By Eric Peterson | Jun 26, 2018
Industry: Electronics & Aerospace; Consumer & Lifestyle
Products: Foldable electric vehicles
As a member of the faculty at ArtCenter College of Design in Pasadena, longtime product designer Delgatty worked with companies on sponsored class projects.
In 2012, he was teaching a class called Mobility Design that brought in General Motors as a sponsor. GM's rep gave the class a design brief. "There was a very big paradigm shift in the fact that Millennials are choosing not only to not purchase cars, but not even get driver's licenses," says Delgatty. "Millennials are finding new ways to get in and around cities."
Then Ford came the next semester. "Without knowing what happened the prior term, they gave the exact same brief," says Delgatty. Piaggio "said the same thing” to the following class. "I'm like, 'Okay, this is something,'" he says.
But he had an ulterior motive. "I'm a huge car nut," says Delgatty, who has designed everything from footwear to consumer electronics over the course of his career. "Anything with wheels."
He headed to the garage and brought his napkin sketches to life as working prototypes and did test rides around the Rose Bowl. Then he launched an Indiegogo campaign to fund the first production run, but ran into a host of issues. "We made some mistakes," said Delgatty. "We didn't have our supply chain in line."
After that false start, Delgatty co-founded a new company, Urban 626, and got the concept off the ground with a new investment team in 2015. One condition: Manufacturing had to be in the U.S.
Manufacturing in California "had some challenges, but it was also very good for us, because it kept us very close to the product," he adds. "It was a lot more conducive to iterative design than manufacturing overseas."
The company set up a production line in Pasadena and started shipping its first scooters in September 2015. The catalog now includes the $899 Sport and the $1,699 Pro, with upgraded GT models for each. "We've won 'Best of CES' two times," says Delgatty.
All URB-E models share certain characteristics: USB charging systems, brushless geared motors, and responsive hand brakes. Because they fold down, they don't require much room. "It's designed to be very compact," says Delgatty. "It folds up in a second or less." This design feature is meant to mesh seamlessly with mass transit: "If you're about to miss the train, you can fold it in a half-second and jump on the train."
Or onto an elevator, or into a trunk, or basically anywhere else, as the scooters weigh just 30 to 35 pounds. The Pro model has inflatable tires and a beefier suspension, and can go a little faster (18 miles per hour, versus 14 for the Sport) with a longer range (20 miles on a single charge, versus 16 for the sport).
The Sport is a bit smaller, with solid rubber wheels that "won't ever go flat," says Delgatty. "You can ride over nails."
The Sport is also the value model, and its price tag has decreased largely to improved efficiencies in manufacturing. "We got a little bit smarter building the Sport, and we were able to transfer those savings to the customer," says Delgatty.
One such improvement has been to replace extruded aluminum tubing with flat panels that are bent in-house. "It's a lot more cost-efficient," says Delgatty.
"It's all aircraft-grade aluminum and carbon fiber," he says of an URB-E's construction. "A lot of the production is done in the exact same way you would make aircraft."
Also like aerospace, the scooters' tolerances are extremely tight. "There are a lot of moving parts that have to work properly," says Delgatty, noting that some of URB-E's vendors also supply aerospace heavyweights like Boeing.
The market is slowly but surely hearing word about the attention to detail. "Our sales have grown fairly steadily," says Delgatty. "We've sold a little more than 5,000 units total. This last month [May 2018] was our best ever, close to 200 units."
URB-E has accomplished this without "the luxury of traditional distributions," says Delgatty. The company owns stores in Pasadena and on the campus of University of Southern California, and sells the majority of its scooters directly to customers online. "We ship worldwide," says Delgatty. "We have customers in 40 countries."
Dense urban centers like New York, London, Singapore, and San Francisco are the most fertile markets, but there are exceptions coast to coast. Delgatty notes, "We have customers in every state in the country."
Challenges: "Trying to figure out a way to scale our growth," says Delgatty. "There are challenges with budget and cash flow and our ability to market."
With the direct-to-consumer model, "There are no touch points for people to experience the product," he notes. "We do have a pretty good conversion rate when we have people try the product and experience the product."
To get people on its scooters, URB-E sends teams to target cities for demo rides promoted through social media. "It's still very startup, very grassroots," says Delgatty.
Manufacturing-wise, the challenge is "to keep costs down," he adds. "It's an expensive product to make. You have to weigh out how much a customer is willing to pay. Does it make sense to continue to manufacture in the U.S.?"
Opportunities: Scooter ride-sharing companies like Bird and Lime are the competition, but Delgatty also sees them as a market catalyst. "People are getting to experience [electric scooters] with minimal costs," he explains. "People are starting to recognize the convenience factor of something like this."
And once that realization is made, Delgatty hopes people will graduate from ride sharing to URB-E. "We are an ownership model," he says. "It's a bigger investment our customers need to make up front, but in the long run they save money."
He adds, "There's a huge shift with people moving into cities. With that, there's nowhere left to park."
Needs: "We're in position where getting some kind of bigger influx of capital could get us to the next level," says Delgatty. "We're looking at all possibilities."