E-bikes have been a growing segment in the bicycle industry for years now, and almost every leading mobility player has taken notice. Automotive brands like BMW, Audi and Jeep and motorcycle brands like Triumph and Ducati have all entered the arena, each with its own unique offering. One of the latest iconic brands to enter this space is Harley-Davidson with its spinout Serial 1.
When you look at the numbers, it’s not surprising that so many companies are getting in on the action:
- The global e-bikes market is projected to go from $18,46 B in 2020 to $19,91 B in 2021.
- The market is expected to reach $26,3 B in 2025 at a CAGR of 7%.
- About 130 million electric bicycles are projected to be sold between 2020 and 2023.
Some of the drivers supporting these positive market conditions include rapid urbanisation, traffic congestion, favourable government initiatives, a growing bicycle tourism sector and the increasing need to reduce emissions. Sales skyrocketed during the covid pandemic, as more people looked for viable alternatives to public transport.
But these aren’t the only reasons a company like Harley-Davidson would dip their proverbial toes in the e-bike lake. Additional benefits include the opportunity to:
- Reach a wider target audience
- Create a new revenue stream
- Leverage over 100 years of engineering
This is our Corporate Startup of the week:
Let’s take a closer look at how this legendary American motorcycle manufacturer drew from its industry know-how, engineering capabilities and entrepreneurial spirit to create a new spinout dedicated exclusively to making state of the art e-bikes.
Featured in classics like Easy Rider and more recent movies like Terminator 2, Pulp Fiction and X-Men Origins Wolverine, Harley-Davidson motorcycles hold a special place in the hearts of adventure enthusiasts the world over.
Headquartered in Milwaukee and founded in 1903, Harley-Davidson is one of the leading and most recognisable motorcycle brands in the world. They currently have offices and manufacturing facilities in over 20 countries and more than 5000 employees worldwide - all working towards one mission:
“More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.”
With a 2020 revenue of 4,05 B, Harley-Davidson offers its clients a variety of merchandise, including apparel, accessories, ornaments and model motorcycles (this is of course aside from their super cool motorcycles).
Meet Corporate Spinout, Serial 1
The concept behind Serial 1 was born in Harley Davidson’s product development centre, “skunkworks”, bolstered by a small group of passionate motorcycle and bicycle enthusiasts. Their ultimate goal: To build an e-bike worthy of carrying the Harley-Davidson name.
After some strategic changes brought on by the pandemic, the decision was made to spin out the e-bike project. As explained by Chairman, president and CEO Jochen Zeitz:
"COVID-19 has dramatically changed our business environment, and it is critical we respond with agility to this new reality. The crisis has provided an opportunity to re-evaluate every aspect of our business and strategic plan.”
Today, Serial 1 is an independent company, but Harley-Davison is still a shareholder and provides access to vital assets like the company’s engineering, analysis and testing capabilities. The brand also remains in the hands of a talented team of former Harley-Davidson alumni, including:
- Jason Huntsman, President
- Ben Lund, Vice President
- Aaron Frank, Brand Director
- Hannah Altenburg, Lead Brand Marketing Specialist
Even the name “Serial 1” is a reference to the company’s history, referring to the nickname for Harley-Davidson’s first motorcycle, “Serial Number One”. As described by Brand Director Aaron Frank:
"When Harley-Davidson first put power to two wheels in 1903, it changed how the world moved, forever. Inspired by the entrepreneurial vision of Harley-Davidson's founders, we hope to once again change how cyclists and the cycling-curious move around their world with a Serial 1 eBicycle."
How Serial 1 works
Serial 1 offers four e-bike models:
Each e-bike features front and rear hydraulic brakes, a carbon-fibre belt drive, front and rear LED lights and Super Moto-X tyres. The models range from $3.799 to $5.599 in cost and can be purchased D2C through the Serial 1 website or a select dealer.
The benefits for Harley-Davidson
Spinouts like Serial 1 are often able to stand on their own and be profitable years earlier than their independent counterparts, thanks to the support and backing of their parent companies. In this particular case, virtually every aspect of Serial 1, from its talent to its technology to the brand trust it commands, have all been facilitated by its parent company, Harley-Davidson. As explained by VP of Product Development, Ben Lund:
“If my team needs help, I reach out to the responsible party at Harley-Davidson, and we are able to schedule testing or lab time or whatever we need to do, and we go from there. We have access to Harley-Davidson specialists that we can contact at any time, so we’re never just taking guesses. It’s a very straightforward and neat arrangement.”
Having been spun-out also has its benefits, giving Serial 1 the autonomy to make decisions over its design, engineering and general direction. In other words, their independence enables them to make quick decisions without the hassle of a complex corporate chain of command.
So, what’s in it for the parent company?
Well, like many powerhouses that have ruled their industries for over 100 years, it’s had its fair share of struggles dealing with changing customer demand, fluctuating revenues, and updating its image. Developing innovative corporate ventures like Serial 1 (and eventually spinning them out) can be immensely beneficial in various ways, enabling Harley-Davidson to:
- Reach new, younger customers and expand its customer base.
- Leverage its +100 years of industry know-how to tap into a new market.
- To gain new learnings that will improve existing offerings and help develop new ones.
- Create new revenue streams in a quick, low-risk way.
- Rejuvenate its image and reposition itself in the market as a more eco-friendly provider.
Although there’s been some price point pushback, Serial 1’s promise to deliver an “unmatched riding experience rooted in freedom and adventure” is sure to be irresistible to many loyal HD fans. The option for comfortable monthly payments currently being offered on the website might also help sway customers who might have otherwise been on the fence.
It’s still too early to tell what direction this promising new spinout will take, but we’re all rooting for the team at Serial 1 and can’t wait to see what their next move will be.
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