BeeLine

Market

Target market

Our initial target market is anyone who rides a bike to get around in a city, or would like to. (Later we will target all cyclists and expand into other activities).

Within this group of urban cyclists, our core audience are those for whom cycling is a practical mode of transport and part of everyday life, rather than purely a sport or hobby. These are the people who are most often in need of navigation and are currently vastly underserved. In our experience they tend not to ride extremely expensive bikes, and while the amount they spend on cycling may add up over time, we believe they are less likely to spend vast sums on very high end individual items such as performance cycling computers.

This is the segment of cycling that we believe is growing fastest. This can be illustrated by the rise in city cycle hire schemes around the world, the growing importance of e-bikes which made up 30% of over 130M global bike sales last year and the efforts being made by cities around the world to encourage and accommodate cyclists as the world urbanises. For example, London has a £1B plan to improve it's provision for cyclists.

Initially, while BeeLine will be available to buy anywhere in the world, we will concentrate our marketing efforts on London to build a strong initial community and to focus our data collection to quickly prove how we can use it to create much better routing and guidance. Beyond this we will push into more cities across Europe, the US and Asia, prioritising based on the size of the cycling markets in each.

As we develop our products we will expand beyond urban cycling into all kinds of cycling, and from there into more activities. We believe that BeeLine navigation will be applicable to a multitude of activities outside of driving, but we don't want to dilute our focus on cycling for now.

Characteristics of target market

In London nearly 10% of people (~1M people) ride a bike at least once a week. 2% of all journey are made by bike. In the UK we spend £3B/year on cycling, of which around half is on accessories. We estimate the global cycling accessory market to be $36B p.a.

Cyclists tend to spend a large amount on accessories and upgrades to their bikes. Be these new wheels/saddles, on trend products such as the latest bike lights or, at the top end, devices such as Garmin cycle computers. We have found that cyclists are competitive and enjoy gathering data on their own performance, e.g. see the growth in cycling tracking apps such as Strava.

Cycling is growing at an enormous rate and is being pushed hard by government (London has committed £1B to cycling improvements, e.g. cycle super highways and hire schemes).

In our opinion this growth is driving a shift towards cycling being a lifestyle choice, not a sport, with more focus on design and affordability.

Marketing strategy

To reach the market, we will use various channels and marketing approaches to sell BeeLine hardware products:

CHANNELS
1) Direct sales will be our first channel, selling through our own website, and through the app (free to download and trial BeeLine). This gives us maximum margin to begin with and allows us to hold a close relationship with the customer and understand our early adopters. This has already begun with pre-orders being driven through CPC social media marketing, achieving a CAC of <£10.

2) Retail (traditional and online) will be our second channel, building direct relationships with retailers, this will give us wider reach and a physical presence. We are hoping to test this directly after launch with a trial in Evans' Cycles stores and will look to roll out across more retailers in early 2017.

3) Distributors and sales reps (US) will come later when we have established the brand, are confident in very large scale manufacturing and are ready to go to full mainstream. Distributors will eat into the margin but will help us reach an enormous global retail network.

MARKETING
1) Paid online marketing: Social and Google PPC and retargeting. Early tests are showing a CAC of <£10.

2) Content marketing: Blogs, videos and in app guides.

3) Referrals: Both financial incentives (discount codes) and through building software features that make BeeLine fun to use with others, encouraging "organic" referrals. The standalone BeeLine app combined with in app hardware purchase option will be a key enabler of this.

4) PR and influencers: Particularly for online reviews.

5) Offline marketing, events and creative guerrilla marketing.

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As well as BeeLine device sales, we will push for:

- Standalone app downloads: We will aim to convert these to hardware sales but even app only users (including smartwatch) will contribute the the community and data.

- Partnerships: Hardware collaborations with city cycle hire schemes, bike manufacturers, sportswear companies etc.

Competition strategy

Our current competitors are:

- dedicated SatNav devices e.g. Garmin (often £200+).
- phone based navigation apps e.g. Google maps (free + mount cost).
- other connected bike navigation startups. e.g. Hammerhead (£70+).

BeeLine distinguishes itself against these competitors on several aspects:

- Price: at an RRP of £60 BeeLine is the more affordable than any other dedicated hardware. While phone based navigation apps are free, they require mounting a ~£500 device vulnerable to damage and theft.

- Type of navigation: BeeLine's fuzzy navigation is completely different to standard turn-by-turn navigation so appeals to a different audience. The feedback we've had so far suggests there is a large market for this more liberal, fun and engaging type of guidance.

- Rich features updates: we will develop and release engaging new features through the app and bluetooth updates to enhance the BeeLine experience beyond navigation.

- Simplicity: everything about BeeLine has been designed with simplicity and ease of use in mind. From the simple, intuitive user interface of the device and the app to the long battery life and clean, elegant attachment solution

- Design and brand: the BeeLine device has been beautifully designed specifically for the target market of urban cyclists rather than competitive sports cyclists. This is also reflected in our brand.

- Battery life: BeeLine is designed to last for around 30 hours of standard use, far longer than any competitor solution.

Going forward, there are 3 layers to BeeLine's defensibility:

1) Patents: we have patents pending on the hardware and navigation method with international priority.

2) Software: the network effect of our software means that if people replicate the hardware, there will still be a compelling reason to be a BeeLine user.

3) Data: as we learn from our community, we will use this to enhance the products. When we can do this it will become very difficult for others to replicate what we can offer.