More from Ken
It’s hard to imagine that in America—where cars are a defining part of our culture and our economy—we would have a scooter company valued at $2 billion. But we do.
Bird, a scooter-sharing start-up founded in April 2017, reached a $2 billion valuation by June 2018. Lime, a bike-sharing and scooter-sharing company, reached a $1 billion valuation within its first 18 months. Venture capital investment in bike-sharing and scooter-sharing companies increased 300 percent per year in 2016 and 2017. Funding in 2017 was more than $3 billion, and 2018 is on pace to overtake that. Lime is now an Uber-branded transportation service. Uber also acquired bike-sharing company Jump and is promoting it aggressively.
U.S. automakers, focused for the past several years on pivoting to electric and self-driving cars, have been blind-sided by yet another disruptive innovation. Scooters are not just an alternative method of propelling and piloting cars; rather, when combined with other new transportation options, they constitute an alternative to car ownership for a segment of the public.
The emergence of the lowly scooter as a viable pillar of transportation seems unlikely, even absurd. However, it is actually a logical development, given the new principles of business created by the Internet economy.
One of the most important of those principles is the platform. In the Internet economy, a platform is the framework—enabled by digital technology—that allows people to identify and purchase products and services, and to access those products and services. Unlike traditional platforms—for example, brick-and-mortar stores—platforms in the Internet economy allow a virtually unlimited number of people to rapidly sort through a huge number of potential products and services, and to access them more quickly and conveniently than ever before.
One effect of the platform is that consumers have nearly unlimited flexibility in the products and services they can access. Grubhub gives customers access to delivery from hundreds of restaurants. Uber gives people the option to access a car wherever they want and for whatever distance they want.
The platform principle of the Internet economy allows consumers to access products and services in highly tailored ways that fit each individual’s lifestyle, rather than allowing each product or service provider to dictate that experience.
Enter the scooter. A scooter is not a replacement for an automobile, but it is a critical option, enabled by a platform, that allows consumers to construct and direct a whole new approach to transportation that fits their specific needs and requirements. After all, about 60 percent of car trips today are less than six miles. Consumers who are able to, for example, pick up a scooter at a dock near home and drop that scooter off at a train station on their way to work, may find that car ownership is not the necessity it once was.
Amazon showed that once a platform is established, it can be embellished and expanded at will. The only limit to the types of offerings is the creativity of the company operating the platform. Amazon also showed that there is virtually no limit to the number of people who can use the platform.
In contrast, legacy companies tend to be defined by their traditional offerings. Ford and GM are car and truck manufacturers. They are pivoting toward electrifying their vehicles and incorporating self-driving capabilities, but even with these major changes, they will still be manufacturing cars and trucks. The platform model allows rapid, widespread access to multiple creative approaches that, in the aggregate, can allow a large segment of consumers to completely bypass the legacy product. For example, users could combine scooter-sharing, ride-sharing, and public transportation to fulfill their mobility needs in a highly tailored way, eliminating the necessity of owning a car.
This phenomenon is coming on strong in healthcare. Companies large and small are developing new platforms that can house a variety of approaches to health and healthcare—some that are traditionally in the purview of legacy health systems, some that create entirely new ways to access healthcare.
Virtual healthcare platform Teladoc, for example, started out offering telephonic and video visits for minor, routine health problems like coughs, rashes, and abdominal pain. The company has broadened to include behavioral health, dermatology, and sexual health, and, with the acquisition of Best Doctors, now draws on a network of 50,000 clinicians who can review patients’ medical records, provide advice about diagnosis and treatment, and help find local physicians.
An even more dramatic example is CVS Health/Aetna, which has been outspoken about its intent to create a new, nationwide healthcare platform populated by cutting-edge services. The company plans to focus initially on patients with diabetes, hypertension, hyperlipidemia, asthma, and depression, with a special focus on managing high-risk patients. They plan to treat patients in CVS stores and in patients’ homes, using digital tools and advanced analytics.
As the automobile industry is finding, a scooter company—especially a $2 billion scooter company—is not just a scooter company. It threatens the automotive industry by being one of many new options for people to transport themselves, made available by the platform principle of the Internet economy. Ford recently confirmed its intent to acquire scooter-sharing company Spin—a recognition by Ford that, with each new option offered to the consumer, it becomes less and less viable for automakers to compete by focusing within their traditionally circumscribed model.
Healthcare options are proliferating for American consumers. Thanks to the Internet economy, increasingly sophisticated platforms are allowing those options to be aggregated, organized, and delivered with more convenience than ever. While legacy healthcare organizations need to excel within their traditional purview, they also need to move aggressively to understand and participate in this new style of healthcare delivery that is being constructed within the Internet economy.