Running Out of Time

A look at a start-up struggling to sell its better mousetrapto the government and what it's doing wrong.

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Anatomy of a Start-up

Vincent Yost built a parking meter that's a 'better mousetrap.' But his customer doesn't care. His customer is the government

Once again, Vincent Yost is feeding a parking meter. Not, like most businesspeople, prior to making a sales call, but during his sales call.

Two years ago Yost founded Intelligent Devices Inc. to create and bring to market a "smart" parking meter that could sense the arrival and departure of a car. On this day in October he has set his two-foot-high demo model atop a table in the office of Leonard Bier, acting executive director of parking for the Camden, N.J., parking authority. Yost has just parked a late-model chair in front of the meter, which senses its presence with an infrared detection system. He buys an hour's worth of time with four quarters and starts describing the many unique features of his state-of-the-art electronic meter.

Again and again Bier nods his head. Then Yost vacuums up the dirt on the carpet, so to speak. He tugs the chair away from its place in front of the meter. Four seconds later the meter's digital display automatically zeros out. His intelligent meter has just recaptured 50 minutes of "free parking."

"That's beautiful," says Bier, who knows parking meters the way Martha Stewart knows potpourri. Called in to rescue Camden's troubled parking authority, he's legal counsel to the New Jersey Association of Parking Authorities and owns a parking consulting business. His summary assessment to Yost: "If the mechanical meter is a single, and the electronic meter is a double, this is a home run or a grand slam, even."

Unfortunately, Yost has yet to triumphantly circle the bases. In fact, he's stuck in the batter's box, still looking to collect his first nickel, desperately trying to generate some sales momentum so he can stay ahead of his well-entrenched, far bigger competition. Welcome to an entrepreneur's worst nightmare: create a better mousetrap; then feel like the mouse.

For the first time in his business career, 44-year-old Yost is selling not within the competitively predictable realm of the business-to-business market but rather to a classically risk-averse customer. He's now selling to cities and towns, a universe of slow-to-change, monopoly-like entities, where, to his dismay, the rules and the reality are different--and for the most part, stacked against him. If only his smart meter could solve his core problem: how to speed up a torturously slow sales cycle, which even in the most responsive municipalities appears likely to top two years.

"I didn't anticipate this," admits a frustrated Yost, the former president of a pioneering computerized-cash-register company, which he left when it chose not to develop his innovative new meter. Yost swapped his 20% stake in the company for the rights to the meter and six months of severance pay. In December 1994 he set up an answering machine, a fax machine, and a computer in a den-sized room in his home in Harleysville, Pa., and started answering the phone, "Intelligent Devices."

His home-based company of the 1990s has done a limbolike job of lowering the bar on overhead. Yost types his own letters. His four technicians work out of their homes. When he shaves in the morning, he sees his entire sales force in the mirror. Meter manufacturing is contracted out--to a Doylestown, Pa., company called Aircraft Instruments, which followed an investment of a quarter of a million dollars in Intelligent Devices (for 22% of the company) with loans totaling twice that amount.

Give Yost high marks for spotting a ubiquitous product in need of technological innovation and for anticipating and addressing most of the potential pitfalls. The concept: grab a healthy, high-end share of the roughly 5 million parking meters that line U.S. streets, by offering a high-tech meter that will outperform anything sold by the industry's entrenched triumvirate: Duncan Industries, POM Inc., and MacKay Meters. Yost's intelligent meter will not just increase revenues by automatically resetting to zero when it detects the departure of a car from the parking space. Its sophisticated software package will also, via handheld remote units, download to parking-authority computers data on everything from an average parking time by zone to missed ticketing opportunities--the kind of comprehensive parking stats that cities currently pay consultants upwards of $10,000 to compile through clipboard-toting note takers.

Yost's timing is also good. After a half century of small refinements, the mechanical parking meter (first introduced in 1935 in Oklahoma City) has begun to give way to a new generation of electronic meters featuring digital readouts, more reliable innards, and most important, coin-counting capabilities aimed at curbing the all-too-common problem of employee theft. Currently, according to the International Parking Institute, only about 10% of the nation's parking meters are electronic; 90% are mechanical. In the next 10 years those percentages should flip-flop. Yost figures he can ride the crest of that wave.

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