VanMoof Lessons for startups from an ebike superstar’s rise and fall

VanMoof Lessons for startups from an ebike superstar's rise and fall

The Rise and Fall of VanMoof: Lessons Learned for the Ebike Industry

Since its launch in 2009, VanMoof has gained a strong following for its sleek and high-tech city bikes. However, in a surprising turn of events, the once highly successful ebike startup has recently filed for bankruptcy. The news has left riders angry, loyal followers depressed, and the industry questioning what went wrong. At TNW, we wanted to hear from those closest to the action and most affected in the long term – other ebike startups.

Tanguy Goretti, founder of Belgian ebike company Cowboy, one of VanMoof’s closest competitors, expressed his disappointment, saying, “The VanMoof story deserved a better ending. They helped change the face of the industry, the world’s perception of e-bikes, and had a truly positive impact on cities.”

So, what exactly led to VanMoof’s downfall? Startups and industry experts point to a few key factors. One major issue was that VanMoof grew too quickly and relied too heavily on high-tech customized parts for their bikes. Additionally, their after-sales service model became unmanageable. These issues were compounded by the challenging economic climate, ultimately dooming the company.

Bastian Dietz of the Cycling Innovation Accelerator noticed the warning signs early on, saying, “Once VanMoof’s 2021 figures were published, it was clear that their business model wasn’t going to last.” VanMoof suffered significant losses in 2021 and 2022, never turning a profit.

The company’s end-to-end business model, which involved designing, manufacturing, selling, and servicing their expensive ebikes in-house, proved to be too much to handle. Augustin Friedel, an industry expert, commented, “They bit off more than they could chew.” VanMoof’s bikes may have been appealing with their sleek design and custom features, but they were often unreliable, and VanMoof’s own service was the only option for repairs.

Customers reported waiting weeks, and sometimes even six months, for basic repairs or new bike deliveries. As dissatisfaction grew, it became clear that VanMoof’s business model was unsustainable. The global economic downturn and the bursting of the post-pandemic bicycle boom further exacerbated the situation.

James Walker, CEO and founder of Jorvik, Europe’s largest e-tricycle manufacturer, believes VanMoof’s struggles reflect the impact of the cost of living crisis on fledgling businesses. Rising expenses, such as import fees, maintenance costs, taxes, and salaries, can push businesses into the red, making recovery nearly impossible.

VanMoof’s approach of aggressively expanding into new markets, opening stores worldwide, and continually borrowing money to sustain growth further strained their resources. Tuuli Jevstignejev, CMO at Ampler Bikes, emphasized the importance of focusing on quality over quantity in the industry to ensure adequate bike servicing. Growing too big too fast often results in compromised customer service and experience.

The ebike industry can learn valuable lessons from VanMoof’s downfall. Startups should emphasize simplicity in bike design and avoid unnecessary complexity. Lemmo, a German ebike startup, emphasizes the importance of designing bikes that can be serviced using existing infrastructure and avoiding proprietary parts. Their bikes can be ridden manually or with electric assist, and the digital components are located outside the frame for easy servicing.

Ampler Bikes’ Jevstignejev echoes this sentiment and calls for the ability to switch out components like handlebars or pedals and the flexibility to continue cycling without battery power. Rather than focusing solely on launching new gadgets, Jevstignejev believes efforts should be directed towards improving existing products and maintaining a strong after-market support system.

For VanMoof riders, a major concern is the potential obsolescence of their ebikes without regular software updates. While Cowboy has developed an app to help VanMoof owners, William Godfrey, founder of Twist, stresses the need for an “end of life protocol” in hardware development. This ensures that products can live on even if the company goes under, reducing electronic waste.

Investor appetite in the ebike industry may wane due to the impact of the current economic climate. However, Dietz believes VanMoof’s bankruptcy won’t significantly affect the mobility ecosystem. On the other hand, Friedel and Lemmo suggest that VanMoof’s failure could lead to increased scrutiny in the investment process for other ebike startups and the larger micromobility sector.

VanMoof’s rise and fall serve as a clear message to the ebike startup ecosystem: simplicity and sustainability are paramount. By building bikes that work, outsourcing parts and servicing to trusted partners, and considering the full lifecycle of their products, startups can create a more resilient and successful business model.

Ultimately, ebikes gained popularity because they offered a quick, accessible, and sustainable mode of transportation. It’s crucial not to overcomplicate these vehicles and risk losing the simplicity that made bicycles a time-tested and reliable technology in the first place.

VanMoof Lemmo Ampler Bikes