Segway LLC History

Company Perspectives:

Dean Kamen's inventions start the same way--looking at a problem, ignoring the conventional thinking that surrounds it, and working tirelessly until it is solved--a formula he's used since high school. Like most of his innovations, Segway HT reflects Dean's belief that science and engineering can be harnessed to improve people's daily lives. Dean and his team saw a way for his balancing technology to be applied to human transportation, brought together a core team to perfect it, and formed a new company to bring Segway HT and its vision to market.

Key Dates:

1976:

AutoSyringe Inc. is founded to market Dean Kamen-designed infusion pumps.

1982:

Kamen sells AutoSyringe and founds DEKA Research & Development Corp.

1989:

For Inspiration and Recognition of Science and Technology (FIRST) is founded.

1990:

IBOT, a six-wheeled wheelchair, goes into development.

1995:

The company begins development of the Segway HT.

2000:

Financing is obtained for Segway LLC.

2001:

The Segway HT is unveiled.

2002:

Consumer versions of the HT are scheduled for launch late in the year; IBOT undergoes FDA testing.

Company History:

Segway LLC was created to market an upright, self-balancing people-mover called the Segway Human Transporter (HT). The inventor of the Segway HT, Dean Kamen, has made a career of developing technical solutions to some of the world's most challenging problems. For most of his professional life, Kamen developed advanced medical devices under contract through his DEKA Research & Development Corporation. The Segway HT, spun-off from the six-wheeled, stair-climbing IBOT wheelchair created at DEKA, is his product for a mass consumer audience. If the amount of publicity the HT has garnered and the financial backing Segway LLC has attracted are any indication, Kamen's invention will change the way cities move. Kamen's other business ventures have included industrial automation firm Enstrom Helicopter Corporation, Teletrol, and New Power Concepts.

Origins

Born in 1951, Dean Kamen was raised in Rockville Centre, New York. His father was a commercial artist as well as a cartoonist for such publications as Mad magazine. His mother taught high school business education and would later help with Kamen's bookkeeping. By age 17, Kamen had his first patent, for an automated control system for audiovisual displays. It was eventually used by sites such as the Hayden Planetarium, the Museum of the City of New York, and Madison Square Garden.

Kamen attended college at Worchester Polytechnic Institute in the 1970s. He was there for five years but did not graduate. Nevertheless, Kamen was soon tackling some of the most serious technical challenges in the world of medicine.

While Kamen was at college, his oldest brother, pediatric oncologist Bart Kamen, lamented the problem of giving patients medication in steady doses. In the mid-1970s, Kamen invented his pocket-sized infusion pump. AutoSyringe Inc. was set up in 1976 to market this device. One of the company's its board members, Bob Tuttle, would join Kamen in several other ventures. After the infusion pumps began being used to administer insulin to diabetes patients, the company's staff grew to 100 employees. In 1982, Kamen agreed to sell AutoSyringe to Baxter International Inc., making him a multimillionaire at age 30.

Origins of DEKA Research

The same year, Kamen founded DEKA Research & Development Corporation in Manchester, New Hampshire. The firm's name was a contraction of his own first and last names. It was originally called Advanced Medical Development, and most of its clients were medical device manufacturers.

Kamen would be amply rewarded for his contributions to medical technology, and he was wont to use his wealth in interesting ways. For example, he made his daily ten-mile commute to work in one of two helicopters manufactured by Enstrom Helicopter Corp., a company he was involved with. Kamen also owned North Dumpling Island, a two-acre getaway off the coast of Connecticut that he declared a sovereign nation with its own currency based on the mathematical value of pi.

Kamen claims the slogan "Live Free or Die" on New Hampshire's license plates prompted him to move to that state, where he established a 5,500-square-foot plant along the banks of the Merrimack River. Kamen's 30,000-square-foot, hexagonal home--equipped with its own machine shop--was also the site of much of the inventor's work. Usually dressed head to toe in blue denim, Kamen professed not to take vacations and hated wasting time away from work.

Doug Field, an engineer at DEKA, described the company's philosophy to Design News by quoting Nobel prizewinner Linus Pauling: "The best way to a good idea is to have lots to choose from." In a nod to the tale of Prince Charming, the company gave a "Frog Award" to the engineer with the most spectacular failure. To keep teams on schedule, meetings were clearly defined as either in "ideation" or "generation" mode.

In 1989, Kamen established For Inspiration and Recognition of Science and Technology (FIRST), a nonprofit group devoted to inspiring high school students to learn about science and technology. FIRST's main project was a robotics competition.

DEKA continued to improve medical devices--and the lives of their users--throughout the 1990s. A portable dialysis pump, only the size of a telephone book, replaced others the size of a dishwasher. DEKA also helped develop a flexible heart stent.

The company did not market these products itself; it was usually hired by large medical device manufacturers such as Baxter to design or improve them in exchange for fees and royalties. About 200 engineers worked with Kamen at DEKA. The firm was able to pick and choose the most intriguing projects.

In 1990, Kamen was troubled by the sight of a man trying to get his wheelchair over the curb of a sidewalk. Kamen's interest in solving this problem led to the development of DEKA's IBOT Mobility System. This six-wheel, motorized wheelchair could climb stairs. The IBOT could balance two sets of wheels on top of each other, allowing its most dramatic feature: the ability to lift handicapped people to eye level with the rest of the world. The IBOT was in clinical trials in 2002. Its manufacturer, a unit of Johnson & Johnson, hoped to begin selling the devices by the summer of 2003 at a projected cost of $25,000 each.

Segway HT: New Wheels for the New Millennium

DEKA began development of the Segway Human Transporter (HT) in the mid-1990s. As the IBOT's code name had been "Fred Upstairs" after Fred Astaire, the HT was initially known as "Ginger" in honor of Ginger Rogers, the other half of the legendary Astaire/Rogers dancing duo. (The Christian Science Church, which partially controlled rights to Ginger Rogers' estate, reportedly would not allow the company to market the device under this name.) Subsequent prototypes were dubbed Mary Ann and Mrs. Howell after characters on the television sit-com Gilligan's Island.

For the HT, DEKA borrowed from the balancing technology developed for the IBOT. The HT was a two-wheeled platform with handlebars on which the user was seated upright. It used microprocessors and solid-state gyroscopes to balance itself on two wheels. Kamen did not like the word "scooter" applied to the unique invention; in function, he said, the device was more akin to "magic sneakers." Its speed was electronically limited 12.5 mph, though a police version had a theoretical top speed of more than twice that. Conventional friction brakes would not work, since it needed to keep its wheels active to balance itself; in the HT's braking process, energy from stopping was transferred back into the batteries.

The HT would cost $100 million to develop. Backing its commercial launches were Credit Suisse First Boston and the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, which had previously bet on Netscape and Amazon.com. Kleiner Perkins partner John Doerr predicated Segway LLC would reach $1 billion in sales faster than any other company, reported Vanity Fair. The firm was valued at a colossal $600 million; Kamen gave up less than 15 percent of the company to his financiers: Credit Suisse and Kleiner Perkins invested $38 million each for their respective 7 percent shareholdings. These investments were lined up in the spring of 2000.

A book proposal about the HT--then known only as Ginger or "IT,"--was leaked to the press in January 2001, prompting a whirlwind of media speculation about the nature of the new device. The HT had not actually been described in the proposal, but the document was filled with titillating testimonials about the value of the device from a few of the select technology figures who had actually seen it.

After months of speculation about the nature of "IT," the Segway Human Transporter (HT) was officially unveiled in December 2001. It generated a great deal of publicity as celebrities tried the devices out on a variety of national TV shows. The HT was even written into an episode of the sit-com Frasier.

Kamen immediately began lobbying governments in Europe and the U.S. to allow the HT--a motorized vehicle--to be driven on city sidewalks. Eighteen U.S. states had agreed by the spring of 2002. In fact, Vanity Fair reported Atlanta municipal planners were keenly interested in the HT as a way to relieve that city's notorious congestion.

In 2002, the industrial version of the HT was being tested by the likes of the U.S. Postal Service and GE Plastics. Other launch partners included Michelin North America (the maker of the Segway's custom tires), the National Park Service, the City of Atlanta, and Amazon.com. The Boston Police Department was another early trial user.

The consumer version of the HT was scheduled for its commercial debut in late 2002, priced at $3,000. Segway LLC, the company created to develop and market the HT, was a separate venture from DEKA and employed 130 workers.

A Motor for the Future?

After the launch of the Segway HT, Kamen held more than 150 patents. His next project was to build a working Stirling engine. The Reverend Robert Stirling, a Scottish minister, had first suggested the concept in 1816. This engine, which Kamen likened to a refrigerator compressor, ran on waste or anything that could burn as fuel. As a bonus, the engine's heat would purify water at the same time. Kamen hoped to eventually produce Stirling-powered Segways, thereby solving the problems of transportation, energy, and clean drinking water in the same product. Another advantage of the proposed machine was its theoretical ability to go for years without maintenance.

Principal Competitors: C. Rizzato & Co.; Sanyo Electric Co., Ltd.; TH!NK Group; ZAP.

Further Reading:

• Deagon, Brian, "Inventor Builds on Knowledge; Innovate to Succeed: Inspiration from Surroundings Keeps Dean Kamen Pumped," Investor's Business Daily, December 27, 2001, p. A6.
• Heilemann, John, "Machine of Dreams," Vanity Fair, May 2002, pp. 184-88, 222-30.
• Joshi, Pradnya, "Dean of Invention--A Wheelchair That Climbs Stairs? It's Just One Product of Kamen's Idea Factory," Newsday, April 29, 2002, p. D1.
• Lewis, John, and Karen Auguston Field, "Balancing Act; An Exclusive Look at the Engineering Behind the Segway HT, with Some Never-Before-Published Technical Details," Design News, March 25, 2002, p. 52.

Source: International Directory of Company Histories, Vol. 48. St. James Press, 2003.

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