In 1987 at age 31, Robert Bennett proposed to his wife, Martha, that he resign his job as a Boston computer salesman, sell their vacation home and other assets, and use the proceeds of $50,000 to found a business that he wanted to call _MicroFridge Inc._
Bennett, who had a Master_s degree in engineering, wanted to exploit an idea of his to combine a refrigerator, freezer, and 500-watt microwave oven into a single unit for sale to college students. Bennett was aware that many colleges had rigid
policies against cooking in student dormitories
because of the risk of fire posed by hot plates.
According to the National Fire Protection
Association, there were over 1,600 fires annually
on college campuses.
Bennett had devised electronic circuitry that
shut off power to the refrigerator/freezer
whenever the microwave oven was switched on.
In this way, the unit would never pull more than
10 amps of current. By comparison, a hot plate in
tandem with a refrigerator drew about 20 amps.
His proposal (see illustration) was for a compact
appliance weighing 87 pounds and under 4 feet in
He approached General Electric, Amana and
other domestic appliance manufacturers without
success, but Samsung Electronics and Sanyo
Electric were willing to discuss terms for offshore
manufacture provided Bennett agreed to pay
upfront for all specialized jigs, dies, and tools.
Sanyo offered to supply him at a landed price of
$263.00 per unit, and estimated the upfront
tooling payment at about $170,000. Bennett
tentatively added a $300,000 budget to cover his first year of selling and administration, and $60,000 for incorporation, patents, and other start-up legal costs. He hoped to be able to set a price to the next level of the distribution channel that would earn him a return of 15% on the selling price, or $309 on Sanyo_s landed price.
Early in his explorations, Bennett asked Boston_s Atlantic Research to conduct interviews with 200...