Recently I wrote about closing Bolt Motion, the startup I founded with my father 6 years ago after a successful crowdfunding campaign. We created Bolt, an electric skateboard with a focus on portability.

The reason we closed is that our startup never became profitable.

As expected for first-time entrepreneurs, we made several mistakes. The following are the main ones. I'm writing this as a reminder to myself, to avoid making the same mistakes in the future.

Mistake #1 - Impatience to Be an Entrepreneur

When I was a teenager in Italy, I read "The 4-Hour Work Week" and TechCrunch. I was dreaming of never having a 9-to-5 job. I was thinking:

"I will start a startup and be my own boss"

I wasn't so sure about pursuing normal education, but without any viable alternative, I enrolled in Engineering. Knowing that having a perfect score on my degree wasn't really my style, I always preferred to work on projects on the side. Over the years, I've made several DIY projects with my dad. I was taking care of the software and he handled the electronics.

In university, I had this idea for a small electric skateboard that could help me commute every day. With my dad, we turned that into a prototype, and then we started a crowdfunding campaign.

Thanks to crowdfunding, I was able to start a company. I surely learned a lot and gained valuable experience. But financially and emotionally, it was not successful. I ended up with a lot more stress than I was expecting.

While I do agree it's never too early to be an entrepreneur, I feel like it was too early for me to start a hardware company.

Being the founder of Bolt Motion was my first job ever.
I was 21, still living with my parents, without any salary or savings.

As many people say:

Hardware is hard.

It needs big capital to get started, iteration is difficult and slow, and revenue is small and non-recurring.

Having more experience in how companies work would have helped me. But maybe it was the fact of being naive that made me start. Otherwise, I would not have started at all. (I realize now that having a normal job isn't so bad after all. You have fewer responsibilities and always get a salary at the end of the month.)

If you want to be an entrepreneur at all costs, you will end up in a very stressful situation. Like the people who have this dream of opening a restaurant and put all their savings into it, only to close after 6-12 months because they don't have the skills required to run it successfully.

It's never too late to be an entrepreneur. The average age is closer to 45 years old than 20, as you might expect. The 21-year-old CEOs you see in Silicon Valley (the real place or the TV series) are the exception, not the norm. Keep working on interesting projects and use all the skills from your previous work experience and you will eventually become an entrepreneur. Do it on your own terms. Don't take it too seriously. Try to always have fun.

Mistake #2 - Not Having Enough Margin

When the crowdfunding campaign reaches its goal, the real adventure starts. Because that's when production begins. When our crowdfunding reached the goal, we had 200 Bolt preorders and about $150k in funding. In the campaign, you publish estimates for fund allocation and an ETA for shipping (like 9 months). This will never correspond to reality. Shit happens and you will end up late and over-budget.

We ended up being almost 1 year late on delivery, mostly due to a big problem with Customs that I will discuss later.

The cost of the product turned out to be higher than expected, leaving us with basically no profit at the end. There are so many hidden costs that you don't consider at the beginning: shipping, materials, packaging, assembly, VAT, taxes, accounting, rent, lawyers...

When doing estimates, take your best guesses and double them. Or, if you want to be extremely safe, triple them. Better to be safe than sorry. You will thank me later.

Mistake #3 - Overlooking Things When You Are in a Rush

Every time we rushed through things, we ended up making things worse. Every single time. It's better to take a moment to think. Always choose the right thing to do instead of the quick fix.

During production, we imported batteries from our Chinese manufacturer. Chinese companies often declare a lower amount when shipping to customers. They do this to lower the import taxes for the customers.

However, for an incorporated company, this is completely useless as the bigger part of the importing tax is VAT, which can later be used as credit. Moreover, there is the risk of being fined for importing goods with the wrong declared value.

We explicitly asked all our suppliers not to undervalue the goods for the reasons above. However, when importing the batteries, which was the most important part of our production (and the most expensive one), Customs asked us if the importing documents presented were okay.

We were rushing to receive the batteries, as it was one of the last components necessary to complete the skateboard, and we were already late.

We overlooked the value declared by the manufacturer and reported that everything was okay. We never had any problems with Customs before and never had a detailed control.

Unfortunately, this time Customs wanted to go a bit more in-depth and asked us to provide the bank transfers to the manufacturer to check that the value declared matched what we paid for. We realized that the manufacturer had declared a lower amount than what we paid for and immediately noted the mistake to Customs.

It was already too late.

They put the batteries under seizure.

Without the batteries, we couldn't finish the production and ship the skateboards to our customers.

We tried to get them back from Customs, as re-ordering them would take several months and be very expensive, but it was almost impossible. Communication with the Customs office alone was very difficult. We had to use legal email and wait 1 or 2 weeks for an answer. We had no idea if and when we could get the batteries back, and we had no idea what to tell our customers.

It took 7 months and a €10k fine.

Long story short, don't overlook things just because you think you are in a rush. It can be counterproductive.

Mistake #4 - Being Late to Market

Despite the issue with Customs and the delay, we were able to finish production and ship the products to customers. People were pissed about the delay, but the reception of the product was good.

When the crowdfunding campaign finished and the preorders closed, we were still receiving emails like "Can I buy a Bolt?" This was 2015, the product was new and was addressing a completely new niche. So we thought there was a nice market for an ultra-portable electric skateboard with good performance (and high price point).

We were in a sort of limbo. Demand was there, but we didn't have any product to offer.
We were totally relying on Indiegogo contributions, and when those ran out, we didn't have any other way of doing another batch of production.

After thinking about it, we decided to raise some angel capital with them. This way we had enough resources to do a 2nd batch. Everyone agreed, only some small details had to be figured out before funds could be transferred. By chance, we were approached by a family friend who liked the project and half-jokingly asked if we needed some investment. He had some money from an inheritance to invest.

The process of raising money lasted 1 year.

We had several meetings and discussions about our Business Plan. We re-wrote 5-year sales projections multiple times, listening to our potential investors. We defined Call and Put options. We hired external consultants as supervisors. We defined a repayment strategy for their investment.

We were a company of only two people and basically zero profit. As you can imagine, most of what was written in the 5-year plan turned out to be completely useless.

Mistake #5 - Overestimating the Demand

During investment discussions, we said multiple times that we should get to market as quickly as possible. It took us 1 year to raise money and several more months to get the product back to the market again. In the meantime, competitors started to appear like mushrooms. Boosted Boards, the leading company in the electric skateboard world, launched a small version of their popular electric longboard. They eventually went out of business in 2020. Chinese companies started producing electric skateboards, copying our photos, design, or logo.

In 2017, we launched a new version of Bolt with several improvements.

We had some sales, but the figures were far from what we expected. We made projections based on the idea that in 2 months of crowdfunding we got 200 preorders. We were expecting a somehow similar pace and invested most of the funds into having the warehouse ready to supply this demand.

But selling on your shop instead of doing a crowdfunding campaign is a completely different thing. It's really difficult to drive people to your site. You should expect 10x less or 10x slower. This is the post-crowdfunding effect.

Crowdfunding gives you a lot of visibility and people who are always looking for the latest gadget. They will be your early adopters, but it does not mean that your idea is validated and there is a market for it.

Having known this, we should have remained lean and done smaller production batches until we reached product/market fit. Trying to iterate as fast as possible and not caring about profit immediately. But it's difficult when you have investors waiting to get their money back.

Mistake #6 - Raising Money

Another thing that I regret was raising money. And going with the wrong people.

I wish I would have been wise and courageous enough to turn down the investment offer. The startup should have been closed after the crowdfunding. But I was ambitious and the idea had potential. Getting investors completely sucked the fun out of my startup.

When you get an outside investment, you are in debt. And for me, that's one of the worst feelings. I realized that I'm not comfortable with being in debt to other people.

An investment is money with strings attached—your signed promise that you'll make it 10x more.

So you are feeling the pressure to deliver, you can't make mistakes because of your resources.

We also chose the wrong people.

First, because we already knew them before, and it means the relationship is going to be ruined.

Second, because they were not experienced in investing in an early-stage hardware startup. These investments are really high risk and the loss should be expected. Unfortunately, they seemed not to realize this.

When we saw that the company was not going according to the plan, we put a lot of effort into trying to change its trajectory. We tried several different marketing strategies, but nothing changed.

I was feeling trapped and hopeless.

This was completely the opposite of what I wanted to be. I wanted to be my own boss to be free. And now I was just working for someone else and feeling terrible.

I was willing to close the company and move on, but since I was not the only shareholder, I could not do that. And somehow I had a sense of guilt about doing this to people who believed in me and gave me their money.

Eventually, I took the difficult decision to do an internship in Switzerland (my first real job), while working on my startup on the side.

Fast forward to the end of 2020, we decided to make a huge discount and sell every Bolt we had in the warehouse. Finally, we could close the company.

This was a difficult text to write, a lot of history and emotions condensed into 2000 words. I had to do it mostly for me, to write everything down before I forget.

I'm not a fan of thinking about the past with regrets. What is done is done and can't be changed. Take this as a learning experience to avoid making the same mistakes in the future.

Let me know what you think about this story on Twitter @lorenzcella