How did they do it?

Any startup is doomed if it fails to captures a Blue Ocean.

An Apple-1 computer, built in 1976

One out of ten startup fails. The stats is not so helpful and inspiring to an enterprenuer, but it does tells a very big story. That one startup survives because it is able to capture a blue Ocean.

If you look at the computer hardware industries, almost of them created Blue Ocean. The ones which didn’t, failed (and you hardly know their names). IBM, Dell, Microsoft, Apple, Compaq, Lenovo, all of them created a market which noone else saw, before them. Here, in brief, I would like to highlight how did these player got their initial Slingshot. Also, why they succedded, while other failed.

IBM

Although my first reading of IBM history was rather a critical account about the company’s involvement in World War II ( IBM and the Holocaust), I still admire this company for it’s managerial and technological achievement.

The strategy — Create a computer market for business (IBM was already selling to Government it’s Hollerith’s tabulator).

The tool — It created IBM 650, the first (almost) computer for business.

The features — Simpler, powerful, cheap ($200,000 compared to $1 million for UNIVAC).

The result — Captures 85% of computer market. Revenue from $412 million (1952) to #1.16 billion (1959).

The guy — Thomas Watson Jr.

APPLE

I know I know fan crowd, it’s your favorite. Sit down and listen.

The strategy — Create a computer market for home users (WTF? Who will use that machine at home, I mean why??? They are dumb!!)

The machine— The Apple II home computer.

The features — Compat, including peripherals (keyboard, monitor, graphics). Also, a bunch of softwares.

The result — +200,000 units sold/year. That was a adrenaline start. Apple became what it see it today.

The guy — The name is Jobs, Steve Jobs.

COMPAQ

OK. So now we have computers for Government, computers for businesses, computers for homes. We are done. No more new market to create? (We can’t see computers to chimps.)

The strategy — Create a blue ocean for PC Servers. Existing players were costly, sophisticated and not user-friendly (who needs simple machine for a business critical job?)

The machine — ProSignia (1992 article).

The features — Easy installation, file sharing features, printer, low cost, high speed.

The result — The Server industry went to $3.8 billion in 4 years.

The guy — Eckhard Pfeiffer

DELL

The direct sale guys. Micheal Dell is famous for distrupting the computer sales industries right from his bedroom, while still a teen.

The strategy — Computers cost low on hardware and manufacturing, but sold to customers at a high rate due to middleman. Let’s cut them out and do direct sales.

The tool — Turbo PC (it wasn’t the machine, but the way it was sold).

The features — Low cost to customers, faster delivery, great user experience. Viola.

The result — This company went from 0 to $73 million in first year of it’s operation.

The guy — Micheal Dell