COMMENTARY | COLUMNISTS | PHIL BAKER

A great concept, Human Transporter not yet a success

In my Jan. 6 Daily Transcript column I wrote, "Based on my experience in bringing dozens of products to market, the invention is less than 10 percent of the total contribution to a product's success. Every successful product needs to start with a good concept, but a good concept alone is a long way from success. Like a good recipe, it needs a lot of ingredients combined together in just the right way. Leave out any key ingredient and you have failure."

A good illustration of this is the Segway Human Transporter, a great concept and an incredible invention developed by Dean Kamen, a prolific inventor, perhaps the Thomas Edison or Edwin Land of our time.

You've likely seen this device -- originally called Ginger -- as it was slowly leaked to the press, and finally debuted last year. It's a two-wheeled platform you stand on that propels you virtually anywhere you want to go at up to 12.5 mph. It is eerily silent and seemingly magic as it moves forward or back with the slightest body lean. Its "training wheels" are built-in gyroscopes that magically prevent you from falling. A built in rechargeable battery provides a 15-mile range per charge.

As great a product concept and as well engineered it is, it cannot yet be considered a commercial success. Its sales have been slow, it has run into regulatory resistance, and its cost is higher than its original target. For this product to be successful, a lot more marketing needs to be done and a lot more money needs to be spent.

Fortunately, the company, Segway LCC, has strong financial backing to make the additional investments. These additional resources will likely prevent Segway from being added to the list of many startup companies with good ideas and products that are no longer in business.

The company probably did not expect such market resistance. With such a revolutionary product and so much excitement within the company during its development and among the early testers, it is hard to get an objective view when you are so close. There is nothing like the reality of the marketplace as a measure of success.

This week Segway offered me a chance to be trained and try out the device. The training took all of 3 minutes, because it is so brilliantly designed and intuitive. The Segway is all that you have read about and more. It's the closest thing to the science fiction devices we've seen that you strap on and are propelled wherever you want to go, effortlessly and magically.

In spite of great technology and terrific execution, and despite broad public hype, few people are buying it. The company needs to make a much greater effort in marketing their product. Prospective customers do not understand its potential uses. To quote my wife, it's "cute but who needs it?"

Any product that changes habits and requires a new mindset brings out skeptics and naysayers, some as vocal as the supporters. For this reason, products such as the Segway require some vision by the customer in figuring out what to do with it, as it provides new capabilities that were never expected. To achieve this, the company needs to identify its potential markets and to communicate specific benefits to these markets through real use examples. That calls for a large PR and marketing campaign and the ability to demo the product before buying.

Segway has begun to address these issues by moving to markets that can immediately benefit from this product. Examples include postal carriers, warehouse and factory workers, law enforcement and those with some mobility disabilities.

Next, they are slowly expanding distribution. Currently the product is being sold only through Amazon.com. One of the best selling features is actually experiencing it and, with local dealers, that will become possible.

Lastly, price is an issue. At $5,000 and up most buyers, beyond early adopters, need to have a practical reason for buying it. I believe for those that have a real use, such as commuting or providing mobility to someone with a disability, its price is reasonable, but to expand the market and interest, a lower-priced model will help.

The company is also addressing regulatory issues raised by government agencies. Some localities are considering limiting its use due to concerns over pedestrian safety. San Francisco has outright banned the product. From my limited observations, it can be maneuvered and controlled so easily that pedestrian safety should not be a real issue.

Then there are those that say the Segway will cause people to exercise less. I'm sure they said this about the automobile. In fact, the Segway allows you to do tasks much more quickly, as it travels up to 4 times as fast as walking. This can actually give you more time to exercise; it can also propel you to new locations where you would not normally walk. It is also a means to extend your range of activities, to replace a car for some tasks and to do things you could never do before. It's great for dense urban neighborhoods and city areas. It's a perfect commuting device for San Diegans that live and work in the city. Imagine zipping out of your apartment, down the elevator, across town, up the elevator to your office. No parking and complete freedom of mobility.

Is there hope for Segway? Yes, but only if the company creates a market and communicates all of the benefits to that market, and only if it addresses the safety concerns. So indeed, this does illustrate how much more effort is needed beyond invention to reach success, not only for Segway, but for most other products as well.

I rest my case. And yes, I want a Segway.


Baker is San Diego's Ernst & Young Consumer Products Entrepreneur of the Year in 2000 for successfully bringing to market Think Outside's folding keyboard for the Palm and other PDAs. He can be reached at phil.baker@sddt.com.

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