I’m assuming when writing this post that you might find $100M difficult to come by (although not to rule out anybody who thinks otherwise). This post could be called ‘creating a bike sharing business for the rest of us’, with the size of the business only dependent on the size of the investment you put in.
Here is a case study:
Jack signs up for a BYKE partner account using his Facebook account as the identifier. With this account he creates a unique program name, and thinks that his local town Cambridge is a sensible place to target. He finds that cambridge.byke.mobi is still available, so he secures this program name.
Now, he needs some bikes. Under a conventional bike sharing scheme, Jack would have to buy the bikes and racks, which at $3000 a bike, can be quite expensive. However, Byke is different, because the bikes already exist. They are sitting unused in people’s Cambridge back yards, and those bike owners could be earning from the bike’s rental. So all he needs to do is communicate to those bike owners that they can be earning from their bikes.
Communicating the message can be done several ways
- Local Facebook Ads
- Local Google Ads
- Classified adverts in papers
- Local news media
- Local radio
- Existing mailing lists
- Tweeting or Facebook sharing
- Local outdoor advertising
Some of these methods cost, and others don’t, but lets assume Jack tries a local Facebook advert. He runs an advert using this message:
Help save the planet and earn
some pocket money at the
same time in Cambridge!
Jack sets the cost per click at $0.30, and runs the campaign targeted to Cambridge. He finds that the cost per added partner bike (which can be checked in the Byke account) is $8, and it takes a day of advertising on Facebook. This is considerably cheaper than buying the bike himself!
After a sufficient density of bikes has been achieved, the service will become useful. Jack feels 30 bikes and hence 30 bike locations within the town, provides a good density for end users of the cambridge.byke.mobi scheme to choose renting over taking a bus or driving. This means he invests $240. Proud of the fact that he now has a bike share scheme working for him, he announces the scheme in the local media. Word spreads and the bikes start being used.
How much does he earn? Jack shares 50% of the net revenues with Byke themselves, which has a 33% share in the bike rental earnings (66% goes to the individual bike owners in the scheme), and an average of $5 per day per bike. Given a 30% rental filled rate per day, this equates to $7.45 per day or $225 per month. Within one month of operation, he makes a return on his investment, and then starts turning a profit in the second month.
Word spreads, particularly with 30 hi-vis cycling bibs moving around town, and the number of people signing up with bikes increases. Before long there are hundreds of bikes in the business and Jack decides to quit his day job!
Note: this business is repeatable where you are, so feel free to copy the creative or graphics.
