James Dyson: Building a billion dollar vacuum cleaner empire

All it took is 5127 prototypes. 5 years of his life. And finally, James Dyson had built a superior vacuum cleaner. But that was just the beginning of his problems.

The vacuum cleaner wasn’t James Dyson’s first invention. Dyson had always paid attention to the smaller problems in life and had spent time and his engineering skills solving them. Once while renovating an old farmhouse, his wheelbarrow had gotten stuck in the mud. And so, Dyson replaced the wheel with a large ball. While the wheel could only move front and back, the ball could move in all directions. And so it would not get stuck. The ballbarrows were a huge hit and had replaced 50% of wheelbarrow sales in a few years!

In 1978, Dyson was vacuum cleaning his new home. And he was getting frustrated because the suction of the Hoover vacuum cleaner wasn’t good at all. Being an engineer, he dismantled the whole thing and realized that it was an inherent design problem. As the vacuum cleaner was used, the accumulated dust would clog the pores in the filter bag, and as a result, its suctioning power would reduce. It didn’t really matter how powerful the engine was in the vacuum cleaner, it was the clogged bags that reduced the suction.

Connecting ideas

At about the same time, Dyson visited a sawmill. And saw how it removed the sawdust from the air by using large industrial cyclone extractors. James Dyson realized that if he could shrink the industrial cyclone extractors, he could create a vacuum cleaner that didn’t require a filter bag, and would never lose its suction power. 

And so, with a little bit of seed money from his old boss, James Dyson started on his journey of building a modern bagless vacuum cleaner. Little did he know that it would take 5 long years. His wife had to start working to support the family. 

After 5127 prototypes, the Dyson vacuum cleaner was finally ready. And it worked great! The only problem was: Dyson didn’t have the money to build a manufacturing plant.

What do you do when you don’t have money?

James Dyson used the last of his funds to get patents for his invention in various countries. Because he knew that without patents, licensing would be impossible. But no company was interested in licensing it either. Hoover and Electrolux flat out said no to Dyson.

You see: the filter bags that had to be replaced in a vacuum cleaner every so often were a 100 million a year business. The leading vacuum cleaner manufacturers didn’t want to sell a new type of a machine that would kill their residual cash cow.

Finally, a small company in Japan agreed to license it. And surprise surprise – it sold really well in Japan! In fact, it became kind of a status symbol in Japan. And even when that company raised the price to $2000, the Dyson vacuum cleaners sold!

Earning 5% of sales allowed Dyson to pay off all his loans. And he finally got a bank in London to loan him part of the funds to set up his own factory. To raise the remainder of the funds, Dyson sold his cash cow: perpetual licensing rights in Japan for a one time upfront payment of 1 million pounds. When the funds were still a little short, he remortgaged his own home to build his factory.

Build a better product and the people would come.

At the behest of the retailers who carried the Dyson vacuum cleaner, Dyson started running ads: “100% of the suction 100% of the time!”

But the people didn’t come. The sales were just a trickle. Dyson tried a lot of different ads with a lot of different taglines. “No clogging. No loss of suction” to “The vacuum cleaner that never loses suction.” But yet, the sales needle didn’t move a lot.

Could it be that not everyone was as concerned about the suction issue as James Dyson was?

When the tagline was changed to “Say goodbye to the bag” sales went through the roof! And Dyson became the best selling vacuum cleaner in the UK within 2 years! 

People hated changing the filter bags more than poor suctioning leading to poor cleaning. The idea of never having to change the filter bags resonated!

Understanding what people want – when they don’t know it themselves!

James Dyson is a meticulous man. He made over 5000 attempts to perfect his machine. And he kept on reworking his ad and messaging to increase sales. Because of which he succeeded. 

But is there a shortcut to know what people really want? 

Crafting your 100M Offer

In his book the 100M Offer, Alex Hormozi gives us a formula to create offers that people take you up on. He says that value is made up of two parts. 

Value = dream outcome / effort required.

  1. What is the dream outcome and how likely are people to achieve it
  2. What time and effort and sacrifice is needed to achieve the outcome

It’s similar to the pleasure / pain continuum. Your offer needs to increase the pleasure, and reduce the pain. But if given a choice between pleasure or pain, focus on the pain. Because people make decisions based on reducing their pain instead of increasing their pleasure!

When Dyson was too focused on only the dream outcome – of having perfect suction to clean the house better – things didn’t move much. But when the focus was shifted on how Dyson vacuum cleaners reduced the effort for folks by not having to change bags – ever, sales saw a hockey stick growth! 

Today, Dyson sells more than 50% of vacuum cleaners in the UK. And over 20% of vacuum cleaners in the rest of the world! 

Action Summary:

  • You can make the best product but it won’t sell if your offer doesn’t resonate with your audience.
  • Value = dream outcome / effort required. Don’t only focus on how your product is superior. Also focus on how it reduces the pain and the effort.