Here are three statements, each made nearly 40 years apart:
“You could put in this room… all the radiotelephone apparatus that the country will ever need,” stated by W. W. Dean, President of Dean Telephone Company, in 1907;
“I think there is a world market for about five computers,” attributed to Thomas Watson, Chairman of the Board of International Business Machines (now IBM), in 1943;
“640k ought to be enough for anybody,” attributed to Bill Gates, founder of Microsoft, in 1981.
It’s all too easy to chuckle over these statements but it’s a little unfair to do so, considering we have the advantage of 20-20 hindsight. Perhaps more importantly, it’s foolish to laugh when we could be learning from these remarkable examples of shortsightedness.
These individuals were all of sound mind and well respected in their field of expertise. So where did they go wrong in their belief that only a limited amount of a technological advance would be sufficient? Is there some underlying pattern and fundamental flaw to statements that we will never need more than ‘X’ of a particular advancement, where ‘X’ is often set to zero? One need only browse through a few books of quotations to run across dozens of similar assertions, all proven wrong in increasingly diminished periods of time.
Naturally, there’s a good reason to seek out this flaw if it exists. All of us, when not gifted with 20-20 hindsight, make similar statements. We’re prone to un-derestimating the proliferation of a technology, usually to the detriment of that process we call strategic planning. If any exploration can heighten our awareness to a flaw we’re all guilty of then maybe we can avoid it. What is it worth to an
organization if its ability to avoid foolish predictions is enhanced?
Statements about the expected proliferation of a technology naturally occur while the technology is in its infancy. This is so obvious it’s hardly worth mentioning, except that it does point to two aspects of any technology at this stage in the development cycle:
- It’s costly to produce because it’s just out of the prototype stage and economies of mass production have not yet reduced costs;Because it’s a new technology, it’s difficult to imagine how it might be used.
High cost and a perceived lack of applicability readily combine to produce the statement, “We’ll never need more than ‘X’ of these.” The flaws in our logic are based on poor memory and a stubborn lack of faith.
The most difficult flaw to correct is our lack of faith. Though we may not personally be able to envision a widespread use for a technology, the world is a big place. Put a new capability into the hands of the masses and they will inevitably find a use for it.
Which of course ties us right back to the other flaw: the technology costs so much we can’t see the masses buying it, especially since we can’t imagine how they might use it – a neatly packaged negative feedback loop. We’re blind to the certain knowledge that production prices drop – always.
There’s a simple, mechanistic way around this feedback loop. Just pretend ‘it’ – whatever ‘it’ is – costs 100 times less than it does today. Would people buy it? Would they find a use for it? This is not that big a leap of faith. How much
did the first telephone exchange cost? The first computer? The first megabyte of memory? What do they cost today?
Now push the envelope and consider more than just the cost. What happens when your product becomes 100 times lighter, or smaller, or faster? What happens when your watch can contain a GPS, computer, radio, music player, communications centre, personal medical diagnostic tool and whatever else you’ll let yourself imagine, and you can buy it for less than $100? Or less than $20?
Or do you believe that only a handful of people need a personal GPS… and why would anyone want all that stuff… what would they do with it? I hear the cries of Dean, Watson and Gates in the background.
Peter de Jager is a speaker and consultant on management issues relating to Man-
aging the Future. Contact him at [email protected]