Focus Groups Never Lie

I‘ve been re-reading George Gilder’s fascinating Telecosm and I came across this telling anecdote about focus groups.
In 1980 when Bob Metcalfe, inventer of Ethernet, came to pitch the industrial megacorporation General Electric on behalf of his fledgling company 3COM, GE executives explained that they had done considerable research on the new personal computer and networking industries. In focus groups composed of GE customers held all over the country, executives were told over and over that there was no consumer interest in personal computers. PCs, the focus groups said, only were of interest to businesses. And the same could be said for networking.

The GE execs came to the conclusion that there was no home PC market, and never would be. They decided to stick with refrigerators, nuclear reactors, and light bulbs, and to this day the company has never touched in personal computing or networking thereby missing the fastest growing businesses in the past 20 years.

6 Replies to “Focus Groups Never Lie”

  1. Focus groups can only tell you the present – not the future. In 1980 there wasn’t enough consumer interest in computers for a huge company like that to pay attention. They weren’t really missing out on much until the mid 90s.

  2. and GE just merged with Vivendi… so they are diversified, just not into computers. :^) They did miss the ups and the downs of the computer industry, though.
    “Vivendi-GE deal creates media powerhouse
    General Electric (GE) and Vivendi Universal have signed a final deal to merge their showbusiness companies, creating a US$43 billion entertainment powerhouse with assets ranging from Hollywood’s Universal Studios to United States television network NBC.
    Under a deal initially outlined last month, GE will take control of Vivendi’s studio, cable channels and theme parks, combining them with its NBC television business to rank alongside global titans such as Walt Disney and Viacom.”

  3. HP turned down the Apple computer when Woz who worked for HP at the time had to get permission from HP
    to do it. HP said go for it and have fun we are not interested.

  4. While we’re at it why don’t we discuss the inventions out of Xerox park that never gave Xerox any $$$. OK, maybe another day.

  5. GE also missed the boat on DBS. In 1990 they were more than willing and prepared to be the first “DirecTV”. They balked on the idea.

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