02-16-2015, 06:11 PM | #11 | ||
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Perhaps Norrod was brought in to find a buyer, which he did. That is a liquidity event, just as he stated. Quoting 'media reports' as facts is often stated as weak, by you and others, when they are media reports you do not like. They are weak when not substantiated by facts. Media opinions are not facts. I have had enough of this topic. Thanks for the debate. Have a nice day.
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Karl Ian Sagal To view links or images in signatures your post count must be 5 or greater. You currently have 0 posts. "Well done is better than well said." (Ben Franklin) Bene factum melior bene dictum Proud past President of SEG America and member of the First Premier Segway Enthusiasts Group and subsequent ones as well. |
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02-16-2015, 08:47 PM | #12 | ||
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I am interested in the facts behind your statement that Norrod did find a buyer. All the announcement says is that Norrod was out as CEO. Quote:
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02-17-2015, 07:42 AM | #13 |
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When Segway was acquired by Segway UK at the end of 2009, that was indeed the liquidity event that Norrod was working on. It's fairly common for a new buyer to come in and put their own management team in place. That's why Norrod left when he did.
As for the original discussion, I'm not sure I'm following the line of reasoning that suggests experienced investment banks and VCs invested $100+ million in a company without having done any due diligence into whether there was a market for the product. Investors generally don't hand over money to an unknown entity without a pretty solid plan in place. John
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02-17-2015, 09:43 AM | #14 |
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Wasn't that the point of the Forbes story: The plan, not the product, was at fault?
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02-17-2015, 10:20 AM | #15 | ||
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Let's look at the known facts. Pre-investment marketing at any company is intended to understand the market for a product, AND to provide the company with ammo to pitch the investment to investors (for those in need of such investment). In 2001, inventor Dean Kaman was seriously talking up the opportunity, claiming Segs "will be to the car what the car was to the horse and buggy.”, and predicting that "he will sell 50,000 vehicles in the first year...". (WSJ 9/27/2010) The Wall Street Journal refers to the pre-launch publicity as "incredible hype". There are published reports that "...investor Kleiner Perkins Caufield & Byers (KPCB) once expected scooter sales to reach the $1bn per year mark. At $5,000 a pop, it would take 200,000 units to reach that revenue goal", that Segway investor John Doerr predicted that Segway would be the fastest company to reach $1 billion in sales. CNN reported in 2004 that the initial expectation was 40,000 units per year. To be sure, those reporters were likely not involved in internal meetings between Segway and their investors, but based on the way private investments develop, one can reasonably conclude that Segway made statements to investors about likely sales performance, and investors found those statements sufficiently convincing and promising, and subsequently made investments. I don't feel particular compassion for investors in start-ups. It's a risky business, and they must do their own due diligence assessment. They are responsible for making the decision to invest and they will take the loss if they are wrong. HOWEVER, investors will certainly review the company's market information as a part of due diligence, and [I]one can bet that Segway's pitch to investors did not say that they expected to sell an average of around 8,000 units per year over a 6.5 year period[/I]. (Gen 1 public sales launch on Nov 18, 2002 to company official comment in March 2009) So Segway made serious mistakes in their marketing projections, and (some) investors followed them through the looking glass. It happens all the time. Quote:
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02-17-2015, 10:45 AM | #16 | |
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At this point in time, it's abundantly clear that somebody botched it. The Forbes author has a particular point of view regarding how "world changing" products should be marketed, and I'm saying that Segway never gets into production if their own sales projections were even reasonably accurate. |
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02-17-2015, 01:56 PM | #17 |
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You again seem to be saying that the company developed a pre-market plan on one-hand (since they had to present something to get investment money), but on the other, say that no such plan was developed because it would've shown there to be no market...? Color me confused.
Potential investors do not just take something a company says at face value. You don't get to be John Doerr or Kleiner Perkins Caufield & Byers without having your own team(s) do their own set(s) of due diligence (which goes way beyond reading something the company created with colorful graphs and sales projections). My point is that if even the experts got it so wrong (including both star CEOs as Bezos and Jobs), then it's hardly the (lone) fault of the company. Everybody got it wrong. The Forbes article is Monday-morning quarterbacking at its finest, but it's whitewashing some of the facts to suit its perspective. John PS - And remember, the hype wasn't started by the company. The hype was started by a dumb book author who got a draft copy of his book leaked with just enough detail to have people guessing (and the origin of SegwayChat!). The company would've been far happier if that had never been leaked and they could've released it with just 10 percent of the hype (because some hype good; too much hype just means everyone will be disappointed).
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02-18-2015, 11:49 AM | #18 | |||||
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What I wrote was, Quote:
I thought I was pretty clear in saying that whatever sales numbers were projected by Segway, they must have been much higher than 8k units per year over the first six years. I make this conclusion because I don't believe 50k units over six years would be attractive to investors, and Segway would not exist today. Kamen himself was quoted as saying that he would sell 50K units in the first year. Quote:
However, the Forbes article is about failed product marketing. You wrote, Quote:
Although the investors have to take ultimate responsibility for their decision to invest, it was Segway itself that developed the post-launch marketing and sales plans, which resulted in ~8k units per year from 2002 to 2009. You can't put the responsibility for the company's performance over 7 years on the original investors. If the early marketing projections had the annual sales at significantly greater than 8K units per year, they were wrong. Quote:
John, to help us understand your position of knowledge, when were you an employee of Segway, and in what position? |
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02-18-2015, 02:28 PM | #19 |
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I did not make any "amazing admission" (can we cool it with the hyperbole?). Marketing was a part of the pricing equation, but obviously we couldn't set the price according to what we thought we'd sell it best at without taking into consideration the BOM. You cannot divorce pricing from production realities.
And it's not true that every product makes sense at only price points. There are many luxury goods that make little sense at their price point, yet still have a market. Segway was simply more price sensitive than I think many in the company originally thought. Despite the studies showing productivity gains would offset the cost of the machine for certain commercial applications, they were not enough to convince most commercial enterprises to take them on past pilot usage. Failed product marketing is in no way an adequate or complete explanation for the failure of the Segway to gain the traction it had hoped in certain markets. It feels like a simplistic, sloppy excuse for the complicated story of why the Segway failed. I'll agree now that product marketing may have been a part of that failure, but it in no way explains it alone. (I'd make the same argument for many famous product failures, like the Apple Lisa or Newton.) John PS - My position at the company is history and a quick search of the forums can answer that question for you. The leak was not orchestrated by the company. And as always, I speak only for myself, not for anyone else or any third party. I don't pretend to know all the facts about the company and I'm also pretty certain things are different there today than when I left a decade ago.
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02-18-2015, 02:48 PM | #20 |
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PPS - To the productivity equation, we actually developed a productivity calculator for business use cases, which you can still see on the archived version of the site from 2003 (which, amazingly, still works in the archived page):
https://web.archive.org/web/20030605...y/biz_app.html
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