AI transcript
0:00:01 This is an iHeart Podcast.
0:00:38 Every week, she’ll introduce you to leaders with unique insights on work, answering questions like, how do four-day workweeks work?
0:00:40 Do will a machine ever take my job?
0:00:44 Get some surprising answers on TED Business wherever you listen to podcasts.
0:00:52 Pushkin.
0:00:56 Hey, it’s Jacob.
0:01:02 Today, we are going to play for you an episode of a new show that I’m hosting in addition to What’s Your Problem?
0:01:08 The new show is called Business History because it’s a show about the history of business.
0:01:13 I’m hosting it with Robert Smith, who some of you might remember I used to work with at Planet Money.
0:01:15 He was a co-host at Planet Money.
0:01:22 And the episode we’re going to play today is about Thomas Edison, who is an extremely what’s-your-problem kind of guy,
0:01:26 huge figure in the history of technology, very interesting in many ways.
0:01:31 This is actually the first of a three-episode series we’re doing about Edison.
0:01:36 If you happen to subscribe to Pushkin+, you can listen to the whole series now.
0:01:41 Otherwise, they’ll come out one episode a week over the next few weeks in the Business History feed,
0:01:45 which you can, of course, get wherever you are listening to this show right now.
0:01:51 Also, if you happen to want to see me and Robert, in addition to hear us, you can watch it on YouTube.
0:01:52 I hope you like the show.
0:01:55 If you like it, of course, I would love it if you would subscribe.
0:01:56 Thanks.
0:01:57 Here’s the show.
0:02:01 Business History, Episode 2, Edison, Part 1.
0:02:04 What if that’s the segment that’s sponsored?
0:02:05 Sponsored by what?
0:02:07 By whoever wants to pay for it.
0:02:10 We can talk about that afterwards, I suppose.
0:02:22 Thomas Edison died in 1931.
0:02:24 He was 84 years old.
0:02:29 And when he died, the President of the United States, Herbert Hoover,
0:02:33 decided that Edison was such a big deal that the whole country,
0:02:36 the entire United States, needed a moment of mourning.
0:02:38 So Hoover is talking this over with his days.
0:02:40 What should we do to honor Edison?
0:02:48 And somebody says, what if the whole country turns off the electricity for one minute to honor Thomas Edison,
0:02:50 the man who brought electricity to the masses?
0:02:54 And you’re laughing for what I think is an obvious reason, right?
0:02:59 Because if you think about it, who needs electricity all the time, right?
0:03:00 Everyone.
0:03:05 Fire departments, hospitals, sanitation systems, they all need it every minute.
0:03:10 They need this thing that Edison helped create, electric power.
0:03:15 This thing that nobody had, nobody had, you know, a few decades before this, crucially, right?
0:03:20 This itself is testament to Edison, right?
0:03:24 This fact that if you turn off electricity for one minute, people will die.
0:03:32 And Hoover actually puts out this official statement where he walks through this thought process that he and his aides have gone through.
0:03:34 He writes, quote,
0:03:44 This demonstration of the dependence of the country upon electrical current for its life and health is in itself a monument to Mr. Edison’s genius.
0:03:53 And so Hoover decides, OK, we’ll do this more modest thing where it’s like, if you want to, turn off the lights for one minute at 10 p.m.
0:03:55 And a lot of the country does it.
0:04:01 So I can imagine the nation sitting in the dark for 60 seconds, just waiting to turn the lights back on.
0:04:04 You can hear a fridge whirring in the background.
0:04:06 Did not exist when Edison was born.
0:04:08 Maybe the radio is playing softly.
0:04:09 That wasn’t around.
0:04:16 And when the light comes back on, people could see cars in the streets, planes in the sky that didn’t exist 50 years earlier.
0:04:28 You could see the Empire State Building and the Chrysler Building, both brand new at the time, as were skyscrapers in general, because you couldn’t build a skyscraper if you didn’t have electricity because nobody’s going to walk.
0:04:29 What is it?
0:04:30 A hundred stories up, right?
0:04:34 Buildings were like 10 stories tall, max before electric grids.
0:04:42 When we look back, Edison’s life was probably this moment in U.S. history where the most progress was made, between the time he was born and the time he died.
0:04:43 Technological progress.
0:04:51 And if you look in such a compressed period of time, it is unimaginable how much life changed for people.
0:04:52 Certainly if you were 80 years old.
0:05:01 But even if you were 60 years old, your life was entirely different by 1930 than it had been when you were a small child.
0:05:06 And, you know, to be clear, Edison wasn’t the cause of all of that.
0:05:08 He didn’t have anything to do with cars and planes.
0:05:12 He didn’t really invent the light bulb, in fact, though people thought he did.
0:05:14 And there was this myth of Edison that was part of the story.
0:05:19 But I think Edison really did do as much as anybody.
0:05:30 He certainly did an incredible amount to use technology and business to bring about this incredible change in daily life for hundreds of millions of people.
0:05:32 I’m Jacob Goldstein.
0:05:33 And I’m Robert Smith.
0:05:37 And this is Business History, a show about the history of business.
0:05:40 That’s why we call it Business History, because it’s about the history of business.
0:05:44 And today we are starting on a three-part series.
0:05:45 Big.
0:05:46 Pretty sure it’s going to be three.
0:05:48 About Thomas Edison.
0:05:52 Edison was this incredible figure in a lot of ways.
0:05:54 He was an inventor, a tinkerer.
0:06:07 He was like a grinder, you know, workaholic, huge self-promoter, great entrepreneur, invented the phonograph, built the first electric grid of any size to light up lower Manhattan, controlled essentially the entire American movie business.
0:06:16 But today, in the first episode about Edison, I’m going to argue that the most important thing he did came before any of that.
0:06:22 And it wasn’t even any particular thing or system that he invented.
0:06:25 It was this kind of meta breakthrough.
0:06:28 It was this new way of inventing.
0:06:30 And it happened early in Edison’s life.
0:06:31 It happened before he was 30 years old.
0:06:36 He came up with a new way of inventing that industrialized invention.
0:06:43 And that really created the template for the modern 20th century style of progress.
0:06:45 That was his great break.
0:06:46 Which we see even today.
0:06:47 Even today.
0:06:48 In Internet, AI, everything.
0:06:49 Everything.
0:06:52 Thomas Alva Edison.
0:06:55 It’s one of those people you love saying his middle name, Alva.
0:06:58 He was born in what was already an age of miracles.
0:07:01 There was the railroad and there was the telegraph.
0:07:05 And they were shrinking this very notion of distance, of time and space.
0:07:09 It felt like an age that was on the move.
0:07:12 And the spirit of invention, of innovation was everywhere.
0:07:17 And Edison had this particular combination of traits, right?
0:07:18 He was an inventor.
0:07:19 That’s what we learned about in school, of course.
0:07:22 But he was also a hustler, an entrepreneur.
0:07:24 He was interested in new things.
0:07:28 But he always asked himself, what are people willing to pay for?
0:07:28 Yeah.
0:07:30 And it’s really striking.
0:07:33 You see both of these traits.
0:07:35 The entrepreneur and the inventor, the tinkerer.
0:07:38 You see them from very early in his life.
0:07:40 You see him from when he’s a kid, a little kid.
0:07:47 So he’s born in 1847 in a town called Port Huron, Michigan, on the shore of Lake Huron.
0:07:49 I’ll be honest with you.
0:07:51 I did not remember as one of the Great Lakes.
0:07:52 It’s one of the greatest of the lakes.
0:07:53 Would you have got it?
0:07:53 Have you been?
0:07:58 I was born between Lake Huron and Lake Erie in London, Ontario, Canada.
0:08:00 Yeah, no, I wouldn’t have got it.
0:08:00 Yeah.
0:08:04 So he’s born on the shore of Lake Huron, this little town out in the middle of nowhere.
0:08:07 He barely goes to school.
0:08:09 Goes to school for like a few months here and there.
0:08:11 He was a bad, distracted student.
0:08:13 And he’s working from a young age.
0:08:20 When he’s 12, he gets a job selling like candy and newspapers on the train that goes
0:08:22 back and forth from Port Huron to Detroit.
0:08:24 He’s working the angles.
0:08:24 He’s hustling.
0:08:29 There’s this detail that I love, which is, you know, when the train gets to Detroit, he
0:08:32 gets a bunch of newspapers to sell on the way back to Port Huron.
0:08:38 And if he has some unsold papers when he’s almost back to the end of the line, while the train
0:08:43 is still moving at the edge of town in Port Huron, there’s this like sandbank or something.
0:08:47 He throws the bundle of papers off the train into the sandbank.
0:08:52 Then he jumps off the moving train after him and walks home selling the papers one by one.
0:08:56 These days, we don’t let 12-year-olds out by themselves, you know, in the modern era.
0:08:58 This guy’s jumping off trains.
0:09:03 Yeah, and like, obviously a bad idea, but in my heart, I kind of love it.
0:09:04 Like in my 12-year-old boy heart, it sounds awesome.
0:09:05 I could see it in the movie.
0:09:06 Yeah, yeah, yeah.
0:09:11 So, you know, he’s out there selling newspapers on the train, off the train.
0:09:16 And after a little while, he thinks, wait, I’m just like a chump.
0:09:17 I’m out here working for the man.
0:09:19 I could be selling my own papers.
0:09:27 And so he buys a used printing press, puts it into some space on a baggage car on the train,
0:09:31 and starts printing his own newspaper on the train.
0:09:32 What is he reporting on?
0:09:35 Like the guy in seat 13B, you know, he’s got a hot tip.
0:09:37 It’s not a lot of news.
0:09:38 It’s not news heavy.
0:09:40 You might call it a newsletter, right?
0:09:40 Yeah, yeah, yeah.
0:09:41 Okay.
0:09:44 The Weekly Herald, Thomas A. Edison, publisher.
0:09:45 It’s like one page.
0:09:47 But apparently he’s selling it.
0:09:48 And making all the profits, yes.
0:09:49 And keeping all the profits, right?
0:09:50 Cutting out the middleman.
0:09:52 And so there’s entrepreneur Edison.
0:10:00 And like right next to entrepreneur Edison, in that same baggage car, you see Edison the inventor.
0:10:05 Because next to the printing press, he sets up this little chemistry lab.
0:10:07 So he’s got like magnesium and potassium.
0:10:09 He’s like making things turn purple.
0:10:12 I’m imagining like things bubbling.
0:10:12 I don’t know.
0:10:17 There’s one thing I do know, which is he has some phosphorus.
0:10:20 And the reason I know he has phosphorus, right?
0:10:20 Oh.
0:10:25 Is at some point the phosphorus like spills or whatever and starts a fire.
0:10:26 On the train.
0:10:27 On the train.
0:10:28 On the train car.
0:10:28 Yeah.
0:10:30 Which is like, obviously that’s going to happen.
0:10:33 You have a teenage boy with like dangerous chemicals on the train.
0:10:34 Of course, you’re going to start a fire.
0:10:39 And of course, if you do that, you’re going to get fired, which is what happens to Edison.
0:10:40 So he gets fired.
0:10:45 And now comes this very Horatio Alger turn.
0:10:46 And that is this.
0:10:53 So not long before the fire and the firing, Edison has been hanging out at a train station.
0:10:58 And there is this little toddler, stay with me, who is out playing on the tracks.
0:11:02 And a loose car, train car, comes rolling at the toddler.
0:11:04 And Edison sees it happening.
0:11:07 And he goes and grabs the toddler and brings him to safety.
0:11:10 And this story is almost too perfect, right?
0:11:12 A runaway boxcar, a toddler on the tracks.
0:11:13 Does Steven Spielberg write this?
0:11:14 Apocryphal.
0:11:16 The word you’re looking for in the history game is apocryphal.
0:11:17 Too good to be true.
0:11:21 Although I looked at this and thought about it.
0:11:23 And I think it is true.
0:11:27 You know, there is one recent biographer, this guy, Randall Strauss, who is like particularly
0:11:30 skeptical of Edison’s self-mythologizing.
0:11:31 And he thinks it’s true.
0:11:34 And you can see letters between Edison and the kid’s dad.
0:11:37 So I think the world used to just be more wild, right?
0:11:40 Like more dangerous.
0:11:42 So yes, I think it’s true.
0:11:48 But at this moment, it is in fact helpful for Edison because the father of the child that
0:11:53 Edison rescues runs the station, but also is a telegraph operator.
0:12:02 And so when Edison gets fired, this grateful father teaches Edison to be a telegraph operator.
0:12:06 This is the next phase of Edison’s life, right?
0:12:10 Being a telegraph operator proves to be a huge opportunity for him.
0:12:13 But I want to say one thing first, because it’s another big moment.
0:12:19 And that is, Edison, by the time he’s 12 years old, is mostly deaf.
0:12:21 Like not entirely deaf.
0:12:23 People can shout to him and he can hear.
0:12:29 But the key quote he has later is, I haven’t heard a bird sing since I was 12 years old.
0:12:32 Which is poignant, especially for the guy who’s going to, spoiler alert, invent the phonograph.
0:12:35 But he said, Edison said, he didn’t mind it.
0:12:37 It helped him focus.
0:12:39 Helped him like tune out distractions.
0:12:40 He was a very focused man.
0:12:44 And there is this actually lovely detail, which is later in his life, when he’s like famous
0:12:49 and going to lectures, you know, in big halls, when he can’t hear what the guy is saying,
0:12:54 his assistant will tap on Edison’s leg, will tap what the person is saying in Morse code.
0:13:01 So this is an opportunity for Edison, because at this point, like the telegraph is the cutting
0:13:02 edge communication tool.
0:13:04 Like it’s just exploding at this time.
0:13:08 They’ve just around this time laid the first transatlantic cable.
0:13:12 Suddenly you could communicate instantaneously, right?
0:13:14 You’re in the midst of a civil war.
0:13:17 People want to know the news and suddenly they can know it.
0:13:18 They can move troops.
0:13:18 They can know what’s happening.
0:13:25 And people are just sort of getting used to this idea of information is not this rare thing
0:13:28 that you print on the newspaper and deliver the next day.
0:13:30 Like information is power.
0:13:31 It’s instantaneous.
0:13:37 Edison learning to be a telegraph operator is him walking into this great technological
0:13:38 moment of his time.
0:13:46 And there is this one particular story that I love about how transformational the telegraph
0:13:47 is.
0:13:54 It’s about a pickpocket gang in London run by a guy named Fiddler Dick.
0:13:58 Governor, watch out for Fiddler Dick.
0:14:00 Very good.
0:14:03 What Fiddler Dick’s gang does is this.
0:14:09 They loiter on a train platform and then the train pulls in and you know it’s chaos.
0:14:10 People are getting off the train.
0:14:11 People are getting on.
0:14:12 They’re moving around.
0:14:13 They’ve got all their stuff out.
0:14:17 And Fiddler Dick and his boys pick the pockets of the people in the crowd and then just as
0:14:21 the train’s about to pull out, they hop on the train and head to the next station.
0:14:24 And this is an incredible strategy, right?
0:14:34 Because if you are on a moving train in, say, 1840, there is literally no way to send information
0:14:35 faster than you are traveling.
0:14:41 You might as well be going at the speed of light because no message is going to get to your
0:14:43 destination before you do, right?
0:14:48 So then you just get off the train at the next station and nobody knows anything is amiss.
0:14:56 And then one day in 1844, a cop in London sees the Fiddler Dick gang strike, right?
0:14:59 Somebody, the platform’s like, whatever, my wallet, whatever, I don’t know.
0:15:00 Somebody stop that boy!
0:15:02 And they’re on the train and they’re gone.
0:15:04 But then the cop is like, oh, wait a minute.
0:15:07 We got a telegraph now.
0:15:09 And he just telegraphs ahead to the next station.
0:15:13 And Fiddler Dick and the boys get arrested.
0:15:14 Thank you, telegraph.
0:15:16 He was Fiddler Dick.
0:15:17 He got Fiddler Dick by the telegraph.
0:15:23 So this is the world that Edison is going into.
0:15:30 And it means that if you know how to send and receive Morse code, you can write your ticket.
0:15:32 It’s like being a coder in whatever, 2020.
0:15:33 What was the best year to be a coder?
0:15:34 2020 probably, right?
0:15:40 I feel like we should just say here, if Netflix is listening in, we could write The Adventures
0:15:41 of Young Edison.
0:15:45 Telegraph operator traveling the nation, solving crime, creating inventions.
0:15:46 I love it.
0:15:47 I love it, actually.
0:15:47 Yes.
0:15:50 Next time on The Adventures of Young Thomas Edison.
0:15:51 Thomas Edison.
0:15:51 Very good.
0:15:52 It’s basically this episode.
0:15:54 But with a little more like murder.
0:15:55 Well, sure.
0:15:56 There is a murder.
0:15:58 We’ll be back in just a minute.
0:16:14 Run a business and not thinking about podcasting?
0:16:15 Think again.
0:16:20 More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora.
0:16:24 And as the number one podcaster, iHeart’s twice as large as the next two combined.
0:16:27 So whatever your customers listen to, they’ll hear your message.
0:16:31 Plus, only iHeart can extend your message to audiences across broadcast radio.
0:16:33 Think podcasting can help your business?
0:16:34 Think iHeart.
0:16:37 Streaming, radio, and podcasting.
0:16:39 Let us show you at iHeartAdvertising.com.
0:16:41 That’s iHeartAdvertising.com.
0:16:44 Got a business problem?
0:16:45 There’s a TED Talk for that.
0:16:51 Stay updated on everything business on TED Business, a podcast hosted by Columbia Business School
0:16:52 professor Modupe Akinola.
0:16:57 Every week, she’ll introduce you to leaders with unique insights on work, answering questions,
0:17:00 like, how do four-day work weeks work?
0:17:03 Do will a machine ever take my job?
0:17:07 Get some surprising answers on TED Business wherever you listen to podcasts.
0:17:19 Thomas Edison, he’s going from town to town.
0:17:26 You know, he’s in Indianapolis, Memphis, Louisville, and he’ll roll into town, get a room with
0:17:29 some other telegraph operators, and go to work and make money.
0:17:35 And he’s spending all his money still experimenting, buying chemicals and stuff to build batteries.
0:17:37 And there’s this moment in Louisville, actually.
0:17:42 His room is above the telegraph office, and he spills some acid on the floor, and it eats
0:17:46 a hole through the floor and drips down into, like, the boss’s office below, so he gets fired.
0:17:47 But who cares, right?
0:17:50 He’s like a teenager, and he has this valuable skill.
0:17:55 So he winds up eventually in Boston as a telegraph operator.
0:17:59 And this is where there’s kind of a big turn, the next big turn in his life.
0:18:06 So in the classic story of an entrepreneur, right, you need to have the basic skills, you
0:18:10 need to have a bunch of ideas, but you also have to sort of take a risk.
0:18:13 You have to have that moment of failure before you pivot.
0:18:15 And I feel like we’re about to get to that.
0:18:16 Yes, that’s right.
0:18:18 Both the failure and the pivot, right?
0:18:26 So yeah, so it’s 1869, Edison is 22 years old, and he gets his first patent ever, first
0:18:30 of 1,093 patents he will get in his lifetime, legend.
0:18:35 And this one for him, it’s for an electric vote recorder, right?
0:18:40 And so the idea is, he’s in Boston, which is the state capital of Massachusetts, right?
0:18:44 And, you know, the voting is super inefficient, right?
0:18:49 Hey, whatever, the gentleman from whatever, I don’t know what, wherever.
0:18:54 He sees a pain point there of someone has to write down eyes and nays.
0:19:00 And so he invents this automatic counting machine and takes it to, I think he takes it to the
0:19:01 statehouse.
0:19:04 He takes it to some legislator, takes it to the, you know, customer.
0:19:09 And they’re like, look, this is very clever, but I’ll tell you a little secret.
0:19:12 We don’t actually want our votes counted instantly, right?
0:19:18 We need that time to go talk to the other legislators, see if we can sway them, maybe go out in the
0:19:23 lobby and see if any of the lobbyists out there want to discuss our campaign contributions or
0:19:25 whatever they called them back then, right?
0:19:27 So in fact, this is not a problem.
0:19:30 It would create a problem for the legislature.
0:19:31 They don’t want it.
0:19:32 Nobody buys it.
0:19:35 He has built a thing that nobody wants.
0:19:37 And this is a classic lesson for entrepreneurs.
0:19:44 I mean, even today in business school, people will come up with ideas and even make a prototype
0:19:46 of it and be like, look at how amazing this idea is.
0:19:49 And you’ll be like, well, does anyone want it?
0:19:51 Did you talk to your customers?
0:19:54 And they’re like, oh, not yet.
0:19:55 But it’s clearly genius.
0:19:57 So the engineer, right?
0:19:59 It’s the engineer falls in love with engineering.
0:20:05 Yeah, having a genius idea without a need for it is nothing.
0:20:06 It’s like not having it at all.
0:20:06 Yeah.
0:20:12 It reminded me of, you know, Y Combinator, the famous startup incubator in Silicon Valley.
0:20:17 I think their motto is something like, make something people want.
0:20:21 And I seem to recall, although I could not find evidence of this when I went to look for it,
0:20:26 but I seem to recall that they give entrepreneurs a T-shirt if their business gets to some level
0:20:31 of success that says, congratulations, you made something people want.
0:20:33 It’s a very simple, elegant lesson.
0:20:40 And it’s a lesson that Edison really learns, really internalizes at this point in his life.
0:20:45 And we’ll see this for the rest of his life when he interacts with other inventors, right?
0:20:46 You know, he’s the king inventor.
0:20:48 So he’s often brought in to be like, what do you think about this?
0:20:52 And, you know, they’re showing it off to Edison being like, oh, isn’t this amazing?
0:20:55 And he’s thinking, all right, how much can I get for it?
0:20:58 Who will pay a nickel to use this thing?
0:20:59 How will I get into stores?
0:21:01 Like, what’s the revenue model, essentially?
0:21:07 And this is one of the things that makes him a great inventor and a great businessman.
0:21:12 So Edison takes this lesson and he turns to the finance industry.
0:21:12 Smart.
0:21:17 Smart, because finance is just literally the business of money, right?
0:21:21 And if you can help people make more money, they will pay you for that.
0:21:25 And right around this time, people have started using the telegraph to send
0:21:28 real-time information about stock prices.
0:21:31 It’s basically the invention of the stock ticker is a thing that has happened.
0:21:35 Which is powerful because if stocks are trading for a different price,
0:21:41 let’s just say, in London, New York, New York, Chicago, then that’s this huge opportunity
0:21:45 to buy cheap in one place and sell expensive in another place.
0:21:47 This arbitrage opportunity.
0:21:51 And having that information means you can spot those opportunities.
0:21:52 Exactly.
0:21:57 And if you can improve that a little bit, if you can make it faster or clearer or whatever,
0:21:58 people will make more money.
0:22:02 We saw this even into the 21st century when people were building crazy, you know,
0:22:07 dedicated fiber optic lines and satellite towers and wild things to move price information faster.
0:22:12 So Edison moves to New York, of course, finance, Wall Street,
0:22:18 and gets a contract from the Golden Stock Telegraph Company of New York City.
0:22:18 Really?
0:22:19 What does that company do?
0:22:21 I love old company names, right?
0:22:24 What does the National Biscuit Company make?
0:22:25 I think they make biscuits.
0:22:30 I feel like the Golden Stock Telegraph Company became like GoTelcom in the 80s
0:22:32 and now is known as Spritzel.
0:22:34 Yeah, Spritzel, but no I for some reason.
0:22:41 And so now Edison is in New York and he is able to stop being a telegraph operator.
0:22:46 He’s able to quit his job, start his first company, straightforward name,
0:22:48 Newark Telegraph Works.
0:22:49 Ask me why.
0:22:51 Why?
0:22:52 Was it located in Newark?
0:22:53 And what did they work on?
0:22:54 Telegraph.
0:22:56 He’s hiring workers.
0:22:58 He delivers that first stock ticker.
0:23:03 And he’s also, he’s working on all these incremental improvements, right?
0:23:06 Like not crazy things that are going to make him famous,
0:23:12 but he’s just making all these tweaks that give little efficiency gains,
0:23:16 you know, little better batteries and weird electrical things, right?
0:23:18 His company’s growing.
0:23:19 He gets married.
0:23:21 Married to a Jersey girl named Mary Stilwell.
0:23:23 They buy a house.
0:23:25 But Edison is definitely not a family man.
0:23:26 He’s working.
0:23:28 He’s always working all the time.
0:23:31 In fact, in his first year of marriage, he gets 39 patents.
0:23:33 But I’m sure he made it home for dinner.
0:23:34 Never.
0:23:34 Never.
0:23:36 Probably zero times.
0:23:42 And then in 1874, he comes up with a big idea.
0:23:46 Doesn’t sound like a big idea to us, but it is a big idea.
0:23:54 It’s a system that lets you send four messages at once on a single telegraph line.
0:23:56 He calls it the quadruplex.
0:24:01 Now, at this point, telegraph was essentially one wire.
0:24:02 Right.
0:24:05 And you basically tap into one side of the wire.
0:24:06 Beep, beep, beep, beep, beep, beep, beep, beep, beep, beep.
0:24:08 Person listens on the other end, taps back.
0:24:09 Boop, boop, boop, boop, boop, boop, boop.
0:24:10 Yeah.
0:24:12 And wire is made of copper, right?
0:24:12 It’s copper wire.
0:24:13 So it’s expensive.
0:24:15 It’s expensive, right?
0:24:18 And they’re running the copper wire all over the country, you know, across the Atlantic Ocean.
0:24:22 It costs a lot of money to run all that copper wire, right?
0:24:30 And so if you can get more messages on the same amount of wire, that is a huge efficiency gain, right?
0:24:32 That makes things cheaper.
0:24:34 Yeah, because it’s more efficient.
0:24:36 It’s something that no one would ever see or notice.
0:24:40 But if you’re running a company, I mean, that is a huge productivity increase.
0:24:48 And I want to just like zoom out from this for a moment because, you know, we talk about technology now.
0:24:56 We talk about like amazing things and maybe it’s scary like AI or whatever, but it’s kind of exciting and dramatic.
0:25:07 But in the long run, maybe the most important thing that technology does is make stuff cheaper, makes it cheaper to communicate, makes it cheaper to grow food, makes it cheaper to make clothes.
0:25:11 And when everything gets cheaper, everybody gets richer, right?
0:25:17 The way we have had material progress is by technology effectively making things cheaper.
0:25:20 So shout out to that.
0:25:22 And that is what Edison is doing here.
0:25:26 He is making the most important communications technology of its day cheaper.
0:25:27 So he’s on a roll.
0:25:29 He’s got dozens of inventions at this point.
0:25:30 He’s been tweaking.
0:25:33 He’s finally got something that people are going to pay money for.
0:25:34 He’s got a family, right?
0:25:44 But he’s not yet this world-changing inventor because there’s one last piece of the puzzle any entrepreneur needs, and that is scale.
0:25:45 He needs money.
0:25:47 He needs so much money there’s a special name for it.
0:25:48 Capital.
0:25:49 Yeah, I love that.
0:25:50 He needs capital.
0:25:51 Like, I don’t know.
0:25:53 At what point does money become capital?
0:25:55 I mean, I know you could say it’s like the structure of it, is it?
0:26:00 But I feel like nobody calls $100,000 money, right?
0:26:00 That’s not…
0:26:02 That is investment capital, yes.
0:26:07 He, in fact, at one point, writes to the head of Western Union.
0:26:08 Western Union is the big telegraph company.
0:26:10 He’s doing a lot of work for them.
0:26:12 He writes to the head of Western Union.
0:26:19 I need $10,000, $9,000, $8,000, $7,000, $6,000, $5,000, $4,000, $2,000, $2,000, anyone you would like to advance.
0:26:21 He’s actually writing this to the head.
0:26:21 It’s funny.
0:26:22 It’s good.
0:26:23 It’s charming.
0:26:26 He had this kind of homespun charm people talked about.
0:26:28 Like, he was from the Midwest.
0:26:29 He had that Midwestern charm.
0:26:30 Is that a thing?
0:26:31 I think it is.
0:26:32 For Edison, it is.
0:26:34 Dressed in kind of country clothes, even when he was famous.
0:26:38 So he’s writing this to the head of Western Union, this big executive, William Orton.
0:26:41 And in fact, Orton advances Edison $5,000.
0:26:46 And then they start to properly negotiate over Edison’s big idea, over the quadruplex.
0:26:49 Edison wants $25,000 plus royalties.
0:26:53 Orton, you know, controls Western Union, can kind of do whatever he wants.
0:26:57 So he’s sort of, I think, playing games with Edison, stalling.
0:26:59 He goes off to the Midwest for Christmas break.
0:27:02 And Edison just has to kind of wait around, right?
0:27:05 Has to wait for his big capital infusion.
0:27:14 One day, as this is happening, into Edison’s little Newark, New Jersey workshop, walks Jay Gould.
0:27:16 Jay Gould.
0:27:17 Legendary.
0:27:21 He was a railroad magnate, a big financial speculator.
0:27:22 I won’t call him an investor.
0:27:23 I’m calling him a speculator.
0:27:26 He was a classic robber baron.
0:27:29 But more than that, you know, there was this whole robber barons, they called them, right?
0:27:32 Everybody, you know, thought, oh, they’re stealing all our money.
0:27:33 They’re manipulating the markets.
0:27:36 But even the robber barons hated Jay Gould.
0:27:38 He was a robber baron’s robber baron.
0:27:43 Now, I will say I’ve toured his mansion recently up on the Hudson River.
0:27:45 And the tour guides say he was misunderstood.
0:27:47 He was actually a really great guy.
0:27:48 But we’ll do a future episode.
0:27:50 I bet it’s a nice mansion.
0:27:51 It’s a very nice mansion, yes.
0:27:53 Yeah, even at the time, right?
0:27:55 Even at the time, he was like the villain.
0:27:59 He was always trying to corner the market, like take all the gold contracts.
0:28:00 Yeah, he tried to corner gold.
0:28:02 Yeah, stuff like that.
0:28:10 Some economists have argued that he was hated because he went against big company interests.
0:28:12 And in fact, things got cheaper because of him.
0:28:14 But we will look at this in a future show.
0:28:16 The robber baron who was in it for the little guy.
0:28:18 He was going to give that mansion to the poor someday.
0:28:20 You know, to be continued.
0:28:21 He walks in.
0:28:24 This guy, this famous guy, walks into Edison’s little shop.
0:28:31 And Gould actually, among other things, controls the Atlantic and Pacific Telegraph Company, a rival to Western Union.
0:28:34 Jay Gould has heard about the quadruplex.
0:28:40 And if you’re Edison, it is great news when Jay Gould walks in the door, right?
0:28:47 It’s like that scene in Bugs Bunny when Bugs Bunny looks at a guy and the whole guy is just a big bag with a dollar sign on it, right?
0:28:48 Big bag of money.
0:28:56 Because if Western Union is all you have, if the head of Western Union is jerking around and going off for Christmas break and not giving you any money, you don’t have any leverage, right?
0:28:58 You basically have to just take what they offer.
0:29:03 But now, now there are multiple buyers for what you’re selling.
0:29:05 Now there are multiple buyers for your quadruplex.
0:29:06 And you have leverage.
0:29:16 And so the very next day, Edison goes to Gould’s mansion on Fifth Avenue in Manhattan, goes down to Gould’s office in the basement.
0:29:19 And Edison actually wrote about this exchange later.
0:29:22 Edison wrote, here’s what he wrote.
0:29:25 Gould started in at once and asked me how much I wanted.
0:29:26 I said, make me an offer.
0:29:29 Then he said, I’ll give you $30,000.
0:29:35 And I said, I’ll sell any interest I may have for that money, which was somewhat more than I thought I could get.
0:29:37 Great negotiating lesson.
0:29:41 Always let the other guy say the number first.
0:29:45 Because, right, if it’s more than you wanted, you just say yes.
0:29:46 You just say yes.
0:29:46 Thank you.
0:29:47 Pleasure doing business with you.
0:29:49 So then, of course, Edison gets the money.
0:29:53 Gould actually sells a yacht and gives Edison the money from the yacht.
0:29:55 Lovely, rubber, barren detail.
0:29:59 And then, of course, Western Union sues Gould over ownership of the quadruplex.
0:30:01 The lawsuit goes on forever.
0:30:05 Edison’s inventions are going to end up tied up in lawsuits again and again, right?
0:30:06 Intellectual property story.
0:30:09 But Edison doesn’t care this time because he’s got his money.
0:30:10 What does he do with it?
0:30:15 He does the most important thing he’s ever going to do in his life.
0:30:16 I knew it.
0:30:20 He does the thing that is going to transform the very nature of invention.
0:30:21 Itself.
0:30:22 Itself in the world.
0:30:26 And what that thing is, is he moves to the country.
0:30:37 He moves to this little failed housing development out in the middle of nowhere in New Jersey called Menlo Park next to the railroad between New Jersey and Philadelphia.
0:30:40 So, it’s early 1876 by this point.
0:30:42 Edison is 29 years old.
0:30:45 He’s got two kids who he calls Dot and Dash.
0:30:47 Oh, it’s so nice.
0:30:47 Yeah.
0:30:48 Very sweet.
0:30:50 Although, it’s not like he hangs out with them.
0:30:51 What he actually loves is the telegraph.
0:30:58 His family moves into this big house that used to be the sales office for this failed housing development in Menlo Park.
0:31:01 Some of his workers move into some of the other empty houses.
0:31:08 And then, on top of this little hill, not far from the train station, I think you can see Manhattan from the top of the hill.
0:31:09 I’m not sure.
0:31:17 On top of this little hill, he builds the thing, the main thing that is like the manifestation of his big idea.
0:31:18 It’s a lab.
0:31:21 It’s a lab for him and his employees, where they’re going to work.
0:31:30 And he says, in this building, he is going to come up with, quote, a minor invention every 10 days and a big thing every six months or so.
0:31:42 It’s amazing because if you would ask most people at this time, if you ask most people today, they would say invention is one of those things that, you know, comes from God or the greater spirit, you know, the eureka moment, you know.
0:31:46 And everyone’s story is like, oh, I was out walking when it suddenly came to me, fully formed.
0:31:51 Like, this is the myth of invention, and maybe it happens sometimes this way.
0:31:57 But for Thomas Edison to say, yeah, we got a schedule here, we got a calendar, like invent, invent, invent.
0:31:59 It’s taking away the magic, right?
0:32:03 It’s taking it from this kind of romantic world to the industrial world.
0:32:06 And you didn’t maybe know if it was possible, but it ended up being possible.
0:32:15 So what he builds there is a long two-story wood building, 100 feet long, 25 feet wide, painted white.
0:32:19 People say it looks like a schoolhouse or a church without a steeple.
0:32:22 And on the ground floor, there’s a machine shop.
0:32:24 Upstairs, there’s a lab.
0:32:29 Eventually, people will call this the invention factory, which is a perfect name for it.
0:32:32 But right now, nobody calls it anything, right?
0:32:35 Because nobody outside the telegraph industry has even heard of Thomas Edison.
0:32:38 He’s just some guy moving out to the middle of nowhere.
0:32:44 I’ve seen a replica of this lab in Michigan, outside Detroit, in Henry Ford’s museum.
0:32:52 He so admired Thomas Edison that he rebuilt the laboratory down to, like, the test tubes and the little bits of wire on the wall.
0:32:59 Apparently, so my tour guy told me, when Edison saw it, he’s like, it’s an exact replica, except it’s so clean.
0:33:01 You know, it was, like, perfectly clean.
0:33:14 But there’s a million little things and screws and connectors and all sorts of fabrics and that sort of thing in case Thomas Edison or his people at this point had an idea.
0:33:17 They didn’t have to go to Manhattan to pick up a button.
0:33:19 Or a part or anything, right?
0:33:27 The core thing this place does is it makes Edison’s inventing process frictionless, right?
0:33:39 Anytime he thinks of something, he has right there standing next to him, you know, skilled machinists and electricians and, like, all the parts and machines and chemicals and whatever you can think of.
0:33:41 This is the breakthrough.
0:33:45 There’s this great quote about this from this guy, Paul Israel.
0:33:47 He wrote a biography about Edison.
0:33:51 He spent decades editing the Edison papers at Rutgers.
0:33:53 He’s like a deep Edison scholar.
0:34:01 And the quote is that the lab in Menlo Park showed that invention itself could be an industrial process.
0:34:05 So, like, this is the great era of industrialization in America.
0:34:08 And Edison is industrializing invention.
0:34:16 He’s gone from Thomas Edison, young Morse code operator, to Thomas Edison inventor, to Thomas Edison, Incorporated.
0:34:20 He’s the guy who runs the factory that makes inventions.
0:34:26 And in just a minute, we will hear how the invention factory comes out of the gate with a big one.
0:34:40 Run a business and not thinking about podcasting?
0:34:41 Think again.
0:34:46 More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora.
0:34:50 And as the number one podcaster, iHeart’s twice as large as the next two combined.
0:34:54 So whatever your customers listen to, they’ll hear your message.
0:34:58 Plus, only iHeart can extend your message to audiences across broadcast radio.
0:35:00 Think podcasting can help your business?
0:35:01 Think iHeart.
0:35:03 Streaming, radio, and podcasting.
0:35:06 Let us show you at iHeartAdvertising.com.
0:35:08 That’s iHeartAdvertising.com.
0:35:10 Got a business problem?
0:35:12 There’s a TED Talk for that.
0:35:19 Stay updated on everything business on TED Business, a podcast hosted by Columbia Business School professor Modupe Akinola.
0:35:24 Every week, she’ll introduce you to leaders with unique insights on work, answering questions like,
0:35:26 how do four-day work weeks work?
0:35:29 Do will a machine ever take my job?
0:35:33 Get some surprising answers on TED Business wherever you listen to podcasts.
0:35:48 Jacob, I feel like the pieces are in place.
0:35:51 Edison has his invention side, his business side.
0:35:53 He’s got money.
0:35:56 He’s got the industrialization of invention itself.
0:36:01 He has the manifestation of his own mind on a hilltop in New Jersey.
0:36:08 And yet, no mention of the light bulb or any of these things that, like, every elementary school student knows about Thomas Edison.
0:36:09 It’s coming.
0:36:09 Okay.
0:36:10 It’s coming.
0:36:12 Though it comes in an indirect way.
0:36:14 It comes in a really interesting way.
0:36:14 And that is this.
0:36:20 So, right around the time Edison moves to Menlo Park, there is, in fact, this historic breakthrough.
0:36:22 But it doesn’t come from Edison.
0:36:24 It doesn’t come from his lab on the hill.
0:36:28 It comes from another inventor who’s based in Boston.
0:36:37 And this invention is granted as patent 174465, and it’s called Improvement in Telegraphy.
0:36:38 Yawn.
0:36:39 Wait for it.
0:36:40 The inventor says,
0:36:48 My present invention consists of a vibratory or undulatory current of electricity in contradistinction to a merely intermittent or postulator current.
0:36:55 And essentially, this inventor says this is a breakthrough because you can send more telegraph messages down the same wire, right?
0:36:57 So it’s like quadruplex plus.
0:37:05 But then, at the very end of the application, literally second to the last paragraph, the inventor writes that the patent covers, quote,
0:37:15 The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described by causing electrical undulations.
0:37:22 Similar in forms of the vibrations of air, accompanying the said vocal or other sound substantially as set forth.
0:37:24 And then, last paragraph.
0:37:35 In testimony whereof, I have here unto sign my name this 20th day of January, A.D. 1876, Alex Graham Bell.
0:37:37 Alexander Graham Bell.
0:37:37 I love it.
0:37:42 I love it when you’re reading a famous guy’s biography and another famous guy comes in.
0:37:43 Yeah, yeah, yeah.
0:37:43 Team up.
0:37:44 Alexander Graham Bell.
0:37:46 Watson, come here, I want you.
0:37:47 Alexander Graham Bell.
0:37:49 He is inventing the telephone right here.
0:37:51 And he doesn’t know it, right?
0:37:51 Amazing.
0:37:55 He just thinks he’s, like, coming up with a better way to send telegraphs.
0:37:59 And does Edison see this in, like, Telegraph Weekly or something like that?
0:37:59 Yeah, yeah.
0:38:01 I mean, so Edison tracks new patents.
0:38:04 That’s, like, one of the things he does is he just sees all the new patents that come out.
0:38:12 He reads them and he sees this and he thinks, I’m going to tweak it so I can send even better telegraph messages.
0:38:16 And, you know, he’s all set up to do this, right?
0:38:18 He’s got his muckers.
0:38:19 He’s got his lab.
0:38:20 He’s staying up all night.
0:38:28 And there’s this one piece of this new thing that Alexander Graham Bell has invented called the diaphragm.
0:38:32 It’s the thing that turns sound into vibrations, right?
0:38:33 So it vibrates when sound waves hit it.
0:38:34 Yeah, it’s a thin membrane.
0:38:41 It vibrates and it creates an electrical current that is not dots or dashes but is a variable electric current.
0:38:45 Yes, and going the other way, it turns the electric current into vibrations that you can hear.
0:38:54 And so one day Edison is playing with one of these and just, like, talking into it, and he feels that it’s vibrating on his hand as he talks to it.
0:39:02 He’s having dinner with his boys, with his muckers, probably eating apple pie.
0:39:13 And as he feels this thing vibrating on his hand, he turns to his, like, chief engineer, this assistant named Charles Batchelor, a guy he calls Batch.
0:39:26 And he says, you know, Batch, if we took one of these diaphragms and we put something pointy, put, like, a needle or something on the bottom of it and put it on a piece of paper and talked into it, it would scratch the paper.
0:39:28 It would leave scratch marks on the paper.
0:39:39 And then maybe if we took that paper with the scratch marks and pulled it back under the needle, would it make the diaphragm vibrate and send sound back out?
0:39:41 Would it recreate the sound?
0:39:48 And because they have a factory with needles and paper and diaphragms and all this stuff, they don’t need to wait long to know the answer to this question.
0:39:49 They don’t need to wait at all, right?
0:39:54 All the dudes in the middle of night, in the middle of nowhere in New Jersey, are sitting there ready to go.
0:39:56 And so they just do it, right?
0:39:58 This whole team of people.
0:40:07 There’s a machinist who’s sitting there who walks over to his, whatever, machine and, like, solders a needle onto the bottom of a diaphragm or however you get a needle onto the bottom of a diaphragm.
0:40:15 And Batch, Batchelor gets some wax paper and cuts it up and they build a little wheel, a little system, just right then, right that night.
0:40:18 And, you know, presumably this is every night, right?
0:40:21 Presumably it’s always like Edison’s like, how about this?
0:40:22 How about that?
0:40:24 And most of them are not very good ideas.
0:40:26 But this one, this one is a good idea, right?
0:40:33 So they hook up the diaphragm with the needle so it’s touching the wax paper and there’s this wheel that the paper’s on.
0:40:45 And so Batchelor slowly pulls the paper along the wheel under the needle and Edison says into the diaphragm, Mary had a little lamb.
0:40:51 And they take the paper out and they look at it and it has these little scratch marks on it.
0:40:53 Grooves, if you will.
0:41:01 And then Batchelor puts the paper back on the wheel with the little scratches, you know, pulls the paper under the needle past the diaphragm.
0:41:10 And as it’s going past the diaphragm, they hear like, I am Eureka.
0:41:12 This is a real Eureka.
0:41:14 Yeah, this is a real Eureka, right?
0:41:15 Like it’s not perfect, right?
0:41:16 It doesn’t quite work.
0:41:17 But it works.
0:41:18 It works.
0:41:27 Edison writes in his notebook that day, basically, this is an invention that will make it easier for people at the telegraph office to transcribe messages.
0:41:28 Oh, no.
0:41:29 Oh, no.
0:41:32 So he’s still thinking telegraph, his mind’s in the telegraph.
0:41:37 He’s thinking, oh, yeah, someone at the telegraph office has to use a pencil and paper to write things down.
0:41:43 We could use this new transcription device, essentially, for dots and dashes.
0:41:43 Yes, yes.
0:41:47 He is still in the world that he’s living in, right?
0:41:49 Unsurprisingly, he is still in his world.
0:41:55 But he gets that this thing is going to be big, not to the exclusion of everything else.
0:41:56 He keeps puttering on other things.
0:42:01 But he does have somebody over the next few months make a list of possible names for his new invention.
0:42:03 I know you love a list.
0:42:04 Do you want to take this one?
0:42:04 All right.
0:42:06 Possible names for this new invention.
0:42:07 Autophone.
0:42:09 Cosmophone.
0:42:10 I do like that one.
0:42:11 Acoustophone.
0:42:12 Nice.
0:42:13 Antipophone.
0:42:14 Liquophone.
0:42:15 Chronophone.
0:42:17 Glottophone.
0:42:18 That’s nice.
0:42:19 Clangophone.
0:42:20 Hulagamophone.
0:42:21 Aerophone.
0:42:25 I feel like they have a Latin dictionary there in Menlo Park Laboratory.
0:42:26 They’re just, like, going through it.
0:42:27 Epograph.
0:42:30 They don’t choose any of those.
0:42:30 Nope.
0:42:37 As we know, they choose phonograph, which I think is Edison’s and means something like sound writer, right?
0:42:42 The graph is right there in the name, which is telling.
0:42:46 They’re really still focused on this kind of automatic transcription part.
0:42:48 They’re not thinking music.
0:42:51 They’re not thinking orchestras, that someone’s going to buy this at home.
0:42:52 No.
0:43:01 I mean, if anything, they’re thinking, like, when they think beyond telegraph, they think of, like, oh, this is, like, something that business people can dictate letters into.
0:43:06 It’s very much like a recording device as opposed to a playing device at some level.
0:43:08 So they’re working on it.
0:43:10 They’re, you know, iterating.
0:43:11 They’re making it a little better.
0:43:17 And a few months later, in December, they decide they’re ready to go public with this idea.
0:43:22 And it comes out in Scientific American, which was a big, big deal at the time in this sort of technology.
0:43:22 Sure, sure.
0:43:25 And the story is called The Talking Phonograph.
0:43:27 And I’ll read a little bit of it.
0:43:33 Mr. Thomas A. Edison recently came into this office, placed a little machine on our desk, and turned a crank.
0:43:43 And the machine inquired as to our health, asked how we liked the phonograph, informed us that it was very well, and bid us a cordial good night.
0:43:47 People now went bananas.
0:43:50 People could not believe that this was a thing.
0:43:59 It’s hard to imagine how big it is that a mechanical machine is doing what a human does.
0:43:59 Yeah.
0:44:01 That it talks to you.
0:44:02 It talks to you like a person.
0:44:09 In fact, a professor who reads this article writes to Edison and basically says, like, Mr. Edison, I’m sure you’re an honorable man.
0:44:15 You need to correct this article because it makes it sound like you have a machine that can record sound and play it back.
0:44:18 And surely, as we all know, that is not possible.
0:44:20 It’s the kind of thing you’d see at a carnival in the day, right?
0:44:25 The box that speaks, and it’s a small child or something hidden inside the box.
0:44:26 A child puts your nickel in the box.
0:44:27 A bunch of hokum.
0:44:30 But, you know, it was magic.
0:44:30 I mean, it was magic.
0:44:31 It was magic.
0:44:31 It was magic.
0:44:36 He takes it down to Washington, D.C. at this big, like, scientific meeting.
0:44:42 And so many people want to hear it that they actually have to take the doors off the hinges of the room where he’s displaying it.
0:44:49 While he’s down there, the White House, he hears that the president wants to see his new machine.
0:44:50 Pop quiz, Robert.
0:44:53 Who was the president in 1877-78?
0:44:54 Garfield?
0:44:57 Rutherford B. Hayes.
0:44:58 Oh, classic.
0:44:58 I wouldn’t have got it.
0:44:59 Classic.
0:45:00 Lake Huron.
0:45:01 Rutherford B. Hayes.
0:45:02 The things you don’t know.
0:45:03 The things I didn’t know.
0:45:05 And Rutherford B. Hayes loves the phonograph.
0:45:06 Of course.
0:45:10 He keeps Edison at the White House, like, till after midnight, playing with this incredible thing.
0:45:21 And this is the moment when Edison goes from being, you know, inventor known in the telegraph business to being a celebrity.
0:45:25 This is the moment when he becomes known as the wizard of Menlo Park.
0:45:27 Because this is a leap in technology.
0:45:31 It’s not just a little extra something to make telegraph operators more money.
0:45:34 This wasn’t just the front page of Telegraph Weekly.
0:45:37 This is the front page of the New York world.
0:45:37 Yeah.
0:45:43 And, you know, I think there’s something, something about the human voice is important here.
0:45:44 Oh, interesting.
0:45:50 Like, you know, obviously there had been portraits and people had had their writings, but the voice is connected to the breath, right?
0:45:51 It is ephemeral.
0:45:52 It dies with you.
0:46:04 And, like, immediately when this comes out, people are thinking about, like, oh, this machine is going to let people talk to us after they die, as if they’re talking to us from beyond the grave.
0:46:06 This is, it’s almost supernatural.
0:46:10 So how does he take something that is magic and make money off of it?
0:46:11 This is a great question.
0:46:19 So he is not yet to the point where they can manufacture these at any kind of scale and sell them for a profit.
0:46:21 That’s the obvious thing you would do.
0:46:21 Yeah.
0:46:28 But the sort of minimum viable product version of it, they just got a couple of phonographs.
0:46:37 They rent out rooms, sell tickets, and people pay to come and hear somebody, like, record themselves singing and then play it back.
0:46:39 I would totally pay that nickel.
0:46:40 You would pay it today.
0:46:41 I would probably pay it today.
0:46:42 I probably did.
0:46:43 I probably did.
0:46:43 Was there something in Brooklyn?
0:46:44 Yes.
0:46:48 So, obviously, this is just kind of a stalling maneuver, right?
0:46:51 This is just what they’re doing until the business gets up and running.
0:46:54 And there are investors in the Edison Speaking Phonograph Company.
0:46:58 And they’re like, okay, Edison, let’s get to scale here.
0:47:00 Let’s figure out how to manufacture this.
0:47:05 And it turns out this is not Edison’s thing.
0:47:12 Edison’s thing is not taking his genius invention and operationalizing it, building the factory to build it.
0:47:15 You know, he has his invention factory.
0:47:22 He starts working on the telescopophone, his big idea for how people on, like, whatever hilltops a mile apart can talk to each other.
0:47:23 It’s amazing, right?
0:47:31 He doesn’t want to be in the business of, like, hiring orchestras and pressing, like, music and distributing this through music stores.
0:47:33 I mean, that’s just like being a businessman.
0:47:33 Yeah.
0:47:35 That’s not coming up with cool stuff all the time.
0:47:37 Yeah, that’s not his thing.
0:47:41 But it does mean he leaves the phonograph by the wayside for years.
0:47:50 And several years later, Alexander Graham Bell, him again, actually improves on Edison’s idea for the phonograph, brings it to market.
0:47:51 And…
0:47:52 This is the wax cylinder?
0:47:56 Yeah, he eventually, Alexander Graham Bell is eventually the one who comes up with the wax cylinder, yes.
0:48:03 And that does inspire Edison many years later to sort of follow, right, to chase Alexander Graham Bell.
0:48:10 And Edison does wind up in the phonograph business, but he’s always behind, ironically, given that he invented it.
0:48:13 Like his other inventions, he’s much less clearly the inventor, the ones that are coming.
0:48:16 But this one is him unambiguously.
0:48:22 And yet, and yet, he never dominates the industry, as arguably he should have.
0:48:29 And then finally, in 1929, two years before he dies, he just gets out of the phonograph business altogether, gives up.
0:48:31 He’s got bigger things.
0:48:33 So what do we make of this story, Jacob?
0:48:38 At the very beginning, we promised that Edison wasn’t just an inventor.
0:48:39 He’s an entrepreneur.
0:48:40 He’s a businessman.
0:48:41 Are you making fun of us?
0:48:42 Are you making fun of us?
0:48:44 I am making fun of our actual episode.
0:48:49 But so far, he doesn’t seem to be squeezing every last dime.
0:48:52 He doesn’t seem to have that ruthless businessman in him.
0:48:53 Yeah.
0:48:54 No, that’s true.
0:48:57 You definitely would not call him a profit maximizer, right?
0:49:09 He sort of reminds me of this type of founder you see with startups now, where they’re like brilliant and driven, and they create this very innovative company and get it going.
0:49:15 And then, like, a year or two in, somebody from the, you know, venture capital firm takes him into a back room.
0:49:16 Gray hair.
0:49:17 Yeah.
0:49:18 The gray hair comes in.
0:49:20 Listen, we love you.
0:49:22 You’ve done a great job getting this company off the ground.
0:49:29 But now it’s time to bring in, I’m not going to call him a grown-up, but it’s bring in somebody who’s more into operations, right?
0:49:30 Edison is kind of like that founder.
0:49:33 He could have been the greatest telegraph operator in the world.
0:49:37 He could have been the greatest telegraph maximizer in the world.
0:49:44 He could have been the phonograph magnet and run orchestras around the country and recorded them and sold them all, the first David Geffen.
0:49:50 And maybe he knows himself well enough to know that he has a lot of different interests, right?
0:49:54 He’s almost like, I wouldn’t say scatterbrained, because that seems like an insult.
0:49:58 It’s like things are just coming constantly into his head, you know?
0:50:01 At one moment, he’s showing a phonograph to the president of the United States.
0:50:12 But as he’s showing the phonograph, he’s probably thinking, you know, what if you had a giant tube on top of a mountain that you could yell at other mountains with other tubes?
0:50:14 And Rutherford B. Hayes is like, what?
0:50:15 What are you talking about?
0:50:16 I just want to see the phonograph.
0:50:18 You’ve already done the thing, right?
0:50:21 But that was an actual thing he wanted to do, right?
0:50:21 Yeah.
0:50:22 Yeah.
0:50:31 If he had been this sort of more narrow-minded profit maximizer, he probably would have got stuck at like a sort of local maximum, right?
0:50:34 Like, maybe he would have stopped at the phonograph and be like, I’m famous.
0:50:36 I’m the phonograph guy.
0:50:38 I’m going to be the phonograph king now.
0:50:43 But this is clearly not what Edison had set out to do, right?
0:50:52 He had set out to create an invention factory, a place where he can chase his curiosity, a place where he has all the equipment he needs and he has this team,
0:50:57 and a place, crucially, where he can keep coming up with big ideas one after another.
0:50:58 And he is going to succeed at that.
0:50:58 Yeah.
0:51:02 Inventing the phonograph for most people would have been the big thing.
0:51:07 But one great product is fine.
0:51:11 But transforming a whole system, right?
0:51:20 Transformative technology, the kind of technology that makes everything change, that’s what’s about to come.
0:51:25 We should thank Thomas Edison for his scatterbrain nature.
0:51:27 Yeah, and for his ambition, right?
0:51:29 His ambition was not to be the phonograph king.
0:51:31 It was to invent greater and greater things.
0:51:39 And really, interestingly, like, his whole life he keeps thinking, the next thing I invent is going to be even bigger.
0:51:42 He keeps thinking that even to the point where he’s wrong, right?
0:51:44 Because that’s just who he is.
0:51:48 He keeps trying to invent bigger and better things.
0:52:04 Next time on Business History, Thomas Alva Edison, age 30 or so, he’s still so young, gets bored with the phonograph and builds the first big electric grid in the history of the world and reveals that the great inventor has a fatal flaw.
0:52:07 He falls too in love with his products.
0:52:10 Our showrunner is Ryan Dilley.
0:52:12 Our producer is Gabriel Hunter-Chang.
0:52:14 And our engineer is Sarah Bruguere.
0:52:15 I’m Jacob Goldstein.
0:52:16 I’m Robert Smith.
0:52:20 We’ll be back next week with another episode of Business History, a show about the history of business.
0:52:26 On Masters of Scale, iconic leaders reveal how they’ve beaten the odds.
0:52:30 Asking really strong questions is a superpower.
0:52:35 You want to show up with something radically different and how they’ve grown companies to incredible heights.
0:52:38 The greatest rewards always come from the greatest risks.
0:52:39 That’s hit the gas.
0:52:43 Airbnb, Zillow, Microsoft, Liquid Death and more.
0:52:46 Hear from the founders who’ve changed the game.
0:52:48 It’s anything but business as usual.
0:52:55 Find Masters of Scale on Apple Podcasts, Spotify, YouTube or wherever else you get podcasts.
0:53:01 This is an iHeart Podcast.
0:00:38 Every week, she’ll introduce you to leaders with unique insights on work, answering questions like, how do four-day workweeks work?
0:00:40 Do will a machine ever take my job?
0:00:44 Get some surprising answers on TED Business wherever you listen to podcasts.
0:00:52 Pushkin.
0:00:56 Hey, it’s Jacob.
0:01:02 Today, we are going to play for you an episode of a new show that I’m hosting in addition to What’s Your Problem?
0:01:08 The new show is called Business History because it’s a show about the history of business.
0:01:13 I’m hosting it with Robert Smith, who some of you might remember I used to work with at Planet Money.
0:01:15 He was a co-host at Planet Money.
0:01:22 And the episode we’re going to play today is about Thomas Edison, who is an extremely what’s-your-problem kind of guy,
0:01:26 huge figure in the history of technology, very interesting in many ways.
0:01:31 This is actually the first of a three-episode series we’re doing about Edison.
0:01:36 If you happen to subscribe to Pushkin+, you can listen to the whole series now.
0:01:41 Otherwise, they’ll come out one episode a week over the next few weeks in the Business History feed,
0:01:45 which you can, of course, get wherever you are listening to this show right now.
0:01:51 Also, if you happen to want to see me and Robert, in addition to hear us, you can watch it on YouTube.
0:01:52 I hope you like the show.
0:01:55 If you like it, of course, I would love it if you would subscribe.
0:01:56 Thanks.
0:01:57 Here’s the show.
0:02:01 Business History, Episode 2, Edison, Part 1.
0:02:04 What if that’s the segment that’s sponsored?
0:02:05 Sponsored by what?
0:02:07 By whoever wants to pay for it.
0:02:10 We can talk about that afterwards, I suppose.
0:02:22 Thomas Edison died in 1931.
0:02:24 He was 84 years old.
0:02:29 And when he died, the President of the United States, Herbert Hoover,
0:02:33 decided that Edison was such a big deal that the whole country,
0:02:36 the entire United States, needed a moment of mourning.
0:02:38 So Hoover is talking this over with his days.
0:02:40 What should we do to honor Edison?
0:02:48 And somebody says, what if the whole country turns off the electricity for one minute to honor Thomas Edison,
0:02:50 the man who brought electricity to the masses?
0:02:54 And you’re laughing for what I think is an obvious reason, right?
0:02:59 Because if you think about it, who needs electricity all the time, right?
0:03:00 Everyone.
0:03:05 Fire departments, hospitals, sanitation systems, they all need it every minute.
0:03:10 They need this thing that Edison helped create, electric power.
0:03:15 This thing that nobody had, nobody had, you know, a few decades before this, crucially, right?
0:03:20 This itself is testament to Edison, right?
0:03:24 This fact that if you turn off electricity for one minute, people will die.
0:03:32 And Hoover actually puts out this official statement where he walks through this thought process that he and his aides have gone through.
0:03:34 He writes, quote,
0:03:44 This demonstration of the dependence of the country upon electrical current for its life and health is in itself a monument to Mr. Edison’s genius.
0:03:53 And so Hoover decides, OK, we’ll do this more modest thing where it’s like, if you want to, turn off the lights for one minute at 10 p.m.
0:03:55 And a lot of the country does it.
0:04:01 So I can imagine the nation sitting in the dark for 60 seconds, just waiting to turn the lights back on.
0:04:04 You can hear a fridge whirring in the background.
0:04:06 Did not exist when Edison was born.
0:04:08 Maybe the radio is playing softly.
0:04:09 That wasn’t around.
0:04:16 And when the light comes back on, people could see cars in the streets, planes in the sky that didn’t exist 50 years earlier.
0:04:28 You could see the Empire State Building and the Chrysler Building, both brand new at the time, as were skyscrapers in general, because you couldn’t build a skyscraper if you didn’t have electricity because nobody’s going to walk.
0:04:29 What is it?
0:04:30 A hundred stories up, right?
0:04:34 Buildings were like 10 stories tall, max before electric grids.
0:04:42 When we look back, Edison’s life was probably this moment in U.S. history where the most progress was made, between the time he was born and the time he died.
0:04:43 Technological progress.
0:04:51 And if you look in such a compressed period of time, it is unimaginable how much life changed for people.
0:04:52 Certainly if you were 80 years old.
0:05:01 But even if you were 60 years old, your life was entirely different by 1930 than it had been when you were a small child.
0:05:06 And, you know, to be clear, Edison wasn’t the cause of all of that.
0:05:08 He didn’t have anything to do with cars and planes.
0:05:12 He didn’t really invent the light bulb, in fact, though people thought he did.
0:05:14 And there was this myth of Edison that was part of the story.
0:05:19 But I think Edison really did do as much as anybody.
0:05:30 He certainly did an incredible amount to use technology and business to bring about this incredible change in daily life for hundreds of millions of people.
0:05:32 I’m Jacob Goldstein.
0:05:33 And I’m Robert Smith.
0:05:37 And this is Business History, a show about the history of business.
0:05:40 That’s why we call it Business History, because it’s about the history of business.
0:05:44 And today we are starting on a three-part series.
0:05:45 Big.
0:05:46 Pretty sure it’s going to be three.
0:05:48 About Thomas Edison.
0:05:52 Edison was this incredible figure in a lot of ways.
0:05:54 He was an inventor, a tinkerer.
0:06:07 He was like a grinder, you know, workaholic, huge self-promoter, great entrepreneur, invented the phonograph, built the first electric grid of any size to light up lower Manhattan, controlled essentially the entire American movie business.
0:06:16 But today, in the first episode about Edison, I’m going to argue that the most important thing he did came before any of that.
0:06:22 And it wasn’t even any particular thing or system that he invented.
0:06:25 It was this kind of meta breakthrough.
0:06:28 It was this new way of inventing.
0:06:30 And it happened early in Edison’s life.
0:06:31 It happened before he was 30 years old.
0:06:36 He came up with a new way of inventing that industrialized invention.
0:06:43 And that really created the template for the modern 20th century style of progress.
0:06:45 That was his great break.
0:06:46 Which we see even today.
0:06:47 Even today.
0:06:48 In Internet, AI, everything.
0:06:49 Everything.
0:06:52 Thomas Alva Edison.
0:06:55 It’s one of those people you love saying his middle name, Alva.
0:06:58 He was born in what was already an age of miracles.
0:07:01 There was the railroad and there was the telegraph.
0:07:05 And they were shrinking this very notion of distance, of time and space.
0:07:09 It felt like an age that was on the move.
0:07:12 And the spirit of invention, of innovation was everywhere.
0:07:17 And Edison had this particular combination of traits, right?
0:07:18 He was an inventor.
0:07:19 That’s what we learned about in school, of course.
0:07:22 But he was also a hustler, an entrepreneur.
0:07:24 He was interested in new things.
0:07:28 But he always asked himself, what are people willing to pay for?
0:07:28 Yeah.
0:07:30 And it’s really striking.
0:07:33 You see both of these traits.
0:07:35 The entrepreneur and the inventor, the tinkerer.
0:07:38 You see them from very early in his life.
0:07:40 You see him from when he’s a kid, a little kid.
0:07:47 So he’s born in 1847 in a town called Port Huron, Michigan, on the shore of Lake Huron.
0:07:49 I’ll be honest with you.
0:07:51 I did not remember as one of the Great Lakes.
0:07:52 It’s one of the greatest of the lakes.
0:07:53 Would you have got it?
0:07:53 Have you been?
0:07:58 I was born between Lake Huron and Lake Erie in London, Ontario, Canada.
0:08:00 Yeah, no, I wouldn’t have got it.
0:08:00 Yeah.
0:08:04 So he’s born on the shore of Lake Huron, this little town out in the middle of nowhere.
0:08:07 He barely goes to school.
0:08:09 Goes to school for like a few months here and there.
0:08:11 He was a bad, distracted student.
0:08:13 And he’s working from a young age.
0:08:20 When he’s 12, he gets a job selling like candy and newspapers on the train that goes
0:08:22 back and forth from Port Huron to Detroit.
0:08:24 He’s working the angles.
0:08:24 He’s hustling.
0:08:29 There’s this detail that I love, which is, you know, when the train gets to Detroit, he
0:08:32 gets a bunch of newspapers to sell on the way back to Port Huron.
0:08:38 And if he has some unsold papers when he’s almost back to the end of the line, while the train
0:08:43 is still moving at the edge of town in Port Huron, there’s this like sandbank or something.
0:08:47 He throws the bundle of papers off the train into the sandbank.
0:08:52 Then he jumps off the moving train after him and walks home selling the papers one by one.
0:08:56 These days, we don’t let 12-year-olds out by themselves, you know, in the modern era.
0:08:58 This guy’s jumping off trains.
0:09:03 Yeah, and like, obviously a bad idea, but in my heart, I kind of love it.
0:09:04 Like in my 12-year-old boy heart, it sounds awesome.
0:09:05 I could see it in the movie.
0:09:06 Yeah, yeah, yeah.
0:09:11 So, you know, he’s out there selling newspapers on the train, off the train.
0:09:16 And after a little while, he thinks, wait, I’m just like a chump.
0:09:17 I’m out here working for the man.
0:09:19 I could be selling my own papers.
0:09:27 And so he buys a used printing press, puts it into some space on a baggage car on the train,
0:09:31 and starts printing his own newspaper on the train.
0:09:32 What is he reporting on?
0:09:35 Like the guy in seat 13B, you know, he’s got a hot tip.
0:09:37 It’s not a lot of news.
0:09:38 It’s not news heavy.
0:09:40 You might call it a newsletter, right?
0:09:40 Yeah, yeah, yeah.
0:09:41 Okay.
0:09:44 The Weekly Herald, Thomas A. Edison, publisher.
0:09:45 It’s like one page.
0:09:47 But apparently he’s selling it.
0:09:48 And making all the profits, yes.
0:09:49 And keeping all the profits, right?
0:09:50 Cutting out the middleman.
0:09:52 And so there’s entrepreneur Edison.
0:10:00 And like right next to entrepreneur Edison, in that same baggage car, you see Edison the inventor.
0:10:05 Because next to the printing press, he sets up this little chemistry lab.
0:10:07 So he’s got like magnesium and potassium.
0:10:09 He’s like making things turn purple.
0:10:12 I’m imagining like things bubbling.
0:10:12 I don’t know.
0:10:17 There’s one thing I do know, which is he has some phosphorus.
0:10:20 And the reason I know he has phosphorus, right?
0:10:20 Oh.
0:10:25 Is at some point the phosphorus like spills or whatever and starts a fire.
0:10:26 On the train.
0:10:27 On the train.
0:10:28 On the train car.
0:10:28 Yeah.
0:10:30 Which is like, obviously that’s going to happen.
0:10:33 You have a teenage boy with like dangerous chemicals on the train.
0:10:34 Of course, you’re going to start a fire.
0:10:39 And of course, if you do that, you’re going to get fired, which is what happens to Edison.
0:10:40 So he gets fired.
0:10:45 And now comes this very Horatio Alger turn.
0:10:46 And that is this.
0:10:53 So not long before the fire and the firing, Edison has been hanging out at a train station.
0:10:58 And there is this little toddler, stay with me, who is out playing on the tracks.
0:11:02 And a loose car, train car, comes rolling at the toddler.
0:11:04 And Edison sees it happening.
0:11:07 And he goes and grabs the toddler and brings him to safety.
0:11:10 And this story is almost too perfect, right?
0:11:12 A runaway boxcar, a toddler on the tracks.
0:11:13 Does Steven Spielberg write this?
0:11:14 Apocryphal.
0:11:16 The word you’re looking for in the history game is apocryphal.
0:11:17 Too good to be true.
0:11:21 Although I looked at this and thought about it.
0:11:23 And I think it is true.
0:11:27 You know, there is one recent biographer, this guy, Randall Strauss, who is like particularly
0:11:30 skeptical of Edison’s self-mythologizing.
0:11:31 And he thinks it’s true.
0:11:34 And you can see letters between Edison and the kid’s dad.
0:11:37 So I think the world used to just be more wild, right?
0:11:40 Like more dangerous.
0:11:42 So yes, I think it’s true.
0:11:48 But at this moment, it is in fact helpful for Edison because the father of the child that
0:11:53 Edison rescues runs the station, but also is a telegraph operator.
0:12:02 And so when Edison gets fired, this grateful father teaches Edison to be a telegraph operator.
0:12:06 This is the next phase of Edison’s life, right?
0:12:10 Being a telegraph operator proves to be a huge opportunity for him.
0:12:13 But I want to say one thing first, because it’s another big moment.
0:12:19 And that is, Edison, by the time he’s 12 years old, is mostly deaf.
0:12:21 Like not entirely deaf.
0:12:23 People can shout to him and he can hear.
0:12:29 But the key quote he has later is, I haven’t heard a bird sing since I was 12 years old.
0:12:32 Which is poignant, especially for the guy who’s going to, spoiler alert, invent the phonograph.
0:12:35 But he said, Edison said, he didn’t mind it.
0:12:37 It helped him focus.
0:12:39 Helped him like tune out distractions.
0:12:40 He was a very focused man.
0:12:44 And there is this actually lovely detail, which is later in his life, when he’s like famous
0:12:49 and going to lectures, you know, in big halls, when he can’t hear what the guy is saying,
0:12:54 his assistant will tap on Edison’s leg, will tap what the person is saying in Morse code.
0:13:01 So this is an opportunity for Edison, because at this point, like the telegraph is the cutting
0:13:02 edge communication tool.
0:13:04 Like it’s just exploding at this time.
0:13:08 They’ve just around this time laid the first transatlantic cable.
0:13:12 Suddenly you could communicate instantaneously, right?
0:13:14 You’re in the midst of a civil war.
0:13:17 People want to know the news and suddenly they can know it.
0:13:18 They can move troops.
0:13:18 They can know what’s happening.
0:13:25 And people are just sort of getting used to this idea of information is not this rare thing
0:13:28 that you print on the newspaper and deliver the next day.
0:13:30 Like information is power.
0:13:31 It’s instantaneous.
0:13:37 Edison learning to be a telegraph operator is him walking into this great technological
0:13:38 moment of his time.
0:13:46 And there is this one particular story that I love about how transformational the telegraph
0:13:47 is.
0:13:54 It’s about a pickpocket gang in London run by a guy named Fiddler Dick.
0:13:58 Governor, watch out for Fiddler Dick.
0:14:00 Very good.
0:14:03 What Fiddler Dick’s gang does is this.
0:14:09 They loiter on a train platform and then the train pulls in and you know it’s chaos.
0:14:10 People are getting off the train.
0:14:11 People are getting on.
0:14:12 They’re moving around.
0:14:13 They’ve got all their stuff out.
0:14:17 And Fiddler Dick and his boys pick the pockets of the people in the crowd and then just as
0:14:21 the train’s about to pull out, they hop on the train and head to the next station.
0:14:24 And this is an incredible strategy, right?
0:14:34 Because if you are on a moving train in, say, 1840, there is literally no way to send information
0:14:35 faster than you are traveling.
0:14:41 You might as well be going at the speed of light because no message is going to get to your
0:14:43 destination before you do, right?
0:14:48 So then you just get off the train at the next station and nobody knows anything is amiss.
0:14:56 And then one day in 1844, a cop in London sees the Fiddler Dick gang strike, right?
0:14:59 Somebody, the platform’s like, whatever, my wallet, whatever, I don’t know.
0:15:00 Somebody stop that boy!
0:15:02 And they’re on the train and they’re gone.
0:15:04 But then the cop is like, oh, wait a minute.
0:15:07 We got a telegraph now.
0:15:09 And he just telegraphs ahead to the next station.
0:15:13 And Fiddler Dick and the boys get arrested.
0:15:14 Thank you, telegraph.
0:15:16 He was Fiddler Dick.
0:15:17 He got Fiddler Dick by the telegraph.
0:15:23 So this is the world that Edison is going into.
0:15:30 And it means that if you know how to send and receive Morse code, you can write your ticket.
0:15:32 It’s like being a coder in whatever, 2020.
0:15:33 What was the best year to be a coder?
0:15:34 2020 probably, right?
0:15:40 I feel like we should just say here, if Netflix is listening in, we could write The Adventures
0:15:41 of Young Edison.
0:15:45 Telegraph operator traveling the nation, solving crime, creating inventions.
0:15:46 I love it.
0:15:47 I love it, actually.
0:15:47 Yes.
0:15:50 Next time on The Adventures of Young Thomas Edison.
0:15:51 Thomas Edison.
0:15:51 Very good.
0:15:52 It’s basically this episode.
0:15:54 But with a little more like murder.
0:15:55 Well, sure.
0:15:56 There is a murder.
0:15:58 We’ll be back in just a minute.
0:16:14 Run a business and not thinking about podcasting?
0:16:15 Think again.
0:16:20 More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora.
0:16:24 And as the number one podcaster, iHeart’s twice as large as the next two combined.
0:16:27 So whatever your customers listen to, they’ll hear your message.
0:16:31 Plus, only iHeart can extend your message to audiences across broadcast radio.
0:16:33 Think podcasting can help your business?
0:16:34 Think iHeart.
0:16:37 Streaming, radio, and podcasting.
0:16:39 Let us show you at iHeartAdvertising.com.
0:16:41 That’s iHeartAdvertising.com.
0:16:44 Got a business problem?
0:16:45 There’s a TED Talk for that.
0:16:51 Stay updated on everything business on TED Business, a podcast hosted by Columbia Business School
0:16:52 professor Modupe Akinola.
0:16:57 Every week, she’ll introduce you to leaders with unique insights on work, answering questions,
0:17:00 like, how do four-day work weeks work?
0:17:03 Do will a machine ever take my job?
0:17:07 Get some surprising answers on TED Business wherever you listen to podcasts.
0:17:19 Thomas Edison, he’s going from town to town.
0:17:26 You know, he’s in Indianapolis, Memphis, Louisville, and he’ll roll into town, get a room with
0:17:29 some other telegraph operators, and go to work and make money.
0:17:35 And he’s spending all his money still experimenting, buying chemicals and stuff to build batteries.
0:17:37 And there’s this moment in Louisville, actually.
0:17:42 His room is above the telegraph office, and he spills some acid on the floor, and it eats
0:17:46 a hole through the floor and drips down into, like, the boss’s office below, so he gets fired.
0:17:47 But who cares, right?
0:17:50 He’s like a teenager, and he has this valuable skill.
0:17:55 So he winds up eventually in Boston as a telegraph operator.
0:17:59 And this is where there’s kind of a big turn, the next big turn in his life.
0:18:06 So in the classic story of an entrepreneur, right, you need to have the basic skills, you
0:18:10 need to have a bunch of ideas, but you also have to sort of take a risk.
0:18:13 You have to have that moment of failure before you pivot.
0:18:15 And I feel like we’re about to get to that.
0:18:16 Yes, that’s right.
0:18:18 Both the failure and the pivot, right?
0:18:26 So yeah, so it’s 1869, Edison is 22 years old, and he gets his first patent ever, first
0:18:30 of 1,093 patents he will get in his lifetime, legend.
0:18:35 And this one for him, it’s for an electric vote recorder, right?
0:18:40 And so the idea is, he’s in Boston, which is the state capital of Massachusetts, right?
0:18:44 And, you know, the voting is super inefficient, right?
0:18:49 Hey, whatever, the gentleman from whatever, I don’t know what, wherever.
0:18:54 He sees a pain point there of someone has to write down eyes and nays.
0:19:00 And so he invents this automatic counting machine and takes it to, I think he takes it to the
0:19:01 statehouse.
0:19:04 He takes it to some legislator, takes it to the, you know, customer.
0:19:09 And they’re like, look, this is very clever, but I’ll tell you a little secret.
0:19:12 We don’t actually want our votes counted instantly, right?
0:19:18 We need that time to go talk to the other legislators, see if we can sway them, maybe go out in the
0:19:23 lobby and see if any of the lobbyists out there want to discuss our campaign contributions or
0:19:25 whatever they called them back then, right?
0:19:27 So in fact, this is not a problem.
0:19:30 It would create a problem for the legislature.
0:19:31 They don’t want it.
0:19:32 Nobody buys it.
0:19:35 He has built a thing that nobody wants.
0:19:37 And this is a classic lesson for entrepreneurs.
0:19:44 I mean, even today in business school, people will come up with ideas and even make a prototype
0:19:46 of it and be like, look at how amazing this idea is.
0:19:49 And you’ll be like, well, does anyone want it?
0:19:51 Did you talk to your customers?
0:19:54 And they’re like, oh, not yet.
0:19:55 But it’s clearly genius.
0:19:57 So the engineer, right?
0:19:59 It’s the engineer falls in love with engineering.
0:20:05 Yeah, having a genius idea without a need for it is nothing.
0:20:06 It’s like not having it at all.
0:20:06 Yeah.
0:20:12 It reminded me of, you know, Y Combinator, the famous startup incubator in Silicon Valley.
0:20:17 I think their motto is something like, make something people want.
0:20:21 And I seem to recall, although I could not find evidence of this when I went to look for it,
0:20:26 but I seem to recall that they give entrepreneurs a T-shirt if their business gets to some level
0:20:31 of success that says, congratulations, you made something people want.
0:20:33 It’s a very simple, elegant lesson.
0:20:40 And it’s a lesson that Edison really learns, really internalizes at this point in his life.
0:20:45 And we’ll see this for the rest of his life when he interacts with other inventors, right?
0:20:46 You know, he’s the king inventor.
0:20:48 So he’s often brought in to be like, what do you think about this?
0:20:52 And, you know, they’re showing it off to Edison being like, oh, isn’t this amazing?
0:20:55 And he’s thinking, all right, how much can I get for it?
0:20:58 Who will pay a nickel to use this thing?
0:20:59 How will I get into stores?
0:21:01 Like, what’s the revenue model, essentially?
0:21:07 And this is one of the things that makes him a great inventor and a great businessman.
0:21:12 So Edison takes this lesson and he turns to the finance industry.
0:21:12 Smart.
0:21:17 Smart, because finance is just literally the business of money, right?
0:21:21 And if you can help people make more money, they will pay you for that.
0:21:25 And right around this time, people have started using the telegraph to send
0:21:28 real-time information about stock prices.
0:21:31 It’s basically the invention of the stock ticker is a thing that has happened.
0:21:35 Which is powerful because if stocks are trading for a different price,
0:21:41 let’s just say, in London, New York, New York, Chicago, then that’s this huge opportunity
0:21:45 to buy cheap in one place and sell expensive in another place.
0:21:47 This arbitrage opportunity.
0:21:51 And having that information means you can spot those opportunities.
0:21:52 Exactly.
0:21:57 And if you can improve that a little bit, if you can make it faster or clearer or whatever,
0:21:58 people will make more money.
0:22:02 We saw this even into the 21st century when people were building crazy, you know,
0:22:07 dedicated fiber optic lines and satellite towers and wild things to move price information faster.
0:22:12 So Edison moves to New York, of course, finance, Wall Street,
0:22:18 and gets a contract from the Golden Stock Telegraph Company of New York City.
0:22:18 Really?
0:22:19 What does that company do?
0:22:21 I love old company names, right?
0:22:24 What does the National Biscuit Company make?
0:22:25 I think they make biscuits.
0:22:30 I feel like the Golden Stock Telegraph Company became like GoTelcom in the 80s
0:22:32 and now is known as Spritzel.
0:22:34 Yeah, Spritzel, but no I for some reason.
0:22:41 And so now Edison is in New York and he is able to stop being a telegraph operator.
0:22:46 He’s able to quit his job, start his first company, straightforward name,
0:22:48 Newark Telegraph Works.
0:22:49 Ask me why.
0:22:51 Why?
0:22:52 Was it located in Newark?
0:22:53 And what did they work on?
0:22:54 Telegraph.
0:22:56 He’s hiring workers.
0:22:58 He delivers that first stock ticker.
0:23:03 And he’s also, he’s working on all these incremental improvements, right?
0:23:06 Like not crazy things that are going to make him famous,
0:23:12 but he’s just making all these tweaks that give little efficiency gains,
0:23:16 you know, little better batteries and weird electrical things, right?
0:23:18 His company’s growing.
0:23:19 He gets married.
0:23:21 Married to a Jersey girl named Mary Stilwell.
0:23:23 They buy a house.
0:23:25 But Edison is definitely not a family man.
0:23:26 He’s working.
0:23:28 He’s always working all the time.
0:23:31 In fact, in his first year of marriage, he gets 39 patents.
0:23:33 But I’m sure he made it home for dinner.
0:23:34 Never.
0:23:34 Never.
0:23:36 Probably zero times.
0:23:42 And then in 1874, he comes up with a big idea.
0:23:46 Doesn’t sound like a big idea to us, but it is a big idea.
0:23:54 It’s a system that lets you send four messages at once on a single telegraph line.
0:23:56 He calls it the quadruplex.
0:24:01 Now, at this point, telegraph was essentially one wire.
0:24:02 Right.
0:24:05 And you basically tap into one side of the wire.
0:24:06 Beep, beep, beep, beep, beep, beep, beep, beep, beep, beep.
0:24:08 Person listens on the other end, taps back.
0:24:09 Boop, boop, boop, boop, boop, boop, boop.
0:24:10 Yeah.
0:24:12 And wire is made of copper, right?
0:24:12 It’s copper wire.
0:24:13 So it’s expensive.
0:24:15 It’s expensive, right?
0:24:18 And they’re running the copper wire all over the country, you know, across the Atlantic Ocean.
0:24:22 It costs a lot of money to run all that copper wire, right?
0:24:30 And so if you can get more messages on the same amount of wire, that is a huge efficiency gain, right?
0:24:32 That makes things cheaper.
0:24:34 Yeah, because it’s more efficient.
0:24:36 It’s something that no one would ever see or notice.
0:24:40 But if you’re running a company, I mean, that is a huge productivity increase.
0:24:48 And I want to just like zoom out from this for a moment because, you know, we talk about technology now.
0:24:56 We talk about like amazing things and maybe it’s scary like AI or whatever, but it’s kind of exciting and dramatic.
0:25:07 But in the long run, maybe the most important thing that technology does is make stuff cheaper, makes it cheaper to communicate, makes it cheaper to grow food, makes it cheaper to make clothes.
0:25:11 And when everything gets cheaper, everybody gets richer, right?
0:25:17 The way we have had material progress is by technology effectively making things cheaper.
0:25:20 So shout out to that.
0:25:22 And that is what Edison is doing here.
0:25:26 He is making the most important communications technology of its day cheaper.
0:25:27 So he’s on a roll.
0:25:29 He’s got dozens of inventions at this point.
0:25:30 He’s been tweaking.
0:25:33 He’s finally got something that people are going to pay money for.
0:25:34 He’s got a family, right?
0:25:44 But he’s not yet this world-changing inventor because there’s one last piece of the puzzle any entrepreneur needs, and that is scale.
0:25:45 He needs money.
0:25:47 He needs so much money there’s a special name for it.
0:25:48 Capital.
0:25:49 Yeah, I love that.
0:25:50 He needs capital.
0:25:51 Like, I don’t know.
0:25:53 At what point does money become capital?
0:25:55 I mean, I know you could say it’s like the structure of it, is it?
0:26:00 But I feel like nobody calls $100,000 money, right?
0:26:00 That’s not…
0:26:02 That is investment capital, yes.
0:26:07 He, in fact, at one point, writes to the head of Western Union.
0:26:08 Western Union is the big telegraph company.
0:26:10 He’s doing a lot of work for them.
0:26:12 He writes to the head of Western Union.
0:26:19 I need $10,000, $9,000, $8,000, $7,000, $6,000, $5,000, $4,000, $2,000, $2,000, anyone you would like to advance.
0:26:21 He’s actually writing this to the head.
0:26:21 It’s funny.
0:26:22 It’s good.
0:26:23 It’s charming.
0:26:26 He had this kind of homespun charm people talked about.
0:26:28 Like, he was from the Midwest.
0:26:29 He had that Midwestern charm.
0:26:30 Is that a thing?
0:26:31 I think it is.
0:26:32 For Edison, it is.
0:26:34 Dressed in kind of country clothes, even when he was famous.
0:26:38 So he’s writing this to the head of Western Union, this big executive, William Orton.
0:26:41 And in fact, Orton advances Edison $5,000.
0:26:46 And then they start to properly negotiate over Edison’s big idea, over the quadruplex.
0:26:49 Edison wants $25,000 plus royalties.
0:26:53 Orton, you know, controls Western Union, can kind of do whatever he wants.
0:26:57 So he’s sort of, I think, playing games with Edison, stalling.
0:26:59 He goes off to the Midwest for Christmas break.
0:27:02 And Edison just has to kind of wait around, right?
0:27:05 Has to wait for his big capital infusion.
0:27:14 One day, as this is happening, into Edison’s little Newark, New Jersey workshop, walks Jay Gould.
0:27:16 Jay Gould.
0:27:17 Legendary.
0:27:21 He was a railroad magnate, a big financial speculator.
0:27:22 I won’t call him an investor.
0:27:23 I’m calling him a speculator.
0:27:26 He was a classic robber baron.
0:27:29 But more than that, you know, there was this whole robber barons, they called them, right?
0:27:32 Everybody, you know, thought, oh, they’re stealing all our money.
0:27:33 They’re manipulating the markets.
0:27:36 But even the robber barons hated Jay Gould.
0:27:38 He was a robber baron’s robber baron.
0:27:43 Now, I will say I’ve toured his mansion recently up on the Hudson River.
0:27:45 And the tour guides say he was misunderstood.
0:27:47 He was actually a really great guy.
0:27:48 But we’ll do a future episode.
0:27:50 I bet it’s a nice mansion.
0:27:51 It’s a very nice mansion, yes.
0:27:53 Yeah, even at the time, right?
0:27:55 Even at the time, he was like the villain.
0:27:59 He was always trying to corner the market, like take all the gold contracts.
0:28:00 Yeah, he tried to corner gold.
0:28:02 Yeah, stuff like that.
0:28:10 Some economists have argued that he was hated because he went against big company interests.
0:28:12 And in fact, things got cheaper because of him.
0:28:14 But we will look at this in a future show.
0:28:16 The robber baron who was in it for the little guy.
0:28:18 He was going to give that mansion to the poor someday.
0:28:20 You know, to be continued.
0:28:21 He walks in.
0:28:24 This guy, this famous guy, walks into Edison’s little shop.
0:28:31 And Gould actually, among other things, controls the Atlantic and Pacific Telegraph Company, a rival to Western Union.
0:28:34 Jay Gould has heard about the quadruplex.
0:28:40 And if you’re Edison, it is great news when Jay Gould walks in the door, right?
0:28:47 It’s like that scene in Bugs Bunny when Bugs Bunny looks at a guy and the whole guy is just a big bag with a dollar sign on it, right?
0:28:48 Big bag of money.
0:28:56 Because if Western Union is all you have, if the head of Western Union is jerking around and going off for Christmas break and not giving you any money, you don’t have any leverage, right?
0:28:58 You basically have to just take what they offer.
0:29:03 But now, now there are multiple buyers for what you’re selling.
0:29:05 Now there are multiple buyers for your quadruplex.
0:29:06 And you have leverage.
0:29:16 And so the very next day, Edison goes to Gould’s mansion on Fifth Avenue in Manhattan, goes down to Gould’s office in the basement.
0:29:19 And Edison actually wrote about this exchange later.
0:29:22 Edison wrote, here’s what he wrote.
0:29:25 Gould started in at once and asked me how much I wanted.
0:29:26 I said, make me an offer.
0:29:29 Then he said, I’ll give you $30,000.
0:29:35 And I said, I’ll sell any interest I may have for that money, which was somewhat more than I thought I could get.
0:29:37 Great negotiating lesson.
0:29:41 Always let the other guy say the number first.
0:29:45 Because, right, if it’s more than you wanted, you just say yes.
0:29:46 You just say yes.
0:29:46 Thank you.
0:29:47 Pleasure doing business with you.
0:29:49 So then, of course, Edison gets the money.
0:29:53 Gould actually sells a yacht and gives Edison the money from the yacht.
0:29:55 Lovely, rubber, barren detail.
0:29:59 And then, of course, Western Union sues Gould over ownership of the quadruplex.
0:30:01 The lawsuit goes on forever.
0:30:05 Edison’s inventions are going to end up tied up in lawsuits again and again, right?
0:30:06 Intellectual property story.
0:30:09 But Edison doesn’t care this time because he’s got his money.
0:30:10 What does he do with it?
0:30:15 He does the most important thing he’s ever going to do in his life.
0:30:16 I knew it.
0:30:20 He does the thing that is going to transform the very nature of invention.
0:30:21 Itself.
0:30:22 Itself in the world.
0:30:26 And what that thing is, is he moves to the country.
0:30:37 He moves to this little failed housing development out in the middle of nowhere in New Jersey called Menlo Park next to the railroad between New Jersey and Philadelphia.
0:30:40 So, it’s early 1876 by this point.
0:30:42 Edison is 29 years old.
0:30:45 He’s got two kids who he calls Dot and Dash.
0:30:47 Oh, it’s so nice.
0:30:47 Yeah.
0:30:48 Very sweet.
0:30:50 Although, it’s not like he hangs out with them.
0:30:51 What he actually loves is the telegraph.
0:30:58 His family moves into this big house that used to be the sales office for this failed housing development in Menlo Park.
0:31:01 Some of his workers move into some of the other empty houses.
0:31:08 And then, on top of this little hill, not far from the train station, I think you can see Manhattan from the top of the hill.
0:31:09 I’m not sure.
0:31:17 On top of this little hill, he builds the thing, the main thing that is like the manifestation of his big idea.
0:31:18 It’s a lab.
0:31:21 It’s a lab for him and his employees, where they’re going to work.
0:31:30 And he says, in this building, he is going to come up with, quote, a minor invention every 10 days and a big thing every six months or so.
0:31:42 It’s amazing because if you would ask most people at this time, if you ask most people today, they would say invention is one of those things that, you know, comes from God or the greater spirit, you know, the eureka moment, you know.
0:31:46 And everyone’s story is like, oh, I was out walking when it suddenly came to me, fully formed.
0:31:51 Like, this is the myth of invention, and maybe it happens sometimes this way.
0:31:57 But for Thomas Edison to say, yeah, we got a schedule here, we got a calendar, like invent, invent, invent.
0:31:59 It’s taking away the magic, right?
0:32:03 It’s taking it from this kind of romantic world to the industrial world.
0:32:06 And you didn’t maybe know if it was possible, but it ended up being possible.
0:32:15 So what he builds there is a long two-story wood building, 100 feet long, 25 feet wide, painted white.
0:32:19 People say it looks like a schoolhouse or a church without a steeple.
0:32:22 And on the ground floor, there’s a machine shop.
0:32:24 Upstairs, there’s a lab.
0:32:29 Eventually, people will call this the invention factory, which is a perfect name for it.
0:32:32 But right now, nobody calls it anything, right?
0:32:35 Because nobody outside the telegraph industry has even heard of Thomas Edison.
0:32:38 He’s just some guy moving out to the middle of nowhere.
0:32:44 I’ve seen a replica of this lab in Michigan, outside Detroit, in Henry Ford’s museum.
0:32:52 He so admired Thomas Edison that he rebuilt the laboratory down to, like, the test tubes and the little bits of wire on the wall.
0:32:59 Apparently, so my tour guy told me, when Edison saw it, he’s like, it’s an exact replica, except it’s so clean.
0:33:01 You know, it was, like, perfectly clean.
0:33:14 But there’s a million little things and screws and connectors and all sorts of fabrics and that sort of thing in case Thomas Edison or his people at this point had an idea.
0:33:17 They didn’t have to go to Manhattan to pick up a button.
0:33:19 Or a part or anything, right?
0:33:27 The core thing this place does is it makes Edison’s inventing process frictionless, right?
0:33:39 Anytime he thinks of something, he has right there standing next to him, you know, skilled machinists and electricians and, like, all the parts and machines and chemicals and whatever you can think of.
0:33:41 This is the breakthrough.
0:33:45 There’s this great quote about this from this guy, Paul Israel.
0:33:47 He wrote a biography about Edison.
0:33:51 He spent decades editing the Edison papers at Rutgers.
0:33:53 He’s like a deep Edison scholar.
0:34:01 And the quote is that the lab in Menlo Park showed that invention itself could be an industrial process.
0:34:05 So, like, this is the great era of industrialization in America.
0:34:08 And Edison is industrializing invention.
0:34:16 He’s gone from Thomas Edison, young Morse code operator, to Thomas Edison inventor, to Thomas Edison, Incorporated.
0:34:20 He’s the guy who runs the factory that makes inventions.
0:34:26 And in just a minute, we will hear how the invention factory comes out of the gate with a big one.
0:34:40 Run a business and not thinking about podcasting?
0:34:41 Think again.
0:34:46 More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora.
0:34:50 And as the number one podcaster, iHeart’s twice as large as the next two combined.
0:34:54 So whatever your customers listen to, they’ll hear your message.
0:34:58 Plus, only iHeart can extend your message to audiences across broadcast radio.
0:35:00 Think podcasting can help your business?
0:35:01 Think iHeart.
0:35:03 Streaming, radio, and podcasting.
0:35:06 Let us show you at iHeartAdvertising.com.
0:35:08 That’s iHeartAdvertising.com.
0:35:10 Got a business problem?
0:35:12 There’s a TED Talk for that.
0:35:19 Stay updated on everything business on TED Business, a podcast hosted by Columbia Business School professor Modupe Akinola.
0:35:24 Every week, she’ll introduce you to leaders with unique insights on work, answering questions like,
0:35:26 how do four-day work weeks work?
0:35:29 Do will a machine ever take my job?
0:35:33 Get some surprising answers on TED Business wherever you listen to podcasts.
0:35:48 Jacob, I feel like the pieces are in place.
0:35:51 Edison has his invention side, his business side.
0:35:53 He’s got money.
0:35:56 He’s got the industrialization of invention itself.
0:36:01 He has the manifestation of his own mind on a hilltop in New Jersey.
0:36:08 And yet, no mention of the light bulb or any of these things that, like, every elementary school student knows about Thomas Edison.
0:36:09 It’s coming.
0:36:09 Okay.
0:36:10 It’s coming.
0:36:12 Though it comes in an indirect way.
0:36:14 It comes in a really interesting way.
0:36:14 And that is this.
0:36:20 So, right around the time Edison moves to Menlo Park, there is, in fact, this historic breakthrough.
0:36:22 But it doesn’t come from Edison.
0:36:24 It doesn’t come from his lab on the hill.
0:36:28 It comes from another inventor who’s based in Boston.
0:36:37 And this invention is granted as patent 174465, and it’s called Improvement in Telegraphy.
0:36:38 Yawn.
0:36:39 Wait for it.
0:36:40 The inventor says,
0:36:48 My present invention consists of a vibratory or undulatory current of electricity in contradistinction to a merely intermittent or postulator current.
0:36:55 And essentially, this inventor says this is a breakthrough because you can send more telegraph messages down the same wire, right?
0:36:57 So it’s like quadruplex plus.
0:37:05 But then, at the very end of the application, literally second to the last paragraph, the inventor writes that the patent covers, quote,
0:37:15 The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described by causing electrical undulations.
0:37:22 Similar in forms of the vibrations of air, accompanying the said vocal or other sound substantially as set forth.
0:37:24 And then, last paragraph.
0:37:35 In testimony whereof, I have here unto sign my name this 20th day of January, A.D. 1876, Alex Graham Bell.
0:37:37 Alexander Graham Bell.
0:37:37 I love it.
0:37:42 I love it when you’re reading a famous guy’s biography and another famous guy comes in.
0:37:43 Yeah, yeah, yeah.
0:37:43 Team up.
0:37:44 Alexander Graham Bell.
0:37:46 Watson, come here, I want you.
0:37:47 Alexander Graham Bell.
0:37:49 He is inventing the telephone right here.
0:37:51 And he doesn’t know it, right?
0:37:51 Amazing.
0:37:55 He just thinks he’s, like, coming up with a better way to send telegraphs.
0:37:59 And does Edison see this in, like, Telegraph Weekly or something like that?
0:37:59 Yeah, yeah.
0:38:01 I mean, so Edison tracks new patents.
0:38:04 That’s, like, one of the things he does is he just sees all the new patents that come out.
0:38:12 He reads them and he sees this and he thinks, I’m going to tweak it so I can send even better telegraph messages.
0:38:16 And, you know, he’s all set up to do this, right?
0:38:18 He’s got his muckers.
0:38:19 He’s got his lab.
0:38:20 He’s staying up all night.
0:38:28 And there’s this one piece of this new thing that Alexander Graham Bell has invented called the diaphragm.
0:38:32 It’s the thing that turns sound into vibrations, right?
0:38:33 So it vibrates when sound waves hit it.
0:38:34 Yeah, it’s a thin membrane.
0:38:41 It vibrates and it creates an electrical current that is not dots or dashes but is a variable electric current.
0:38:45 Yes, and going the other way, it turns the electric current into vibrations that you can hear.
0:38:54 And so one day Edison is playing with one of these and just, like, talking into it, and he feels that it’s vibrating on his hand as he talks to it.
0:39:02 He’s having dinner with his boys, with his muckers, probably eating apple pie.
0:39:13 And as he feels this thing vibrating on his hand, he turns to his, like, chief engineer, this assistant named Charles Batchelor, a guy he calls Batch.
0:39:26 And he says, you know, Batch, if we took one of these diaphragms and we put something pointy, put, like, a needle or something on the bottom of it and put it on a piece of paper and talked into it, it would scratch the paper.
0:39:28 It would leave scratch marks on the paper.
0:39:39 And then maybe if we took that paper with the scratch marks and pulled it back under the needle, would it make the diaphragm vibrate and send sound back out?
0:39:41 Would it recreate the sound?
0:39:48 And because they have a factory with needles and paper and diaphragms and all this stuff, they don’t need to wait long to know the answer to this question.
0:39:49 They don’t need to wait at all, right?
0:39:54 All the dudes in the middle of night, in the middle of nowhere in New Jersey, are sitting there ready to go.
0:39:56 And so they just do it, right?
0:39:58 This whole team of people.
0:40:07 There’s a machinist who’s sitting there who walks over to his, whatever, machine and, like, solders a needle onto the bottom of a diaphragm or however you get a needle onto the bottom of a diaphragm.
0:40:15 And Batch, Batchelor gets some wax paper and cuts it up and they build a little wheel, a little system, just right then, right that night.
0:40:18 And, you know, presumably this is every night, right?
0:40:21 Presumably it’s always like Edison’s like, how about this?
0:40:22 How about that?
0:40:24 And most of them are not very good ideas.
0:40:26 But this one, this one is a good idea, right?
0:40:33 So they hook up the diaphragm with the needle so it’s touching the wax paper and there’s this wheel that the paper’s on.
0:40:45 And so Batchelor slowly pulls the paper along the wheel under the needle and Edison says into the diaphragm, Mary had a little lamb.
0:40:51 And they take the paper out and they look at it and it has these little scratch marks on it.
0:40:53 Grooves, if you will.
0:41:01 And then Batchelor puts the paper back on the wheel with the little scratches, you know, pulls the paper under the needle past the diaphragm.
0:41:10 And as it’s going past the diaphragm, they hear like, I am Eureka.
0:41:12 This is a real Eureka.
0:41:14 Yeah, this is a real Eureka, right?
0:41:15 Like it’s not perfect, right?
0:41:16 It doesn’t quite work.
0:41:17 But it works.
0:41:18 It works.
0:41:27 Edison writes in his notebook that day, basically, this is an invention that will make it easier for people at the telegraph office to transcribe messages.
0:41:28 Oh, no.
0:41:29 Oh, no.
0:41:32 So he’s still thinking telegraph, his mind’s in the telegraph.
0:41:37 He’s thinking, oh, yeah, someone at the telegraph office has to use a pencil and paper to write things down.
0:41:43 We could use this new transcription device, essentially, for dots and dashes.
0:41:43 Yes, yes.
0:41:47 He is still in the world that he’s living in, right?
0:41:49 Unsurprisingly, he is still in his world.
0:41:55 But he gets that this thing is going to be big, not to the exclusion of everything else.
0:41:56 He keeps puttering on other things.
0:42:01 But he does have somebody over the next few months make a list of possible names for his new invention.
0:42:03 I know you love a list.
0:42:04 Do you want to take this one?
0:42:04 All right.
0:42:06 Possible names for this new invention.
0:42:07 Autophone.
0:42:09 Cosmophone.
0:42:10 I do like that one.
0:42:11 Acoustophone.
0:42:12 Nice.
0:42:13 Antipophone.
0:42:14 Liquophone.
0:42:15 Chronophone.
0:42:17 Glottophone.
0:42:18 That’s nice.
0:42:19 Clangophone.
0:42:20 Hulagamophone.
0:42:21 Aerophone.
0:42:25 I feel like they have a Latin dictionary there in Menlo Park Laboratory.
0:42:26 They’re just, like, going through it.
0:42:27 Epograph.
0:42:30 They don’t choose any of those.
0:42:30 Nope.
0:42:37 As we know, they choose phonograph, which I think is Edison’s and means something like sound writer, right?
0:42:42 The graph is right there in the name, which is telling.
0:42:46 They’re really still focused on this kind of automatic transcription part.
0:42:48 They’re not thinking music.
0:42:51 They’re not thinking orchestras, that someone’s going to buy this at home.
0:42:52 No.
0:43:01 I mean, if anything, they’re thinking, like, when they think beyond telegraph, they think of, like, oh, this is, like, something that business people can dictate letters into.
0:43:06 It’s very much like a recording device as opposed to a playing device at some level.
0:43:08 So they’re working on it.
0:43:10 They’re, you know, iterating.
0:43:11 They’re making it a little better.
0:43:17 And a few months later, in December, they decide they’re ready to go public with this idea.
0:43:22 And it comes out in Scientific American, which was a big, big deal at the time in this sort of technology.
0:43:22 Sure, sure.
0:43:25 And the story is called The Talking Phonograph.
0:43:27 And I’ll read a little bit of it.
0:43:33 Mr. Thomas A. Edison recently came into this office, placed a little machine on our desk, and turned a crank.
0:43:43 And the machine inquired as to our health, asked how we liked the phonograph, informed us that it was very well, and bid us a cordial good night.
0:43:47 People now went bananas.
0:43:50 People could not believe that this was a thing.
0:43:59 It’s hard to imagine how big it is that a mechanical machine is doing what a human does.
0:43:59 Yeah.
0:44:01 That it talks to you.
0:44:02 It talks to you like a person.
0:44:09 In fact, a professor who reads this article writes to Edison and basically says, like, Mr. Edison, I’m sure you’re an honorable man.
0:44:15 You need to correct this article because it makes it sound like you have a machine that can record sound and play it back.
0:44:18 And surely, as we all know, that is not possible.
0:44:20 It’s the kind of thing you’d see at a carnival in the day, right?
0:44:25 The box that speaks, and it’s a small child or something hidden inside the box.
0:44:26 A child puts your nickel in the box.
0:44:27 A bunch of hokum.
0:44:30 But, you know, it was magic.
0:44:30 I mean, it was magic.
0:44:31 It was magic.
0:44:31 It was magic.
0:44:36 He takes it down to Washington, D.C. at this big, like, scientific meeting.
0:44:42 And so many people want to hear it that they actually have to take the doors off the hinges of the room where he’s displaying it.
0:44:49 While he’s down there, the White House, he hears that the president wants to see his new machine.
0:44:50 Pop quiz, Robert.
0:44:53 Who was the president in 1877-78?
0:44:54 Garfield?
0:44:57 Rutherford B. Hayes.
0:44:58 Oh, classic.
0:44:58 I wouldn’t have got it.
0:44:59 Classic.
0:45:00 Lake Huron.
0:45:01 Rutherford B. Hayes.
0:45:02 The things you don’t know.
0:45:03 The things I didn’t know.
0:45:05 And Rutherford B. Hayes loves the phonograph.
0:45:06 Of course.
0:45:10 He keeps Edison at the White House, like, till after midnight, playing with this incredible thing.
0:45:21 And this is the moment when Edison goes from being, you know, inventor known in the telegraph business to being a celebrity.
0:45:25 This is the moment when he becomes known as the wizard of Menlo Park.
0:45:27 Because this is a leap in technology.
0:45:31 It’s not just a little extra something to make telegraph operators more money.
0:45:34 This wasn’t just the front page of Telegraph Weekly.
0:45:37 This is the front page of the New York world.
0:45:37 Yeah.
0:45:43 And, you know, I think there’s something, something about the human voice is important here.
0:45:44 Oh, interesting.
0:45:50 Like, you know, obviously there had been portraits and people had had their writings, but the voice is connected to the breath, right?
0:45:51 It is ephemeral.
0:45:52 It dies with you.
0:46:04 And, like, immediately when this comes out, people are thinking about, like, oh, this machine is going to let people talk to us after they die, as if they’re talking to us from beyond the grave.
0:46:06 This is, it’s almost supernatural.
0:46:10 So how does he take something that is magic and make money off of it?
0:46:11 This is a great question.
0:46:19 So he is not yet to the point where they can manufacture these at any kind of scale and sell them for a profit.
0:46:21 That’s the obvious thing you would do.
0:46:21 Yeah.
0:46:28 But the sort of minimum viable product version of it, they just got a couple of phonographs.
0:46:37 They rent out rooms, sell tickets, and people pay to come and hear somebody, like, record themselves singing and then play it back.
0:46:39 I would totally pay that nickel.
0:46:40 You would pay it today.
0:46:41 I would probably pay it today.
0:46:42 I probably did.
0:46:43 I probably did.
0:46:43 Was there something in Brooklyn?
0:46:44 Yes.
0:46:48 So, obviously, this is just kind of a stalling maneuver, right?
0:46:51 This is just what they’re doing until the business gets up and running.
0:46:54 And there are investors in the Edison Speaking Phonograph Company.
0:46:58 And they’re like, okay, Edison, let’s get to scale here.
0:47:00 Let’s figure out how to manufacture this.
0:47:05 And it turns out this is not Edison’s thing.
0:47:12 Edison’s thing is not taking his genius invention and operationalizing it, building the factory to build it.
0:47:15 You know, he has his invention factory.
0:47:22 He starts working on the telescopophone, his big idea for how people on, like, whatever hilltops a mile apart can talk to each other.
0:47:23 It’s amazing, right?
0:47:31 He doesn’t want to be in the business of, like, hiring orchestras and pressing, like, music and distributing this through music stores.
0:47:33 I mean, that’s just like being a businessman.
0:47:33 Yeah.
0:47:35 That’s not coming up with cool stuff all the time.
0:47:37 Yeah, that’s not his thing.
0:47:41 But it does mean he leaves the phonograph by the wayside for years.
0:47:50 And several years later, Alexander Graham Bell, him again, actually improves on Edison’s idea for the phonograph, brings it to market.
0:47:51 And…
0:47:52 This is the wax cylinder?
0:47:56 Yeah, he eventually, Alexander Graham Bell is eventually the one who comes up with the wax cylinder, yes.
0:48:03 And that does inspire Edison many years later to sort of follow, right, to chase Alexander Graham Bell.
0:48:10 And Edison does wind up in the phonograph business, but he’s always behind, ironically, given that he invented it.
0:48:13 Like his other inventions, he’s much less clearly the inventor, the ones that are coming.
0:48:16 But this one is him unambiguously.
0:48:22 And yet, and yet, he never dominates the industry, as arguably he should have.
0:48:29 And then finally, in 1929, two years before he dies, he just gets out of the phonograph business altogether, gives up.
0:48:31 He’s got bigger things.
0:48:33 So what do we make of this story, Jacob?
0:48:38 At the very beginning, we promised that Edison wasn’t just an inventor.
0:48:39 He’s an entrepreneur.
0:48:40 He’s a businessman.
0:48:41 Are you making fun of us?
0:48:42 Are you making fun of us?
0:48:44 I am making fun of our actual episode.
0:48:49 But so far, he doesn’t seem to be squeezing every last dime.
0:48:52 He doesn’t seem to have that ruthless businessman in him.
0:48:53 Yeah.
0:48:54 No, that’s true.
0:48:57 You definitely would not call him a profit maximizer, right?
0:49:09 He sort of reminds me of this type of founder you see with startups now, where they’re like brilliant and driven, and they create this very innovative company and get it going.
0:49:15 And then, like, a year or two in, somebody from the, you know, venture capital firm takes him into a back room.
0:49:16 Gray hair.
0:49:17 Yeah.
0:49:18 The gray hair comes in.
0:49:20 Listen, we love you.
0:49:22 You’ve done a great job getting this company off the ground.
0:49:29 But now it’s time to bring in, I’m not going to call him a grown-up, but it’s bring in somebody who’s more into operations, right?
0:49:30 Edison is kind of like that founder.
0:49:33 He could have been the greatest telegraph operator in the world.
0:49:37 He could have been the greatest telegraph maximizer in the world.
0:49:44 He could have been the phonograph magnet and run orchestras around the country and recorded them and sold them all, the first David Geffen.
0:49:50 And maybe he knows himself well enough to know that he has a lot of different interests, right?
0:49:54 He’s almost like, I wouldn’t say scatterbrained, because that seems like an insult.
0:49:58 It’s like things are just coming constantly into his head, you know?
0:50:01 At one moment, he’s showing a phonograph to the president of the United States.
0:50:12 But as he’s showing the phonograph, he’s probably thinking, you know, what if you had a giant tube on top of a mountain that you could yell at other mountains with other tubes?
0:50:14 And Rutherford B. Hayes is like, what?
0:50:15 What are you talking about?
0:50:16 I just want to see the phonograph.
0:50:18 You’ve already done the thing, right?
0:50:21 But that was an actual thing he wanted to do, right?
0:50:21 Yeah.
0:50:22 Yeah.
0:50:31 If he had been this sort of more narrow-minded profit maximizer, he probably would have got stuck at like a sort of local maximum, right?
0:50:34 Like, maybe he would have stopped at the phonograph and be like, I’m famous.
0:50:36 I’m the phonograph guy.
0:50:38 I’m going to be the phonograph king now.
0:50:43 But this is clearly not what Edison had set out to do, right?
0:50:52 He had set out to create an invention factory, a place where he can chase his curiosity, a place where he has all the equipment he needs and he has this team,
0:50:57 and a place, crucially, where he can keep coming up with big ideas one after another.
0:50:58 And he is going to succeed at that.
0:50:58 Yeah.
0:51:02 Inventing the phonograph for most people would have been the big thing.
0:51:07 But one great product is fine.
0:51:11 But transforming a whole system, right?
0:51:20 Transformative technology, the kind of technology that makes everything change, that’s what’s about to come.
0:51:25 We should thank Thomas Edison for his scatterbrain nature.
0:51:27 Yeah, and for his ambition, right?
0:51:29 His ambition was not to be the phonograph king.
0:51:31 It was to invent greater and greater things.
0:51:39 And really, interestingly, like, his whole life he keeps thinking, the next thing I invent is going to be even bigger.
0:51:42 He keeps thinking that even to the point where he’s wrong, right?
0:51:44 Because that’s just who he is.
0:51:48 He keeps trying to invent bigger and better things.
0:52:04 Next time on Business History, Thomas Alva Edison, age 30 or so, he’s still so young, gets bored with the phonograph and builds the first big electric grid in the history of the world and reveals that the great inventor has a fatal flaw.
0:52:07 He falls too in love with his products.
0:52:10 Our showrunner is Ryan Dilley.
0:52:12 Our producer is Gabriel Hunter-Chang.
0:52:14 And our engineer is Sarah Bruguere.
0:52:15 I’m Jacob Goldstein.
0:52:16 I’m Robert Smith.
0:52:20 We’ll be back next week with another episode of Business History, a show about the history of business.
0:52:26 On Masters of Scale, iconic leaders reveal how they’ve beaten the odds.
0:52:30 Asking really strong questions is a superpower.
0:52:35 You want to show up with something radically different and how they’ve grown companies to incredible heights.
0:52:38 The greatest rewards always come from the greatest risks.
0:52:39 That’s hit the gas.
0:52:43 Airbnb, Zillow, Microsoft, Liquid Death and more.
0:52:46 Hear from the founders who’ve changed the game.
0:52:48 It’s anything but business as usual.
0:52:55 Find Masters of Scale on Apple Podcasts, Spotify, YouTube or wherever else you get podcasts.
0:53:01 This is an iHeart Podcast.
What’s Your Problem? host Jacob Goldstein has a new show: Business History.
How did Hitler’s favorite car become synonymous with hippies? What got Thomas Edison tangled up with the electric chair? Did someone murder the guy who invented the movies? On Business History, Jacob and fellow former Planet Money host Robert Smith examine the surprising stories of businesses big and small and find out what you can learn from those who founded them.
In this episode: The inventor that transformed America and the world. Thomas Alva Edison registered over one thousand patents before he died in 1931—and we can thank him for advances in electric power, communications technology, music recording and even the movies. But his biggest breakthrough doesn’t get nearly enough attention. In many ways, Edison invented modern inventing. Jacob and Robert they trace the life story of a scrappy young boy with bad hearing who almost singlehandedly invented R&D. This is the first of a three part series on Edison—if you want to hear the full series, ad-free, right now, join Pushkin+ on the Business History show page on Apple Podcasts or at pushkin.fm/plus.
Find Business History (00:10) on Apple Podcasts, Spotify, YouTube, or wherever you get podcasts.
See omnystudio.com/listener for privacy information.
Leave a Reply
You must be logged in to post a comment.