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In December 2001, an American inventor Dean Kamen launched Segway PT- Personal Transporter, the world’s first self-balancing battery-operated electric human transporter. Segway was expected to revolutionize transportation. Its speed was 6–10 mi on a fully charged nickel-metal hydride (NiMH) battery with a recharge time of 4–6 hours & was priced at $4950. Despite this hefty price tag, there were bold predictions that Segway would be the fastest-growing company into a billion dollars ever. Segway’s journey from the US to China: Immediately after buying Segway in April 2015, Ninebot began to sell a series of Segway branded scooters and other products priced at $1,000 or less taking advantage of economies of scale. They managed to sell far faster than the Segway PT ever did. Fifteen years after Kamen introduced the world to an electric vehicle, the world was finally ready for them with the ever-growing number of bike lanes in urban centers. Now let’s try to deep dive into why Segway’s vision to change transportation failed. The company had a brilliant idea, patented invention & great introductory publicity but still, the product failed. A few questions that I asked in the quest of finding the answer to the above question. 1. Did the company have a complete product market awareness? The product was targeted for which geographic regions & customer segments and what was the purpose? 2. Why were the models recalled in 2003 & 2006? Due to the fear of competition was enough product testing conducted for different scenarios before the launch of any new versions? A survey in Florida highlighted that Segway developed and tested the PT under the greatest secrecy. The company worried a competitor might beat it to the market. 3. Did the target market have the required infrastructure to support the product? Why was Segway banned from sidewalks and roads in a few countries? Was it considered to be unsafe? 4. If the product was a mass product to revolutionize transportation was the product rightly priced? Wasn’t it expensive for most of the population in 2001? 5. How did Segway improve the product after many accidental reports? How did they collect & incorporate customer feedback to enhance the product and customer experience? 6. Were there enough training & customer support centers in the market since the unit required some training after the purchase? What measures for taken for customers' safety? Now let’s see what are the business level strategies which could have helped Segway to change the above story into success: External Analysis External Analysis is part of the SWOT analysis that is critical in strategy formulation. Thorough market research & external analysis of the industry could have made Segway aware of the threats in this industry like advantages & disadvantages over substitutes like bicycles, safety regulations in different countries, infrastructure availability to support Segway-like allotted parking areas, separate pathways for riders, charging points, etc. PESTAL Analysis is one of the useful frameworks for external analysis of the industry. Market Segmentation & Targeting Knowing customer needs & understanding exactly what the customer wants is very critical for a product to be successful. When defining your product market, there are four important aspects: What – Product type To Meet – Customer Needs Who – Customer Segments Where – Geographic region Segway missed the focus on the last two aspects ( who and where). In November 2002, it was available for purchase on the Internet for the public. Considering the sales and recall of machines in 2003, Segway should have focused on the Single Target Market approach whereby the firm selects one particular market segment and makes every effort to lead that market. Initially, they could have targeted only B2B markets like hotels, departmental stores, amusement parks, and huge corporate campuses where employees could use Segway for internal transport. After wider user acceptance of the product, they could have considered expanding & making it available for more customer segments. Intense Product Testing It is critical for improving product acceptance. After a few accidental reports in 2002 & 2003, Segway should have invested more in the testing of different scenarios with a different set of target audiences, analyzing important & safety features, ease of use, appeal, and function, as well as testing whether each customer would likely buy what it is offering. Pricing strategy A company should select a pricing strategy that’s appropriate for its target market such that it maximizes profits while considering consumer and market demand. The product should be affordable for the target market & customers should be convinced by the product's value in exchange for the price that they pay for the product. Segway was made available to the general public over the internet and it was perceived by the majority as expensive. Manufacturing cost & nickel-metal hydride battery made the price of Segway too high and the company couldn’t afford to lower the price initially. To overcome this challenge, the company should have targeted the right market segment i.e. B2B market initially. Segway could have managed to sell more units than they managed to sell initially. Pricing Strategy should match the target group. Invest in innovation Records history shows that most successful innovations involve some degree of iteration, experimentation, openness, and collaboration. An invention needs to gain market acceptance which is possible by incorporating user feedback in product enhancements. Learning from mistakes & soliciting customer feedback is critical in product innovation and enhancements. Kamen, the inventor of Segway had received feedback from multiple business leaders for the product design. Segway was considered to be too heavy and had traditional looks. The feedback was neglected and not considered by Kamen. Customer Training & Support Centers: Segway required some training after the purchase, & thus it needed to have reliable customer interaction points where customers could test drive, learn, and take lessons. Instead, it was available for purchase on the Internet for the public which made the buying process tedious for the buyer to go regional training center for lessons. If a retailer similar to Home Depot could have been the customer contact point, the product could have been successfully sold to a wide marketplace. Resources: https://en.wikipedia.org/wiki/Segway https://edition.cnn.com/2018/10/30/tech/segway-history/index.html https://www.prophet.com/2011/04/30-why-did-segway-fail-or-did-it/ https://www.ft.com/content/7f9de44a-e353-11e4-aa97-00144feab7de #SegwayStory #Segway #Segwayfailure #StartupStory #Businesslessons #Strategy #Startup

In 2009 Kevin Systrom, a 27-year-old Stanford Graduate coded an app called “burbn” as a side hobby. His only intention was to build a community where people having an interest in whiskeys could share their check-in locations & photos. Its only competitor at that time was Foursquare which provided a personalized recommendation of places to go near a user's current location. In May 2010, Mike Krieger partnered with Kevin to join Instagram. After careful analysis of “burbn” it was found that photo sharing was the most popular feature of the app. So they decided to focus only on one thing which was photo-sharing capabilities and scrapped almost everything else. After months of experimentation and prototyping—in October 2010—Systrom and Krieger renamed the app to Instagram – instant camera + telegram. The brand name itself allowed customers to understand the purpose of the app. Over the period, Instagram had multiple releases of the app adding simple features and removing unpopular ones. Like in 2013, Instagram made it easier to share posts by adding links to embed photos and videos. In 2019, Instagram got rid of the ‘Like’ feature in the app. They also kept the app very simple. Often too many features bog down and kill products. Key business lessons for entrepreneurs from the Instagram story: Lesson 1: The company had a false start but it evolved into something else. Sometimes you need to fail to find the right solution. In 2009, little did Kevin know that his side hobby would turn into a multi-billion dollar business. If you are building something and you are not sure which direction to go, you have to focus on core competency & strengths and try not to get attached to ideas that you love. Lesson 2: Keep the brand name in sync with your core capability and purpose for better customer understanding of the product. Lesson 3: You should not be afraid to have simple solutions to simple problems. Make something that customers want and keep the customer-facing design and content simple. Lesson 4: Optimize for customers, don’t optimize for valuation. Analyze your business and find out what is working and what isn’t based on customer feedback. Try to always cut what doesn’t work and isn’t popular. Enhance customer experience by focusing on and improving on what customer wants rather than providing more features. What makes products popular and in demand is when they’re useful and they’re usable. Resources: https://en.wikipedia.org/wiki/Timeline_of_Instagram https://medium.com/@obtaineudaimonia/how-instagram-started-8b907b98a767 https://www.universalcontents.com/2019/08/startup-of-instagram-who-found-instagram-and-how.html #Instagram #Startuplessons #Businesslessons #Strategy #Startup

“Our strategy is to internationalize”. “My strategy is to consolidate my industry”. “Our strategy for this year is to ramp up R&D budget”. “My strategy is to outsource more of my production”. Have you ever come across these lines before? Do you think any of these is a strategy? Definitely not. These are steps towards strategy and not the strategy itself. Why do companies have difficulty with strategy: In today’s competitive & fast-changing business environment, we find many companies fail to grow due to a lack of good strategy. Most organizations believe they have a strategy when in fact they have none. Many people at different levels of organizational hierarchy freely use the word strategy. What is not clear is whether they are all referring to the same thing. There are a lot of management fads that confuse us about strategy. A major source of confusion among managers is to understand competition and the market. Managers think of competition as being the best in the market. “If I become the best, I will succeed”, is a strong belief. However, this is a dangerous way to think about competition. Let me ask you this question: Is BMW the best car? Some people might agree while some won't. It serves a certain set of needs of a certain set of customers whereas other car brands serve a different set of needs & target certain customer segments. There is no best company. There is no one way to compete. Competition is all about creating unique value for the set of customers you choose to serve. It all depends on what needs are you trying to serve. What is strategy? A Strategy isn’t a goal. A Strategy isn’t operational effectiveness. It is neither a business process re-engineering nor bench-marking. A strategy is a set of choices to achieve the organization’s goals & objectives by offering a unique value proposition to customers & achieving sustained competitive advantage. It deals with long-term performance rather than routine operations. It defines how you are going to compete differently. It is utilizing, allocating & managing resources to meet the goals and objectives. A strategy is “emergent”. It is a process and a pattern of actions rather than one, which is fully formulated in the beginning. The first fundamental choice in strategy is who am I trying to serve. You can’t serve everyone. You can’t meet the needs of all. You need to be clear about which needs of which customers are you going to serve. Simple questions to ask during strategic planning are: - What is your unique offering? - Whom are you trying to serve? – On what principles should it be based on? – Is the strategy sustainable? Making the right choices with the help of internal & external analysis, allocating the resources to achieve the defined objectives & offering a unique proposition to set of customers is critical to sustaining in today’s fast-changing business environment. References: Michael Porter (1998) - Competitive Strategy #Competition #Strategy