The Dark Side of the Cloud
You’ve probably never heard of VanMoof. It’s a Dutch e-bike manufacturer. The style and technical innovations are ahead of the competition. An app lets users check battery status, lock and unlock the bike, track rides, and over-the-air updates make the bike smarter the longer you use it. And it all comes at a very reasonable price.
Sounds great? Well, not so much. The favorable price was one of the massive strategic mistakes. Furthermore, highly innovative components that were under-tested led to frequent failures that cost the company a lot of money in repairs and replacements. On July 18, an Amsterdam court declared the company insolvent.
The consequences of risky innovation and insufficient strategy
Insolvencies are not unlikely in the startup sector. And they entail consequences for customers and users. Anyone who bought a VanMoof for more than $2,000 now faces a total loss. The hardware remains in their possession, to be sure. But it becomes absolutely unusable if a part breaks (there is no longer a supply of spare parts) or the cloud platform still running behind the app is shut down (which is not unlikely in the coming weeks or months).
It has never been easier to innovate. Particularly in the area of digital services, hundreds of new solutions come onto the market every week. Some of them offer great value and competitive advantage to their customers. This is especially true for AI-driven solutions that suddenly increase productivity by a thousandfold or make things possible that were previously unthinkable.
It can be a competitive disadvantage not to jump on the bandwagon early. So let’s subscribe to one of the fantastic services (and cross our fingers that they don’t go bankrupt). But, as VanMoof shows, that doesn’t come without a risk.
Innovations can be prone to error, managers of the company can make the wrong strategic decisions, the solution can be blown off the market by competitors, further financing can fail, and so on. But is the risk really higher today than it was a few years ago?