tulipmania and the madness of marketing
For amusement and insight, the stranger bye-ways of history often give some interesting perspective on our present. In the 17th century, Tulip mania or tulipomania was a period in which contract prices for bulbs of the recently introduced tulips reached extraordinarily high levels and then suddenly collapsed. At the peak of tulip mania in February 1637, tulip contracts sold for more than 10 times the annual income of a skilled craftsman. At one point 12 acres of farm land were exchanged for one tulip bulb. Funny to our perspective, looking back on how mad this is. The event was popularized in 1841 by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. This book also discusses other great fads, trends and ideas that crashed and burned. The crusades, the Louisiana Banking schemes, the South Sea Bubble. In my mind, one could add the 20th century tragedies of fascism and communism too. But, in most cases looking back on these fads and trends is amusing because of course, we are doing so with hindsight and the knowledge that surely we would not be so silly as to follow the herd. How could they be so gullible? Why didn’t anybody question the logic of something being over valued? And what about marketing? What are the things of today, that our successors will think of as mad as paying a kings ransom for a flower bulb? A rigid belief in the new channel seems prevalant madness of the marketing crowd. New Coke anyone? Do you remember the launch of the Segway Transporter? The rather whizzy but ultimately ridiculous two wheeled transporter thing that one only sees in comedy tv shows and movies? I remember the launch stating that it was the biggest technological change since the Apple Mac, that would change the world forever. After $100m of investment and marketing, the total unit sales after seven years are 23,ooo units. Twenty three thousand units. Its biggest moment is being seen as the butt of a joke in the recent comedy, ‘Mall Cop’. The rather more traditional Dahon folding bike, sold 280,000 units in US alone in 2008. Two hundred and eighty thousand units in one year. Versus, twenty seven thousand units in seven years. What do I summise? That a great modern product (online or offline), that has great style and functionality will often overcome an over hyped and over complicated rival and as marketers, we have to question the logic and not just follow the crowd. Oh, and if someone offers you a great deal on 350kgs of Tulips, offer to swap them for a load of stock in Segways.