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Product Launch Failure
Let’s be honest: it’s only human to get a kick out of the spectacle of powerful, infinitely rich companies making a disastrous entry into a splashy new field, like Google’s recent epic fail with Gemini Al. These are rare, special cases of plunging right over the edge, involving an unusually choice degree of hubris and corporate humiliation.
Thirty years ago, it was Apple’s turn in the barrel when it introduced Newton, predecessor of today’s tablets and smartphones. At the time, Newton seemed almost miraculous. To be fair, new products often don’t succeed, even when they aren’t paradigm-shaking novelties. Most of the time there’s nothing unusual, let alone disgraceful in that normal winnowing process. It doesn’t usually involve becoming an instant, media-wide, national laughingstock that spoils the launch of a Whole New Thing.
Back then, business people often carried Dayrunners, a trendy brand of totable small looseleaf notebook with calendars, notes, and contact info. Newton let you carry all that, reduced to the size of a paperback book and easily kept in sync with your desk computer. You could scribble notes to yourself, and—here comes the hangup—it could even read your handwriting. It was that one feature that led to ridicule, because Apple released it too soon after insufficient testing. Product designer Jony Ive joined Apple to revise the early Newton. A year later, handwriting recognition worked much better, but by then the PR damage had been done. After Steve Jobs’ return, he would keep Ive for every major product launch thereafter.
Newton’s main problem was it wasn’t networked. WiFi didn’t exist yet. When your 2024 smartphone does handwriting and voice recognition, it’s acting solely as a thin client; the work is done in the cloud and instantly returned to your screen. Newton, by contrast, had to do everything all by itself.
In retrospect, Apple’s big mistake was overpromising, with a pretentious ad campaign that implied a lot more AI than the little MessagePad could deliver. Newton’s basic idea wasn’t dumb. The proof was the late Nineties success of the Palm Pilot, a smaller, lighter, and cheaper Personal Digital Assistant.
My Newton, ready for an overseas trip in 1995.
Four years before the first Betamax arrived, more than a decade before Blockbuster stores would spread through our towns and cities, a U.S. company named Cartrivision released a domestically designed and built home video player. Unlike the handful of earlier attempts to sell home video recorders, this one had a specific marketing target and function: playing pre-recorded movies. Sold through Sears, Roebuck, & Company, the actual manufacturing was done by Packard Bell, a respected if second tier electronics company. Every Sears store that sold it also offered a fifty-film rental library of legal, licensed Hollywood feature films. No previous home video machine offered any.
This pioneering effort did things a little differently. Since most people didn’t live within daily driving range of a Sears, those rentals weren’t charged by the day, but by the number of viewings before a customer brought it back. (Each video cartridge had a simple mechanical counter, like an odometer. There were also a few cartridges for outright sale, mostly of the same kind of drearily cheap content that would later fill direct-to-VHS tapes.) The need to trade off rental tapes would bring customers back into the store frequently, which Sears liked.
It wasn’t a crazy scheme, but it didn’t quite work. Aimed at the top end of the market, for most of its existence Cartivision was available only as a built-in to “wideboy”-styled mahogany console TV sets for the living room. But the target buyers already had expensive color TVs, and didn’t need another console set. It also meant the huge, heavy sets wouldn’t be brought in for servicing, and few of the field technicians in the Sears service trucks had any training in fixing the moving parts of a videotape machine.
In contrast, when Sony came to America with Betamax, it too targeted a specific purpose: time shifting of broadcast programs. Just about any of the previous video recorders could have done that, but Sony was the first to make it the key to sales.
Often, the development period has been so long and expensive that the sunk cost fallacy takes over. That’s what happened to RCA’s incompatible, non-laser videodisc system; by the time it made it to market in 1981 they already knew it would flop, but after seven years of effort and $100 million, they couldn’t go back to their stockholders without making a valiant try. That four-year “try” wasted an additional $60 million.
In other cases, the product is stillborn, barely on the market at all. In 1951, it was CBS’s early form of color TV; a much later example is HD-DVD, the 2007 competitor of Blu-Ray. In 2012, Hewlett-Packard’s tablet computer lasted only 49 days before it was pulled. They all made it to the sales counter, but were almost immediately abandoned by companies that belatedly realized they weren’t going to win.
Most technological products become cheaper over time, but some have an intrinsic wall of high cost and limited demand that never fully goes away. Supersonic flight, Concorde style, never did enter a virtuous circle of becoming affordable. AT&T’s 1970 Picturephone, at a monthly rent of $100 ($775 in today’s money), couldn’t attract enough customers to make calling each other worthwhile. Color TVs, which started out three times as expensive as black and white, spent ten years as a niche for the rich that didn’t hit its 1955 sales goals until 1965, when they were only twice as expensive. But they doggedly hung around long enough to succeed, mostly because RCA, color’s chief developer, never gave up.
The failure of the Alto computer, invented a half century ago at Xerox’s Palo Alto Research Center and a decade ahead of its time, was more than a simple case of lazy or overcautious corporate timing. What made Alto so unique, so advanced was its windows-icons-and mouse interface and its (relatively) high-definition bitmapped screen. At the time, fifty years ago, that required so many expensive silicon storage chips that the product would have been impractically costly. Then, a key breakthrough in cyber engineering allowed the computer to save most of that money by continuously, imperceptibly swapping parts of that screen image in and out of a smaller memory.
With the Alto, Xerox had a five-year head start on a workplace-capable, networked, windowing computer with a laser printer. But this is critical: they knew, they had to know it would be a rapidly depreciating asset. It was literally a case of use it or lose it. They didn’t use it in time, so, in one of the great what-ifs of corporate history, they lost it.
Apple’s nearly forgotten 1983 Lisa computer series preceded the Macintosh by a year, with much of the same system architecture—windows, icons, a mouse. The problem was a familiar one for groundbreaking new technology: it was way more expensive than planned. A well-equipped Lisa workstation cost about half as much as a car. From that point forward, the brand that once called itself “The computer for the rest of us” was twice as expensive as the computer for the rest of “them”—i.e., MS-DOS, later in the form of Microsoft Windows (with a capital “W’).
Sometimes it’s a problem of timing. The project is rushed to the market before it’s ready, like first generation fission power stations, the space shuttle, Newton, or VR headsets in the Nineties. Or it’s too late to reach the market, like Polaroid’s Polavision, instant (silent) home movies that would have rocked the Super 8 market in 1966. But when they finally appeared ten years later, they were overshadowed by truly “instant home movies”—video, with sound, on reusable tape. Sony’s Walkman cassette players were world-beating hits, but their much-ballyhooed 1992 follow-up, the MiniDisc, had a unique Sony recording format that didn’t have time to catch on before direct online digital delivery and storage (MP3 and Apple iTunes) took over from physical media.
At the other end of a particular technology’s birth, widespread adoption, and economic lifetime, there are often a few ideas, once novel, some quirky, that have had unpredictable staying power beyond the grave of obsolescence. Super 8 movies, vinyl records, vacuum tube music amplifiers, instant film cameras; hobbyists gave them ghostly afterlives, decades after their abandonment by the mainstream market.
Some costly corporate misfortunes are outright blunders, combined with, in many cases, infighting and ego. In the case of Google Gemini, it was wokeness, combined with willful blindness. To be fair, plenty of other bad product launches were normal misjudgments, combined with unexpected technical snags and plain bad luck.
Apple’s very recent cancellation of its decade-long, multi-billion-dollar pursuit of a practical self-driving car, is a rare, apparently laudable case of a megacorporation that prudently pulled back from the brink before taking that last, bet-the-entire-company risk of manufacturing and selling a vastly expensive new product. Even the world’s most successful firms are wary of the tricky transition between a promising idea that works in a lab and a commercially viable product for sale to the public.
One suggestion, though: if you’ve got a risky new product, don’t give it a too-easily-mockable name, like Edsel, Ishtar, or Gigli.
You don’t always know what, at the outset, will fail; on the other hand, you don’t always know when an established institution that seems to have been humming along practically forever is about to enter a failure spiral.
I recently opened a used book (Man Without a Face, 1997). After a lifetime of disillusion, Markus Wolf, Communist east Germany’s coldly brilliant spy master, spells out fifty different ways that he helped the DDR state cynically betray the cause of socialism. Nonetheless he couldn’t resist ending his postwar tale with a defiant dedication to Marx:
A demain, Karl! Until tomorrow.
Now, if that’s not a chilly ending, I don’t know what is.
Published in General
In the case of Google, there seems to have been a case of general corporate dysfunctionality coupled with the politicization. I’m seen a lot of comments at Twitter reflecting Google employees who were hired at pretty good salaries and not given much in the way of work to do. I don’t think Google’s current management knows how to effectively run an organization as large and complex as the one they have.
See also Google’s Culture of Fear.
In the mid-century heyday of American corporate labs, Bell Laboratories, RCA’s Sarnoff campus, Xerox PARC, IBM, GM’s research center: we were on top of the world.
Great piece, as always.
We got one of those CED (I think) players at a garage sale way back when. I remember the movies skipped like vinyl records.
Many of you will remember Ricochet member Dylan Newlander, who died last August. He and I corresponded about his experiences in the software/app trenches working for the makers of Graffiti, an aftermarket reader of printed handwriting that was nearly perfect, if you were willing to bend to its style. Here’s a post of his from a few years back.
https://ricochet.com/617687/grafitti-and-me/
Yes, the CED was always a bad idea, just trying to do it cheaper than laserdisc. People still collect laserdiscs.
I remember the Apple Lisa. I really wanted one, but at $16,400 in 1983 – no way could I ever dream to own such a thing… In reality if I had that kind of money in 1983, I would have blown it on a used Corvette that was always parked in the mall parking lot with a “For Sale by Owner” sign in the back window… $12500 OBO. I can almost remember the phone number.
I also remember the Palm Pilot, it was ahead of its time. Pre USB. Users just couldn’t setup serial ports to the device. I can’t count how many afternoons I sat with a realtor, installing the serial port cradle on their computers, setting up the device and waiting for it to sync with their mail clients for the first time… I am sure they paid for the shop time, as much as they did for the Palm Pilot…
Its kinda funny, but Apple kinda cannibalized itself several times, first with PDAs then with IPods, having all that functionality assumed into one device, the Iphone. They have to charge $1500 a phone, because of all the other devices they’re not selling because of the Iphones’ utility.
A really good book on company founding (and by extension new product/service invention) is Zero to One by Peter Thiel of PayPal Mafia fame. Its a few years old now, but I think it holds up.
Thanks, Dotori! Yep, they were CEDs. Our film festival was (unwisely) on screen during the Oscar ceremonies in 1982, so we gamely held off the later shows until the Academy was off the air, and gave away free champagne in the huge lobby, where RCA had new models, and, well, new models to show off. The CED SelectaVision was still new, and it got a special stage of its own.
Betamax was superior to VHS, but it seems like there have been a lot of times when Sony would develop some new standard that really wasn’t better than the competition, just different (and obviously incompatible).
Meanwhile, LP records are making a comeback.
That used Corvette sounds like the right choice for a 1983 bachelor. Let’s be honest, how many actual women named Lisa have ever fallen for a man because his bitmapped display was hooked up to a SCSI drive?
Beta suffered from other issues, including cost and weird running times. ~5 hours on a tape was enough to record 2 2-hour movies, but not enough for 3. etc.
Also, VHS HQ took care of many of the quality differences.
HAHAHAHAHAHA …
Loved the post, Gary!
What about Nova? “Doesn’t Go” in Spanish. Nice job, Chevrolet!
A common example, but it didn’t seem to bother the Colombian family I stayed with on a school exchange program one summer. Theirs was brand new, three times the price we paid here, and they were quite proud of it.
I was 16, in 1983. Not really a Bachelor yet. I dont think it would’ve been the best choice for me. I do regret not leaving High School earlier and go swamping in the 80s. (oil field work) … Its hard work, but top dollar work for a teenager. I wasted 3 very valuable years in high school.
I came to Calgary in 1989, interest rates were 3x higher than they are now… People were giving their houses back to the banks in record numbers… Had I come to town with the money to buy a townhouse/condo even… Even just assume a mortgage on an existing place … Gotten some room mates… I would be in a very different place today, financially…
3D TVs!! I think they are beautiful. I don’t understand why everyone didn’t love them. Yeah, glasses, I know. But I don’t mind since I often wear glasses anyway.
It makes me sad to think what will happen when mine dies.
I also recommend The Hard Thing About Hard Things, by Ben Horowitz, former entrepreneur and now venture capitalist (Andreessen-Horiwitz) I reviewed it briefly here.
Hi. My name is Rodin and I had a Newton.
From a “flashback” episode…
I have some old magazines about the postwar American railroads. One of them was a first person story of being a 17 year old summoned to the principal’s office, and relieved to find out it was because the railroad had called to ask that he be released from school so he could drive up into the mountains before a snowstorm hit. Apparently the Southern Pacific was shorthanded so they were calling up the summer reserve list in February. Nowadays, the principal would fiercely defend the kid, protest that he couldn’t go on such a dangerous job at his young age, and hang up on the SP. But in 1957, the principal crisply said, “You’d better get going”, and the kid headed off in his 1952 Ford.
A different world.
Also, re Calgary: it’s useful to be reminded that not all of our Canadian friends live in trendsetting modern apartments within walking distance of the Toronto or Montreal subways.
Welcome, Rodin. Here, have a vodka with a twist of lemon. Have a seat. You’re among friends.
For the time being, there’s still projection TV, useable with active shutter glasses. Me, I’m a passive shutter fan, but I suspect the real Return of the King answer for 3D will be autostereoscopic (no glasses). I have to admit I am surprised that no manufacturer makes a passive 3D screen, because all it is, is a transparent overlay bonded to a regular flatscreen display, with a cost-free option to display different eye perspectives on alternating interlaced frames.
We mentioned the Sony Betamax. But that was really a Mark II-type deal, because originally the home video machine of the dawn of the Seventies was supposed to be Sony’s ¾ inch U-Matic, whose tapes were about the size of hardcover books. It was a fine product—profitable versions of it remained in professional use right through the end of the century—but when it finally got to the US market, it was too large, heavy, and above all, expensive to be popular in the home. Saving face, Sony immediately made it a success in schools, industry, and soon, broadcast TV.
Sony immediately got cracking on a similar but yet smaller machine, whose ½ tape cassettes would be the size of paperback books. From the first videotapes in 1956, engineers left “guard bands”, physical space between the recorded “stripes” so their signals didn’t blend together. Sony’s new half-inch tape was so closely packed that the guard bands were almost gone, yet superior engineering delivered a clear signal.
In Japanese calligraphy, coating the entire surface with one brushstroke is called “Beta”. Sony decided to represent it with the Greek letter.
Thanks for the recommendation, I’ll check into it.
In 1980, Exxon Office Systems (part of Exxon’s post-Oil Age corporate plan) introduced the latest word in … word processing.
Rather like perfecting the buggy whip as the first Model Ts roll off the assembly line in 1908.
Exxon Office Systems let 20% of their staff go in 1981. They sold off the whole shooting match (to Harris, I think) in 1984.
Very few do. But those that do live in such a bubble that they dont realize it.
Decades ago, CBC gave up on covering Canadian events. It started covering the major cities Vancouver, Toronto and Montreal… These cities have no idea what’s happening in Manitoba – Alberta at all.
You’ll probably laugh, but 40 years ago one of the lures of owning a satellite dish in California was the ability to receive a CBC feed. Imagine! Foreign television, 24/7, as if it were the most ordinary thing in the world! And I was tempted. After all, these were the people who brought the world the National Film Board and expo67.
Both of them, all kidding aside, things that brought the world’s eyes to Canada.
The most popular thing I ever wrote for Ricochet (I think) was partly about a big law office switching over from typewriters to computers.
https://ricochet.com/1007686/men-women-and-workplaces/
Sure the National Film Board made Canadian films in the 60’s to 80’s … but really hasn’t done anything interesting in 30+ years… Its funny, but the CBC gets $1.5 Billion in government funding – nearly twice what PBS gets. To produce entertainment that is 1/2 as entertaining, or less than 1/2 as informative than anything that PBS produces…