicycles or was there a bit more of a winding journey?

Speaker D: Uh, well, close to born thinking about bicycles. I spent much of my youth on a bicycle. I, uh, grew up in very, I guess, remote and rural part of Australia. And, you know, my primary mode of transport from probably age 4 to age 18 would have been a bicycle.

Speaker A: Beautiful.

Speaker D: And so, yeah, I have a very fondness for, for riding bicycles, you know, just. But I didn't really, you know, think about that. And then I think once I moved to the city, my bicycle got stolen pretty quickly actually. And I didn't. And I didn't. I didn't. I didn't.

Speaker A: Yeah, yeah.

Speaker D: And, uh, I didn't ride a bike again really for either recreation or transport for, uh, many years. But I guess as part of the founding story for this company, uh, about in my mid-30s, I really adopted what I learned, eventually became, you know, eventually Learned was the 20 Minute City lifestyle. And I didn't know it was a thing. I didn't really know around, you know, the theory or the framework or the practice around it at the time. But I got really sick of car commuting. Ah. I had two young kids and when I had my second child, I was realizing I was at this kind of 45 minute to an hour and a half type commute from a nice beachside suburb to the city. Um, and it was just killing me. And I proactively just went. Even though we'd just renovated our house and had a young child, I was like, no, we're moving. And we moved back to the CBD area of Melbourne, Uh, Melbourne, Australia. I was living at the time and I had this rule like it just wasn't going to take. It could not take me more than 20 minutes to get home. That's where we were going to rent a house. And, uh, yeah. So anyway, I learned later on from my brother Benjamin, that's the whole thing. And I've learned more about it since. And then, you know, after moving back, and then I had another friend who was like, uh, why are you walking everywhere and still driving your car? Um, why don't you get a bike? I was like, oh, yeah, I like riding bikes. And so I got a bike and very quickly again, got, you know, got back to riding absolutely everywhere. Then my, you know, my partner started riding everywhere and then we started towing the kids around in a trailer. And we're just using bike as a form of transport. So that's the, I guess, the background of, you know, bicycles for me. And then at that time I started looking at transport through my role in banking. Uh, so I was running commercial lending and asset finance at one of Australia's kind of largest commercial banks and got really interested in the transport portfolio.

Speaker A: Sure.

Speaker D: There was a lot of change happening in transport at the time. A lot of opportunity and risk in our portfolio because of that. And then I rang my brother Benjamin, uh, my youngest brother, who happens to be a transport expert who'd been living in Europe for about a decade, working in public transit and vehicle and mobility consulting, asking him what was happening with electric trucks and buses and, you know, autonomous vehicles. This is back 2018. And he got me really excited about micromobility, um, which had just happened to be. At the same time, you know, I'd had my recent personal awakening around, you know, why it was better to be getting around a city on a bicycle. He'd been doing quite a bit of work in micromobility at the time. And, uh, yeah, we both got really excited about that space that exists between, you know, the car and public transit. And this, you know, what we thought was a really exciting category of electric bicycles.

Speaker A: Yeah. And so that, I suppose led to the founding of Lug and carry, which is the trade name you guys use in Australia. Obviously we're talking broadly about electric bicycles. But it's not that you spun up necessarily a manufacturer or that you're white labeling someone else's bikes. Talk about the model for a second if you could.

Speaker D: Yeah, so we do uh, I mean we really were a service innovation and the, you know the founding insights for us were um, Benjamin's a product designer and a lot of people thought we were going to design and build an electric bicycle. But our, our founding is. Yeah, yeah.

Speaker B: Right.

Speaker D: Well, yeah, thank you. Yeah, thank. I mean I probably would have done it right. But having him on the team um, from the start was like no, we're not designing a bicycle and trying to get into manufacturing. No, I mean our read of the market was that there was some really great product coming to market in the micro mobility space. But the sales and service ecosystem that existed for uh, bicycles was not well suited for the opportunity for bicycles as transport. So bicycles, you know, mostly globally are sold as sporting goods and recreational products, not as vehicles. And they don't have the ecosystem or the sales and service networks that um, exist around vehicles or they're immature and they're more set up for like sporting goods use cases. So that was our kind of one of our founding insights. And then you know our second founding insight was that utility bicycles, so cargo bicycles have the opportunity to introduce, introduce a lot of new use, you know by introducing the, addressing new use cases, bring a lot more people into the market and make a bicycle, you know, more useful on a day to day basis for many more trips. And that would displace car trips or public transit. So that was our, you know they probably are two founding insights.

Speaker A: Yeah, the cargo bike is a car replacer and yeah, the fact that many a person that could sell you a acoustic uh, bicycle will have almost contempt for the fact that you want an electric bike because then that's not sporting.

Speaker D: Yeah.

Speaker A: What I particularly like about the Model M from like a business uh, lens is just. Yeah, yeah, it has all the positive attributes but it's, it's almost sort of like a fintech play meets a service play because people are coming to you and instead of buying a $3,000 bike, which is scary and a big commitment, you can now sign up for a monthly uh, effectively a lease and then uh, it's like a much more palatable nibble into the addictive form of electric mobility.

Speaker D: Yeah, yeah. So I think that's, yeah. So really great. Bicycles that are good for everyday transport in a really flexible and supportive ownership model with uh, kind of embedded after sales Service and support. They were our, you know, they're the tenants of what we do. Uh, and there's what's made us successful, you know, not just shipping a bike in a box. And there you go. And you know, I think, you know, we do it on a flexible month to month lease or a subscription, as you might call it. Uh, but it was really about providing that automotive level of financing, insurance, you know, easy to pay for, easy to own, easy to service, you know, good after sales service, but bringing that to this category. And then the flexible side of it was, you know, that was based on the fact we, you know, the consumer research we did show that. So, you know, price, price of an E bike was a very significant factor to adoption. So me people love, you know, if you show people a bicycle and say, could you ride a bicycle and if it had an electric motor, would you like to ride it more? Most people are like, yes, but, you know, simple, yeah, $3,000 is a, uh, big step. And so that ability to have that kind of safe space to try it, you're doing the work we needed to do from a product and a financing perspective to make that work, that's been the unlock for us. So, um, yeah, it's worked quite well.

Speaker A: Yeah. And so you sort of scaled that across Australia's cities and then you thought, I've run out of Australia, where do I go next? And I feel like that must have been when we sort of first met because I feel like before you moved to the US you were visiting very often and this was, I don't know, four years ago or something, meeting with you. And you, uh, met with our managing partner at the fund, Sam. And I think it just kind of started as like a chit chat, like a, uh, hey, should I take this crazy business to the U.S. right?

Speaker D: Yeah, yeah. So I think, I mean the story about coming to the US has been interesting. So we, we launched, I mean we, we received our first hundred vehicles into the fleet late January, early February 2020 in Melbourne, Australia. And then four weeks later, we were in restricted trading conditions for two to three years. And you had the boom and the boom and the uh, supply chain constraints and all the stuff during that time. But I mean, those first hundred vehicles in the fleet moved very, very, very quickly. And our, uh, supply chain partners were very quick to point out that there's something in what you're doing and maybe it would make sense to do it in North America. And so it was actually really early on that, you know, we started talking to our supply chain Partners about that. Uh, but then we really just had to put it to bed. You know, like we, we needed to focus on making sure we had the product market fit and that we could scale operations and do all those things and do that, you know, during what were reasonably, you know, good consumer demand side of things, but difficult trading environment because of both, you know, the retail side of things as well as the supply chain side. But we managed to scale it in Australia and do that quite well. And then I think it was, you know what it was actually Oliver, Oliver Bruce from the Micro Mobility Industries who at some point reached out and said, hey, I've been looking around. Your business is like quite material, you know, globally. And uh, have you thought about taking it to another country? And m. Like yeah, we're kind of getting onto it and that it was quite interesting. That seemed to be that that was the juncture when we both had the headspace as well as I guess a few little stimuli to take it, you know. Okay, let's have a look. Um, and let's, let's look at North America property and start picking some c. We'd done a lot of pre work on it, but we weren't like actively doing it. So yeah, I started to come over and learn the market which would have been when I would have met Sam and yourself. I guess the interesting things for us were we've been very mission driven from day one that the opportunity was not to go into mature markets but the opportunity was to build the market. Particularly like you know, where we saw, you know, it goes back to that founding insight that there's great product out there, but the level of adoption in places like Australia at the time the UK and the US was really low. Bosch had been building electric bike drive trains for a decade in 2019. Really significant, great quality product. The product maturity was really high, but the product adoption was really low. And so proving that we could make that happen in cities that weren't globally recognized as cycling meccas was the coolest

Speaker A: thing about not just selling more bikes to Portlanders, but proving that if you take this to a less, you know, bike pilled market, you can, you can get people to adopt. So sort of a blue ocean strategy, correct?

Speaker D: That's it. Yeah, that's what we wanted to pursue the whole time. And so there's a lot of, you know, a lot of other outdoor recreation consumer goods, uh, companies will tell you there's great overlap between east coast Australia and west coast US in terms of consumer attitudes, brands, et cetera. So that was a Logical place for us to start looking. Ye.

Speaker A: So you're following us, uh, like the Billabong model of the 90s, I suppose.

Speaker D: Yeah, I guess, a little bit. Yeah. I hadn't really thought about Billabong, but yeah, you're right. Yeah. And then, you know, like just what we've seen in say, Sydney, for example, right. Sydney was, you know, people thought we were crazy going to Sydney. They're like, yeah, it works in Melbourne, you know, and it's not going to work in Sydney. Right. Because everyone, like every, every city is not bike friendly. Right. Uh, turns out, you know, Sydney's been a runaway success for us. And then, you know, turns out LA has been pretty good as well. So it's just about, you know, how you're deploying at that local and community level. You know, there's many, many, many three mile trips that are actually quite pleasant and reasonable to do by bicycle. You've just gotta take people on that journey.

Speaker A: Yep.

Speaker D: Yeah, yeah.

Speaker A: So then you launched here in Los Angeles, technically, Culver City. Uh, what, what year month was that?

Speaker D: That was August 2023. I know, right? Yeah, yeah, it really has. Yeah, yeah. And then we're now in uh, both Seattle and the Bay Area as well.

Speaker A: Yep.

Speaker D: All right.

Speaker A: So slowly taking over, uh, the west coast. And I should say maybe I need to do a disclaimer. My wife is a happy Wambi customer. Although she, she pays full price. We're not getting a special promotional rate here, but. Yeah, no, I mean, I think what's amazing is you see them around town. Uh, and again, it's not that you've got, you know, your own crazy special hardware, so it just, you got to look for it in a sense. But uh, yeah, I think adoption really is proving your model people, if they see a bike and it's attainable and affordable and you have like a service that makes them comfortable, that when something happens they're not going to be left on their own. I think obviously it helps that there's been a bunch of bike lane investments locally to make it comfier to use a bike. But uh, yeah, I think, I think the model's bearing out.

Speaker D: Yeah, I think the. And look, this is, this is a hindsight revelation. It was not designed for. Right. But the, uh, we realized that by doing the flexible lease or the subscription, you know, and giving people the opportunity to, to exit really easily. So you just have to give us 30 days notice and we'll actually come and pick the bike up. Like there's no, you know, there are people who do versions.

Speaker A: There's no hard feelings.

Speaker D: No. And there's people who do what we do and there's like a, uh, you know, there's a restocking fee or, you know, it's like really hard to give the bike back and you know, all this stuff. Right. And we just haven't done that from day one because we want to. Well, they're our assets and we own them and we want to look after them is one of the key reasons. But also just from the consumer side, we just want to make sure that, you know, there is that lowest barrier to entry at the acquisition point. But by paying, you know, by having the monthly model, we've got to win the customer every month. Right. And so we end up with a whole bunch of customers who don't become bike riders. We end up with a lot of churn and we, we don't make any money per customer. And so, you know, our uh, origination model is really beyond the point of just delivering the bicycle and training. You know, that's why we do things like a 45 minute orientation that's very prescriptive. That's why we do things like helping our customers understand what riding in their local area looks like. All these things we built into it is all about, you know, kind of activating the person as a bike rider. Not dropping a bike in their driveway and.

Speaker B: Yeah.

Speaker A: Which I think is amazing.

Speaker D: Or sending out on the road.

Speaker A: The DTC model where it's, I don't want to say it's all fly by night, but there's a lot of just like aspirational like, oh, you're going to love this but if you don't, you bought it. So.

Speaker D: Yeah, yeah. And I think that's uh, it just, it works well. Right. Again, it's about playing in that kind of differentiated and blue ocean space for us and being, you know, being a differentiated company. Yeah, that works. Yeah.

Speaker A: And I think, you know, the thing that, and I don't mean to just say you're right about everything, but there is something about cargo bikes. You know, I ride a regular acoustic single speed bicycle. Um, and I don't do a lot of, you know, I don't take it to the grocery store because then I'd have to have a humongous backpack on. But my wife with, you know, it's, it's a turn and you guys got what, quick hauls, GSDs, HSDs. She's got the nice panniers and the rack and yeah, she'll pick up up groceries at Trader Joe's and come back. And yeah, it really does augment trips that might otherwise be done on public transit or worse yet on a car.

Speaker D: Yeah, I think that's it. Right. Like, so the, the, the big thing for me was I made that transition to being a bike rider. Uh, a we, you uh, know, towed the kids around in one of the little trailers behind the bicycle and considered myself a I ride my bike everywhere guy. Right. And it wasn't until Ben just said go and buy an electric cargo bike because everyone in Germany is starting to use these things.

Speaker A: Sure.

Speaker D: Yeah. It's back in 2019 and my wife and I hess rode one and just bought it on the spot because we, we'd had enough lived experience with the other way of doing things. And then after a couple of weeks I just noticed we just. The car hadn't been used.

Speaker A: Right.

Speaker D: And I didn't think, you know, it was like it was an, it was a uh, again a realization after the fact. I was like, hang on, we did that on the bike. We did that on the bike. We did that on the bike. Which was showing me that I wasn't actually riding my bike everywhere. There were so many trips I was still dependent on the car for because I didn't have the utility. And so the utility that the utility is really important and it means you and the other one is like there, you know, and this is Ben. You know, the great thing about having Ben to found the company with is really smart stuff like choosing the turn. But you know, the turn bicycles that we've chosen that are, you know, fit a wide, a uh, broad range of body types, you know, ergonomically and can be easily adjusted and can be adjusted for different types of utility or different types of, you know, passengers of different ages. But even just like shared in a household like your car automatically, you know, comes with the features that allow you to easily share it with somebody who's got a different body type to you.

Speaker A: Sure. Pretty easy to slide that seat back. Yeah.

Speaker D: Right. Bicycles just haven't done that. Right. It's always been a personalized object around, you know, optimized sporting kind of outcome. Right. And that, that, that's carried out that still carries over into the cargo and the utility space. But with the turn, um, bicycles, you know, low step over points, really adjustable handlebars, all those sorts of things that allow you to, you know, use it as a shared household object. All of a sudden it becomes a genuine car alternative or supplement in the household. And that's, you know, that's exciting. Yes.

Speaker A: Yeah, yeah. And it does feel like in a way, you know, you've sort of become this, you know, extension for an amazing brand like Turn. You know, I had the pleasure of getting to meet like the Turn CEO in Taiwan. And just like everyone else, they speak so highly of you. I think that same ethos of not screwing over the customer if they want to cancel. Being a good business person seems to carry a lot of water. But, uh, yeah, is there, I suppose, you know, can you see the brand moving beyond just cargo bikes one day?

Speaker C: Yeah, yeah.

Speaker D: I mean, and we, we've started to. Because there is definitely demand for uh, I don't think we'll move beyond core urban utility is kind of the way we talk about it. I mean, God, they're three words, core, you know what. But yes, we were still, we were not going to get into like, you know, the super recreational space that would

Speaker A: be just the uh, 10 carbon fiber, 2 pound bicycle.

Speaker D: Yeah, yeah.

Speaker A: Different customer.

Speaker D: Yeah. A slightly wider range of bicycles is useful for where the market's at now. It wasn't useful six years ago when we started, but having a wider range now definitely is. And we've, we've started to do that still keeping it reasonably tight because we want to keep our SKUs down and keep the business as efficient as possible. And having an efficient business means we can keep the price down and still give good service.

Speaker A: And speaking of business efficiency, how have you gone about scaling business? Like, what is it like spinning up a new market? What's it like, you know, financing these vehicles just get, get wonky with us for a second.

Speaker D: I mean it's not easy, but that's good because I think we've got a little bit of a moat there. Right. Uh, I think it, you know, and there's been people who've attempted to do what we've done in like the local markets and being able to do it on 10 bicycles is quite easy. Doing it on thousands of bicycles at once is hard.

Speaker B: Right.

Speaker D: And it's hard from a financing and it's hard from an asset management perspective. So let alone just doing, you know, everyone can kind of, you know, maybe do customer service quite well, but the uh, you know, the financing and asset management side of it is not straightforward. And that's, that's kind of good.

Speaker B: Yeah.

Speaker D: For us and being an early player,

Speaker A: the sales versus the service, those are two different skill sets. So kind of getting that.

Speaker D: That's right. I think the, you know, the having just good backend processes, fasting and making sure I think the, the Fun way of saying it is that we treat the bike itself and the customer as kind of equal objects, if that makes sense in terms of our internal processes and management is like we have great record keeping and processes around the bike, uh, and how it lives with us and how it comes to us and leaves us and how we manage it while it's here, the same way we do a customer. And I think that's been the essential part to being able to scale the business that in a way that kind of makes money.

Speaker A: So yeah, what about, you know, taking a step back, what are the sort of like macro trends that you think are most relevant? Both, you know, looking at some of the other bike players in the space we just had like the dance swap fiat merger. What are sort of the policy levers that are getting pulled? What's, what's happening above? Wambe.

Speaker D: Yeah, so I think, uh, I mean from my perspective, one of the most interesting things that's been going on, particularly over the last 12 months, is the heavy swing to the, you know, legislative space and looking at the legislative environment which electric, we'll call them electric bicycles or light electric vehicles in general kind of operate in. Right. And I think, you know, I used to use this analogy or this story that, you know, five or six years ago, the biggest retailer of, you know, consumer electronic goods in Australia, like a, like a Best Buy, used to have, in the front of their store near my house, they used to have both, you know, great ovens from good brands like Fisher and Paykel and, and you know, KitchenAid or whatever right over here. Um, and they used to have electric scooters. Right. Which were illegal in the state at that time to ride on the road. Right. And they used to have marketing materials that would show people commuting on them. Right. And they were only available for off road use and, or on personal property use. And they'd have them next to the, you know, the display center for the ovens and the kitchen appliances and the TVs and all of them there's like, if they were selling ovens that were unable to be installed in your kitchen and used legally, you know, the consumer

Speaker A: can only be used with your own propane tank.

Speaker D: Yeah, right. Like, you know, this just shows how immature the market was. Right. Is that the consumer, the consumer regulators weren't, weren't policing that Right. Back at that time, but they are now.

Speaker B: Right.

Speaker D: And there's been, you know, and unfortunately it's, it's taken, you know, quite a lot of injuries and deaths for it to be taken Seriously. But, but you're now looking at, I guess the pendulum swings and there's a lot of legislation at both state, local, federal, national levels, people revisiting the legislative environment around E bikes, emoeds, scooters, et cetera. So I think that's been good, see

Speaker A: how that's good for you in the sense that I think a lot of people got addicted to this idea that oh, I can go online, I can order a $600 electric bicycle and surely nothing will go wrong. And then it turns out the battery and the build quality on something like that might not be what you need it to be.

Speaker D: Yeah, that's right. Well I think there's, that obviously there's been the fireside and then the safety aspect of speed and the vehicle. And I think that for me the most interesting one has been when Ben and I looked at the market. I mean I didn't really know much about E bikes or anything at all. But the thing that gave me, and coming from banking, I, uh, you know, had quite a risk management mindset at the start. But the thing that gave me, I guess confidence around the category is that the, the legislative environment in Australia at the time was following that of the European standard which had kept, you know, the pedal assist electric bicycle was as close to a bicycle as possible. Right. Like it was a bicycle, which meant that like it could be legally deployed into the world like a bicycle because it did similar speeds to a bicycle. You know, it could use you and it was not a road going vehicle. Uh, and it had most of the attributes of a bicycle which meant you know, for me the legislative environment could remain relatively stable. Right. It's when you started to see the industry, you know, it is the industry pushing for, you know, allowing really high speeds like mopeds and throttles. Those, those things. Yeah, right. Those things are not, not attributes of a bicycle. And so it's not as straightforward to say we can just put these things into the world because you know, they're closer to a road going vehicle speeds and you know, like, you know, higher speed things go on roads and yeah, so I think the uh, it's nice to see things coming back towards, you know, the bicycle if that makes sense. Because you know, bicycles do exist in the world. They could exist better and you uh, know in our built environment bicycles can and have existed reasonably well and can be supported, exist better and so it's easier to keep deploying the things the closest they are to the bicycle.

Speaker A: Yeah, yeah, yeah, well said. I think that's a good sort of, uh, spot to leave it, Dan. I know you and I could just chat about bikes forever, but, uh, folks, thanks for tuning in.