Don’t let past success cloud your vision
Commodore computer was founded by Jack Tramiel – a native of Poland and a survivor of Auschwitz. After WWII, Tramiel moved to the USA and became a typewriter repair technician. By the mid 1950’s he moved to Canada and set up a company selling low cost office furniture and began developing electromagnetic adding machines. By the 1970’s Commodore Business Equipment was making calculators and digital watches and entered the semi conductor world with the purchase of MOS Technologies.
In the 1970’s it was thought that the future of computing was in large data base type computers but Mr. Tramiel rejected this idea and started to develop some of the first personal computers. Commodore’s early success came from their first computer, called the PET (Personal Electronic Transmitter). Next they launched the first 64 bit technology personal computer called the Commodore 64. The marketing for the 64 was brilliant – “I adore my 64” was a great catch phrase. As the first computer with a sound card it was positioned as something fun to use rather than something purely functional.
Despite their early success, Jack Tramiel sold all his shares and resigned from Commodore in 1984. Under new management in 1985, Commodore lost their way. The new management team at Commodore seemed to think that technological superiority could win the market. Without a clear vision or perhaps misguided vision of the future of personal computing Commodore launched their next big machine, the Amiga. Technologically brilliant the monitor could display over 4000 colors and in anticipation of merging computers with home entertainment the Amiga had outputs for both TV and VCR. The machine was launched with a lot of fanfare. TV production studios loved Amiga but Commodore failed to follow through with the advertising and consumer education needed to position the computer as anything more than a game machine.
Computers at this point in time were starting to align with the standard operating system (DOS) which Commodore refused to incorporate. Without a large enough fan base loyal to its unique operating system Commodore soon became an anomaly. Failing to expand from their TV production roots Commodore couldn’t re-orient itself. They kept trying to develop new superior products to regain market traction rather than create computers consumers wanted. For the next seven years Commodore seemed out of touch with the computing world. Never getting on the DOS bandwagon they eventually closed their doors in 1992.
What can Commodore teach us:
- Technology never sells itself: Superior products do not sell if the customer is unaware of the elements that will bring them value.
- Confusing a marketing challenge with a technological challenge:With sales floundering, Commodore invested in more R&D rather than in the marketing needed to promote the product.
- Without a vision of the future companies quickly flounder: After Tramiel’s departure Commodore developed multimedia production machines. When that failed the company didn’t re-orientate and drifted without a clear vision.
Having enjoyed some initial success Commodore’s management thought they were the next market darlings. Over confident and lacking Tramiel’s market sense Commodore lost its way. Don’t let past success cloud your vision.
1. Commodore story from Jones International and Jones Digital Century 1994