I teach an occasional class on innovation and marketing at a local university, and I find it very educational, hopefully for the students but especially for me.   The specific course is a 4th year capstone class for engineers, in which they identify an opportunity or problem, investigate customer needs, develop solutions and create a working prototype, all over the course of their final year.  If this sounds a bit like an entrepreneurial activity, I think you are right.

In my lectures I often talk about the Segway and its struggles for market acceptance, for several reasons.  First, the Segway is a technological marvel.  Second, the marketing that supported the launch created almost impossible expectations.  Third, it is clearly a case of a technology seeking a customer need.  The Segway story is a classic case of too much focus on the technology and not enough on the actual needs of customers.  In response to the Segway story, which many students today don't know, a student asked:  why are Bird and other electric scooters crowding our streets, when the Segway, which claimed to fill the same niche, failed?

Cheap, Easy Service

If you aren't familiar with the Bird scooters or others like them, you soon will be.  Here in my hometown hundreds of them were simply deposited on street corners and people started using them almost immediately. The scooters are very simple, powered with a small battery and can achieve perhaps 15-20 mph.  They emerged so quickly that there aren't definitive regulations or laws about their use.  Should they be allowed on the streets?  Should you be required to have a license or wear a helmet?  No one knows, because they reached critical mass adoption before the city was aware they'd become attractive.

The electric scooters fill a niche that the Segway was supposed to fill - simple, easy transportation across a short distance.  However, the Segway never took off while the scooters are overrunning the streets.  There are several key reasons why scooters are winning:

  1. They are a service, not a purchase.  Like the ubiquitous Lime bikes, the scooters are a service.  You can find them on almost any street corner, use them and leave them.  Segway used an ownership model and were relatively expensive to acquire.
  2. They are really easy to use.  Many of the people using the scooters grew up using Razor scooters, without a motor, so the learning curve is negligible. There's really very little to learn to use a scooter.  Many people can simply step on and go.  Segways require some training to use.
  3. The scooters are convenient and fun.  In Raleigh you can find the scooters all over town and be up and riding in moments.  Moreover, the scooters are useful but also fun.  The Segway was far too expensive and complicated to ever be convenient and rarely seem fun.
  4. Not to overemphasize the point, but the scooters are ubiquitous.  There's hardly a street corner in Raleigh where you won't trip over three or four scooters.

In other words, the scooters are familiar, easily understood, work in ways that people are already accustomed to, require very little education or training to use and operate in a fee for service model.  Users don't own the device or maintain them.  They seem readily accessible almost anywhere and the user does not have to leave the scooter in a rack or a charging dock.  In fact many seem simply abandoned where ever the rider completed their trip.

Learning from Apple and Airbnb

If some of these attributes (familiar, easy to understand, require little education, operate like a service) sound familiar, they should.  This is almost the same model Apple follows for its iPhone.  The phone is exceptionally simple to use, very familiar, well designed and until recently few people actually paid for the phone, they simply amortized the price over a contract.  We've become accustomed to having someone else care for, maintain and service our devices.  We want convenience, with few ownership responsibilities.  The electronic scooters fill such a niche and provide a business model and relationship to customers almost perfectly aligned to expectations and needs.  It's no wonder they've taken off so successfully.

It remains to be seen what the  authorities will do to regulate the use of the scooters on the roads and sidewalks - this is perhaps the only real risk to the scooter phenomenon.  Which should also sound familiar.  Airbnb has a similar model - a service not ownership, convenience without maintenance and one of the few barriers to its success will be local authorities who decide what can and cannot be rented as an Airbnb.

The takeaway?  Your innovation must fill an unmet market need, be exceptionally easy to understand and use, provide convenience, require little commitment from the user and ideally should be a service.  Learn from the examples of the Segway (an over-engineered marvel not quite right for the conditions) and the scooter (a simple solution almost perfectly aligned to the task).

Published on: Sep 12, 2018