The Value of Innovation

Chapter 1The Importance and Challenges of Innovation

Clifton Leaf, editor-in-chief of Fortune magazine borrowed a stranger’s silver and orange bicycle and rode it two kilometers. When he was finished riding, he leaned the bike against a street lamp at a city intersection. Clifton was benefiting from the remarkable business model of Mobike, a Beijing-based start-up whose more than 100 million registered users do much the same thing an average of 20 times a day. This is more than three times the rate of use by other types of ride-share bikes. Many cities have bike-sharing where users typically pay to release the bike from a docking station and return it to another docking station within a particular timeframe. Mobike has eliminated the cumbersome docking process entirely. A user downloads an app, finds a bike nearby, and scans a QR code to unlock it. After using the bike, the user drops off the bike wherever they would like, because GPS and other wireless technologies are built into the bike’s chassis, allowing the company to track its whereabouts. A smart-locking system bolts the rear tire in place until the next user shows up [1].

The old dock-based sharing systems are like the first-generation PCs. According to Davis Wang, CEO and co-founder of Mobike, while first-generation PCs were attached to desktops, Mobikes, in contrast, are like smartphones—you can take them anywhere you would like. Today, Mobike has more users than Uber, although it has been in business only two years. ...