PREDICTIONS – 10 Years Later - Santa Fe Institute

3. INANIMATE PRODUCTION LIKE ANIMATE REPRODUCTION
niche. The Italian S-curve curve published in 1992 had indicated
a ceiling of 20 million cars for Italian motorists. Ten
years later, and via a smaller follow-up curve, the Italians have
demonstrated that they could squeeze 32 million cars in their
congested car niche. This should not be interpreted as evidence
against natural growth. We will see in Chapter Seven that S-
curves can cascade, and that a large one may in fact consists of
several cascading smaller ones.
I became involved in fitting S-curves to populations of man-made
products while I was looking into the possibility of computer sales following
such growth. The first computer model I tried turned out to be a
showcase, one of Digital’s early successful minicomputers, the VAX
11/750. The cumulative number of units sold is shown at the top of Figure
3.1. An S-curve passes quite closely to all twenty-eight trimesterly
data points. In the lower graph we see the product’s life cycle, the number
of units sold each trimester. The bell-shaped curve is the life cycle as
deduced from the smooth curve at the top.
When I produced this graph in 1985, I concluded that the product
was phasing out, something which most marketers opposed vehemently
at the time. They told me of plans to advertise and repackage the product
in order to boost sales. They also spoke of seasonal effects, which
could explain some of the recent low sales.
The data points during the following three years turned out to be in
agreement with my projections. To me this came as evidence that promotion,
price, and competition were conditions present throughout a
product’s life cycle and have no singular effect. The new programs that
marketers put in place were not significantly different from those of the past
and therefore did not produce a modification of the predicted trajectory.
Many DEC executives claimed that the phasing out of the VAX 11/750
was an unfortunate event precipitated prematurely by the launching of
MicroVAX II, a computer as powerful but at one-third the price. Their
arguments were irrational. Like early 20th-century physicists resisting
quantum mechanical concepts, they were having a hard time with the
facts of Figure3.1, which spelled out the fate of the VAX 11/750 three
months before MicroVAX II was announced.
64