I was searching through my files for inspiration on what I can upload for the blog this week and I came across this case study that I submitted for an Innovation and Technology Management course at LSE last semester. I really enjoyed writing this and I believe it is very relevant to the group projects we have been working on. What I found different from our approach from when I wrote this however is that we never focused on a born global technology company where the purpose of the entrepreneur is to grasp a large consumer group at initiation. Now, looking back, I see a vast correlation to claim-making strategy, shaping strategy and even blue oceans strategy in this case of Segway. Long story short; my argument in this case was that Segway’s customer target was too large and the infrastructure was too insufficent for Segway to create and lead an industry, and hence it only reached the enthusiasts and eventually failed to change the way people walk. I leave it to your judgement whether you think this was a well argued case:
p.s. apologies for the length of the post…
Technological advancements do not always bring about great innovations. Structured marketing and management practices play an important role in the success of innovations. Firms that fail to understand the importance of these practices often fail to survive, even though the technology could be highly beneficial to the society. Additionally, these technological advancements only become utile if they improve users’ quality of life. In order to do so, communication with the potential customers and experienced relevant industry players is essential throughout every stage of development, marketing, and sales. In this context, this essay will discuss the prematurely glorified human mobility device Segway’s unforeseen failure to become what the car became to the horse and the buggy.
Segway Inc. was founded to “develop, manufacture, distribute, market, and sell self-balancing and zero-emission light electric transportation devices, accessories, and associated services for consumers and businesses” in 1999 (Bloomberg BusinessWeek 2011). Their products and services were a mystery at that point, yet it was exciting for technology enthusiasts because it was founded by Dean Kamen, one of the most successful and admired inventors in the world, leading 300 scientists and engineers, devoted to making things “better mankind” (Pacella 2009). Dean Kamen was best known for inventing the ‘AutoSyringe’, the first wearable infusion pump, which rapidly gained acceptance from such diverse medical specialties as chemotherapy, neonatology, and endocrinology, ‘The HomeChoice’ peritoneal dialysis system, which allows patients to be dialyzed in the privacy and comfort of their home, an advanced prosthetic arm for DARPA, which highly advances the quality of life for returning injured soldiers, crown stent for Johnson & Johnson, and the iBOT mobility device (DEKA 2011).
Segway Inc. was a firm adopting an unfamiliar mission to those accustomed of Kamen, who had built his career by licencing inventions. When asked why he decided to establish his own company rather than licencing as usual, he replied: “Where could I have turned to produce the first Segway Human Transporters? An automotive giant? A car company would have every reason to bury this. An electronics company? This isn’t the Sony Walkman, it isn’t electronics. It’s a new idea. That’s what’s so exciting, but that’s also why I couldn’t license the technology” (Rivlin 2011). It was a form of vertical integration, taking a brave footstep into wilderness of previously underexplored functions such as manufacturing, sales, marketing, services, and distribution. The company was going to be tailored around a unique product and that according to Kamen, “all 6 billion people in the world owning one of these products was only going to be a matter of time” (Heilemann 2001).
This company, fabricated around the smart motion technology, had two commitments for its product: (1) Increasing efficiency of urban transportation, and (2) doing it by helping conserving the environment. It was evident that the escalation of CO2 emissions was increasing the rate of global warming. The total global emissions of CO2 had increased by 60 per cent between 1971 and 2001 to nearly 24 billion tonnes by the release date of Segway Inc.’s first product (Banister 2005). Transport’s share in the emissions had boomed from 19.3 per cent in 1971 to 28.9 per cent in 2001, thus absolute and relative share attributable to transport consumption was perceptibly increasing (Banister 2005). Additionally, transport was almost totally dependent on oil for energy and attempts to introduce alternative fuel vehicles had so far been unsuccessful (Banister 2005).
Weeks prior to its release, the rumour had it that it would be called, ‘Ginger’ or ‘IT’. General public had little knowledge of what it may look like, and what it may be capable of, since it was being developed behind closed doors by Kamen and his devoted scientists and engineers. It was persistently cited on television and technology magazines, comparable to the Apple ipad2 today. It had gained the blessings of important frontrunners in relevant fields and wealthy investors such as Vernon Loucks, Steve Jobs, Jeff Bezos and John Doerr, whom had the chance to see its first range of prototypes. Having obtained confidence and support, Kamen made big promises about soon-to-be-released product, famously comparing himself to Henry Ford. He believed that he was going to revolutionise urban transport, like Ford did in rural transport (The Telegraph 2008).
Finally, it was unveiled to the general public on 3rd December 2001. The company had spent $100 million to develop it (McIntyre 2009). It was labelled as the world’s first self-balancing human transporter. Although some continued to call it IT or Ginger, its official name was to be “Segway”, the same name given to the firm (Pacella 2009).
As a reaction to its popular media coverage, prior to selling a single product, Kamen made a vast investment in leasing a brand new 77,000 square foot factory near his house in Manchester, USA (Rivlin 2011). Again, before selling a single human transporter, Kamen blithely forecast that by the end of 2002, his enterprise would be stamping out 10,000 machines a week (Rivlin 2011). He adopted the strategy to convince governments to legitimise riding Segways on sidewalks and public places. To do so, he hired an army of lobbyists to persuade legislatures to rewrite laws, whilst convincing the general public that Segway can indeed substitute walking or riding a bicycle (Rivlin 2011). His best-known backer, venture capitalist John Doerr, predicted Segway Inc. would rack up $1 billion in sales by the end of 2002, faster than any company in history (Rivlin 2011, and McIntyre 2009).
There had been other attempts to improve the efficiency of urban transportation and help lower CO2 emissions in the past. For example, in the 1980s, Nicolas Hayek, CEO of SMH (makers of the Swatch watch brand), and founder of Hayek Engineering AG, began developing, what is now known as the Smart ForTwo. In cooperation with Daimler-Benz AG, Smart was brought to life in 1998 as a compact, forward thinking car, specifically designed for eco urban transportation (Lewin 2004). Likewise, William Grout discovered the folding bicycle in 1878, which was further developed to become affordable, compact, and easier to ride by Hanz Scholz in 1989, making them a feasible solution to the urban transportation problem (Herlihy 2004). Similar to the development of the folding bicycle, rollerblades were industrialized in late 1980s by two Minnesota brothers Scott and Brennan Olsen (Herlihy 2004). Although not as fashionable today, they acted as a conventional urban transportation tool in 1990s and beginning of 2000s. Rollerblades went out of fashion in 2000s and were replaced by kick/push scooters.
Segway made great publicity. Even former American president George W. Bush was seen riding one. Founder Kamen was now becoming confident that Segway would meet the expectations not only in terms of popularity, but also in sales. He signalled to believe that large cargo companies, airports, postal services and warehouses would get flooded with these products, resulting in placement of too many orders to be able to manage, when he stated that “people don’t realise they need a Segway before they hop on one” (Rivlin 2011). However, its media popularity proved insufficient to convince big industry players like FedEx into an agreement (Rivlin 2011). Others unexpectedly followed this trend, initiating the failure.
Firstly, it was priced at $4,950, which was highly criticised. It weighed 80 pounds, and it was equipped with a battery that allows it to travel only 11 miles on a charge, causing inconveniences during busy days (Rivlin 2011). Most importantly though, there were serious concerns with safety and familiarity. To more conservative employees, it seemed too hard to learn, and too dangerous to ride, and older employees had every reason to be afraid, since they were worried that falling off one of these products could put their health at jeopardy and end their career (Rivlin 2011). Concerns in cities were that the sidewalks were not suitable for these products and it did not improve the time it took people to get from home to work (Rivlin 2011). It was too clumsy to take into the tube, the bus, and the office. It could not be used during rainy days since the user could not hold an umbrella and a bag whilst riding a Segway. Just as people had started to overlook its gradual failure, Kamen stated: “I wouldn’t have predicted the mountain would be so big, and that there would be so many hills to cross to get to the top” (Heilemann 2001 p1). This raised the concerns of his loyal clients and customers. Kamen, in order to respond to the issues of familiarity and safety, and showing his devotion to his clients, initiated Segway training courses at certain hubs in America, where users were invited to be taught how to use the Segway. Although this was positively welcomed, it added to costs, putting Kamen in a deeper debt than before (Heilemann 2001).
Critics had started to highly doubt Segway’s profitability one year into its release. Karl Ulrich, professor at the University of Pennsylvania predicted that “they’re producing 10 per week”, as opposed to Kamen’s premature forecast of 10,000 per week by the same date (Heilemann 2001 p1 and Rivlin 2011). This sealed the rumours of failure to meet the targets. When Kamen stated that “Segway will be to the car what the car was to the horse and buggy”, it seemed very hard to believe, and he had already lost his chance of making that happen (Heilemann 2001). Shortly after this unfortunate comment, resignations began. 2 presidents and a marketing manager resigned in 24 months of its release, showing the instability at the Segway Inc. (Kawamoto 2003). All together, the company only managed to sell 30,000 units of its two wheeled scooter in 7 years (McIntyre 2009).
Segway has now settled in a number of niche markets such as airport staff transport, warehouse mobility, golf course mobility, and tour guidance. They continue to improve and upgrade their product range, whilst investing in partnerships with companies such as General Motors in order to create concepts for the future. However it is safe to say that Dean Kamen, who once compared himself to Henry Ford, failed to revolutionise urban transportation, and become the new Bill Gates.
So why did Segway, a product once admired by the media and world’s most successful businessmen, failed to revolutionise the urban transportation? Although there were certain design faults, it seemed to incorporate all the necessary physical characteristics to be adopted, and it certainly was a good, innovative solution to the urban transportation problem. However there were three underlying reasons for the failure, all unrelated to Segway’s physical characteristics:
- Adoption of “Too Much” Closed Innovation during development,
- Inability to Facilitate Diffusion to the “Early Majority” cluster,
- Failure to “Cross the Chasm” Between the “Early Adopters” and the “Early Majority”
1. Adoption of “Too Much” Closed Innovation during development
Segway was the fruit of closed innovation, a paradigm that proved very popular during the patent race in late 90s. Closed Innovation paradigm suggests that control is essential; therefore products are developed internally with emphasis on secrecy. All intellectual property is generated internally and kept within the company frontiers until the product is released (Chesbrough 2003). For example, the firm that is at the forefront of closed innovation in 21st century is Apple. Here, members of the public are not informed of the products prior to release, nor are their inputs and suggestions online and/or offline are recognisably captivated. Apple has never exploited the idea of crowdsourcing, a popular tool employed by large firms, including Apple’s biggest competitor, Microsoft.
Microsoft, conversely, adopts open innovation, a paradigm that assumes that “firms can and should use external ideas as well as internal ideas, along with internal and external paths to market in order to innovate” (Chesbrough 2003, p.xxiv). Microsoft creates value from customer and expert feedback via this paradigm, but struggles to create products that are unique and unexpected. This section will go on to discuss the advantages and disadvantages of closed innovation in comparison with open innovation, and why Segway failed due to closed innovation.
Figure 1. The Closed vs. Open Innovation Paradigm (Chesbrough 2003)
Figure 1 shows the closed versus open innovation process and Table 1 explains the differences between the principles of Open and Closed Innovation principles. Segway was developed under the Closed Innovation paradigm, which employs the smartest and most able people in the field, as opposed to utilising smart people inside and outside the field via Open Innovation. This was evident in Segway since all development was done by the 300 devoted engineers and scientists working for Kamen. Although the end product may be unique and novel, this creates the risk of overdependence in skill and knowledge, which may vanish if an employee leaves. Also, this knowledge can be passed on to a competitor, who may utilise it to get to market first, or rapidly draw near in competition. For example, in Segway’s case, there were 3 executives who left to join competitors, which although was less harmful than possibly anticipated, certainly caused major risks for the future.
Table 1. Adapted from Chesbrough, 2003.
Additionally, there is emphasis on the importance of internal R&D in Closed innovation, whereas R&D is externalized in the Open Innovation paradigm, significantly lowering development costs and response time to changes in markets. Segway Inc. was unable to implement some of the negative feedback, such as holding an umbrella whilst driving, in time to make the product feasible within the time it was desired most (Heilemann 2001).
Closed Innovation underlines the importance of creating the best ideas, whereas open innovation underlines importance of making best use of ideas, whether they are internal or external. Kamen had a reputation as a world class inventor; therefore questionably closed innovation was inevitable for Segway Inc. This is also reflected in the next point; control is the essential variable in closed innovation. Companies employing this paradigm, like Segway Inc., accentuate the importance of obtaining intellectual property rights internally. They file patents and design rights secretly, and see this characteristic as an important tool for competitive advantage. Open innovation paradigm suggests licencing and purchasing of IP, as well as acquisitions for innovative benefits is more advantageous as it is less timely and allows room for quicker response to change, although it may be more costly and risky than closed innovation.
Closed Innovation also proposes that first to release a unique product captures the market, i.e. believing in first mover advantage. On the other hand, open innovation paradigm introduces the idea that innovating first does not always bring market domination. We are yet to see this, since no product has yet dominated the eco urban transportation market, with the exception of Honda’s and Toyota’s successful impact in the hybrid car industry (Ettenson and Gaeth 1991).
Having identified the characteristics of the type of innovation Kamen’s team employed, we can now comprehend the advantages, but also recognise the disadvantages which stimulated the failure of Segway. Thanks to closed innovation, Segway will always be known as the first product of its kind, holding the IP rights for the smart motion technology that enables its products to monitor its environment, control its motion, and make decisions. Segway’s development was strictly controlled by Kamen, questioning every decision made, creating an aura of trust of the product. However, there were essential drawbacks as a result of this paradigm, which evidently affected the failure of Segway.
Firstly, employees that left Segway when the light at the end of the tunnel was no longer visible, i.e. executives George Muller and Peter Poulin (Rivlin 2011), seized essential knowledge with them to competitors. Also, at Segway Inc., knowledge and skills of the employees were highly relied upon, and their absences were highly noticeable. Another disadvantage of deploying closed innovation is the speed at which the firm can respond to change. For example, when necessity to introduce a storage space was discovered, it took 3 years for Segway Inc. to implement the relevant modifications (Rivlin 2011). Chesbrough (2003) would argue that it would have taken a shorter time if open innovation was employed. This argument is also interrelated with issues on irreversibility of certain investments. For example, Segway comprises of a technology that requires users to stand, yet elderly citizens who struggle to stand could debatably make best use of this technology. Kamen expressed his recognition of the argument when he created a concept with General Motors, which allows the users to sit. However, it would now be a much larger investment to implement the changes than 10 years ago, since Kamen has invested in a production line, creating fixed, intangible assets. There are certain solutions to the problem, but all either via open innovation and outsourcing, or they are exceedingly time dependent. Also following closed innovation principles, Kamen has become reliant on internal R&D. Although this increased control over the development of Segway, it has attached more costs to each product and decreased the flow of information from the outside of the firm, narrowing the thinking process.
Finally, Kamen, a renowned engineer, who is not a marketing expert, was unable to capture the needs of its potential customers, since he was unaware of Segway’s target markets. The product had no specific targets, only to change the way people move in urban areas, claiming it is only a matter of time before all 6 billion people in the world would own one of these, yet he concentrated on signing deals with likes of FedEx, showing he had no immediate marketing strategies. Next part excels further on this by discussing the rate of market diffusion.
2. Inability to Facilitate Diffusion to the “Early Majority” cluster
Second reasoning behind the failure of Segway is concerned with projecting incorrect market diffusion rate. Diffusion of Innovation is the process by which a new idea or new product is accepted by the market (Rogers 1995). The pioneer of this theory, Everett Rogers, proposed 4 main elements that influence the spread of a new idea: innovation, communication channels, time, and a social system, defining diffusion as the process by which an innovation is communicated through certain channels over time among the members of a social system (Rogers 1995). He also defined five stages in diffusion, concentrating on one, the decision stage. He then went on to identify five forces that provoke a positive decision. Customers who make this decision are then clustered under five types, and are demonstrated on the Technology Adoption Lifecycle diagram in Rogers’ study. When observing Segway’s market diffusion, it is predicted that Segway failed to fulfil four of the five forces, provoking customers to make negative decisions, failing to attract majority of the market, which was vaguely branded in the first place.
Figure 2. Five stages of diffusion (Rogers 1995)
Figure 2 shows the five stages of diffusion: knowledge, persuasion, decision, implementation, and confirmation. Knowledge stage simply describes the exposition of the innovation to the individual. Persuasion stage is concerned with interest on behalf of the individual who actively seeks information about the innovation. Decision stage is where the individuals weigh advantages and disadvantages of adopting the innovation in order to make a choice. Rogers (1964 p.83) notes that this is a crucial point in market diffusion, like a pivot, which at the same time is the most difficult stage to acquire empirical evidence. If the decision is positive, the next stage becomes implementation, where the individual adopts the innovation to a capricious level, in order to estimate its utility. If the new innovation proves itself to be implementable, and a feasible candidate to replace the previous object, it is said to be “confirmed”, and the innovation becomes applied at its full potential (Rogers 1964).
Observing Segway’s diffusion, the knowledge and persuasion stages for the target customer base were positive, as Segway was highly anticipated by the general public. This was thanks to appraisal by important figures in innovative fields, and large media coverage. However, the product almost hit a brick wall at the decision stage. Rogers emphasises the difficulty of crossing this stage, since individuals can be reluctant to make changes to their habits (Rogers 1995). Segway’s advantages were difficult to observe, and there were significant disadvantages regarding its price, speed, battery life, social acceptance, weight, safety etc (Pacella 2009)… Besides, if individuals did actually make the decision to buy, rent, or even try a Segway, it failed to prove beneficial. This was due to its inability to improve the immediate speed and utility of urban transportation in most cases, which not only caused failure of the implementation stage, it also meant that confirmation stage was next on the line.
Table 2. Definitions of the forces that affect the diffusion of innovation. Adapted from Rogers (1995 and 1964).
Rogers, in order to suggest solutions for the most crucial step in diffusion, the decision stage, goes on to define five forces that can influence the decision process: Relative advantage, compatibility, complexity/simplicity, trialability, and observability (1995). Although rather self-explanatory, definitions to these forces can be found on Table 4. Arguably, Segway failed to present a relative advantage over existing products and habits, proved incompatible with individual’s lives, was too complex and too big a change in culture, making individuals less able to do certain tasks like holding an umbrella whilst driving a Segway, and made people look lazy, failing in terms of observability. This explains why individuals and targeted companies felt owning Segways was not going to improve the quality of their lives/firms.
Roger went one step further to categorise adopters of innovations into 5 groups: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards (1995), defined in Table 3.
Table 3. Categorisation of Adopters (Rogers 1995)
Innovators are typically risk taking young people with high social class, financial lucidity, and explicit interest and connection in scientific resources and innovators. Early adopters tend to have good leadership skills, and tend to be opinionated, social, and highly educated. Early Majority generally adopt after seeing the innovation previously adopted. They are slower in the adoption process, but they certainly have connection with early adopters. Late majority category tends to consist of sceptical people who have less financial fluidity and little opinion leadership. Finally, Laggards are those with aversion to change. They tend to be older, with focus on traditions, and they generally are only in contact with family and close friends (Rogers 1995). Though it may seem unnecessary, it is crucial to be able to differentiate between each category, and understand the needs to capture each cluster. Kamen failed to do so, which is a critical reasoning behind why “all 6 billion people in world” will never own one of these, as opposed to what he had predicted 10 years ago (Rogers 1995 & Rivlin 2011).
Figure 3. Technology Adoption Life Cycle (Rogers 1962, Bohlen and Beal 1957)
Figure 3 exhibits the technology adoption life cycle, where the curve demonstrates the distribution of market share among the categories of adopters. The question is; where did Segway stand on this diagram one year after its release, where Kamen had predicted 10,000 units to be sold per week?
The red arrow is where author predicts the market share Segway could have attained. Referring back to Rogers’ decision stage and the five forces, here are 2 reasons why Segway could have gained a maximum of 15% of the market share, failing to dominate urban transportation industry. Firstly, it failed to fulfil four of the forces that influence consumers’ decision-making in adopting an innovation. Early adopters take risks. They are opinionated and they need products such as Segway to show their environmental concerns, and stand out (Rogers 1995). Segway can make them leaders in adopting innovations, similar to the Apple ipad today. Since early adopters have great financial lucidity, investing in a Segway is perceived less risky in large the scheme than the financially unstable, if it turns out to be incompatible. This clustering is also applicable to firms. I.e. organisations that are leaders in their industries and have financial freedom are more likely to invest in an innovation. However, individuals that are clustered in the “early majority” category need to see it adopted, implemented, and confirmed as an innovation that improves the quality of life before making the decision to invest in it (Rogers 1995). It is at this point where Segway Inc. failed. Debatably, the environment was not suitable for Segways to dominate. Simple problems like going up escalators would have become hazardous for Segway owners. Therefore, the early adopters did not fully confirm the promised necessity and absolute advantageousness, which meant that the early majority could not have seen it adopted to a level in which the day-to-day improvements outweighed its costs. Hence it failed to tap into the market past this (15%) level.
The second reason why Segway could have gained a maximum of only 15% of the market share, failing to dominate urban transportation industry is concerned with Kamen’s inability to actually establish a target market. Since Segway was advertised to “change the way people move”, the efforts to convince people were highly disjointed. This meant that Kamen had to try to tap into too many markets, and compete with too many competitors, and practices. This dispute is further discussed in light of Geoffrey Moore’s research in the following section.
3. Failure to “Cross the Chasm” Between the “Early Adopters” and the “Early Majority”
Geoffrey Moore expanded on the theory by Rogers (1964) on diffusion of innovations arguing that there is a chasm between “early adopters” and the “early majority” in disruptive innovations, which is the reason why numerous great innovations fail to meet their expectancies (Moore 2006). Geoffrey Moore’s book described as “the bible for entrepreneurial marketing 15 years later” by Tom Byers (2006), faculty director of Stanford Technology Ventures Program, identifies the criticality of understanding this chasm if one wants to succeed in a market with a technological innovation.
Figure 4. The Chasm in the Technology Adoption Life Cycle (Moore 1991)
Moore (2006) studied the Technology Adoption Life Cycle, the same curve discussed in Rogers’ book (1964). However, he argues that there are gaps between each adopter group, one being particularly larger than others, marked with a red arrow in Figure 4.
Moore believes that the early adopters, or what he calls “visionaries”, and the early majority, i.e. “pragmatists”, have very different anticipations and expectations, more different than other clusters, and prescribes 4 key steps which every new innovation must apply in order to avoid “the chasm”:
- Target a niche market
- Offer a solution to the customer’s problems in its entirety. i.e. support, training etc…
- Create positioning to show that you are the leader in the segment
- Launch the invasion with a direct sales force (Moore 1991)
Kamen’s team did a fantastic job “launching the invasion” by hiring an army of lobbyists, leasing a factory with the capacity to produce 10,000 products a week, and approaching potential sale and distribution lines such as Amazon (Rivlin 2011). Segway Inc. conceivably prospered the most at showing its leadership in the innovation of urban transportation and eco design, whilst successfully responding to the problems customers had in terms of support and training. However, what Segway failed to do, and failed astonishingly, is targeting a niche market. As mentioned many times in this essay, Kamen’s inexperience in entrepreneurship of this kind, and certainly inexpert strategies, combined with personal overenthusiasm and excessive belief in the innovation appear to be the cause in failure to target, enter, and dominate numerous niche markets to build grow steadily but in a sustainable manner.
Ten years since its release, Segway is still to become to the car what the car was to the horse and buggy, but this seems further away now than it ever was. Kamen, although still involved in Segway Inc., continues to what he does best; invent. He has established DEKA, where innovations are “fostered” by him and growing number of highly skilled scientists and engineers devoted to him. He has also established FIRST, a program to get students interested in science, technology and engineering, talent spotting and educating them in the meantime. Kamen seems to have hurt his fingers playing with fire, returning to doing what he does best, with general public holding slightly less trust and belief in him than before Segway’s commercialisation.
Segway Inc. however, managed to settle in a number of niche markets, slowly growing its business (Bloomberg Businessweek 2011). It is now possible to see new generation, highly customised Segways in airports, used by staff, warehouses, golf courses, and touristic locations rented for tour guides. The product has evolved to meet these demands too, now with longer battery life, more storage space, and weighing much less than the original product (Bloomberg Businessweek 2011). Also, the technology has been explored further to create concepts for the future, in cooperation with likes of General Motors (Pacella 2009). Although Segway failed to be the car of urban transportation, it certainly created an “inventive step” that is likely to help contribute to improving our society in the future (Howells 2005).
All in all, Segway was an invention ahead of its time. This essay argues that the reasons behind its failure lie in the foundations of the company. Run by ingenious engineers and scientists, the methods chosen in the development process and weaknesses in strategy and marketing brought failure to Segway Inc. Firstly, Kamen’s team chose to follow a closed innovation paradigm to develop the mobility device. Although this approach helped creating a unique product, far ahead of its competitors, it also caused risks of leakage of confidential information, over dependence on certain employees’ knowledge, a slow response mechanism to change, and a less sensitive development process to market requirements and customer needs. Secondly, Segway struggled to prove advantageous since it failed to present a relative advantage, came across simple, negatively affected observability and was not compatible to day-to-day lifestyles of the intended consumer base. Final contribution to the failure was due to overconfidence in the product, failing to determine niche markets for Segway. This capped Segway’s market growth, causing it to fall into the chasm before reaching the early majority.
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