• January 5, 2017

Business Story: Haloid, market positioning and value repositioning

 
Let me tell you a business story.
It’s about a smart company! Sorry, a previously dumb company! The first company to come up with personal computers. The first company ever to create a PC. No, it’s not IBM. It’s called Haloid. Haloid was the first company ever to come up with smaller computers. Fascinating story. They were the first to come up with a mouse. Someone else launched mouse to the world, though. But they engineered it. Haloid came up with the first small keyboard. It was literarily big. Around 1973, they only produced 2000 of them. 1000 for their own employees, 500 for universities and kept 500. They never marketed this product! Never.
 
Until one day, a guy, who lives in Palo Alto calls them and says, ‘hey, I heard you guys got this machine that and just want to see. I am getting ready to start a company and I’m willing to give you this company of mine. I’ll give you 100,000 shares for a million USD.’ Just allow me to see the machine. This guy walks into Haloid in 1978, amazed at the mouse, and documenting everything. ‘This is a mouse?’ How come you ain’t selling this to the public? He saw the device, and got very antsy and could not control himself. Do you guys realize how powerful this is? How many have of these have you made- only 2000? Oh my gosh!!!
 
You know who that guy is? Steve Jobs.
 
Steve went to this place, sees a big dumb company with a little understanding of what the small PC could be. They didn’t see the vision. 2000 computers; 1000 for their employees, 500 for the universities and 500 in a safe place. Yet, Mr. Jobs gave it to the world. And Apple today is worth 400 billion USD.
 
Now read a little further. A few years later, in 1973, Apple launched this computer and 8 years later Haloid decided to launch the same. In 1981, Haloid launched it again. You know for how much? $100,000. Funny! In 1981, how many people could afford a 100,000USD? That is just like $500,000 today.
 
IT FLOPPED! Guess what! Apple was taking the lead on everyone, and the other companies like Compaq, the Atari etc were also coming up to the same space. Immediately Haloid discovered they were behind the eight ball. Haloid had a machine that they made that was named Xerox. It became the number one ‘copy machine’ and on computers, Haloid was ranked #10.
 
So they said, yes, we can go compete with computers, but you know what? Why don’t we reposition ourselves because of its about positioning, not size! Haloid dropped the entire computer company. They lost 84 million dollars when they wrote it off. They decided to position themselves with copy machines. They said, ‘we are not a computer company’. We missed out here but we can go after this fully and completely.
 
A big dumb company made a mistake and were honest about it. They repositioned and saved the company. Today, Xerox is still a fortune 500-company worth $24.8 billion. They dominate the copy machine marketplace.

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