The Edsel City

The Ford Edsel is considered one of the most famous product failures in American business history. On the other hand, the Apple iPod is considered a smashing product success. While the products and eras are apples and oranges (I’m sooo witty), the underlying reason for a product  failing or succeeding rests with whether consumers will buy it. In short, it’s a question of demand.

If we think of Amsterdam as a product, let’s ask ourselves a basic question: is this a product we want to buy? More importantly, are we managing the product as an Edsel or as an iPod?

If we step back and look at our product, we see some things that should drive demand: small city lifestyle, proximity to outdoor and cultural activities, low crime, ample supply of housing stock. On the other hand, we see some things that suppress demand: a lackluster school district, blighted neighborhoods, negative perception of Amsterdam, high property taxes.

Like any product, we have a set of pluses and minuses when it comes to features. The trick to selling the product is satisfying customer demand given the features of our product and given the price of the product. However, when you study or analyze any local policy discussion — choose a topic– you notice that few policy makers ever look at demand; all they ever look at is supply. It’s exactly this lopsided view of economics that gets us to where we are now.

The Walter Elwood Museum provides a good example of the clash of economic viewpoints. The school board views the product as a building. To their way of thinking, a building is a building so whether it’s a museum or an apartment complex, it really makes no difference. They have a supply of one building and as supply siders, they focus on managing the supply regardless of the demand. To a demand side thinker, the purposing of the building as a museum or as an apartment building matters. It matters a lot.

I often feel like bashing my head against a wall, repeatedly, as we never seem to get policy decisions that will drive demand for the city. We’re just stuck with a mediocre product that keeps getting its best features plucked out. We have a historic downtown; tear it down. We have a museum; shut it down. We have a high performing elementary school; shutter it. Even worse, we get product managers who want to add negative features: remember the push for a landfill?

WTF!

At this rate, what product will we have left that someone will want? If we keep decimating the few features that give us any desirable differentiation to other localities, how do we ever expect to sell it? We’re just stuck with an Edsel– a product that more and more people pass over and lingers on the lot.

What we really need is someone to own and manage the product to envision and to build a product customers will want. While I believe Mayor Thane gets this, I don’t believe the school district does; not even close. And without a competitive, attractive school district, I think we’ll forever be stuck with an Edsel.

I don’t believe the way forward for the city rests with any notion of a commercial or industrial revival; I don’t see it happening. Whether we build a bridge from the mall to the south side or create a commercial district on the south side or prop up shell buildings in the industrial park will not help us at all if we can’t get people to stay or move here. You can choose which century economy we face: the one in 1908 or the one in 2008.

In the end, the market decides which products win and which ones lose. I think we can find a way to productize Amsterdam so it’s a viable product, maybe not an iPod, but at least not an Edsel. But we have a lot of supply siders so I’m not sure we’re going to make it.

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