morning Daniel can you hear me okay loud and clear sorry I'm a minute late the train was stuck outside the station again no problem we haven't started Korea how was the trade show last week busy my feet still hurt but it was worth it we had a lot of people stop at the stand to look at the gray version and two bike shops asked about wholesale I'll share the full notes in the channel it It doesn't need meeting time. Did anyone ask about the old model? A couple of people, yes. Which reminds me we should talk about the leftover stock at some point. Let's fit it in after production. Okay, let's start. Okay, I think everyone's here. Good morning all. This is the weekly launch sink for Beacon 2 and today is Monday, October 12th. I've got four things on the agenda. First, the beta feedback and the firmware problem. Second, production and freight with Castro. Third, pricing where we need an actual decision today. And fourth, the launch plan, including the retail side with Northgate. If we have time at the end, Daniel wants to talk about battery certification. Yes, I'd like five minutes on that at the end, if we can. It's not urgent yet, but it will be. Noted, Tomas, Priya, anything you want to add before we start. Nothing to add. I just need a firm answer on volumes today, because Kestrel is holding a production slot for us and they won't hold it forever. Same from me. The launch email and the landing page both depend on the price, so I really hope we leave this call with a number. That's the plan, let's go in order. Daniel Beta Feedback. Sure, so quick recap for everyone. We shipped Beta Units to 64 riders, split between Lisbon and Portland. As of Friday, 51 of them have sent at least one feedback form, which is a pretty good response rate for a beta. The headline is positive. People like the brightness. They like the mouth, and almost nobody has complained about battery life. The battery is the 2600 mAh and riders in Portland are getting around 11 hours on the flashing mode, which is better than we promised. It's great news, what's the bad news?
The bad news is the brake light. On firmware version 1.4.2, the brake light sometimes stays on after the bike stops. It doesn't turn off until the rider moves again. Nine riders reported it and we reproduced it in the lab on Thursday. It's a bug in how we read the accelerometer when the bike is completely still. Is that a safety problem or is it just annoying? It's mostly annoying. The light is on, not off, so the rider is still visible. But it drains the battery faster, and it looks broken, which is the bigger problem for reviews. If a journalist sees that, it's the first thing they'll write about. Agreed, we can't launch with that. Do we have a fix? We have a fix. It's infirmware version 1.4.3. The change is small, but I want the beta riders to run it for at least a week before we lock the launch firmware. My plan is to ship 1.4.3 to all 64 beta testers by Wednesday, October 21st. Okay, Daniel, so that's yours. Firmware 1.4.3 out to the beta testers by Wednesday the 21st. Yes, that's mine. Does the fix change anything in the hardware? Because if it touches the board, I need to tell Castro right away. No, it's firmware only. The board stays exactly the same. Keskerel flashes whatever image we send them on the production line, so we just give them the final file before the run starts. Good, then I'll need that final file, at least five working days before the run. That's fine, we'll be well ahead of that. One more question on the beta. Did anyone mention the mount on carbon handlebars? We had that support question last year with the old model. people asked about me and the answer is the same as last year. The rubber shim works on carbon bars up to 35 millimeters. I'll add a line to the f of Q, but I don't think it needs to go on the agenda. Fine, let's keep moving. Anything else from beta? Just one number that might help pre- when we asked if they'd recommended to a friend, the average was 8.6 out of 10. Oh, that's useful. Can I I quote that in the launch material.
Only if we say clearly that it's from our own beta group, 64 writers, not from a survey of customers. I don't want it to look bigger than it is. Of course, I'll word it carefully. Before we leave the beta, Daniel, what did people say about charging and the weather? Portland has had a lot of rain this month. Charging has been a non-issue. Everyone likes that it's USB-C now instead of the old micro USB port. A full charge takes about two and a half hours from a normal phone charger. On weather, Portland has been a good test. We had riders out in heavy rain for over an hour at a time, and we haven't had a single water field. The housing is rated IPX6 and so far it's behaving like it. What about the strap? Last year the strap was where most of the returns came from. The new strap is much better. This thicker silly Kong and we changed the hook. One rider in Lisbon broke a strap, but he told us he stretched it over a very thick arrow ball, so I'm not too worried. We'll keep an eye on it. Did anyone comment on the colours? I know the grey version was a bit of a gamble. A few people said the grey looks better in person than in the fold-ups. Nobody asked for more colours, which honestly is a relief. Good, so beta is in decent shape apart from the brake light. Let's not add anything else to the firmware unless it's a real bug. I'd rather ship 1.4.3 with just that fix than open the door to new problems. Agreed, one fix, one week of testing, then we lock it. OK, Tomas production. Right, so as you know, our manufacturer is guest or components in Penang. They've offered us a production slot starting the first week of November. The original plan was a first run of 6,000 units. My recommendation is to go smaller with a first run of 4,800 units. Why smaller? Two reasons. First cash. 6,000 units ties up a lot of money before we know how the launch goes. Second, the return rate on the previous model was 3.7% and most of those returns were in the first two months. I'd rather learn from the first batch and fix things in the second run than sit on 6,000 units with a problem we haven't found yet.
From the engineering side, I agree. If there's a second hardware issue we haven't seen, I'd rather find it on 4,800 units than on 6,000. Will 4,800 be enough for the launch though? We already have pre-orders. Good question. How many pre-orders do we have right now? As of this morning, we have 1,321. Sorry, let me check. No, So, 1,312, 1,312 pre-orders. So even with Northgate's opening order, 4800 covers us comfortably for the first six weeks. And Kestrel told me a second run could start about five weeks after the first, so we aren't locked out if demand is higher. Okay, I'm convinced. Let's make that the decision. The first production run is 4,800 units, not 6,000. How moss can you confirm the slot? Yes, I'll confirm the production slot and the 4800 units with Castrel by Friday, October 16th. They asked for written confirmation by the end of this week anyway. Great, so that's on you by Friday the 60. Toe moss while we're on production. Where are we on packaging? Packaging is basically done. The box is the same size as last year, which keeps our shipping cartons the same. The difference is that it's now fully recyclable. There's no plastic window anymore, and the insert is molded paper instead of foam. Castrel already has the final print files. And the manual, I remember we talked about cutting it down. The printed manual is now a single folded sheet, mostly pictures in five languages, English, Spanish, French, German, and Portuguese. The full manual lives on the website. That saves us a little on cost and a lot on weight. Did the QR code on the sheet get fixed? The first proof pointed to the old support page. Yes, that was fixed in the second proof. It now goes to the Beacon 2 support page. I checked it myself last Wednesday. Good, so no action needed on packaging, it's covered. Thank you, Tomos.
While we're on Castro, there's also freight. Freight has gone up. When we did the budget in the summer, freight from Penang was $2.10 per unit. The latest quote is $2.65 per unit. That's a big jump. It is. It's about a 26% increase on freight. It doesn't kill the margin, but it's not nothing. The question is whether we ship the whole first run by sea or put part of it on air freight so we hit the launch date. What's the difference in timing? Sea is roughly four weeks door to door. Air is about six days, but it costs a lot more per unit. I don't have a firm air quote yet. I only have a rough number from last year and I don't want to use an old number for a decision like this. Could we fly just the pre-order units and send the rest by seat? That's exactly the option I want to price. Preorder units by air everything else by sea Let me get two proper quotes one for all sea and one for the split and we can decide with real numbers Okay, when can you have those I can have both freight quotes by Monday October 19th Good two freight quotes see versus the air and sea split by Monday the 19 and then we decide on freight at next week's sake Tomas Priya mentioned the old model. How much beacon one stock do we still have? 730 units of beacon one in the warehouse. My plan, which we agreed last month, is to sell them at $49 through our own website, starting the day beacon two launches. That's already set up in the shop system, it just needs switching on. And that's only beacon one right. I want to be careful that nobody thinks the new light is being discounted. Only Beacon 1. The $49 price is for the old model and only on our website, never at Northgate. 730 sounds like a lot. Will it compete with the new one? Not really, it's a different customer. People who buy Beacon 1 at 49 are people who are never going to spend 79. And once those units are gone, we are done with it. Fine, it's already planned and agreed, so there's nothing new here. Let's not spend more time on it.
which brings us to the launch date because it's connected. The plan was to launch on November 3rd. With the firmware fix, the beta week, and production starting in early November, I don't think November 3rd is realistic anymore. I was afraid you'd say that. I know, but I'd rather move it once now than slip twice later. My proposal is that we move the launch from November 3rd to Tuesday, November 17th. That gives Daniel the full beta week, gives Tomos time for the first shipment, and it's still well before the holiday season. November 17 works for engineer. For operations, the 17th works if we decide freight next week. If we wait longer than that, it gets tight. Marketing can work with the 17th. I'll have to move the press embargo and the email schedule, but it's doable. To be honest, a Tuesday launch is better for email anyway. Then it's decided. The launch date is now Tuesday, November 17. Everyone, please update your plans to that date. Now pricing, we've gone back and forth on this for three weeks. The two options on the table are $79 and $89. Priya, give us the marketing view. Okay, my view is $79. The main competitor lights in this category sit between $70 and $85, and at $89 we're the most expensive light on the shelf at Northgate. We'd have to explain why. At $79, we're premium but still in the normal range, and the pre-order customers already saw $79 on the landing page as the expected price. I'll argue for 89, just so we look at it properly. With freight going up to 265, our margin at 79 is thinner than we plan. At 89, we have room for the retail margin Northgate once, and for promotions later. How much thinner are we talking about? At 79, with the new freight, we are still above our minimum margin, just not by much. fine as long as we don't discount heavily in the first quarter.
That's the key point for me. If we're above the minimum margin at 79, I'd rather win on price in the first season and protect the brand by not discounting. So here's the decision. The retail price for Beacon 2 is $79. We're not going with 89. And we agree now that there will be no discounts below 79 before the end of March. Thank you. That makes my life much easier. by me as long as we hold the line on discounts. We will, I'll take the website. I'll update the pricing page and the product page to $79 by Friday, October 23. I want it there before the launch email goes out. Can I ask something about the competition before we move on? Has anyone seen the new life from the big brand that launched in September? I have, it's $85, it's brighter on paper, but it doesn't have a brake light at all and the battery is smaller. Review so far are mixed. People complain about the mount. Which is one more reason not to go to 89. If they're at 85 without a brake light, we look good at 79 with one. That's how I see it too. Priya, I'd like the comparison to be factual if we use it anywhere. Only things we can show, like the brake light and the battery size. No claims we can't back up. Understood, I'd rather not name them at all in the ads. I'll keep any comparison for the sales sheet, and only with facts from their own spec page. OK Priya, the launch plan. Sure, the total launch marketing budget is $18,500. Roughly half of that goes to paid social in the first two weeks, about a quarter goes to the retail launch with Northgate, and the rest covers photography, the video and the press kit. And the email. The launch email goes to our full list, which is about 31,000 people on launch morning. I have a draft, but it still says November 3rd and $89, because I wrote it as the worst case. I'll rewrite it with the new date and the $79 price, and I'll send the revised draft a Maya by Tuesday, October 20th. Her fact, send it to me by Tuesday the 20th and I'll review it the same day. One related thing on the website. When we opened pre-orders, the page went down for about 20 minutes because of the traffic. Do we expect that again on launch day?
We move the shop to a bigger hosting plan in September, so it should be fine. We also tested it with about ten times the pre-order traffic and it held up. Good to know that was a bad 20 minutes. There's one more idea I want to raise. I've been talking to an agency about a TikTok influencer campaign. Around ten creators, mostly urban commuters, with a budget of about $5,000 on top of what I just described. On top of the 18.5. Yes, on top, that's the catchy. Do we have any data that TikTok works for us? Last year, almost all our sales came from search and from the bike shops. Honestly, no, we've never tried it, so we have no data. That's part of why I wanted to test it. I like the idea, but not for this launch. We just moved the date, we just cut the price, and we're adding freight cost. I don't want to add $5,000 for a channel we've never tested in the same month. Let's not do the TikTok campaign for the launch. We can look at it again in January with a much smaller test. That's fair, I'll park it. No TikTok campaign for the launch. Okay, so to be clear for the notes, the influencer campaign is not happening now. We'll revisit it in January. Where are we with press units? Press units are already out. We sent 8 units last Thursday to the reviewers we worked with last year plus two new cycling podcasts. Everyone has agreed to the embargo which now has to move to November 17. I'll let them know with the general date change so that isn't a separate task. Are the press units on the old firmware? They are that's a good point. Then they'll see the brake light button. Can they update the firmware themselves? They can through the website update. I'll include a short note when we send the date change, with a link to the update once it's released. Good, I'd rather the update before they start testing properly. Okay, that's covered by the date change email, so no new item. Next, next Northgate. Yes, so Northgate Outfitters has confirmed they'll carry Beacon 2 in 42 stores from launch day. That's up from the 30 stores they originally talked about. Their buyer is a leaner Varga and she asked for a short briefing before their store teams get the launch pack Did she say anything about the opening order quantity?
She mentioned around 600 units for the first month, spread across the 42 stores. But that's not confirmed, so please don't plan on it yet. OK, I'll treat 600 as a soft number, until we have it in writing. What does Elena need from us? She wants the final price, the launch date, the product photos and a one-page sheet for the store staff. Basically, how to mount it, how to charge it, and the answers to the three most common questions. Now that we have the price and the date, I can do it. I'll brief Alina Varga at Northgate by Tuesday, October 27th. Good, Priya, you have the Northgate Briefing by the 27th. And please include the carbon handlebar answer Daniel mentioned. That's exactly the kind of question store staff get. Good idea, I'll add it. I can send you the exact wording for that today. quick one before batteries, support for launch week, who's covering it. Same setup as last year, our two support agents plus me as backup. Last year we had about 140 tickets in launch week and most were about the strap and the mount. This year the strap is better so I'm expecting fewer. And the carbon handlebar question, which is now going into the FQ. Exactly, if the FQ is good, the ticket volume drops a lot. Last year we had no FQ ready on launch day and it hurt us. OK, no changes there. Let's keep last year's Rota. Daniel, you wanted five minutes on battery certification. Yes, so, because the light has a lithium ion battery, it needs the UN-38.3 transport test before we can ship it by air. The Castro's lab already ran the test on the 2600 mAh cell, and it paths. The certificate is dated September 29th. What we don't have yet is our own summary document, which retailers and freight forwarders ask for. Northgate will almost certainly ask for it, and so will the air freight company if we fly the pre-order units? So this matters, but my freight quotes too. If we go with the air split, the foreorder will want that summary before they accept the shipment. When can you have it?
I'll write the UN-38.3 test summary and share it with Tom Moss and Priya by Friday, October 30th. Okay, Daniel, battery test summary by the 30th. Daniel can you send me a draft earlier, even an incomplete one, if a folder asks next week, I want to show them something. I can send you the certificate itself today. The summary will follow by the 30th. That WUGS. Daniel, one thing people keep asking on the preorder page is whether there's an app. Not at launch. We decided that in August and nothing has changed. Everything you need is on the light itself, the button and the modes. Firmware updates go through the website updateer on a computer. An app is on the list for next year, but it's not part of this launch. Okay, I'll make sure the FAQ says that clearly. So we don't promise anything we are not shipping. Good, clear, and honest. No app at launch. OK, we're nearly out of time. Let me recap the decisions, and then I'll set up the next big meeting. The decisions today. The launch moves to Tuesday, November 17. The price is $79, with no discounts before the end of March. The first production run is 4,800 units, and there's no tick-tock influencer campaign for this launch. And freight gets decided next week. Right freight gets decided at next week's sink once Tomos has the quotes and one more thing from me. I'll schedule a go, no go meeting for Tuesday, November 10, one week before launch. Everyone should come to that meeting with a clear yes or no for their area. I'll send the invite today. Should that include cestral? Not the whole meeting. No MOS can bring their status. If we need them, we'll do a separate call. That's fine. I'll have their shipping status by then. Great thanks everyone. Same time next Monday. Thanks Maya, bye everyone. Thanks bye. Bye.