Gizmos and Gadgets
Example- Bell Control
Here is an example of a gadget that was introduced to the marketplace about twenty years ago. It is a neat analog gadget that allowed a consumer to turn of the bell or ringer on his or her telephone. In those days, all phones in Canada and the US were rented from the Bell companies or pruchsed through them. The Bell companies did not want you to turn the ringer off- it would tie up their networks with longer answer times and more redialling. So you could turn the ringers down but not off. For folks who wanted a quiet dinner- tough luck.
The Bell Control allowed people to plug their phones into the device and the device into the wall and turn off their ringers (a safety light would flicker instead of the phone ringing). A cute device- there were only a couple of problems: a) because the Bell group of companies controlled the market, there was no obvious channel to market these devices, b) not too many people really want to turn off their phones.
These problems occur over and over again with gadgets and gizmos- neat ideas with no real potential to find a market. The best you can do with these types of things is make a J.O.B. for yourself- there is no way to create a lasting business with substantial value creation with these types of things.
Example- the Wayne Gretzky Starflyer
A flying disc- that lights up at night! A 'Frisbee' that looks like a flying saucer!
Wow. Great. The only problem is: no one wants to play 'Frisbee' at night.
The Starlyers also used golfball technology to dimple the surface creating a long distance and highly stable new kind of flying disc. This industrial patented flying disc (the 'Superflyer') is inventive and useful in terms of playing with flying discs, distances traversed, accuracy and so on. Again, the problem is how to find a market. The toy and game markets are dominated by huge industrail players with enormous marketing budgets.
There is no effective way to gain entry to shelf space- retail chains will ask the entrepreneur how he or she will support shelf space with national roll-outs. The answer will be: "Uh, actually, we don't have one."
Well capitalized companies with huge marketing budgets and strong management are a formidable group0 to break into. Even if the entrepreneur has great ideas, indeed, possibly much better than existing toys and games and gizmos and gadgets, they will find it tough going.
It is true that the net does today make it possible to compete on a more even footing but the entrepreneur with a gadget is still highly likely to do no more than create a J.O.B.
Substantial value creation requires much more than just a neat idea. Eeven a whole series of neat ideas usually don't create a sustainable business model- they often don't even have the same distribution channels so it becomes nothing more than a grab bag of stuff with close to zero synergy. Try instead to Get the Business Model Right.
('Frisbee' is a trademark of the Wham-O Corporation.)
25 Steps