TiVo's problem lies in its inability to convince consumers to change their television consumption habits. Improper targeting and positioning led to an ineffective product, pricing, and promotion strategy that stuck TiVo in the abyss between the early market and the early majority. TiVo is a truly discontinuous innovation, a product that requires consumers to radically change their past behavior with the promise of equally dramatic new benefits. TiVo's main challenge is to convince the consumer to buy an expensive product in a new product category. While the early market, classified by visionaries and technology enthusiasts, is adopting the product, TiVo has had little success in convincing the Early Majority segment, also called pragmatists, that the risk of change is worth the reward of their innovative technology. This is evidenced by TiVo's current overall market penetration level of 0.04% and lackluster future projections. Visionaries are not a good reference for pragmatists due to their belief in evolution rather than revolution: . There are two things TiVo can do to convince the early majority to buy. First, they must secure a leadership position in the market. When pragmatists decide to adopt a new discontinuous innovation, they buy from the market leader. As the market leader, everyone else in the market adapts their products to work with the leader's product. Furthermore, the market leader attracts third-party companies that make aftermarket products, even if the leader is not responsive. Second, TiVo can position its product to a target market that evaluates the product as a 100% solution to the problem, what is typically called a whole product. Determining the right target segment requires an analysis of the customer, the company and the competition (fig. 2). The TiVo customer is defined by the unmet needs of the market. Although TV is one of the most hidden and ritualistic elements of contemporary American life, there are still aspects of television viewing that do not meet customers' needs. An estimated 68% of Americans complained of feeling "widowed" toward their loved one during the fall television season because their spouses were chained to the television during prime time from 8 to 11 p.m. Additionally, parents expressed difficulty getting their children to do homework during key television programming times. Overall, this is evidence that consumers want more control over their TV viewing habits. Analysis of the TiVo Corporation reveals their core competencies, which include proprietary software, national distribution through established outlets such as Best Buy, Circuit City and Sears, and product co-branding with trusted electronics giants Philips and Sony.