Gad and Hans Rausing are among the richest men in Britain, their wealth surpassing even that of the Queen. These Swedish brothers, who came to Britain in 1983 have made their millions from one product - TetraPak, the aluminium and plastic laminated container for milk and fruit juice found all over the world.
One evening, near Christmas 1944, a young Swedish economist called Ruben Rausing was watching his wife Elisabeth making sausages in the small kitchen of their home in the university town of Lund, Sweden.
He was impressed by the manner in which the sausages were contained in a skin and kept fresh by pressing shut each end. So, he began questioning his wife about the method she used. Their conversation that evening was to lead to the invention that would revolutionise lives throughout the world, and make the couple - and their family - billionaires.
For Ruben was to apply the principle to milk, inventing the low-cost, germ-free packaging system, which he called TetraPak
- a roll of cardboard twisted to make a pocket and sealed into a rectangular carton. Today if you buy milk or orange juice at virtually any supermarket from Dublin to Peking it will have come from Rausing's idea that day in his kitchen.
This is the legend of TetraPak. However, it seems that the reality could be rather different. It is certainly true that Ruben realised the huge potential if a form of germ-free sealed packaging could be found for household items such as milk. But the alternative version of the story suggests that at this point he approached Erik Wallenberg, a young research scientist working for his company. Wallenberg claims hat he is in fact the person who designed the first TetraPak, working from an idea originated by Ruben.
Now aged 78, he recalls the day Ruben Rausing came to him. Rausing told him that he had bought a herd of cows which needed milking, and wanted a container made to package the milk.
'I was under a lot of pressure to find a solution,' Wallenberg said, 'but strangely it was while I was at home with flu that I came up with the idea of the tetrahedron-shaped milk package.'
Rolling up a piece of paper to demonstrate the process, he continued. T made up my mind that a cylinder - a tube - should be made and that it should be pressed together at one end. I decided it should also be pressed together at the other end. However, to avoid getting a flat cushion-like package which could contain only a small amount of liquid, I decided to make the second pressing together in a plane at right angles to the first one ... that is simply how the TetraPak was born. I went back to the laboratory and we began testing.'
Wallenberg said Ruben had early doubts about the possible success of the idea, 'but we tested it by putting water inside for several days and, when there was no leakage, he was convinced. I think that Ruben Rausing realised its potential immediately. He bought the patent and all rights from me for 3,000 kronor (a little less than £300), which to some people was a half a year's wages at that time. Obviously, at the time those in the company knew of my work but after a while another story began to emerge of the invention — that it had all been the work of Mr Ruben Rausing. Yet although clearly among the world's most successful businessmen, they pride themselves on their secrecy.
Whatever is the reality, by 1952 the first TetraPak containers were being successfully produced, and in a few years Ruben had built up a huge business.
By the late fifties, all three of Ruben's sons had joined their father within the company. But it was already clear that Hans would play the leading role in the company.
'He was,' says Wallenberg, 'extremely able and, like his father, single-minded. He only seemed to have one interest and that was to make money.'
Despite their enormous wealth, today both Hans and Gad live modestly, and as far as Hans is personally concerned, in a recent interview he admitted, 'I have no idea how much money I have. You can't measure money in lists.(3326)
Why the last shall be first
Have you heard of Berkey or Ampex? Gablinger or Chux? Perhaps you should have, because each occupies an important place in the history of product innovation. Berkey produced the first hand-held electronic calculators, Ampex the first video recorders. Gablinger developed low-alcohol lager and Chux sold the first disposable nappies.
Or perhaps you should not, because none of these companies made a commercial success of their innovations. Today the calculators we use are probably made by Casio, our video recorder comes from Matsushita, our low-alcohol beer is Miller Lite, our nappies are made by Procter & Gamble. In each of these markets the innovator was swept away. Xerox looks like an exception to this sorry catalogue. The company was first into the photocopier market and, even if its dominance was ultimately challenged by Canon, it remains a large and successful company today. But Xerox was also a pioneer in fax machines and personal computers. Each of these eventually proved to be a success - but not for Xerox Corporation.
As we all know, it was Apple that developed the personal computer market. But Apple's leadership quickly disappeared when IBM came on the scene. Apple then jumped ahead by introducing the graphical user interface. Its windows and mice brought personal computing within the reach of everyone. But it is Microsoft that does this now.
The business world is not kind to pioneers. Even if you know how a market will develop, timing is a matter of luck - or of quite exceptional skill.
There are two closely related lessons. One is that being first is not often very important. The other is that innovation is rarely a source of competitive advantage on its own. Individuals and small companies can make a great deal of money out of good new ideas. The success of large established
corporations -Matsushita, Philip Morris, IBM or General Electric is generally based on other things: their depth of technical expertise, their marketing skills. And time and again these characteristics enable them to develop the innovative concept far more effectively than the innovators themselves.
This is not to say that there is no role in business for the great innovator. After all. General Electric was built on the extraordinary creativity of Thomas Edison's mind, the Ford motor company on the abilities of its eponymous founder. The imagination of Walt Disney created a company that is still without parallel or rival. Perhaps Akio Morita of Sony occupies a similar place in the annals of modern business.(2139)