This chapter focuses on the period that precedes commercialization of the product and is based on the VCR case study. Only one or a few companies can succeed, usually after many attempts, in developing a sufficiently excellent product to achieve the dominant design. In this chapter, first, the time until the emergence of the dominant design is separated into three parts: the embryo period, the fetus period, and the birth period. Next, the basic requirements for achieving commercial success are discussed. It is very important for any new category of products to satisfy all the minimum consumer requirements rather than to improve a critical factor because those products which can not satisfy some minimum requirements are defective and will not diffuse widely. To complement the discussion in this chapter, the movement of Sony and JVC in this period and the emergence of the video software industry are explained.