4 ms·

George Hotz (of all people) had a great take on e-scooter as a business model. If the startup/company puts up all the capital, has marginal costs and competiti

George Hotz (of all people) had a great take on e-scooter as a business model. If the startup/company puts up all the capital, has marginal costs and competition, there is never any potential for "takeoff." Impossible trifecta. That's why he thinks waymo is doomed. Uber showed that even a handful of competitors can discipline prices enough to make profiting hard. uber can at least scale without buying cars, but competition means tight margins. It's ironic that SV-Startup world accidentally created a Perfectly Normal Business Sector and found it bemusing. It's emblemagic of current private sector conundrums. Inasmuch as price competition exists, the value of the S&P 500 approaches zero. That's chalkboard extremism, obviously... OTOH, while "Monopoly Requirement" is too strong a descriptor but "moat" is not strong enough. The other cons (ugly/dangerous/etc.) are emblematic of current public sector conundrums. To scale scooters/biking, we need a proficient public sector. Regulation for basic safety that isn't regulating to death, or regulating badly. Also, how are we an advanced global civilization but can't adapt our cityscapes any better than literal iron age brutes. As we advance in some fields, the fields that do not advance become blatant. Our forebears dug canals with sticks, and often did a very impressive job. We can't 100X digging with sticks?

paxys 6y ago
What killed e-scooters was regulation, not competition.
- bsder 6y ago
  What killed e-scooters is the fact that they are never where you need them and they are always in all the places that are annoying. If I'm hitting the grocery store, I need a scooter near my house. The problem is that this isn't a volume point, so nobody puts more than one at a convenient point and its always gone. Once I get to the grocery store, I need one to come home. This IS a volume point, but quite a few people walk to the store and then ride home. This drains the volume point so I can't count on having one when I need it. However, I will be tripping over scooters generally at the halfway point (there's a very popular hipster coffee shop) when I walk to that grocery store--a point where the cost isn't worth it anymore so now the scooters just piss me off. The problem to be solved wasn't scooters--it was roads. We need dedicated low-speed infrastructure--walking, biking, scootering, whatever, that doesn't allow cars. However, fixing that is slow, not profitable for just you, and requires that you move the political apparatus.
  - dalbasal 6y ago
    IMO, both wrong. Hotz right. :) Regulation can't be true, because escooter rentals boomed and busted in hundreds of cities around the world. All different regulatory angles tried. The other points (infrasture, convenience, etc.) are not relevant. Scooter rentals didn't fail because they were unpopular. They were popular, whatever the shortcomings. Demand exists. The problem is the business model. Maybe it can be run sustainably, but it can't be run very profitably. It's not going to generate enough cash to fund exponential growth and profit margins are disciplined by a market. There's no shortage of desire to bring tech's business models, funding models, norms and mentality to other areas. Why not bus companies? Why not wework? There has been a lot of this recently. Inevitably, these companies encounter some difficult realities. The localized monopolies, zero marginal cost and zero capital of software businesses are requirements for many of those industries' norms. Those norms often don't work, once standard elements of "perfect markets" are brought in.

paxys 6y ago

What killed e-scooters was regulation, not competition.

bsder 6y ago
What killed e-scooters is the fact that they are never where you need them and they are always in all the places that are annoying. If I'm hitting the grocery store, I need a scooter near my house. The problem is that this isn't a volume point, so nobody puts more than one at a convenient point and its always gone. Once I get to the grocery store, I need one to come home. This IS a volume point, but quite a few people walk to the store and then ride home. This drains the volume point so I can't count on having one when I need it. However, I will be tripping over scooters generally at the halfway point (there's a very popular hipster coffee shop) when I walk to that grocery store--a point where the cost isn't worth it anymore so now the scooters just piss me off. The problem to be solved wasn't scooters--it was roads. We need dedicated low-speed infrastructure--walking, biking, scootering, whatever, that doesn't allow cars. However, fixing that is slow, not profitable for just you, and requires that you move the political apparatus.
- dalbasal 6y ago
  IMO, both wrong. Hotz right. :) Regulation can't be true, because escooter rentals boomed and busted in hundreds of cities around the world. All different regulatory angles tried. The other points (infrasture, convenience, etc.) are not relevant. Scooter rentals didn't fail because they were unpopular. They were popular, whatever the shortcomings. Demand exists. The problem is the business model. Maybe it can be run sustainably, but it can't be run very profitably. It's not going to generate enough cash to fund exponential growth and profit margins are disciplined by a market. There's no shortage of desire to bring tech's business models, funding models, norms and mentality to other areas. Why not bus companies? Why not wework? There has been a lot of this recently. Inevitably, these companies encounter some difficult realities. The localized monopolies, zero marginal cost and zero capital of software businesses are requirements for many of those industries' norms. Those norms often don't work, once standard elements of "perfect markets" are brought in.