Business models and missing fingers

I thought that this was so fascinating that I’ve wanted to post about it since the first time I heard about it. According to the Bureau of Labor Statistics there are an average of about 1,400 workplace amputations per year. Most of these amputations are to fingers and hands cut off by saws. It’s a combination of carelessness, lack of experience, and unsafe conditions. It’s a major souce of workman’s compensation claims and loss of productivity (only carpal tunnel results in greater loss of productivity). Unfortunate. Sad. Probably not a great deal that can be done about it.

That is unless you’re physics PhD and lifelong woodworker Steve Gass. Gass has invented a method he calls the SawStop technology that he claims can put an end to these kinds of workplace (or high school shop class or home workshop) accidents. Watch the video. It’s really amazing.

Gass took his invention around to the established tool manufacturers and couldn’t drum up much interest in their licensing his invention (his original business plan) so he’s started manufacturing his own power saws using his remarkable invention. I hope he sells millions of them.

Now I don’t think the moral of this story is that the tool manufacturers are heartless and unfeeling. I believe that established businesses have fairly rigid ideas (frequently wrong) about what business they’re actually in. In this case the tool manufacturers obviously didn’t believe they were in the safety business—they believe they’re in the business of making the cheapest possible saw. Gass’s mistake was in going directly to the manufacturers. He should have gone to insurance companies and state and local governments who have an interest in reducing claims and workman’s comp cases respectively.

The same kinds of rigid ideas about what business they’re actually in is the reason that established businesses haven’t capitalized on the possibilities of Internet commerce that were imagined some years ago. It was widely touted that the Internet would put manufacturers directly into contact with consumers. But that hasn’t really happened. What has happened is that a new group of Internet retailers have sprung up.

The manufacturers just don’t believe they’re in the business of selling to the end-users (the consumers). They’re in the business of selling to distributors, dealers, and other middlemen and won’t threaten their distribution chains on an unproven business model.

Similarly, the recording companies are in the business of selling records, tapes, and CD’s to distributors and retailers not in the business of getting music to customers.

It’s all in how you define your business.

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