Put a price on “new” and exploit it

By | March 24, 2011

A whole new series of metrics appear by which businesses are valued and judged. These have turned conventional wisdom on its head. Now, some of the most sought after shares are those of companies that have lost, and continue to lose, millions of dollars every month from inception. Many of these concerns have no tangible properties such as buildings and transport they are purely clicks and mortar.

The catalyst for this change has been the internet. A classic example being Amazon.com which now offers for sale almost anything under the sun via the world wide web.

But the past holds many examples of how innovation radically changed how we perceive and utilise that which surrounds us. In so doing fortunes have been made by those who saw that their time had come and reacted promptly. Let’s go back 100 years.

Thomas Edison, inventor of the electric light bulb, experimented with electricity for many years before the introduction of his product. He bided his time until the critical mass of urbanisation justified the investment of resources and provided the consumer market on which to capitalise.

A jeweller, Otto Rohwedder, in the early days of the 1900s, was a man who was fascinated with the concept of having a sliced pan. His efforts and idea was of little avail until 1925 and the introduction of a bread wrapping machine. He filed for a patent in 1928 and within a few years 80% of bread sold in the United States was pre-sliced. However poor old Otto died in 1960 without realising a fortune.

In 1904, New Yorker, Thomas Sullivan (he’s got to have Irish connections) to save money on the tin boxes needed to send out his tea samples, used tiny silk sacks instead. His customers (probably not Irish) put these bags into the tea pot and, unwittingly, invented the tea bag!

A secretary, in an effort to cover up her typing errors, took to using a tab of white paint. With a little help from her friends she perfected this somewhat and marketed it as Liquid Paper, selling it in some 30 countries. In the late 1900s she sold out to Gillette and was worth more than $50 million and continued.

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