Focus Groups Never Lie

George GilderI've been re-reading George Gilder's fascinating Telecosm and I came across this telling anecdote about focus groups. In 1980 when Bob Metcalfe, inventer of Ethernet, came to pitch the industrial megacorporation General Electric on behalf of his fledgling company 3COM, GE executives explained that they had done considerable research on the new personal computer and networking industries. In focus groups composed of GE customers held all over the country, executives were told over and over that there was no consumer interest in personal computers. PCs, the focus groups said, only were of interest to businesses. And the same could be said for networking.

The GE execs came to the conclusion that there was no home PC market, and never would be. They decided to stick with refrigerators, nuclear reactors, and light bulbs, and to this day the company has never touched in personal computing or networking thereby missing the fastest growing businesses in the past 20 years.