Excelsior-Henderson motorcycles: Could lean start-up methodology have averted a $100-million Mistake?

Abstract

This case applies the recently proposed lean start-up methodology to the failed Excelsior-Henderson Motorcycle Manufacturing Company. Company founder Dan Hanlon and his family pursued a dream to start a new American motorcycle company based largely on market leader Harley-Davidson’s inability to meet customer demand. Excelsior-Henderson’s founders followed a path of crafting and executing an elaborate business plan filled with goals and assumptions, with no customer discovery, validation, or iterative testing performed. The result was misjudging the complexities and financial demands of the motorcycle industry and an ultimate lack of customer response which led to a loss of US$100 million in capital and eventual bankruptcy. Students will learn to evaluate the challenges start-ups face through the lens of the lean start-up method, including customer discovery and the consideration of a minimum viable product (MVP).