MaRS

Skycar photo courtesy Moller International

Flying cars. The topic has been bugging me since the 70’s when I used to read every word of Popular Science and Car & Driver magazine each month (yes — full disclosure here — once a nerd always a nerd). As I kept up with various advances in aviation as a kid, I secretly hoped someone was working on the problems I had with waiting for my bus to get to school.

Believe it or not, it was Dr. Paul Moller, a farm boy from Trail, BC (where this author once lived after coming to Canada) who has arguably demonstrated the most passion for getting cars to fly over the past few decades.

Moller, a mechanical and aeronautical engineer, moved to California in the 60s to earn a PhD at the University of California at Davis where he started experimenting with the idea of flying cars. His Moller Skycar® prototype is what he describes as a “milestone in the development of vertical take off and landing (VTOL) aircraft.” In various iterations, Moller has been working on his vision for over 35 years, and over the past decade has done this through Moller International, the publicly-traded company that bears his name. The prototype Skycar is a beauty and the beast combination powered by eight air-cooled Rotapower® rotary engines capable of generating approximately 500 pounds of thrust required for takeoff and hovering. Stabilization for the aircraft is provided by a complex onboard digital computer system.

While ground and flight tests of his first vehicle started in September 2001, the prototype Moller has created is still tethered to a crane for insurance purposes. Yes, it flies… sort of. As the YouTube videos of some Skycar test flights clearly reveal there is still work to do. Not certified for use by the Federal Aviation Authority (FAA) nor as a licensed road vehicle, the Skycar stands as a very expensive example of how to blow through vast amounts of investment, while at the same time failing to look at the harsh realities that the whole concept faces.

Some very cursory research on the many failed attempts to take vertical take off and landing (VTOL) to the next level (such as the Pentagon’s Osprey aircraft project) would suggest to any educated investor that this is a very complex area of physics to solve. The concept of a Skycar in every garage is also one that the FAA has not fully processed yet. To enable this mass consumer adoption, Dr. Moller is counting on the folks at NASA to build something called “The Highway in the Sky.” Talked about for years, it’s a vast computer system designed to let millions of people fly whenever they please, take off and land from wherever they please, in their very own vehicles. Ouch… Regulatory and technical issues abound in the VTOL ecosystem. Not to mention the way police will have to deal with the emerging threat of “air rage.” It seems there is more to this than I originally thought as I flipped through the pages of Popular Science inbetween classes.

But wait: there’s more. Perhaps it’s the marketeer in me talking here, but I fear Dr. Moller has forgotten to do some other important research: with customers. An important question for any business (especially one that has taken millions in venture capital and gone to the public markets) should be: Does the customer really want the product? An even more formative question: “What do consumers (really) need to do in their daily lives that a Skycar would help them with in ways that are faster, cheaper, better?” And in the end, is it “flying cars” that pop out as the logical answer to solving these points of pain?

This was the question I posed in my first of two lectures on marketing at the MaRS CIBC Presents Entrepreneurship 101 lecture last Wednesday: “Why is Moller’s Skycar not taking off?” To make this more fun, we announced a little competition (complete with a nice prize) that has got lots of students thinking about this question of what key elements are really necessary to move an “idea to income.” We talked about how technology on its own is often NOT the best starting point for the creation of a new business. Technological innovations are out there everywhere. But what’s more meaningful is the process of connecting groundbreaking technologies to complimentary market and infrastructure trends; compelling needs that paying customers have; and a competitively synchronized business model designed to generate profit.

I’m happy to report that my inbox has been overwhelmed with responses from students in the program, all weighing in on the merits of flying cars. The Skycar story is the kind of stuff that really provides a rich set of case history to illustrate how we need to better understand how technology fits with marketing. You just can’t make stuff like this up.

Here are a few clues for the students participating in the competition:

• Look at the key requirement in buyer utility that Moller is looking to solve through what is a misguided VTOL strategy that adds too much regulatory/technical complexity and unrecoverable cost to the Skycar product;
• Look at what buyers really want and what they may be willing to pay for. Hint: Think “convenience” and “portability.” Are there other more economical plane designs and profitable business models for personal aviation emerging that could work to satisfy many of these customer needs and grow the market category?
• Look at the new license and aircraft category the FAA recently created that lays the foundation for a whole new “blue ocean” of opportunities in the personal aviation market.

I look forward to your thoughts when we revisit this case study at the next CIBC Presents Entrepreneurship 101 lecture.

As a footnote to all this, as a kid I used to think Detroit was doing something with the flying cars thing. But seeing the distinctly muted tone of this month’s Detroit International Auto Show, the “Big Three” presumably have better things to think about than flying cars.

See you Wednesday night. 

Downloads and Resources

• Class Summary: Basics of Marketing – Part 1
• Video: “Ideas to Income: An introduction to marketing”
• Presentation: Download the PDF
• Join the Facebook Group: CIBC Presents Entrepreneurship 101