We’ve made plenty of mistakes at Kona Impact over the years, but there is one error in our thinking processes that we have made a few times over the years.
Simply put, it was letting technology lead instead of letting the needs of our customers lead.
Not only have we wasted money, but we’ve also incurred losses due to wasting time and energy on things that would not be profitable.
Here are a few examples from many years ago
The HD Videography Plan
Many years ago high definition video was revolutionizing the quality of video. It was a sea change in quality compared to the old standard definition standards. We had heard of one guy who had spent $80,000 on an HD video camera when they first came out, so when there were high-quality models available a few years later for under $10,000, we jumped at the opportunity and spent a lot of money on a camera, lights, special memory cards and batteries.
Our mistake was that nobody wanted videography services! We had failed to do any solid market research, and after a short time, we realized that there was very little, almost no, market for what we were capable of doing. There was TV-level work, but that would have required more skill, trained personnel, and equipment than we had.
After about year–with the equipment sitting on the shelf for months–we sold everything at a great loss.
The CD/DVD Duplicating and Printing Plan
About 12 years ago, I was buying some camera equipment and the guy at the store mentioned that CD/DVD duplicating was something “they were asked all the time about.” Without much additional research about the market, we bought a machine that would automatically duplicate and print CDs and DVDs. It was a few thousand dollars, money which we never recouped because we only sold a few hundred dollars of duplicating services. Again, our awe of the technology clouded our judgment, and we lost a lot of money and time.
How We Avoid Making This Type of Mistake Again
There are a few questions that always ask ourselves now when considering new investments:
- How many customers have asked for that product or service in the past year?
- Are there other companies in town that do it better, faster, or cheaper? Or, are there other companies that have poor quality, slow, and expensive service?
- How closely aligned with our core competencies and products is the new idea?
- Would the new technology be at least, if not more, profitable than what we do now?
- Is there support or service available for it on island, or can we do most service tasks by ourselves (if it’s a big machine)?
We now try to look at new equipment from many angles and focus on customer demand, competition, profitability, our skill sets, and costs of running and maintaining the equipment.