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The tale of Sega and the Dreamcast serves as a cautionary example of how neglecting your core product and failing to innovate can lead to failure in a highly competitive market like the video game console industry.

Founded in 1940 by American entrepreneurs who specialized in entertainment machines, Sega rose to prominence throughout the 1980s and 1990s as one of the leading video game and console companies, going head-to-head with Nintendo. Sonic the Hedgehog, Sega’s most famous character, became a pop culture icon and emblem of the brand.

However, in the early 21st century, Sega faced a series of challenges that culminated in its withdrawal from the hardware market in 2001, following the failure of its latest console, the Dreamcast. The Dreamcast’s downfall can be attributed to various factors, such as stiff competition from the PlayStation 2, which boasted superior graphics, a more extensive game lineup, and an integrated DVD player. A lack of investment and support from Sega, coupled with the company’s already tarnished reputation due to its previous consoles, and the rampant piracy and ease of copying Dreamcast games were also significant factors in its demise. Delays in the European and Japanese launches further persuaded many users to wait for the PS2 instead of purchasing the Dreamcast.

A key factor contributing to the Dreamcast’s failure was Sega’s lack of innovation. While the console did feature intriguing elements, such as an integrated modem for internet connectivity, online gaming, and the ability to connect to a VGA monitor for improved image quality, these features were insufficient to set it apart from the competition. Unlike Nintendo, which had developed the successful portable Game Boy console, and Sony, which had launched the PlayStation 2 with an integrated DVD player, Sega failed to introduce an innovative feature that would entice consumers to its product. Instead, it concentrated on enhancing existing features found in other consoles, like graphics quality and online gaming, without offering anything truly groundbreaking.

Moreover, Sega was unable to create a game catalog that sufficiently captivated consumers. Despite having Sonic as its flagship character, many of the games released for the Dreamcast failed to capture the public’s attention in the same way that Nintendo and Sony’s games did.

The story of Sega and the Dreamcast underscores the importance of innovation and offering products that genuinely stand out in a competitive market. Neglecting the core product is not an option, and it’s vital to stay informed about market trends and consumers’ needs and desires to provide a product that not only meets their expectations but also differentiates itself from the competition.


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  • Good to Great: Why Some Companies Make the Leap and Others Don’t. The book emphasizes the importance of focusing on what sustains a company and maintaining it. Available on Amazon.
  • The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. The book highlights the importance of balancing focus on existing products and developing new ones. Available on Amazon.
  • The Art of Possibility: Transforming Professional and Personal Life. The book emphasizes the importance of focusing on what sustains you and transforming your mindset to achieve success. Available on Amazon.


“Take care of what feeds you” in business often means focusing on the elements of your business that provide the most value or generate the most revenue. Here’s how to think about it in practical terms, along with some advice for what to do if you’re facing issues related to these areas:

  1. Identify Your Core Business: Your core business is what drives the most value for your company. It’s what you’re best at and what your customers appreciate most about what you do. This could be a particular product, service, or even a specific customer segment.
  2. Focus on Customer Satisfaction: Customers are the lifeblood of any business. If you’re not meeting their needs and expectations, they can easily find another company that will. Make sure you’re regularly seeking and acting on customer feedback, and invest in customer service and customer relationship management (CRM) tools to improve your interactions with them.
  3. Invest in Key Relationships: This can include relationships with customers, employees, suppliers, and business partners. Regularly evaluate these relationships to ensure they’re healthy and mutually beneficial. If they’re not, take steps to improve them. 
  4. Monitor Financial Health: Regularly review your financial statements to ensure your company is financially healthy. Look at metrics like profitability, cash flow, and liquidity. If you’re not financially healthy, it’s hard to take care of anything else in your business.
  5. Maintain Quality and Innovation: Quality products or services and continuous innovation are key to staying competitive. Make sure you’re investing in quality control and research and development.

If you’re facing a problem related to one of these areas, here’s a general approach to addressing it:

  1. Identify the Problem: The first step is to clearly identify the problem. What’s not working? Why isn’t it working? 
  2. Develop a Plan: Once you’ve identified the problem, develop a plan to address it. This might involve bringing in outside help, investing in new tools or technology, or making changes to your processes.
  3. Implement the Plan: Put your plan into action. This might involve some trial and error, but stay persistent and keep working at it.
  4. Monitor Progress: Regularly review your progress and adjust your plan as needed. This might involve setting specific metrics or goals to measure your success.
  5. Seek Feedback: Don’t be afraid to seek feedback from others. This could be from your team, your customers, or outside consultants or advisors. They can provide valuable insights and ideas that you might not have considered.

Remember, it’s important to address problems sooner rather than later. The longer you wait, the more difficult it can become to resolve the issue.


We want to test your knowledge about “Take care of what feeds you”. Participate and find out how much you know!

1. Which of the following is a key aspect of taking care of what feeds you in business?


2. In the context of business, “what feeds you” refers primarily to which of the following?


3. Why might a business focus on nurturing relationships with its suppliers as part of “taking care of what feeds you”?


4. How does employee engagement contribute to the principle of “take care of what feeds you”?


5. How does taking care of customer relationships feed a business?


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