Boosted Boards: from flight risk to $70 million failure

this video was sponsored by Skillshare the first thousand people to join with the link in the description will get two free months on their Premium Membership skateboards have always been cool but when someone decided to put a motor in them they became even cooler hazards aside of course and with this latest trend of micro mobility and last mile vehicles it might come as a surprise that the first motorized skateboards exist since the early seventies but in recent years Millennials have taken to Electric skateboards and scooters to move about and upload tic TOCs while doing so and this is largely due to one company boosted yes other motorized boards existed before but boosted elevated the game they took an old idea made it slick 3d and high quality the control system was easy to use and as a company they sought to form strong bonds with their customers but in march 2020 who's that laid off many of its employees and sought a buyer so it begs to wonder if this company had successful products with millions in investment a cult-like following and even the endorsement of one of YouTube's biggest stars why did it fail sure there was the china-us trade worthy but was that all of it not quite this is company forensics boosted Stanford engineers students sanjay Dastur John almond and Matthew Trent came up with the boosted brand of Electric skateboards in 2012 though they had toyed with the idea for years they wanted an electric skateboard that was portable lightweight and easy to use and their idea was so well conceived that it was backed by Stanford's own startx accelerator program and then went to a very successful Kickstarter campaign with a goal of $100,000 in just 24 hours they reached the goal and ended up with over 460 thousand dollars in pledged money not only that but they also graduated from the Y Combinator program a hotbed for innovative products and a source of a lot of our forensics videos anyways having succeeded in getting investors boosted launched at its first products the single the dual and the dual plus boards in 2014 the models had one or two motors and varied in range power and of course price part of their almost immediate success was their outstanding quality and attention to detail ready users consider them the apple of a boards vestments that's compared to other brands boosted boards weren't cheap as models went from $1000 and above still people bought them and the company was working hard on its second generation of a boards which had more power improved aesthetics and more sizes once again boosted boards garnered a cult-like status writing groups reddit threads YouTube channels you name it boosted was there and right around this moment they got a 10 million dollar investment so the ship was sailing in the right direction but a lot of it is also due to one youtuber you might have heard about Casey nice dad he used a boosted board in many of his videos and this got people hooked but let's talk about one particular video which involved Aladdin that's right Casey produced and directed a video called Aladdin magic carpet prank and it was a hit the numbers at the time well upwards of 17 million views right now that video stands at 28 million views Aladdin chilled on his board and cruised around New York City and bystanders stood in wonder what was he writing it's so easy to write the video certainly got people interested marketing agency overdrive makes a very compelling case for the impact this video on boosted but it was also a double-edged sword because what would happen if it's suddenly nice that didn't promote his boost at board and even with all of this going for them some bumps appeared on the road is that smoke in early 2016 Rick bras not Rick Ross Rick bras and avid boost that user reported that his board emanated some sort of smoke in fact the conversation with his roommate is quite funny your board thing is smoking the first thing that bras told his room it was videotaping because you know viral videos he then rushed to his house only to find the board's battery overheating on the verge of exploding his apartment was filled with a heavy chemical smell so he put on a gas mask he bought as a joke shirt that's why you have a gas mask he then posted the entire situation on a reddit thread and guess what boosted contacted him immediately offered spares and asked to get the damaged parts back but it didn't stop there boost its CEO Sanjay dostler flew from California to New York to meet up with bras and analyze the damaged board and it wasn't a one-time thing as another user reported a smoking battery boosted was forced to issue a recall and told its users to stop using the boards all together and to disconnect the batteries doused or recognized that the problem stemmed from their own quality control standard which meant stopping production in November and December the peak of consumption though they had hoped to restart production in January 2017 boosted took a big blow to their sales and times didn't really improve for dastoor he had always wanted to see boosted grow past electric boards but his efforts weren't yielding results so in mid 2017 has stepped down a CEO and another Stanford graduate came in Jeff rusik off a new era Bruce ACOG looked to grow boost that and as soon as he arrived injected resources into the company he practically doubled the work first around a hundred sixty employees moved to a new office and worked hard to launch the third generation of boosted boards those who worked hard to increase employee health benefits he told the meeting of the company had grown four hundred and fifty percent in 2017 and planned to keep growing with cheaper and smaller boards like the boosted meeting these new products had a price of $750 compared to pricier larger boards and yes Rosica was also adamant in expanding from only words into other products like scooters but even with apparently such a strong year in 2017 and new products boost it needed money so 2018 was also a year of raising capital part of the capital would be funneled towards launching the rev a $1600 scooter and finally breakout from the skateboard market the rev was different from most electric scooters in the sense that its build quality was above average steel frames not a hint of plastic big wheels and a solid braking system if meant the Rev was serious business but so was its price and a weight of 46 pounds the idea was good enough for investors who dished out 60 million dollars to the company but even with the new product about to come out hefty investment and interest from the public Rosa Cowden stand still he aimed to grow and by 2018 the company had vendors in 34 countries trade war competition and cost the promising new scooter Rev was to be entirely produced in China in fact all of boosted's products were manufactured in China it seemed that boosted would be directly affected even if Bruce account assured everyone otherwise he told the verge boost that could eat the tariffs implemented during the trade war but as soon as the trade word started to heat up boost it applied and was granted exclusion on the products the US government wasn't paying retributions immediately in fact they were taking a lot of time so boosted wouldn't see these benefits in the short run then word got out that boosted wasn't paying its vendors on time turns out that Rev the Savior scooter had been delayed and some vendors were owed up to $100,000 plus it's not like they weren't other scooters in the market competition from Asia mitts cheaper options were available which weren't all that bad so in reality boosted was stalling in a very fast-moving market cost cots and downfall by this time Goosen was a big company most of its around 150 employees were engineers commanding good salaries and this meant a hefty chunk of change just on payroll and yes their products were great but micro mobility is still a niche market with stiff competition reverse engineered products coming from China ironically filled the market and some cost half as much so in order to stay alive in late 2019 and early 2020 the company started shedding cost they reduced employee benefits such as providing lunch they instead cordially asked the employees to bring their lunch to work and this might seem like a small change but it was an indicator of how things were doing the company then lost many of its top management the CMO left and the VP of engineering then the VP of quality the VP of Operations and the customer experience manager just to name a few signs were pointing to troubled very troubled times and it was just a matter of time before the inevitable happened but no one expected it to happen so fast with a brief declaration and boost its website Rosa Cao told the world that it will continue to pursue strategic options on their new ownership but also there it was between the lines the real reason why boost had failed unfortunately developing manufacturing and maintaining electric vehicles is highly capital intensive it is just ask Tesla and it will continue to be for a long time so if you want to store your own product my advice is to start with a really really like really cool logo then make hundreds of stickers and slap them onto Chinese products you'll be better off another alternative is you can take errand drop Lin's course on how to design merch he has a fantastic class that covers everything from choosing a design that works finding the best vendors to make your stuff creating on metal files for handoff and the manufacturing at scale you can access this class and thousands more for free by signing up for Skillshare they are our sponsor for today's video and have offered to free months to the first thousand people to sign up using the link in the description thanks a lot for watching it's been around six months since we published our first forensics video on we work we have over twenty stories of failed companies and new stories coming every single week so hit that subscribe button to stay tuned see you next week [Music]

Channel: Slidebean

Views: 816,224

Rating: 4.8521252 out of 5

Keywords: Boosted board, boosted board out of business, boosted board, boosted board going out of business, boosted boards, boosted board mini, boosted boards 2020, boosted boards closed, boosted boards out of business, boosted boards out of stock, slidebean, caya slidebean, company forensics, slidebean forensic, slidebean startups 101, startup company, startup failure, startup company review, electric skateboards, Boosted boards are out of business, electric skateboard

Id: jxPDeFT4oTE

Length: 9min 41sec (581 seconds)

Published: Thu May 21 2020

Reddit Comments

[u/mmmanl]

So basically a “reversed engineered in China” product that's a cheaper alternative.. welcome to the new age of innovation

[u/[deleted]]

I don't think China or the tariffs are the problem here. This is the classic Bay Area problem/Bay Area VC problem that kills many tech startups.

First, the Bay Area problem. Many tech companies start in the Bay Area and unfortunately, that's a bit of a world unto it's own. So solutions like this set out to solve the problem of mobility facing the Bay Area. But because it solves so many problems there, it can demand a much higher price. There is more money there than just about any other place and with the cost of living so high the high price can usually be justified. But then when you try to expand out of the market, now the people willing to pay that price is drastically reduced.

Effectively, micro mobility solves the problems in the Bay Area, but in many other cities with seasons, or long distance travel without a solid underlying public transportation network, you have become a rich person's toy.

But you can't lower the price because you've over engineered the hell out of it because you want it to be the best product available. This pit is very well documented. Some call it the chasm. The jump from a real product with Bay Area appeal to a real product with wide spread appeal kills lots of companies. And it is the hurdle that few product companies can make.

It's funny that he mentioned Tesla, because there is an example of this problem and a company that managed to cross it. The made lots is early adopter money in the roadster. Then the Model X and S solved the Bay Area problem. Now the Model 3 solves the global problem.

Further the model 3 solves that problem by not really compromising, but through good value engineering. That's what this company needed. Figure out how to make their product cheeper and still high quality through good value engineering.

The second problem is generally a VC problem, but is really rooted in the culture of Bay Area VCs. You have a problem, we can solve it when cash. The idea that more money can solve any problem and growth is more important than fundamentals is so intrinsically Bay Area that I kind of have to single them out. But it's also fundamental to the VC model.

A VC is an investment capital firm. They have investors in they're fund who invest based on a prospectus. They have a time line for that return, and they are trying to get the money in early and get it out within that time line. The problem is that time line is stupidly short. 10x in 5 years is the mantra. They want their money back so fast and they don't worry about business fundamentals because they don't have to be there for the long term. They will exit before the company fails. They just want market share at all costs.

But then you have a company that is bleeding money, has not ever turned a profit, and who has shit cash flow. Rather than working on the fundamentals of build a product, get early success, value engineer to improve margin, then value engineer to reduce price, gain widespread adoption, move to other market segments. They just move to other market segments because profitability isn't important. You can always get more capital.... till you can't.

[u/arealhumannotabot]

I can't watch this, he's taken editing to a whole other level. He keeps cutting mid-sentence to different takes

[u/MrElpis]

Holy jump cuts

[u/chrisgseaton]

I don't understand who was the 'flight risk' here?

[u/climb-it-ographer]

People need to understand that headlines like "A $60 million investment" doesn't necessarily mean that they immediately got $60 million in cash right away. The terms sheets for those investment rounds are never made public, and that can easily mean something like '$5 million per year for 3 years (if specific milestones are met) with 3 larger payments of $15 million at the end in preparation for large scaling operations", or something along those lines.

Implying that they somehow had $60 million on-hand all at once is disingenuous.

[u/gsrgapwlwxoaarawlg]

looks like the dude from Detective Pikachu

[u/primus202]

So...can I get them discounted now that they're out of business or do I just buy a knock off?

[u/digitalrank]

China's products always had a drawback and apart from the comfort zone. People are becoming crazy these days. The speed that kills, Speed that Cost passing through any school zone. Which is why it's so important to wear a helmet. The first thing we need to get the board is riding on over the cycle shop to pick one out.

And moreover, it is still not a cost-effective product.