SUMMARY THE COMPANY Concept: Produce and market red contact lenses for egg-laying chickens, altering their behavior so they fight less, eat less and produce more eggs - on the rise Egg farming profitability projections: possible pre-tax net margins of 25%; 1989 sales of $329,000; Sales of $24 million in 1992. Obstacles: Persuading historically conservative egg farmers, who operate on thin margins, to risk money upfront on an untested product; support the company in the face of slower-than-expected product acceptance; defend a product that can be easily copied by competitors who might enter after the market opens. Randy Wise's decision to sell contact lenses for chickens is not the result of a sudden impulse. He's been preparing for this since he was a teenager in California. In the early 1960s, his father, a chicken farmer, became involved in a similar venture. The idea then was to reduce the cannibalism of laying hens with a lens that distorted their vision. The business failed, but the goal, improving the economics of egg production, is something Wise never stopped thinking about. At Harvard Business School in the early 1970s, he wrote a popular case study evaluating his father's unfortunate experience. and outlined the opportunity for a new company. It explored the economics of egg farming and examined options for commercializing the new targets. Even today, the case (which sells about 6,000 copies a year) is used in business schools across the country to highlight pricing and marketing issues. Wise hoped to start the business right after business school, but was unable to secure financing. “Investors had a hard time relating to egg production,” he recalls. Fifteen years ago... middle of paper... I did the same thing with chicken farmers and convinced one or two of them to try the product. Their mistake was to think exclusively in economic terms. They said, “Here's an industry that needs our product because cost savings should be automatically embraced.” They wasted time. At best, egg production is a high-volume, low-margin business. As a group, farmers have lost money over the past year. It is very difficult to deal with new technologies when you are under pressure. Farmers, for example, will not buy fertilizer when they lose money, even though it is obvious that they should. But the sector is expected to recover over the next 12 months. Animaleni should use this period to ensure that testing is done correctly so that credibility is there when the industry improves. If the tests confirm what they said, I think they have a viable chance.