return to homepage

Archive for the ‘History’ Category

Advertisings First “Whisper Campaign” Created the Modern Antiperspirant Deodorant Industry

Friday, January 18th, 2013

by: Geoff Ficke

Until the early 20th century body odor was addressed in basically one of two ways. The uneducated and impoverished simply did not address their hygiene. The upper-classes bathed on average once each week and most undertook a “toilet” once or twice each day. This consisted of standing at a wash basin filled with hot water and administering a simple sponge bath with a soaped sponge and then a full body rinsing wipe down.

The first modern deodorant product was Mum, introduced in the 1880’s. This product was packaged in jars and applied to the armpit and elsewhere on the body by rubbing onto the skin with one’s fingers. Many people considered the application of the cream in such a manner to be unpleasant and the product possessed and unusual unpleasant odor.

The far larger quandary facing the marketers of products designed to mask and correct unpleasant body odors was that almost all women of the day were simply unaware that they projected offensive odors. They just did not consider their hygiene to be offensive to others, and importantly, their paramours. Body odors were considered natural, even if rancid smelling.

Early in the 20th century a young woman in Cincinnati, a surgeon’s daughter named Edna Murphey tried to sell an antiperspirant product that her father had developed to keep his hands dry while performing surgery. She labeled the deodorant Odorono. Though determined, Ms. Murphey was not very competent or successful at marketing.

The team of door to door sales women Ms. Murphey assembled did not move Odorono at sales levels she had planned. Pharmacists refused to carry the item as they were not receiving calls for such a product to address sweat or perspiration. In desperation, she took a booth at the 1912 Atlantic City Exposition to demonstrate the features and benefits of Odorono. Initially sales were tepid. Fortunately for Ms. Murphey, the expo lasted all summer and 1912 was a particularly hot year. By the end of the fair she had sold over $30,000 worth of Odorono and seemed to be on her way to success.

Sales did grow for several years then hit a wall. Odorono needed professional help and so Ms. Murphey hired the J. Walter Thompson Advertising Agency to handle her account. JWT opened an office in Cincinnati and assigned a young copywriter named James Young to manage the office and the Odorono account.

Mr. Young immediately confronted the problem that Ms. Murphey had not able to overcome: the commonly held belief of the time that blocking perspiration was unhealthy. Mr. Young’s first ad copy highlighted the scientific provenance of Odorono and positioned the problem of “excessive perspiration” as a medical malady in need of correction.

Sales again accelerated but in a few years began to stutter again. James Young knew that he had to do something radical to save the Odorono account and his fledgling advertising career. He decided to present the problem of body odor and perspiration as a social faux pas. His first ad, which appeared in Ladies Home Journal in a 1919-edition was titled “Within the Curve of a Woman’s Arm”. It was a masterstroke.

The image in the ad was of a woman in a romantic situation with a man. The copy directly and pointedly stated that if the lady wanted to keep her man she had better not smell or stink. In fact, a smelly gal might not even realize she is offensive and this could lead to males avoiding her. The ad caused shock waves and Ladies Home Journal even lost subscribers because of the content.

However, the controversy brought attention to Odorono and the newly addressed problem of feminine body odor. In 1920 sales of the product soared to $417,000.By 1927 Company sales had hit the $1 million mark and in 1929 Edna Murphey sold her business to Northam Warren the makers of Cutex Nail Polish Remover.

This is widely considered the first commercial use of a “whisper campaign” in advertising used to scare female consumers into buying a product to combat sweat and natural body perspiration. Competitors began to mimic the model created by James Young and the technique became a common strategy utilized in the advertising and consumer product marketing industry.

James Young went on to enjoy a career as one of the most famous and successful advertising copywriters of the 20th century. He rose to become Chairman of the J. Walter Thompson Advertising Agency, helping it to grow into the largest in the world. His “whisper campaign” was instrumental in launching Odorono and thus laying the first brick in the creation of what is today an $18 billion industry: deodorant antiperspirant products. His creation of the “whisper campaign” is still studied in University marketing courses to this day.

The Art of Candle Making Reaches its Apex In Paris at This Cathedral of Artesian Scents

Thursday, January 10th, 2013

by: Geoff Ficke

For many years I was intimately involved in the Perfume business as an international distributor, developer and producer of finished Branded fragrance items and raw materials. One of the necessities essential to achieving success in the essential oil industry is to spend considerable amounts of time in Provence, France. This hardly qualifies as hard duty.

In addition to tending to my firms requirements to source packaging and novel perfume formulary I enjoyed wonderful networking opportunities. From producers of rare specialty plants to famous “noses” I met some of the most creative talents in the luxury cosmetic world. They were always suggesting new stores and ateliers for me to visit to discover fresh, unusual, and often ancient, techniques and recipes for concocting some of the most wonderful aural experiences the world has to offer.

One of these visits led me to discover a nearly four century old purveyor of candles. These are not candles as you might envision. Tapers, votives, or glass encased, over-scented illuminations. The candles crafted by Cire Trudon are works of art.

Founded in 1643, Cire Trudon established quickly itself as the “apothecaire” to the Court of Versailles. Claude Trudon, originally a Parisian grocer, developed a wax production method utilizing the highest quality beeswax and then washing this material thru gypsum. Mr. Trudon imported the finest cotton wicks and this lead to a final candle that was the whitest, cleanest burning in Europe.

In the 17th and 18th centuries, before electrification of homes, candles were the preferred light source for use in illuminating space. Royalty and the upper class used copious volumes of candles to bring light to their palaces and lodges. A by-product of this type of lighting source is smoke and discoloration of furniture, frescoes and tapestry.
The Cire Trudon candles minimized these deficiencies and became the preferred purveyor of spatial light initially to the French, then quickly to royalty across Europe.

Napoleon Bonaparte was a great fan of Cire Trudon candles and gave them exclusively as gifts. When his son was born he received but a single present from his Emperor father: a Cire Trudon candle embellished with three solid pieces of gold sculpted as his head.

Cire Trudon avoided the calamity that befell so many candle manufacturers when electrification and the light bulb were introduced. The Company had long before become a cult favorite of the rich and famous owing mainly to its collaboration with the fragrance houses based in Grasse, Provence. The firm’ products tell stories through the wonderful, poetically conceptual scents that have been crafted over the ages by these perfumers.

The Cire Trudon range consists of 22 classic scents. Each tells a story. One of the most famous is “Solis Rex” (Sun King). The floor boards of the Palace of Versailles smell of fir bark and cedar wood. That this amazing aura is captured so magically in these candles is testament to the craft and creative genius of the perfumers of Grasse and the candle makers of Cire Trudon.

Cire Trudon also provides modern consumers proper guidance in the lost art of properly burning the ancient, simple candle. The first burn of a new candle should last about two hours in order to properly release fragrance. When extinguishing a candle use a metal wick dipper to gently push the wick into the wax. This will eliminate smoking which interferes with the scent. Two hours is the ideal time to burn a candle, not all day.

When in Paris a visit to the Cire Trudon store is to step back into time, a time when artisan craftsmanship was paramount. Cire Trudon candles are sold in fine stores around the world. However, they always seem more illuminating when experienced in their original home venue.

Did a Fragrance Really Trigger the Events That Led to the Infamous Beheading of Marie Antoinette?

Tuesday, June 14th, 2011

by: Geoff Ficke

Did a Fragrance Really Trigger the Events That Led to the Infamous Beheading of Marie Antoinette? 

Jean-Francois Houbigant launched his famous Perfume atelier and shop on the Fauborg St. Honore in Paris in 1775. This was during the gilded age of French royalty and of the elite that that parasitically clung to the Court. Luxury, hedonism and sensuality were the cornerstones of life for these denizens of hedonism. 

Mr. Houbigant opened his shop and carried a beautiful basket of flowers over the threshold on its first day in business. The basket of beautiful flowers drew very favorable comment from his initial clients, so, being a clever Marketer he commissioned a sign to be painted representing the bouquet. This sign was hung over Houbigant’s shop door at 19, Fauborg St. Honore and became indelibly identified with the success of the Fragrances and Soaps produced therein. For decades Houbigant advertisements and handbills copy began with “At the sign of the Basket of Flowers”. 

The list of clients who frequented Houbigant included everybody who was anybody in pre-French Revloution Paris. Only the finest, rarest Toiletries were produced and made available at Houbigant. Dandies, church prelates, government ministers and military officers and their wives were listed on preserved invoices as having been customers. But it was the Royal Family and their Court members that conveyed a special patina on Houbigant. 

Alas, the glow of the royal life would be sundered by the violence and anarchy produced by the outbreak of the French Revolutionary. The rich and luxuriant class associated with all that was wrong in France was hunted down by the mob, instilled with the lust to remove those whom they perceived had caused their impoverishment and servitude.   

The Empress Marie Antoinette was certainly a prime target for revenge. Her ladies in waiting knew that she was a highly prized object of derision by the mob and that violence would be done her if caught. The Empress was purportedly bundled into a carriage and surreptitiously led away, hopefully to safety. 

The escape was foiled, however, when the carriage carrying Marie Antoinette became bogged down in the confusion of peasants fleeing the violence in all directions. There was a maelstrom of mob activity, noise and mistrust around her. Then someone sniffed an elegant scent emanating from a carriage. Only a person of real wealth and refinement could wear such a Fragrance. That person would naturally be an enemy of the enraged proletariat. 

And so, Marie Antoinette was captured by the mob. Her beautiful, refined Houbigant Perfume had signaled that she was definitely not one of the masses. This story has taken hold and become part of the legend of Houbigant. After the spouting the infamous quip, “Let them eat cake”, the Empress Marie Antoinette was unceremoniously beheaded. Houbigant survived the French Revolution. It seems that the new non-bourgeoisie rulers of France loved luxury Perfumery too. 

For the next 200 years Houbigant prospered, introducing over three dozen unique Fragrances including such classics as Quelques Fleur (1912) and Chantilly (1941). The luxury and exclusivity that Houbigant represented insured that stores around the world pampered the brand. 

Unfortunately, as so often happens when classic family nurtured brands come under the control of asset managers, Houbigant declined in the late 20th century. By the 1980’s Houbigant products were only to be found in mass merchandise outlets. The Company was acquired out of bankruptcy by a start-up; Renaissance Fragrance. Renaissance itself filed for bankruptcy in 1999. 

By the beginning of the 21st century the venerable House of Houbigant was no longer producing Perfume Products. The revered Brands that the Company had launched, nurtured and pampered had been watered down, diluted and were sold in deep discount chains. The Luxury Scents that had enchanted Marie Antoinette, and is said to have lead to her capture and subsequent execution, also has disappeared forever as a harbinger of beauty, quality and exclusivity.

An Eccentric Lifestyle Popular in the Early 19th Century Has Left Us the Simple Graham Cracker and More!

Thursday, May 19th, 2011

by: Geoff Ficke

An Eccentric Lifestyle Popular in the Early 19th Century Has Left Us the Simple Graham Cracker and More! 

The Presbyterian Reverend Sylvester Graham, an early 19th century proponent of an extreme, aesthetic lifestyle, is largely forgotten today. During his life, however, he was amazingly popular and many of the theories he espoused are actually popular to this day, though he is rarely credited with their acceptance. He was also widely reviled and a controversial figure of derision. 

Rev. Graham promoted a strict form of vegetarianism at a time when meat was a staple and considered essential to a healthy lifestyle. He held a number of extremely controversial diet and wellness ideas which he championed and was militant in defending. His followers were so dedicated that they became known as Grahamites. 

Speaking before adoring crowds, Rev. Graham spoke boldly and powerfully against women wearing corsets, any type of gratuitous sexual activity and nihilism. His encouragement of a Spartan lifestyle was widely reported in the media. 

In an age when bathing was rare and oral care primitive Grahamites practiced both; daily and religiously. Temperance was strictly enforced among Grahamites. Excitement was discouraged. They also did not use spices to enrich the taste of food, as these additives were considered to excite the senses and encourage sexual activity. Consuming meat, butter and white bread were forbidden. Especially white bread! 

The elimination of white flour from their diet became central to the lifestyle and philosophy of Grahamites. Rev. Graham preached about the evils of white flour which was considered crucial by bakers in producing whiter loaves and more commercially appealing bread. He despised any food that contained additives and chemicals. Darker types of bread were considered a foodstuff for the lower classes during the Industrial Revolution. Graham set out to change this perception. 

He created the recipe for Graham bread. It was made from un-sifted flour and contained no alum or chlorine, both present in the white bread of that time. He believed that bread should be coarse not fluffy and uniform like the loaves then being mass produced in industrial bakeries. A variant of the recipe for Graham bread lead to the creation of Graham crackers, popular to this day. Grahamites consumed massive quantities of Graham crackers to supplement their exceedingly bland diet. 

Grahamism died out soon after Rev. Sylvester Graham’s death in 1857. His death in Northampton, Massachusetts, where a restaurant named Sylvester’s stands on the site of his home, marked the zenith of his movement. His influence, however, had touched such important Americans as Horace Greeley, Dr. John Harvey Kellogg and his brother William Kellogg. Their creation of Kellogg’s Corn Flakes, and founding of the Battle Creek Institute, was heavily linked to their belief in Grahamism.

It has been over 150 years since the death of Rev. Sylvester Graham. It is generally forgotten that he is responsible for the creation of ubiquitous Graham Crackers, still found in most home larders. And yet, many of the principle ideas which he pioneered and were forgotten after he was deceased are again au courant today. 

Modern nutritionists strongly endorse limiting the consumption of meat and refined, processed foods in the diet. Dark, multi-grain breads are promoted as key elements of a healthy diet. A vegetarian or vegan type of diet is increasingly popular. Daily bathing and proper oral care are cornerstones of hygiene and personal care. All of these ideas were key, if controversial planks in the philosophy that was central the Grahamist lifestyle. Today we accept them as   factual truths, supported by science and research data.

How a Long Forgotten Shipping Magnate Removed His Name from Restaurant Menus around the World

Thursday, May 19th, 2011

by: Geoff Ficke

How a Long Forgotten Shipping Magnate Removed His Name from Restaurant Menus around the World 

Ever enjoyed a meal of Lobster Wenberg? You will not find the dish on any fine restaurants or diner’s menu today. In fact, the dish existed as Lobster Wenberg for less than a month at Delmonico’s in the 1890’s. This epicurean delight has thrived ever since, but the name has changed, and the man who was responsible for popularizing the treat has been forgotten. 

Benjamin J. Wenberg was a late 19th century shipping magnate. He travelled widely managing his far flung enterprise. While on a trip to South America he enjoyed a lobster dish such as he had never tasted before. It was rapture at first bite. He immediately began to assemble the recipe and carried it back to New York. 

On a visit to the famous Delmonico’s restaurant Wenberg described the dish to the owner, Lorenzo Delmonico. He raved about the sauce made from sherry, thick cream and egg yolks, and how the shelled lobster taste was so enriched by the creamy concoction.  Mr. Delmonico was intrigued and began to have his chef’s work on the recipe. When it was perfected he added it to the menu as Lobster Wenberg, in honor of the discoverer. 

The dish was an immediate hit with Delmonico’s wealthy patrons. Word of mouth, the best form of marketing spread like wild fire. The restaurants sales increased dramatically. Then, providentially for Benjamin Wenberg, and the dish he had discovered and initially helped popularize, fate visited a cruel turn. 

While on one of his regular visits to Delmonico’s, Wenberg imbibed a bit too much grog, got into a fight with another customer in the main dining room and was permanently evicted from the eatery. Lorenzo Delmonico was furious, and he now had a problem. His hottest gastronomical offering was named for a cad who had torn up his dining room and could no longer visit and partake of the meal he had uncovered. 

Lorenzo Delmonico was nothing if not a great restaurateur. He was not going to take the dish off his menu; it was too popular and profitable. However, he was furious with Mr. Wenberg and decided to remove his name from the dish. He chose the name Lobster Newburg, Newburg being the name of a small city on the Hudson River. Newberg is also an amalgam of the letters in the last name of one Benjamin J. Wenberg. Mr. Delmonico never announced definitively which applied. 

Today Lobster Newberg is ubiquitous on fine dining establishment menus everywhere. Benjamin J. Wenberg is but a footnote to culinary history and largely unknown, except for his being a footnote in restaurant lore.  His name had adorned the dish he was instrumental in launching for less than a month. 

History is replete with examples such as this of people who are forgotten, but their discovery, invention or product lives on after being driven to commercial heights by others. But for a night of debauchery, Lobster Wenberg would still be the ultimate indulgence to enjoy after a promotion, the birth of a child, or any of life’s other successes are celebrated.

Two Centuries Ago “The King of Chefs, the Chef of Kings” Created the Modern Gourmet Cooking We Know Today

Thursday, May 19th, 2011

by: Geoff Ficke

Two Centuries Ago “The King of Chefs, the Chef of Kings” Created the Modern Gourmet Cooking We Know Today 

We live in an age of plenty, when food is consumed and pursued as much for entertainment as for sustenance. Haute cuisine foodie magazines abound. There are television food channels that are devoted to every aspect of gastronomy. Celebrity chefs are as ubiquitous and as famous as actors and politicians. Gourmet food stores have sprouted in every town of any size in the United States. Chains such as Kroger and Safeway have in-store gourmet shops solely devoted to enhancing the preparation and presentation of meals. 

As recently as two centuries ago this adoration of food and cooking was unthinkable. For the vast majority of people the only interest they had in food was securing enough nutrition to stay alive. Taste, presentation and assortments of foodstuffs were of no importance and beyond their reality. This changed in the first decade of the 19th century in Paris. 

In 1792 Marie-Antoine Careme was born to destitute parents at the height of the violent French Revolution. The parents abandoned the boy and he was apprenticed at the age of eight to the famous patissier Sylvain Bailly. The young boy was ambitious, hard working and smart and Bailly encouraged him to open his own bakery after he had complete his apprenticeship. 

Careme opened the Patisserie de la Rue de la Paix in 1813. The shop quickly gained fame and a loyal following. The windows were famous for “pieces montees”, elaborate constructions famous for their scale used as table centerpieces. Many were designed to look like ruins and famous buildings from around the world. They were as much sculpture as edible food. 

As a baker Careme was always experimenting, seeking to push the envelope of presentation, subtle taste enhancements and inventing new forms of cooking. He is credited with creating gros nougats, grosses maringues, croquantes and solilemmes. The famous French politician Charles Talleyrand and Napoleon became fans of his work and he was often commissioned to cook for diplomatic functions. 

Eventually Talleyrand hired Careme to work exclusively for him at his country estate. Talleyrand famously presented Careme with a test. He had to devise a menu for a complete year of meals, with no repetition of dishes and using only local, seasonal foodstuffs. When Careme passed the test Talleyrand vigorously promoted his young chef who had turned his attention from solely baking to formal cooking. 

After the fall of Napoleon Careme went to London and served as chef de cuisine for King George IV. Later he travelled to St. Petersburg to work for Czar

Alexander I. Finally, returning to Paris and the employee of James Mayer Rothschild, he died at the age of 48. It is believed that Careme died at a young age because he spent his life cooking near open charcoal flames.

It was as chef for Talleyrand that Careme spread the greatest influence. He cooked for the large diplomatic councils that Talleyrand convened. As diplomats returned to their distant countries they carried stories about the wonderful delicacies that Careme had concocted. The upper classes of Europe quickly became enamored and haute cuisine, stylized French cooking became the rage. 

Careme is the most influential chef of all time. Many of his techniques and improvements are in use to this day. He invented the famous toque (chef’s hat). His creation and classification of the universally utilized four Mother Sauces changed cooking. He pioneered the “service a la Russe”, serving dishes one at a time as they appeared on the menu. Numerous recipes and cooking techniques are attributed to this culinary genius. 

His five part book “L’ Arte de la Cuisine Francais” is still considered a classic. It details numerous recipes, plans for menus and tables settings, organizing kitchens and the history of French cookery.

In most major cities around the world, the French restaurant is considered the apex of taste, refinement and luxurious dining. When visiting Paris, especially for first time travelers, the experience of viewing patisserie windows is street theatre. The colors, styles and shapes of the treats are so visually stunning. The pace and style of French restaurants have a cadence all their own. Food is art and life to the French.  Marie-Antoine Careme, “The King of Chefs, and the Chef of Kings” deserves much of the credit for this grand legacy.

King Gillette Pioneered the World’s Most Lucrative Sales Model

Friday, September 25th, 2009

by: Geoff Ficke

Today we know Gillette to be one of the world’s most successful and highly respected consumer product brand names. The Gillette safety razor is ubiquitous in homes all over the world. The Company is now owned by Proctor & Gamble and continues to introduce new shaving innovations on a regular basis.

King C. Gillette was a travelling salesman, a bit of a bon vivant and a very ambitious entrepreneur. During his travels he fortuitously made the acquaintance of William Painter. Mr. Painter was the inventor of the Crown Cork bottle sealer. His invention was the impetus for the Crown Cork & Seal Company, hugely successful to this day. The inventor was almost messianic in his belief that the key to any successful invention was the ability to repeatedly re-sell the product to the same users. Mr. Gillette became enamored of the concept of “planned obsolescence” and began his quest for an invention that he could commercialize.

One day in 1895 while shaving Mr. Gillette had an idea. At that time shaving was an ungainly affair. The process required a bowl of drawn water, soap, brush, and a straight razor that needed to continually be stropped to maintain sharpness. King Gillette’s brainstorm was to design a razor that held a disposable steel blade. He would sell the razor as a fixture and the blades as refill products, over and over to the same customers.

There was a technical problem, however, that Gillette had to overcome. At that time it was considered near impossible to create a small metal blade that would hold a sharp edge for multiple shaves and be inexpensive. It took six years and the engineering skills of MIT graduate William Nickerson to create the technology to mass-produce disposable razor blades.

King Gillette was nothing if not dogged. However, it took the entry of the United States army into World War I to popularize the Gillette Safety Razor.

Mr. Gillette’s company was able to secure a contract with the government to distribute Gillette Safety Razors to every soldier. By the end of the war 3.5 millions razors and 32 million razor blades had been distributed to soldiers in the field.

When the Armistice to end the war was signed and the American soldiers returned home they imported the Gillette shaving habit with them. There was immediate demand created across the country for Gillette products. The future success of the company was assured and the Gillette brand became a cornerstone of the American consumer product marketplace.

My consumer product marketing consulting firm reviews hundreds of products each year. Recently we had the opportunity to analyze a wonderful beauty product accessory. The inventor had done a wonderful job of crafting the prototype and the features and benefits of the item were of excellent utility. However, the item was a one-time sale. There was no consumable, resale item included in the offering.

We advised the inventor of this obvious, limiting deficiency in the project. Retailers are reluctant to carry single items. Sales would initially spike and then dramatically slow as market penetration occurred. We offered to create a liquid “activator” product to be used in conjunction with the implement. The “activator” would be the razor blade, the hardware implement the equivalent of the Gillette razor.

The “activator” was inexpensive to produce, had huge perceived value, completed and embellished the marketing story and offered retailers and the inventor the opportunity for a steady repeat sales stream. The product is now sold in thousands of beauty salons across the United States and in Europe.

The Gillette sales model is now so common that we take it for granted. “Planned obsolescence” is ubiquitous and insures brand loyalty for many years. The key to building a successful brand that consumers treat as generic is often to mate a fixture or implement with a consumable item. Gillette often gives away the razor to insure that the consumer must purchase their proprietary razor blades or cartridges. Ambitious entrepreneurs should always seek to extend their products reach by incorporating King Gillette’s model.

A Religious Sect Accidentally Created A Great American Industry

Friday, September 25th, 2009

by: Geoff Ficke

During the Civil War years of the 1860’s the Seventh Day Adventists opened the original Western Health Reform Institute in Battle Creek, Michigan. This religious group was keenly interested in healthy living and undertook some of the earliest research on the benefits of foodstuffs naturally derived from Native American crops. The result was their creation of the earliest breakfast cereals.

For the rest of the 19th century the Seventh Day Adventists consumed their breakfast cereals made from oats, corn, wheat and sorghum. They never really attempted to fully commercialize their recipes for these cereals.

Their original health institute became the famous Battle Creek Sanitarium. One of the doctors at the sanitarium was named W. K. Kellogg. Dr. Kellogg, a devoted follower of the Seventh Day Adventists, was keenly interested in healthy diet and the effect of diet on sick patients. While seeking a foodstuff to replace bread in the diet of his patients, he stumbled into an answer that created an iconic American industry.

Dr. Kellog was boiling a pot of water that contained wheat. His attention became diverted and the wheat overcooked, thus softening. He removed the softened wheat and let it dry. When he returned later he found that the overcooked wheat had begun to turn brittle. He began to break apart the wheat and it broke off into little flakes. Amazingly, the wheat flakes had a most enticing taste. Dr. Kellogg had accidentally invented the process essential to mass-produce wheat cereals and corn flakes.

Today we know the Kellogg Company as one of America’s great brand names and purveyors of numerous popular breakfast cereals. The Kellogg Company was later followed by C. W. Post and General Mills in making the prepackaged breakfast cereal industry one that is uniquely American.

Dr. Kellogg spent the rest of his life seeking to create healthy products that would improve and extend life. However, the accidental discovery of the process necessary to produce dry cereals is his great legacy. Every day millions of people all over the world start their day with a tasty, nutritious bowl of cereal that owes its provenance to an overcooked pot of wheat.

Many great inventions and product improvements owe their existence to accidents, mistakes that open new doors and plain dumb luck. The key to commercially profiting from these errors is to always keep an open mind in the face of the unexpected. Dr. Kellogg was looking for a new type of bread. His mistake in overcooking a pot of wheat has contributed to making his name one of the most famous in the world.

The Historic Link Between Tulips and The Sub-Prime Mortgage Debacle

Saturday, September 12th, 2009

by: Geoff Ficke

Almost every living individual is being effected adversely in some way by the international economic meltdown we are experiencing today. The genesis of this severe financial downturn is attributed to the United States government encouraging the expansion of homeownership to people who would have historically been deemed unworthy of obtaining credit. The banking systems participation and eagerness to leverage credit risks by extending loans to people with poor credit histories is the principal cause of the current sub-prime mortgage crisis.

Historically, the bursting of the credit bubble follows a long and dubious line of similar scandals. Greed, hubris and suspension of common sense and disbelief are always present before the hen comes home to roost after the gravy time has ended. The panic of 1908 in the United States, the worldwide Great Depression and the implosion of the technology stock bubble in the late 1990’s are memorable examples of euphoric periods followed by great loss and assignation of blame as to the causes of these financial busts.

These peaks and troughs in economic fortune are not unique to modern times. One of the earliest documented financial crazes was the Dutch Tulip Mania in the 17th century. The Dutch, being a tiny, mercantile nation, surrounded by larger, stronger empires were the earliest creators of trade policies and sophisticated financial products. One of their most creative vehicles was the introduction of the futures market.

Tulips were introduced into the Dutch economy and agronomy early in the 17th century. They quickly became prized for their beauty and the floral engineering that created many unique, exotic varieties of tulips. An exchange mechanism developed for speculation in the valuations of the various strains of bulbs. By 1637 a full-scale mania had erupted in evaluating future tulip bulb harvests.

Records from that period are sketchy, but it is known that a single Viceroy Tulip bulb was valued under contract for between 3000 and 4200 Dutch florins in 1637. Contrast this with the annual wage of a skilled Dutch craftsman of 150 florins per year. Isn’t this a definitive example of excessive senseless mania?

The Dutch referred to such trading contracts as “wind trade”. This was because no one ever actually took possession of the tulip bulbs. They simply owned a piece of paper, a contract that documented their claim on the tulip bulbs. Does this example of financial engineering ring any bells today in our current distressed situation?

The popularity of the tulip trade, and the amazing returns, mostly paper gains that were realized by the early speculators created a stampede of inexperienced, gullible speculators. Noblemen, farmers, sausage makers, chimney sweeps and day laborers began to speculate hoping to turn a few florins into exponentially huge investment returns. Of course, the last investors in, were the most harshly abused by the implosion of the tulip bulb speculative bubble. This is true in all bubble cycles.

The British economist Charles Mackey wrote a tome in the 18th century cataloguing the history of the Dutch Tulip Mania. His “Extraordinary Popular Delusions and the Madness of Crowds” remains in print to this day. Business schools and economists refer to Mackey’s study of the herd mentality of people during manias. Nevertheless, though Extraordinary Popular Delusions is still studied, its lessons have hardly been taken to heart.

The greed and hubris that are always present in manias too often define the human condition. People tend to see someone profit from an enterprise and try to emulate their perceived success. This engenders ever more people attempting to participate in the affair and the result is a panic, a mania, a bubble, then disaster.

The no money down payment, zero document loans, offered in the last decade created a completely different type of borrower and lender. The borrowers have no skin in the game. They get to possess a home in which they have no equity. As long as their condition is stable they can maintain possession. However, if their fiscal condition recedes, or the value of the property declines, they are in deep trouble. Foreclosure is a reasonable action for them to undertake to simply walk away from a gamble that did not work out for them.

The lenders have suspended proper underwriting standards in order to induce entry into these risky home sales transactions. They have little skin in the game, because they have conceived exotic packaged investment vehicles where mortgages are bundled and sold to investment speculators all over the world. The owner of the mortgage is actually unknown to the mortgagee, or even the originator of the loan. The loan originator collects their fees and offloads the loan obligation from their balance sheet. The risky transaction is now someone else’s responsibility.

As a result we have endured a period of fake prosperity built on credit swaps, personal irresponsibility, corporate irresponsibility and governmental corruption. The mania of our time is cheap credit. This bubble has burst, and every homeowner faces shrinkage in the valuation of their property because of the greed of speculators and the attempt of government to secure homeownership for people who should be renters. Community banks and credit unions that have maintained high lending standards are being hurt because of the recklessness of the giant money center banking institutions.
Retirees and prudent investors have seen their savings and investments slaughtered because of the inane greed and corruption of others.

The 1990’s technology stock bust decimated a generation of people who came to believe that investing in the internet was the new “Holy Grail” for prosperity. Startup companies with no sales, no balance sheets and inexperienced management were given huge market valuations. Investors were advised that the tech boom was just in the first or second inning of this nine inning game. Brokerage firms provided guidance on equities that they actually made markets for. This bit of double dealing lead to constant buy calls on tech firms stock that insiders knew had no prospects for success.

The Dutch Tulip Mania, the Mississippi Company, the South Seas Company, the South African Milk Culture craze and the many modern crazes, Ponzi schemes and asset bubbles that we continue to experience are testament to man’s inability to control emotions. Greed, power and wealth are aphrodisiacs for many. We are imperfect beings, susceptible to herd mentality, even when we have knowledge of history’s lessons and could apply these to spare ourselves the pain of participating in activity that will assuredly lead to great pain and loss. Discipline, responsibility and thrift are essential to long term success.

Imagine What Would the World Be Like Without the Simple Screw

Thursday, September 10th, 2009

by: Geoff Ficke

We take the simplest devices for granted in our modern technologically advanced world. We turn a tap and water is delivered, hot, temperate and cold. We hit a wall switch and darkness is overcome by light. We open the refrigerator door and peer into a compartment that contains climate controlled stored foodstuffs. These conveniences are omnipresent in the developed world in the early 21st century.

And yet, we reflect little on the simplest, most important inventions that make all forms of product possible. Consider the humble screw. Yep, the little fastening vehicle that is ubiquitous in every tool-box, do it your self pre-pack, or kitchen catchall drawer. The ability to affix two opposing elements or surfaces together and insure that their attachment is permanent is essential to the structural integrity of virtually every non-consumable product we use today.

No one knows who invented the screw. We do know that wooden screws were in use during the time of Christ. They were widely used in the Middle East in pressing grapes for wine, olive oil production and woodworking. The applicable uses for screws really did not change much until the 18th century. Englishman James Ramsden invented the first “screw cut lathe” to mass- produce steel screws in 1770. This advance made screws more economical and their usage in industrialization processes began to increase exponentially.

In the 1930’s, Henry Philips, in response to the booming automobile industry’s need for closer tolerances, invented the Philips Head Screw. This square headed screw was a significant advance as it enabled machine tools to apply more torque to the screw head, thereby providing much tighter fit and finish between conjoined parts.

Billions of screws are now used every year in millions of applications. Screws of all sizes and metallic composition are essential to every product that we manufacture. As useful and universal as the common screw is in our lives, we never really reflect on it’s importance, it’s efficiency, it’s economy and what the world would be like without these ingenious little linkage devices.

There is a contemporary lesson here. The simple screw has made life easier and more comfortable for every consumer. Jobs are created to produce screws, distribute screws and utilize screws. Prosperity is enhanced by the usefulness of this simplest of inventions.

Many entrepreneurs and inventors seek to improve life and profit commercially by creating new innovative products. The lesson we can all learn from the plebian screw is that sometimes the most valuable, most useful concepts are the simplest. It is not necessary to re-invent the transistor or discover a new system of water desalinization to profit. Looking into your universe of work, family or play and finding a simple improvement that will benefit consumers is the easiest path to commercial success.

In my consumer product development and marketing consulting company , Duquesa Marketing, we review hundreds of product submissions each year. The best, most commercial are inevitably the simplest. They offer the most utility for the greatest number of consumers. These concepts typically do not require re-educating the consumer, which can be a difficult and expensive proposition.

So keep it simple and apply the simple “screw” test to determine simplicity, facility, cost effectiveness and applicability. This is a wonderful template that can be transferred from an ancient product to modern inventions to determine prospects for success.