BetterPlace - The Fat Startup

http://www.eytanlevit.com/post/51416804786/betterplace-the-fat-startup

by eytanlevit • 13 years ago

36 10 13 years ago

sgpl• 13 years ago

Hindsight is 20/20.

Agreed that they could have done a lot of things better, but perhaps testing at scale was one premise that would have validated its viability in the long run.

I do argree that they should have perhaps concentrated in succeeding in one market before expanding to other markets, but they had a lot going for them, including tax breaks and other incentives to launch in other cities. Also IMO when you have a lot going for you, it gets easier to make irrational decisions that seem rational at the time.

And I'm glad they weren't cloning the TSLA model because if BetterPlace would have been successful, it would have been pretty "awesome" too.

With any new innovation/technology, there are bound to be some unexpected setbacks, perhaps if they had received another round of funding, or had not forced Shay Aggassi out, they could have fixed some of the problems/errors and become a successful company. I'm just theorizing, but it is possible that in the distant future, this model will come back to life and be successful.

flyinglizard2• 13 years ago

While I agree that BP was grossly mismanaged, I disagree with the reasoning in your post -

Developing an electric vehicle of that sort is a monumental task. It's not just an urban getaround but a proper car. Developing a mass produced car from scratch can easily exceed $1bn, and while BP used an existing model (Renault Fluence), the extent of their modification is huge - from the obvious drivetrain, to the chassis (for battery mounting), to body panels (it's longer than a standard Fluence), and all the way to the in car entertainment system.

Everything BP had was developed for scale and for daily use. It takes huge time and money. In comparison, the original Tesla Roadster looks like a DIY project.

Their 'MVP' would have been narrower deployment (in one country, for example), but their principal was always "a direct replacement for your family car" and for ascertaining that, well, you really need to develop a product that can replace the family car. Giving partial solutions would have taught them nothing and would have left customers with an unjustified bitter taste of what the electric car is about.

You see, there's nothing to validate about this market. It's clear enough electric vehicles are the future, the only thing preventing us from getting there are the technicalities - those very same ones BP addressed.

Now then, why have they failed?

1. Their pricing model in Israel was really bad: I don't know about other countries, but here they overcharged for the vehicles. They tried to sell them for a price of an equivalent petrol model (while the BP vehicles enjoyed 12% tax as opposed to ~90% for a petrol model, AND were sold with no battery which is the most expensive component in an e-vehicle; the battery would be leased to you as part of the purchasing agreement). Back at their original pricing model, it simply wasn't worth the hassle. Over the last few months they've brought their pricing model to where it should have always been - around 25% of the cost of an equivalent petrol car + a monthly operating subscription covering the battery and the electricity. If they had done it from the get go, things would have been better.

2. Advances in battery technology: When they started this venture, batteries were heavier and with less energy stored. Meanwhile, Tesla and others advanced the field to the point where a Model S can go hundreds of miles and be at least partially charged in 30 minutes. That pretty much voids the entire premise of BP and their replaceable batteries.

3. BP never had full backing from an auto manufacturer. They cut some kind of deal with Renault for providing them their vehicles, but Renault itself kept developing fixed-battery models. Obviously car models have a limited lifespan, and the cost of reengineering the BP solution to fit another/new models would have been insane.

4. Engineering: A part of why electric vehicles are indeed the future has nothing to do with the energy itself. Electric vehicles, where smartly designed from scratch like the Model S, have huge mechanical advantages. The batteries can form the car's floor, and the electric motors together with the lack of a gearbox are tiny in size and very easy to package compared to a traditional gasoline drivetrain. BP vehicles, based on the modified petrol model and limited by the replaceable battery mechanism, were a very bad compromise in terms of packaging. Such a modified bastard child is much worse in packaging and dynamics than either a purposely designed E vehicle, or the original petrol one.

So the entire offering of BP was the replaceable battery. That advantage should have gone a long enough of a way to justify the compromises around the vehicle itself, and the huge costs developing it. Now, with the problem of range quickly diminishing, this solution is no longer justified.

The backers of BP are rich enough to keep this venture going if they really thought it's the future, but in the world where Tesla (and others) operates, it's no longer good enough.

Gravityloss2• 13 years ago

For some reason, almost all pure electric cars have resembled traditional front engined cars with a long hood. Form has not yet followed function. Just like early automobiles looked like horse drawn carriages without the horses. It is frustrating how bad design must be in order to sell.

cynicalkane• 13 years ago

These cars are famous for their design and they have the engine in the back:

https://upload.wikimedia.org/wikipedia/commons/thumb/8/88/Vo...

https://s3.amazonaws.com/rapgenius/filepicker%2Ftr7FdygeTg64...

http://static.cargurus.com/images/site/2008/06/03/21/19/1985...

Cars feel better to drive when the driver is near the car's physical center, or the center of gravity, preferably both.

jzwinck• 13 years ago

Go on, tell us what sorts of shapes you'd rather see. One thing to note: the hood is not just a place to store the engine, but a place to absorb kinetic energy in a crash, so it serves a vital function even if full of luggage.

nvr219• 13 years ago

שבע פרות רזות באות לסטארט-אפ השמן.

teyc• 13 years ago

A BetterPlace is an infrastructure company rather than an IP company. The odds are never good in the first place, and I wondered who'd actually invest in this thing.

It didn't take long and it looks like the Israel Corp - who owns 28% - is a government run VC http://www.israelcorp.com/AboutUs/HISTORY.aspx who decided to bet on a "green" venture. If you take a look at their holdings, they are big into plants and overseas expansion. IC Power builds power generation facilities in third world countries, IC Chemicals is apparently #1 in magnesium.

anon1685• 13 years ago

Israel Corp. was privatized over the years and is now a publicly traded company.

BetterPlace - The Fat Startup

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