Dont Take it Upon Yourself to Educate the Market

Some products are so novel that the buyer must have it explained to them why they need the products before there is a chance of sales taking off. With hindsight, both the fax machine and e-mail are blindingly obvious innovations, as you will see later on. The first took over 130 years to take off and the second around 20.

Double Check That Name

Image how thrilled I was to be invited to the launch of a new computer at London's prestigious Dorchester Hotel in the late 1980s. Apricot (which later became part of Mitsubishi in 1990) then was the main U.K. microcomputer manufacturer and was on a roll; sales had never been better. The evening started well with cocktails in the famous foyer and a three-course meal in the colossal ballroom (where the U.K. version of the Oscars normally take place). After dinner the lights dimmed, a drum rolled, and a spotlight picked out Apricot's CEO who took to the stage to much applause. He started to tell us how the latest computer with the new Micro Channel Architecture was going to make all our fortunes and trail blaze the standard for computers from here to eternity. And its name was the Apricot Chi. How could we go wrong with a computer named after everyone's favorite panda at London's Regent's Park Zoo?

The applause continued unabated. Then I saw a friend, a fellow dealer, with a funny look on his face. Patrick was French but had lived in the United Kingdom for the last 10 years. I went over to him to ask what was wrong. Patrick whispered in my ear, "Chi is French slang for crap."

This major firm had spent millions designing the product, choosing the name, printing the literature, running the initial machines off the production lines and no one had remembered to check the name in the major languages.

Two months later, the machine entered the market retagged as the Apricot Qi without so much as a blush.

Table 14-1 lists some notable damp starts; these form some of the best-known names in their fields.

Table 14-1 Notable Slow Starts

Year

Product

First Year's Result

1874

Remington Typewriter

Only eight purchased

1883

Coca-Cola

Income $50, Costs $70

1948

Scrabble

532 sets sold

1956

Liquid Paper

1,200 bottles sold

1975

Microsoft

Turnover $20,000

Some very well-known products experienced slow starts. It was a smart move on Bill's part not to give up.

Are You Ahead of Your Time?

Benjamin Franklin used to say that if a man built a better mousetrap the world would beat a passage to his door. It's a lovely statement but it oversimplifies. In the pre-industrial world, where the greatest concern was being overrun by mice and the most sophisticated agricultural defense was a man armed with a hoe, the mechanization that the trap offered to solve the most pressing problem must have been nirvana. However, in a progressively highly developed society it isn't always as easy to see the mice for the cheese.

Some products fail because the world isn't ready for them. The fax machine, believe it or not, was developed before the American Civil War. Alexander Bain, a Scotsman living in England, actually patented the invention in 1843. A stylus at one end generated differing electrical signals as it was moved. These were sent down a telegraph wire and reproduced by another stylus at the other end. It worked, so why didn't it catch on? Well, nine years later, Giovanni Caselli built a variation called the Pantelegraph. The French Post and Telegraph agency actually used the Pantelegraph to transmit documents between Paris and Marseille from 1856 to 1870.

Then in 1888, Professor Elisha Gray (the man who received his patent for the telephone three hours after Alexander Graham Bell) patented another variation called the Telautograph.

Fifteen years later Dr. Arthur Korn demonstrated photoelectric telephotography using selenium cells. This enabled words to be accompanied by half-toned pictures (pixels in shades of grey).

Ten years later Edouard Belin's Belinograph employed telephototransmission, which made possible the direct capture of documents.

Then, finally, in 1966 Xerox put huge marketing effort behind their Magafax telecopier. This was the precursor of the modern fax machine.

The fax machine finally took off in Japan (because it was easier to send their symbolic language by fax than the other means available at the time—telex, telegram, and so on).

In the United Kingdom, the fax only became ubiquitous as a way of getting around the 1977-78 postal strike.

Why did such a useful invention have to undergo five major iterations before it became a worldwide success? The idea was brilliant and recognized as such from the outset. The marketing reasons are fascinating and highly instructive. To begin with, few people in 1843 wrote and read regularly. So the fast message market was infinitely smaller; and the message market that did exist was mainly centered along the new railway lines. Morse telegraphy monopolized these installations.

It is noticeable that the two who followed Bain basically repackaged the concept under their own fancy names, but they didn't have the resources to educate and create sufficient customers and met with no more success.

International communications, which might have opened up the pioneers' markets had to wait for transoceanic cables to be laid. It was only when Marconi demonstrated the transmission of signals by wireless telegraphy (from Cornwall to Newfoundland) in 1901 that inventors began to think sideways. Out came two vital product improvements: the ability to incorporate pictures and the elimination of manual encoding. By the close of World War II, international communications had mushroomed to such an extent that would-be users began for the first time to look for quicker, easier, cheaper modes of transmission.

One corporation finally introduced electrostatic replication and invested enormous intelligence and capital to promote it. Their educational efforts slowly began to make headway.

Two special classes of potential end users recognized the fax's value. In one instance because the complex forms of the script could be more easily transmitted to Europe and the United States by fax than by telex, which is better suited to alphanumeric symbols.

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