Quote:
Originally Posted by KSagal
It seems to me that marketing, and funding are not always in line with superior products. While frequently pure market pressures do make more and better products and values, this is surely not always the case...
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Indeed, the difference between success and failure in the marketplace depends on many factors, not all of them a matter of being a better product.
Some have to do with how well the company is managed. How effective the company culture is at adapting in the face of change.
How well it the product is communicated. Perceptual biases in the customer base, and how well they can be countered by effective marketing. The ability of management to lie. Government regulations. The ability of competitors to lie. Hollywood endorsements.
But the problem with a hot market is that you're seldom in control of it.
Back in the early 1980s, I worked for Symbolics -- the very first .com (literally, the first .com domain registered). We made workstations, not unlike what you have on your desk -- bitmap displays, windowed graphics, hardware dedicated to one user at a time, the ability to run multiple processes, strong networking, and much more, including features that are still being reinvented today.
Sun Microsystems ate our lunch, with inferior hardware and software. I won't try to cover all the reasons for that -- there were many -- but they survived, we did not.
Fast forward about a quarter century. Sun Microsystems is eaten as an appetizer by Oracle.
In fact, every company larger than 10 people I've worked for in the past 50 years, has been eaten up by other, more successful companies (not always larger!). Except for the grocery warehouse, all those assets ended up in the hands of two companies when all was said and done -- HP and Oracle.
The sole exception being my present employer, and even there, the group I work for was acquired, long before my tenure.
Oftentimes, success boils down to whether you can pour money into a business long enough to see a return on your investment -- and then, whether you can continue to supply money long enough to change -- a race between corporate finance and corporate inertia.
Your example of Betamax vs VHS was won on the basis of content distribution. There was a narrow range of applications where the technical advantages of Beta mattered, but not enough to justify the price of U-matic. VHS won because people valued content over video quality.
That specific reason doesn't really apply in this case, as the manufacturers of battery cells for Segways and such don't sell to consumers. But manufacturers have their own concerns -- stability of supply being a major one. Redesigns because a supplier goes under really really hurt. Not only is it expensive, to redesign, retool, maintain a supply of spares for existing models, new test procedures, etc. You can literally be left with your entire operating expenses + redesign costs, and no product to sell. A single supplier going under can sometimes kill a manufacturer. My first job out of high school -- landscaping -- ended abruptly due to a problem with their supplier of sod.
So an upside to all this inefficiency, is that if Valence disappears, there's A123. If Segway has to move to A123, they can start looking at other chemistries from other suppliers.
But they won't be alone in that. I think it's unlikely that both companies will disappear. Far more likely that one or both will be snapped up by someone with deeper pockets, who -- for a price -- can offer the customer base some stability, and possibly retain their business down the road with whatever the replacement technology is.