Hello from Tower Founder & CEO Stephan Aarstol

[Tower Electric Bikes]

Hi everyone. My name is Stephan Aarstol. Tower Electric Bikes is a privately owned company, owned by myself and Mark Cuban. Mark is the strategic advisor and investor. I’m the CEO.

Tower Electric Bikes is a subsidiary of a larger brand, Tower (formally “The Tower Group”), which was founded in 2010 as a direct to consumer beach lifestyle company focusing on stand up paddle boards initially. We’re headquartered in San Diego and have a beachfront showroom in Mission Bay called the Tower Beach Club. We live and breathe the beach lifestyle, of which biking is a big part – San Diego is one of, if not the, biggest bike market in the US with over 1.1 million residents who regularly bike.

Over the past decade, we’ve extended Tower’s direct to consumer product offerings into many beach lifestyle products beyond paddle boards, including: surfboards, skateboards, bikes, sunglasses, surfboards, portable docks, and most recently, eBikes (specializing in electric beach cruisers).

A few years ago, we developed and refined the “World’s finest beach cruiser”, called the Tower Tulum, which is a stylish, non-electric, high-end, aluminum frame, belt drive, beach cruiser with our patented passenger pegs. Our first eBike, the beach bum, is based on the popular design of our non-electric beach cruiser.

While we’re a relatively new entrant in eBikes, we’ve been offering up great products direct to consumer for the past decade. I’ve personally been an executive in the online space since 1999, and developing and selling products direct to consumer since 2003. I was in poker chips prior to paddle boards. Mark Cuban, billionaire owner of the Dallas Mavericks, founder of Broadcast.com, serial entrepreneur, and investor, doesn’t need much of an introduction. He invested in us on Shark Tank, and we’ve gone on to become his most successful investment in the history of Shark Tank. Tower has done well over $30 million in sales, all direct to consumer, one satisfied customer at a time. We didn’t advertise for the first 4 years of operation, and we still don’t rely heavily on advertising as we prefer to pass savings onto the end consumer. We focus on creating great products and providing incredible value to consumers. Our satisfied customers tend to spread the word themselves. In 2014, Tower was named the #1 fastest growing private company in San Diego. In 2015, we were ranked #239 on the INC 500 list of America's fastest growing companies. Harvard Business School has written case studies about Tower. We've done all of this because we provide great value to consumers.

With the paddle board company we were basically selling high-end, design-focused paddle boards thru the Internet direct to consumers for roughly half the price of comparable quality retail boards. We plan to serve eBike enthusiasts with a similar business model.

We're a direct to consumer eBike brand and that term “direct to consumer” confuses many consumers as the retail and e-commerce landscape has changed so much in the past 25 years. By direct to consumer, we mean we ONLY sell direct to consumer and completely forgo the traditional retail distribution channel. We cut out the middlemen, which means we can save you around $2000 off a comparable high-quality, highly-considered eBike purchased in a retail store.

The confusion sets in when consumers see 2 eBikes both selling for say $2000, but one is sold thru retails stores (and maybe also from the brands website), while the other is sold direct to consumer ONLY. No resellers. No middlemen. While the traditional retail brand has to earn a profit margin to pay off distributors, wholesalers, salesman, retailers, and the brand itself… the direct to consumer brand only has to earn a living itself. All that savings gets passed to the consumer in the form of either a far better price on a comparable product, or a far better product at the same price as a retail product.

When you consider that in today's global economy the production cost to produce something tends to get cheaper over time as we find cheaper places to produce them, people closer to the sale get more expensive. As a result, in today's world it’s frequently the distribution channel that accounts for a lion’s share of the cost of products we buy thru retail. Sometimes the product production cost is only a sliver of the final consumer price. Ever by a $20 hat in a store... that hat costs $1.87 to produce. I know. We produce hats too. That’s kind of broken in my opinion. Now do that with a product that costs $1000 to produce and things get crazy!

Because consumers #1 indicator of quality is price, most consumers would assume these two $2000 eBikes mentioned above are fairly equivalent quality. You get what you pay for... right? That’s been true for centuries and smart consumers know this adage well. The adage was reliable… up until the direct to consumer revolution, fuelled by the Internet and social media, really took off big time in about 2010 with brands like Warby Parker selling glasses, brands like Casper selling mattresses, and brands like Dollar Shave Club selling razors. Today, you might well get twice the eBike for the same price if you buy from a direct to consumer brand. What’s more? You get better customer service as you can actually reach the brand directly instead of not even being able to reach the brand at all (try calling Kit Kat, or Budweiser, or any corporate brand) or being routed thru a retailer, whose business is likely struggling to survive as is, and they really don’t have deep product knowledge on most of the products they carry in the first place.

The result? Hundreds of direct to consumer brands are taking over because the value proposition they offer is off the charts!

At Tower Electric Bikes, we’re not only a direct to consumer brand, but we’re also focused on the premium end of the eBike market. We’re not interested in selling the cheapest eBike we can make. We don't make cheap, heavy eBikes with cheap components. We’re not a transactional, fly by night brand trying to spin dimes. We're building a brand for the long term a we've been doing for a decade. We only make great products. Products so compelling that our customers will tell their friends about. We refuse to produce crap. That’s our game plan.

Nice to meet you all! Myself and my team will keep an eye on this forum and hopefully we can answer any questions you have. We have a small, lean team and work a 5-hour workday (which we invented, check out The Five Hour Workday book) in the summer months, but we work fast so we'll try to be as responsive as possible.

-Stephan Aarstol

 

[gtpharr]

Liked your video - not a single helmet anywhere. Riding barefoot with a surfboard in one hand and only 1 hand on the bars. To be honest, I would have done some of that in my younger days, but I am glad I lived through it long enough to become a little more safety conscious.

Good luck in your business endeavors.

 

[Ebiker01]

Hi everyone. My name is Stephan Aarstol. Tower Electric Bikes is a privately owned company, owned by myself and Mark Cuban. Mark is the strategic advisor and investor. I’m the CEO.

Tower Electric Bikes is a subsidiary of a larger brand, Tower (formally “The Tower Group”), which was founded in 2010 as a direct to consumer beach lifestyle company focusing on stand up paddle boards initially. We’re headquartered in San Diego and have a beachfront showroom in Mission Bay called the Tower Beach Club. We live and breathe the beach lifestyle, of which biking is a big part – San Diego is one of, if not the, biggest bike market in the US with over 1.1 million residents who regularly bike.

Over the past decade, we’ve extended Tower’s direct to consumer product offerings into many beach lifestyle products beyond paddle boards, including: surfboards, skateboards, bikes, sunglasses, surfboards, portable docks, and most recently, eBikes (specializing in electric beach cruisers).

A few years ago, we developed and refined the “World’s finest beach cruiser”, called the Tower Tulum, which is a stylish, non-electric, high-end, aluminum frame, belt drive, beach cruiser with our patented passenger pegs. Our first eBike, the beach bum, is based on the popular design of our non-electric beach cruiser.

While we’re a relatively new entrant in eBikes, we’ve been offering up great products direct to consumer for the past decade. I’ve personally been an executive in the online space since 1999, and developing and selling products direct to consumer since 2003. I was in poker chips prior to paddle boards. Mark Cuban, billionaire owner of the Dallas Mavericks, founder of Broadcast.com, serial entrepreneur, and investor, doesn’t need much of an introduction. He invested in us on Shark Tank, and we’ve gone on to become his most successful investment in the history of Shark Tank. Tower has done well over $30 million in sales, all direct to consumer, one satisfied customer at a time. We didn’t advertise for the first 4 years of operation, and we still don’t rely heavily on advertising as we prefer to pass savings onto the end consumer. We focus on creating great products and providing incredible value to consumers. Our satisfied customers tend to spread the word themselves. In 2014, Tower was named the #1 fastest growing private company in San Diego. In 2015, we were ranked #239 on the INC 500 list of America's fastest growing companies. Harvard Business School has written case studies about Tower. We've done all of this because we provide great value to consumers.

With the paddle board company we were basically selling high-end, design-focused paddle boards thru the Internet direct to consumers for roughly half the price of comparable quality retail boards. We plan to serve eBike enthusiasts with a similar business model.

We're a direct to consumer eBike brand and that term “direct to consumer” confuses many consumers as the retail and e-commerce landscape has changed so much in the past 25 years. By direct to consumer, we mean we ONLY sell direct to consumer and completely forgo the traditional retail distribution channel. We cut out the middlemen, which means we can save you around $2000 off a comparable high-quality, highly-considered eBike purchased in a retail store.

The confusion sets in when consumers see 2 eBikes both selling for say $2000, but one is sold thru retails stores (and maybe also from the brands website), while the other is sold direct to consumer ONLY. No resellers. No middlemen. While the traditional retail brand has to earn a profit margin to pay off distributors, wholesalers, salesman, retailers, and the brand itself… the direct to consumer brand only has to earn a living itself. All that savings gets passed to the consumer in the form of either a far better price on a comparable product, or a far better product at the same price as a retail product.

When you consider that in today's global economy the production cost to produce something tends to get cheaper over time as we find cheaper places to produce them, people closer to the sale get more expensive. As a result, in today's world it’s frequently the distribution channel that accounts for a lion’s share of the cost of products we buy thru retail. Sometimes the product production cost is only a sliver of the final consumer price. Ever by a $20 hat in a store... that hat costs $1.87 to produce. I know. We produce hats too. That’s kind of broken in my opinion. Now do that with a product that costs $1000 to produce and things get crazy!

Because consumers #1 indicator of quality is price, most consumers would assume these two $2000 eBikes mentioned above are fairly equivalent quality. You get what you pay for... right? That’s been true for centuries and smart consumers know this adage well. The adage was reliable… up until the direct to consumer revolution, fuelled by the Internet and social media, really took off big time in about 2010 with brands like Warby Parker selling glasses, brands like Casper selling mattresses, and brands like Dollar Shave Club selling razors. Today, you might well get twice the eBike for the same price if you buy from a direct to consumer brand. What’s more? You get better customer service as you can actually reach the brand directly instead of not even being able to reach the brand at all (try calling Kit Kat, or Budweiser, or any corporate brand) or being routed thru a retailer, whose business is likely struggling to survive as is, and they really don’t have deep product knowledge on most of the products they carry in the first place.

The result? Hundreds of direct to consumer brands are taking over because the value proposition they offer is off the charts!

At Tower Electric Bikes, we’re not only a direct to consumer brand, but we’re also focused on the premium end of the eBike market. We’re not interested in selling the cheapest eBike we can make. We don't make cheap, heavy eBikes with cheap components. We’re not a transactional, fly by night brand trying to spin dimes. We're building a brand for the long term a we've been doing for a decade. We only make great products. Products so compelling that our customers will tell their friends about. We refuse to produce crap. That’s our game plan.

Nice to meet you all! Myself and my team will keep an eye on this forum and hopefully we can answer any questions you have. We have a small, lean team and work a 5-hour workday (which we invented, check out The Five Hour Workday book) in the summer months, but we work fast so we'll try to be as responsive as possible.

-Stephan Aarstol

Nice post !


But the 5 hour workday you didn’t invent ....is called “banker hours”...way back when the bankers were doing a 10-3 shift.

Other then that, all is great. Maybe write the ebike website name , so that people can just click on it. You’d be amazed that many ppl. are super lazy nowadays.

Q- how would you solve various warranty /ebike issues that may occasionally arise ?

With ebikes, unless the customer is knowledgeable enough in ebiking technology, a local dealer is paramount for success.

Look at Trek, they have an amazing dealer network, they coming with a very hot 4grand 28mph ebike that w/o a doubt it will be a top 5 seller for 2020. There’s a few others companies with great support but this one is advancing very good.

A ebike is completely different then a paddle board, most people new to ebikes don’t have the skills , patience to inspect , ship back and forth the parts.. they want it fixed yesterday !

 

[tomjasz]

The advertising is pure blather. You call a $1500 bike a $3700 bike. You tell us you use brand name components, yet any avid cyclist knows the brand name alone doesn’t define the quality level. You never reveal who builds the motors, nor whose cells are used in the battery packs. While you obviously have advertising power, your specs reveal nothing. Seriously? Do you think the market believes that a cruiser is a $3700 bike but you’ll sell it for $1700? I can build a cruiser with a vastly superior motor, 500-1500W and a Bluetooth BMS battery with cells from Panasonic for less. AND with better components. Typically I wouldn’t bother responding to sales blather but extolling your virtues based on sales of other products is just that. Blather. Fortunately this is a kinder gentler forum, but don’t mistake the friendliness for naivety.

 

[Tower Electric Bikes]

Thanks for the post Ebiker01. Yes, good call on the website URL. It's to the point... https://www.TowerElectricBikes.com.

On product issues, we've tried to approach that from going with the best quality components to minmize issues, and going with a modular design approach. If a motor fails or isn't working, we'll ship out a replacement of the whole rear wheel. The integrated controller can be taken off with 3 screws and a plug and can be replaced pretty quickly. And we are just dealing with issues on a customer by customer basis, with an eye towards taking great care of our customers.

I agree there are some advantages to having local service teams, and I actually think this is one the biggest business opportunities in the eBike business. Bike shops make most of their money on service anyways, so I believe a lot of eBike repair shops will pop-up as demand and the installed base of eBikes grows. Today, many eBike shops will repair any brand. As the eBike market in the US grows from 300K units annually today to upwards of 10 million over then next decade, repair shops will thrive.

On the "banker hours", perhaps you are right! Haha!

I have my suspicioins that those fat cat bankers were figuring out how to work less, do less... the intent of our expeirment to shorten hours was to increase productivity in light of the new productivity tools afforded by the connectivity and reach of the Internet. Similar to Henry Ford taking a lead in moving to an 8-hour workday to adjust the new productiviity realities introduced by the industrial revolution.

-Stephan

 

[Tower Electric Bikes]

The advertising is pure blather. You call a $1500 bike a $3700 bike. You tell us you use brand name components, yet any avid cyclist knows the brand name alone doesn’t define the quality level. You never reveal who builds the motors, nor whose cells are used in the battery packs. While you obviously have advertising power, your specs reveal nothing. Seriously? Do you think the market believes that a cruiser is a $3700 bike but you’ll sell it for $1700? I can build a cruiser with a vastly superior motor, 500-1500W and a Bluetooth BMS battery with cells from Panasonic for less. AND with better components. Typically I wouldn’t bother responding to sales blather but extolling your virtues based on sales of other products is just that. Blather. Fortunately this is a kinder gentler forum, but don’t mistake the friendliness for naivety.

Hi Thomas. Thanks for posting, and I get your concern. No need to worry... since the moderators of EBT created a sub-forum to discuss our brand today or yesterday, and our Tower Beach Bum eBike review just dropped today, I thought it would be helpful to politely introduce our brand, the people behind it, our history, and our approach to the eBike market to the community. I was under the impression that this was encouraged for brands to do just that. You know... let people know we're here listening and let peole know that we plan to make ourselves available to answer questions as we can. Just trying to be helpful. Really. Nothing nefarious. We've got no intentions to spam your forums in some kind of feeble attempt at "marketing". I'm well versed in online and discussion group prototcol. You won't have any problems from us.

On your questions on our products and marketing, we see a focus on building great products and a business model that provides value as the marketing itself. On your specifics:

- Yes, our $1700 eBike sold dtc is comparable to some $4000 eBikes sold in retail. I tried to explain this in my post.

- Yes, the brand does say someting about quality on some components. Samsung cells on the battery, as you testify to. Schwalbe Fat Franks on the tires are quite different than generic beach cruiser tires. Velo seats & grips. Tektro brakes, not absolute top of the line, but pretty solid. And so forth.

- Yes, we private label contract manufacturer our motor because we are confident it allows us to offer superior power at a better value. If you find yourself in San Diego, come try our eBikes and you can see for yourself how they will out hill climb the competition regularly. Here's a side by side video: Tower Beach Bum Hill Climbing Side by Side

-Stephan

 

[Ebiker01]

Thanks for the post Ebiker01. Yes, good call on the website URL. It's to the point... https://www.TowerElectricBikes.com.

On product issues, we've tried to approach that from going with the best quality components to minmize issues, and going with a modular design approach. If a motor fails or isn't working, we'll ship out a replacement of the whole rear wheel. The integrated controller can be taken off with 3 screws and a plug and can be replaced pretty quickly. And we are just dealing with issues on a customer by customer basis, with an eye towards taking great care of our customers.

I agree there are some advantages to having local service teams, and I actually think this is one the biggest business opportunities in the eBike business. Bike shops make most of their money on service anyways, so I believe a lot of eBike repair shops will pop-up as demand and the installed base of eBikes grows. Today, many eBike shops will repair any brand. As the eBike market in the US grows from 300K units annually today to upwards of 10 million over then next decade, repair shops will thrive.

On the "banker hours", perhaps you are right! Haha!

I have my suspicioins that those fat cat bankers were figuring out how to work less, do less... the intent of our expeirment to shorten hours was to increase productivity in light of the new productivity tools afforded by the connectivity and reach of the Internet. Similar to Henry Ford taking a lead in moving to an 8-hour workday to adjust the new productiviity realities introduced by the industrial revolution.

-Stephan

Actually here in Ny i’ve encountered a few regular bike shops whose mechanics refused to work on ebikes. So, there is an opportunity for ebike only repair shops. The problem , at least in Nyc , where there are Zero ebike specific stores( there ised to be Nycewheels but they closed down jan. 2019$), is the sky high rent.

With only selling/servicing ebikes , for now , b/c there is still a low demand for them , opening an ebike only shop in Nyc is a big gamble.

That’s great that you roll with a fewer working hours. It is the reality of how a business ahould be run and most employees are not productive beyond the 5th/6th hour. On top of that some have 1-3hours commutes.

Hopefully others business will follow suit and reform. Another aspect is the pay(instead of hourly , it should be a communal owned enterprise. That makes the employees much more involved and responsible , knowing that they have a stake , wether its a really small or smaller equity.

Well , your direct competitor for the Beach Bum(great name ) is the Pedego, and they sell for 3-4k. Not sure which one has better components, but they are rolling with a dealer owned franchise nationwide.