Meet the new boss
Same as the old boss.

In the early seventies Chicago was perhaps as good a place as any to do a start-up, or at least a young man named Aaron Ward thought so. He identified what he believed to be an enormous under-served market segment that traditional, old economy retailers were not adequately satisfying. So he did what all nascent entrepreneurs do: hits up the family for capital (in this case his brother-in-law for $1,600) and goes for it.

Due to delivery bandwidth constraints at first Aaron’s technology took forever to reach the market but its superior graphics more than compensated. Although he only offers 30 items initially, his business model was so scalable he eventually went to 10,000 compared to his highly fragmented retail competitors whose shelves typically held 250 at best. With no storefront and no intermediaries like wholesalers and retailers his prices are significantly lower, and he makes it as undemanding as possible for consumers (who never have to leave their home to order or receive his merchandise) to choose from a selection absolutely unimaginable from one source. Hell, from any number of sources for that matter.

Like most technology guys, Aaron gets off not only on the business but on bringing it to the masses. He’s connecting huge numbers of disenfranchised people to a larger consumer society that’s quickly emerging, even encouraged customer networking to reduce freight costs. Perhaps more than anyone else in the country he understood the impact of the new RFD delivery mechanism.

Of course, he’s dismissed at first, encountered all the typical channel pushback: who would purchase products without seeing them from some guy named Aaron whom they’ve never met? What about payment security and redhibition (the return of defective or unwanted merchandise)? He was way ahead of them though, pioneering a return policy better than any in the universe and a fairly liberal credit policy.

Aaron mailed his technology out just like AOL disks and many retailers actually encouraged their collective burning as if they’re Beatle records in Mississippi. Which is about the best they can do because the paradigm shift is becoming evident. Really evident. And everyone freaks because this is the big one. The dawn of a new economy in which there will be little need for conventional bricks-and-mortar retailers nor will wholesalers, distributors or sales representatives be much required.

Talk about a first mover advantage. Aaron’s middle name was Montgomery. The year was 1872.

The same rules apply to Montgomery Ward’s successors of today as they did then. They applied well before him and will apply well after whatever.com. His ultimate impact? Well, at the time, Robert E. Lee no longer had to ride hundreds of miles on the magnificent Traveller to Richmond in order to purchase a new pair of britches. He could remain in Lexington and tend to his lovely little college while they were delivered right to his door.

But soon a newer technology in the form of the automobile would transform once again the purchasing experience, shifting the paradigm back to retail stores. Ward’s responded by going into the licks and mortar business.

The more things change, the more they stay the same.