How the Osborne effect harms companies and how not to encounter it in everyday life

What is the essence of the Osborne effect

The Osborne effect is a marketing error when a company announces a new product too soon, causing people to stop buying its current products.

The name of the phenomenon is related 1. J. Schofield. Adam Osborne / The Guardian
2. M. Campbell Kelly. Adam Osborne / Independent with the failure of Osborne Corporation, a computer corporation created in the 1980s in the United States by entrepreneur Adam Osborne. In 1981, the company introducedM. Campbell Kelly. Adam Osborne / Independent one of the first laptop computers in the world.

It was Osborne 1 — a “suitcase” weighing almost 11 kilograms with a small 13‑centimeter screen. The car immediately hadD. H. Ahl. Osborne Computer Corporation / Creative Computing everything you need: a keyboard, a monitor, the programs you need to work. At the same time, the first “laptop” cost a little more than the applications preinstalled on it. Therefore, the computer has become very popular. The monthly turnover of Osborne Corporation a year after the launch amounted to

J. Schofield. Adam Osborne / The Guardian 10 million dollars.

Things seemed to be going well, and in 1983 Osborne demonstrated to journalists the prototypes of new computers: Vixen and Executive. It was assumed that these would be improved models. For example, they were going to install screens of a larger diagonal and more capacious disks.

But, oddly enough, Osborne shot his company in the foot with this presentation. Although journalists did not write about Vixen and Executive until the agreed time, the information reached the equipment dealers. They were afraid that they would not be able to sell the old models when intriguing new ones came out, and they stopped buying Osborne 1. Sales of Osborne's computers plummeted, and the company went under: in September 1983, it became bankrupt.

Many later doubtedA. Orlowski. Taking Osborne out of the Osborne Effect / The Registerthat it was the presentation that ruined Osborne's company. For example, it turned out that he had invested a lot of money in the assembly of outdated equipment, although the company had already switched to new models. The corporation itself has not ceased to be unprofitable. And a big blow to the sales of Osborn's "laptops" dealtM. Campbell Kelly. Adam Osborne / Independent the release of similar, but cheaper and more technologically advanced devices from competitors: Kaypro, IBM and Compaq.

Nevertheless, the effect that too early presentation of the new model can produce has been named after Osborne.

What Osborne's Story Can Teach

Although corporations are mostly afraid of the Osborne effect (remember, for example, how they hide new models of gadgets or cars before their presentation), it can also manifest itself in everyday life.

Don't rush

Osborne Corporation is not the only company that has suffered from premature announcements. For example, in the early 2010s, Nokia announcedT. Riker. RIP: Symbian / engadgetthat will migrate their smartphones from the Symbian operating system to Windows Phone.

At the time of the announcement, Symbian devices continued to generate good profits for the company. However, in an attempt to keep up with Android and IOS, Nokia CEO Stephen Elop has made it clear that the company is ending support for the old system. And it does it abruptly - it was planned that new applications would not work on devices with Symbian.

Sales of old phones collapsed, although the new ones were not yet ready. When devices on Windows Phone did come out, they turned out to be raw, which is why they quickly stopped buying. As a result, the part of Nokia that was engaged in the mobile business and once dominated the market was bought in 2013 byR. Ando, ​​b. Rigby. Microsoft swallows Nokia's phone business for $7.2 billion / Reuters Microsoft.

In life, such a rush can also hurt. For example, if a person accidentally repeats after the CEO Elop and recklessly declares to his superiors that changes jobs, although he has not yet received an offer from another company, he will easily get into trouble situation. And if he switches to a “burning” problem, as Nokia once did, but does not complete the matter, then the difficulties will become even greater.

“Going to” and “I will” are not the same thing.

In many ways, Osborn's failure was due to the fact that he showed a device that had not yet gone into mass production.

North Star Computers faced a similar situation a little earlier. The company in 1978 statedA. Orlowski. Taking Osborne out of the Osborne Effect / The Register, which is developing new drives that will have twice the memory of the old ones, and the price will remain the same. At the same time, the corporation did not have any ready-made device - only plans. As a result, sales of existing equipment fell, and North Star itself almost went bankrupt developing a new disc.

Similarly, a person who has made loud statements is then forced to solve the problems that he himself created by the sweat of his face. He has to apologize, blush and process. And sometimes put up with the fact that he was deprived of a bonus for a report not submitted on time. Therefore, it is better not to promise to do something that you may not be able to handle.

The consequences of our actions are unpredictable

To reason with the sellers, Osborne personally demonstratedD. H. Ahl. Osborne Computer Corporation / Creative Computing them Executive and tried to prove that the new device is not a competitor to the old one. But the listeners reacted unexpectedly: after the meeting, Osborne 1 began to sell worse than before.

Unfortunately, people do not always behave as we expect, and this can disrupt any plans. It is worth considering this in advance and be prepared for surprises. For example, to calculate different options for action or keep a few ideas in stock. Then you will definitely not be confused, as Osborne once was.