Segway Case: poor value proposition

At the time, the Segway revolutionized the transportation market by being the first gyroscopic electric transportation device with a computer-controlled self-balancing device and two side wheels. Even though at first it did not meet the high expectations generated by its launch, this small and ergonomic means of transport could travel long distances and the best thing is that it was ecological because it did not require fuel.

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But along the way, some unfortunate events occurred that prevented the invention from achieving collective adherence as a means of personal transportation other than the gas-powered vehicle. In this new case study, we intend to investigate the history of Segway, analyzing the circumstances that stopped its growth when it had everything to compete and win in the market. Know the Segway case.

Segway history

The history of the Segway dates back to the late 1990s when Dean Kamen founded Segway Inc. in July 1999 to develop non-medical applications for self-balancing machines.

Later, Kamen also invented the Segway, and it was first introduced to the public in 2001 on ABC's Good Morning America. He arrived at a critical moment in US history when the country was still remembering the tragic events of 9/11.

However, Dean Kamen makes an appearance to demonstrate this unique invention destined to revolutionize the way people travel on public city streets. How did you come up with the name Segway? The word Segway is notably related to the word "segue," which means "smooth transition from one thing to another." Kamen wanted his invention to be a smooth transition as a new means of transportation.

In this case, the previous term was slightly modified to be called "Segway", the sophisticated vehicle that will transport people of all ages around the world without problems.

The Segway uses 5 gyroscopes (mounted spinning wheel and its axis that can rotate freely in any direction) to allow the vehicle to achieve "self-balancing" or, in David Kamen's team terms, dynamic stabilization. Along with the gyroscopes, the Segway also has tilt sensors that monitor the user's center of gravity 100 times per second, giving the rider the sensation of gliding through the air.

Despite the important innovation for transportation that the Segway meant, sales were not what was expected, destroying the enormous expectations that had been aroused in people. Even Steve Jobs himself claimed that it was a revolutionary invention that everyone should have.

The company expected to sell 50,000 units in the first year, but after almost two years only 6,000 had been sold. The unexpected lack of demand, manifested in the poor sales, caused it to be withdrawn from circulation for the time being. In addition, it generated all kinds of speculation regarding a possible lack of safety for the driver in low battery conditions.

The company was eventually sold to British businessman Jimi Heselden in 2010, but an unfortunate accident took his life a short time later. Heselden was driving a Model x2 through rough terrain in West Yorkshire when tragedy struck, causing it to fall 80 feet over a limestone cliff near his home.

The bumpy road has many tree roots, and it is believed that he may have lost control of the x2 by hitting a tree root, causing him to fall and thus the tragic outcome.

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Where did Segway go wrong?

The high price of the vehicle, depending on the model, is considered the main factor responsible for the low demand. Likewise, his followers maintain that the presentation of the first Segway model was ruined when part of the details of the device were leaked in advance, generating very high expectations that the company was not able to sustain with the virtues of the product.

Aside from the high prices and inflated expectations, it was also said that the company, to avoid giving the competition an edge, did not test its vehicles on public roads, so people would not be able to get acquainted with the new creation and the company itself could not identify the possible risks of its operation for clients.

Consequently, since failures or risks are not detected, it is not feasible to produce improvements because the basic problems are not known to work on optimizing the value proposition addressed to the customers, who are the ones who pay for obtaining it, based on this analysis, a product that lives up to their desires.

To eliminate possible misunderstandings, and reduce the bad image associated with the vehicle, Segway Inc. has opened dealerships throughout the United States where people can examine and test Segways to make sure they are safe and working properly.

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In conclusion, the Segway case is one of those examples of companies that, although they have everything to sweep the market since they debut with an innovative and overwhelming commercial proposal, make some commercial mistake that causes them to lose millionaire figures, facing the risk of lowering your reputation among your followers.

Segway did two things: raise the prices of its product and create too much hype by trying to keep its operation a secret until its launch. This lack of empathy with the customer cost them dearly, since not only did it not meet their expectations, but the product did not offer a differential value for its cost.

People were afraid to invest in a Segway because they didn't see it as safe. Over time, other companies improved on these details and that is why today's vehicles such as skateboards and scooters are gaining renewed importance.