By most accounts, Bixi — Montreal’s much-loved bike-sharing service — is a runaway success.
It has thousands of impassioned riders who use it to get around for 7 months a year. It has boosted cycling culture and encouraged more bike lanes and safety measures to be put in place. It has gotten otherwise inactive people exercising more. It frees up road and transit capacity, it’s good for our health, it’s good for the environment, and — for a time — it was good for our city’s image. The bike’s designs won awards and were sold and adopted in a dozen other cities around the world. For a time, Bixi was Montreal’s darling.
Ah, but here’s the rub: It’s not making money.
In fact, it was bleeding so much cash and had racked up so much debt that it had to file for bankruptcy and get taken over by the city.
And that is a very, very big problem for Bixi. So big, in fact, that you merely have to mention the word “Bixi” to just about anyone, and the first thing they’ll say in response is “they’re in financial trouble, aren’t they?”
The thing is, those folks aren’t wrong. Bixi isn’t profitable. But does that mean it’s not successful?
Unrealistic targets
Bixi’s problem isn’t that it’s not making money. Its problem is that when it launched, it announced, to great fanfare, that it would be completely financially self-sustaining. In other words, it defined success by the wrong metric.
No form of transit — private or public — has ever been financially self-sustaining. We fund roads and bridges and tunnels. We fund public transit in Montreal to the tune of 65 cents on the dollar (with less than 35% coming from user fees). We fund bike paths for people to ride their own bikes. I’m sure that when hovercraft are invented, they will require expensive infrastructure funding, too.
Bixi should never have been asked to turn a profit. It should have been viewed — and funded like — public transit from the start, with user fees and other revenue streams like sponsorship forming a portion of the budget, and public subsidies forming another portion. With a regular source of funding from the start, Bixi could have been defined by other, more relevant metrics.
By setting more realistic expectations from the start, Bixi might have had a better chance at attaining them.
On borrowed time
The city is continuing to operate Bixi for the current season, but has made no promises beyond this year. The mood among riders is glum; most of us know that, barring a miracle, it won’t be back next season. People simply don’t want to fund a service that is perceived to be a leech on tax dollars. And, for better or for worse, Bixi painted itself into this corner by defining itself by its ability to make money.
This just goes to show that otherwise-successful brands can fail spectacularly when they don’t pay the proper attention to how they define the success. Measuring by the wrong metric can be just as dangerous as failing to measure at all.
A lesson for brands
Many, many companies struggle to define success. They launch big, expensive, complicated projects and measure them the wrong way. They believe something has failed when perhaps it is actually a runaway success. Or they continue to pour money into a losing product or service in the false belief that it’s actually successful.
This discussion needs to go beyond the analytics department. Success metrics can be measured via key performance indicators (KPIs), but they don’t get defined there. Defining success needs to be done at the outset of a project, brand launch or idea. It needs to be part of the core mission and vision.
What makes a good success metric?
Great success metrics are:
- Realistic — Bixi promised something that no form of transit, ever, could possibly deliver. Setting yourself up for failure at launch is just a bad idea all around.
- Simple — The best success metrics are taglines; they can be easily communicated to all of your stakeholders, both internal and external. They define you as a brand, and you will live and die by them. Simplify your metric into a slogan that fits on a campaign button.
- In line with your mission — Beyond making money, what is the product, service or brand looking to do? If Bixi had thought beyond the traditional profit and expansion model, it may have realized that it is, in essence, a public service that could be operated and funded as such. Other private companies may also have goals that go beyond the obvious profit motive. Are you looking to change an attitude? Advance a cause? Proliferate a technology or a way of doing something? Brands can often “win” by accomplishing these sorts of goals, which then leads invariably to sales and profit growth.
- Stepping stones — Once you’ve achieved your first bar, now you need to raise it. Even as you define your short-term metrics, you should always be thinking ahead to longer-term ones. Plenty of brands have floundered when they achieved their early success metrics, only to lose focus. Never be satisfied with what you have already achieved. Always have a greater goal in mind.