Henry Ford — Built cars to get rid of horse poop….
If I had asked what they wanted, they would have said faster horses. Henry Ford
We have been hearing this statement since time immemorial. Product managers and entrepreneurs use this as an example to talk about customer obsession.
Let me break the bad news for you.
Henry Ford — never said that.
Not only that, Henry Ford’s MODEL T car that sold over 15 million units was not even his first car.
Wait a minute, Henry Ford was not even the first entrepreneur to make cars.
Add to that, the intent of making cars was never to go faster.
TL/DR
Prefer watching instead of reading. This is part of a 4 session class on customer obsession.
- Part 1: Henry Ford Case Study
- Part 2: What is Customer Obsession (WIP)
- Part 3: Common Mistakes in Customer Obsession (WIP)
- Part 4: How can we be obsessed about customers (WIP)
Ouch, that hurts. I apologize to all those who were seeking inspiration from Henry Ford’s quotation on customer obsession. Don’t worry, I will find you someone who can continue to inspire you.
So what was Henry Ford doing in the early 1900s? Let me break it down for you, but before that…
Was the problem really to go fast?
To answer this question, we need to go back in early 1900s and understand the society a little better.
- Back in the 1800s, it would take very long for traveling distances. For example, Michigan to Florida would take almost 2 weeks.
- Sometime later in the 1900s, when steam engine was invented, railroad and sea travel made the travel from weeks to days.
- In early 1800s, national roads program was initiated in US. That was a huge trigger for the automotive industry since geo-political scenarios were supporting the automotive industry.
At the same time a lot was happening in the American society.
- Up until the 18th Century, the agriculture industry was dependent on oxen and horses for agriculture, therefore a large population of the horses was with the farmland owners.
- The need to travel far was a thing for the elite. If you owned a horse at that time, then you were considered an elitist.
- So much so, that in Spanish the word for “gentleman” is “caballero” meaning “horseman”.
- These horses found their way from farmlands to city streets. It was the perfect companion for city travelers to move short distances.
- There was a new thriving business called Liveries that allowed folks to buy or rent horses.
Looks like the world was perfect. There doesn’t seem to be any problem with this beautiful world of horses and horse carriages.
So what was the problem?
There were nearly, 150,000 horses in New York city in 1800s. There was a big problem with these horses.
- A single horse generated nearly 15–30 pounds of manure a day.
- These horses together generated 3 million pounds of horse poop and 40,000 gallons of horse urine per day. Source: The Great Horse-Manure Crisis of 1894 — Foundation for Economic Education (fee.org)
- In 1880–15,000 horses died i.e. 40 horse carcasses/ day in New York. The situation was that a horse fallen due to overwork would be shot on the spot or abandoned to die, creating an obstruction that clogged streets and brought traffic to a halt.
- Billions of flies around horse manure would spread diseases like typhoid and infant diarrheal diseases. Source: The Horse Flu Epidemic That Brought 19th-Century America to a Stop | History| Smithsonian Magazine
- Nearly, 200 people were killed in New York city in horse-related accidents, in 1900s.
- The average life of a street horse was around 2 years. A horse would cost around $250 while its maintenance would cost around $100-$200 / year, therefore the lifetime cost of a horse — $650. Remember this number.
Now, this was a big problem… horse poop, horse carcass, and people dying because of horses. One thing was clear that horses needed to be replaced.
So what did Henry Ford do about this?
How many of us felt that an obvious solution to horse poop is a car. Not many of us….right, neither did Henry Ford. The need was clear. The horse had to be replaced. It is important to understand what was Henry Ford doing at this time.
- At the same time, in some other part of the world, Henry Ford was exposed to building horse-less carriages.
- Henry Ford was an employee at Edison Illuminating Company where he was exposed to the idea of carriages not driven by horses.
- Ford made some horseless carriages that were mostly human driven or steam driven. Source: Ford Quadricycle — Wikipedia
- There were several companies that were experimenting with replacing the horse.
This was the early experiment to replace the horse. This experiment was both good and bad.
- It would cost only 0.5c / mile to ride a steam run car.
- It was less noisy.
- All the problems with horse poop were taken care of.
- Some of these cars would be even 20 Horse Power strong.
- These cars were incredibly slow at 3 -20 miles / hour
- More expensive than a horse — $1000. A horse would cost $650 over its 2 year lifetime.
- These vehicles were very heavy — nearly 2800 pounds. Almost twice the weight of a horse.
- These were fairly complex machines.
- The biggest problem was that starting a steam engine vehicle would take nearly 10–15 minutes.
Henry Ford’s foray into cars
With all these innovations around him, it was not that one fine day Henry Ford came up with the idea of the Model T car and it suddenly became a hit.
It was a long arduous journey for him.
Before the famous Model T, came the model A, B, C, N, K, N, R, and S. Call these the MVPs of Henry Ford’s model T.
Over the next 5–6 years Henry Ford invested in building many cars… 9 to be precise. The table below shows how Henry Ford tinkered with color, horse power, price, raw material, and car designs each year. He was shipping 1–2 car models each year and kept experimenting. Some of these cars were very successful.
These various experiment helped him not only perfect the car but also the car manufacturing process.
What should catch your attention is how Henry Ford reduced the price of Model T from $850 to $290 in 16 years. This was due to efficiencies in operations and advantages of scaling.
So what was Model T’s Value Prop
The best way to find the real value of Model T is to look at its 1st advertisement. If that advert talks about going faster, then all my research just falls flat. So here it is…
Let me highlight some of the key points mentioned in the advertisement.
- 20 Horse Power: This car was a beast. That is 15000 watts of power in one of the earliest cars made.
- Cost $850: Henry Ford ensured the price was nearly the same as the cost of maintaining a horse ($650). Looking at salaries in 1900s, a common man would have to save almost a year’s worth of salary to buy model T.
- Sells for several hundreds of dollars less at least equal value with any 1909 car: What Ford was selling was an economical car with all the features one would expect.
- Vanadium steel — finest steel: Vanadium was a rare metal however I am not sure why this was used in adverts. It is like one of those fancy elements highlighted in the advert that no one knows about but it feels exquisite.
It is like this toothpaste advertisement that boasts of charcoal, coconut oil, and bentonite clay. If you know why bentonite clay is good for your teeth, then message me on LinkedIn Sandeep Chadda | LinkedIn and I will send you a surprise gift.
Back from the distraction…
- Easy access to all moving parts of engine: This statement is a direct competition against steam engines.
- Weight only 1200 pounds. Again a direct value add over steam engine run vehicles. A steam engine was almost 2800 pounds.
- Gasoline capacity — 10 gallons: This was a key point. I have never seen an advert of that era talking about gasoline capacity. Henry Ford was therefore selling the ability to go FURTHER not FASTER.
- Not an ounce of dead weight, not an ounce of necessary weight sacrificed: Again a light weight car would help folks to drive further.
- Reference to reputation of Henry Ford : Interestingly, since Henry Ford had already shipped 6 amazing cars, Model Ts reputation was tied to the reputation of Henry Ford.
To conclude,
In the early 1900s the problem was anything but going faster. It was:
- Dead horses on the street
- Poop and pandemic hitting hard due to horses
- Steam engine run cars not being a great substitute
- People having aspirations to go further rather than faster
So the next time, someone quotes Henry Ford that he invented cars to replace faster horses, you have a long answer ahead of you.
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