What would you do if your bike got stolen at school? Buy a new one, walk, or take the bus? As a devotee of the outdoors, technology and extreme sports, Theo Cerboneschi’s answer was to outfit a skateboard with a makeshift motor. While riding around town on his electric skateboard, he received offers to buy it right out from underneath him. After more than a dozen people offered to give him cash on the spot, he and his buddy Ryan Evans decided to turn it into a business.
Fast forward two and a half years later to March 2015. Behold the M1 electric skateboard from Inboard Technology of Santa Cruz, Calif. Cerboneschi serves as chief technology officer and Evans CEO. The battery-operated gadget sports LED headlights and taillights. It features three different riding settings and zips from 5 miles an hour for beginners up to 20 miles an hour for advanced riders. A new model in development, with mobile-app controlled acceleration and braking, can dash as fast as 24 miles an hour.
“We wanted to build the first electric skateboard that looked and felt like a traditional skateboard but had all the advantages and intelligence of an electric skateboard,” said David Evans, Inboard’s chief marketing officer. “The biggest differentiator is our in-wheel electric motors, The Manta Drive.
“The Manta Drive allows us to build the entire motor system directly into the rear-wheels of the M1. We are the only electric skateboard on the market offering this technology. This allows for an extremely lightweight, sleek form factor.”
The M1 costs an eye-popping $1,399 and has a 65% margin. It scored a jaw-dropping $5.6 million in pre-orders from a mix of U.S. retailers, global distributors, Inboard’s website and a Kickstarter campaign that launched in March 2015. Backers got their orders in summer 2016.
The M1’s parts are made all over the world. The final product is assembled in San Francisco for quality control. Inboard designed and engineered every inch of the M1 except for the skate trucks, which were made by their friends at another firm.
The changeable batteries can charge in less than 15 seconds versus 90 minutes for competitors. Boasting 100% FAA compliance, the M1 can be used anywhere as a personal transportation vehicle.
“You can weave around stop and go traffic on your way to work, after work you can bring your M1 with you in an Uber or take it on a train with you to the airport and then hop a plane to the other side of the world,” Evans said. “The M1 is designed for everyone’s increasingly on-the-go urban lifestyle.”
The company has more than 20 patents — some pending — for the deck, motors, swappable battery technology, integrated LED lights, remote control and even the accompanying travel bag. It has trademarks and copyrights on the Inboard name, Manta Drive and PowerShift battery.
“Unlike most other brands in the space we wanted to own the intellectual property of the product,” said Evans. “We knew that much of what was currently available off the shelf would not perform to the standards of style, performance and safety that are core to our brand.”
Getting Two Sharks On Board
CEO Ryan Evans, his brother and CMO David Evans, and CFO Chris Haley pitched Inboard Technology in a December 2016 Shark Tank episode. They asked for $750K for 4% equity, valuing the company at $18.75 million. They announced publicly for the first time they had gotten a distribution deal with the electronics big-box chain Best Buy.
Guest shark Chris Sacca and Mark Cuban bowed out, contending it was a crowded space. Cuban also did not want to compete with a hoverboard company he owns. Robert Herjavec didn’t see the mass market appeal. Lori Greiner and Kevin O’Leary liked the company but not the valuation given they had already raised $2.7 million at a $10 million valuation. After some back and forth with Greiner and O’Leary, they settled on a debt offer of $750K at 9% interest, due within 36 months, plus 4% equity.
Evans would not want to disclose sales figures from the Shark Tank effect “due to the competitive nature of the electric rideable transportation category.” But it was huge and the momentum continues.
“We’ve had attention from several high-profile media outlets, distribution partners and retailers, which we’re going to leverage throughout 2017,” said Evans. “We thought there would be a spike and things would settle back down again. But the demand has sustained. It’s forced us to scale production even faster.”
Other current investors include Ed Culligan, former CEO of Palm Computing, and a group in Europe. The company hopes to raise additional venture capital this year to expand the business on all fronts: global sales, operations, research and development, marketing and developing mobile apps. It also hopes to license its technologies and have started negotiations with several global companies.
“When we started Inboard we always did it with the intent that the underlying system needs to be robust and can easily be ported to other form factors, from new sizes of skateboards to industrial applications and even healthcare/mobility applications,” said Evans. “We see Skateboards as the first entry into this new category: lightweight electric rideables.
“People don’t have to wrap their head around the concept of a skateboard. It’s an easy leap from traditional skateboard to electric. The issues we’ve seen with rideables not taking off mostly has to do with form factor. For example, self-balancing electric scooters just seem dorky and unusable as actual transportation vehicles. Hoverboards are too heavy or bulky to be truly portable.”
Going to Hell and Back
Inboard’s founders are tech and action-sports aficionados. They built a team of like-minded outdoor enthusiasts who have complementary skills. Before starting Inboard, CEO Ryan Evans was president of North America for Best Kiteboards.
“I really fell in love with action sports when I studied abroad in college in Christchurch, New Zealand,” said Ryan Evans. “After I graduated, the first thing I did was move to Cape Hatteras, N.C. and pursued my love of kiteboarding, surfing and skating full time. I worked my way up through sales in the industry until I was president at Best.”
Dave Evans worked in advertising for large ad agencies that had accounts with major global companies.
“Getting the opportunity to leverage all of that experience on a start-up brand has been a true thrill,” he said.
Haley, the chief financial officer, came to Inboard with 22 years of experience on Wall Street.
“I was ready for a change. I wanted to build something that mattered,” said Haley. “The M1 was the perfect product to start on. I would have used the M1 everyday that I lived and worked in Manhattan. It would have made getting around so much easier.”
Building an electric skateboarding company is no cakewalk. In the beginning, they couch surfed to meet up with prospective investors. They built a prototype in Dave Evans’ garage and hired day laborers, standing outside a Los Angeles Home Depot, to sand deck molds.
“This whole team has gone through hell and back and lived on peanut butter and bagels for over a week,” said Haley. “We’ve all personally bet on Inboard. That can be scary sometimes. But we believe in each other. And we believe in the product.”
Cash flow was always the biggest problem as it took a lot of money to buy parts and assemble the final product.
“Hardware is hard,” Haley said. “That’s why so many companies fail in this space. You need to have a team that really believes in the product, people that prop each other up during the hard-times and high-five each other during the good-times.”