Redefining energy

Startups often win against well-funded competitors in almost every industry. So why does that keep happening? Why do startups always beat the odds in this David vs. Goliath scenario? There are several reasons, and Scott Colosimo’s journey building LAND is the perfect story to go deeper into this.

Are they willing to take the risks?

“Isn’t it strange to compete with the large carmakers in Europe and Detroit?” an interviewer asked Elon in 2008.

“So where is their electric car?” he replied. “We have to appreciate what really is the constraint. It’s not the quantity of resources. Is there a very talented, focused, dedicated team that's willing to take the risks and make something happen? That's the scarce commodity. Not money."

And that’s the first reason why startups win, and Scott’s story is a perfect example of a founder with a vision who is willing to take those risks. His obsession with vehicles led him to start Cleveland Cyclewerks, a motorcycle manufacturer. But after 12 years at the helm of his first company, Scott and his team started to research electric vehicles. “As we delve deeper and deeper into research and development, it became clear that energy was really the reason for being,” explains Scott.

Deeply fascinated by their discoveries, Scott became increasingly less engaged with gas vehicles. He considered the possibility of expanding the existing business into electric vehicles. But that’s when he faced a tug of war between the old and the new. “We had thousands and thousands of gas vehicles on the market,” recalls Scott. We were trying to go into the future and think of big ideas. But we were pulled back by fuel injection, carburation, replacement parts, and all the stuff at the first company. That’s not how you push R&D forward. It became apparent that I needed to make a change.”

This led to the tough decision to sell Cleveland Cyclewerks to one of his distributors, who continues to run and scale it. This shift of focus allowed the team to explore and innovate in the electric vehicle space. But without the old company’s revenue, financial challenges arose. Scott still remembers their bookkeeper exclaiming, “Scott, what did you do? We’re broke!” after just 30 days of cutting revenue from the old company.

LAND eventually raised VC funding, and this change of direction allowed the team to focus entirely on innovation. Still, navigating this change wasn’t a walk in the park, and Scott took a massive risk in selling his old company. But it’s when an entire team of talented and dedicated individuals moves fast that great things happen. And while Scott could sell the business and start from scratch with a renovated focus, large corporations just can’t get away with that. They are forced to serve their existing business, trying to keep up with trends while losing the lowest market share possible. They are just not built to innovate and move fast. On top of that, there is something else holding the EV industry back from real innovation. But before we get into it, let’s take a step back.

First principles thinking

We’ve previously discussed the danger of relying on assumptions and ideologies in Going against the grain. Of course, I was pretty fascinated when Scott brought this up again.

There are a lot of things that founders hold dear as wise advice. Things like “you have to launch a first version you’re embarrassed by,” “you have to immediately release an MVP," or "you have to raise little capital upfront.” But the truth is that blindly following advice and ideologies is rarely a good idea. Deep, strategic first-principles thinking is how great products are built. But this isn’t what’s happening in the EV industry.

According to Scott, “Some people look at electrification almost like a religion, something that needs to happen now and at all costs. They’re trying to make e-bikes do the same thing as big, heavy gas motorcycles. But this isn’t a car where you can fill the whole floorboard with batteries. The more weight, the heavier the e-bike. When it comes to top speed and long distances, gas still does better than electric.”

The whole industry is essentially trying to “soft land” by creating an electric version of a gas motorcycle. But why would you ever do that if there is no benefit for the end user? Instead, Scott and his team started entirely from scratch. Without any assumptions, they tried to understand if there is really a case where electric offers more benefits than gas. “We weren’t trying to make an electric version of a gas motorcycle,” explains Scott. “We assumed we knew nothing. We just kept scratching and scratching and went deeper and deeper. We kept using the product and breaking it, trying to understand where it could offer more value than gas.”

They discovered that the value of e-bikes is not to replace traditional "highway burners," but to create better urban-focused vehicles. In this segment of the market, electric bikes offer significant advantages over their gas counterparts. “It’s twist and go. There’s no shifting,” explains Scott. “It’s easy to hop on and learn how to ride it. I can plug in when I come to work or when I get home. I don’t have to go to a gas station.” In other words, urban-focused e-bikes are more convenient and enjoyable than their gas counterparts.

Not only does LAND face lower competition in this segment, but this market can be even larger than the average motorcycle user. “Only 5% of the US population rides motorcycles," explains Scott. "This means that 95% are not motorcycle people. Every industry player is chasing 5% of the market. But we are not going to win market share by trying to convince the gas motorcycle rider that electric is better. We will focus on the 95% instead.” In other words, Scott recognized a vast opportunity in attracting the “moto curious” — those who don’t see themselves as traditional motorcycle riders but might be attracted by convenient, enjoyable, urban mobility solutions.

*****

Scott’s journey is the perfect example of a founder with a bold vision who is willing to take big risks and make something happen. But this journey wasn’t without its challenges. The reason he got to this point is that he kept pushing through when he was on the brink of giving up. That’s why his last piece of advice is all about resilience. “Some of the biggest breakthroughs I’ve had came when I felt completely out of options,” he notes. “Moments when I was about to go bankrupt, when everything was looking as bad as it could ever be. Just sort through the chaos, put one foot forward, and make just another step. That’s the only thing that separates success from failure.” If you want to follow along, you can connect with Scott on LinkedIn.