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48 THE PRACTICE OF INNOVATION

builder, still very small, decided to look around. He found that there
had been a change in what the young American couple wants in its
first house. This no longer represents the family’s permanent home as
it had done for their grandparents, a house in which the couple expects
to live the rest of its life, or at least a long time. In the 1970s, young
couples were buying not one, but two separate “values” in purchasing
their first home. They bought shelter for a few short years; and they
also bought an option to buy—a few years later—their “real” house, a
much bigger and more luxurious home, in a better neighborhood, with
better schools. To make the down payment on this far more expensive
permanent home, they would, however, need the equity they had built
up in the first house. The young people knew very well that the “basic
house” was not what they and their contemporaries really wanted,
even though it was all they could afford. They feared therefore—and
perfectly rationally—that they would not be able to resell the “basic
house” at a decent price. So the “basic house,” instead of being an
option to buy the “real house” later on, would become a serious
impediment to the fulfillment of their true housing needs and wants.
The young couple of 1950 had still perceived itself as “working-
class,” by and large. And “working-class” people in the West do not
expect their incomes and their standards of living to rise materially
once they are out of their apprenticeship and into a full-time job.
Seniority, for working-class people (with Japan being the major
exception), means greater job security rather than larger incomes. But
the “middle class” traditionally can expect a steady increase in its
income until the head of the household reaches age forty-five or
forty-eight. Between 1950 and 1975, both the reality and the self-
image of young American adults—their educations, their expecta-
tions, their jobs—had changed from “working-class” to “middle-
class.” And with this change had come a sharp change in what the
young people’s first home represented, and what “value” was con-
nected with it.
Once this was understood—and all it took was to listen to prospective
homebuyers for a few weekends—successful innovation came about eas-
ily. Almost no change was made in the physical plant itself; only the
kitchen was redesigned and made somewhat roomier. Otherwise, the
building remained the same “basic house” the homebuilders had not been
able to sell. But instead of being offered as “your house,” it was offered
as “your first house,” and as a “building block toward the house you
want.” Specifically, this meant that the young couple was