The Exchanges

Q Alright, so you get the TP for the bike. You start a business, you call it Rad Power Bikes, obviously after your name, Mike Raddenbaugh. You said, hey, I'll do this for people, and was that basically it?

A Yeah. Really grew organically and slowly. And so like the, the teepee trade happened. Right. And then the next thing was another guy that was local. He was really creative and really active guy, but he was also, you know, he had late stage Lyme disease. And so his mobility was a little bit impeded and he also lived up a really steep hill. And so this was my second customer was somebody that had like actual physical mobility needs. So that was a really great exploration and a great experience for me. And I think for the customer too, which was like, We like kind of went to, you know, town together, figuring out the right configuration of like a comfortable seat, a more laid back, uh, geometry for the bike and more power to get up the hills. And so that build, that project was really influential to the future of kind of rad power bike specifications, like other bikes.

AI assessment note: “Yeah. Really grew organically and slowly.”

Q Because, because the video, what, the video promises you a bike for what? What did you have to put in to get a bike?

A Yeah, so we were, we were essentially giving the bikes away, I think is a good way to look at it, is we needed to get, you know, fund that first production run. We were selling them for 1200 or 1300 bucks each, I think, something like that, and, uh, yeah, we had this conservative goal of 40,000, which would have gotten us going, and we also ran the campaign for 30 days, rather than the normal 45 or 60 days for a campaign, because frankly, we wanted to just quickly get a taste if this was Like, what customers were really looking for. We had no idea what kind of legs this would have, and within 30 days, right, we had done, I think over 300 people had signed up, so we did 320,000 dollars in pre-orders.

AI assessment note: “We were selling them for 1200 or 1300 bucks each”

Q Wow. So, so when you had to go to high school, the expect, I mean, the expectation was that you had to figure out how to get there, like your mom and dad were not able to drive you there every day?

A Yeah. So in my freshman year, I, I had a couple options, right? I could try to bum a ride from friends, but that was challenging and inconsistent. We had a school bus, but same thing, challenging and inconsistent. I think the school bus route took over an hour and a half just to get to school because Right, it was 16 miles of country roads. You know, I couldn't afford a car then, and eventually I did get a car, but I couldn't keep it running because the car that I could afford wasn't going to be very reliable, and sure enough, blew a head gasket one thing after another, and so I was kind of a little bit stranded.

AI assessment note: “Yeah. So in my freshman year, I, I had a couple options”

Q All right. So you call up Ty and you say, Ty, I think we should do this. And what is, what does he say?

A You know, Ty and I have really aligned values, but we're also polar opposites. So Ty's generally very careful, and I'm really action-oriented, and sometimes I go too fast. And so when I called Ty, I thought he was going to say yes, but I thought he was going to be a careful yes. Like, I'm into it. Let's do this, but let's ease into it, right? And it was actually the complete opposite. He was like, I'm in. Tell me when you want to start. Let's get this thing going. And it was because he had Seeing what the corporate world was like. He wasn't tapped out, but he had seen how fun this would be to be entrepreneurial and like take these skills to his own business. That was a huge accelerant. Like I was committed. I was like, I'm doing this. But then when he was that excited and eager to get going, I was like, this is a really thoughtful, cautious guy normally. And if he's that excited, we better get going.

AI assessment note: “He was like, I'm in. Tell me when you want to start.”

Q I mean, at this point, China had already had a lot of experience with e-bikes, so what, what, what were the challenges that you guys had in, in getting these made?

A So we actually ran into a problem once the bikes arrived to Seattle as we unboxed some of the first bikes out of the containers and put them together, started doing quality checks. I went out for a test ride on one of the first bikes and it's like something's wrong. Something's off here. What's going on here? And I realized very quickly that the factory had installed the brakes backwards. And so the front brake was on the right and the, uh, rear brake was on the left. That's the standard in other countries, but not in North America. And so we had specified everything in the bill of materials and all the spec sheets and quality documentation, but that was the one thing we didn't spec because we just assumed everyone does it the same way. So we spent a, I think a week straight with three of us in the company at that point, like unboxing every bike, switching the brakes around. It was, it was a doozy just to get those bikes shipped.

AI assessment note: “I realized very quickly that the factory had installed the brakes backwards.”

Q I think you took your first outside investment in March of 2019. You got some funding from the guys who founded Seattle-based, Sue Lilly and Blue Nile. You were doing fine without any outside investment, um, but did you need the outside investment to really bring Rad Power Bikes to the next level?

A There's two big things that pushed me over the edge on enthusiastically, like racing into this partnership with the founders of Zulily. They also built Blue Nile together, two of the world's best e-commerce entrepreneurs. One, we got this taste early on in the business of having great advisors in the company. So that was one reason. The second reason, every single summer we were out of stock and we, for Long periods of time, weeks on end. So we were cash constrained, like we needed to be able to order more inventory near the tail end of each year to be prepared for the upcoming summer. And so it was those two things that just made this a total, uh, no brainer for us.

AI assessment note: “we were cash constrained, like we needed to be able to order more inventory”

Q How did you know how to do this? Like, how did you know what parts to put where and what to plug in where? Like, had you been taking things apart for a while? I mean, yeah, how?

A Yeah, I was, I think it was really equal parts obsession, because I was, I was so in love with this idea of Building electric bikes. I was just spending, like, every night, late into the night, before my parents had, like, you know, yelling at me out in the shop, basically, like, you gotta get to bed, kid. And it was, and the other part of it really was just growing up, building stuff. You know, I was just always doing stuff with my hands, and, you know, I had some good guidance from online forums, like some of the early DIY, like, you know, community stuff. So I was, I was kind of just really sponging off of this forum community online that we're Building electric bikes that were affordable and high power, finding ways to get parts off the shelf, and finding ways to import parts from countries where, you know, electric two-wheelers were more common back then.

AI assessment note: “I had some good guidance from online forums, like some of the early DIY”

Q So, I think by 2018, you were doing forty five million dollars in revenue. Did you start to get a lot of investors contacting you and saying, hey, can, what, what's the deal? Can we invest it? Like, was, did that start to happen too?

A You know, I always felt it was really important for us to keep our heads down and just kind of keep building value and keep us on the track. It was a really bold mission as a business, and, um, I didn't want Anyone to kind of change that trajectory. And so we were careful for a long time as a business, but the frequency of people contacting us did increase a lot. And, and through that increased frequency, we started to see a lot of really special partnerships, potential start to form, you know, people that were investing in our mission, not just investing in a kind of a short term run at the bank. And that's when our conversations first started with potential investors.

AI assessment note: “the frequency of people contacting us did increase a lot.”

Q And, and then what? I mean, so, so you knew that something was going on when it actually, because you're in Seattle, Seattle was the epicenter of, we forget, it was the epicenter of COVID for a while. Were you worried that this was going to, you know, you guys were going to take a hit?

A We've always been a pretty hardcore office culture. Frankly, it's fun. We all bike into the office together. We have really huge bike parking lots outside versus a car parking lot. And, and this is something we had a lot of pride in that we like came together as a team each day. And so Yeah, you're right. The first days, I think there was a nursing home where there was the first case of COVID-nineteen. This horrible event happened and We started to see it spread wider and wider, and we immediately had to transition, right? We had to pivot our whole plan for the year. I mean, it was really like, bam, out of nowhere, came straight to home. Like, Seattle's where we have hundreds of employees. This is our headquarters location. It was epicenter number one in the U.S.

AI assessment note: “we immediately had to transition, right? We had to pivot our whole plan”

Q So you come up with a prototype to get you to school, and, um, how does it work? I mean, did it help you pedal? Was it, is that what it did? It made it easier for you to pedal and to go faster?

A Yeah, the, the first couple versions didn't help that much. I think you'd make it a mile or two before, You'd blow a sensor or fry something. And, uh, you know, I remember a couple times having to, you know, hitchhike back to my house, throwing my bike in the back of a neighbor's truck or something that was driving by. Um, but each iteration, it started to become more and more, you know, effective. And frankly, like the first time I really was able to like ride that whole way to school, it was an overwhelming sensation of freedom. Like, I think that was just something I was so excited about was this feeling as a young person, like looking for Mobility freedom, like this ability to go and do what you want to do and learn and, you know, feel life for yourself. I just really captivated by that from day one with e-bikes.

AI assessment note: “the first couple versions didn't help that much. I think you'd make it a mile”

Q Do you envision a future where most cities are, are carless, like Amsterdam, you know, where you basically can't really drive anywhere and people are just using e-bikes or bikes?

A There was a month where Seattle was completely shut down, right? There was, there was very few cars on the road. It was a devastating time. And it was also remarkable to see how livable streets could become without cars everywhere. And so there was a month there where I was going to the grocery store to get essential stuff. And I mean, it was frankly, I was riding in the middle of the road. It was amazing. It was just this, it was the safest I've ever felt out there. And that's the future that I want to see. I want to see a future where everyone can feel that everyone can feel safe going from point A to point B and do it without carbon emissions.

AI assessment note: “And that's the future that I want to see.”

Q uh, decide to launch this Indiegogo campaign to raise 40,000 dollars. First of all, how did you get the word out? I mean, I mean, you guys are not, forgive me, you were, you didn't know, you didn't have any connections, you didn't have a platform, it was just, it was just you guys and living in Northern California. How did you get people to even become aware of this?

A Yeah. And I gotta give credit to Ty on this one. Cause he's, he's an amazing brand marketer. And so that was a big piece from day one is like, we launched that campaign fast. Like we were like, we're doing this, we're going to go live. And I think we got the Indiegogo campaign up within 90 days or a hundred days or something like that. But it was also, this has always been a word of mouth business. And so that was always kind of wind beneath the wings for the brand. Even from right when we launched the campaign, it was like, we were seeing Comments on the Indiegogo campaign, friends telling friends to come look at the campaign, like, you gotta get one of these so we can ride together, and so that's been a big piece of the growth from that Indiegogo campaign forward.

AI assessment note: “this has always been a word of mouth business. And so that was always”