How IBM, Ford, DuPont, and Sony passed on Windows, Cadillac, Gore-Tex, and iPod

There are many reasons why companies ignore good ideas. Some of these reasons seem plausible: the idea doesn’t match the task at hand, or it requires too much capital or manpower or too much management focus. Then there are the cases where the big bosses may not have been paying enough attention.

Consider Thomas Edison, who briefly employed in his laboratory a colleague named Nikola Tesla. Tesla came up with an alternating current induction motor and suggested to Edison that it was a better source of electricity than Edison’s direct current dynamo. Edison is said to have told the assistant, in one of the most obvious miscalculations in business history: “Save me that bullshit.” Let’s enjoy a little more.

Apple adjusts

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In the late ’90s, when mp3 players were starting to boom, an engineer named Tony Fadell had an idea for a line of digital music players. Fadel had worked for large consumer electronics companies, but had been navigating Silicon Valley for a decade trying to develop his own devices, with limited success. He took his player to one of the pioneers of digital music at the time, RealNetworks, who was selling music over a network and refrained from creating a separate personal music device. Consumer electronics companies such as Philips and Sony were not interested in this.

Finally, he found a guy named Steve Jobs, whose computer company was in dire need of connecting mp3 players to its iTunes app. Fadel thought he would give some advice to keep his company going. I thought wrong. Jobs told him: You’re joining Apple and building this in a year. Fadel, like many others, obviously found jobs as irresistible as they were annoying. Five years later, Apple sold the 100 millionth iPod. Unfortunately, after a 20-year run, the iPod will join the Walkman at the Museum of Technology – Apple recently announced that it would stop manufacturing the device.

DuPont leaves one slip away

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In the late 1950s, a chemical engineer named Wilbert “Bill” Goure was getting a warm haze about a compound he was working with called polytetrafluoroethylene. Perhaps this did not make him popular at cocktail parties; However, you will earn him a lot of money.

Gore thought the compound, which DuPont called Teflon, had potential beyond what his employer had in mind — a nonstick coating. So, he and his wife, Viv, started off alone and founded WL Gore & Associates in 1958, in the basement of their Newark, Delaware home. PTFE was highly heat-resistant, making it ideal for electrical insulation—and just in time for the emerging space age and computer age, which craves electrical efficiency; It was applicable to medical implants as well.

But that’s not why you know their nickname today. In 1969, after their son Bob created an extended version, called expanded PTFE, the company found a market for a breathable, waterproof fabric they called Gore-Tex—making winter weather more bearable for all of us.

Ford vs Lincoln

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This is the story of two Henrys. Henry Leland was a genius mechanic, gunsmith, and supplier to early automobile companies who could consistently make parts within tolerances (0.001 inches) unheard of at the time. He envisioned a high-end car running like a dream. On the other hand, Henry Ford was a design innovator, but lousy at the time in manufacturing. And at the turn of the last century, at his second company, Ford could not produce the low-cost, about $1,000 models he was hired to manufacture – and he wasn’t interested in the $3,000 luxury cars.

So, in 1902, Leland was brought in by investors who took control of Henry Ford to fix things. Ford, who no longer runs Ford, walked away. Leland began focusing on high-end models and renamed the Cadillac Company. Leland later sold Cadillac to General Motors, regretting it, and resurrecting the idea of ​​an independent luxury car brand in 1917. Being an admirer of a certain American president, his new luxury car was named Lincoln. Ford would have had the last laugh, however, when it bought Lincoln after bankruptcy in 1922. This year, Lincoln is celebrating its centenary, the legacy of two great entrepreneurs who didn’t always get everything right.

IBM opens the window for Microsoft

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The question was: Do you want to buy it or do you want me to buy it? The answer will change computing. The speaker was IBM exec Jack Sams, who needed an operating system for the IBM 5150 personal computer. The machine was built with an open architecture – unheard of by IBM – when it was introduced in 1981. The question was asked to 24-year-old Bill Gates , which he started, Microsoft, didn’t actually have an operating system, but he located a site called QDOS (for Fast and Dirty Operating System) from a local company. Given the opportunity to buy or lease QDOS, IBM has made the latter.

Gates cleverly negotiated the right to license QDOS – which became MS-DOS, and later part of Windows – to all comers. And they came. The rush of third-party computer makers that followed the introduction of computers in 1981 – including Dell, Compaq and HP – would turn Microsoft into the largest software maker on the planet, and eventually force IBM out of the PC market. Sams’ question sounds dumb now, but it would have seemed less so for a company racing for a market that was slipping away. Perhaps IBM should have ordered one of its mainframes first.

From the May/June 2022 issue of company magazine

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