DG504 | The Dutch way of biking

Chester Maessen Yannick Brouwer Sway Leung Lisa Vork

1 Table of Contents

Introduction

• Market ● End user insight ● Channel ● Competition • Value Proposition ● Concept ● Benefits ● Moneyflow

• Technology ● Functions & Modules ● Needed Capabilities • Dynamics ● Market ● Technology ● Risk assessment • Partnerships & Supply chain ● In-house & outsourced technology • Road map in 4 years

2 Introduction

As final task for this assignment we were asked to design an own product line. In order to do this properly we went through several exercises to gain enough information to be able to set a successful product on the market. The product we want to design is a bicycle. Along the way we discovered VANMOOF, who has kind of a similar vision as we have. Therefore we used a lot of their insights in our research.

First we investigated the market. We needed to make a persona and state the needs, desires and problems this persona might face to find out what product it would need. The next step was to find out what the best way is to sell our product, how we could reach our users best. After that, It was useful for us to look into the competition we would face. That way we could make sure to add something new and different to the market, and not only be copying.

Now we have some more background information, second up was a value proposition. We made a first concept description with help of the information we gathered during the market research. On the basis of this concept description we made a value ladder to see if every aspect of the concept made sense, if we could trace the functional specifications back to certain values. This also helped us to get a better image of what kind of people would like our product, and if we needed to add functions to match the user’s desires better. As we were happy with the concept, we defined how the money would flow through the delivery chain. This told us whether there was value in this product for us.

After we were satisfied about our business model we tried to define what modules and functions our product needs according to our concept description, and which supporting technologies we would need to use. If we were really to make this product we would need this description to explain specialists what we want, so they can make it for us.

As the plan for our product is almost finished, we focused on dynamics and made an evaluation on what the value drivers and the key buying factors are. It is good to know these, so we know when is a good moment to release our product on the market. Also it could help us to find out what is smart to focus on with our campaign. We also did a Risk assessment to see where the possible week spots are in our product, so we can make a good planning to bring our product in the market with as little risk as possible.

As a fifth we found out what companies and brand are interesting for us to collaborate with. Some parts or supporting technologies we might want or need to outsource, while others we can make ourselves.

Now that we have a clear view on what the product is going to look like, and have a positive feeling about it being successful in the market, we made a roadmap for the upcoming 4 years. While making this roadmap the research on dynamics came in handy, because that told us some more about moments in time that are good to release a certain product. Defining the

3 qualifiers, winners and diversifiers helped us to see what modules we should improve in future products and what modules we could reuse. This roadmap will help us to work structured in the upcoming years and be well prepared for the next steps.

4 Market | End user insight

Big cities all over the world are growing extremely fast, this increase in population puts a big pressure on the internal transport structures and causes traffic jams, parking problems and overcrowded public transport. Many believe that the solution is to be found in Amsterdam, with its revolutionary concept of an inner city infrastructure made for biking. Holland is well known for its use of bicycles, and special bicycles lanes are never far away. In the last 5 years New York is copying this concept, to make the city more user friendly for bike users, and to stimulate more people into using a bicycle. Thereby reducing the stress that is put on the roads by car drivers and reducing traffic jams.

The only thing that misses in this story is the perfect bike for the modern bike commuter in the city. The city environment not only asks for bikes that can stand the jungle of pavements, potholes and traffic lights, it wants the bike to address so many other desires as well.

Need

A transportation device that gets people from point A to point B.

Desire

The main desire is to get from point A to B as fast as possible, this means without getting stuck in traffic jams, and without getting in crowded areas. Another main desire because of the ever increasing gas prices is to spend less money on transportation without drastically increasing travel time. and that getting a parking spot is simplified. Of course it is essential that the product is durable and provides a certain feel of security, but it should not get too complicated or uncomfortable. The perfect solution to these needs would of course be the bike.

Problem

The major problem for this particular solution is, is that a bike and its parts can get stolen relatively easy, especially lighting. Another problem for battery powered lighting systems on the bike it is that if you forget to turn off your light, the battery will run dry pretty quick. Wear and tire is another problem which is unavoidable. Durability isn’t that high in most bicycles, but as city bikes need to endure a lot of hardship like bumps, curbs, holes, sidewalks and small crashes it is desired to have a very durable bike. Other small problems could be minor mall functions like pedals coming off, brakes that aren’t working correctly and chains that loosen and come off. This is due to wear and tear, and is unavoidable, but can be postponed when you make components incredibly durable. Another good solution would be an easily accessible bike repair service. The last problem is that you usually can’t bring your bike on to the public transport.

5 Persona Pieter van der Zwaag is 30 years old, raised in Hilversum. He studied Business at the University of Utrecht and is now living and working in Amsterdam. 3 year ago he started working as a salesman at advertising agency TBWA\Neboko. He is in a relationship with Ellen van der Molen.

In his spare time he likes to go to a bar with friends, when he is at home he likes to watch movies and series or play the piano. To stay connected to friends and information he uses his iPhone and MacBook for access to social networks and blogs. He is always looking for new gadgets, clothing and the campaigns that other advertising agency’s make.

He has a driver-license but does not own a private car. For his daily work he bikes to the agency and when he has a business meeting he uses the public transport to get there. A problem is that it is hard to get to the office of the customer in a different city when he comes there by train.

Therefore he would like to see a folding bike that is strong enough for the city, lightweight, and as fast as his previous bike. Important is that he still has a professional appearance.

Conclusion

We want to make the perfect city bike for the modern professional that also can be taken in the public transport. It has to be affordable, durable, portable, secure and aesthetical pleasing.

6 Market |Channel In this paragraph we will describe how we want to bring the product to the end user, in other words: the sales channel. To find out what would be the best way to do this we found out why people buy a bicycle, when they buy it, and what they want when they buy one. Why do people buy a bicycle?

There are roughly three cases in which people buy a new bike. Case one is when a person's bicycle doesn't work properly anymore, and he/she wants a new one. Case two is when a person uses a bike for a certain purpose, but then due to change in circumstances wants a bike to serve another purpose. For example a man who used to ride a BMX in the rural area where he lived, but now he is moving to a more urban area and needs a bike to take him to his fancy job. Case three is when a person's bicycle gets stolen and he/she needs a replacement bike as soon as possible.

When and where do people buy a bicycle?

In the first case, he/she is not in a hurry so not searching actively and will therefore probably not go to a bike store. This person will buy a bike when he/she sees one that serves his/her desires. This could be anywhere for example when in the supermarket, when shopping for clothes or on the Internet. In case two, he/she will find herself in new circumstances and it is hard to decide for this person what kind of bike or other transportation she needs. She might ask friends, and then go to a bicycle store to get more information about different bike types. In the third case, he/she will be actively looking for a new bike and is therefore likely to visit a bike store or another place where he is sure to find a bike.

What do people want when buying a bicycle?

In the first case, this person is not in a hurry. He/she still has a bike, but is looking for a new one to replace it, and takes time to look around for a good replacement. Since these people don't buy the bike out of a real need, they want to have the feeling that they actually upgraded their life by buying a new bicycle. Otherwise it is not worth the investment. In the second case, people want service. They want to be well informed on what their personal needs will be in this new environment and what kind of bikes are available and what features will be helpful to them. In the second case, this person is probably still annoyed by the fact that his/her bike got stolen and wants to have a replacement as quick as possible. What they want is either a bike that gives them the confirmation that it won't het stolen, or a really cheap bike so that if it gets stolen again, it doesn't matter that much.

7 In both cases, the person wants to get the bicycle in an as easy way as possible. This means he/she want to buy it in a shop nearby or be able to order it online and get it delivered at their home.

Through which channel could we sell our product best?

Because we want people to find us easily when they are looking for a bike, we definitely need to sell our product through bicycle stores. In that way we reach the people that are actively looking for a bike. What is also important is that if we sell our product through already existing bicycle stores, our product will be easily available all over the country and not only in one place. To reach the people that are not actively looking for a bike, but maybe want a new bike, we want to create awareness for the existence of our product. We want achieve this by using social media. Social media such as Twitter and Facebook are worldwide, and if we play it smart we can get people to talk about us. They can then visit our site and read all about our product, the specifications as well as where to buy it. This way we can also reach and inform the people that don’t know much about bikes or are new to the market entirely. A good example that shows us this strategy works is VANMOOF, who are also extensively using the social media to stay connected to their users.

8 Market |Competition

All-round Bike:

This style of bikes addresses the general public. It focuses on a wide range of areas and the competitors in this field usually have to provide numerous lines of product to satisfy the market. Such as mountain bikes, speed bike, or just a normal bike. The advantage these competitors have is that they have variety and they could choose which line to focus on. The disadvantage this group has is the diverse market, is harder to attract customers because there is so many choices for them. Examples of competitors in this category are: Giant, Batavus, Gazelle, Koga Miyata, Union

The advantage we have in this area is that we have a strong vision. We are not ‘just’ a brand that makes several bikes, we have a strong focus.

BMX:

This style of bikes addresses the teenagers and the X-sport market. They focus on allowing people to perform tricks on their bikes; therefore they specialize in durability, lightweight, customization, and looks. Their advantage in this area is that they allow people to customize their bikes however they want it to in performance and style. The disadvantage of this area is the style of the bike, cost, and functionality only suits a specific part of the market. A few of the competitors in this field are Kink and We the people.

We are not in competition with this area since our target group is way different from theirs. But we could however learn a lot from these brands in matters of durability and lightweight frames.

Public Bike:

This addresses the general public. They focus on durability, ease of use and access. The advantage of this is that is low cost to consumers and consumers could get access to the product easily. The disadvantage of this is wear and tear from the public; which will decrease consumer satisfaction and costly in terms of repairs and transport. The OV-Fiets by NS is the competitor in this area of the market.

From these competitors we can probably learn something in matters of durability, but otherwise I don’t think it is much of a competition for us. For most people it already gives an extra dimension to buy own a product yourself instead of renting it, since that means it serves your personal desires and you are the one responsible for the wear and tear.

9 Folding bike

This area addresses people who are always on the move. They focus on portability. The advantage of this is that their product is portable, space efficient, and addresses to the urban area well. The disadvantage is that it is not very durable and much less efficient compare to the other bikes in terms of functionality (speed, looks, etc.). Competitors in this area are Montague, Strida-Bike and Kettler.

We want to use techniques and systems that these competitors use, but improve it to solve or decrease the disadvantages. This will put us above the competition in this market.

Stolen bikes

This area addresses people who just want cheap bikes. Their focus in this market is only on making deals. The advantage of this is zero cost in supply yet making profit and very low cost for the consumers. The disadvantage of this is that the quality isn’t very good and is ethically incorrect. The competitors in this area is thieves.

We simply can’t compete with illegal activities because the bikes are offered far under the retail price.

10 Value Proposition | Concept

A lightweight folding bike that provides the freedom to take it with you everywhere you go. It helps you to be fast and flexible in the city, moving from one place to another without getting stuck in traffic jams, crowded places, or long line ups. The integrated lock provides a secure feeling, the same counts for the durable frame that is made to survive the obstacles of the city. Last but not least the bike will give you a professional look.

To be short:

- Affordable - Durable - Lightweight - Secure - Aesthetical pleasing

11 Value Proposition | Benefits Value ladder

12 The most important values we try to address are freedom and comfort. These are substantially supported by the built-in lock, that provides the user with a lot of comfort that most bikes don’t give them, and the GPS-system, which provides the user with a lot of freedom in a sense that that person doesn’t have to worry about whether he can find the places he wants to go. The user will be free to go to a new city without bringing maps with him.

When you look at the value ladder, people with social values are also thoroughly addressed, especially in the emotional benefit section. This again shows that using social media to radiate our product vision will probably be very beneficial.

Process of making the valueladder

For this value ladder we started to write down all the functions and properties we thought of for our bicycle. Also we wrote down the values we want to try to address.

After we had these lists we started to work down the value ladder, taking the functions and properties as a starting point. For some functions it was easy to see what functional benefit it has, such as a built-in lock which will obviously cause the user to have a securely locked bike without him/her having to do a lot of extra effort. For others it was somewhat more difficult, for example customization which is a broader notion. Its functional benefit is that the bike will be customized exactly to your special needs.

Further down we come to the emotional benefits. We could quite easily derive those from the functional benefits, and this left us with a quite clear list of the emotional benefits our users can have with our product.

The last step was to see whether the values we wanted to address could be connected to the emotional benefits. Luckily they fitted right in.

13 Value Proposition | Money flows

The money flow of this product, starts with the buying of all the parts, including 3th party items. Of course production cost like welding and machinery have to be taken into account, and last but not least the man hours per bike. After we have calculated all this “loss” we can decide the selling price for our bike, usually this is higher than the “loss” thereby making profit, but taking into consideration that the higher the selling price the less products will be sold. This fact included it is usually better to take a modestly profitable price, instead of a high price, since to modest price will in the end give you more profit, due to that more units are sold.

As said before, the first step is to buy the parts, the aluminum frame will cost 8 to 12 euros each, our lighting will cost about 5 to 6 euro per set this is including batteries, and the brakes are about 6 to 8 euro. The wheels and gears vary from 10 to 15 euros and lock is 25-30 euros, The folding system costs us 12-15 euro, other smaller parts combined including the phone holder are 8 to 10 euros as well. Combined this is 74 - 96 euro per bike. The time needed to assemble the bike is about 2 hours, including 0.5 to 0.7 hours of sub assembly, 0.6 to 0.8 hours of assembly and 0.4 to 0.6 hours of inspection. These 1.5 to 2.1 hours cost about 45 to 65 euro. Taken all this into account the total production cost of the bike is about 119 to 161 euro.

This is the production cost without gas and electricity, a total of 10% is taken for all other costs, including gas and electricity, this brings the total to 130.9 - 177.1 euro production cost.

Now to search for the ideal selling price, we should not aim for extremely high, since little to no products will be sold, but we don’t want to go to low either since we still want to make as much profit as we can. For this we have looked into what bicycles normally cost, the standard models from Gazelle and Batavus cost about 600 to 800 euro, and the models from VANMOOF cost about 600 to 900 euro. This is not the price that we sell them for to the retailer, but for this it might be easier to work backwards. As a VANMOOF ranges from 600 to 900 we aim to keep our product at the bottom end, making it available for 499.99 €. In this price profit for the bike reseller is included, so this is not what we will get. Our selling price to the reseller is 350 to 400 euros, depending on the amount of orders that are placed.

14 Technology | Functions & Modules

The bike has got all the standard functions and modules of a normal bike, which is to provide transportation; this however does not mean that it is a standard bike. This bike features a very light but durable frame, and a very good lighting system. This model will include an integrated lock for the bike, contributing to the ease of use of the bike, as well as an integrated GPS system for navigation. The aesthetical pleasing design can be an extension of your lifestyle.

The lights The lights will be the same as the ones VANMOOF uses. These are made in collaboration with Philips using their Luxeon extra bright technology. This gives the headlight a brightness of 40 lux, which is comparable with the flash of a professional photo camera, but concentrated in a beam which will provide you with a clear view of the road in front of you even in the darkest alleys. the rear light is a homogeneous ring of light giving a sleek design touch to the bike, while still being clearly visible to other road users. all this power comes from a single LED, one in the rear light, one in the head light, making the lighting of the bike very durable and power efficient.

Battery The battery is integrated in the frame of the bicycle; and it is charged while the user cycles on the bike. It is used to power the display and the lights.

The frame The frame is also inspired by VANMOOF. It is made of aluminum, making the bike lightweight with a little compromise on durability. While designing the frame they wanted to avoid unnecessary combinations of layers and coating, therefore they have chosen to anodize the frame. This makes the aluminum stand out while maintaining a simplistic look that can stand the test of time. Three new features that we will add to the frame are: a dock holder for the smart phone, a weather proof display and a folding system.

The lock The lock is made in collaboration with Dutch lock specialist AXA. it is a hardened chain lock, that completely falls away into the frame. AXA claims that to be one of the best on the market, it can be loaded with the weight of a small car before giving way.

The GPS System Users of a fold able bike use their bike often in the public transport. They will go to city’s different then their own which means that they do not always know where to go. A build-in GPS system would not be very convenient because the price would increase, and it makes the bike more attractive for thieves.

15 Within the target group there are a lot of young professionals that are likely to have a smart phone; the combination of a secure dock for the smart phone and a weather proof display screen in the frame, that work together as a GPS device would be a good solution.

User Interface (Application) In order for the GPS system to function properly with the smart phone an application is needed to allow the user to set the destination on their phone, calculate the distance, and display the direction and distance on the display on the frame of the bike.

Display

It is back-lit screen that only displays numbers and arrows that points in all directions. It is integrated in the steering frame area to acts as the display for the GPS system.

Drive, Brake, and Steering system

Like all ordinary bikes today, these are the core of the bike. It allows the user to peddle to generate movement from the drive system to go forward, a twist-able steering frame attached to the front wheel as direction guides and controls for the braking system and or the gear system, and braking pads on the wheel to stop the bike.

The Folding System For the folding system we’ve made a new partner, namely Montague Bikes. We have done this for their unique fold system that is used by military paratroopers that carry fold able bikes with them. This unique system gives great support, it even enables soldiers to add 20kg to their normal load out and supporting up to 160 kg of weight, making this system extremely reliable for city use. in the picture you can see the folding system, this is directly below the saddle. It will reduce the size of the bike, making it more space efficient and easier to travel with.

The Extras We believe in the modularity of our bikes, so the consumer can choose if they want extras like a front or back baggage carrier. There is also an option to add extra gears for those that need it. Since not every country is flat like the Netherlands, the models with extra gears also come with stronger double roller brakes. This option is also available for the model with the standard number of gears.

16 Architecture

Light(On/Off) Drive(L,R,F,S) Accessories Controls Light System Brake System Steering System Lock System Power System Drive System Housing (Frame System) Carry System + Appearance

The user will interact with the lights, the drive system, the accessories, and the controls of the bike. The lights will have to be able to be turned on and off, a drive system which allows the user to go forward, left, right, and stop, accessories that allows the user to customize their bike by putting them on and off, and controls that allows the user to do all of the above.

The main architecture of a bike are highlight blue above, it consists of 7 main modules and they are as follows:

- Light system - Brake system - Drive system - Power supply - Housing + appearance - Steering system - Carry system

One of the modules that isn’t part of the original bike system is the lock system. In our bike, however, the lock is integrated in the frame which makes it part of the architecture..

17 Module Map

Above is an overview of the module system of the bike. The user will first provide the input source (human strength) to the user interface, which are the controls for the bike. From here, depending on which part of the user interface is being activated, there will be a different outcome or influence different modules. Below is a list of the outcomes after triggering a specific user interface on the bike:

- Steer: goes in the desired direction - Lock: release or secure the bike - Drive: drives the bike forward - Brakes: stops the wheels from spinning - Battery: . send power to the lights for visibility . send power to the display - Frame: 1 . downsize or expand the bike out . connects smarts phone to the display

- Display: Receives information that needs to be displayed and power from the battery to perform the function of a GPS.

18 Technology | Needed Capabilities Black box:

The required input for the bike is human power and electricity power (3V to 18V). The benefit here for the user is that they can get some exercise and it doesn’t require much power to have lighting. An unavoidable result is that human will get fatigue from peddling. Peddles, steering wheel, buttons, and applications are the required controls for the bike; peddles to turn the wheels and drive the bike forward, twist-able steering wheel to guide the direction, buttons to turn the lights on and off and for the brakes to activate, and an application on the smart phone to send the correct signal to the display for the GPS. The norm for the bike is safety; there are different laws and regulations in different countries in regards to selling and cycling a bike. The supplies needed for operating the bike are electricity and human power. Getting the user from point A to point B without being stuck in crowds and jams and use the time for exercise are the means from the user to use a bike. The desired output of this bike are: movement to get the user from point A to point B, visible lighting, navigation, and reduced or expanded size. Some unavoidable factors in the output of the bike are: wear and tear over time, noise from the movement, vibration from riding on the street, and heat from cycling, sitting, holding on the handles, and the tires rubbing on the road.

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Function tree:

Street bike

Product Function Manufacturing technology Supporting technology

Frame Welding CAD - M Drive system Engraving Consumer testing Brakes Assembly (Hand + line) Consumer marketing Light Molding / Forming Aerodynamic testing Lock Soldering System Architecture User interface Anodizing Reliability testing User controls Gluing User Interface design Wiring (Hand or Line) Software development

The product function of the bike are as follows:

- Frame: to hold the other modules and carry the user - Wheels: for movement - Gears + Chain: for the drive system to generate this movement - Brakes: to stop the movement - Lock: to secure the bike - User interface: to set destination and navigation display - User controls: to brake, turn lights on/off etc.

The following technology is needed to manufacture the bike:

- Welding: the aluminum together for the frame - Engraving: for putting the brand name in the frame in a good looking and durable way - Assembly (hand/ line): for putting the parts together - Molding / forming: the frame bars - Soldering: for the display and lights - Anodizing: for the finish, conservation and looks of the frame - Gluing: for handle bars, seats, and the lights - Wiring: for connection between smart phone and the display and for the lights

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The following are the supporting technology needed for this bike:

- CAD: for conceptual purposes - Consumer testing: to verify concept/idea - Consumer marketing: to address a certain group on the market - Aerodynamics test: for speed efficiency - System architecture: to verify whether the product will still suit the market after development - Reliability testing: to test the durability of the bike, impact test - User interface design: whether is ergonomic, the human factors are addressed in the design of the bike, and whether it will trigger the functionality of the bike - Software development: for the GPS system, the software in the smart phone to send the right signals to the display in order show the user where to go.

21 Dynamics | Market

Introduction Compared to the extreme competition and fast changing product cycles in the market of for example smart-phones, the market for bikes is relatively calm. Competition is based on quality, durability and price, instead of processor power, display resolutions and marketing campaigns. It means that a relatively small brand with some media coverage like VANMOOF can get a position in the market where they can earn enough to survive.

The main dynamics in the market of bicycles are determined by factors like price and quality but also by external factors. See for example this graph of the use of bikes in New York:

Janette Sadik-Kahn started as commissioner of the New York City Department of Transportation in 2007. She was a key player in the improvement of bicycle lanes within the city, as you can see there is a big increase since her inauguration.

Another example is the right graph about the production of bikes versus the price of gas. As you can see since the 70’s the production of bikes increased extremely compared to cars. From the mid 90’s there is an interesting pattern visible, the production of bikes and the price of gasoline for consumers make a similar progress. Influences from outside like governmental decisions and oil prices can change the way of biking in the future.

In conclusion we can say that a good moment for us to introduce our bike to the market would be when gasoline prices are rising.

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Value drivers & Key Buying Factors Influences like oil-prices and the provision of new biking lanes have an impact on not only our brand but on the whole cycling branch. Therefore keeping those in mind will not necessarily put us on top of the competition. In the market itself the brand can distinguish itself from competitors by Winners and Diversifiers:

Qualifier: A qualifier in the folding bike market is that the bike is portable and easy to carry in the public transport.

Winner: Winners in the folding bike market could be a big improvement in the size or ease of use what makes it better to handle compared to competitors. Also an improvement in price could be a winner.

Diversifier: The GPS system we want to add in our bike will not be adequate for everyone but can absolutely be a factor to attract a target-group that uses the bike to go to different places. Another possible diversifier is the design of the bike, the young target group(as you can see in our persona) is more attracted to looks than generations before, they use it to express their style.

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Dynamics | Technology System Behavior The system behavior is the specific items and their specifications needed for the purposed product. They are listed in groups: desired items and specs, unavoidable outcome, needed supplies and means, and external conditions and regulations.

Desired items and specs: - 3 years of battery for lighting - 3 years lighting without replacing - Bike chain lock for security - Reduce its size by folding the bike to the size of a 60cm standard checked luggage - Speed efficiency, just because that it could be folded it shouldn’t be slower than a standard bike of the same size - Secure dock for the phone - Ability to customize and personalize - Navigation system which shows direction and distance needed to arrive at the - destination - Parts that are durable enough to withstand a certain amount of impact - Tires that could withstand little sharp objects like glass bits and thumb tacks - Lighter than 15Kg - Free Application download

Unavoidable: - Wear and Tear: Over time and usages - Maintenance and Replacements: of broken items - Noise: from cycling - Vibration: from the traction between tires and the ground

Needed Supplies & Means - Human with a pair of legs capable of cycling - Battery power (between 3V to 18V)

External Conditions - Functional between -10ºC to + 50ºC, Relative Humidity 60% to 90%. - Waterproof

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Regulations Since we want to bring the Dutch way of cycling to the city’s over the world, the laws and regulations are different in countries regarding selling bikes. We compared some of the laws in Holland with our neighboring countries Great Britain and Germany to see what differences there are. This is just an example of things we have to take in consideration to supply in countries over the world:

The Netherlands: - The front light must be white or yellow. - The back light must be red and attached to the bicycle at a distance of 26 to 120cm above the road surface

UK: The new bike will have to follow the PBSR regulations if it will be sold in the UK, and the following must be present in the new bike: - A bell - Any hand-operated brakes arranged left-hand rear, right-hand front - White or yellow reflectors on both sides of each wheel or tyre - A white wide-angle front reflector, or a front lamp - A red wide-angle rear reflector - Yellow reflectors front and rear on each pedal

Front Lamp: One is required, showing a white light, positioned centrally or offside, up to 1500mm from the ground, aligned towards and visible from the front. If capable of emitting a steady light it must be marked as conforming to BS6102/3 or an equivalent EC standard. If capable of emitting only a flashing light, it must emit at least 4 candela.

Rear Lamp: One is required, to show a red light, positioned centrally or offside, between 350mm and 1500mm from the ground, at or near the rear, aligned towards and visible from behind. If capable of emitting a steady light it must be marked as conforming to BS3648, or BS6102/3, or an equivalent EC standard. If capable of emitting only a flashing light, it must emit at least 4 candela.

Rear Reflector: One is required, colored red, marked BS6102/2 (or equivalent), positioned centrally or offside, between 250mm and 900mm from the ground, at or near the rear, aligned towards and visible from behind.

Pedal Reflectors:

25 Four are required, colored amber and marked BS6102/2 (or equivalent), positioned so that one is plainly visible to the front and another to the rear of each pedal.

Germany If the bike is being sold in Germany, the design will need to follow these regulations:

- Brakes: Two independently acting braking devices (mean deceleration on dry pavement m/sec2 4 at an initial speed of 20 km / h). - Bell / horn: For dispensing acoustic warning. - Lighting: Non-blinking front headlamp to illuminate the road of white or pale yellow color. A red rear taillight that stays lit when stationary and may blink (intensity 1 cd). - Reflectors: front with a white with a red rear reflectors that may be connected to the lights and/or connected to the pedals. At least two yellow reflectors on each wheel. Alternatively reflectors may be part of the lighting system (light entry surface 20 cm2). Wheel reflective sidewalls can be alternatives to reflectors attached to the wheels. • In daylight and good visibility bicycles may be used without lights. The law says that lights must be firmly attached to the bicycle but experts say that battery powered detachable lights are permitted (light intensity 100 Candela). The law requires headlights to be "light sensitive surface at least 20 cm2.

26 Dynamics | Risk assessment

Market acceptance The biggest risk builder in our product is the integrated GPS. This technology hasn’t been applied in a bike before and therefore it is hard for us to estimate how users will react to it. However if users like it, it will be big success factor since this feature makes our product exclusive. We want to make this bike stand out with a new design that will make this foldable bike look professional. If we succeed it will be a success, but just as everything that is new it brings the risk that the design might not be right the first time. The concepts of the integrated lock and lights on solar power are quite new, and therefore risky. But since they’re not of groundbreaking difference from already existing systems, the risk is at a minimum.

Bicycles have been on the market a long time, also the market for foldable bikes for city-use has been around for quite some time. This means research on our target group will be a lot easier, we can already find a lot about who they are where they go by investigating competitors. This gives us a big advantage, also in terms of market acceptance. Because people are already familiar with the general concept of a foldable bike, people will be more open to our product. We want to make our bike easily customizable. This way we can easily and quickly adapt our product to market demands, which will reduce the risk of our product being old fashioned and us not being able to sell it.

Performance level Making component yourself as a start-up company is very risky. Your company doesn’t have the experience and expertise that other companies do. Therefore we chose to buy most of our components from existing, well known companies so we can deliver good quality. We want to make partnerships with Montague and AXA for the same reasons. They respectively have done research on a good functioning folding system and locks, and we think we can use that very well. By re-using the components that work properly already (like brakes, steer, lighting and a pedal & gear system) we save money and time so we can put that in the modules that really need development. Thereby we can raise the performance level without drastically increasing the risk. Renewing every model every time you bring out a new product will make the product really complex and thus increase the chance of you overseeing a problem.

27 Partnerships & Supply chain | In-house & outsourced technology

One of the most important parts in a bicycle is the frame, it has to be durable and is the connection between the different parts. To reduce the costs the frame will be welded in Asia and then shipped to Holland. Wheels are often standard parts and can be bought at a manufacturer, it is easier than starting our own plant.

For parts like lighting, saddle and lock we could start a partnership, since there is a lot of knowledge available and both brands can benefit. In lighting we can collaborate with the pride of Eindhoven: Philips. Philips has a strong position in LED lighting and has a wide collection available, it would be interesting to team up to integrate the whole lighting system in the frame.

Locks can be first bought by a big brand like Axa, but when the bike becomes successful we could partner up to implement the locking-system in a new version of the bike. The big advantage is that Axa is a Dutch brand which can be helpful in the cooperation. Brakes are from vital importance in the city and have to work at any time. A gearbox also have to work properly, both could be manufactured from Shimano.

Things like handles, pedals and saddle are important but do not need a brand to give trust in the product. We have to find the highest quality for a reasonable price.

To keep the last quality control within hand reach the bikes will be assembled in Holland, this means that the cost will be higher but if you want to keep a view on the quality this will be the best solution. To keep costs acceptable we would like to use a social workshop were young school drop outs can work and learn to assemble the bikes.

28 Road map within 4 years

29 Above is the road map for the purposed bike in the next 4 years after the current model as ‘bike 1’. In this model the frame will be a durable and fold-able frame, a new category is added for the GPS system between a display and the smart phone, and a lock will be added to the bike, to address the portability, security, personal travel tool, and durability. The next consumer insight that the bike should focus on is ease of use and comfort. Having a key-less lock will be convenient for the user. A kinetic generator to recharge the battery on the bike will save troubles for the user and the user feels comfortable both physically and mentally, because it’s Eco-friendly. Also it saves time and effort when the bike’s battery allows them to charge their smart phones while riding. A more ergonomic handle and a waterproof seat that doesn’t soak in water could also address this insight by providing a comfortable handle while biking and a seat that doesn’t stay wet easily which could prevent the user having wet pants when they ride. An extra accessory that should come with the bike is a mechanism that will allow the user to carry one standard size checked luggage to address portability again and comfort. The model after should address cost, by lowering the cost to produce the frame and accessories to set up for the next model. The last model of the bike after 4 years should address the insights of personalization and family. Since the producing cost is already lowered, the price could drop to make it more affordable to families. Providing different styles, sizes, and colors of the frame and the accessories for the bike it could address different members of the family, and also allowing people to personalize their own bike.

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Sources Market Foreigner view on biking in Holland(fun read): http://www.ski-epic.com/amsterdam_bicycles/

Value Proposition

Technology

Dynamics Graph: http://schutt.org/blog/2008/10/gas-prices-and-bike-production/

Based on: - The Economist: On your bike: Obesity and high oil prices are good news for the world’s biggest bike maker - Earth Policy Institute: Economic Indicators: Bicycles - U.S. Census Bureau: International Database - U.S. DOE Energy Information Administration: Peal Petroleum Prices

Climate: http://www.climatetemp.info/netherlands/ Regulations Holland: http://southholland.angloinfo.com/countries/holland/cycling.asp Regulations UK: UK Lighting Regulations, http://www.ctc.org.uk/DesktopDefault.aspx?TabID=4072 Regulations Germany: http://bicyclegermany.com/german_bicycle_laws.html

Partnerships & Supply chain

Road Map 4 Years

www.ibike.org/library/statistics-data.htm http://www.worldometers.info/bicycles/ http://walkbikecostarica.com/2011/08/24/top-10-countries-with-most-bicycles-per-capita/ http://cyclinginfo.co.uk/blog/728/cycling/cycling-in-holland/ http://www.policy.rutgers.edu/faculty/pucher/Irresistible.pdf

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