Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

The Critical Mass Problems

Sometimes I’m intrigued by what I call critical mass problems, meaning businesses based on ideas that work only if masses of users adopt them. These make intriguing startups sometimes, because if they go big, they go really big.

The best example in my lifetime was the fax machine. I dealt with the precursor in the 1970s when I was still with United Press International (UPI) and we used an early fax-like technology to send pictures to New York from Mexico City. Fax machines were in every business 10 or 15 years later, and the spread of fax was a critical mass problem because a fax did nobody any good until lots of other people also had fax machines.

Pricing and volume are an integral part of critical mass problems. The UPI telephoto cost tens of thousands of dollars. Fax machines were expensive at first, but got cheaper quickly as they became a standard. Eventually the fax machine was replaced by fax boards, which, in turn, were replaced by fax technology in the personal computer operating system.

Companies rose and fell as technology changed.

The other day I thought of critical mass related to the parking meter problem. I hate having to have quarters all the time. parking meter

Yes, I know there are partial solutions already. Near me, Portland OR has a pay-to-park system that takes a credit card and spits out a receipt. And in Eugene, OR, they’ve installed some newer meters that let me swipe a credit card and buy minutes. And I love the way the San Francisco airport has integrated its pay parking with the fast track system, making it automatic. I assume those of you who live on the Eastern side of the country have that option because you have all those crazy toll roads.

Give me a national account with ties to my mobile phone. Give me a device I can put in my car or my rental car. Come on, the technology is obvious.

It’s a great example of the critical mass problem: to really solve it, somebody has to establish a standard that everybody follows.

Still, people: inventors, parking lots, cities: make something cheap and efficient that reads credit cards or talks to mobile phones. Let’s make it like the credit card swipers we have at retail almost everywhere now, so it’s not about quarters.

Oh, and while I’m at it … laundromats.

(Image: Slideshow Bruce/Flickr cc)

3 responses to “The Critical Mass Problems”

  1. Clint Wilson says:

    Great Friday morning reading Tim and if you head down to Pacific Heights you will not find a single laundromat where you can use quarters except in my condo building I think:). Some are still stuck in the 90’s it seems.

    ~Clint
    @cazoomi

  2. Dane Pymble says:

    I like you parking meter idea Tim! This company looks like they have promising technology – http://www.mercurien.com/free-flow-parking.html

    They are Australian based (like myself). I cam across them recently as they were looking for capital.

  3. Cliff Elam says:

    I recently drove across six states in the east using the same toll transponder. Great stuff.

    More scarily, the new toll road in Raleigh uses camera’s to photo your license plate and debit your account based on your on/off exit. And undoubtedly also send you tickets for speeding….

    -XC

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