new product factory floor design & prototype financing

timallardtimallard Posts: 1subscriber
Market: Low cost bicycles worldwide.
Product: Cheap automatic transmission for said bikes, same cost as existing gearing or less.
Advantages: For the mass market a replacement part that changes "gear" for you on a hill, otherwise acts like any single speed. This can be built to fit any standard hub or gearing system, any bike in the world.
Project Status: Patented, 7,059,618, two proof-of-concept and five subsequent prototypes including a decent demo for a kids bike.
Special concerns: This product is entirely new, except for a single gear used that people would recognize, it`s a fluid drive. Therefore, to manufacture these at high volume requires some newly designed machinery able to knock them out, and that prototype represents the factory floor version, not a working one-off.
To sell to the `Bigs` this project needs a captial investment of about $200k to have something for companies such as Pacific Cycle, the highest volume dealer of bicycles in America for example, to look at seriously and sign.
Annual sales worldwide is about 35 million bikes a year at this price point. This is a very large potential market for growth. Yet, since it`s entirely new, a utility patent, funding sources that have the knowledge for this type of investment are few and that`s the problem for this small under-capitalized small sole-proprietor business with a big patent to commercialize on.
So, questions to the list ??
I need help in funding for this next crucial step, that of outlining the factory floor spec`s and in making the prototype that would be built by the new machines to put in the hand of the agent to get the license agreement signed.
thanks for all replies,
 
 

Comments

  • Innovator7Innovator7 Posts: 9subscriber
    35M a year sales figure can be deceiving considering there`re 1.3 billion Chinese.So i`m curious about bike sale figure for USA.Interestingly, they make battery-powered bikes in China.  There goes the health benefits of biking.I see a problem with automatic transmission: no more acrobatic moves.
  • timallardtimallard Posts: 1subscriber
    Steve, the new Shimano uses gears and is "very expensive" compared to the fluid automatic.
    The cheap fluid automatic has no gears, it`s a very simple device with few internal parts and self-lubricates the seal so is very low maintenence. It`s a perfect match for the cheapest bikes since you get a way to go up a hill on a one-speed bike.
    Slick trick. But the market for this is low-end, not hardcore cyclists. The way it changes "gears" is to allow a fluid to slip and this is inefficient so racers don`t want these but Sally Sue who hates to shift will love them.
    yours,
  • timallardtimallard Posts: 1subscriber
    With annual sales figures I try to be conservative. In the USA, a few companies make up 99% of low-end volume and amount to some 10-million units a year, India/China do make up most of the world market so it`s conservative to say 25-million a year (and as you say it`s getting motorized pretty fast).
    Then I can be confident to say the manufacturing volume has to pump out over 1,000/hour to do 10-million. So, it makes sense to consider the capital investment in brand new equipment for a potential market this large.
    These don`t change fast enough to prevent you from being fairly tricky ... you can still play around a lot with them. For tricksters you tune it to handle more torque (it`s easy to adjust the viscosity on certain models).
    Freeriders and downhillers like the fluid drive since they don`t have to be distracted with shifting and don`t care about efficiency.
    yours,
  • timallardtimallard Posts: 1subscriber
    Good insights.
    To give a value to them, begin with the after-market parts retail price being about $15, somewhat the same as an average 6-7sp freewheel. The target market figures given in the USA and worldwide is probably OK for this market of bikes which retail for $250 or less, especially those less than $100, and which can use automatics instead of a single speed on the same hub.
    These are perfect for non-cyclists that ride the cheapest bikes in a most obvious way.
    To sell to the large manufacturers, they need to see a realistic prototype of something brand spanking new that`s never been manufactured before yet convinces them that it`s the real deal.
    That`s what the next stage of development is. To prototype the actual product that threads on to a standard freewheel hub or cassette. It`s what you`re going to see in the store (five distinctive prototypes have been built so far that fit standard 8-9 cassettes).
    Then to map out the factory machine requirements and methods used that produce them. If someone wants to sign on for a million units, your machines must assemble a minimum of 1,000 an hour per line for a volume market this large, the cost will not be low enough to compete if they take too much time each to assemble.
    This design can compete for el cheapo because the costs are low enough, machines are simple enough and the rider gets a reliable transmission.
    Most of the bicycles in the world are used in transportation and commerce on rather level riding. This transmission is perfect for them. The mass market in the USA is much smaller for the low-end bike than much of the world still using freewheels.
    Fluid drives have advantages for this large market because it`s easier on the rider to not do anything but pedal the whole time, hit a hill, it`s still work to climb up the hill but the torque doesn`t go too high like being in too big a gear.
    Does this explain things better ?
     
  • timallardtimallard Posts: 1subscriber
    My agent has had Pacific at the table waiting for this next prototype.
    What they need is the production prototype for a brand new technology that`s based on fluid machines from the 1940`s and oils from the 1970`s to create a cheap automatic bike tranny.
    This product design is ready now, but in view of what these manufacturers require is this next one is an engineered product prototype. That means engineering the fluid dynamics, getting rider feedback and tuning the ride via engineered constraints so predictive, then also, consider how each part is made for final assembly so it`s viewable to these licensees as a benefit and they want to sign.
    Appreciate the interest. There is another side to fluid drives, some tidbits:
    Get rid of the shifters and the rider is able to ride anywhere without worrying about gearing at all, it`s actually pretty fun. You can "shift" by either easing up on the pedal to get a higher "gear", or hammering to get into low.
    What`s not obvious is that it`s also perfect for downhill racing, free-riding and being a cyclocross rider, it`s a blast for cross, you can`t get stuck in the wrong gear, this bails you out right at that moment, but you still use your gearing.
    This item is called the "Save Your Butt" freehub because it replaces the freehub instead of the cassette gearing. Not much difference in weight but if you`re in too big a gear it`ll slip for you until the torque has gone down again, essentially lower the gear and allowing your legs to turn over and still putting a lot of power to the rear wheel. The product title fits the market but it`s a small volume compared to the cheap automatic.
    Yet, I`m still needing help with financing the production prototype. My company has no capital, the patent is the only relevent collateral but what is a fair deal to borrow $200,000 to move this to the table. What return should an investor expect? Any info like that would be very helpful.
    Thanks.
  • timallardtimallard Posts: 1subscriber
    I`d seen the Shimano & Ellsworth in mags before but not the CVP unit. All are expensive and require a custom hub for sure.
    That`s a big difference, my device can be made to fit any standard hub worldwide, and, since it`s cheap and gives you automatic operation at the same price, it`ll beat everything up to this high-techie design which can only appeal to the funded hardcore cyclist that wants an automatic, but also a chain/gear drivetrain for it`s efficiency (not even a low volume market).
    So what`s a better investment, the one a something new that has all bikes, existing and new, as a potential market, or, build something to a rather narrow, expensive niche?
    I chose the worldwide market, that`s what this product is for. The high techies hate the idea of a cheap automatic. But, if you ride a one-speed and have ever had to get off and push up a hill, this is the transmission for you!! That`s exactly why it`s better if the price is the same as the one-speed.
    This is something all the others can`t touch, it`s an advantage of using fluids for a transmission if you`re willing to trade some efficiency, it`s also the reason the patent is so solid, no one makes them.
    I want the cheap market, in tens of millions of units a year, that`s what the design is for.
     
     
  • timallardtimallard Posts: 1subscriber
    Hey man, you don`t have to sell me on it. I think you have a great product. I was just sharing that other tranny since I happened apon it. The most successful disruptive technologies start at the low end of the market. That`s you. Go for it!
  • timallardtimallard Posts: 1subscriber
    Right on, didn`t mean to go on a winger, mainly wanted to point out the differences since a lot of folks have a hard time understanding the thing.
    cheers,
    tom
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