One of the things I wanted to talk about is that you led Damon for seven years. You were the founder there, and regardless of what has happened, we always looked to Damon as a beacon of technology for electric motorcycles. There was a lot of product promise, there were IPs created, and a significant amount of funding raised; you mentioned that you did raise that funding in very difficult times while COVID was going on. But most importantly, we love Damon for the excitement that it created. Damon’s promise illustrated what is possible with electric motorcycles and whether there really can be a contender to a litre-class ICE superbike. What Damon showed was the closest people could get to an ICE superbike. Coming from that perspective, I want to know your opinion on how important an exciting brand is in, let’s say, a not-so-exciting subject nowadays, electric mobility?
Jay Giraud: It’s a great question, and I think my reflection on it is a little different than it might have been a few years ago, because at least over here in North America, the attitude towards electric vehicles has changed so much again, and it just really depends on where you are. I mean, in Vancouver here, one in three cars sold is electric. It’s incredible. I think it’s the highest per capita electric vehicle purchases in North America. It’s practically like Norway, and we don’t even have many incentives. So I guess, like, if the world really wants electric motorcycles, there must be some impetus for that, which is beyond, you know, fuel savings or emissions reduction. Once I knew that electric vehicles, electric cars, could be better than gas cars, I knew that electric everything could be better than gas everything. I guess that’s kind of where I’ve been coming from for a really long time now, since 2007, when I built my first electric vehicle company.
It’s in my years of building various EV and mobility, and telematics companies, that I knew it’s just not a technology problem. It never was. It’s a market adoption problem. It’s a brand problem. It’s a marketing problem. It’s a product-market fit problem. It’s very often a cost or a price problem, but it’s never a technology problem.
So, the famous saying that Elon Musk made, where he said, “It’s time to give the car industry a hardcore smackdown,” was, I think, the predecessor statement to the Tesla Model S. When it came out, and it wasn’t just, you know, a fancy Roadster, it was flat out a better car. Not only was it faster, but it was a better car. It was more comfortable. It was safer. It had better aerodynamics and better handling. Many would say it was a better-looking car. It was more user-friendly. It had features never seen before in cars. So, in every way, it was a better car.
That was the hardcore smackdown he was referring to about a year before the Model S was launched. I thought that’s exactly what we need to do in the motorcycle industry. So it’s not enough to just build a faster motorbike. Damon was already coming from the idea that we can make motorcycling safer. So how do we make it safer, smarter, and better?
So these concepts, like the SHIFT that Dom invented. I’ll never forget the day he came up with it. We were in a tiny little garage in the back. We’d stripped down a litre-bike, a gas-powered liter-bike, down to its frame, with the front forks and the rear swing arm still there, and the handlebars and the clip-ons were also there. He just stood there like this and and he invited me over, and I said, “What?”
And he’s like, “Do you think we could make the handlebars go up and down and the foot pegs go up and down?”
I knew immediately what he was intending by saying that. We never even talked about transforming a motorcycle before, but when he said it, I knew what he was trying to get at, what problem he was trying to solve, you know, of course, which is comfort.
So, it’s those kinds of innovations. The more we took motorbikes apart and put them back together, the more we saw how many problems in motorcycling had never been solved before and could suddenly become solvable. Yeah, you could say that we took on trying to do too much for the first bike. You could totally, absolutely, easily say that, and you’d be right, I think. Did the first bike need SHIFT? Did the first bike even need Co-Pilot? Did it need to have 200 horsepower?
You know, hindsight’s 20/20. I think we intended to deliver a hardcore smackdown to the motorcycle industry and to demonstrate that these problems are worthy of being solved. They can be solved. People want them to be solved. And that would distance Damon substantially from all the gas-powered motorcycle companies and create the kind of evocative evangelism that very few companies enjoy. Tesla is a tremendous example of one that does, where in the years 2018, 2019, and 2020, Tesla customers would go to dealerships and help deliver cars, working for free, just to help Tesla meet its quarterly sales goals.
You know, if you can cause that to happen for your brand, you are a brand like none other, like one in a million, maybe even less. Because of what we were doing, because of the ambition of the project, we created that kind of magic with the followers and the customer base, I should say, the reservation holders.
So that’s really what it was about. But I can’t speak for Damon today.
Creating a high-performance motorcycle brand is very risky. There are a lot of nuances associated with a high-performance motorcycle brand. So, what attracted you to that? Why not play safe and go for a midsize bike? Why always try the extreme?
Jay Giraud: I think that I’d actually like your reflection back on this, because your reflection will likely be the reader’s reflection. So this is one I’ve explained many times, and I’ve rarely seen it copied into the articles that people write. And so maybe it’s just not landing for some reason.
But my answer is always that you can scale down technology, but you can’t scale it up when it comes to vehicles. So if you’re going to make the best motorcycle brand in the world, do you start at the smallest bike or do you start at the biggest bike, or do you start in the middle?
We agreed that you have to start with the biggest bike. Not the biggest physically, but the most powerful and the longest range because the market of motorcyclists currently believes that electric can’t achieve what gas can achieve in range or speed or acceleration or top speed, right? So, you have to establish with not only the early adopters who might go for a mid-range motorcycle, but you have to establish with the trend-setters that electric is ready to compete with gas. It may seem to me like it’s really obvious because the Model S already delivered that hardcore smackdown to the car companies. Why couldn’t electric motorcycles do the same?
But that’s not how people think. They think what they’ve got is the best in the world. I’ve got my Ducati. I’ve got my Yamaha R1. Whatever bike it is, nothing can be better than that. They’ve got identity associations with their favorite bike. So, they already have a heavy bias. In order to change that bias to get people to buy a new brand, a new brand that no one’s ever heard of, you can’t just be a tiny bit better, or you can’t be the same. You have to be way better, like 10X better. Hence, SHIFT and CoPilot and so on. You have to be what somebody says is so much better; they’re willing to break their identity association with their favorite brand, and love something else. That means just blowing the socks off of whatever they already own. So maybe we can engineer a motorcycle to beat a Yamaha R1, but how do we do it in a way that can be repeatable and scalable?
That requires engineering a platform. So, designing a size-reducible platform where you can use instead of a 150 kW inverter, we developed a dual 75kW inverter. We did that on purpose. Instead of engineering a single 20 kWh battery pack, we engineered modules inside to be removable in parallel groups of voltage, such that we could have a 20, a 15, and an 11 kWh battery pack in the same frame.
So cost reductions, economies of scale, economization of the designs, and the parts, all in a way that you could have a small, a medium, and a large version of each bike. Design the hyperdrive casing in such a way that it can be used for a sport bike, but it could also be used for an adventure bike or a touring bike or a cruiser bike, or a standard bike, in those three different-size tiers of battery packs without changing the voltage. That was really the strategy. You wouldn’t do that on a midsize bike because it’s harder to engineer up as it is to engineer down in terms of size and power.
You have to start at the top. Interestingly, you know, VW never bought Porsche. Volkswagen was not nearly as profitable per model as Porsche was. So Porsche bought Volkswagen. One of the smallest volume car producers in the world bought the largest car producer in the world because there’s more profit in the higher end. So, there’s also a revenue strategy to building the bigger bikes first. They make a higher profit margin. So, just standard Business 101 type of reason for building the Hypersport. Brand power, evangelism, economies of scale, and economization of parts and design, allowing us to really go horizontal across the line of bikes that people would expect from us.
In the larger picture, do you think a brand, a high-performance brand, does it have a rub off effect on the rest of the industry, when the rest of the industry is making normal run-of-the-mill motorcycles, and then there is a brand that is trying to create iconic products? Do you think that brand has an impact on the overall industry? Is the industry better off with the brand or without it?
Is the industry better off with a brand like Damon, do you mean?
In other words, is excitement in motorcycles still relevant?
You know, some brands don’t compete in Moto GP, and I wonder why not. Then some brands do compete in Moto GP, and I wonder why. You know, how much of the Moto GP tech really transfers down to the mass-produced motorcycles? Well, they probably transfer down to the premium motorcycles, but they sell so few of those. Do they transfer down to the utility motorcycles? Probably very rarely. Honestly. I don’t think many features are relevant. Like, no one needs launch control on a 250cc standard bike, right? Maybe they do eventually get ABS down there, but you don’t have to test ABS on the racetrack. In fact, what features come from Moto GP?
To get to the point of answering your question, I would argue that it’s essential. Maybe the lusting for a brand in the car industry is not as necessary as it is in motorcycling. But motorcycling has its roots and its history with a group of people who rode bicycles that strapped single-cylinder engines to them that had no brakes. So there was always this counterculture rebellious cache that came with motorcycling, and it’s still alive and well in motorcycling today.
You know, when I spent time in Jakarta, I saw massive throngs of people riding motorbikes for A-to-B purposes, but underneath their jackets, they wore Moto GP jerseys, and they had Moto GP gloves on. They live and breathe the badass, exciting culture of motorcycle racing even though they’re buying 125cc scooters. And they ride those scooters, and they put their feet on the back pegs instead of the front pegs.
So, they’re sitting on these very mom-and-dad-like scooters, but they’re sitting on them in a Moto GP fashion. I love that. Absolutely love that. You know, because every day at the end of the day, we’re human beings. We’re emotional, and we want to have fun, and we want to feel alive. So, I think, a brand like Damon and a brand like Ducati are critical. Ducati evokes emotion more than any other motorcycle brand in the world. It’s their job. I would argue that it’s their job, and if they stopped doing it as well as they do, I think that the CEO should get fired.
Not going too much into the mainstream, that’s Ducati’s job in the motorcycle industry. That’s its position on the map of motorcycle companies.
Maybe that’s not Honda’s position. Honda’s position is over on the other end of the chart in safety and mass production, and providing transportation for all.
But that’s not Ducati’s job. And Ferrari is the equivalent in the car industry, isn’t it? It’s their job to deliver emotion to driving. It’s the opposite of Ford. These brands kind of take these positions in the market and have a duty to continue to fulfill upon that in the marketplace. While I was its CEO, Damon’s job was to elevate the standard of safety and performance without compromise.
Fair enough. I would reckon that you, as the CEO of a performance motorcycle brand, would have spoken to the maximum number of investors in the world when you were raising funds for Damon. From an investor’s point of view, not many understand technology, so for them to evaluate a high-technology motorcycle brand is extremely difficult. What is your advice to them, considering that in the future, there will be more brands coming?
That’s a great question. I think we were very successful in raising a lot of money, but I think we struggled enormously with raising enough money at the pace we needed to achieve the company’s goals, which ultimately resulted in some of the struggles we faced and the reason why the company went to the stock market. So I appreciate that it was a lot, but it wasn’t enough, and it wasn’t fast enough, and there were too big gaps in between the fundraising that slowed us down and just burned into the runway.
I think you’re absolutely right. Investors have a hard time knowing how to evaluate it. The proof was in the pudding every time. We had investors who got serious, flew to our California Development Center, just north of San Francisco, where Damon was, and we would spend two and a half hours walking them through these stations inside the building, showing them every major component.
They could put their hands on it. They could turn it over. They could ask questions. They often brought technology evaluators with them. And then when we were done with all of that, we rolled the bike outside, and we did massive 100 mph wheelies up and down the road, and massive burnouts on the road in front of the building. Every time, we watched people looking at all the parts inside the building, with their thinking caps on, and then we watched them standing on the side of the road getting frightened, walking backwards unconsciously as the bike ripped past them on its back tire.
We made hairs rise on the back of their necks, and they felt the power and the energy of this thing where people say, “Oh, electric vehicles, they’re not visceral the way combustion engines are.” Well, yes, they are. At 100 miles an hour on one back tire, you know, with the rider pointing his finger at you as he goes by, and it’s screaming past you.
These things were loud. The Damon Hypersport is a loud bike that sealed the deal every time because you can see it working. Seeing is believing. Talking about it is nothing. So my advice to investors would be to get your legs around over one of the demos or have the demo bike presented for you. And yes, raising money before you have that demo built it’s really hard. It’s much, much harder.
Excellent. I think that was an interesting outlook on how investors are looking at it. Now there are upcycles and down cycles in investing, and what we have seen nowadays is that investment is more focused on mobility than on products. Where do you see this heading? How good or bad do you think it is for the industry? Products make the industry, but the focus of the investors has moved towards solutions or solving for mobility or mass mobility; everything but products, really.
Isn’t that unfortunate? If we look at the mass mobility ride-sharing companies, the Ubers and the Limes of the world, piles of bicycles and scooters that came and went ended up in these giant heaps in the dumpsters. Because venture capital rushed in and pumped these mobility solutions, where large manufacturers of commodity scooter and e-bikes just mass-produced them for mobility companies. Venture capital rushed in and overvalued everything. One or two survived. 98 died.
Somebody made money in the venture capital community, and in the next go-around of this, which will inevitably happen at some point, we’ll have new venture capital investors with a short-term memory. That’s kind of the pattern that I’ve seen over the last 20 years, not only in mobility but in many other industries where there’s a there’s brief bubble, there’s an absence of technology differentiation, there’s an absence of actual product being made and innovated upon.
Money gets in and it gets out; some make some money, most don’t. I think that’ll just keep happening, frankly. I think that’s the pattern. Gogoro was a bit different, though.
Yeah, we have always questioned their business model.
I think Gogoro was different because it was a vertically integrated mobility provider where they designed their own scooter, unlike many others who were undifferentiated. Gogoro really took a shot at it with the swapping stations, and that was a brilliant attempt to solve a very complex problem at scale, and in some ways, they did scale quite a bit. But the business model was so difficult. These new business models are always the shiny things that attract the less experienced investors.
But buying something for X and selling it for Y. That’s the business model that’s tried and true. It’s worked for thousands of years, and it will always work. It might have been better for customers to just buy scooters designed by Gogoro than for the company to try to couple the battery swapping with it.
That’s a very interesting point, buying a thing for X and selling for Y, and in the process, you make some profits. That should be a pretty simple business, except that we seem to be running after very complex business models. In fact, I hardly see any electric two-wheeler manufacturer nowadays claiming to be a two-wheeler manufacturer. They want to be energy companies, battery-swapping companies, and more. Everything but a product company, that is.
I guess that they’re trying to speak the language that the investors want to hear. I don’t know how it will turn out for the industry eventually, but do you see this lack of excitement creeping in? Motorcycles were exciting for me while growing up. I’m sure that happened with you as well. But I don’t see that happening now with the new generation. The sort of excitement linked with motorcycles has declined. Is it a passing phase or something that stays permanent?
I think it’s a passing phase. I am super hopeful of some new trends right now, and one of them is e-bikes. I’ve never been an ebiker, because ebikes are not motorcycles. So I sort of look down on them. It’s not a liter bike, or a 600cc cool-looking motorcycle, and so I would never be caught dead on an ebike.
Well, as soon as you ride an ebike, the impression changes. Oh my god, they are fun!
So, I think e-scooters, ebikes, and e-mopeds are the perfect gateway drug into motorcycling. All over North America and Europe, I’ve seen more kids riding ebikes. They don’t even know how to pedal anymore. They know how to use their thumbs, and they know how to use their wrists, but they don’t know how to pedal.
I think that’s probably a really good thing. I see so many people riding around on these that somehow parents can afford USD 5,000 e-mopeds for their 16-year-olds. I guess it’s cheaper than buying them a car. That seems to be happening quite a bit. Kids aren’t getting cars when they turn 16. They’re getting emopeds to go to school on, so their parents don’t have to drive them to school anymore. And, what a great gateway drug.
The other trend that I think pairs really, really well with this is, you know, we were caught up in the allure of social media, people like Gen Z, Gen X, and millennials, and we’re the ones stuck with the dopamine addiction of constantly scrolling. But the Gen Zs and the Gen Alphas are not.
So I’ve got a Gen Z son who’s 17. I’ve got a Gen Alpha son who’s 13, and they’re already sick and tired of scrolling because they’ve been scrolling since they were 6 years old. They want flip phones, and there’s this big trend towards an analog lifestyle right now where these teenagers and 20-something youngsters are seeking a life away from their computers, a life away from their devices.
I think that analog trend is appearing in many different facets of the way these kids live will pair very well with ebiking, biking, mountain biking, and any of those kinds of outdoor fun activities where you feel the wind and you feel the world outside you. There’s a craving that I’m seeing with this generation, and it’s probably really healthy that they want to break up with their smartphones.
That’s a very interesting point, this analog trend. It seems to be a little early for India, but we are always a couple of years behind for some of these trends.
I think what’s interesting is the part that’s making it difficult to avoid it now is AI. The term AI slop is quite new, but we’re all already getting really sick and tired of AI. You could say that one reason Instagram became more popular than Facebook is that an image is worth a thousand words. And Instagram was built around the idea of photography that a picture tells a story better than words ever will. So Instagram became this way of telling a story about your life that was more evocative than speaking it in words. People are putting up photos about how great their lives are. But now that AI has become the dominant content producer, the authenticity of being online and looking at your friends’ lives on Instagram is gone.
So there’s no point in being online anymore because it’s all fake. It’s all AI slop. The allure of looking at your life, the allure of presenting your life online, and the allure of looking at other people’s lives online, how great they are, and getting inspiration from those other people’s lives is evaporating. So the only way to connect with people again and enjoy the authenticity of how you’re living and how others are living is back in the real world. So I think AI is causing the tipping point of a resurgence of young people to go back into the analog world.
