Milestone for the Belgian cowboy
Adrien Roose, co-founder and CEO of Belgian e-bike startup Cowboy, could have just yelled 'Yee-haw!' and fired a few shots in the air. Instead, he opted for the classic approach to inform about his company's recent success via LinkedIn. Roose announced that July was Cowboy's first profitable month and expressed his goal of achieving full profitability next year.
Roose did not disclose the specific basis for achieving profitability, but this milestone is noteworthy, especially in light of the bankruptcy of Dutch rival VanMoof and its subsequent acquisition by McLaren-Applied-subsidiary Lavoie.
It underscores that selling high-priced, digitally integrated city bikes can indeed be a viable business model when executed correctly and when technology doesn't fail. This was the case with VanMoof, whose products were once referred to as the 'iPhone on wheels' but later faced quality issues. Observers partially attributed this to the founders' lack of experience. Additionally, an insufficient repair service was a consequence of their direct-to-consumer strategy, which meant that the local independent bike shop couldn't easily fix defects. All of this led to considerable customer frustration.
Manufactured locally, repaired locally
So, what sets Cowboy apart? At first glance, not much. The bikes and software of the Belgian company are just as loaded with technical gadgets as those of VanMoof (users can now choose their routes based on air quality, for example). Moreover, the direct-to-consumer approach initially remains the same.
However, CEO Roose told tech portal 'The Verge' that Cowboy differentiates itself significantly from VanMoof. For instance, Cowboy bikes are assembled close to European customers, while VanMoof manufactured its bikes in a factory in Taiwan. Furthermore, despite direct sales and service, Cowboy is building a growing network of independent bike dealers.
Operationally, Cowboy appears to have made recent changes. Roose stated that they reduced inventory by 50%, freeing up capital. Production costs have also dropped by a fifth. In early August, the company increased its prices to remain 'healthy.'
Whether all of this will help Cowboy break even next year remains to be seen. It's premature to label Cowboy's first profitable month as a 'triumph' over VanMoof, but it's certainly a small victory.