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the good enough revolution
FROM DIGITAL MUSIC TO VIDEO CAMERAS TO MILITARY AIRCRAFT, CHEAP AND SIMPLE BEATS PERFECT ALMOST EVERY TIME. IT'S CALLED THE MP3 EFFECT, AND IT WILL CHANGE EVERYTHING.
Why lo-fi high tech will rule the world.
In 2001, Jonathan Kaplan and Ariel Braunstein noticed a quirk in the camera market. All the growth was in expensive digital cameras, but the best-selling units by far were still cheap, disposable film models. That year, a whopping 181 million disposables were sold in the US, compared with around 7 million digital cameras. Spotting an opportunity, Kaplan and Braunstein formed a company called Pure Digital Technologies and set out to see if they could mix the rich chocolate of digital imaging with the mass-market peanut butter of throwaway point-and-shoots. They called their brainchild the Single Use Digital Camera and cobranded it with retailers, mostly pharmacies like CVS.
The concept looked promising, but it turned out to be fatally flawed. The problem, says Simon Fleming-Wood, a member of Pure Digital's founding management team, was that the business model relied on people returning the $20 cameras to stores in order to get prints and a CD. The retailers were supposed to send the used boxes back to Pure Digital, which would refurbish them, reducing the number of new units it had to manufacture. But customers didn't return the cameras fast enough. Some were content to view their pictures on the tiny 1.4-inch LCD and held on to the device, thinking they'd take it in later to get prints. Others figured out how to hack the camera so it would download to a PC, eliminating the need to return the thing altogether.
Brisk sales combined with a lack of speedy returns destroyed the company's thin margins, and the camera failed. But the experience taught Kaplan and Braunstein a lesson: Customers would sacrifice lots of quality for a cheap, convenient device. To keep the price down, Pure Digital had made significant trade-offs. It used inexpensive lenses and other components and limited the number of image-processing chips. The pictures were OK but not great. Yet Pure Digital sold 3 million cameras anyway.
Kaplan and Braunstein also learned something important about camera retailing in general. The market had long been split into...