Electric car startup Tesla Motors casts a long shadow. The time that Rob Ferber spent as Tesla’s science director got the most play last week after electric motor developer KLD Energy Technologies named him chief technology officer. But according to Ferber, it’s chapters from his career in e-commerce — as CTO of eToys, and founder of Zelerate, a provider of open source e-commerce applications that went under during the bust — that hold a key lesson for startups working on electric vehicle technology: Go where the customers are.
“You can kill yourself on customer acquisition costs,” Ferber said. “Why not go where the public is already prepared for it?” For the two- and three-wheeled electric vehicle market, where KLD will first deploy its motors, and potentially with electric vehicles in general, Ferber says that means going to Asia. As we’ve noted before, companies that move early and fast to dominate the EV market in China, for example, which has significant government support on its side and could reach $220 billion by 2030, could use China as a springboard for a broader international play.
According to Ferber, following the customers is part of the logic behind KLD’s plan to deploy its system in electric three-wheelers and scooters internationally (starting in Asia and South America), and to target the lower cost electric scooter market in the U.S. through a deal with Vietnamese scooter manufacturer Sufat. That could be a risky move given one of the earliest players in the electric scooter market, Rhode Island-based Vectrix, recently closed up shop. But Ferber says Vectrix’s folding (which he described as “unfortunate”) offers confirmation of KLD’s strategy. “It turns out the overlap of motorcycle and EV enthusiasts appears to be smaller than for sports cars,” referring to the contrast between poor sales figures for Vectrix’s $11,000 Maxi scooter and the relatively high demand for Tesla’s $109,000 Roadster. KLD and Sufat’s scooters, for comparison, are set to sell in for $3,288.
But at some point, Ferber said, you just “have to learn by entering the market.” eToys, for example, found an unexpected customer base in members of the American military stationed overseas. With electric motors and vehicles, he expects we’ll eventually see “surprising opportunities where no one is really looking today.”
As the market develops, Ferber expects some of the earliest opportunities to arise in markets with lower performance and warranty expectations. That can allow startups to go through a few iterations of their technology without disappointing customers or acquiring a negative reputation. Offer a three-year warranty in a market where few scooter makers offer warranties at all, and you can gain a competitive edge, Ferber said. But offer that in a market where legacy players have ten-year warranties, and you’ll have a hard time winning over customers who already have skepticism about a new technology. With KLD joining a raft of electric mobility ventures on the market next year, we’ll be able to see how that plays out.
Photo credit KLD Energy Technologies