Computers, like shoulder pads, were huge in the 80s. Both in popularity and in physical size.
Computers were big and expensive, and only used for serious work. The market was dominated by IBM, who’s president Thomas Watson said in 1943:
"I think there is a world market for maybe five computers."
The Not-so-serious Computer
A new type of computer called the personal computer appeared in the late 70s, such as the Altair and the Apple Computer. Industry experts considered these devices to be toys, not suited for real work and certainly not a threat to mainframes. Their reasoning was simple and sound: PCs were vastly underpowered compared to mainframes. Their processing speed was limited, their memory capacity was extremely small by comparison, and they didn’t support the serious software of “real” computers. Looking at the clock speed of mainframes and PCs of the time illustrates this point:
Of course, the experts were wrong. PC shipments began to rise, and then grew exponentially through the 80s, and continued ever since:
PCs changed the landscape of computing. Rather than competing with mainframes head-on, PCs created whole new categories for computing to be used. Good enough A good model to understand this is the use of value curves, described as part of the Blue Ocean strategy. The model is elegantly simple: by comparing values across different products or services, it is possible to see that making strategic choices to be worse at some values and better at others can lead to new market opportunities. In the case of computing, a simple value curve analysis could look like this.
PCs sacrificed speed, memory and multiuser capabilities to have a dramatically better single user experience and lower cost. For many applications, the values that were de-emphasized were “good enough” for a large number of real world applications. Over time, these values improved, to the point where they were “good enough” for almost anything that a large numbers of users could want from a computer.
Serious Manufacturing
This analysis and dynamic can be explored in the context of manufacturing products. The process of getting a product from design to the market is a long and complex one, spanning multiple countries, supply chains and job descriptions. The product company has three basic approaches to choose from:
- An established, large contract manufacturer
- A smaller, niche contract manufacturer
- Set up an in-house manufacturing line
Each of these has its own pros and cons, and within each option decisions can be made to automate more or less of the manufacturing and assembly activities. A trade-off of these values can be explored using value curves:
No strategy is dominant, meaning that each one is a credible option for a product company depending on which value is most important to their business.
However, examining the values, it’s clear that time is one that is particularly difficult to achieve. It’s slow to start a project and it takes a long time to bring a product to market, in a large part because of the complexity of the whole process.
So there is space to innovate. To dramatically speed up the time a product takes to get to market, a few things need to be true:
- Production has to be much more localized, with much less activity happening offshore
- Projects need to be much easier to start and run
- The process needs to be automated, from quoting to assembly, so that information and material can move at the speed of computers, not people
Looking at this automated manufacturing approach on the same value curve chart shows the trade-offs:
The more limited supply chain, lower volumes, and the (as yet) more limited capabilities of robots compared to people all mean that the types of products and cost of products made through this approach is not as attractive as traditional methods. But they can be “good enough,” and the dramatically faster time to start and time to market can open up possibilities that are simply infeasible to pursue otherwise. Imaging newly relevant values – such as “Less international travel needed” – can only strengthen the point.
Conclusion
As with any new technology and innovation, opening up new markets takes time and ongoing effort. But the compounding results can shift industries. Local, automated manufacturing will start off with niches, then expand to more of today’s products, and allow the development of new products and industries that simply couldn’t exist with the traditional method.
And the serious mainframes?
Launchpad is developing the software, hardware and AI tools to dramatically speed up the manufacturing of low and medium volume products, made here in America. We’re still early in our development, and will be launching a private beta later this year. Please get in touch with us at hello@launchpad.build if we can help you, or sign up to our newsletter to stay up-to-date with our developments.
