The binary world: My childhood discovery of adult stupidity

When I was in elementary school, I was watching a movie with my father (I don’t remember the plot at all, but I could tell two characters were in conflict). I asked him directly: “Which one is the good guy, and which one is the bad guy?”

My father, clearly exasperated, simply replied, “It’s hard to say, son.”

I remember being profoundly astonished, thinking how stupid adults (or at least my father) were. At the time, the children’s shows I eagerly watched on Sunday mornings made the distinction between hero and villain instantaneously clear. For a child, the world is constructed of simple, easily judged binaries, and that judgment is very quick. However, (and perhaps this is just me) I forgot my mistakes just as quickly, meaning that despite my fast judgments, my personal progress was painfully slow.

This childish trait meant that many phenomena in my life were subjected to fierce, binary debates. Two popular TV shows airing at the same time, Puma vs. Adidas, and, of course, Coke vs. Pepsi, were among them.

The greatest marketing failure… or was it?

When I was a kid with a limited budget, the choice between Coke and Pepsi was a matter of serious philosophical debate. In the early 1980s, PepsiCo launched an aggressive marketing offensive—comparative advertising, Michael Jackson endorsements—and, crucially, it seemed to be working. I remember many forward-thinking Japanese kids switching allegiance from Coke to Pepsi.

In 1985, to strike back, Coca-Cola launched its long-awaited replacement product, “New Coke,” following years of meticulous preliminary market research. It is now legendary in the marketing field as the greatest commercial failure of the century.

I vividly remember the news spreading in Japan. We all thought Coca-Cola had lost its mind. As a 7th grader, I knew the flavor of tradition was more important than the sweetness of innovation.

The chaos of success: Why failure is a matter of perspective

On April 23, 1985, Coca-Cola launched New Coke and withdrew the old formula from shelves. The ensuing chaos was immediate and overwhelming: Coca-Cola offices worldwide were flooded with endless, often furious, calls of complaint. Weeks later, they capitulated, returning the old formula under the new name, “Classic Coke.”

If you only view this as a promotion for New Coke, it was indeed the failure of the century. But we cannot overlook the fact that this promotion inadvertently triggered a furious enthusiasm for the original Coke—a passion that had been dormant. Many critics argue the fiasco was a brilliant, accidental masterstroke that proved the old product’s enduring value.

Depending on the point of view, the New Coke “failure” looks suspiciously like a massive success.

The Donald Keough Principle: Confession of a slapdash approach

Donald Keough, the then-President of Coca-Cola, famously confessed: “Some critics will say Coca-Cola made a marketing mistake. Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart.”

Since he passed away, the full truth remains unknown. But what is undeniable is this: It is almost impossible to predict the sales outcome of a new product, even for a giant like Coca-Cola, even after careful, costly preliminary market research.

So, what is the alternative to slow, expensive, and ultimately flawed research?

From this perspective, our own product development strategy may not be such a bad move after all. Yes, there is a distinct risk of making many commercial flops. We rapidly and continuously develop products without extensive preliminary market research—a “slapdash” approach, if you will.

But this speed gives the marketplace a powerful impression: that we are a furniture manufacturer full of a fighting spirit and the rapid development ability required to constantly innovate. When the alternative is spending five years and millions of dollars to launch a guaranteed failure, fast failure is always better.

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