VanMoof interview: S3 e-bike issues and new $40m mobile service network

VanMoof simply introduced $40 million in new outside investment to capitalize on the surging world demand for electrical bikes. Importantly, VanMoof’s co-founders, Ties and Taco Carlier, inform The Verge that a couple of third of that new cash will probably be directed at fixing VanMoof buyer assist points which have intensified with the launch of the corporate’s new S3 and X3 e-bikes in the midst of a world pandemic.

“Over the following six to 12 months, we’ll have upgraded each step of the client journey, from manufacturing to scheduling check-ups. Getting a VanMoof e-bike serviced will probably be as simple as ordering a meal on-line,” guarantees Taco in a ready assertion asserting the brand new funding spherical.

Picture: VanMoof

I caught up with the Dutch brothers over Zoom on Monday to higher perceive two issues: what’s being completed to handle the standard and supply points which have sullied the S3 / X3 launch, and the way this new money infusion will enhance issues sooner or later. Ties, the automotive mechanic-turned-engineer, was in Taipei the place he oversees VanMoof’s provide chain and a brand new devoted meeting plant operated by SINBON Electronics. Taco, the engineer-turned-business government, was in Amsterdam the place VanMoof is headquartered.

Gross sales of VanMoof bikes have been booming. The corporate says that it bought extra bikes within the first 4 months of 2020 than it did within the earlier two years mixed. Gross sales of its new S3 and X3 e-bikes, launched in April, have additionally been promoting at twice the speed of any earlier launch from the corporate because of the decrease beginning value of $1,998, which set a brand new trade baseline for premium electrics.

Amplified gross sales have been mirrored by amplified complaints, nonetheless. Assist boards like VanMoof-ing (which the corporate and founders monitor intently) are rife with sad prospects. Probably the most vocal are these nonetheless ready for his or her bikes to reach, struggling missed deadlines by a number of weeks at a time, but receiving little to no communication from the corporate. That is regardless of assurances that the supply points that plagued VanMoof’s earlier technology of bikes wouldn’t be repeated this time round, due to the corporate’s new “hyper environment friendly manufacturing and distribution system” touted on the S3/X3 launch occasion.

To make issues worse, some VanMoof homeowners who’ve obtained their new e-bikes complain about scuffs and injury that occurred throughout transport. Others complain about wobbly wheels, hydraulic brakes that make noise or don’t work, or a variety of cryptic error codes that flash on their disabled bike’s show. It’s additionally commonplace to be on maintain for 20 minutes, 40, or longer when making an attempt to name VanMoof assist.

“We need to construct the perfect service expertise ever. And we’re going from concerning the worst to the perfect, I feel,” admits Ties in a second of full transparency. “There’s lots of frustration, I do know. Even when it’s just a few p.c of patrons that’s nonetheless method an excessive amount of.”

One thing clearly hasn’t gone to plan.

SO WHAT WENT WRONG?

The primary points with the S3 / X3 shipments appeared nearly instantly and in far higher quantity than anticipated. “We thought this bike could be ten occasions higher than the S2 as a result of we mounted all the pieces,” explains Ties, the engineer. However new points introduced themselves quickly after the primary few thousand S3 bikes shipped, creating 10 occasions as many buyer assist calls as an alternative. “We calculated in about 1 p.c — 1 out of 100 bikes throughout the first week or so would have one thing essential sufficient for a buyer to offer us a name. However that seems to be nearer to 10 p.c,” he says. The corporate’s assist workforce was shortly overwhelmed, making a backlog of assist requests.

The corporate presently assembles and ships between 400 and 500 bikes every day, or about 12,000 bikes every month. “We can’t cease even quickly to meet up with customer support as a result of lots of people have paid and are ready for his or her bikes,” Ties says.

VanMoof says that some points have already been corrected on the level of meeting. However that gained’t repair the bikes which have already left for the staging warehouses within the US, Europe, and Japan earlier than supply to patrons. So VanMoof needed to in a short time mobilize high quality management groups to examine each bike on the warehouses and filter out those with recognized points. That further high quality management step within the center created a delay of as much as three weeks for some prospects.

Picture: VanMoof

VanMoof’s new eco-friendly bins additionally created points. The smaller, much less wasteful bins had been cheaper to ship, serving to to deliver down the price of the bike, however they didn’t supply sufficient safety throughout tough dealing with.

Ties means that he would possibly activate the sensors on VanMoof bikes throughout cargo to measure the G-force they’re subjected to throughout supply. “We didn’t do it but, however we should always. Generally you see the injury and it’s insane. We can’t even replicate it right here, even when we throw it off a 10-meter wall,” he says.

Picture: VanMoof

VanMoof as soon as famously packed its bikes in bins that implied they contained fragile big-screen TVs. It helped at first, however then the phrase obtained out. “It was such a widely known hack, and different firms began doing it,” says Ties. “I don’t assume it actually works anymore.” His brother Taco, nonetheless, is much less satisfied: “It could possibly be a cool thought to attempt to do some A/B testing and put the tv again on the field to see if it really works.”

In the interim, VanMoof began reinforcing the smaller bins to make them stronger whereas including foam again to the packaging to guard the bike tubes. Thus far, the change seems to be promising, leading to much less injury throughout supply, says Ties.

The opposite complication, unsurprisingly, was making an attempt to launch the brand new VanMoof electrical bikes in the midst of a pandemic. VanMoof’s provide chain of customized elements was effective, buzzing alongside whereas its rivals had been compelled to close down attributable to an absence of elements. However abruptly, everybody who ever purchased a VanMoof bike within the final 11 years started calling buyer assist as bike utilization soared around the globe. “In April, or the top March, when the disaster began, at first it was three weeks of full silence, after which it went all loopy,” remembers Taco. “Hundreds of individuals began emailing and calling and it overwhelmed buyer assist.” Preorders for the S3 and X3 began in early April earlier than the bikes started transport in Might.

The corporate has been scaling buyer assist ever since, but it surely’s had to take action throughout the restrictions of a COVID lockdown, with individuals working from house and having to be employed and skilled remotely.

It’s simple to say with the assistance of hindsight, however all the indicators had been there that bicycles, electrical bikes, and VanMoof e-bikes, particularly, had been in unusually excessive demand even earlier than the cheaper, however extra feature-packed, S3 and X3 bikes went on sale. Even VanMoof was saying as a lot in a blog post from March 20th, speaking concerning the gross sales soar the corporate had seen since February. “I both had no time or I didn’t assume to make the client assist lots larger at the moment,” admits Ties. “However we should always have anticipated that half as properly, for positive.”

VanMoof is now catching as much as the backlog whereas bettering the preliminary high quality of its bikes, however the firm’s not out of the woods but. The Brothers Carlier now concede that they’ve outgrown their present assist mannequin that always requires bikes to be reboxed and shipped backwards and forwards for restore.

“We had some large points previously 4 months with our service platform,” says Taco. “And I feel it is a large alternative not solely to repair these points, however reinvent how a motorbike must be serviced sooner or later.”

Picture: VanMoof

A GLOBAL MOBILE SERVICE NETWORK

“Our subsequent frontier is to remodel our enterprise by constructing a full assist ecosystem round each rider,” mentioned Ties in right now’s funding announcement. The corporate is focusing on a rollout within the subsequent six to 12 months constructed round 4 important elements:

• A worldwide cellular service community
• Extra intuitive app assist
• Smarter software program with distant diagnostic options
• Extra proactive buyer assist

That first bullet is essentially the most notable. Rivals like Cowboy in Europe, and Rad Power within the US, additionally supply cellular service networks, whereby elements are shipped to a buyer’s house the place a licensed technician is dispatched to carry out repairs past the purview of the client or native bike store. Rad Energy notably companions with Velofix to broaden its assist community to extra cities.

The Carliers, in conventional VanMoof type, assume the perfect strategy is to construct their very own cellular service community, because it does almost each element on the S3 and X3 bikes. The cellular service community will probably be staffed by each full-time VanMoof staff and freelancers, skilled to solely restore and preserve VanMoof bikes.

The service will probably be provided in just a few cities firstly after which rolled out globally shortly thereafter. “80 to 90 p.c of our bikes are shipped to 50 cities around the globe,” says Ties. “So we will concentrate on these 50 cities, that’s very doable. The primary 5 or 10 are essentially the most work, that’s what we’re engaged on now.” From there, it must be simple to take the mannequin and develop it to extra cities as wanted, or so the considering goes.

When requested if VanMoof would ever associate with a third-party bike-service firm to reinforce VanMoof’s personal cellular service community, Taco, the ever-pragmatic enterprise government, responded as anticipated: “By no means say by no means,” he mentioned.

Ties says that constructing VanMoof’s cellular service community on a world scale solely lately turned doable. First, they wanted to start transport in the kind of quantity seen with the S3 and X3, which is barely anticipated to develop within the years forward — in Might, the corporate claimed to have “over 120,000 riders.” Second, VanMoof wanted to take management of the provision chain to make sure it had prepared entry to the elements wanted for restore, one thing they’ve slowly been doing since their first electrical bike launched 4 years in the past. Lastly, VanMoof wanted to attain the kind of modularity and OTA replace capabilities discovered within the S3 and X3 bikes so {that a} skilled technician — not an costly bike mechanic — could possibly be cost-effectively dispatched to a buyer’s house or workplace for service.

The brand new VanMoof cellular service community will not be the identical because the $340 Peace of Mind: Maintenance subscriptions that VanMoof presents in 21 cities right now. POM, as Ties calls it, sends VanMoof’s Bike Docs to your property or workplace to exchange worn tires, lubricate the drivetrain, and carry out different routine upkeep duties at outlined intervals. The cellular service community kicks into motion as points come up and will probably be out there to all VanMoof prospects who want help within the cities supported. Pricing for the brand new cellular service community hasn’t been finalized.

Picture: VanMoof

WAIT, THERE’S MORE?

As to the opposite three elements of the brand new assist ecosystem — extra intuitive app assist, smarter software program with distant diagnostic options, and extra proactive buyer assist — the VanMoof founders defined their plans for these as properly.

Ties says to anticipate the VanMoof app to supply higher assist, probably providing a utility that may be run on the bike to diagnose a difficulty as an alternative of requiring a name to buyer assist. It’d even order the half routinely after affirmation from the proprietor.

VanMoof bikes presently obtain software program updates just a few occasions annually, possibly as soon as each three months by Ties’ estimate. This new spherical of funding will assist speed up that. “Tesla vehicles, for instance, the place you get a weekly software program replace that provides options but in addition fixes lots of bugs — I feel that’s the place we actually need to be.” Ties says it’s additionally essential to constantly replace older bikes to maintain them on the street longer, noting that VanMoof nonetheless maintains a software program workforce devoted to the S1, VanMoof’s first electrical bike launched in 2016.

VanMoof is working to make its bikes so good, so stuffed with sensors, that they’ll be capable to detect a difficulty earlier than the client does after which proactively take steps to resolve it. “We’re engaged on extra sensors…” begins Ties earlier than pausing. “I don’t know the way a lot precisely I ought to inform about this, however there are extra sorts of sensors that we will construct into the bike.” Ties envisions a motorbike that may detect a worn brake pad, for instance, earlier than the proprietor even notices, inflicting VanMoof to ship a substitute half on to the individual’s house. “You possibly can simply change it, or possibly within the close to future the cellular service agent can do it.”

VanMoof wouldn’t be the primary to implement distant diagnostics within the mobility house. Superpedestrian scooters have had this functionality for some time. The corporate answerable for the Copenhagen Wheel equips its fleet scooters with the intelligence to detect about 100 totally different factors of failure to set off a service request when wanted.

However solely a 3rd of that $40 million funding VanMoof introduced right now is earmarked for bettering after-sales assist. In line with Taco, the opposite two-thirds will probably be equally allotted to R&D and to ramping up manufacturing capability.

“We have now chosen two traders, NVP and Felix Capital that know all the pieces about scaling manufacturers. We intentionally selected an investor within the American market as a result of I nonetheless imagine that’s our greatest potential,” says Taco, who describes the US as VanMoof’s third-fastest development market. “We additionally selected an investor — Balderton — with a deep data of tech and particularly software program that may deliver our software program platforms to the following degree.”

VanMoof’s rivals are elevating capital as properly. For instance, Rad Power raised $25 million in February whereas Cowboy raised $23 million in July. And with VanMoof elevating $53.5 million in new funding since Might, two issues are actually abundantly clear: VanMoof is not a startup, and traders are actually betting on electrical bikes as the following frontier in mobility.

It’s cash that offers VanMoof lots of runway to attain its aim of getting the following billion on bikes, simply as cities around the globe are lastly waking up to the idea.