February 26, 2021
Near the turn of the millennium, inventor Dean Kamen promised to change the world with an invention so fascinating that even Steve Jobs and venture capitalist John Doerr had to fire up their jets to see it in person.
It turned out to be a scooter. The Segway.
In fairness, the wheels ran abreast of each other, and balancing it required a complex dance of motor and software control. But what caught my attention was Kamen's observation that the automobile was a fundamentally flawed idea. Not just because of carbon et al (imagine if your computer had a smokestack?) but because the machine spent over 90% of its energy moving the machine.
This made no sense, Kamen explained. You don't build transportation machines to move transportation machines. You build them to move people.
A similar effect exists in finance. You don't build infrastructure to support infrastructure. You build funds, software, and systems to achieve the end goal for a human being. The goal for almost everyone is not to own a Unit Investment Trust, or pay a 5% sales charge on an A share. The goal is, at least for many people, to have certainty as you travel through life that you have a financial cushion, and that cushion becomes more of a couch as you approach retirement.
It's easy for you, and it's easy for the financial industry, to lose sight of that goal. When you build a financial plan, the objective needs to be clear, and every part of the process needs to support that objective. Otherwise it's wasted energy and resource. It's like raking water uphill. Or using 4,000 lbs of automobile steel to move a 150 lb person.
In a fitting denouement to the Segway, scooters have roared back to help solve our transportation conundrum. Only this time the wheels are aligned front to back - a simpler design. But the principle hasn't changed.
1. In that era, everyone was going to change the world, and everyone planned to run a company forever, right up to the buyout, when they suddenly didn't. So when Jobs and Doerr fired up their Gulfstreams and blazed a carbon trail from California to New Hampshire, people paid attention.
2. Dean Kamen holds over 1,000 patents. To see other inventions of his, click here.
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