Osborne Effect: Announce your future product too soon, and customers stop buying your current one. The company often dies before the new product ships. Tomorrow's promise kills today's revenue.
Article: Too Much, Too Soon: The Osborne Effect In Tech History
How to destroy your company with good news? Announce the better product you're building.
The Osborne Computer Corporation learned this the hard way in the 1980s. While selling the Osborne 1 computer, founder Adam Osborne announced the upcoming Osborne Executive. Customers stopped buying immediately. Why get the old model when an upgrade was coming?
Sales collapsed. Inventory piled up. The company went bankrupt before the new model could launch. This pattern has a name: the Osborne Effect.
It works through three steps. First, a premature announcement. The company reveals or leaks information about a new product before it's ready. Second, customers react. They delay or cancel purchases, anticipating the improved version. Third, revenue collapses. The sudden sales drop creates cash-flow problems, inventory surplus, and lost investor confidence.
Apple understands this well. They carefully time iPhone announcements to avoid cannibalizing current sales. Tesla occasionally faces criticism when Elon Musk teases future models or features, causing customers to delay purchases.
The solution is discipline. You must keep upcoming products secret until near release, use gradual transitions with discounts on old stock, stagger feature rollouts, and manage expectations through careful communication.