In 2016, Alta Motors was on the top of the world. The firm’s Redshift MX electric dirt motorcycle earned the #1 spot in the AMA EnduroCross racing series.

The Redshift MX also took first place at the Geneva Supercross in 2017, beating out the top gas-powered motorcycles. Success kept coming the firm’s way, too.

On a Saturday night in Reno, Nevada, later that year, an Alta Motors bike became the first electric motorcycle to make the podium in an AMA Pro National race. Its rider, Ty Tremaine, said this after the race, “The night was almost perfect. After winning the bracket race, the energy of the crowd was amazing. I couldn’t be happier with the way the motorcycle performed.” Commenting on Ty’s performance, Derek Dorsten, Alta’s Chief Technology Officer, said, “I’m really happy with this step. We’re homing in on a good setting and Ty is really starting to shine on the Alta. With this result we are demonstrating the trajectory of Alta and electric motorcycles.” Regrettably, less than a year and a half after that night in Reno, Alta Motors failed.

Several articles about Alta Motors allow us to peek behind the scenes and better understand why the company failed. There are three factors that played a major role in Alta’s demise.

In March 2018, Alta Motors and Harley-Davidson formed a partnership. As we discuss in different parts of this text, partnerships between entrepreneurial firms and larger companies are not unusual in that each firm anticipates a benefit by collaborating. The deal was that Harley-
Davidson would provide Alta Motors with much-needed investment capital, if Alta would help Harley build electric motorcycles. Just six months after announcing the partnership, Harley-Davidson pulled out. Most observers attributed the split to a clash of cultures. Harley-Davidson was an old-school Midwestern industrial company, while Alta Motors was a scrappy Silicon Valley startup.
Apparently, the two cultures simply did not mesh.
For the reasons mentioned above, Alta Motors ran out of cash and was not able to raise capital to continue operations.
To the firm’s credit, it bowed out in a gracious manner.
In its final Instagram post on October 1, 2018, the company said to its followers: “Our sincere gratitude goes out to all those who have believed in Alta over the years. Thank you for your support and being a part of the #FutureOfFast......

Discussion Questions:

1. Of the three reasons mentioned in the case as contributing to Alta Motors’ failure, which one do you think was the most damaging? Explain your answer.
2. What environmental trends are working in favor of and what environmental trends are working against the electric motorcycle segment of the larger motorcycle industry?
3. According to the feature, the median age of motorcycle riders in the United States is 50 years. What can future electric motorcycle startups do to try to appeal to a younger demographic?
4. What can startup founders learn about the importance of understanding the industry a firm is entering via Alta Motors’ experiences?