The Osborne Effect is one of the most legendary tech blunders in history, and it's worth retelling because the lesson still applies today.
Back in the early 1980s, the Osborne Computer Corporation released one of the first truly portable computers: the Osborne 1. It had a tiny screen, twin floppy drives, a full keyboard, and it came bundled with a nice software package. It was a hit. They were selling like hotcakes to business professionals who wanted to take their work on the go. For a brief moment, Osborne was riding high.
Then the founder, Adam Osborne, made a critical error. While the Osborne 1 was still selling well, he got a little too excited and publicly announced the next model in development, the Osborne Executive. It was going to be better, faster, and more capable. But it wasn't ready yet.
And that was the problem.
The moment customers heard a better model was on the way, they stopped buying the current one. Dealers canceled their orders. Inventory started piling up. Sales cratered almost overnight. Osborne had unintentionally destroyed demand for its own successful product. With cash flow suddenly gone, the company couldn't stay afloat. They went bankrupt not long after. And the tech world coined the phrase the Osborne Effect.
This is exactly why modern software companies have learned to handle transitions more carefully. Ever notice how if you buy a computer right before a major Windows release, you're often offered a free upgrade? That's Microsoft avoiding the Osborne Effect. They want you to buy the current version without fear that something better will come out tomorrow and make your purchase obsolete.
I do the same thing with my courses. If I'm working on a new version of an older course, and you buy the current one within about a year before the update is released, I'll upgrade you to the new version for free. It's only fair. The goal is to keep people learning, not sitting around waiting.
The same logic applies in Access development, or any kind of software development really. If you're building an app and teasing new features, be careful not to talk too far ahead of what is ready. If your users think the good stuff is always just around the corner, they might stop using what's in front of them right now.
And remember, if you ever find yourself about to pre-announce the next big thing before your current product is stable and profitable, stop and think about that poor little portable with its 5-inch screen and a dream. The Osborne 1 deserved better.
I got to witness a similar event. A company that I was working for was funding R&D for a new product by doing overflow work for a competitor's product that their own new product was going to compete with. They announced the new product before it was ready and inadvertently killed the cashflow needed to complete development of the new product. They were left with neither product to manufacture.
Thomas Gonder
@Reply 28 days ago
When I worked at Microdata in the 80s, they announced a newer, bigger, better, improved mini-computer on the horizon, but it was to have a healthy price increase. The older, less-expensive model was to be vanquished. At the same time, they discounted the older model, for which sales had been lagging. Further, they offered a generous trade-in for the older model that had been out for years, many of which had slower processors and hard disks (planning to use the parts in field service to eliminate manufacturing replacement boards for the older minis, so they could focus on the new mini production.) The sales guys were immediately busy taking orders for the older model that had started to pile up in the factory. Announcements can go both ways if properly executed.
Yeah, I've seen companies offer discounts on this year's version promising a free upgrade to the new version when it comes out "next year" or whenever... And that can boost sales. (I've done it myself. LOL)
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