Famously, back in 2001, inventor Dean Kamen was going to change the world. The buzz just before the launch of his Segway personal transporter was astonishing. Tech investor John Doerr posited that it would be more important than the internet. South Park devoted an episode to making fun of the hype before the product was released. Steve Jobs said that it was “as big a deal as the PC”. But when it finally launched it was a commercial flop.
So the technology behind today’s rapidly growing electric kick scooter companies has been around for decades. Segways have been on the market for 17 years. Today’s electric kick scooters without the self-balancing of the Segway and with the increased range of lithium ion batteries came on to the market four or five years ago and are available for just a few hundred dollars online.
Yet by deploying them around a few cities and renting them out Lime and Bird have just raised hundreds of millions on valuations over $1 billion. And there are 11 other companies (Uber/JUMP, Lyft, Skip, Spin, Scoot, ofo, Skip, Razor, CycleHop, USSCooter and Ridecell) who have applied for permits to operate electric scooter sharing in San Francisco alone.
What’s going on?
The bottom line here is that what’s innovative in Lime and Ride isn’t the technology, but the business model. And that’s a hugely important lesson for startups and product managers alike.
My Venn diagram describing product management as the intersection of technology skills, UX skills, and business skills is more relevant than ever precisely because today’s innovations build on a combination of insane advances in technological capability, a design and user experience discipline that is making technology more human centric every day, and new, innovative, business models:
How we interact with technology is changing: New interaction models keep popping up, tearing us away from our clunky old desktops and laptops. First came mobile, then wearables, then all at once augmented reality, virtual reality, voice, bots, and AI seem to be changing how we use our technology and how we interact with it.
How we interact with each other is changing: Every day a new paradigm for social interaction pops up, from the heady days of email to chat tools, snapchat, and video apps. Who could have predicted how quickly Slack was going to take over our professional communication?
How we interact with the businesses and services we use is changing: But perhaps most significantly we are also seeing the emergence of several new business models. Try to remember just how revolutionary software as a service was just 10-15 years ago. In the past few years we’ve also seen the dominance of the app store model and experimentation in subscription services, pricing models, DLC in games, and so much more. Today you can even subscribe to a Volvo or Porsche where you pay a monthly fee and get a car with all the costs except fuel covered – including insurance, tax, servicing, etc.
And that’s the important lesson we can learn from the insane valuations of these electric scooter sharing companies: business model innovation is sometimes more important than building a better product.
So let’s stop thinking great products can only come from great engineers or great designers. MBAs and “the business people” have their place in product teams too. And we can only be successful by working together. Let’s stop focusing so much on the shiniest new designs and technologies, and simply make sure that the products we build solve actual customer problems in the best possible way. And sometimes that involves buying a commoditized product like an electric scooter from someone else and figuring out how to rent them out to users.