On innovation and pricing
Do users want great products or do they want a low price? If you believe the Apple narrative, you'd think that once you have a great product, people will pay any price. But isn't as much of a foregone conclusion as you'd think.
I've been digging into the history of Xerox PARC and I found this stunning video. It is a demo video of the Xerox 8010 Star office computer. Introduced to the world in 1981, it was a device beyond its years. A full-fledged graphical user interface, complete with icons, windows, local area networking, wysiwyg document editing and printing, networked storage, the works! The catch - it cost sixteen thousand dollars. Given the never-seen-before system though, it was assumed that buying the system was a no-brainer.
And yet, the technology that took the world by storm was the IBM PC. No graphical user interface. No mouse. No networking. The user had to memorize arcane commands to get things done. And the display was a monochromatic green on black display. The ticket price ~1200 dollars. Many will tell you that the reason the PC succeeded was because it was an open platform and people quickly developed new applications for it. But that was to come later. The price mattered. Why?
Back in 1981, office computers were not things that the executives used. They were to be used by the secretaries. And while the secretaries loved the Star, there was no way management was going to spend $16,000 per person to equip their secretaries. All told, the Star sold only about 25000 units. A commercial failure.
Pricing matters. Timing matters. Your end customer matters.