Why Electric Scooters are the Next Big Innovation
They are slow, lower-range and many other downturns. And that’s the future.
It is no secret that Tesla is one of the most innovative companies of the decade. Before Tesla, electric vehicles were not a thing. They made the electric car more than possible; they made the electric car desirable while the automobile industry is shrinking fast. Tesla can make almost everything your gas-driven car does. However, the Tesla vehicles are expensive and demand a charging infrastructure that yet does not exist outside rich countries, and that’s a big deal.
The electric scooters, on the other hand, maybe only have 60 km of range, a maximum speed of 75 km/h and the price is just as expensive as a regular gas scooter. But, as I just read “The Innovator’s Dilemma”, by Clayton M. Christensen, I’ve thought about this subject. He points out that innovation flourish where we believe there’s not a market. That’s, literally, the definition of innovation.
My dad is a motorcycle nerd. The kind of nerd who knows every bike launching year, how the engine is made, and which bike is passing on just by their sound (yes, this is possible and he can do it). As my father says, electric scooters are just not worth it. We want harder, better, faster, and stronger choppers. And there it is, our Innovation Dilemma! The motorcycles companies are listening to consumers and making a better product as we demand. They will never develop a bike worse than the current models. However, while it looks like nobody would like a weaker electric scooter, now we see them becoming each time more popular. But why? Who are these buyers? Electric Scooters are not a luxury product as a Tesla? The answers are where we think there isn’t a market. Think about you have a teenage daughter, who must go to school, and you don’t have the time to take her there. At the same time, you don’t want her racing around or going too far from the school. The electric scooter is the perfect solution.
Scooters are, in general, targeted for in-city driving. Making the scooter as fast as 120 km/h just does not make a big difference. The gas scooter is an established product. In the last 10 years, few things changed. On the other side, the electric one keeps making improvements. The battery is getting bigger, the speed is increasing, and the more people buy this product, the more we need charging stations — which is not even close to popular in poor countries. As seen here, in Brazil there is 675 EV charging stations. This means 1 in each far, far away distance. In some time the electric scooter will be as powerful as the gas-driven, with the pros of been more eco-friendly and cheaper in cost/km.
The simple yet efficient Electric Scooter has the power to change the market more deeply than Tesla. Rather than focuses on the richest, the Scooter focuses on day-to-day driving.
What about the established big players?
Now, you and I know about the future of electric scooters — and we are just regular people that probably don’t work in this sector. Yamaha, Honda and Harley-Davidson must be doing something, right? Yes, of course. They are trying too. But these companies are fantastic at making the regular oil motor. The electric one is quite different, and the parallel is not so easy. Furthermore, the electric vehicle depends on the battery. These “regular” companies do not have expertise in such research and development. Actually, most regular vehicles companies use third-party batteries.
By these technical aspects, Yamaha, Honda, and Harley-Davidson do not have any advantage. We must understand the electric vehicle as a new product that uses the same old design.
That’s not all. These big regular oil companies sell hundreds of thousands of products by the year. They already expect these big numbers. If a new Yamaha motorcycle sells “just” thousands, it is considered a big fail. Yet, the emerging startup is trying to sell the first thousand and the same number would be considered a huge success. Now, can you picture these same numbers in a board meeting with Yamaha and some startups: “We sold about 10,000 units last year”. While the Japanese executives will try to cancel the project, the startup would probably invest even more, seeing this as a new opportunity.
That’s why big companies sometimes create a new startup in another place, far from the matrix, where relatively small numbers can be considered relatively big numbers. Where old processes and bureaucracy are not a thing. Yet.
The established companies will die, sooner or later
The scooter electric technology is such a new business that it still has many entrants, each one trying a different thing. There isn’t, at the time, The Main electric scooter company. Because this is an innovation, the market is not yet completely ready, and many companies will fail while others will rise like stars.
Almost all (if not all) companies respect the natural life cycle: they are born, they grow, they get old, they die. Many times, it’s when the company feels the strongest and the better that they can’t see new entrants. I’m not saying established companies are arrogant, but they are just as huge a cruise boat: they’re slow to change, but when change, they are unstoppable. The startup, on the other hand, is the speedboat: small, fast and efficient. Someday a new startup will overcome the established company just as David and Goliath.
