鈥淎 CHURCH organ mated with a weaving loom鈥� is how one commentator described
the 200-tonne telharmonium, one of the world鈥檚 grandest attempts at an
electronic synthesiser. Thaddeus Cahill designed the musical mammoth in the
dying years of the 19th century and raised hundreds of thousands of dollars to
install one in New York. He then hooked it up to the telephone system and piped
his tunes to fashionable Manhattan restaurants.
Cahill hoped to do the same in cities all over the US, but he utterly failed
to see the potential of a burgeoning new technology. Once radio came along,
people didn鈥檛 want to tie up their phones to hear music. By 1918 his creation
had been assigned to the dustbin of history.
Now fast-forward to 1987, when Motorola dreamt up a constellation of
satellites to relay phone messages from and to anywhere on the planet. It
created the Iridium company and raised billions of dollars. Eleven years later,
the service opened with great fanfare, yet within nine months Iridium found
itself in deep financial difficulty. Last week we heard that it has finally gone
bust, though its satellites may still be saved
(see p 9).
Advertisement
These grandiose plans may not have failed for exactly the same reasons, but
there are some tantalising similarities. To some extent, Iridium did fall foul
of a rival technology. Cellphones were nowhere when Iridium was conceived. Yet
by 1998, they were all the rage in many industrialised nations. In some cases,
the same cellphone could be used in several countries, which undoubtedly eroded
Iridium鈥檚 pool of potential customers.
Even then, when Iridium went live, its handset was 10 times the price of a
cellphone, and weighed four times as much. A minute on a cellphone cost cents
but, on Iridium, calls were counted in dollars per minute.
So, did Iridium offer enough extra to compensate for these disadvantages?
Hindsight says no. It was a white elephant. But Motorola should have been able
to predict the bad news and respond. Forecasting customers鈥� desires is now a
much more precise technique than in Cahill鈥檚 day.
The cardinal sin in both cases was not to think about the customer. Whether
hubris or folly, both projects seemed to be guided by the principle 鈥渂uild it
and they will come鈥�. This is a maxim best left to Hollywood fantasy.
