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What An Incredible Story of Innovation!
Have you ever heard the story behind Gorilla Glass? This is the hyper strong glass that Steve Jobs insisted be developed for the first iPhone. To me it is an interesting story of the free enterprise system at work. This report is based on the following article.
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Corning Glass, Inc.
Most of us are familiar with the Corning Glass company, the makers of CorningWare among other things. You remember CorningWare don't you? The almost unbreakable ceramic dishes.
I say almost unbreakable because I had a friend who had a set of the plates and she said they were unbreakable. I proved her wrong. While they were extremely strong, under the right circumstances they would shatter into thousands of sharp little shards.
Corning first started marketing CorningWare in 1959 and it was the result, as so often is the case, of an accident in 1952. During an experiment something went wrong and the glass got heated to a much higher temperature than normal. When they opened the furnace they found something they didn't expect. They had just accidently created the first CorningWare.
After that success Corning started researching other ways to make glass stronger and Project Muscle was born. Now here to me is the beauty of the free enterprise system. This company had made a product that the public really liked and so they set about trying to find other ways to develop their competitive advantage. And how did they do that? Not by taking government money. They did that by consistently reinvesting 10% of their revenue into research and development.
In good times and bad Corning Glass consistently reinvests in itself. They are one of the few companies that still fund some research simply for research sake, realizing that through this approach they will sometimes discover answers to questions they didn't even realize needed to be asked.
The Beginnings of Gorilla Glass
Take a look at one of the results from Project Muscle. "A breakthrough came when company scientists tweaked a recently developed method of reinforcing glass that involved dousing it in a bath of hot potassium salt. They discovered that adding aluminum oxide to a given glass composition before the dip would result in remarkable strength and durability. Scientists were soon hurling fortified tumblers off their nine-story facility and bombarding the glass, known internally as 0317, with frozen chickens. It could be bent and twisted to an extraordinary degree before fracturing, and it could withstand 100,000 pounds of pressure per square inch. (Normal glass can weather about 7,000.) In 1962 Corning began marketing the glass as Chemcor and thought it could work for products like phone booths, prison windows, and eyeglasses." If you're Corning Glass you're probably thinking "we've got a home run here in this new product". And you would have been wrong. It was a flop. Corning shelved the project in 1972. And again here is the beauty of the free enterprise system. They took a chance, invested their own time and money, and in this case it didn't pay off. They lost money. Nobody came and bailed them out for their wrong choices. That I believe is the biggest problem facing our financial system today. We have to get back to letting businesses enjoy the fruits of their labor but in exchange they need to suffer the consequences of their wrong decisions. We can't have free enterprise on the profit side and then turn around and socialize the losses. It doesn't work that way! Now to Finish the Story All right, now let's fast forward to 2006. Steve Jobs is at Apple developing the first iPhone. In their testing they find that when people out their phones in their pockets, their key scratch up the plastic screen they were planning on using. That was unacceptable. Steve Jobs decided that the screen had to be made of glass. Let's pick up the story from the article: "The office of Wendell Weeks, Corning's CEO, is on the second floor, looking out onto the Chemung River. It was here that Steve Jobs gave the 53-year-old Weeks a seemingly impossible task: Make millions of square feet of ultrathin, ultrastrong glass that didn't yet exist. Oh, and do it in six months." "Apple was suddenly demanding massive amounts of a 1.3-mm, chemically strengthened glass-something that had never been created, much less manufactured, before. Could Chemcor, which had never been mass-produced, be married to a process that would yield such scale? Could a glass tailored for applications like car windshields be made ultrathin and still retain its strength? Would the chemical strengthening process even work effectively on such a glass? No one knew. So Weeks did what any CEO with a penchant for risk-taking would do. He said yes." The Entrepreneur's Response
This is another thing that I love about our free enterprise system. It encourages the entrepreneur's spirit. That's the spirit that when asked "Can you do this?" kicks in and says "Absolutely!" even though you're really not sure if you can or not. All you know is that you have an extreme faith that you can figure it out. For several years I ran a successful computer consulting firm as a second business. I can't tell you how many times I had a client ask if I could write a program for them that would do X? My answer was always, "Of course!". I didn't really know for sure but as I said above, I was pretty sure I could figure it out. And the Rest Is History! I would encourage you to read the whole article. It is really fascinating how they took a "failed" product that had been sitting on the shelf for over 30 years and turned it into a winner. In six months they tweaked the formula, adapted the manufacturing process, and made a product that had never been mass produced before to help launch one of the most successful products in history, the iPhone!
Their investment from 30 years ago was about to pay off bib time. How big? In 2007, the first year, Gorilla Glass generated $20 million. In 2011 it generated $700 million. Not bad for a failed product! Celebrating the Free Enterprise System
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Speaking of celebrating free enterprise, Ayn Rand's classic novel Atlas Shrugged has been made into a movie. Atlas Shrugged Part II will have its world premiere on Friday October 12, 2012. If you've not read the book or seen the movie I would highly encourage you to do so. You can click on the graphic above to watch the trailer.
I've read the book several times. My oldest son took the book to Iraq with him and read it on his tour of duty there. It has been featured on many talk shows. Click on this link to hear what Glenn Beck, Sean Hannity, John Stossel, and Judge Andrew Napolitano among others have to say about it.
http://www.atlasshruggedmovie.com/atlas-shrugged-part-2-trailer-ayn-rand
Reames Financial will be hosting an Atlas Shrugged Part II World Premier private screening on October 12, 2012 at 6:30 at the Rave Theater in downtown Kalamazoo.
If you would like to attend this private screening as a guest of Reames Financial, please give me a call. Out seating is limited so don't wait if you would like to attend!
Until next week , Protect Your Wealth!
Sincerely,
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