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In
the center of Issaquah, Washington, not more than two blocks off
of main street, there is a full-fledged operating salmon hatchery.
The founders of Issaquah, apparently not being a very creative lot,
named this street "Front Street." Today, on Front Street you will
find restaurants featuring a cross-section of quasi-ethnic cuisine,
a camera repair shop, a musty-smelling used-office-furniture store,
and a large commercial dairy with pictures of cows painted on the
side facing Front Street -- which also happens to be the side where
the large shiny tanker-trucks pull up to pump out their loads of
fresh milk.
A
few steps further there is a small bridge crossing an offshoot of
the creek used by the salmon to get to the hatchery. Next is the
Village Theater with its Stage Right Cafe, an art gallery, a dentist's
office, several modest variety stores, a dilapidated used-everything
store, and a TV repair shop with 50s-vintage sets in the window.
There are the obligatory four gas stations at the intersection with
Gilman Blvd. If you can visualize all this and add some fir- and
maple-tree covered mountains for a background, you will have a reasonably
good idea of what you would encounter on a stroll down Front Street.
And in keeping with the reputation of the Pacific Northwest you
may also wish to include a few clouds and a raindrop or two.
The
only disruption to this bucolic sleepy-little-town scene is the
day-long traffic jam reflective of the all-too-rapid growth that
the Pacific Northwest has experienced over the last few years. The
"serious" shopping areas, however, are a few blocks away at the
quaint boutiques of Gilman Village and the upscale strip malls that
have taken over the adjacent area that not too long ago was a dirt-strip
airport.
No
matter where you live on this planet, or which country you visit,
such fairs seem to be much the same. The food vendors always appear
to be the busiest. At the Issaquah Salmon Days, the barbecued salmon
steaks are a particular favorite -- for obvious reasons I suppose.
The rest of the arts and crafts vendors seem to be mostly providing
free entertainment for the wandering crowds. People love to look
and compare, but few buy. I often wonder why the vendors come. The
business model for such a venture looks mighty shaky. With the cost
of the tent and set-up, the rental of the booth space, the cost
of inventory, and the cost of putting in at least two days away
from home, the sales rate for most of the vendors doesn't seem to
make for even a minimum-income operation. A few seem to do it to
make contacts for hoped-for future sales.
Yet,
there is an occasional exception.
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On
that warm and rain-free October Sunday afternoon, as we strolled
among the crowds on Front Street, I started noticing a person here
or there carrying a weather vane. No, not the kind you mount on
the peak of a roof. These were on six-foot black metal poles intended
to be stuck into the ground. Most had an animal cutout (a rooster,
cow, or dog) on top of the crossbar with the N-W-S-E letters, and
immediately below there was an assembly that looked like anemometer
cups. A few of them also had a person's name painted on a flat protrusion
on the pole.
The
more we strolled, the more weather vanes I noted. This was becoming
very puzzling. They were certainly not very handy to carry around.
The materials from which they were made did not look to be of particularly
great quality. So why were people buying them? Was I maybe wrong
about the craft items not selling well? No, hardly anyone was carrying
a painting, photograph, or other evidence of a purchase. The weather
vanes were definitely in the majority.
With
my curiosity building, it was time to go take a look at this vendor's
booth. I knew it wouldn't be hard to find. I would just go the opposite
direction from the weather-vane carriers. When I came upon it, I
couldn't believe what I saw. There was a line of at least 50 people,
each patiently waiting to get his or her very own weather vane.
Why? Of all the hundreds of items at this fair, why a weather vane?
Every other vendor (except for the vendors of the barbecued salmon,
elephant ears, and kettle popcorn) had to wait patiently for that
occasional buyer. Yet, here were a couple of plain-looking guys,
with a well-stocked truck nearby, selling weather vanes as fast
as they could assemble them. They must have known this would happen
because they had come well prepared to meet the demand.
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A
partial explanation could be that the price was attractive. The
basic matte-black weather vane was priced at $19.95. For an additional
$7.00 one could add the non-functional anemometer cups, and for
another $7.00, the personalized sign. This came to a typical total
of $33.95 plus the Washington sales tax of 8.5% -- not real expensive,
but also not pocket change. But why stand in line for an item that
doesn't provide much in the way of functional usefulness or, in
my opinion at least, decorative value. What was the appeal? Perhaps
I should have asked. Would these customers have told me? Was the
price of $33.95 perceived as a great value for this type of object?
Was the opportunity to choose the cutout figure from a dozen or
so examples the appeal? I noticed that this same booth was also
selling a black "Victorian" lamp post with a personalized name rider
for $30.00. But, I didn't see one person buying that item. There
was definitely some special and magical attraction to the weather
vanes.
Here
was a great lesson in product marketing. In an environment where
the typical vendor is happy with a few sales that may barely cover
expenses, these guys had struck "gold." How did they know? What
distinguished them from the rest? Or did they just stumble upon
this by accident?
This
led me to think about some of the marketing challenges that I regularly
encounter in working with client companies and potential investors.
Quantifying new market opportunities for evolving display technologies
can sometimes be about as challenging as predicting that weather
vanes will outsell every other product by an order of magnitude.
As
a result of this Salmon Days experience, I have come to the conclusion
that at times I must be trying to sell weather vanes before anyone
has realized just how terribly important weather vanes are going
to be. Corporations and institutional investors want lots of reassurances
(typically known as due diligence) that their investment will not
be too risky. However, if the only current examples are the "craft
booths" that have hardly any sales, it is impossible to provide
the quantitative data that will show that there exists a "weather
vane" of an opportunity.
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It
takes vision and perhaps some trial marketing to verify that such
an opportunity is there and ready for exploitation. Otherwise, by
looking only at the existing markets, it is not possible to find
the data to show how a new product, based on a new technology, will
create an entirely new growth market.
Before
there were desk-top computers, what could we say about the market
size for desk-top CRT or LCD monitors? Before there was an Internet,
could we quantify the opportunities for Internet shopping businesses?
The
early pioneers have the most difficult challenges in this regard.
Until the new territory has been explored, there is no way to know
how big or lucrative it may be. However, once the initial successes
happen, everyone wants to jump in. And "everyone" is usually a few
too many. I suppose at next year's Salmon Days there will be at
least six vendors selling weather vanes. By then, the demand may
no longer be there.
How
can we desire the successes from "boldly going where no man has
gone before" while at the same time hoping to "quantitatively assess
the detailed outcome of our journey into the new and untested?"
How
can we see "weather vanes" when everyone else is looking for minor
variations on existing "trinket themes?" In words no more sophisticated
than these, I have at times been asked why I can't just go out and
find "low-hanging fruit." As I understand it, this is intended to
mean that there must be some immediate, and as yet untapped opportunities,
just waiting to be "picked." In many years of working for and with
companies and investor groups, I have yet to find one of these fruit-laden
low-hanging branches. Have you ever found one? If you did, you were
darn lucky. Looking for such niche opportunities, I have decided
at least for myself, is a difficult and futile way to go through
life.
Market
success comes from thoroughly knowing potential customers and their
needs. The only way to know those needs is to spend intelligent
time in face-to-face interactions with as many of them as possible
and, on occasion, doing some real-time inventing while in the middle
of such a meeting. It is necessary to be able to interpret the customers'
needs better than the customers can articulate them. Only then,
by presenting a new technology or a new product concept in a way
that clearly shows what needs it meets -- whether obviously logical
or sublimely mysterious -- can a new product introduction be successful.
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We
in the display industry are fortunate. There are, and will continue
to be, so many opportunities that we will have a difficult time
choosing the best ones. Nevertheless, that doesn't mean that we
are impervious to making bad choices. I am sure that each of you
can name a couple of recently announced display technologies, or
products using displays, that seem to have lost touch with the reality
of what users might want even under the most optimistic of circumstances.
The
process of marketing new technologies, and products based on them,
perhaps has some parallels to quantum mechanics. We can determine
some features but others are too fuzzy to see. An attempt to measure
can disrupt the phenomenon being measured. The deeper we probe into
new territory the more uncertain becomes the measurement. Yet with
understanding of the fundamental influences, and with skill at interpreting
them, we can predict the opportunities on a grand scale. The process
is not mysterious. But just as quantum mechanics combines the behaviors
of particles with waves, the merging of technological possibilities
with seemingly unpredictable emotion-driven human behavior is comfortable
territory for only a few.
Should
you wish to share your opinions of what you consider to be the most
outrageous recent new product announcements, or other topics of
interest, you may do so by contacting me via e-mail at silzars@attglobal.net,
by phone at 425-557-8850, by FAX at 425-557-8983, or by way of the
downtown Issaquah post office to my home office, at 22513 SE 47th
Place, Issaquah, WA 98029.
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