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Smart, But Very Wrong

Reading Time: 2 minutes

Published: March 22, 2010

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In the late 1800s, when Gottfried
Daimler built the world s first automobile
by mounting an engine on the back end of
a stagecoach, you can bet his neighbours
thought he was wasting his time. Daimler
must have wondered himself. But then a
decade later, Daimler met Karl Benz, and
together they convinced themselves they
could build a market for the new machine.

Of course, it would be a niche market,
although Daimler and Benz thought they
could make it a big niche. In fact, in the
early 1900s they tried to forecast just how
big a niche it could be. Their answer: within
100 years, there could be as many as one
million horseless carriages on the planet.

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We know now just how wrong they
were. Drivers around the world today own
some 700 million cars and our factories are
churning out nearly 60 million cars a year.

They were so wrong it s easy to overlook
why. But they did have a method.
Automobiles are owned by wealthy people,
the pair had reasoned. More than
that, automobiles are owned by people
wealthy enough to hire chauffeurs. So
Daimler and Benz looked at the best
available economic models in order to
estimate how many people could afford
those chauffeurs, and came up with the
number of one million.

Don Peppers and Martha Rogers delve
into the Daimler example in their influential
2008 book, Rules to Break and Laws
to Follow. They also emphasize that
Daimler and Benz weren t alone. Alexander
Graham Bell was certain that the number
of telephones would be permanently
capped by how many operators could be
hired to manually connect the wires, and
it was scarcely more than a generation
ago that IBM s Tom Watson predicted the
world would only need five computers.

Change is real, and as you read this
issue s special focus on farm machinery,
you ll see how machinery makers have
changed in order to keep up with changes
in farmers. We have fewer machinery makers
who are battling it out for large combine
and tractor markets. Beneath them,
we have myriad short-line makers who
specialize in niche markets. But even in the
niche markets, we re seeing huge change,
including the building of global investments
and international partnerships.

Farming has always had an advantage
because it has kept the long term in view,
compared to so many other sectors that
are managed for short-term gains. Now,
however, the long-term view has to be a
view of a very different marketplace.

Consumers today are different, just as
you re different from your parents. You ve
changed the machinery manufacturers. Now,
how are consumers going to change you?

It s a humbling thought, and it drives
us back to the core job ahead of agriculture.
If we re going to get through this, we
have got to have consumers who trust us.
That means us individually, not just collectively.

Are we getting it right? Let me know.
You can reach me at 519-674-1449, or at

[email protected].

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