Rad Power Bikes: Mike Radenbaugh

Growing up in rural Northern California, Mike Radenbaugh hated biking to high school—it was a 16 mile slog; hilly and tiring. So he scrounged up a battery and a motor, rigged them to an old mountain bike and began cycling to school without breaking a sweat. When Mike's neighbors starting asking him to motorize their bikes, Rad Power Bikes was born. He eventually designed an eye-catching e-bike with fat tires and a throttle that could push any pedaler to 20mph. Today, Rad Power Bikes is the largest e-bike brand in the U. S., and has barely been able to keep up with demand since the pandemic began. Pre-order the How I Built This book at: https://smarturl.it/HowIBuiltThisSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  We get support from US Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems.

• 0:45Guy Raz?

  But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned. Money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes

• 1:30Guy Raz?

  based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one Hard question. How do we make sure AI goes well for people?

• 2:14Guy Raz?

  So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them write the business plan, build the prototype, analyze the market, maybe even come up with the idea. What separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt.

• 2:54Guy Raz?

  Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting and a CMS built in, so the work is production ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit and publish in one place at a whole new pace. AI agents and humans work together.

• 3:36Guy Raz?

  The agents bring speed and scale and people bring taste, judgment and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 4:21Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 5:06Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Hey, it's Guy here. So what are some of the key traits that successful entrepreneurs have in common? Why do some people succeed when others fail? How do you build something with no connections, no money, and no experience? And can you learn to develop the skills and traits it takes to become an entrepreneur? Well, to find out the answers to all these questions, pick up a copy of my new book.

• 5:50Guy Raz?

  It's called How I Built This. And if you love the show, you will love this book. And if you order before September 15, I'll send you a free autographed book plate to put inside the book. Just visit guyraz.com or howibuiltthis.com to order, or pick up How I Built This wherever you get your books. And thanks.

• 6:17Speaker 01

  We unboxed some of the first bikes out of the containers. And I went out for a test ride on one of the first bikes. And it's like, something's off here. What's going on here? And I realized that the factory had installed the brakes backwards. And so the front brake was on the right and the rear brake was on the left. So we spent a week straight, the three of us in the company at that point, like just to get those bikes shipped, unboxing every bike, switching the brakes around. It was, it was a doozy.

• 6:51Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 7:03Guy Raz?

  I'm Guy Raz, and on the show today, how Mike Radenbaugh slapped a battery and a motor on his bike so he could get to school faster, and then went on to build the biggest electric bike brand in the US, Rad Power Bikes.

• 7:22Guy Raz?

  The holy grail of marketing is word of mouth recommendations. Sometimes, word of mouth can be engineered. Think Tupperware parties or a friend who has a side hustle selling Mary Kay cosmetics. But really powerful word of mouth marketing happens organically. And it's usually products that marketing guru Seth Godin would call extraordinary. You might be familiar with Seth's purple cow theory. Basically, no one notices an ordinary cow in a pasture. But a purple cow? You would stop your car to see that, and then you would tell all your friends about it. It's part of the reason why Tesla doesn't have to spend a whole lot on advertising.

• 8:07Guy Raz?

  If you know someone who owns a Tesla, you probably can't get them to stop talking about it. Word of mouth is also how Allbirds Wool Shoes got so big so fast. The early adopters who bought them loved telling all their friends how comfortable their feet were. And the same principle applies to our story today. Because if you ride a bright orange Rad Power electric bike through town, people will want to ask you about it. How do I know? Well, this is kind of where I become a character in the story. A few years ago, I was looking for an electric cargo bike that I could use to take both of my

• 8:48Guy Raz?

  kids to school on. I wanted something sturdy enough to handle a few cases of wine and groceries, but zippy enough to get me around town fast. The problem is that many electric cargo bikes are expensive, more than $3,000. But in my search, I came across a review for the RadWagon bike made by Rad Power Bikes. The review was good, but most importantly, the price was right, considerably cheaper than anything else I could find. So I bought it. And everywhere I went, someone wanted to ask me about it, especially when my kids were sitting on the back. At the farmer's market, the library, the Bart Station where

• 9:31Guy Raz?

  I parked it, dads, moms, grandparents, they wanted to know more. Several of them even asked if they could give it a go, which I happily obliged. Well, it turns out that this phenomenon is the secret to Rad Power Bike's success. Just five years ago, in 2015, Mike Radenbaugh launched an Indiegogo campaign to build the first Rad Power Bike. Today, his company has about 25% market share in the US e-bike space, making Rad Power Bikes the largest e-bike seller in the country. Last year, the company did almost $100 million

• 10:12Guy Raz?

  in sales, and this year, they're on track to grow 300%. In fact, right now, there are more Rad Power Bikes on order, waiting to be delivered, than the company has sold in its entire five-year history. And as you will hear, a lot of that has to do with the pandemic. Lots of people are looking for a quick way to get around town, and electric bikes make it a lot easier to go up hills or long distances. But even though it sounds like this business blew up overnight, Mike Radenbaugh actually started building and selling e-bikes more than 15 years ago as a high school student when he was growing up in a very rural part of California.

• 10:56Speaker 01

  I grew up really out in the middle of nowhere in a town called Garberville in Northern California, and it's an area called the Lost Coast. And so there's a lot of dirt roads, there's very few even stop signs, let alone stoplights. And it's just an area that's like covered by old-growth redwood forests.

• 11:13Guy Raz?

  Wow. So you were basically born there and raised there?

• 11:18Speaker 01

  Yeah, the first five years of my life, I lived in an airstream trailer on the property my parents bought on some sort of a lean. And as they slowly built the house up, and that childhood home I grew up in is still not finished today, but it was a really great upbringing, organic garden on the property. And just surrounding us everywhere, there was off-grid marijuana farms. And the area was opportune for it just because it was so out there and out of touch from society.

• 11:50Guy Raz?

  So did you ever ask your parents why they, I mean, did you ever say, "Why did you guys move out here to the middle of nowhere?"

• 11:54Speaker 01

  Yeah, I think it was the era. I think there was this, they were part of that kind of move back to the land, and that was during the back-to-the-land era. And when my parents moved there, I think that was really when the movement was starting. And luckily, they taught me the value of hard work and career life. But I think there was this connection that was happening around music and spirituality and I think connecting with nature. And so, yeah, they were in a Volkswagen van and they just moved up to Humboldt County.

• 12:21Guy Raz?

  And your mom was a nurse or is a nurse?

• 12:24Speaker 01

  Yeah, my dad was a carpenter and my mom was a nurse. She was an ER nurse growing up, and then she transitioned to being the nurse at my high school, which was a bit of a coincidence, but made for an interesting four years of high school.

• 12:37Guy Raz?

  So, all right, so your dad was a carpenter. And what did he do carpentry for, like, home renovations? Or what kind of work did he do when you were a kid?

• 12:46Speaker 01

  Yeah, my dad was really creative. He was featured in Fine Home Building Magazine for a couple of the places that he built. So he specialized in building really unusual homes. So he focused on round houses, like octagon shaped houses. And I grew up building with him, right? You know, I mean, you know, I would go to the job sites with him on the weekends when he was needing to finish up on stuff. So I just, I just grew up building with him. So I learned how to work with my hands and how to do stuff in that way for my dad.

• 13:14Guy Raz?

  And presumably he could be made a living off that. I mean, that was, that was sort of enough to kind of sustain the household.

• 13:20Speaker 01

  It was, it was hit or miss where we grew up. Construction opportunities were off and on. And so he ended up actually, especially around in the early 2000s, he ended up transitioning to a full-time job at the local golf course, which is like, you know, kind of a rundown nine-hole course. He worked there as a maintenance person, fixing sprinklers, you know, doing electrical maintenance jobs, like that.

• 13:42Guy Raz?

  So from a pretty early age, you were kind of working with tools, like helping your dad out?

• 13:48Speaker 01

  Yeah, we would just, where we grew up, it was oftentimes you needed to fix it. You weren't going to be going to town and buying a new version of it. And like, that's, sometimes you have to dig out the well or fix the well pump, right? You're chopping firewood. You're fixing up the house. You know, you name it. It's just kind of more the country lifestyle.

• 14:05Guy Raz?

  And it sounds like you didn't have the money to pay people, to hire people, to mow your lawn or, right? Or to fix your car, whatever.

• 14:11Speaker 01

  Yeah, definitely not. I remember one time my mom walked out of the house and it was like a winter morning and I would climbed up on the roof and my dad was watching me at the bottom. And a shingle had broken off the roof from a tree branch that had fallen on the house. And so I'm like climbing up these slippery shingles, right? And my mom's kind of yelling at me like, you know, my dad's name's John. Like, John, why would you let him do that? That kind of thing. And so it was kind of just the way of, the way of life back then was just keeping things together.

• 14:37Guy Raz?

  Yeah. All right, so you're growing up there. And I guess around the time you went to high school, like your high school was kind of far away, right? It wasn't, you can just walk there.

• 14:48Speaker 01

  Yeah, so my high school was 16 miles away. Half of that was on country roads and half of it was on a highway 101.

• 14:55Guy Raz?

  Wow. So when you had to go to high school, 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?

• 15:06Speaker 01

  Yeah, so in my freshman year, I had a couple of 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.

• 15:39Guy Raz?

  And did you have a bike?

• 15:40Speaker 01

  I did, yeah. So I was racing mountain bikes. And so where we grew up, about four miles away from my house, had this amazing community park that had a three-mile mountain bike loop in it. And so from a young age, I was biking over there and riding laps around this park. And I just totally fell in love with two wheels.

• 15:59Guy Raz?

  Was it possible to bike from your house to high school on a bike?

• 16:03Speaker 01

  Because I was riding to school and back each day. I was doing that for training because I was actually starting to race and it was very competitive. And so I needed to be putting on a lot of miles. But my parents did not like that. Like, they gave me a lot of freedom, but they did not like that half of that distance was traveled on a freeway. You have 70 mile an hour logging trucks flying by. And I don't know why they gave me the thumbs up, but I think that does share with you kind of how dusty and kind of country my upbringing was.

• 16:32Guy Raz?

  And that probably took you a long time. It probably took you, what, 40 minutes or so, at least?

• 16:37Speaker 01

  Yeah, it was definitely like an hour-long ride because it was also really hilly where I grew up. And so, you know, I'd show up sweaty to school. You have a teenage kid, a freshman or sophomore in high school at that point. And I'm already struggling enough to not be the dork. And showing up sweaty wasn't so cool.

• 16:53Guy Raz?

  I guess you start to think, well, maybe I can make it easier if I had an electric bike. First of all, this is in like, what, 2004, '05, something like that?

• 17:03Speaker 01

  Yeah, in 2005.

• 17:05Guy Raz?

  And electric bikes, thinking back, I don't even know if I even knew what that was in 2005. What did you know about electric bikes at that time?

• 17:14Speaker 01

  Yeah, you know, at that point, I think, you know, three or four years earlier, I had, as a 10-year-old or an 11-year-old, I started saving up for something that I really, really wanted. And this thing just so happened to be a electric scooter that was for sale in the saw shop in town. So like, the shop that sold chainsaws also had an electric scooter on display.

• 17:33Guy Raz?

  Like a stand-up scooter?

• 17:35Speaker 01

  Yeah, just like, you know, pneumatic tires, but definitely a small, like, kind of child-sized electric scooter.

• 17:40Guy Raz?

  Right.

• 17:41Speaker 01

  So I had this experience where I'd saved up for this thing, I got it, and I just rode it nonstop for a couple of years. And, you know, I just kind of fell in love with electric vehicles from that, you know, goofy little scooter. It's just the simplicity, I think, of just a battery and a motor and a control system. And it's just almost like magic, right?

• 17:59Guy Raz?

  And you thought, maybe I can do something like this for my bike?

• 18:03Speaker 01

  Yeah, I kind of, I went to kind of researching online and kind of poking ground a little bit. And I started to see some people doing conversion kits. So they'd find electric motors and batteries, and they'd figure out a way to attach them to a bike. And I also found that there were actually some e-bikes that you could buy then, too. The problem was, just like today, most e-bikes are really expensive.

• 18:25Guy Raz?

  Right. And just to be clear, the idea was that you would have an electric bike that would operate like a motorcycle, where you wouldn't have to pedal? Or was it a bike that, where you still would have to pedal?

• 18:37Speaker 01

  Yeah, I really wanted a little bit of both. I wanted a hybrid because I needed to be training, but I wanted to be able to go further and, like, you know, get to school without breaking a sweat. Yeah, faster.

• 18:46Guy Raz?

  Yeah. So what do you do? Like, you're 15, how do you convert your bike to an electric bike?

• 18:53Speaker 01

  I just started with off the shelf stuff, you know, I like searched online, kind of figured out what it would take. So that was a little bit of stuff from Radio Shack, some stuff I ordered on eBay. I had an old mountain bike. So it was like, it was the mountain bike that I'd used for my previous racing season. So it was pretty beat up and scratched up. And so it was a really great donor bike for the first project. I found the electric motor that I put on it. I found that on a website. Like I was able to buy one and airship it by DHL Express and

• 19:20Guy Raz?

  And this was, by the way, a motor for a bike or a motor for, a motor for what? What was the motor designed for?

• 19:25Speaker 01

  Yeah. So the motor was designed for a scooter, like a scooter that you would see hauling 100 pounds of cargo in Asia, as an example.

• 19:34Guy Raz?

  Like a, a sit, a sit on scooter that you would sit on?

• 19:37Speaker 01

  Yeah. So it would be a sit on scooter.

• 19:38Guy Raz?

  Okay.

• 19:39Speaker 01

  And, you know, a motor controller from some kind of DIY, kind of hacker in Canada. So I had imported it and shipped that to myself. And then I found lead acid batteries that are used as starter batteries on motorcycles. And so I strung three of those together to make 36 volts. And that was really the PowerPoint for the first prototype.

• 19:59Guy Raz?

  Huh. And how long did it take you to convert your mountain bike into something that had electricity?

• 20:07Speaker 01

  It was not so glamorous. That's what I'd say, this process. I think it was, you know, about nine months and probably 12 failed prototypes later. And I had an e-bike that I could actually get to school with, but I couldn't get back. So I'd have to get to school and then kind of, you know, sneak around and try to find a place to plug my bike in and, and charge it up while, while I'm in class during the day.

• 20:27Guy Raz?

  Because 16 miles, like that battery would just conk out, right? After

• 20:31Speaker 01

  That was, yeah, that was pushing it.

• 20:33Guy Raz?

  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?

• 20:46Guy Raz?

  Yeah, how?

• 20:47Speaker 01

  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 were 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.

• 21:32Guy Raz?

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

• 21:43Speaker 01

  Yeah, the, the first couple of 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, you know, I remember a couple of 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. 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 was just really captivated by that from day one with the bikes.

• 22:26Guy Raz?

  So how fast did it go?

• 22:28Speaker 01

  The first bike did about 30 miles an hour and

• 22:31Guy Raz?

  Wow, that's fast.

• 22:33Speaker 01

  Yeah, and it shouldn't have gone that fast, considering a lot of the parts were held on with, you know, zip ties and duct tape.

• 22:40Guy Raz?

  Was it safe-ish?

• 22:42Speaker 01

  Yeah, I've got some scars. I've got some remnants still from a lot of those early prototypes, but I, I think as each iteration went on, they got a little less sharp around the edges and a little bit more tied together.

• 22:54Guy Raz?

  How much do you think this ended up costing you to put this together?

• 22:58Speaker 01

  Yeah, I mean, I was sinking every dollar I had into parts. And, you know, so I had meaningful financial skin in the game, I think, back then. But, you know, keep in mind that that's probably a $500 or $1,000 worth of investment between parts and the air shipping costs to kind of import some of this stuff.

• 23:15Guy Raz?

  So this worked. This actually got you to school faster and you'd plug it in at school and then ride it home.

• 23:22Speaker 01

  Yeah.

• 23:22Guy Raz?

  And I guess, not surprisingly, your local newspaper thought this was really cool and they wrote an article about you.

• 23:30Speaker 01

  Yeah, it was so much fun because it was, people were stopping me when I was in town to ask me about the bike. And, and yeah, the local newspaper did like a little story on us. And I think I got some fun nicknames kind of early on. The e-bike guy, I think different things like that. People came to know me pretty quickly.

• 23:46Guy Raz?

  So, all right, so you do this. And a couple of years in, still in high school, you decide to found to start a company that would take someone's regular bike or mountain bike and then convert it into an e-bike. Does that, did that happen because people were asking you to do this for them?

• 24:03Speaker 01

  Yeah, I just, I think the first person, it was like a friend of the family. I was at the bank and, you know, I walked outside and they were looking at the bike and like, oh, hey, Mike, how's it going? I was like, oh, you know, hey, man. And, you know, I think he said like, what's this all about? How cool is this? He's like, well, can you build me one? And I was taken aback. I remember just kind of being dumbfounded in the moment and like, yeah, I guess so. Like, I guess I could build you one.

• 24:26Guy Raz?

  They probably got a good deal because you didn't even know how to price it.

• 24:29Speaker 01

  Yeah, just to get it to work, I think I probably blew up a few fuses and just to get a functioning bike out for that horse customer.

• 24:36Guy Raz?

  So did you start to get more and more people asking you to do this?

• 24:39Speaker 01

  Yeah, the first customer I had, I actually ended up trading the bike for a teepee, like an actual like teepee that I lived in for a summer on my parents' property. You know, trading stuff back then, you know, that was pretty typical where I grew up. And I wanted mobility freedom and also, you know, at that age, I was really in love with the idea of like, I could live in the backyard and like, I don't have to live with my parents this summer.

• 25:00Guy Raz?

  Yeah.

• 25:01Speaker 01

  And so, you know, I think I was showing one of the first prototypes off at a local fair in town. And it was like a partly a farmer's market and partly a craft fair. And I was kind of at a little booth setup, kind of showing off my bike. This woman came by that was selling teepees and she took a liking to the e-bike. And I was like, is that your teepee booth over there? Cause I saw the person came from and I was like, that thing's really cool, right?

• 25:24Guy Raz?

  I love it. I want a teepee booth. I want to, by the way, what was it made out of? Like animal skins, what canvas?

• 25:32Speaker 01

  Yeah, this was a, this, this was a vegan teepee. So this was a canvas teepee. Yeah.

• 25:38Guy Raz?

  Oh my God, a vegan teepee. Well, and she said, hey, you make me want to use, I'll give you one of my vegan teepees.

• 25:45Speaker 01

  Yeah. You know, I lived in that teepee for a year. I lived in it into the winter and you realize pretty quickly that you have to be pretty hardened to live in a teepee in the winter in, in Northern California. So I moved back in with my parents pretty quickly.

• 25:59Guy Raz?

  I'm assuming that teepee had no indoor plumbing.

• 26:01Speaker 01

  Oh no, oh no. Yeah, that was the, that was the apple tree that was next to it, right?

• 26:07Guy Raz?

  All right. So you get the teepee for the bike. You start a business, you call it Rad Power Bikes, obviously after your name, Mike Radenbaugh. You said, hey, I'll do this for people. And was that basically it?

• 26:18Speaker 01

  Yeah, it really grew organically and slowly. And so like the teepee trade happened, right? And then the next thing was another guy that was local. He was this really creative and really active guy, but he was also, you know, he had late stage Lyme's disease. And so his mobility was a little bit impeded and he also lived up a really steep hill. And so this was my, 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 geometry for the bike and more power to get up the hills. And so that build, that project was really influential

• 27:02Speaker 01

  to the future of kind of Rad Power Bikes specifications like of our bikes.

• 27:07Guy Raz?

  So at this point, when you really turned it into a business, was it just you running the business?

• 27:13Speaker 01

  Yeah, yeah. So I was just hanging out in, you know, late into the night each night in my, basically, parents' woodshed, where I had kind of like a soldering table set up and a little stand for the bikes. And so I was just kind of cranking away on bikes there, kind of one at a time. And I ended up posting an ad in the local newspaper that I think they ended up cutting me quite a deal on it because they just, they knew that I didn't have a dime to my name and just started getting flooded with inquiries. And it was mostly word of mouth, though. Like, the newspaper ad wasn't really doing much. It was a lot more just, like, the last person I built a bike for told their friends, and then they would contact me.

• 27:45Guy Raz?

  All right. So you're making these bikes, like, just if people would want one, they would, they would bring their bike in and you would just convert it?

• 27:51Speaker 01

  Yeah. And other times, they didn't even know where to start. And so oftentimes, I was guiding the customer through the process. So they'd reach out to me and they'd say, I love this idea of an electric bike, but I have this application for it. Like, can you build anyone that will do these things? Like, they were like, I need to carry stuff. Like, if they were on a farm, they worked on a farm, they needed to carry stuff, or, or they wanted to pull a trailer with their dog in it behind them. Like, this is really what fueled me for this, you know, building e-bikes one at a time for people.

• 28:17Guy Raz?

  And by the way, did you, did you make some money?

• 28:20Speaker 01

  Yeah. So I, you know, I had to pay my own way through undergrad. And, you know, it was, it was totally, you know, sufficient for me to pay rent and, like, kind of go on my own. I didn't even move into dorms. I moved right into a house when I first started in college.

• 28:35Guy Raz?

  So you decide to, when it's time for you to go to college, you decide to stay close. You went to Humboldt State University, and you go and study industrial design. It wasn't that far away, right? Couple, what, how many miles from where you grew up?

• 28:48Speaker 01

  Yeah, it's an hour and a half north of where I grew up.

• 28:50Guy Raz?

  So when you got to college, did you keep your business going? Did you keep converting bikes for people?

• 28:55Speaker 01

  Yeah, I was working nights and weekends, doing conversions. You know, the business, it was still very small. It was just me building bikes one at a time, right? But it was, it was a good income. It wasn't six figures, but I was, you know, one of the reasons I went to Humboldt State was because I got a partial track scholarship as well. And so that was important. So I was running the 800 meter at Humboldt State as well at the same time. So it was kind of, it was a mixture of scholarship, mixture of the income from early days Rad Power Bikes.

• 29:25Guy Raz?

  So when you went to study industrial design, you're thinking electric cars. Were you thinking, hey, maybe I'll go like work for Tesla one day? Because by 2012, I mean, of course, they didn't have the Model S or the Model 3 and that stuff. But they already had a viable. I think they already had the first, like the Roadster out. Were you thinking, maybe that's a place I'd work one day?

• 29:46Speaker 01

  Yeah, I was. I was just really eager to be a part of the electric vehicle revolution. I just felt like this was, there was really no other outcome. Like, I thought electric vehicles were going to become king. I just felt like from a society, environment, like all these reasons why we're going to need electric vehicles, why we needed them desperately then and why we need them just as desperately now. That's where I wanted to take my career.

• 30:07Guy Raz?

  Did you think of yourself in college as like a future entrepreneur? Or did you think, I'll just learn this and maybe figure it out and get a job somewhere?

• 30:15Speaker 01

  Yeah, I was always very entrepreneurial. And so I had started another company in the electric vehicle space in my junior year of undergrad, actually.

• 30:23Guy Raz?

  Wow.

• 30:24Speaker 01

  And so I was, I was running this other company and this company is called Golf Board. And it sounds pretty literal, but it's literally an electric skateboard that you use on golf courses.

• 30:33Guy Raz?

  What was it? It was like a golf cart scooter?

• 30:36Speaker 01

  Yeah, so I had started building off-road electric skateboards with some friends in town who were also electric vehicle nuts like myself and.

• 30:45Guy Raz?

  Yeah, I see a picture of it, you standing on a golf course. It's like a skateboard, basically where you could put your golf clubs in the front and there you go. You don't need a whole golf cart.

• 30:55Speaker 01

  Yeah, and one of those guys had taken this prototype with them that we had built. They brought it on a vacation with them in Hawaii. And they were riding it, like going to the beach or something, right? And he ended up crashing on this prototype. And it was just because they hit a pothole. And he ended up crashing in this gravel lot. And he was all cut up and bleeding. And he like gets up and he looks up and famous surfer Laird Hamilton is like running over to like help him out. So it was this really odd grouping of things that happened in a row. But Laird had been playing golf on electric skateboards in Hawaii with a good friend of his, who was a really famous entrepreneur, a guy named Don Wildman, who's the founder of Bally's Total Fitness.

• 31:39Speaker 01

  And so these two guys that lived in Hawaii together had been riding electric powered skateboards on golf courses there. But our electric skateboard prototype was better for that. It was four-wheel drive, right? So like, it was great for use on turf. And we started a business together, like me, a couple buddies from my hometown and Laird and Don Wildman.

• 31:57Guy Raz?

  Wow. I mean, that is just such an incredible story. You just like meet them. And then you guys actually went on to build a pretty solid little company, right? Like, like it did pretty well, right?

• 32:11Speaker 01

  Yeah, they, you know, Don Wildman funded us right out of the gate. We found a manufacturer in New Jersey to start kind of commercializing the product. And this was my first kind of real taste of building a real business with a team.

• 32:23Guy Raz?

  Wow.

• 32:24Speaker 01

  First entrepreneurial experience.

• 32:26Guy Raz?

  So what was your position? Were you the CEO of the company or the chief designer or both? Or what?

• 32:32Speaker 01

  So I was the, one of the founders and I ran product development. So I was really, from day one, I was helping with a lot of stuff, but then I kind of, as the business grew, we started bringing on a management team. And so we hired a president, we hired a CEO, you know? So I was starting to get surrounded by people that have been there, done that in ways that I hadn't, but I was able to go really deep on the product development, the commercialization part of the project.

• 32:54Guy Raz?

  So I'm assuming, you know, you've got some equity in it, but probably a little bit.

• 32:59Speaker 01

  Yeah, I was a, you know, major shareholder out of the gate and we were fortunate that we didn't raise a lot of money for that company from day one. So I did learn the value of being careful with equity from there and like making sure we could maintain the vision of the company and kind of protect the mission.

• 33:14Guy Raz?

  Yeah.

• 33:15Speaker 01

  But as we brought in more and more senior people into the company, it did start to become more and more like, you know, I was a minority voice within the organization. And so that was part of the reason why I ended up leaving golf board is I had less say in the direction of the company.

• 33:29Guy Raz?

  Sure.

• 33:29Speaker 01

  And, you know, my love for golf board is still alive to this day. I think it's an amazing product and frankly, a great team, but I was controlling less and less of the destiny of that company. Even the direction of product development started to kind of shift more towards management.

• 33:42Guy Raz?

  Meantime, you still have Rad Power Bikes. And it sounds like you kind of, in your mind, you're thinking, you know, this golf board thing, it's great, I love it, but I don't feel like it's really my company. Like my company is Rad Power Bikes, but. I can't just keep converting people's bikes into e-bikes. This just doesn't make sense.

• 34:01Speaker 01

  Yeah, you know, I think this really was when the lightbulb moment happened for me. You know, I was, I had always been riding e-bikes for this whole time. And I was riding e-bikes and building e-bikes. And it really was my true and deepest passion. I was visiting my aunt and uncle for, I think, Thanksgiving or something.

• 34:18Guy Raz?

  Where do they live?

• 34:19Speaker 01

  In Phoenix, Arizona.

• 34:21Guy Raz?

  In Phoenix, okay, yep.

• 34:22Speaker 01

  And so, sleeping on their living room floor, I wake up in the morning and for some reason, I just had this, like I said, lightbulb moment. I had seen a Fat Tire bike. It's just a, it's a bike that you pedal. It's got really big tires on it. And those started to become popular in like 2012, 2013.

• 34:39Guy Raz?

  Yeah, I remember seeing those.

• 34:40Speaker 01

  They're a dog to pedal, right? There are these big, huge tires and they're super comfortable and they're really cool looking, but they're really hard to pedal. And so that's, that's when I thought like, that would be a great platform to combine everything, you know, that I've learned about e-bikes to make a flagship product that's commercialized. I think I spent the whole morning asking my uncle and aunt questions. Like, I sketched it on a pad and I was asking them, what do you think of this? Would you ride it? What color would you want it to be if you had one? I think my aunt said candy apple red. And, you know, sorry Aunt Jackie, we have never built a candy apple red bike, but maybe one day we'll, we'll build you a special one. But no, that was the moment right then is, was kind of, you know, I learned that lesson pretty early on is like getting out of your normal zone, traveling, visiting factories,

• 35:25Speaker 01

  visiting customers. That's, that's when we've had a lot of our best ideas.

• 35:29Guy Raz?

  Why did that Fat Tire bike, why did you look at that bike and think, oh, this is perfect for an e-bike? What was it about that bike that made it perfect in your mind?

• 35:37Speaker 01

  All the early customers that have been coming to me, they all wanted bigger and bigger tires. And so they would all say, they'd almost like start off, they'd say, I want really big, comfortable tires because the roads are rough. So it was a theme I kept hearing time and time again. And then there was something else about the big tires that I really liked, which was that e-bikes, normally you don't even know they're e-bikes because they're silent. It just looks like someone riding a bike, just going a little bit faster. But the Fat Tires were just so eye catching. And so I thought, maybe this would help propel the popularity of electric bikes, like something that really gets you out there, kind of like a silent version of a Harley-Davidson.

• 36:15Guy Raz?

  Yeah.

• 36:16Speaker 01

  It's bodacious, right? Everyone looks at you and it's like, it's, they're, they're fun. And so when you combine this fat tire, the comfort, the durability with an electric motor, you kind of have the best of both worlds. And that was kind of the special kind of launch point for the brand.

• 36:30Guy Raz?

  And did you think, maybe I could just buy a bunch of these fat tire bikes and just convert them into e-bikes? Was that, was that your initial thought?

• 36:37Speaker 01

  Yeah, I, I remember immediately just getting online and trying to search out where I could kind of have these things made. And a vast majority of bikes were manufactured across Asia. And so that's where I started looking. I started reaching out to vendors, reaching out to factories. And I was using my Rad Power Bikes email address to reach out to them, which no one had ever heard of. So I'm surprised any of them even got back to me, but sure enough, a few of them did.

• 37:02Guy Raz?

  What were you asking? You were asking them, you were inquiring to see if they would build a bike to your specifications?

• 37:09Speaker 01

  Yeah, I, you know, I started out by gauging what it would cost to build a normal electric bike, if you were to actually have, find a factory, build them on an assembly line. That's something I just never got into a taste of, because I'd been building all of our bikes, you know, like I said, one at a time. And so this was a new exploration for me. So that's how it started.

• 37:27Guy Raz?

  All right, so this is what, like 2014? And did you think, you know, this is what I should do? I should convert this business where I'm just retrofitting bikes into a, an e-bike company?

• 37:39Speaker 01

  Yeah, so I started by looking for sources. And then the next thing I did though, is I called Ty up.

• 37:46Guy Raz?

  Ty Collins, this is your childhood friend that you know from kindergarten, from preschool?

• 37:50Speaker 01

  Yeah, so, you know, Ty Collins came on as my co-founder in 2015. He's just this brilliant guy. And, I mean, to give you a sense, we have really aligned values. And we have really aligned values because we both went to the same Montessori preschool. And so we grew up in the same hometown and, and he's a polar opposite to me when it comes to work skills. He's a marketer, a digital marketer by training, by background, by career. And I was really a, a product guy, right? A product CEO. And so we had grown up together, went to preschool together. I lived with him in college. In college, he was helping with some branding. Some of our website stuff. And so he was there with me all along, supporting me. And he believed in e-bikes all along. And I think we had even talked about during our college

• 38:34Speaker 01

  days together, like, God, it'd be cool to really go big with this thing one day when it was the right time. And after college, he went to San Francisco and underwent kind of this like six or seven years of blossoming and becoming a great performance marketer. And when I first had this lightbulb moment, I figured he's the guy to call. He can run the marketing and sales side of the business.

• 38:57Guy Raz?

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

• 39:03Speaker 01

  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 seen 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,

• 39:47Speaker 01

  this is a really thoughtful, cautious guy normally. And if he's that excited, we better get going.

• 39:52Guy Raz?

  Yeah. This is 2014. E-bikes, really big in Asia, like in China, they were all over the place. And people had been riding them for years there, but not really in the US. They had not really been a big thing yet. Still really kind of niche at that point.

• 40:09Speaker 01

  Yeah. Most of the e-bikes that were out there in the market were built for European standards, actually, right? In around 2014. And so they were 250 watts of power. They didn't have throttles. They had really skinny tires. So we saw this path to build a bike that was a lot more, it was just built for these, you know, the Western world where you have rough roads and high traffic speeds and people want power. And that's kind of what we went to go build.

• 40:38Guy Raz?

  So you have this idea. How do you, I mean, the first step is you got to raise some cash to build a prototype or to get a factory to agree to make them because I'm assuming if you want to put in an order with a factory, they're not just going to make you one or two or five or 10 bikes. You got to put in a big order, right?

• 40:56Speaker 01

  Yeah, I had emails going back and forth with probably a dozen different factories. And we had a good sense then of what the minimum units were going to be for an order and the pricing. And there was frankly, no other way for us to get it off the ground except for crowdfunding.

• 41:10Guy Raz?

  And how much money did you need to raise in order to put in an order?

• 41:15Speaker 01

  We had a minimum of about $40,000. So that was kind of our target because if we had done that, we could have filled about a half a container of e-bikes and done a less than container load shipment. We didn't know what the campaign was going to do. And we wanted at least to be able to just fund some initial units and get a production run going to get a sense if there really was a market there.

• 41:35Guy Raz?

  Meantime, you are designing the bike.

• 41:37Speaker 01

  Absolutely. We knew going out of the gate, we wanted to be more powerful than, you know, it's in the name, right? Rad Power Bike. So we wanted it to be 750 watts. 750 watts is the federal legal limit for e-bikes to be treated like a regular bike. So you can still ride them.

• 41:52Guy Raz?

  Without having to get a license for it, right?

• 41:54Speaker 01

  Exactly. You don't need a license. You don't need registration. You don't need to drive. Yeah. So that was our target. Our target was to build this 750 watt e-bike with big tires on it.

• 42:04Guy Raz?

  Right.

• 42:04Speaker 01

  And get it out there in the world. But the other thing we found was really important was to make it really simple, too, because we couldn't afford to have 10 different versions. And so we just had one size fits all. And we made a white one and a black one. And the bike was a little bit absurd in the sense that these huge tires on it, it also had a throttle on it, which was really super unusual back then. Most e-bikes are only assistive. So as you're pedaling, it helps you out a little bit.

• 42:31Guy Raz?

  Yeah.

• 42:31Speaker 01

  But our bike had a full on twist throttle on it, like you would have on a scooter or a motorcycle.

• 42:36Guy Raz?

  And was that e-bike, like I think people don't fully understand, like you, a pedal assist bike, you get on it and you just like fly. You really take off. It's It's like being a superhero. It's like being Superman on a regular bike. All of a sudden, you've got superhero powers.

• 42:53Speaker 01

  Yeah, and what we've always seen, we've always called it, at least from the early days, is the e-bike grin. And that's what you see on someone's face when they come back from their first test ride, because it is unbelievably freeing feeling. And it's frankly, a little bit shocking.

• 43:07Guy Raz?

  All right, so you've got this prototype down. Your goal is to raise $40,000.

• 43:13Speaker 01

  Yeah.

• 43:13Guy Raz?

  It's you and Ty, and then you bring in another friend, Marimar White Espin. Who's Marimar, by the way?

• 43:21Speaker 01

  Yeah, so Marimar and I were in a relationship at the time, and she was helping run operations for the company.

• 43:27Guy Raz?

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

• 43:48Speaker 01

  Yeah, and I gotta give credit to Ty on this one, because 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 gonna go live. And I think we got the Indiegogo campaign up within 90 days or 100 days, or something like that.

• 44:03Guy Raz?

  Wow.

• 44:04Speaker 01

  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.

• 44:25Guy Raz?

  So you launch an Indiegogo, this campaign goes viral.

• 44:30Speaker 01

  Yeah.

• 44:30Guy Raz?

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

• 44:35Speaker 01

  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, fund that first production run. We were selling them for 1,200 or 1,300 bucks each, I think, something like that. And, 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 in pre-orders.

• 45:14Guy Raz?

  And what was the promised turnaround, like, six months?

• 45:17Speaker 01

  Yeah, we, I think it was about six months to fulfill it.

• 45:20Guy Raz?

  So you raised $320,000 through Indiegogo. First of all, I mean, so some people listening to this might think, woohoo, that's amazing, incredible. You're probably jumping up and down. But it's also a huge burden. Like, you've got to fulfill all those orders and all those people and all those emails. If you've ever done an Indiegogo or put money into one, and I have, you know that you're going to be like, where's my thing? Where's my bike? Where's my product?

• 45:47Speaker 01

  Oh, man. Yeah, you know, I remember sweating constantly for, you know, every day running up to the campaign. And I thought that that was hard, just getting the campaign launched. And but, boy, oh, boy, like, that's when the hard part really started.

• 46:01Guy Raz?

  When we come back in just a moment, how Mike took his first factory-fresh e-bike for a test drive, and why it went very, very wrong. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 46:30Guy Raz?

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• 48:03Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's 2015, and Mike Radenbaugh and his partner Ty Collins have 300 e-bike orders to fill from their crowdfunding campaign. And at this point, they've moved Rad Power Bikes to Seattle, and they're working with a factory about 6,000 miles away in China.

• 48:27Speaker 01

  So I had placed the order before even visiting the factory. And so I quickly got on a plane and got my butt over there to try to oversee production and be a part of the production process, to learn, digest, get a feel for this new partner we were building this relationship with.

• 48:44Guy Raz?

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

• 48:53Speaker 01

  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 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, I think, a week straight,

• 49:37Speaker 01

  the 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.

• 49:45Guy Raz?

  Wow. And the bikes that you delivered to customers, I think they maxed out at what? 25 miles an hour? Is that right?

• 49:51Speaker 01

  Yeah, all our bikes go 20 miles an hour.

• 49:53Guy Raz?

  Yeah. And pretty much from the beginning, I guess your decision was let's make this a direct to consumer brand. Let's, let's just have a website and figure out how to get people to buy directly from us instead of sell to bike shops and use distributors. Why did you decide to, from the beginning, to go that route?

• 50:11Speaker 01

  We needed to get the brand out there. There was no bike distribution network that would have taken, you know, these two young guys with this kind of absurd looking bike in some ways. Traditionally, bikes have always been sold through dealerships and the dealership needs to make margin, right, to pay for rent and pay for their employees and operating expenses. You have a distributor in a country, right? They have a markup. And so direct to consumer is the way where we could really get the brand started and kicked off.

• 50:40Guy Raz?

  Were you able to fulfill all those orders on time from the Indiegogo campaign?

• 50:46Speaker 01

  Yeah, it wasn't absent of a lot of long nights and, you know, blood, sweat and tears, but we did. We got, I think we got them all fulfilled on time, you know, plus or minus a few weeks, I think. And it did quickly become, you know, frankly, totally out of hand, like just being able to have timely responses to customers. And so we ended up posting our first job, you know, and our first job was a customer service, you know, agent position.

• 51:09Guy Raz?

  So here's my question. If that $320,000 that you got through Indiegogo, Went to pay for all these e-bikes. Basically, you were subsidizing the bikes because people were getting them for at cost or even less than what it cost you to produce them. So you were, you didn't have a whole lot of cash left over after those bikes were sent out. How did you, I don't know, where did you go from there?

• 51:34Speaker 01

  Well, we had a Shopify already up and running by the time we launched Indiegogo. That was just a great tool for us because it was really easy to get it launched and it really eliminated this huge barrier to entry. It's like, you know, we wanted to run the campaign on Indiegogo because it would get a lot of eyes on it.

• 51:49Guy Raz?

  Yeah.

• 51:49Speaker 01

  But then, you're right, we needed to have revenue at a more sustainable margin right away. So, right after the 30-day campaign ended on Indiegogo, we switched on our website's, you know, ability to accept orders. We didn't know what was going to happen. We didn't know if raising the price from the crowdfunding price and going up to $14.99, which is the price the Rad Rover still sells for today, was going to work. Like, we didn't know if we were going to see customers still excited to adopt one of our bikes.

• 52:19Guy Raz?

  And how did you guys get the word out? I mean, was it Ty's sort of skills as a digital marketer?

• 52:25Speaker 01

  That's been just a huge component of the traction that our brand has gotten from day one is that because we were a direct-to-consumer and because Ty had this background in, you know, performance and brand, got a digital marketing, we were able to just immediately get eyes on the site. And that was still complemented, right, with this word-of-mouth thing that was going on. It's like, it's like a ski doo. You know, you don't want to buy one ski doo, you want to buy two so you can go with your friend.

• 52:50Guy Raz?

  Yeah.

• 52:51Speaker 01

  You see the same thing with e-bikes, which is, it's a lot more fun to go ride with a pal.

• 52:55Guy Raz?

  So you basically, you hang your shingle out on Shopify and then a slow trickle of orders start to come in?

• 53:02Speaker 01

  The first day, I think we had one order come through the site, and that was really exciting because, one, we learned that the website was working, and, two, we realized if people, maybe someone out there is willing to, like, that $14.99 price works for us. And it was a sustainable margin for us. And so we knew if we could sell bikes at that price, we could build a robust business. But if there wasn't any traction, then we didn't know what we were going to do.

• 53:26Guy Raz?

  Yeah. Because you could be out of cash pretty soon.

• 53:31Speaker 01

  Yeah, really quickly. And then day two came around and I think we sold three bikes, right? And like, wow, okay. Day three comes along and I think we sold 15. And each day that went by, I remember having, I think my heart rate has never been faster than those, that week following our crowdfunding campaign, transitioning to website sales.

• 53:52Guy Raz?

  All right. So meantime, this is like 2015, 2016. E-bikes still are not, had not quite taken off in the US. Some, you know, you've got some early adopters and stuff, but you were thinking of this because I think most people still think of bikes as a form of exercise. In some cities, it's a form of transportation. I'm a bike commuter, been a bike commuter for, I don't know, 20 years. You were promoting this as a, as a utility, right? As a transportation tool, not as a leisure thing.

• 54:22Speaker 01

  I think one of the first things we ever copy wrote was this term, it's built for everything and priced for everyone. And this was kind of an early tenet within the business, which is that, you know, it's almost like a Swiss army knife or Leatherman of e-bikes. And at a price that allows for mass adoption.

• 54:38Guy Raz?

  In your mind, who was, who was your target customer?

• 54:42Speaker 01

  It was people just looking for mobility. We really were targeting people getting around their ranch, or running to get in the mail, or taking their dog for a walk, or, you know, running to the store just to pick up groceries, or the pharmacy. You know, it was just a lot more about just mobility and under 20 mile, under 30 mile kind of trips.

• 54:59Guy Raz?

  You know, I mean, one of the things about, about this was this would allow people who are maybe not in great shape to ride a bike.

• 55:07Speaker 01

  Yeah, this has been just the most compelling part of our story so far. And I think what really drives a lot of our team members, especially the customer facing ones that see these stories all day long, every day from people that are adopting Rad Power Bikes and becoming part of the e-bike movement is like, it's not just transportation, it's health and wellness as well. You know, I think you'll hear maybe people that ride e-bikes being called, you know, quote unquote, cheaters because they're not pedaling on their own. But actually, nothing could be further from the truth because you're actually out there and you're going further and you can pedal as much as you want to. And our customers find that it just reduces the barrier to entry into cycling and they end up getting way more exercise. I think I've seen studies talking about how you actually get more exercise

• 55:53Speaker 01

  riding an e-bike than you do get a regular bike because you ride it more often.

• 55:56Guy Raz?

  Yeah, I mean, people who call e-bike riders cheaters need to understand they are not, they're not producing any carbon emissions. This is a carbon-free way of transportation. Like, it's nuts. You know, there came a point around 2016, 17, where VC money started pouring into like bike stations, and then it was electric scooters, and now it's you've got electric Vespa-style bikes going into cities. And did you guys start to think, hey, maybe we should partner with cities and get our bikes in cities as like something people could rent?

• 56:32Speaker 01

  Frankly, we've been just overwhelmed with demand as full-paying customers that want to own their own bike. And so we never got pulled into the share economy conversation. And we just were hearing something very different from our customers. They wanted to own their bike. They wanted to customize it themselves. They wanted different features on their bikes than what was available on share bikes. And so, yeah, we never went down that path.

• 56:53Guy Raz?

  So, all right, so you were basically just financing the business through, through sales, through just the cash flow that was coming through, right? That was what was fueling the business?

• 57:05Speaker 01

  We had, in the first year, so in 2015, we did a million and a half in sales. So we did 300,000 on crowdfunding and then 1.5 for the year. We were a bootstrap business, right, for so long. But we did have two local guys in Seattle, these amazing entrepreneur slash angel investors that joined us in 2015 and started to function as kind of a quasi-board of directors with me.

• 57:28Guy Raz?

  And, and they kind of gave you some angel cash and advice as well?

• 57:33Speaker 01

  Yeah, that's right. Yeah, they, you know, it was a small angel investment. And the role that they played was so pivotal in those early days because they were kind of the first adults in the room. And these guys were named Hugh Holman and Mike Gertner. And they had ran a really successful seafood company. They pushed us to take chances, learn, adjust, and do a lot of things that we weren't comfortable doing. And like, one really fun example, I remember fondly was they, in one of our early meetings with them, they asked Ty, they said, Ty, how much are you spending on marketing each month, right? And Ty comes back to him and says, I think we're spending a thousand. Dollars a month. And one of these guys looks back at him, he says, a thousand dollars a month? That's crazy. He's like, you need to double that. And I remember Ty looking back at him dumbfounded like,

• 58:15Speaker 01

  double the budget? No way are we going to spend that much money on marketing. And so we doubled it. And sure enough, the amount of eyes on the site doubled.

• 58:24Guy Raz?

  And what were you spending the money on? Like Instagram and Google and Facebook?

• 58:29Speaker 01

  Yeah, exactly. Kind of just different digital channels. But this is a people led movement. Like, I think the people have just been ready and eager for a solution like this.

• 58:38Guy Raz?

  But I mean, that's not, not just about, about RadWagons. I mean, I'm just curious, like, why do you think it all of a sudden took off? Why did people start to say, hey, electric bikes? What was going on?

• 58:51Speaker 01

  I think that there's so many factors impacting this e-bike revolution that's happening now. Right? And there's, so, you know, BikeShare is a good example here. We actually saw BikeShare as being sort of an advertisement for our product because people were seeing thousands of bikes in the streets. And maybe they were trying them. And if they tried them, we were hearing from our customers saying, you know, I tried one of these share bikes, but I'd really love to see what a real e-bike is all about. You know, that's, I think that's what we were hearing, like almost verbatim.

• 59:22Guy Raz?

  Okay, so here's a question a lot of people ask us about founding companies, which is complicated. We've got co-founders. You started this business when you were 15, basically Rad Power Bikes is you. But now you're sharing the company with Ty. So how did you divide up the work and the responsibility?

• 59:42Speaker 01

  Ty's got a really amazing marketing brain. And I was always way more on product, on like, product innovation and manufacturing. And so it was actually, it was easy for us to break the work up because we had these complementary skillsets. But we're also totally opposites. And, you know, in many ways, opposites complement each other. But we've also learned in all the management training we've done together that, you know, it actually makes it really hard and, right? It's a bit of push and pull because he is very thoughtful. And sometimes I'm very action oriented and bridging into reckless in my speed at which I go at problems. And so it just has sometimes made decision making hard. And so one of the big learnings I've kind of taken away from the last

• 1:00:25Speaker 01

  awesome five years with Ty has been like, acknowledge the tension and address it head on. Like, don't let it. Build up pressure because it you might think it's not creeping out into the rest of your team's work, but it does. And so you as co-founder, I think you really do have commitment that you have to make to your employees that you'll like, make sure that's a healthy relationship because with every relationship, there's especially co-founder relationship, it's important that that's healthy because it does trickle down to the rest of the company.

• 1:00:54Guy Raz?

  So I think by 2018, you were doing $45 million in revenue. Did you start to get a lot of investors contacting you and saying, hey, can what's the deal? Can we invest it? Like, was did that start to happen too?

• 1:01:09Speaker 01

  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. We have a really bold mission as a business and 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 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.

• 1:01:48Guy Raz?

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

• 1:02:08Speaker 01

  There's two big things that pushed me over the edge on enthusiastically like racing into this partnership with the founders of Zoo Lily. 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 no brainer for us.

• 1:02:48Guy Raz?

  I'm just trying to figure this out because it sounds like you knew this was going to work and that's probably true. But you sound like, and maybe I'm wrong, you sound like you just didn't have a whole lot of sleepless nights.

• 1:03:00Speaker 01

  There's been a ton of sleepless nights. I mean, anyone that knows me knows that I don't really have a life outside of the company, even still today. In this business, it's like the speed at which we're growing, a huge piece of learning I've taken away is that you just need to get comfortable with things being different almost every day. I used to say, things are changing a lot every month or every quarter, but really, it's just getting comfortable with change, and that takes time. You're building out totally new departments, or building new supply chain partnerships, or bringing on new investors. Like, all this stuff has a, the smaller you are, the more likely all this stuff is to sink your ship. And you're less equipped to deal with it, just because you haven't developed that muscle, like how to process some of these emotions or these changes.

• 1:03:43Guy Raz?

  Do you remember, like, any specific thing that happened that got you just stressed out?

• 1:03:51Speaker 01

  In mid-2018, right? We were growing up really fast, and we had a lot of bikes on order compared to our balance sheet. And all of a sudden, tariffs hit us really hard. E-bikes were part of the Section 301 tariffs. So, like I said, we had all these bikes on order, and then all of a sudden, all of them were going to cost us 25% more. That's our whole margin. That's like, that's, that's everything that we had to reinvest in the business. And it was almost overnight that this happened. It felt so unfair. The intent of the tariffs were to encourage domestic business and domestic hiring, and it had the totally opposite effect on us. You know, we're growing headcount like crazy, and then

• 1:04:33Speaker 01

  all of a sudden, our administration, right, tells us that, actually, we're going to go ahead and take this pool of investable capital that you could use to fund more inventory and hire more people, we're just going to go and take all of that, right? And so it really did feel like a direct hit on our mission. And our mission's to decrease emissions and make mobility zero emissions, right? And like, and so it had, it felt horrible. It was all-consuming for months on end, trying to figure out how to deal with it.

• 1:05:03Guy Raz?

  How was it resolved, ultimately?

• 1:05:05Speaker 01

  Well, we had been diversifying manufacturing at that point, right? So we already had bikes being built in Taiwan and starting to build bikes in other parts of Asia outside of mainland China. And so that work's continued and it's accelerated since tariffs came into place. But frankly, we haven't. Like a big part of the, you know, raising additional capital, navigating this with our banks around our lines of credit, like it's just been a huge additional pressure on the business and it's impacted our ability to scale.

• 1:05:39Guy Raz?

  And so because you're making fewer products in China, you're not subject to those tariffs?

• 1:05:46Speaker 01

  Yeah, so our diversification efforts mean that less and less of our bikes have been subject to the tariffs, but at the same time, our production in mainland China has also been increasing. So on a percentage basis, it's fewer, but on a total unit, it's actually more. The supply chains for electric bikes, they don't exist in America. They're not going to exist.

• 1:06:08Guy Raz?

  Yeah. But I mean, despite all of those challenges, 2019 was, I think, a record year for you. I mean, do you remember what your revenue was in 2019?

• 1:06:19Speaker 01

  We were nearly 100 million in sales last year.

• 1:06:23Guy Raz?

  Wow. So you're thinking, oh, this is just incredible, you know? And then 2020 hits and all of a sudden COVID lockdown and the whole economy starts to collapse. When that started, were you nervous about what was going to happen to your company?

• 1:06:42Speaker 01

  For Rad Power Bikes, COVID-19, the impact started to hit us, you know, right in January. So basically, all of our employees across our factories in Taiwan and China and Southeast Asia, they were impacted first. So we really just focused in like, what could we control and what could we, what could work on there? So we just focused on caring for those teams and still trying to make sure they're safe, healthy, and still able to produce bikes in the cases where that was a possibility. And so it was like battening down the hatches on supply chain.

• 1:07:11Guy Raz?

  And then what? I mean, 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 gonna, you know, you guys were gonna take a hit?

• 1:07:26Speaker 01

  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 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-19. 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 US.

• 1:08:07Guy Raz?

  Meantime, the opposite happened to your company that's been happening to many companies is that you saw sales spike. All of a sudden, there were like insane number of requests for e-bikes, which makes sense because people don't want to use public transportation right now. They're nervous about getting on crowded subways. When did you start to see sales all of a sudden spike?

• 1:08:29Speaker 01

  Initially, when Seattle was the epicenter, right, we went into total cost control mode, actually. We ended up cutting our forecast for the year in half. And as each week went by, sales kept picking up, right? And it was really fortunate for the company because we didn't need to lay anybody off. And it went the opposite. Since then, we've actually, I think we have over 100 open roles right now.

• 1:08:53Guy Raz?

  Wow.

• 1:08:54Speaker 01

  You know, and those are across supply chain, sourcing, right, customer service focused roles. It's really, we ramped our customer service team from like 40 people to 140 now, or something like that. And we've been ramping teams as fast as we can to keep up with customer inquiries.

• 1:09:12Guy Raz?

  Give me a sense of percentage increase in demand this year.

• 1:09:16Speaker 01

  So, April of 2020, we've done 297% more bike sales than we did April 2019.

• 1:09:25Guy Raz?

  300% year over year.

• 1:09:29Speaker 01

  And take it for context, we're a business that has grown 100, more than 100% per year for the last five years. And we're planning for another year like that. Take a business like that, right? Triple it again. And so you can imagine just, it's been a lot of work. It's hard work. It's fun work. But we're just in the business of delighting our customers. And that's been really hard since demand has frankly spiked.

• 1:09:52Guy Raz?

  What's the waitlist now for a bike?

• 1:09:55Speaker 01

  The waitlist varies by model, but for some of our more popular models, right? There's as long as four months.

• 1:10:04Speaker 01

  And, and this is not, you know, this is not a small business or a small supply chain that we're running anymore, right? We have, bikes are being built across factories, across four different countries. And we're spending a huge amount of time on supply chain innovation. We, we think a switch was flipped on, you know, the, the light has been shed on e-bikes as a tool for the masses.

• 1:10:25Guy Raz?

  Yeah.

• 1:10:26Speaker 01

  And so now it's not so much about just keeping up with this demand that has spiked from COVID-19, people working from home, shopping from home, looking for social distance ways to get around. But this is a switch that was, is flipped on and it's not turning off for years to come. And so the work we're doing now is just all about planning for that future demand. It's not about planning for next summer's orders. It's about planning for the orders 10 years from now, frankly.

• 1:10:53Guy Raz?

  Will you open up brick and mortar shops?

• 1:10:55Speaker 01

  Yeah, we, we found that our customers were really eager to try our bikes before they buy them. And some customers obviously are getting referred by their friends and they're buying online and shipping direct to door. But we found there's a whole other set of customers that really wanted to try before and see which bike fit them the best, which model was really for them. And so that's why we opened our first retail store back in 2016 and had a lot of success with that. And so we, we actually did have a plan to launch more retail stores this year. That's on pause. And, but next year, you'll start to see some more stuff come out where we're going to experiment with different formats and kind of the new world we're in.

• 1:11:33Guy Raz?

  You know, I think Rad Power Bikes are now the top selling e-bikes in the US. Is that, is that right?

• 1:11:39Speaker 01

  Yeah, that's right. Yeah, you know, we estimate we have about 25% or more of the North American market.

• 1:11:44Guy Raz?

  Wow.

• 1:11:45Speaker 01

  Then the other 75% is, I think, made up of about 100 other companies.

• 1:11:50Guy Raz?

  Wow.

• 1:11:51Speaker 01

  And, you know, we think that what we're building can become the Ford, the Toyota, the Volkswagen, all combined into one of this whole new mobility movement. And so we're not focused on building a couple hundred million dollar business, but we have a lot bigger aspirations is that I think e-bikes are the next thing to be the solution for the future of mobility.

• 1:12:12Guy Raz?

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

• 1:12:23Speaker 01

  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.

• 1:12:49Guy Raz?

  Wow.

• 1:12:49Speaker 01

  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.

• 1:13:00Guy Raz?

  Wow. I mean, you started this when you were like 15. And I should mention, you are, because you wouldn't know by just hearing this, you're, you're 30, right?

• 1:13:09Speaker 01

  Yeah, I am, yeah.

• 1:13:10Guy Raz?

  It's rare that we interview people at such a young age, at such a young point in their lives, because, you know, we want to tell the full story of a business and a company, but this is, your business has been around since you were 15, for 15 years. It's going to sound pretty remarkable to a lot of people to discover that you now have a business that is going to, what you're probably projected to do 250 million dollars in sales this year, maybe more.

• 1:13:33Speaker 01

  Yeah, well, I, you know, I, I, I just say, keep in mind, it's not just me leading this company, you know, I like, I, I run the company, but I have frankly, an amazing set of executives who have bought into the culture and they see the same vision I do. And so I think that has been a big part of this mission that we got into it really early. Like I, I was right there, kind of the dawn of the e-bike revolution. And I think that's been a big part of it. But the bigger part has been around identifying areas that I need support as a young entrepreneur.

• 1:14:01Guy Raz?

  You, I mean, you can do like 10 more business, you can start five more companies. I mean, most startup entrepreneurs are like, the average age is like 39, 40. Do you see yourself in this business for the rest of your professional life?

• 1:14:15Speaker 01

  Yeah, this is the question that came up in all of our kind of fundraising conversations. You have people that are joining the business and they want to know what they're going to be in for here. And I'll, I'll tell you the same thing that I've told all, all these folks. It's that this is the most fun that I think I could ever have. It's what I want to commit my, the rest of my life to. And it's also really hard, but I learned early on that no matter what you're doing, like it's going to hurt in some ways and it's going to feel great in others. And we all have to work tirelessly to achieve this vision because it's a big one. We're going up against big auto, big oil. We have big opponents and we got a lot of work cut out for us.

• 1:14:55Guy Raz?

  Wow. Mike, when you think of your, your journey and what you've built, it, it sounds like an overnight success story, but of course now we know it's not. It started when you were 15, but really, you know, from the time of the Indiegogo campaign to today, it really is remarkable how quickly this company has scaled. Do you think that a lot of this has to do with just how hard you worked and how skilled you are? Or do you think some of this is just because you got lucky?

• 1:15:21Speaker 01

  Yeah, I mean, we, we definitely could not have done this without luck and timing. But I think hard work and grit are, they're definitely been a foundation of this business. You know, it's been a pure passion of mine since I was a youngster. And you know, really, our fanatical owners are, you know, they're what's, what's driving us now is like, we just have to keep up with demand and we also have to innovate and build the future. And so that's going to take a lot of work. And, and the company that becomes synonymous for electric bikes and the future of mobility is going, going to be the one that takes an early mover advantage like Rad has. And I think we're well set up to do that, but gosh, I hope we have some more luck along the way.

• 1:16:02Guy Raz?

  That's Mike Radenbaugh, founder and CEO of Rad Power Bikes. And by the way, even though the company limits the bike speeds to 20 miles per hour, there are many, many YouTube videos that show you how to hack the system and get it up to speeds closer to 30 miles per hour. Not that I would personally know anyone who actually did this.

• 1:16:26Guy Raz?

  I'm assuming you have a car, right?

• 1:16:28Speaker 01

  I have a 2009 Toyota Tacoma. It's currently sitting in one of our back parking lots in our buildings with a dead battery because I haven't driven it in about 10 months.

• 1:16:39Guy Raz?

  Wow, so you're pretty much all e-bike all the time?

• 1:16:42Speaker 01

  I'm all e-bike. And I have been since I was 15. It's how I got to school every day. It's how I got to college every day. And it's how I get to work every day.

• 1:16:56Guy Raz?

  Thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis or at guy raz. You can also follow me on Instagram. That's at guy dot raz. This episode was produced by J.C. Howard with music composed by Ramtin Arablouei. Thanks also to Candace Lim, Derrith Gales, Julia Carney, Neva Grant, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This.