NASHVILLE, TENNESSEE – SEPTEMBER 2, 2019: Tourists riding Segway PT personal transporters prepare to … [+]
Two decades ago, I walked into a meeting with some oil industry executives visiting M.I.T. to be greeted with “Have you heard the news? There’s a new invention that will revolutionize transportation!” Questioning brought forth the fact that nothing was known about this invention except the codename ‘Ginger’ and the identity of the inventor, Dean Kamen, a successful inventor and entrepreneur. I recall sighing and asking the executive how many times in his career he had heard similar stories that ultimately proved trivial.
Indeed, during my roughly three decades at M.I.T., numerous advances and discoveries were described by engineering colleagues with great optimism, few of which have ever been realized. (My favorite was the engineering professor who proudly informed his audience that the prospects for his research target had been rated highly—by his students and staff.) This has led me to be skeptical about any given technology while optimistic about technological progress in general.
And the Segway (originally referred to as ‘Ginger’) was actually more successful than many similar projects, with tens of thousands of units produced and sold, and only being abandoned recently after nearly two decades of production. But originally, excitement for its prospects were rampant, with Time speculating about it in a story labeled “Best Inventions of 2001”. An author who received a six-figure advance for a book about the project said it “would revolutionize personal transportation, urban design and our daily lives.” And a venture capitalist predicted it would “make quick work of $1 billion in sales.”
There are any number of other prominent failures. Ballard Power’s announcement of progress in fuel cell design two decades ago saw its stock price surge from single digits to over $100 (and back down again). But not only investors were exuberant about its projects. A consortium $1 billion in capital was formed with major automobiles companies, and it was predicted they would sell as many as 50,000 fuel cell vehicles a year by 2004. (2019 sales of fuel cell vehicles in the U.S. were just over 2,000.)
And one of my favorite stories was a 2007 report on CNN that said “Watch out, Detroit. A new crop of electric-vehicle startups aims to put a dent in the Big Three by applying the latest in high-technology engineering and design.”
The story featured seven startups such as the Aptera and Zap, none of which developed a commercial product.
Yet there is another side to this. That same CNN story remarked that they didn’t consider Tesla
Boosterism not skepticism dominates press coverage;
Many advances in the laboratory don’t work in the real world;
Cost is the dominant factor, but not the only one;
Barriers to entry are important;
Consumers are the ultimate judges of the desirability of a technology.
The Segway was a moderately useful but expensive product which worked very well (not perfectly) in the real world, but as a pedestrian transportation device faced a significant barrier to entry, namely, the fact that it’s size made it awkward to use on public sidewalks. This was one of the major factors behind regulatory resistance at the local level in many places. And unlike the flying cars in the movie “Wall-E” the Segway could not navigate stairs.
Many of the electric vehicle start-ups failed for similar reasons: the cars were expensive and performed poorly, plus the capital needed for a distribution and service system was beyond what the entrepreneurs could manage. Again, Tesla has mostly overcome these with annual sales now in the six-figure range. This doesn’t mean electric vehicles are ready to be more than a niche market, but it demonstrates that the technology has advanced greatly, enough that some will pay more than for a similar gasoline-powered vehicle.
There is a huge gray area between those touting as-yet non-commercial fuels and technology (think hydrogen) and the denialists who think expecting more progress is ‘magical thinking.’ Understanding what makes a product viable requires a lot more than skimming the internet for information.
