There is much more to a good business than a great product. That’s the foundation on which you can build, the foundation on which you can grow, but it needs much more than that. History is littered with failed businesses that began with a great product, but through bad luck or bad business, were not able to make the sort of money that everyone thought they did.
This was a hugely popular toy and it has been popular for many generations of kids. What’s more, it has also become popular with adult performsers and is used as an exercise tool. So how did it fail?
Well, the reason it was so popular is also the reason it failed to make a lot of money. It all comes down to the way it is built. It’s cheap and easy to make, yet it is also durable and built to last. The means they could sell it cheap and sell in bulk, but it also means that most users would only ever need one. The lack of repeat orders combined with the fact that it was very cheap meant that there just wasn’t a lot of profit there.
If it was a little weaker and less solid, prone to occasional breaks and bends, then a single user may have ended up buying 3 or 4. They would have still spent very little and would have still been happy with the product, but to the manufacturers it would have meant 3x to 4x more profit at the very least.
During the height of its popularity in the 1950s more than 50,000 of these were sold per day, retailing for less than a couple dollars and earning them cents in profit with every sale. Add the cost of marketing and R&D, as well as all the other costs involved with maintaining a business, and this is one toy that failed to live up to its promise in terms of profit.
Whether you love them or loathe them, it’s easy to see why these fun machines are so popular. From the US to Japan they help millions of revelers to make a night of it. It’s one of those things that people only seem to enjoy when they are the ones doing it, before spending the rest of their time cringing and waiting their turn, but it’s popular, it brings people into clubs and they have also found their way into our homes.
Despite being widespread, they didn’t make their owner a lot of money. Their Japanese investor leased the first ones he created to nightclubs and made some money doing it, but as the idea caught on he failed to patent it and to make something big of it. As a result many other businessmen and businesswomen profited from something that he created.
A Russian investor, Alexey Pajitnov, created this game back in 1985. He was working for a Russian research facility at the time and they were the ones who claimed his invention and all of the royalties that went along with it. The inventor did eventually start earning royalties for the game, but ten years went by before this happened, by which point Tetris had had its time in the sun and had all but been resigned to the annuals of video gaming history.
Scooters and Bikes
These days everyone has a scooter or a bike and they have been around for a very long time. But the inventors don’t make as much money as you might have thought simply because these things existed in some form prior to their official inventions and it is a trend that many inventors profited from.
The bike is a good example of this. It has existed in one form or another since the 13th century, with users often building their own. In the early 1800s a German invented created an early version of the modern bicycle and took his invention across Europe. As it became popular, other inventors took his idea, built upon it and then started profiting from it. By the time bikes were popular, there were many investors and businesses earning a piece.
The same goes for kick-scooters, which were often cobbled together from boards, wheels, skateboards, roller-skates and more and didn’t earn a huge amount of money even when it became the must-have trend in the 1990s and early 2000s. See the Electric Rider to learn more about this machine and its current versions.