Scooting to smart growth
I was fascinated to see how electric scooter hire firm Bird plans to scale its business. The approach is something akin to a platform meets a franchising model, meets a white-labeling model.
Independent entrepreneurs can sign up to the Bird Platform. What happens next? TechCrunch explains
The company will provide the independent operators with scooters, which they are given free rein to brand as they please, as well as access to the company’s marketplace of chargers and mechanics, in exchange for 20 percent of the cost of each ride. Bird says fleet managers, which may be independent entrepreneurs or local mom and pop bike rental shops, for example, can also collect and charge the scooters themselves.
Unlike the VCs throwing money at these firms, scooters don’t excite me much. They probably make sense as part of a strategically deployed transport mix in some cities, but they can be dangerous and, if left unchecked, can clutter up streets and pedestrian areas.
As such, they work best when heavily regulated – something that will impede the hockey-stick growth venture capitalists like to see. And that problem is accentuated if you factor in the slow pace at which local authorities tend to work.
Still, Bird’s scaling strategy is – on paper – an excellent way of being able to spring up where there’s demand with limited friction. It genuinely made me grin with appreciation when I read about it.
But the same problems remain. Will these ‘fleet managers’ follow the rules and give scooter hire a good reputation in their local area? Will they be held back by local laws? Will they be scared off if a customer gets badly injured?
I know VCs are encouraged to look at 'what could go right’ rather than 'what could go wrong,’ but were I investing in tech companies, my gut would keep me away from scooters entirely.