My Biggest Mistake: Michael Smart

The general manager of Muratec, UK arm of Murata, the Japanese manufacturer of fax machines, has been in the business for a quarter century and still sees the kind of potential he didn't defend first time round.

MY BIG mistake was in failing to see the opportunities provided by the fax machine.

The market today is very different from when I joined the business in 1977 by going to 3M. Then, Xerox and 3M were about the only companies in the field, and trying to sell a fax machine was rather like it must have been trying to sell the first telephones. Everybody wanted to know who else had bought one.

Not only did the people the customer wanted to communicate with have to have a machine, but it also had to be a compatible one. Furthermore, the machines were big, noisy and gave off fumes.

When selling them, one had to take care not to demonstrate in a small room, because it would immediately be clear the machines were not, as we say today, 'environmentally friendly'.

I spent 11 years with 3M, almost exclusively in the fax business, and when I left in 1988 the picture had changed dramatically. There were more manufacturers in the market, the machines had become smaller and cheaper, there was compatability between manufacturers and it took closer to 10 seconds, rather than the former six minutes, to transmit each sheet or document.

The reason I left was that, as a corporation, 3M had decided that, because of the way the market had gone, the fax sector was not a business it felt it wanted to be in for the long term. It initially put the business into a joint venture with a US company called Harris, then sold it entirely to Lanier, which was then a leader in the production of dictation machines.

My mistake, I now realise with the benefit of hindsight, is that if I had been a person with vision I would have seen that the real change occurring in the market was in distribution. Customers were still going to specialist shops selling business equipment - but many companies were moving down-market, and before long it was going to be possible to buy a fax from consumer stores like Dixons.

To make it in that market, though, one would need a high-street presence - a brand name. And 3M had one of the best and biggest - its Scotch tapes and other products were available everywhere. Indeed, in those days, 3M was selling a pounds 100 Scotch-brand copier through W H Smith.

Instead of thumping the table hard enough, I left 3M and went to a company that I felt had a brand awareness - Toshiba. It was not yet in the fax business, but was thinking about it.

I started the fax operation there, and five years later joined Muratec, because at Toshiba I had gone as far as I wanted to go. Murata is a bit of a sleeping giant in this country, but in the US is the No 1 brand in the consumer field and No 2 overall. It has made fax machines since 1972, producing many for such companies as Philips, Rank Xerox and Konica, but it remains relatively unheard of here.

There is another revolution in the fax business. We sell a lot of very sophisticated equipment, such as products that combine computers and faxes, but people are also increasingly using faxes in their homes - to send each other recipes and messages, to do their personal banking, and even to shop.

And I'm damned sure I'm not going to make the same mistake this time around.