November 8, 2022 • 30 mins
This time my guest is Daniel Tonkopi, the CEO and founder of the unique Ukrainian e-bike producer Delfast.
Their bikes hold the world records in speed and distance, drive longer than Tesla, used by police, army and ordinary people around the world.
In our conversation Daniel shares his story about entering US market.
We will talk about:
- How to sell in US
- What is the role of PR and marketing in international expansion
- What is the best way to understand the local markets
- ...and other insights from the experienced exporter
This podcast is made in a partnership with Do Business With Ukrainians, the platform of Ukrainian business teams you can work with now.
Work with verified teams. Access the best, trustworthy small and medium businesses. You may request cooperation with Ukrainian business here: https://www.dobizwithua.com/
Create your international expansion strategy with Start Global, your guide to foreign markets. https://www.start-global.biz/
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I'm Dmytro Shvets.
(00:06):
Your host at the Start Global Insights, where I interview local experts in different countries
about local insights and international expansion experience.
Today we will hear the story of the Ukrainian company with the truly unique product that
has managed to enter the US market and other 40 countries around the world.
(00:27):
My guest today is Daniel Tonkopi, the CEO and founder of Delfast, the producer of e-bikes
and the Guinness World Record holder for the longest range on a single charge.
Hi Daniel.
Hi Dmitry, thank you for having me here.
Tell me please about Delfast for those who don't know the company and the history.
(00:50):
Yeah, definitely.
Delfast is an e-bike manufacturer.
We develop, produce and sell electric bicycles.
We have our headquarters in Los Angeles.
I am in LA.
I created Delfast in 2014 and initially the idea of the company was fast delivery.
(01:11):
You order a smartphone and my couriers will bring it to you within one hour.
And that's why I called it Delfast because we deliver fast.
Clear.
And we're trying to find the best transportation for our couriers.
Of course, they're stuck in traffic.
They cannot fit in one hour.
Motorcycles you have to pay for gas and they pollute air.
It's not ecological friendly.
(01:34):
And bicycles like pedal bicycles, they are not good because couriers are getting tired.
So I thought, oh, electric bicycles, that could be a solution.
It was in Ukraine.
Yes, in Kiev, Ukraine.
So me and my partner, we started to use electric bicycles, but we quickly realized that all
e-bikes had small range, less than 30 miles on a single charge.
(01:58):
And we needed 130 miles.
So we tried to solve our own problem.
We started to develop e-bikes and over time we started to produce and sell bikes as a
separate business.
And in 2020, we sold our courier part of the business during the COVID lockdown.
(02:18):
So we became a bike production company rather than a courier service.
So this is our story in a few words.
Interesting how you switched from the problem actually to solving this problem with this
type of solution.
And you have initially started your sales in Ukraine or you figured out that it should
(02:41):
be the whole world as a market.
Well, when we worked as a courier service, we sold our services to Ukrainian online stores,
Ukrainian Amazons, let's say, and Ukrainian banks were delivering their cards with our
couriers, Ukrainian printing houses and all other corporate clients.
(03:01):
Yes, that was a Ukrainian company.
But then in 2017, we started to sell e-bikes and we launched our sales through Kickstarter
crowdfunding platform.
So apparently we went to the global market and we found that 80% of our customers on
(03:22):
Kickstarter were from America, from the United States, like 15% from the European Union and
the rest is the rest.
So we understood that time that, okay, North America is our largest market.
So we have to be here.
And after several years, we moved here.
America is still our largest market and we are here.
(03:43):
We decided to be closer to our clients, to our customers.
So you selected your first market because of the sales on Kickstarter.
Yes, this was initial sales analytics.
And then after several years, we still saw this kind of proportion.
And what about these 40 countries apart from US?
(04:06):
How did you select those countries to enter?
One can go to our website, delfastbikes.com and see our beautiful bikes, order them, and
we will deliver it to almost any place in the world.
We don't supply to Russia.
So your main sales channel is the website?
Before the previous year, we sold 100% of our bikes through our own website.
(04:30):
But in September 2021, we moved our headquarters from Kiev to Los Angeles and we started to
build our dealership network.
So we signed a contract with almost 30 bike dealers in the US and with about 25 dropshippers,
online stores in the US.
So now we have our B2D sales, like dealership sales.
(04:55):
It makes up to 30% right now.
So 70% our website and 30% dealership network.
And so the sales to other countries go through the website?
Yes.
Yes, website.
And yeah, we have clients in Australia, in South Africa, in Japan, in Middle East countries.
(05:16):
We supply our e-bikes to the Mexican police.
So while you are selling through your website to these 40 countries, do you have any kind
of a focus country where you promote your products or it is just like global promotion?
Because I believe that it would cost quite a lot if you will promote it globally.
(05:37):
So you should still be focused on some markets.
Definitely.
Yes.
We are a small company.
We are a startup and we don't have such huge amount of resources to promote in all the
countries.
At one moment, we decided, we thought that we cannot focus on all the markets.
We have to choose something.
(05:58):
We use Pareto rules, 80-20, and as far as we realized that we have 80% of sales in the
US, so we decided that we have to start from here.
We have to develop, to grow up in America.
It's a huge market.
It's a multi-billion, tens of billion dollars market for e-bikes in America.
(06:20):
So we have a lot of space to grow, a lot of customers, and we have a lot to do here.
Then when we achieve some remarkable results in America, we will go to other markets.
And why did you move the headquarters to the US?
Is it needed to have a local representative office to sell?
We were selling our bikes from Kiev, from Kiev office.
(06:43):
We had our sales managers, customer support there, R&D, et cetera.
But first we had time difference.
We had to shift our working shifts in Kiev.
We switched to the evening work.
But this wasn't enough.
We had to be closer to our customers, to our clients.
We had to communicate with them.
(07:04):
We had to speak with bike dealers.
And they told us a lot of interesting things.
You actually shifted your focus to B2B clients, and then the sales from distance did not work
well in this case.
So you needed to meet face-to-face your clients.
Of course.
When you speak with dealers, they want to see you.
(07:24):
They want to be sure that you will bring them spare parts if needed.
They want to call you in case something happened with the client's bikes.
And the dealer, he wants to be sure that we are here, that we will respond to his request
shortly.
At least we are in the same time zone.
And as the best, we should have all the stock, all the bikes here on the stock, all the spare
(07:52):
parts and support and everything.
So yes, this is really important.
How do you think from your experience being in the States and selling in the States, for
those who just begin to review the US market as the target market, would it be possible
for them to start not being present in the US physically?
(08:13):
Yes.
This is how we worked in 2018 and 2020.
But my advice for myself, if I could give advice to younger me, I would tell myself,
Daniel, go to the US as fast as you can.
So if we would have an opportunity to move to the US earlier, we should have done this.
(08:41):
And coming back to this market, how do you sell there, especially in B2B, what is the
process or the roadmap, how did you start and how do you do it now?
And maybe what mistakes were done at the beginning?
Well, it's a lot of legwork.
One and a half year ago, me and our chief revenue officer, Sergey, we came from Kiev
(09:03):
to several states of the US to analyze this market and to make a decision where we will
settle our headquarters.
So we picked several states, Florida, New York, Texas, California, and we traveled to
a lot of them to understand the sales, to understand the customers.
And we realized that about 40% of our sales volume comes from California.
(09:27):
So we realized, okay, we have to be here.
And then answering your question, we called to potential dealers, to bike stores, we called
from Kiev and arranged appointments.
Hey, guys.
We are coming to California, we want to see you, we have a proposal for you.
Let's discuss the sales of our bikes.
(09:47):
And they were responsive.
They were really open, they were interested in our bikes.
And we arranged like tens of appointments.
So we had pretty tough schedule.
We had up to 10 meetings a day in Los Angeles, in San Francisco, in other cities.
And we met with bike dealers.
(10:08):
Like we brought our bike, we showed our bike to these dealers, and we discussed with them
their commission, the terms, the marketing support, et cetera, et cetera.
And I would say that more than 50% were interested in our bikes.
So they had some feedback.
So we started to discuss the contracts and step by step, when we settled up our office
(10:32):
here, we signed contracts with many of them.
So the conversion rate is kind of quite big.
So 50% of leads converted to potentially interested companies.
Yeah.
Exactly.
Yes.
And I would say maybe half of this 50% signed contracts at the end of the day.
So that was really good.
Cool.
And you traveled between the offices of your potential partners on e-bikes.
(10:57):
Well, there are far distances here in Los Angeles and generally in America.
So we rented a car, we put the bike inside the car, and we pulled out the e-bike out
of our minivan every time we visited.
(11:17):
Several quarters before, yes.
Yes, yes, yes.
Showing that you're riding long distances with your e-bike.
Yeah, we just came from Texas on an e-bike.
Yeah.
Definitely French.
And we need your electricity, yes, just to recharge.
Yes, yes.
Just to show our future range that we can cover on a single charge.
(11:42):
But still interesting, yes.
What was the most difficult in this first contact?
Because I hear that it is quite difficult to do this cold sales, yes, just to reach
a person and make an appointment.
It is a challenge.
Well, I'm recalling these times and what we did.
We just opened Google Maps and trying to search bicycle stores, motorcycle stores, auto dealers.
(12:13):
And not all of them were responsive.
Auto dealers, they didn't want to sell electric bikes.
So yeah, we had close to zero responses from auto dealers.
Motorcycle stores, they had slight interest.
We had an assumption that motorcycle stores, they would like to sell electric motorcycles,
(12:34):
but we were wrong.
Most of them, they don't want to switch from oil motorcycle sales to electric.
Not all of them.
We have several motorcycle stores among our great dealers.
But generally, motorcycles, it's different audience.
And then we found that bicycle stores are ready to shift to electric bikes.
(12:58):
And bicycle customers, bicycle riders are looking for something more, not just pedaling
bikes, but having a pedal assisted bikes.
And then they shift to e-bikes.
So we had this kind of research and we didn't have this 50% response rate all the time.
No, we had to find this.
(13:20):
And then probably we should have found some uniqueness in order to make them interested.
When we called them, we were always saying, hey guys, we are the Guinness World Records
holder for the longest distance, et cetera, et cetera.
Of course, it attracts attention.
But the most important thing, why they answered our phone calls is because we helped them
(13:43):
to earn money.
I think this is the main reason.
And you packaged this message in your sales pitch.
Yes, basically, yes, we described how they can earn more money with our product.
Then they became interested and arranged meeting.
And then we were digging deeper into the details on the meeting.
(14:04):
But this is always the main point, how they can make more money with your product.
Coming back to this phrase about the world Guinness record, this is a part of your marketing
strategy or how did you come to this point?
And how do you now support your sales with marketing activities in the US?
(14:25):
Yeah, in 2017, when we launched our Kickstarter crowdfunding campaign, we had our tagline,
our uniqueness, that our bikes can ride 370 kilometers on a single charge.
And all this big media like Mashable, Tech Insider, and others wrote their articles that
(14:47):
an electric bike from Ukraine drives more than Tesla 3.
So yeah, we could go farther than Tesla.
That was a really captive tagline.
But some people, they said, ah, this is scammers.
(15:07):
This couldn't be true.
So it's fake.
It's all false.
No, don't believe them.
But it was true.
But they didn't believe us.
They said it's fake.
So we had to establish an official record.
We invited all the Guinness Book Record representatives, journalists, and we actually did it.
(15:30):
So we proved that we are actually the best in the world.
OK, cool.
And coming back to this marketing question about US, how it is important to support your
sales with some marketing communication at the local market?
And if yes, then how is the best way to do?
Yeah, of course, it's really important.
(15:52):
It's really important to have a clear message because every single customer would like to
know how is our product better than competitors' product.
And we are telling them, hey, guys, we are number one in the world in terms of range.
This is just one.
Second, not only this.
(16:13):
We established a Bonneville speed record in the salt desert.
We developed with our fantastic Ukrainian inventor, Sergey Malik, we developed an electric
motorcycle and established a speed record.
So we are number one in the world in terms of speed as well.
(16:36):
We won several European electric marathons.
So there were marathons for electric cars and electric motorcycles.
But we won.
We received golden medals for several of these marathons.
So we developed a lot of technologies in the electric vehicle sphere and implemented them
into our product.
(16:59):
So our e-bikes are really smart.
They have their own proprietary electronics, mobile computer with GPS tracking and mobile
app and everything.
Like if someone will try to steal this bike, then a bike will send push notification to
owner's smartphone saying, hey, please check your bike.
(17:20):
Something is going on.
Something is happening.
So we have a lot of technologies, a lot of uniqueness in our bikes, and we communicate
this to our customers.
So this is not just a question of marketing itself, but it's about communication, what
we tell to our customers, to our dealers, to online stores.
This is how we differentiate our product from others.
(17:44):
And we are saying that, hey, guys, you see, we are number one.
We are better than others in this and that.
What are the main channels of communication in the US?
What channels do you use to deliver this message to your clients?
We have maybe three main channels.
First is search engine optimization.
(18:05):
So Google people are searching for a product for a bike, for e-bike in our case.
And they go to Google and try to find e-bike in Los Angeles, e-bike in Dallas, et cetera,
e-bike with high speed, e-bike, et cetera, et cetera, et cetera.
So thousands of search requests.
So we have about 40% of our traffic to our website coming from the search engines.
(18:29):
Second important part is advertising.
Google ads and Facebook ads and other paid promotions.
Maybe 25% or something, 27% of our customers come from paid ads.
This is our second largest channel.
And the third, last but not the least, another 25% is PR activity, articles, media.
(18:57):
So semi-free promotion.
We don't pay for these articles in Forbes, for example.
Yeah, Forbes wrote several articles about us, American Forbes, I mean, and Ukrainian
Forbes, of course.
We had a lot of articles in Ukrainian media, in American media, in Tech Ranch.
Bloomberg wrote about us, Bloomberg.
(19:19):
And we didn't pay any single cent for this article.
They saw my post in Facebook, how we support Ukrainian army, and they published it.
And then we had a lot of other publications in Tech Ranch and The Verge, Mashable, Insider,
et cetera, et cetera.
So top tier media.
(19:40):
And this gave us 1.5 billion contacts this year.
So yeah, PR activity is huge resource.
1.5 billion contacts, 1.5 billion impressions.
You just have to give interesting content to journalists, and they would be happy to
share this.
(20:01):
So this is our three main channels.
And I think that supports also the dealer sales as well, yes?
Yeah, of course.
We have a lot of our activity.
I mean, we have email marketing.
We give some printed materials to our dealers.
We show our bikes at road shows, at expos.
(20:23):
We showed our bikes at CES in Las Vegas in January this year.
And we were presented at Electrify Expo in Long Beach in June.
And we have cooperation with YouTube bloggers.
We have a lot of hundreds of different types of advertising and promotion.
(20:43):
But I just listed three main activities which give us the most.
So you are experimenting with channels and then selecting those that are working the best.
Exactly, absolutely.
And you said that actually you are doing all the advertising for dealers as well.
So it is not like you just found the dealer, signed the contract, and then it's up to them
(21:04):
to promote and sell.
Of course.
It never works in that way.
We should support them.
We should ask their questions.
We should help them with some paid advertising in Google, with some printed materials, with
some promo, etc.
So they should have some instruments to help selling our bikes.
(21:29):
For example, if we have a dealer in Sacramento and we don't have other dealers in Sacramento,
we may tune our Google Ads in Sacramento area and lead potential customers to this specific
dealer in Sacramento.
So this is not just our general brand advertising, but advertising that helps to sell bikes in
(21:55):
the dealer's store.
Of course, you have to do this.
Okay, yeah.
Because in most cases, exporters do think that the main thing is to find a dealer.
It's just the first step.
So they are just the sales channel, but you need to make your job till the user of the
bike.
Yes.
(22:16):
You have to communicate with your dealer.
For example, we have a promotion.
And if a customer goes to our website and sees a price cut off $500, and then if he
goes to a dealer's store, he is expecting to see the same discount.
And a dealer should be aware of this promotion.
(22:39):
So several days or weeks before this promo starts, you have to communicate this promo
to your dealers to explain to him this mechanic of the promo so he could explain this to his
customers.
So it's constant.
It's continuous work with dealers.
You should always speak, communicate with them, trying to find how you can make more
(23:03):
money together, what you should do better, what you should change in your business model,
maybe in your promotion, maybe.
So it's everyday's work.
Clear.
And all these marketing activities and sales, you are doing with your own Ukrainian team
or you hired somebody locally?
(23:24):
We have a marketing team both in California and in Ukraine.
So we found a marketing professional who helps to develop our website, to develop our marketing
in terms of sales, to improve our customer acquisition.
And she's local.
She's American.
(23:44):
Also we have a local PR agency.
They are based in San Francisco area, in Bay Area, and they help us to communicate with
journalists, with editors in America, with Forbes, et cetera.
And also we have our Ukrainian marketing team.
They help us with social media contacts, with email marketing.
(24:07):
We have partners who help us with advertising, Google Ads, Facebook Ads, Google Analytics,
et cetera.
There is a lot of work.
And also we have contractors.
They help us to make our texts cleaner and clearer to American customers.
Also, even their perfect English speaker in Ukraine, he's not native.
(24:32):
So even if we can prepare most of the text in Ukraine, but then we need a native speaker
to proofread it, to make some edits, to make it sound like native.
So yeah, we have this kind of international marketing team.
Okay, clear.
(24:54):
Very interesting story.
Thank you.
And I hope that it will be even more interesting further.
What plans do you have for the future in terms of international sales to US and not only?
Thank you for asking.
We had just one e-bike model, top three O, top three OI, modification of this model,
(25:17):
with 200 miles range, with 50 miles per hour speed.
We supply these bikes to the law enforcement units, to the couriers, to delivery services.
But being here in California, we realized that not all the people want such heavy duty
technique.
And we developed our new e-bike model here.
(25:40):
And we called it DelFast California.
And we launched it just a few days ago.
This is our new model.
And we believe in the good future of this model.
So answering your question about our plans, this is our plan.
We want to wider our market.
We want to conquer the wider audience, not only professional riders, but just common
(26:06):
people who use bikes for commuting, for fun, for everyday rides.
So we developed this bike during the war time.
And the frame of this bike is being produced in Ukraine, in Chernivtsi city.
And electronics is being developed in Dnipro city.
And plastic parts are produced in Ukraine.
(26:29):
And we make this bike in final assembly here in California, in Los Angeles.
So it's a Ukrainian-American bicycle.
We have so much work to do here in America.
Yeah, so we have our plans for the next one or two years connected to the US market.
(26:50):
When we will achieve some ceiling here in the US, when we will stop in our development,
then we will, of course, closer to that point, we will start exploring other markets.
But now we don't see the ceiling.
We don't see the limits here in the US.
It's a huge market, tens of billions of dollars market in America.
(27:14):
We have a lot of work to do here.
So this is our strategy for the next few years.
Clear, clear.
What were the main mistakes that you did by entering other markets?
And what would you do in a different way if you knew that it would be so?
(27:35):
Thousands, thousands of mistakes.
Everything that could have been wrong was wrong.
Like literally everything.
We had issues with electronics, with production, with people, with contracts, with marketing
strategy.
Like small and funny mistakes.
(27:56):
Just as an example, when we came here to the US one and a half years ago to speak with
the dealers and to analyze our potential on this market, one dealer saw our website and
said, hey guys, here is your address.
Like whatever, 1111 Santa Clarita Street, like a city, county of something, like area,
(28:25):
then zip code, then USA.
He said, nobody says county here.
So it doesn't matter.
Everyone is writing a city and then state and zip code.
So nobody says county.
So now guys, everyone is seeing that you are foreigners, not from the US.
(28:47):
And guys, you see you're right here, USA.
Nobody says USA because it's obvious.
Of course we're here in the US.
And at least if someone will indicate the country, they would say US, not USA, but just
US.
Right?
So this is like small and funny mistakes that shows that we are foreigners.
(29:11):
But we also had, of course, some big mistakes.
And the largest mistake probably, the largest mistake was we should have come to this market
much earlier.
So we should have learned everything several years before than we actually did.
And to every listener who is listening right now, this is my advice.
(29:35):
Go to your target market as early as you can.
Don't wait for the perfect moment.
Don't wait when you have budgets, when you have money for this.
Just secure a minimal necessary budget for tickets, for housing, and go to the market.
Because the two weeks of being here in America, we've learned more than we knew during the
(30:01):
two years being in Kiev.
So the best way to understand the market is to talk to your clients.
Yes, yes.
So go to your market as early as you can, physically.
There are a lot of opportunities.
So just do it.
Yes, just do it.
That's true.
Good.
Thank you.
It was such an interesting story and a lot of valuable points and insights.
(30:25):
I think that they will be helpful for the exporters to the US market for sure.
Thank you for having me here.
And thank you everyone for listening to us.
I hope it was interesting and useful.
Hi, I'm Dmytro Shvets.
(00:06):
Your host at the Start Global Insights, where I interview local experts in different countries
about local insights and international expansion experience.
Today we will hear the story of the Ukrainian company with the truly unique product that
has managed to enter the US market and other 40 countries around the world.
(00:27):
My guest today is Daniel Tonkopi, the CEO and founder of Delfast, the producer of e-bikes
and the Guinness World Record holder for the longest range on a single charge.
Hi Daniel.
Hi Dmitry, thank you for having me here.
Tell me please about Delfast for those who don't know the company and the history.
(00:50):
Yeah, definitely.
Delfast is an e-bike manufacturer.
We develop, produce and sell electric bicycles.
We have our headquarters in Los Angeles.
I am in LA.
I created Delfast in 2014 and initially the idea of the company was fast delivery.
(01:11):
You order a smartphone and my couriers will bring it to you within one hour.
And that's why I called it Delfast because we deliver fast.
Clear.
And we're trying to find the best transportation for our couriers.
Of course, they're stuck in traffic.
They cannot fit in one hour.
Motorcycles you have to pay for gas and they pollute air.
It's not ecological friendly.
(01:34):
And bicycles like pedal bicycles, they are not good because couriers are getting tired.
So I thought, oh, electric bicycles, that could be a solution.
It was in Ukraine.
Yes, in Kiev, Ukraine.
So me and my partner, we started to use electric bicycles, but we quickly realized that all
e-bikes had small range, less than 30 miles on a single charge.
(01:58):
And we needed 130 miles.
So we tried to solve our own problem.
We started to develop e-bikes and over time we started to produce and sell bikes as a
separate business.
And in 2020, we sold our courier part of the business during the COVID lockdown.
(02:18):
So we became a bike production company rather than a courier service.
So this is our story in a few words.
Interesting how you switched from the problem actually to solving this problem with this
type of solution.
And you have initially started your sales in Ukraine or you figured out that it should
(02:41):
be the whole world as a market.
Well, when we worked as a courier service, we sold our services to Ukrainian online stores,
Ukrainian Amazons, let's say, and Ukrainian banks were delivering their cards with our
couriers, Ukrainian printing houses and all other corporate clients.
(03:01):
Yes, that was a Ukrainian company.
But then in 2017, we started to sell e-bikes and we launched our sales through Kickstarter
crowdfunding platform.
So apparently we went to the global market and we found that 80% of our customers on
(03:22):
Kickstarter were from America, from the United States, like 15% from the European Union and
the rest is the rest.
So we understood that time that, okay, North America is our largest market.
So we have to be here.
And after several years, we moved here.
America is still our largest market and we are here.
(03:43):
We decided to be closer to our clients, to our customers.
So you selected your first market because of the sales on Kickstarter.
Yes, this was initial sales analytics.
And then after several years, we still saw this kind of proportion.
And what about these 40 countries apart from US?
(04:06):
How did you select those countries to enter?
One can go to our website, delfastbikes.com and see our beautiful bikes, order them, and
we will deliver it to almost any place in the world.
We don't supply to Russia.
So your main sales channel is the website?
Before the previous year, we sold 100% of our bikes through our own website.
(04:30):
But in September 2021, we moved our headquarters from Kiev to Los Angeles and we started to
build our dealership network.
So we signed a contract with almost 30 bike dealers in the US and with about 25 dropshippers,
online stores in the US.
So now we have our B2D sales, like dealership sales.
(04:55):
It makes up to 30% right now.
So 70% our website and 30% dealership network.
And so the sales to other countries go through the website?
Yes.
Yes, website.
And yeah, we have clients in Australia, in South Africa, in Japan, in Middle East countries.
(05:16):
We supply our e-bikes to the Mexican police.
So while you are selling through your website to these 40 countries, do you have any kind
of a focus country where you promote your products or it is just like global promotion?
Because I believe that it would cost quite a lot if you will promote it globally.
(05:37):
So you should still be focused on some markets.
Definitely.
Yes.
We are a small company.
We are a startup and we don't have such huge amount of resources to promote in all the
countries.
At one moment, we decided, we thought that we cannot focus on all the markets.
We have to choose something.
(05:58):
We use Pareto rules, 80-20, and as far as we realized that we have 80% of sales in the
US, so we decided that we have to start from here.
We have to develop, to grow up in America.
It's a huge market.
It's a multi-billion, tens of billion dollars market for e-bikes in America.
(06:20):
So we have a lot of space to grow, a lot of customers, and we have a lot to do here.
Then when we achieve some remarkable results in America, we will go to other markets.
And why did you move the headquarters to the US?
Is it needed to have a local representative office to sell?
We were selling our bikes from Kiev, from Kiev office.
(06:43):
We had our sales managers, customer support there, R&D, et cetera.
But first we had time difference.
We had to shift our working shifts in Kiev.
We switched to the evening work.
But this wasn't enough.
We had to be closer to our customers, to our clients.
We had to communicate with them.
(07:04):
We had to speak with bike dealers.
And they told us a lot of interesting things.
You actually shifted your focus to B2B clients, and then the sales from distance did not work
well in this case.
So you needed to meet face-to-face your clients.
Of course.
When you speak with dealers, they want to see you.
(07:24):
They want to be sure that you will bring them spare parts if needed.
They want to call you in case something happened with the client's bikes.
And the dealer, he wants to be sure that we are here, that we will respond to his request
shortly.
At least we are in the same time zone.
And as the best, we should have all the stock, all the bikes here on the stock, all the spare
(07:52):
parts and support and everything.
So yes, this is really important.
How do you think from your experience being in the States and selling in the States, for
those who just begin to review the US market as the target market, would it be possible
for them to start not being present in the US physically?
(08:13):
Yes.
This is how we worked in 2018 and 2020.
But my advice for myself, if I could give advice to younger me, I would tell myself,
Daniel, go to the US as fast as you can.
So if we would have an opportunity to move to the US earlier, we should have done this.
(08:41):
And coming back to this market, how do you sell there, especially in B2B, what is the
process or the roadmap, how did you start and how do you do it now?
And maybe what mistakes were done at the beginning?
Well, it's a lot of legwork.
One and a half year ago, me and our chief revenue officer, Sergey, we came from Kiev
(09:03):
to several states of the US to analyze this market and to make a decision where we will
settle our headquarters.
So we picked several states, Florida, New York, Texas, California, and we traveled to
a lot of them to understand the sales, to understand the customers.
And we realized that about 40% of our sales volume comes from California.
(09:27):
So we realized, okay, we have to be here.
And then answering your question, we called to potential dealers, to bike stores, we called
from Kiev and arranged appointments.
Hey, guys.
We are coming to California, we want to see you, we have a proposal for you.
Let's discuss the sales of our bikes.
(09:47):
And they were responsive.
They were really open, they were interested in our bikes.
And we arranged like tens of appointments.
So we had pretty tough schedule.
We had up to 10 meetings a day in Los Angeles, in San Francisco, in other cities.
And we met with bike dealers.
(10:08):
Like we brought our bike, we showed our bike to these dealers, and we discussed with them
their commission, the terms, the marketing support, et cetera, et cetera.
And I would say that more than 50% were interested in our bikes.
So they had some feedback.
So we started to discuss the contracts and step by step, when we settled up our office
(10:32):
here, we signed contracts with many of them.
So the conversion rate is kind of quite big.
So 50% of leads converted to potentially interested companies.
Yeah.
Exactly.
Yes.
And I would say maybe half of this 50% signed contracts at the end of the day.
So that was really good.
Cool.
And you traveled between the offices of your potential partners on e-bikes.
(10:57):
Well, there are far distances here in Los Angeles and generally in America.
So we rented a car, we put the bike inside the car, and we pulled out the e-bike out
of our minivan every time we visited.
(11:17):
Several quarters before, yes.
Yes, yes, yes.
Showing that you're riding long distances with your e-bike.
Yeah, we just came from Texas on an e-bike.
Yeah.
Definitely French.
And we need your electricity, yes, just to recharge.
Yes, yes.
Just to show our future range that we can cover on a single charge.
(11:42):
But still interesting, yes.
What was the most difficult in this first contact?
Because I hear that it is quite difficult to do this cold sales, yes, just to reach
a person and make an appointment.
It is a challenge.
Well, I'm recalling these times and what we did.
We just opened Google Maps and trying to search bicycle stores, motorcycle stores, auto dealers.
(12:13):
And not all of them were responsive.
Auto dealers, they didn't want to sell electric bikes.
So yeah, we had close to zero responses from auto dealers.
Motorcycle stores, they had slight interest.
We had an assumption that motorcycle stores, they would like to sell electric motorcycles,
(12:34):
but we were wrong.
Most of them, they don't want to switch from oil motorcycle sales to electric.
Not all of them.
We have several motorcycle stores among our great dealers.
But generally, motorcycles, it's different audience.
And then we found that bicycle stores are ready to shift to electric bikes.
(12:58):
And bicycle customers, bicycle riders are looking for something more, not just pedaling
bikes, but having a pedal assisted bikes.
And then they shift to e-bikes.
So we had this kind of research and we didn't have this 50% response rate all the time.
No, we had to find this.
(13:20):
And then probably we should have found some uniqueness in order to make them interested.
When we called them, we were always saying, hey guys, we are the Guinness World Records
holder for the longest distance, et cetera, et cetera.
Of course, it attracts attention.
But the most important thing, why they answered our phone calls is because we helped them
(13:43):
to earn money.
I think this is the main reason.
And you packaged this message in your sales pitch.
Yes, basically, yes, we described how they can earn more money with our product.
Then they became interested and arranged meeting.
And then we were digging deeper into the details on the meeting.
(14:04):
But this is always the main point, how they can make more money with your product.
Coming back to this phrase about the world Guinness record, this is a part of your marketing
strategy or how did you come to this point?
And how do you now support your sales with marketing activities in the US?
(14:25):
Yeah, in 2017, when we launched our Kickstarter crowdfunding campaign, we had our tagline,
our uniqueness, that our bikes can ride 370 kilometers on a single charge.
And all this big media like Mashable, Tech Insider, and others wrote their articles that
(14:47):
an electric bike from Ukraine drives more than Tesla 3.
So yeah, we could go farther than Tesla.
That was a really captive tagline.
But some people, they said, ah, this is scammers.
(15:07):
This couldn't be true.
So it's fake.
It's all false.
No, don't believe them.
But it was true.
But they didn't believe us.
They said it's fake.
So we had to establish an official record.
We invited all the Guinness Book Record representatives, journalists, and we actually did it.
(15:30):
So we proved that we are actually the best in the world.
OK, cool.
And coming back to this marketing question about US, how it is important to support your
sales with some marketing communication at the local market?
And if yes, then how is the best way to do?
Yeah, of course, it's really important.
(15:52):
It's really important to have a clear message because every single customer would like to
know how is our product better than competitors' product.
And we are telling them, hey, guys, we are number one in the world in terms of range.
This is just one.
Second, not only this.
(16:13):
We established a Bonneville speed record in the salt desert.
We developed with our fantastic Ukrainian inventor, Sergey Malik, we developed an electric
motorcycle and established a speed record.
So we are number one in the world in terms of speed as well.
(16:36):
We won several European electric marathons.
So there were marathons for electric cars and electric motorcycles.
But we won.
We received golden medals for several of these marathons.
So we developed a lot of technologies in the electric vehicle sphere and implemented them
into our product.
(16:59):
So our e-bikes are really smart.
They have their own proprietary electronics, mobile computer with GPS tracking and mobile
app and everything.
Like if someone will try to steal this bike, then a bike will send push notification to
owner's smartphone saying, hey, please check your bike.
(17:20):
Something is going on.
Something is happening.
So we have a lot of technologies, a lot of uniqueness in our bikes, and we communicate
this to our customers.
So this is not just a question of marketing itself, but it's about communication, what
we tell to our customers, to our dealers, to online stores.
This is how we differentiate our product from others.
(17:44):
And we are saying that, hey, guys, you see, we are number one.
We are better than others in this and that.
What are the main channels of communication in the US?
What channels do you use to deliver this message to your clients?
We have maybe three main channels.
First is search engine optimization.
(18:05):
So Google people are searching for a product for a bike, for e-bike in our case.
And they go to Google and try to find e-bike in Los Angeles, e-bike in Dallas, et cetera,
e-bike with high speed, e-bike, et cetera, et cetera, et cetera.
So thousands of search requests.
So we have about 40% of our traffic to our website coming from the search engines.
(18:29):
Second important part is advertising.
Google ads and Facebook ads and other paid promotions.
Maybe 25% or something, 27% of our customers come from paid ads.
This is our second largest channel.
And the third, last but not the least, another 25% is PR activity, articles, media.
(18:57):
So semi-free promotion.
We don't pay for these articles in Forbes, for example.
Yeah, Forbes wrote several articles about us, American Forbes, I mean, and Ukrainian
Forbes, of course.
We had a lot of articles in Ukrainian media, in American media, in Tech Ranch.
Bloomberg wrote about us, Bloomberg.
(19:19):
And we didn't pay any single cent for this article.
They saw my post in Facebook, how we support Ukrainian army, and they published it.
And then we had a lot of other publications in Tech Ranch and The Verge, Mashable, Insider,
et cetera, et cetera.
So top tier media.
(19:40):
And this gave us 1.5 billion contacts this year.
So yeah, PR activity is huge resource.
1.5 billion contacts, 1.5 billion impressions.
You just have to give interesting content to journalists, and they would be happy to
share this.
(20:01):
So this is our three main channels.
And I think that supports also the dealer sales as well, yes?
Yeah, of course.
We have a lot of our activity.
I mean, we have email marketing.
We give some printed materials to our dealers.
We show our bikes at road shows, at expos.
(20:23):
We showed our bikes at CES in Las Vegas in January this year.
And we were presented at Electrify Expo in Long Beach in June.
And we have cooperation with YouTube bloggers.
We have a lot of hundreds of different types of advertising and promotion.
(20:43):
But I just listed three main activities which give us the most.
So you are experimenting with channels and then selecting those that are working the best.
Exactly, absolutely.
And you said that actually you are doing all the advertising for dealers as well.
So it is not like you just found the dealer, signed the contract, and then it's up to them
(21:04):
to promote and sell.
Of course.
It never works in that way.
We should support them.
We should ask their questions.
We should help them with some paid advertising in Google, with some printed materials, with
some promo, etc.
So they should have some instruments to help selling our bikes.
(21:29):
For example, if we have a dealer in Sacramento and we don't have other dealers in Sacramento,
we may tune our Google Ads in Sacramento area and lead potential customers to this specific
dealer in Sacramento.
So this is not just our general brand advertising, but advertising that helps to sell bikes in
(21:55):
the dealer's store.
Of course, you have to do this.
Okay, yeah.
Because in most cases, exporters do think that the main thing is to find a dealer.
It's just the first step.
So they are just the sales channel, but you need to make your job till the user of the
bike.
Yes.
(22:16):
You have to communicate with your dealer.
For example, we have a promotion.
And if a customer goes to our website and sees a price cut off $500, and then if he
goes to a dealer's store, he is expecting to see the same discount.
And a dealer should be aware of this promotion.
(22:39):
So several days or weeks before this promo starts, you have to communicate this promo
to your dealers to explain to him this mechanic of the promo so he could explain this to his
customers.
So it's constant.
It's continuous work with dealers.
You should always speak, communicate with them, trying to find how you can make more
(23:03):
money together, what you should do better, what you should change in your business model,
maybe in your promotion, maybe.
So it's everyday's work.
Clear.
And all these marketing activities and sales, you are doing with your own Ukrainian team
or you hired somebody locally?
(23:24):
We have a marketing team both in California and in Ukraine.
So we found a marketing professional who helps to develop our website, to develop our marketing
in terms of sales, to improve our customer acquisition.
And she's local.
She's American.
(23:44):
Also we have a local PR agency.
They are based in San Francisco area, in Bay Area, and they help us to communicate with
journalists, with editors in America, with Forbes, et cetera.
And also we have our Ukrainian marketing team.
They help us with social media contacts, with email marketing.
(24:07):
We have partners who help us with advertising, Google Ads, Facebook Ads, Google Analytics,
et cetera.
There is a lot of work.
And also we have contractors.
They help us to make our texts cleaner and clearer to American customers.
Also, even their perfect English speaker in Ukraine, he's not native.
(24:32):
So even if we can prepare most of the text in Ukraine, but then we need a native speaker
to proofread it, to make some edits, to make it sound like native.
So yeah, we have this kind of international marketing team.
Okay, clear.
(24:54):
Very interesting story.
Thank you.
And I hope that it will be even more interesting further.
What plans do you have for the future in terms of international sales to US and not only?
Thank you for asking.
We had just one e-bike model, top three O, top three OI, modification of this model,
(25:17):
with 200 miles range, with 50 miles per hour speed.
We supply these bikes to the law enforcement units, to the couriers, to delivery services.
But being here in California, we realized that not all the people want such heavy duty
technique.
And we developed our new e-bike model here.
(25:40):
And we called it DelFast California.
And we launched it just a few days ago.
This is our new model.
And we believe in the good future of this model.
So answering your question about our plans, this is our plan.
We want to wider our market.
We want to conquer the wider audience, not only professional riders, but just common
(26:06):
people who use bikes for commuting, for fun, for everyday rides.
So we developed this bike during the war time.
And the frame of this bike is being produced in Ukraine, in Chernivtsi city.
And electronics is being developed in Dnipro city.
And plastic parts are produced in Ukraine.
(26:29):
And we make this bike in final assembly here in California, in Los Angeles.
So it's a Ukrainian-American bicycle.
We have so much work to do here in America.
Yeah, so we have our plans for the next one or two years connected to the US market.
(26:50):
When we will achieve some ceiling here in the US, when we will stop in our development,
then we will, of course, closer to that point, we will start exploring other markets.
But now we don't see the ceiling.
We don't see the limits here in the US.
It's a huge market, tens of billions of dollars market in America.
(27:14):
We have a lot of work to do here.
So this is our strategy for the next few years.
Clear, clear.
What were the main mistakes that you did by entering other markets?
And what would you do in a different way if you knew that it would be so?
(27:35):
Thousands, thousands of mistakes.
Everything that could have been wrong was wrong.
Like literally everything.
We had issues with electronics, with production, with people, with contracts, with marketing
strategy.
Like small and funny mistakes.
(27:56):
Just as an example, when we came here to the US one and a half years ago to speak with
the dealers and to analyze our potential on this market, one dealer saw our website and
said, hey guys, here is your address.
Like whatever, 1111 Santa Clarita Street, like a city, county of something, like area,
(28:25):
then zip code, then USA.
He said, nobody says county here.
So it doesn't matter.
Everyone is writing a city and then state and zip code.
So nobody says county.
So now guys, everyone is seeing that you are foreigners, not from the US.
(28:47):
And guys, you see you're right here, USA.
Nobody says USA because it's obvious.
Of course we're here in the US.
And at least if someone will indicate the country, they would say US, not USA, but just
US.
Right?
So this is like small and funny mistakes that shows that we are foreigners.
(29:11):
But we also had, of course, some big mistakes.
And the largest mistake probably, the largest mistake was we should have come to this market
much earlier.
So we should have learned everything several years before than we actually did.
And to every listener who is listening right now, this is my advice.
(29:35):
Go to your target market as early as you can.
Don't wait for the perfect moment.
Don't wait when you have budgets, when you have money for this.
Just secure a minimal necessary budget for tickets, for housing, and go to the market.
Because the two weeks of being here in America, we've learned more than we knew during the
(30:01):
two years being in Kiev.
So the best way to understand the market is to talk to your clients.
Yes, yes.
So go to your market as early as you can, physically.
There are a lot of opportunities.
So just do it.
Yes, just do it.
That's true.
Good.
Thank you.
It was such an interesting story and a lot of valuable points and insights.
(30:25):
I think that they will be helpful for the exporters to the US market for sure.
Thank you for having me here.
And thank you everyone for listening to us.
I hope it was interesting and useful.
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