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Tue 4 Mar 2008 04:00 AM

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The perfect balance

An electrically powered, self-balancing scooter may not appear to be the answer to increasing energy concerns but Segway thinks otherwise. Laura Collacott talks to CEO James Norrod to find out more.

An electrically powered, self-balancing scooter may not appear to be the answer to increasing energy concerns but Segway thinks otherwise. Laura Collacott talks to CEO James Norrod to find out more.

Like any invention that's ahead of its time, the Segway PT [Personal Transporter] is often misunderstood," declares the company's website; "The gleeful smiles of Segway PT riders may have created an impression that this is...well...a toy.

Like any invention that’s ahead of its time, the Segway PT is often misunderstood.

But make no mistake. While a Segway PT is incredibly fun to ride, it is serious transportation designed for today's world". If you have seen a Segway in action, you will appreciate the novelty factor but the product has been well received in some less obvious arenas.

For the uninitiated, the Segway PT is a two-wheeled, electrically-powered scooter. It can run up to 38km on a single charge and, being electric, has a minimal carbon footprint. Its creator, Dean Kamen, was inspired by disabled mobility aids: seeing a wheelchair-bound young man struggling to mount a curb, he set about creating a device that could self-balance and allow users to negotiate traditionally trickier terrain.

The result was the Independence IBOT Mobility System which elevates users onto two wheels so that they can move more fluidly around and interact with the world at eye level. The rights to the IBOT have subsequently been sold to health care leviathan, Johnson & Johnson (J&J) but Segway retained the non-medical rights to the technology, enabling them to market the Personal Transporter.

Although it may be seen as a bit of a toy by the general public (a fact that the management are at great pains to alter), the Segway PT has proved very popular in commercial applications. "The first, and probably still the biggest, application is security and police," divulges James Norrod, Segway's President and CEO. In America, a number of police forces have invested in the green technology to aid their patrolling forces.

Using Segway PTs, officers can cover a greater area than on foot and preserve their energy: "They can get to an emergency faster and have all their energy about them when they arrive on the scene," he says. The PT's popularity with various forces is evident from the optional extras that Segway offer; a police light and siren can be attached to the standard model and now a dedicated police transporter is also available.

Airport and shopping mall security staff have found the equipment helpful for patrolling vast buildings. With a presence in 25 of the biggest airports in the world and key relationships with large mall groups, it is clear that there are advantages. Where before security patrols would be walking many kilometres a day, they can now scoot around on the Segway PT, saving energy and travelling further.

Standing on the transporter also makes staff around 20cm higher than those around them, giving them a much better vantage point in crowds and increasing visibility, all points that the company is keen to advertise.

Another high-exposure application is in the transport for tours. Disney World, for example, has introduced several different tours around the Magic Kingdom to let guests see more and faster. Many cities across the States and increasing numbers internationally are introducing guided Segway tours of their sites of interest.

Authorities in cities in Hawaii, Alaska and the Zambezi have installed these tours as a fun and quick way to see scenic areas, historic monuments or enjoy the atmosphere of a particular location.

One of the advantages of the Segway in this situation is the range; being pedestrian-friendly due to the low operating speed and high levels of control, the transporters can roam around a far wider area than other conventional vehicles.

Good visibility is not just good for security; it's also good for sales. It is hoped that by having an active presence in the areas of security, policing and tours awareness of the Segway PT will grow and fuel consumer sales. And not only does it increase public awareness, it also validates the product.

When people see security staff on the Segway it legitimises the use of it," says Norrod. The high profile use of the vehicles in large public arenas and around town is a sure way to stimulate public curiosity, a strong facet of the consumer marketing campaign.

The international sales apparatus demands that a broad strategy be used; Segway supply the products to dedicated distributors who then install a network of retail points in a two-tier relationship. These managers can then oversee a localised marketing or advertising campaign as they see fit.
The main structure of this campaign is to suggest potential home-uses for the Segway amongst the general public: "We have a marketing strategy in which we use public relations and marketing communications to promote consumer uses," says Norrod. From the central management the goal is to promote different uses, the main ones being commuting, off-roading and golf.

The golf adaptation is particularly close to Norrod's heart, being a keen golfer himself. A special model has been developed for individuals that includes turf-friendly tyres, a bag carrier and scorecard holder. These offer advantages over the more traditional golf cart, speeding up the game for the players and increasing revenue for the club (by allowing them to charge for the hire of a vehicle per person instead of the shared cost of a buggy).

The Segway PT is designed with the future in mind. Its inventor and engineers have seen past the contemporary world to create a product that will fit into a carbon-neutral, energy-efficient environment.

It is good news for the groundsmen too: "It's much less damaging to the turf than a golf car or even, believe it or not, walking," Norrod reveals. "All the studies that turf management companies have done have shown that golf carts are the most damaging, walking the second most and the Segway golf unit the least damaging.

Elsewhere, Segway is keen to promote commuting as a key use: This is feasible in its key markets of North America and Europe. Expanding, Norrod points out that as the machine does not need petrol or a troublesome parking space, it is a convenient and efficient way of making short journeys to work. "It's a great product if you live maybe 5km from your office," he says.

This may be the case in the more established infrastructure systems of the West but those of the Middle East are still developing, albeit quickly.

There are many areas in Dubai, for example, that simply do not have safe pavements that the Segway PT could be used on. Countering this, Norrod points out that models are available for more rugged terrain - "we have the off road product that works very well on dirt and sand" - but surely only a brave few would tackle the perilous Gulf roads in anything less than a fully-enclosed car?

Yet the Segway PT is designed with the future in mind. Its inventor and engineers have seen past the contemporary world and attendant energy and transport issues to create a product that will fit into a carbon-neutral, energy-efficient environment. Thinking beyond the clogged and dangerous roads of today, Segway envision a paradigm shift - in the not-too-distant future - where efficiency is the prime concern.

This shift has already begun. "Those in the Middle East, even though they're sitting on the biggest oil reservoirs in the world, are worried about the planet," says Norrod. If you needed any proof of this, the fact that our meeting took place at the World Future Energy Summit in Abu Dhabi is fairly compelling.

Among the collection of big companies and organisations meeting here to collaborate on non-traditional energy sources is Masdar, one of Segway's investors and hopefully customers. Masdar is an initiative by the government in Abu Dhabi with the remit of discovering and deploying clean, alternative, renewable and sustainable energy sources.

One of their projects is a Special Free Zone which epitomises the vision that Segway have for the future. This campus will host practical facilities for Masdar, light industry and research facilities in an entirely sustainable, green area. On a confined but large (six square kilometres) campus with limited vehicular access, the Segway PT will come into its own. As Abu Dhabi leads the way in sustainable energy initiatives, it is hoped that similar projects will roll out across the region in years to come.

In Europe, where the infrastructure has been set up differently, Segway has entered into other alliances more relevant to the situation. Working with General Motors Europe, plans were unveiled in 2007 for a concept car known as the Opel Flextreme. To bridge the transition from widespread car use to alternative transport methods (and catering for the fact that it isn't always practical to use a Segway PT), the vehicle integrates two transporters and charging systems into a cutting-edge electric car.

As one would expect from such a forward-thinking company, the idea is to redefine transportation for consumers and businesses.

Commenting on the collaboration, Carl-Peter Forster, president of General Motors Europe said; "Our team wanted to make the Opel Flextreme concept the most versatile, eco-friendly transportation system ever seen. As the leader in electric personal transportation it was clear that Segway was the only company that could provide the urban transportation solution that matched the technological innovation and the environmental profile of the Opel Flextreme."

The potential of the product is now being recognised by more and more people but what of those who saw it at the outset? The company is part-funded by Kleiner Perkins Caufield & Byers (KPCB), a formidable venture capital company with a string of shrewd investments to its name. When its directors contacted James Norrod to get involved with a new venture, he knew to give it careful consideration.
Kleiner Perkins is known for making wonderful investments", he begins; "they started companies like Amazon and Google." Swayed by this reputation, Norrod accepted his latest role. Norrod has an educational background in economics and business as well as extensive experience of working in technology companies spanning 25 years. His documented successes in these undertakings as well as the relevancy of his field were key factors in his appointment.

The investors targeted me because of my background in growing companies," he discloses, a background that can be directly applied to Segway's ambitious goals.

We’re growing at about 50% per year and we expect to grow another 50% this year.

Though enthusiasm for Segway products is high in and around its own specific sector, transferring this to a wider audience is more difficult. Norrod cites changing behavioural patterns in favour of the Segway PT as one of his biggest challenges.

How long did it really take for people to start using a cellphone?" he asks. "It took longer than everybody thought it would, but now everyone has one. It was the same with the microwave oven; 25 years ago people didn't know they existed and now every home has one." With unshakeable faith in the product's potential, he leads Segway in a passionate campaign to encourage more widespread use of the product.

So far, it is working. "We're growing at about 50% per year and we expect to grow another 50% this year", Norrod confesses, demonstrating the growing popularity of green products. This growth is still focused in "The largest market outside the USA is Europe. The EU is where we're doing most of our international business, followed by Japan, followed by South America: the Middle East is a relatively new area.

The foray into the Middle East will surely be fuelled by the changing sentiment towards energy and initiatives that Segway have already cleverly aligned themselves to.

It is Norrod's role to make sure that growth continues at such a consistently high level. To do this, he needs a competent team around him. The team is already of a high standard, as he describes; "I have never worked with smarter people in my career. It gets you up in the morning - you have to be sharp because they're sharp!

Away from the existing team, Norrod's key strength (and the reason the investors chose him) is his experience, and subsequently contacts, in the sector. "The nice thing is I've been in this job for so long I know a lot of people in the industry. When it came to hiring, I went to people that I've worked with in the past in previous companies.

The method is effective because of the pre-established relationship between parties and a faith in their actual abilities. "It works great because you trust them; you know them, you've worked with them, you've had experience with them," Norrod surmises. "You know they'll do a great job

It also fits with his delegatory style of management. With operations growing on an international scale, it grows more and more difficult to oversee each role in detail. "My style is to hire great people and to give them the authority to do their job," he says. And in this, a high level of trust is mandatory. A requirement well met by his method of recruitment.

As with all multi-national executives (especially one growing a business into a new area) time is precious and Norrod has to work to a tight schedule. The interview draws to a close and I ask him what he makes of the Middle East: But with the time constraints of his schedule, seeing the countries he visits in anything more than a business capacity is difficult. Given more time that would be different; "I wish I could get to see more of the countries.

I would love to just go off and drive around the Middle East." Perhaps more opportunities will arise as the popularity of the Segway gathers momentum in the region.

Name:James Norrod


Title:President and CEO

Length of time in position:3 years

Previous role:CEO Telebit Corporation (Acquired by CISCO)

Core values: People, planet, profits

Best piece of advice:Do the best thing for all three values

Arabian Business: why we're going behind a paywall

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