[UPDATE] Over the past year, numerous interesting start-ups have been presented here. That is why we will be reviewing a number of successful young businesses here over the next few weeks. And of course, we have asked them to tell us how they are doing at the moment. Constanze von Kettler of Pendix gives us an update of the current state of affairs:
“So far, we’ve weathered the corona crisis really well. The demand for our products has barely fallen. On the contrary. The social distancing measures have given cycling an incredible boost. There are plenty of people who appreciate our very sustainable principle, who have wanted to retrofit their bikes for a very long time and are now just doing that. It’s always better to retrofit a good bike than to store two bikes in your basement, as in a conventional one and an e-bike. Incidentally, we are expecting turnover to continue to rise due to the temporary reduction in VAT that’s to end in December. Time and time again we hear that a bicycle equipped with Pendix looks much nicer and more stylish than an ordinary e-bike because the battery has such a timeless, simple design and the engine is practically unnoticeable. But we also offer our Smart System. Each cyclist can update the firmware via the app, our customers can even view any error data themselves. You have to first drop by the workshop for the other systems.”
More and more e-bikers can be seen on city streets. Until now, making the switch from an old bicycle to an electric bicycle seemed inevitable. But since Pendix, a start-up from Zwickau, has developed a retrofittable electric motor for bicycles, this is no longer necessary. The well-loved bicycle can easily be converted. Christian Hennig, technical director at Pendix, explains why the company initially chose a completely different path and why it ended up on the e-bike market.
Why did you start Pendix?
We are five founders who got to know each other during our studies in Zwickau. During this time, we were mainly involved with electric car drive systems and we also took part in the Formula Student design competition. As a spin-off from the university, we decided to set up something of our own in Zwickau and together started to develop and manufacture innovative propulsion and automotive electronics.
How did you come up with e-bikes?
That was quite simple. We received an inquiry from the bicycle industry. When we took a closer look at the market, we realized that this segment of the industry is a good work field for us. While for many years the automobile sector has been characterized by a high degree of professionalization, the bicycle industry is still very much in its early stages in this regard. This is one of the reasons why we were able to successfully develop as a new company. We soon realized that with our experience, we would be able to contribute to the bicycle market.
Wasn’t that a huge change?
Yes, because we first developed a bicycle propulsion system with a gearbox on an electrical motor for cargo bikes. However, the project ground to a halt on the customer’s side. This gave us the idea of developing a propulsion system for bicycles which could be retrofitted. That was about six years ago.
How did you finance yourself during this time?
Through a start-up scholarship, given that we were still at the university. Then we financed ourselves by providing various services and finally founded Pendix GmbH in 2013. Shortly afterward, we started looking for investors and subsequently found what we were looking for. It took us about two years to get our bicycle propulsion system ready for mass production. We finally presented our propulsion system at the Eurobike in Friedrichshafen, one of the largest bicycle trade fairs out there.
How does the propulsion system work and how can it be installed?
It was important to us during the development stage to make the propulsion system as simple as possible. Both in terms of installation and use. Therefore, every bicycle that is to be retrofitted only needs to fulfill one main criterion. It must be equipped with a BSA bottom bracket. This is the case for about 85% to 90% of all bicycles. It is also important that the battery fits into the frame and that the motor can be mounted on the left side. It is very easy to use – just install the battery, switch it on and you can start cycling. The force exerted by the cyclist while pedaling is measured in the crankshaft and recorded by the motor control unit so that the motor knows how much power it has to generate.
So what do I do if I want to retrofit my bike?
In the meantime, we have built up a network of over 800 specialist dealers in Germany. We are also represented here by a wholesaler who sells our bicycle solution. In addition to our dealer network where you can buy the drive systems, we started our own online shop this year. On there I can choose whether to have it sent to my nearest dealer for installation or directly to me for a do-it-yourself installation. The crankshaft must be switched, battery, motor, and speed sensor must all be integrated. Of course, the bike should be checked before the conversion to see if it is technically safe and roadworthy.
What difficulties did you have to overcome when setting up Pendix?
Getting a start-up scholarship was a major obstacle. We had to improve our concept twice until it actually worked. The founders in Germany are very busy with the formal side of things. You have to keep on going. If you have a good idea that you are convinced of, don’t let yourself be discouraged too easily, but fight for it instead.
Was there a moment when you wanted to give up?
Generally, giving up was never an option, but yes, of course, occasionally there are a few doubts. Even in a start-up, it is not always peaches and cream. We had a few arguments amongst ourselves. It can often be the case that the next goal will be a major milestone. This can lead to losing oversight when you’re standing in front of a huge pile of work. Here, it often helps to set smaller sub-goals and to reach them bit by bit until you’ve finally climbed that huge mountain. An especially difficult phase was making the prototype ready for production. It is a great challenge and achievement making sure that every product comes off the production line straight away. Looking back, we have mastered this very well, despite the great challenges.
What does it mean to run a company?
You have to grow a little where the development of the company is concerned. We now have 40 employees. What used to work via recommendations is different now. At a certain point, the processes become unclear and inefficient. Then the various areas have to be divided up and regular meetings need to be held. They have to be able to work actively on the processes and still make dynamic adjustments at short notice. A young company is very fast-moving, so new insights can also change a previously decided direction, which you then have to react very quickly to.
What has been your biggest success with Pendix so far?
The market launch was clearly a major milestone. Most of the time you are never 100 % satisfied with your own product and want to keep on working on it forever. Developers sometimes want to invent the golden key to success. But the best product is of no use if it is not launched on the market.
How did you bring your product to the market?
We did a lot of marketing, from trade shows to online marketing, to advertisements in trade magazines and much more. In order to access the market as quickly and efficiently as possible, we engaged a marketing agency as a service provider and at the same time, set up the sales team. The sales staff successively took over from specialist dealers, as well as customers in other channels, such as bicycle manufacturers or fleet operators. After initially working on consumer-end marketing without direct sales, we then focused primarily on retailer marketing in order to bring the drive systems to the market via this channel. We learned relatively quickly how to support retailers with POS materials and by other means. There is also a lucrative bonus program for retailers.
What is the next step?
We are currently working on various product updates, which we plan to showcase at this year’s Eurobike, as well as on the expansion of our Pendix.bike Pro App. It has been available for Android and Apple since last year. In addition, we are currently investigating the potential of the Australian market for expansion. We are already selling the e-drive in ten countries in Europe.
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