In the late 1990s, I had the privilege of serving as an advisory board member to Xerox Parc’s venture arm. Our charter at the time was to go into Xerox Parc and look at what their many scientists were creating and see if they had any potential for commercial applications. This was in the early days of the internet and Xerox Parc had been developing both new software and hardware technologies the parent company wanted to try and either license or sell to other companies.
If you know Silicon Valley’s history, you know Xerox Parc has either dreamed up or created some of the most important technologies of our time, such as Ethernet, the original vision of a laptop and tablet, the mouse along with other core technologies for PCs — Graphical User Interfaces and WYSIWYG DTP systems and many more. However, in most cases, they never reaped a serious financial reward from these inventions. The most famous example of this came from a visit Steve Jobs took to Parc in the early 1980s where he saw what they were doing with a prototype of a graphical user interface. Jobs went to school on this and created his own GUI for the first Mac and, as they say, the rest is history. However, Xerox never received licensing fees or any other compensation for Apple GUI.
During my four years working with their venture arm, I came to understand why many of the technologies they created during those days never got to a commercial market. I don’t have time to go into detail but there was a lot of politics, infighting, licensing model disagreements, patent sharing issues, etc., that pretty much kept them from ever receiving the kind of compensation they should have on technologies they created. Most of what did achieve commercial success came about because, as in the case of Ethernet, the person who created it inside Xerox Parc, Bob Metcalfe, left to start a separate company. He founded 3COM and used the core technology of Ethernet to build a powerful networking communication company.
But there was another interesting lesson I learned from my time inside Xerox Parc. Often, when I was shown a product an engineer had created with the hope of commercializing it, I encountered a product that may have been interesting but I could not see an actual need for it. One great example was a two-handed mouse I was shown that was difficult to use and, on the surface, could not see anyone adopting it. When I asked the person who created it why he did, his basic answer was because he could.
Over the years, I have often seen products behind the scenes that may have been interesting but had no real market potential. When I asked them why they created it, they often gave very weak answers that, in a lot of cases came down to, “because I could.”
Last week, the media had many stories about a company called Juicero. Juicero created a $399 (initially priced at $700) device that squeezes juice from pouches, doing away with the hassle of cleaning a juicer and making it simple to have fresh juice drinks on demand. But, when some of their investors got their machines, they discovered if they hand squeezed the pouches, the juice would come out on its own. In essence, the need for the Juicero to squeeze the juice from the pouch was unnecessary. The problem is their reason to exist was engineered around the device itself — the device cost was a major focus of their funding. Yes, the recurring revenue from selling pouches with juice ingredients was also part of the business plan but the capital expense of the device was a key part of the business model.
I don’t know how the Juicero story will end or even if it still has potential, given the device itself is not really needed to get the juicing results desired.
While their case for the reason to exist is interesting, this one too follows the “because we can” model in the sense that the total solution offered has major flaws and, when you add the role of the device to squeeze out the juice if you can just squeeze it by hand, one has to ask, why they did a device in the first place?
The consumer products and consumer food industry does serious research and extensive studies about products before they ever bring them to market. They never create a product “because they can.” They don’t only crunch the total available market numbers but they also do serious analysis to understand the numbers and the trends behind them. Some of the big tech companies like Google, Amazon, and Facebook do similar research but smaller companies skip this step for many reasons, mostly related to cost and the lack of understanding the role research needs to play in creating a marketable product.
The “because we can” motto I see often in Silicon Valley needs to be retired permanently. The tech market is too competitive these days and, unless a product breaks new ground or provides a significantly different value to an existing product already in the market, creating anything otherwise will most likely fail unless it has research that shows it adds new value or solves a specific problem. Otherwise, things like Juicero just won’t make it in the long run.