The story behind Dean Kamen's Segway scooter, and his combustive meeting with the kingpins of Apple and Amazon. Excerpt from Code Name Ginger.
by Steve Kemper
Steve
Kemper was given complete behind-the-scenes access to Dean Kamen and
the Segway design team during development of the much-hyped "human
transporter." The result: A new book, Code Name Ginger. Here's an excerpt. —Ed.
Evidently, he's always
late, said Aileen Lee, John Doerr's associate. It was almost 8:30 A.M.,
half an hour after the meeting was supposed to start, and everyone in
the locked and guarded ballroom was still waiting for Steve Jobs. The
December 8 meeting at the Hyatt Regency near the San Francisco airport
had been Doerr's idea. He wanted Dean to brainstorm about Ginger with
him and some friends, including Jobs and Jeff Bezos. The three
billionaires could spare only a couple of hours, so Doerr's request
required a long trip for a short meeting.
Brian Toohey
didn't mind. Barely settled in as Ginger's new vice president of
regulatory affairs, he was still dazzled by Dean's roster of
acquaintances and it was worth some inconvenience to meet these West
Coast business icons. Tim Adams and Mike Ferry felt a bit more jaded
and exasperated. Traveling to and from San Francisco chopped two days
out of a schedule with no fat in it. Tim and Mike also suspected, as
did Dean, that Doerr was setting them up for an ambush on his home
turf. But all of them also realized that people who invest $38 million
sometimes need their hands held, so Tim, Mike, and Brian had each put
together a PowerPoint presentation for what Tim called "another dog and
pony show."
In addition to Jobs and Bezos, their audience would include Bob
Tuttle, Dean's top lieutenant; Michael Schmertzler, representing the
$38 million investment of Credit Suisse First Boston; Bill Sahlman,
professor of entrepreneurial studies at Harvard Business School and the
yenta who had introduced Dean to Doerr and other investors; and Vern
Loucks, a minor investor in Ginger as well as a board member.
Schmertzler had changed his mind about not coming, probably because of
his evergreen suspicions of Doerr.
Brian, keyed up, got to
the ballroom early to check the audiovisual equipment. By the time the
others arrived, he had filled the screen with a giant photo of Dean,
wearing jeans and sitting on an iBOT, smiling widely as he shook
President Clinton's hand in the Oval Office.
The smile
was missing as Dean pushed a tall hotel luggage carrier into the
ballroom. The carrier held a couple of large black duffels, oddly
protuberant, and some taped-up cardboard boxes, including an old Apple
computer box. Dean instructed the security guard to lock the ballroom
doors and not to let anyone enter without permission from someone
inside.
When the doors were locked, he opened the duffels
and the boxes, removed a couple of chassis and control shafts, and
assembled two D1 Gingers using a screwdriver and hex wrenches. He
finished in ten minutes, turned one on, and began tearing around the
ballroom, looking happier with every revolution. Jeff Bezos arrived.
Dean zipped up to him, stopping sharply at his shoe tips. Bezos didn't
flinch.
"See how much I trust you?" said Bezos.
"Is that good judgment?" said Dean.
Bezos
claimed the other Ginger, and his laugh soon gusted through the
ballroom. Doerr entered wearing casual clothes and old sneakers. Dean
surrendered his Ginger to him. Everyone was having too much fun to mind
Jobs's tardiness.
Dean didn't mind either, for other
reasons. He had flown his jet to San Francisco yesterday, carrying the
Gingers. A limo hired by Doerr had whisked him and the machines to
Jobs's house, where the two of them spent the afternoon. Jobs did most
of the talking. Ranting, really, about Ginger's design. So Dean more or
less knew what Jobs was going to say today and wasn't in a great hurry
to have the Ginger guys hear it.
The others were so intent
on Ginger that they didn't notice Jobs walk in. He was dressed even
more casually than Dean, in sneakers, a black turtleneck, and Levi's in
which a white pocket poked out of a big front hole. There was a hole in
his wallet pocket, too. Within a couple of minutes, after some quick
introductions, everyone settled around the big square table, Jobs at
one corner, flanked by Dean and Doerr.
"Good morning to
everyone," said Tim, smiling at the front of the table. "Before we
start, we'd like to ask you to hold your questions until after each
presentation."
"Yeah, right!" snorted Bezos, followed by that honking laugh.
"Otherwise we might as well not be here," said Jobs.
"How long is your presentation?" asked Doerr. "Each pitch is about ten minutes."
"I can't do that," said Jobs. "I'm not built that way. So if you want me to leave, I will, but I can't just sit here."
Tim
studied Jobs for a moment, then turned to the screen and put up a spec
sheet about Metro and Pro. "As you can see—" began Tim.
"Let's talk about the bigger question," interrupted Jobs. "Why two machines?"
"We've talked about that," said Tim, "and we think—"
Because I see a big problem here," said Jobs. "I was
thinking about it all night. I couldn't sleep after Dean came over."
There were notes scribbled on the palm of his hand. He explained his
experience with the iMac, how there were four models now but he had
launched with just one color to give his designers, salespeople, and
the public an absolute focus. He had waited seven months to introduce
the other models. Bezos and Doerr nodded as he spoke.
"You're sure your market is upscale consumers for transportation?" said Jobs.
"Yes, but we know that's a risk for us," said Tim, "because we could be perceived as a toy or a fad."
If
they charged a few thousand dollars for the Metro and it was a hit,
said Jobs, they could come out with the Pro later and charge double for
industrial and military uses.
Tim's eyebrows shot up
approvingly. He looked at Dean, whose face was a mask, so he turned
elsewhere. "Mike?" he said, looking at Mike Ferry for a marketing
opinion.
"It's a good point," said Mike, giving his usual noncommittal response.
"What does everyone think about the design?" asked Doerr, switching subjects.
"What do you think?" said Jobs to Tim. It was a challenge, not a question.
"I think it's coming along," said Tim, "though we expect—" "I think it sucks!" said Jobs.
His vehemence made Tim pause. "Why?" he asked, a bit stiffly.
"It just does."
"In what sense?" said Tim, getting his feet back under him. "Give me a clue."
"Its
shape is not innovative, it's not elegant, it doesn't feel
anthropomorphic," said Jobs, ticking off three of his design mantras.
"You have this incredibly innovative machine but it looks very traditional."
The last word delivered like a stab. Doug Field and Scott Waters would
have felt the wound; they admired Apple's design sense. Dean's
intuition not to bring Doug had been right. "There are design firms out
there that could come up with things we've never thought of," Jobs
continued, "things that would make you shit in your pants."
There
wasn't much to say to that, so after a pause Tim began again: "Well,
let's keep going, because we don't have much time today to-" "We do
have time," said Doerr curtly, changing his own ground rules. "We want
to get Steve's and Jeff's ideas."
"The problem at this
point is lead time in our schedule," said Tim. Jobs snapped his head
from Doerr on one side to Dean on the other, as if he'd been slapped.
"That's backwards," he said, his voice rising.
"Screw the lead times. You don't have a great product yet!
I know burn rates are important, but you'll only get one shot at this,
and if you blow it, it's over." Agitated, he turned to Bezos. "Jeff,
what do you think?"
"I think we'd do a disservice to the
machine if we didn't give a great design firm a chance," said Bezos in
a calm, soft voice, trying to lower the volume. "I think Steve is
right—that as he so elegantly put it, they could do things that would
make us shit in our pants." Jobs grunted.
After
another pause, Tim moved on to the issue of service, determined to move
ahead despite the punches coming at him. Within two sentences, Jobs was
on him again. Tim put up his next slide, about the new plant, but again
Jobs came at him with a flurry of half-insolent questions. Where are
you building a plant? Why are you building a plant? Why are you manufacturing the machine yourselves?
Partly,
explained Tim, because giving our code to someone else would be a great
risk. Not a good reason, in Jobs's view, because the code could easily
be reverse-engineered. No it couldn't, said Tim. Could, said Jobs. He
added that Tim should be spending money and management time on other
things, especially since there was no way he could convince any
world-class manufacturing and procurement people to move to New Hampshire, for God's sake, his tone implying that only slow-witted rubes could bear such a place. Dean lifted an eyebrow.
"We
have an adequate staff", said Tim defensively, but it sounded as weak
as the adjective. Tim had lost control of the meeting. That was
probably Doerr's plan all along. Dean sat silently, offering no help or
defense as Jobs rampaged through Tim's presentation.
Brian
Toohey spoke next, on the regulatory obstacles Ginger would face and
how he intended to overcome them. Brian was a big, burly man who knew
how to boom his voice, which may explain why he got two minutes into
his spiel before Jobs began interrupting. Doerr suggested that instead
of going through each slide, everyone should "take a study hall and
read the deck" that Brian had handed out, then ask questions. Bezos had
already read it, so he started chatting quietly (for him) with Dean.
"Jeff, have you read the entire deck?" said Doerr in a schoolmaster's voice.
"Yes, John, I have," said Bezos, amused.
When
the study hall ended, Bezos held up Brian's handout. "I think this plan
is dead on arrival," he said. "The U.S.A. is too hostile." The "car
guys" were going to lobby against Ginger and they were going to win.
"No they're not," said Brian, smiling.
Bezos
suggested starting slow, using one city or country as an experimental
station. Once Ginger's benefits were clear, the company would have a
wedge to pound into U.S. regulations. The perfect place to begin,
thought Bezos, was Singapore. "You only have to convince one guy, the
philosopher king, and then you have four million people to test it."
Vern
Loucks, who had been quietly watching the fireworks up to this point,
said, "You mean Gob Click Tong. He's not a king, he's the prime
minister. I can get us in to see him if we want to do that," he added.
Michael
Schmertzler hadn't said much. Now he asked when they should instigate a
strategic leak to arouse interest in the product.
But Jobs
was still shaking his head at Bezos's suggestion. Because of the
Internet, he said, slow was no longer possible. People would learn
about Ginger in a flash of bits and bytes, and would want one now. So a
small launch in a foreign place was foolish, because if the machine was
unavailable in the United States, the company would blow its chance for
$100 million of free publicity in its biggest market. Plus, Singapore
was a nest of pirates, and the company would end up spending a fortune
fighting them. If the company wanted a slow, controlled launch, better
to start on a handful of U.S. college campuses.
"If you
show this to Hennessy," Jobs said to Doerr, referring to John L.
Hennessy, president of Stanford University and a world-class engineer,
"he'll shit in his pants." Evidently Hennessy did that more readily
than Jobs did. "And if you offer to give him a hundred of them if he'll
run a safety study and a usage study, that's a done deal in ten
minutes," continued Jobs. "You do that at ten colleges and maybe at
Disney, so people can see them but not buy them."
But he warned that even this sort of slow launch was
filled with dangers. If one stupid kid at Stanford hurt himself using a
Ginger and then announced online that the machine sucked, the company
was sunk, because there was no way to control that or counter it if
people couldn't ride one for themselves. With a big fast launch, on the
other hand, a few malcontents wouldn't be heard above the general
hoopla. "I understand the appeal of a slow burn," he concluded, "but
personally I'm a big-bang guy." For the first time that day he smiled.
"The risk with a fast burn," he continued, "is that it exposes you to
your enemies. You're going to need a lot of money to fight thieves."
"We have a few things they can't get," said Dean. "Specialty components with only one source."
"They'll figure out a way around that," said Jobs.
"I've spent nine years looking," said Dean, "and I don't think so."
"I
think the emphasis of this conversation is wrong," said Bezos. "You
have a product so revolutionary, you'll have no problem selling it. The
question is, are people going to be allowed to use it?"
Jobs
said he lived seven minutes from a grocery and wasn't sure he would use
Ginger to get there. Bezos agreed. Schmertzler wondered if it might be
wiser to start with commercial sales. Bezos liked the idea—it was safer
and could give the business a solid foundation for growth.
By
then it was 10:30. Bezos and Jobs had to leave. As they stood, Dean
rose too. He had been almost silent, listening to Jobs like everyone
else. Now he thanked Jobs and Bezos for coming. "This is the most
energetic discussion we've ever had," he said, "and like all good
energetic discussions it leaves you with more questions than answers,
and leaves you questioning everything you thought you knew." He paused.
"And that's good." 
via hbswk.hbs
Yesterday, we published
a link to what appeared to be the release version of the iPhone 2.0
Firmware. This version of the firmware was successfully installed on a
number of original iPhones and readers were able to start using Apps
from the iTunes App Store. 
