Founders - #267 Thomas Edison

Starting point is 00:00:00 There were other notable American inventors in his time, but they were more usually lonely, troubled souls, and his personality outshone theirs. By 1929, two whole generations of Americans had grown accustomed to watching the progress of this self-educated man who worked in a laboratory that had its windows virtually open to all of the world. He had known how to dramatize his inventions. He had known how to gather interest, faith, and hope in the success of his projects. He typified the independent, lone-handed inventor of the 19th century's heroic age of invention. He had begun his work in the age of gas and kerosene lamps and was leaving it with the cities throughout the world lit up with his lights and music and voices sounding everywhere. That is an excerpt from the book I'm going to talk to you about today, which is a 60-year-old biography of Thomas Edison, originally published in 1959. It is Edison, a biography written by Matthew Josephson.

Starting point is 00:01:06 Okay, so I want to tell you why I started with that paragraph in particular. When I read that paragraph towards the end of the book, it made me think of Steve Jobs' quote, that we're here to put a dent in the universe. That paragraph describes the dent that Thomas Edison put into the universe. And so the way I think about the conversation that you and I are about to have, it's really a continuation of the conversation that I think started back on episode 263. To me, these last, I guess this is the fifth episode in a series that I think are heavily related to each other.

Starting point is 00:01:37 So it starts back on 263 and 264 with Edwin Land, the founder of Polaroid, then 265, Steve Jobs, and 266, Henry Ford. And the reason to mearoid, then 265 Steve Jobs and 266 Henry Ford. And the reason to me it's just one conversation that is appearing over five different episodes is because they all admired and studied each other. So Edwin Land studied Thomas Edison, Alexander Rumbel, who's also in this book, but I'm not going to talk about today, and Henry Ford. Steve Jobs is the one that turned me on to all of them. So Steve Jobs talked about how Edwin Land was his hero.

Starting point is 00:02:05 Jobs also talked about what he learned from studying Henry Ford and Edison. And then you get to Henry Ford and Henry Ford essentially idolized. He winds up becoming almost best friends with Edison, who's like two decades older than him. But he idolized Edison. And the reason I'm bringing that to your attention now is because Edison to me is different than Land and Jobs and Ford. So when you and I are going through these books, when you're listening to this podcast, one of the main points is like, okay, this is how they did their life, how they built their company. What are the ideas? Like, how can

Starting point is 00:02:35 I let those ideas influence my life? And that is what I was thinking of as I was working through. This is a 500 page biography. It took me over 25 hours to read and actually ingest before I could sit down and talk to you about this. And so as I'm doing so, I like Edison. Like he is wicked smart, really funny, and he gave all of his life and his career and the one that Henry Ford, Steve Jobs and Edwin Land used, I'm choosing Ford, Jobs and Land. Because I think what they did that Edison did not was focus. And this is not a criticism of Edison. I don't think he could. It was clear, like go back to what Charlie Munger says, you've got to follow your natural drift. Edison's natural drift was that he was curious about a lot of things.

Starting point is 00:03:24 He wanted to work on a bunch of different things at once where if you go back and listen to the last few podcasts once ford had one idea right he's like i just want to make an affordable car for the everyman and he dedicated his entire life to that once steve jobs making starts making products his same thing he's like i just want to make insanely great products and then i want to build a world-class organization that outlives me. Edwin Land literally invented the industry that he worked in in instant photography and dominated that industry for four decades. And I want to give you another example. I was just reading yesterday this fantastic newsletter. It's written by my friend Frederick. I'll link to it below. I feel a little funny linking to it below because at the beginning he talks about me, but that's not why I'm linking

Starting point is 00:04:01 to it. The entire thing is worth reading, But this one section, Frederick does a fantastic job of like weaving all these different ideas together. And so in his post, he has this story that Warren Buffett is relaying. And Buffett is talking about being at dinner, or I guess drinks maybe, with Bill Gates and Bill Gates' dad. And this is what Buffett says. Then at dinner, Bill Gates Sr. posed the question to the table. What factor did people feel was the most important in getting to where they've gotten in life? And I said, Buffett saying, focus. And Bill said the same thing. And if you think about just from that one post, the last five weeks of the conversation you and I have been having together, we have Bill Gates, Warren Buffett, Henry Ford, Steve Jobs, and Edwin Land all saying the exact same thing.

Starting point is 00:04:47 Focus. A simple thing to say and a nearly impossible thing to do over the long term. So with that, let me jump into the book. I want to read a description of some of the ancestors of the Edison family, which I found fantastic because they're a family full of misfits. This one trait is probably what I admire about Thomas Edison the most. It said, they were a simple, hardy, pioneering people. Most of them were short on education. The family was full of dissidents and eccentrics. A marked family trait distinguished them. They were strong individualists, often naysayers and independent minded to the point of obstinacy.

Starting point is 00:05:26 Obstinacy is just a fancy word for stubborn. And so when the author says there, hey, they're a family full of dissidents, he means that literally. There's a fantastic story. Edison's dad had to literally run for his life. And if you think about this, this changed the entire trajectory of his son's life. So Edison's dad was part of this insurrection movement where they were literally trying to overthrow the royal Canadian government. And so his dad's name is Sam. It says Sam Edison was publicly denounced as a leading figure among the would-be revolutionists. Before dawn, Sam was off through the woods, running like a deer towards the United States border that was more than 80 miles away. He was hotly pursued by the King's men. I don't know why that line made me laugh. Just the idea of being pursued by the King's men. By performing

Starting point is 00:06:11 the incredible feat of running for two and a half days and stopping only for brief intervals of rest and food, he managed to reach the United States. Why is that important? Why am I reading this section to you? This line explains that. It was by this stroke of chance that Thomas Edison happened to be born in the heart of the American Republic. That line is even more important because not only was he born in America, but he's born at a time where in America, at this point in history, they idolized the lone inventor. Edison's lifelong fetishization and grasping for as many patents as he could possibly gather was not an accident. It was heavily influenced by this point in history they happen to live in, where people thought that was their way to freedom and wealth.

Starting point is 00:06:52 Then we fast forward to something that happens to Edison when he's six years old that he remembers for the rest of his life. And so this is how the author describes this event. There's a bunch of people. They were gathering in the village square. What were they gathering to see? Sam Edison was whipping his youngest son. A public chastisement carried out in anger in the presence of the neighbors and their children. This is a crazy sentence right here. Sam Edison had advertised the event in advance. So it says a public chastisement carried

Starting point is 00:07:23 out in cold anger in the presence of the neighbors and their children was something drastic. Edison had set a little fire inside the barn, quote, just to see what it would do. He's six years old. The public thrashing he received, this is why I'm reading this to you. The public thrashing he received stamped itself on the boy's mind and memory. For Thomas described it all 60 years later when he thought back upon his boyhood. From his description, we have a picture of the boy receiving blow after blow and early in life learning that there was inexplicable cruelty and pain in this world. That part especially stood out to me because this happened to me as well. I was 10 years old and I lit a newspaper on fire in the house and

Starting point is 00:08:13 my dad beat the shit out of me. And I knew it had to be bad than the other times he beat the shit out of me because my mom was trying to get him to stop. And that's actually an important point because not only do you see it in the books, also in your own life because my daughter is the same age I was when that happened to me and I'm about the age my dad was when he did that. And I could never imagine laying a finger on her. Never have, never would. And so the important point is like I understand it happened in their family and up and down the family tree and all that other stuff but it's okay. It only takes one person to be like, no, that stops here. And I think the idea that one person can not only change the world around them, but also change the relationships that families have is exhilarating to me.

Starting point is 00:08:50 So I want to move forward. This is very bizarre. This is one of the things I like about Edison, right? Where he's obsessed with Jesus, constantly asking questions, constantly getting in trouble, as we just saw. Very mischievous, very independent-minded, very hard to control. In fact, on this page where I'm about to read to you, it says he was very headstrong and willful when you could not have his way.

Starting point is 00:09:08 Early signs that he was meant to be an entrepreneur, right? But what was fascinating is that he had this life, he just knew he's like, I want to invent things. And that's kind of bizarre when I'm going to read the description of the first inventor that he ever meets. And so there's this guy says this, this eccentric person named Sam Winchester. Often Edison would be found with his nose pressed against the back window of Winchester's shop, watching the strange things being done there. The mysterious Winchester was constructing a passenger balloon. So he fills a balloon by hydrogen and he's trying to fly in a hydrogen balloon. And the reason I think this is so strange is because, again,

Starting point is 00:09:45 this is the first inventor that a young Edison sees. What's about to happen to this guy is not going to be good. And Edison's like, yep, I want to do that. And so it says he had a few attempts at flight, didn't work out. But it says then during the next trial, Mr. Winchester managed to ascend into the air, then was wafted slowly in the direction of Lake Erie, never to be seen again. And to think Edison's like, yeah, I want to be an inventor after seeing this guy disappear into the sky. So Edison's constantly getting in trouble. He's not, people, like he can't even last in school.

Starting point is 00:10:14 So he gets in so much trouble that he has to be homeschooled. But his mom does something that's so smart and intelligent here. And so she's going to be his teacher. So I'm going to describe her method of teaching, and then Edison's going to tell you why this i'm going to describe her method of teaching and then edison's going to tell you why this is so important that she did this for him she literally changed his life nancy edison had superior taste believing that her son uh was far from being dull-witted so what they're talking about is the fact that he didn't he hated rote memorization he was very

Starting point is 00:10:39 curious he wanted to basically have like self-directed learning his teachers at the time like think about what kind of school he could possibly be in you know this mid-1800s and i think they're in rural ohio but basically his teachers misinterpreted his own like will for self-directed learning as you know maybe this boy's stupid so her his mom's like no i i know my son i think he's 12 at this time uh and she's like nope i'm pretty sure he's not stupid. So it says she believed that her son was far from dull-witted, and she had unusual reasoning powers. She read to him from such books as The Decline and Fall of the Roman Empire, The History of England, and then from literary classics ranging from Shakespeare to Charles Dickens. He grew fascinated. Oh, he's

Starting point is 00:11:21 actually nine. He's even younger than I thought. He grew fascinated and at age nine was inspired to read such books himself. He became a very rapid reader. This is one of my favorite things about Edison. Later on, I'm going to have a highlight for you where he's not making a lot of money. I think he has to buy a subscription to a library, right? And I think that the subscription to the library equates to like two day, two full days of work. And there's no such thing as an eight hour day at this point in history. He's working like from the time the sun rises to coming back like 10 in 10 at night. And he's like 11. And so when he goes to the library, it's not like, OK, I'll just pick out some books. He reads the entire library, every book, all of them.

Starting point is 00:12:03 It's incredible. So I'll get there in a minute. She brought another book on physical science, which was called The School of Natural Philosophy. This book changes his... He's got a few books that change his life. This is the first one. Which described and illustrated various scientific experiments that could be performed at home. The boy had truly caught fire. He read and tested out every experiment in the book.

Starting point is 00:12:24 All of his pocket money went for chemicals purchased at the pharmacist for experiments. Thus his mother, and this is the important part, the reason I'm reading this entire section to you, thus his mother had accomplished that which all truly great teachers do for their pupils. She brought him to the stage of learning things for himself, learning that which most amused and interested him, and she encouraged him to go in on that path. It was the very best thing she could have done for this singular boy. Amen at that.

Starting point is 00:12:52 And he sums this up for you and I. She let me follow my bent. So at one point in childhood, his father had a profit for his business. There was a lot of ups and downs. This is now the down part where his father's not doing well. I think he might have even lost the business. So this is where he starts work at 12 years old. This is actually going to change his life. So, okay. He's going to actually save a young, he's going to work in the railroad. He's going to work on a train. And the reason,

Starting point is 00:13:17 and I'll get to this in a minute, but the reason this job that he gets at 12 is going to change his life is because he's going to save a young boy's life. I think the kid was like three years old. He was like on a train track and Edison winds up grabbing him before he could be hit by a train. And in return, I think it's a station master's son, if I'm remembering this correctly, the station master is like, how can I ever repay you? Thank you so much. And he teaches Edison how to operate a telegraph. And why is that important? Because Edison's first experiments were how to make a telegraph better. This may sound stupid to you and I, or like silly to you and I, but at this point in history, the telegraph

Starting point is 00:13:54 is the leading edge of communication technology in the entire world. The best description, in case you don't know what it is, it's just a point-to-point text messaging system. So instead of sending a letter by horse that gets there three months later, and then maybe you get a response six months after that, you can send a message immediately. If you were a young person interested in the cutting edge of technology at this point in history, you would have worked on the telegraph. So we'll get to that in a minute. He learned that there would be a job on the daily train for a newsboy. So he's selling newspapers, and then he's selling food and sweets to the passengers. He was only 12. And this is the beginning of these extremely long hours at work that he maintains his entire life. He would leave at dawn and the young boy would return to home at

Starting point is 00:14:33 10 or 11 at night. And so this is the first example of a young Edison's relentless resourcefulness. There's all these times where like he's riding a train all day long. He has to get off and switch trains. And sometimes there's like this long layover, right? And so what does he do? He's constantly into in and out of Detroit. And he realizes, hey, I have a several hour layover every day in Detroit. And there's this fantastic library. And this is what I was referencing to you earlier. In Detroit, during the hours of layover, he found his way to the public library. This is Edison describing this point in his life. My refuge was the Detroit Public Library. I started with the first book on the bottom shelf and went through the lot one by one. I did not read a few books. I read the library. And so when I got to this section, it made me

Starting point is 00:15:15 think of this, what I've told you over and over again. I hope you've watched it. I hope you've watched it five times by now. What I feel is the best talk on YouTube for entrepreneurs is by the investor Bill Gurley for entrepreneurs is by the investor Bill Gurley. It is called Running Down a Dream, How to Succeed and Thrive in a Career You Love. I will leave a link in the show notes. Anytime I say, hey, there's something in the show notes, it's in the show notes in your podcast player. It's also available at founderspodcast.com. I will leave a link for the full video in the show notes. I will also leave Blake Robbins' incredible notes on Bill Gurley talk. And I'm going to read from those notes

Starting point is 00:15:46 right now. This is the section that came to mind when I read this part. Bill Gurley says, greatness isn't random. It is earned. If you're going to research something, this is your lucky day. Information is freely available on the internet. That's the good news. The bad news, and this is why I think this video is so important for entrepreneurs and founders to watch and listen to over and over again, because it just holds you to a higher standard. He goes into great detail how bad people want. There's five examples how bad these people want the dreams that they're going after. And this talk also helped shape my approach to founders.

Starting point is 00:16:21 So let me start this part over. Greatness isn't random. It is earned. If you're going to research something, this is your lucky day. Information is freely available on the internet. That's the good news. The bad news is now you have zero excuse for not being the most knowledgeable in any subject you want because it's right there at your fingertips. That is something Thomas Edison knew instinctively. He is 12 years old? Yeah, 12 years old this time.

Starting point is 00:16:46 And he's like, all right, cool. I got access to the library. I'll read every single book. That's something he does throughout his entire life. I have a bunch of, I'm pretty sure I'll get to him. I have a bunch of highlights. He just does this over and over again. And when, you know, he's studying a million different fields of study.

Starting point is 00:17:00 And he's just like, okay, where can I start? He was extremely big on experimenting. But before he experimented, he would just, you would just see him laying on the floor with like 50 books on the subject. He's like, I'll just read everything. So let's go back to this fact that he's on this train. He's got this job. Now, it's a few years later. And again, resourcefulness. He's like, well, I'm selling somebody else's newspaper for like a quarter. Why don't I just make my own? So he says he undertook the venture of editing, printing and selling a local newspaper which was produced in his baggage car he sold it for eight cents a copy and had a circulation of about 400 people it was said to have been the first newspaper in the

Starting point is 00:17:32 world that was published on a train so that was a good idea it's like okay instead of selling somebody else's product i can just make my own here's the bad idea he allowed another person to influence the direction so he starts printing like personal stories of people in the industry because his friend convinced him that it would sell more. The problem is Edison's like a 15-year-old country boy. He doesn't know too much about human nature yet. And so this is what happens to him. One of these candid little stories touched on a local figure. This proved to be excessively candid.

Starting point is 00:18:01 And so the person he's writing about did not like the fact that his business was put for everybody to read. And he says, I'm going to find this Edison kid and I'm going to extract my vengeance. So now this is a grown man, a grown adult attacking and beating the hell out of a 15 year old kid. One day, the man cited the young editor near the docks. He laid violent hands on him and then threw him into the river. Shortly after, Edison closed down that operation. This is the event that changes his life that I referenced earlier. Edison noticed that the three-year-old son of the station master was playing right on the main track in the path of the car. He dashed towards the child and snatched him up in time to avoid the car.

Starting point is 00:18:40 The guy's name was McKenzie. McKenzie was filled with such gratitude and expressed a desire to repay him in any manner within his power. He had noticed that Edison hung over his telegraph table constantly. He offered to teach the boy to be an operator. That is really important because even if he fell back and he made jokes about his life, obviously later on he's much wealthier than he is now. But he's like, oh, worst case scenario, I can always be a telegraph operator for 75 bucks a month. It's almost akin to being like a programmer today. So it says within him, within

Starting point is 00:19:06 Edison, that is, there is a passionate curiosity to learn certain things. So what they're talking about is like as soon as they start teaching him the telegraph, you had a hard time getting him up from it. He says he works alone at his experiments for long hours and enjoys himself heartily. And so most of these telegraph operators are young men. They really, the telegraph operators were the digital nomads of their day. So it says Edison could find work almost anywhere because the need for telegraphers was so urgent during the Civil War. These were his wandering years that began when he was only 16. In those days, the strange new tribe of telegraphers were generally young men noted for the nomadic or bohemian habits. They would travel light, pitching their tents for a brief season in one place

Starting point is 00:19:47 and then journeying on to another that seemed to offer greater pastures. A few steady young operators rose from the ranks to become industrial magnates like Andrew Carnegie, because that's one of the first jobs Carnegie had. I think he was around 12 at the time, too. So not only are they making good money for their age and their time, their trade is in high demand. And also they didn't really need much because they just hop a train. And in many cases, they were like trying to sleep in the offices where their telegraphs were. So that's another trait that Edison would use his entire life. He would just fall asleep

Starting point is 00:20:20 wherever, whether he was in New York trying to build out the electrical system, right? Or he's in Menlo Park. He'd just sleep where, like like you go to the corner and just fall asleep fall asleep in a chair on a table he just didn't really care so for the next few years he becomes obsessed with the telegraph this is the electric telegraph so remember there is no electrical lighting before him this is like the cutting edge of electric like if you have an electrical industry it's manifested most pronounced like it's most pronounced manifestation is in the telegraph. And so he's just sitting there constantly getting better at it, constantly thinking of ways to improve the telegraph. The reason that it's important is because what he's focused on now leads him to everything else that happens in his life after.

Starting point is 00:20:55 The germs of many ideas and strategies perfected by him in later years were implanted in his mind when he worked at the telegraph. He described this phase of his life afterward. His mind was in a tumult, he said. It was besieged by all sorts of ideas and schemes. The future potential of electricity obsessed him day and night. It was then that he dared to hope that he would become an inventor. And the next step in his life

Starting point is 00:21:22 that was hugely important was he discovers his hero. This is when he discovers his hero, Michael Faraday. And so Edison's fired up about being an inventor, but at this point he still has a job. And the problem is, like, he kind of neglects his duties to follow whatever he's most excited about at this point. Though he tended to be reserved at this point in his life, he could become excited and vehement in expounding his novel schemes.

Starting point is 00:21:43 He would hold forth with undeniable eloquence on every conceivable subject, excepting that relating to the prompt dispatch of messages that the company had on file for transmission. So that's one of his coworkers saying, hey, this guy knew a lot of stuff. He would speak passionately about it, but he would neglect his work. And if he kept doing that, he's going to get fired. And it says his job to him was a distasteful bondage. It was at this time that he bought a secondhand copy of Michael Faraday's book, Experimental Researches in Electricity. Edison said this first encounter with the great English scientist journals on his experiments was one of the decisive events of his life. What I wrote down here, we've seen this over and over again. Not only did Edwin Land also, Michael Faraday was one of his heroes and somebody he studied

Starting point is 00:22:28 immensely, but there's always like a book that changes everything. So in Land's case, it's that book on light by the physicist Wood that he would keep underneath his pillow and read like the Bible, he said. But what really popped to mind when I got to this point was what Buffett said, that the day that he discovered, Warren Buffett said the day he discovered Ben Graham's book changed his life the exact same thing is happening in Edison's life right now and I think he's around 19 or 20 years old so it says uh this was one of the most decisive events of his life this is why here at last was the lucid exposition of Faraday's long searches in the field which most fascinated young Edison

Starting point is 00:23:04 and it was steeped in the spirit of truthosition of Faraday's long searches in the field which most fascinated the young Edison. And it was steeped in the spirit of truthfulness and humility before nature that was always in Faraday's character. His explanations were simple, Edison said. And then he starts seeing parallels between Faraday's life and his life. He's like, oh, okay, there's another me out there. It's very comforting. Michael Faraday had been poor, like Edison. And though virtually without schooling, had taught himself everything too, like Edison. And so check out Edison's insane schedule. He purposely picks the night shift because less messages come in overnight and it

Starting point is 00:23:35 gives him more time to learn. So it says, though he'd worked to an early hour in the morning at the telegraph office, Edison began reading Faraday's book when he returned to his room at 4 a.m. and continued throughout the day that followed, so that when he went back to the telegraph office, Edison began reading Faraday's book when he returned to his room at 4 a.m. and continued throughout the day that followed, so that when he went back to the telegraph office, he had not slept. He was filled with determination to learn all that he could. Two sentences here that give you an idea of what's happening. His brain was on fire, and then this is a fantastic quote. He loves the word hustle, and he loves hustlers. He likes hustling.

Starting point is 00:24:07 He just repeats it over and over again in the book. He's hilarious. I've got so much to do and life is so short. I'm going to hustle. So this is where he gets the inspiration to become an entrepreneur. He is rather crazy for doing this because it's one thing, okay, I'm going to start a business. There's a demand for the product. He's like, I got to invent the product I'm going to sell and I haven't invented it yet.

Starting point is 00:24:25 So to describe why this was important, I'm actually going to read from a different book. So this is technically the fourth book on Edison that I've read. The first one was The Wizard of Menlo Park. I'll leave all the episode numbers in the show notes for you. The Wizard of Menlo Park. Then I read Empires of Light, which is about the war of the currents between Edison, Tesla, and Westinghouse. That's episode 83. And then I read the book Vagabonds, which is about the relationship between Henry Ford and Thomas Edison.

Starting point is 00:24:54 And that's episode 190. But this excerpt that I'm about to read to you comes from the book The Wizard of Menlo Park. I think this might have been like the second or third episode I ever did of Founders. And really, I think it describes just what was important to Edison. And this is the step one in chasing after this dream. Having one's own shop, working on projects of one's own choosing, making enough money today so one could do the same tomorrow. These were the modest goals of Thomas Edison when he struck out on his own as full-time inventor and manufacturer. The grand goal was nothing other than enjoying the autonomy of entrepreneur and forestalling a return to the

Starting point is 00:25:32 servitude of employee. And so his first invention flops. I'm going to skip over that because I thought this was just fascinating. And this leads to so many opportunities after this. And it's a great example of that maxim that you and I always talk about, that history doesn't repeat, human nature does. And so it says, during the Gilded Age, after the Civil War, speculators in gold and securities on all the financial exchangers

Starting point is 00:25:53 were, of course, greatly dependent on the telegraph. Market quotations were rushed by wire to distant cities and to newspapers all over the world. And so he's identified a willing party that would pay for his invention, which he's like, hey, there's these things called stock tickers. They already exist. I guess I need to pause here too because this is another maxim that you and I always talk about, especially at the beginning of your career.

Starting point is 00:26:15 Imitation precedes creation. We are all going to build on the work of the people that came before us. In many cases, the first few iterations of our product are going to be imitations of them. As we understand and we go along and we learn more and we understand more of what we're doing, then we get to actual creation. And that's exactly what happens in Edison's career. The very beginning, he's like, okay, there's already stock tickers. Let me just take an existing product and make it a little better. Because there's clearly the people that

Starting point is 00:26:38 are trying to sell gold or speculate in all kinds of financial instruments. If I can get their information faster or better, they will pay me for the ability to do so. That was true in the 1870s when this is happening, and it's still true today. And so that's the first reason I'm reading this to you. The second reason is because he gets taken advantage. This is what I meant about, I'm not going to call him a cautionary tale by any means, but if you looked at Ford and land and jobs, they always had control over what they did. Edison was so scatterbrained, he never did. And so he gets taken advantage of later on by people like Jay Gold, JP Morgan. I mean, it's not really his fault. I'm not like, I don't want you to think I'm like judging this guy

Starting point is 00:27:13 for any means. Like imagine being in your twenties. I think he was 22 when Jay Gold buys his patents. Like, come on. Undoubtedly, Jay Gold would have tied me up in pretzels if that was me. And when I was 22, he'd still do that to me today. You're talking about one of the most sophisticated investors and entrepreneurs to ever walk the planet. So let me finish this before I get ahead of myself. So it says Edison conceived a number of refinements on the stock ticker, which he incorporated in his own model. This was his second invention, and he acquired another backer who had lent him some money. He was in his early 20s.

Starting point is 00:27:42 Edison was a whirlwind of activity, sleeping little and working all hours of the day and night. His patent rights were sold off to a large telegraph company. And thanks due to his want of business experience, meaning he didn't know what he was doing, Edison received almost nothing for his work on this venture. That is why I'm reading this to you. The early career of Edison is him constantly linking up with bad partners. Go back to what I can't remember if it was Warren Buffett or Charlie Munger said, you can't make a good deal with a bad person. And one thing is clear from history, you should not expect other people to not act within their own interests. And so in many cases, these are much older men. They see like this young country bumpkin. He may be a great inventor, but he doesn't know much of anything else. And so they're like,

Starting point is 00:28:22 okay, we can take advantage of this guy. And that happens over and over and over again. So I think the warning there is just be very, very careful about who you're letting into like your, your work and who you're partnering up with. Because after this happens, he's left with no money. So he's in Boston. Now he's got to go to New York. He can't raise money for anything. And what's crazy is like, you find somebody that may be maybe they're going to make the point here. Like there's very few people on the planet that knew more about telegraph, like the science and technology telegraph telegraphs than Edison did at this point. Yet he literally has to borrow money like he has no money. He's almost homeless.

Starting point is 00:28:57 So it says the moment was a desperate run. He was deep in debt. He seemed to have gone from one failure to another step by step. And now his credit in Boston was virtually ruined. He arrived the next morning in New York with not a coin left in his pocket. And this is why there's such a disconnect between the knowledge and the talent that he has in his financial station in life at this point. There were not even 10 people in America who knew the tricks that he had with currents, relays, and resistances for the telegraph. His mind buzzed with ideas for improvements in electrical communication. He described himself as a fire with no chimney through which his smoke might escape so at this

Starting point is 00:29:47 point edison's 22 no money but to tell all these telegraph people like is very common and all the engineers and everything they kind of know each other and so he goes and seeks out this other guy named pope and pope is working in this company called the gold indicator company and so the gold indicator company is just another company set up. This is really like there's multiple versions of this basic idea in different forms throughout the book. But it's essentially saying that any machine that facilitated or sped up communication concerning this key market assumed immense importance. Remember, this is New York City in the 1950s. By the 1850s, the telegraph was the prime instrument for rapid

Starting point is 00:30:28 financial intelligence. And so that is what this company traffics in. They traffic in rapid financial intelligence. So he just happens to seek out this guy, Pope. Pope was working in this office and he's got great timing because he's going to wind up getting hired at this company that's transmitting valuable information to investors, right? And he gets hired by being immediately useful. The day he shows up, the entire system goes down and Pope, who's the head engineer there, can't figure out what's going on. And so while Pope and the founder of the company are yelling at each other and they're all going crazy, you have all the customers, like they're literally, the customers are like rushing their office. They're like, dude, the thing that you sold us, it's off. It's not working. I need this information. So they're going crazy. And so it

Starting point is 00:31:07 says Edison had been quietly engaged in looking over the machine himself and soon ascertained the cause of the trouble. He managed to convey to them that his belief was that one of the contact springs had broken off and dropped between the two gear wheels, which stopped the whole mechanism. Fix it, fix it, fix it. Be quick for God's sakes. Laws yelled at him. This is the guy that owns the company that's about to hire him. Remember, Edison does not work at his company yet. So he's like yelling. He's like, fix it, fix it, fix it.

Starting point is 00:31:29 So it says within two hours, the gold indicators quotations were being communicated all over the street once again. And so Laws is like, okay, who are you, strange kid? How the hell did you do that? They wind up talking. And then Laws is like, oh, I'm going to hire this guy right away. Laws hired him at once at a larger salary than he had ever received. And so now this guy's got this giant organization that Edison can actually apply his trade to. A fruitful and prosperous period had opened for Edison, who now perfected a whole series of new devices, mainly refinements upon the telegraph.

Starting point is 00:31:58 This instrument was Edison's first great love. This is why I keep bringing it up to you. We cannot understand the invention of the phonograph, the invention of the electric light, the invention in many ways of the early movie industry, and everything else that Edison did without understanding this period of his life. Everything was built upon this. This was Edison's first great love,

Starting point is 00:32:18 the primary invention out of which many other innovations were to flow. I just ran over my own point there. Some of them eventually destined to supplant the Morse's instrument itself. And so they're talking about Samuel Morse, the inventor of the telegraph. Edison, along with Bell, obviously Bell's credited this. Edison's trying to figure out, how can we do a speaking telegraph? That's the way telephones, it's hilarious, that's the way telephones were thought of

Starting point is 00:32:41 at this point in history. It's like, well, a telegraph will transmit text. How can we get it to transmit voice? And if you think about what an early telephone is, really to this day, it's like a speaking telegraph. Now, this part blew my mind. Okay, so you know, or you probably know, I did this podcast on Jay Gold. This is back on episode 258. If you haven't listened to it, you got to listen to it. When you're done listening to this, go listen to that. Why is Jay Gold, why is listening to episode 258 important? Why is studying and reading about Jay Gold important?

Starting point is 00:33:07 Because if you ask Rockefeller who's the best businessman he ever met, he said Jay Gold without hesitation. Cornelius Vanderbilt, who doesn't give out compliments for anything, said Jay Gold was the smartest man in America. And at that time, Vanderbilt was like 40 years older than Gold. You've got to study Jay Gold. The reason this blew my mind is because in that book that I read on gold i'm going to read many more in the future and that podcast i talked about that jay gold became infamous because he tried to corner the gold market i had no idea that the person inside the gold indicators company transmitting all of these quotes on the price of gold the day this is happening was 22-year-old Thomas Edison.

Starting point is 00:33:48 I always say, like, it's amazing how many events in history are kind of interlocked and connected to one another. This is crazy. It says he was an eyewitness to one of the most stirring events in America's financial history. So after the whole, like, market collapses, he goes outside, climbs up on, like, a telephone telephone pole and he's so bewildered because he's got no fight it's like when you have financial markets melting down right he's a 22 year old kid with almost no money i think he's like sleeping at the office or something at this point so he's just looking at these grown men losing their entire life's fortune going crazy and he can kind of just step outside of just kind of like this bemused spectator but that's wild the

Starting point is 00:34:23 day jay gold tries a corn jay gold and fritz fisk is it frisk or fisk i can't remember his part jay I'm not like this bemused spectator. But that's wild. The day Jay Gold tries to corner Jay Gold and Frisk. Is it Frisk or Fisk? I can't remember his part, Jay's name at the moment. It's either Fisk or Frisk. But yeah, the day that happens, Edison's actually the one at the machine. That's remarkable. So there is a telegraph monopoly at this point. It's Western Union.

Starting point is 00:34:41 This is the one Jay Gold is actually going to fight with. And one of the weapons that Gold uses to fight that monopoly is actually patents that Edison they were actually patents granted to Edison but Edison's a freelance inventor at this time so he's selling he'll sell his patents and and his inventions to you know basically the highest bidder I guess per se so he's actually selling something to Western Union at this point. And I just want to bring this up because it's the continuation of this idea that Edison just keeps making more and more improvements to telegraphic stock tickers. And as a result of doing so and keep doing so,

Starting point is 00:35:17 I think this is now two years later or thereabouts, he gets his first big payday. And I thought the description of that was rather funny. And so he's meeting with the people at Western Union. He says, well, young man, the committee would like to settle up the account. How much do you think they are worth? His invention. Edison was uncertain about what to demand. He had thought that he should ask for $5,000. Instead, he said, can you make me an offer? And then the guy from Western Union said, how would $40,000 strike you? And Edison was hilarious because he's describing

Starting point is 00:35:46 this later on. He goes, I felt near fainting. Edison managed to stammer out that the offer seemed fair enough. He gets the money in cash, goes back to his little, he's in a dingy boarding house in Newark, New Jersey. This is just one sentence. This is funny. I had to read to you. He sat up all night, unable to sleep for fear of being murdered for the sake of his great of his great reward. He'd never seen so much money in his life. He's like, oh, somebody's going to kill me for this. So now we fast forward a few years in the story.

Starting point is 00:36:15 He's 26 years old and he makes the mistake and he corrects it later on when he opens up Menlo Park. But he's just like he's like trying to invent. He's trying to be an inventor and a manufacturer at the same time. So eventually he's going to realize, hey, I picked the wrong path and he's going to change course. But I want to bring up how he managed because the way he managed that when he's 26 years old and very, it's very much the way he managed his entire life. And it's why he had a lot of dedicated employees that worked almost their entire lives with them because they didn't work for him. They worked with him.

Starting point is 00:36:41 Edison was as dirty as any other workman. I immediately felt that there was a great deal to him. One of his employees said he was like no other shop boss those men had ever known. He was approachable, and yet in the next breath, he was very severe with them, and he was bent on keeping them, quote-unquote, hustling perpetually. His intuitive powers and his endless curiosity about everything amused and intrigued his co-workers. He showed them an irrepressible enthusiasm like that of a child. He kept his men at work long hours, but he himself would work even longer. He's working on a bunch of different ideas, but the most important idea that's going to come out of this period of his life

Starting point is 00:37:14 is what's called the multiplex telegraphic system. Think about it. It's like a way to send two messages simultaneously. So it essentially takes the existing telegraph machines and makes, it just allows them to send more messages. This is one of the weapons Gould is going to use in his war against Western Union. But it says Edison's method, I want to read this part to you because this is one of his most important inventions.

Starting point is 00:37:36 And it also reminded me of Edwin Land where he's like, he'll just read it all. Like Edwin Land goes and reads every single book on light in the Harvard Library. Then he goes to New York and he reads every single book on light in the New York Public Library. You see the same thing that Edison's doing over and over again. And so it says Edison's methods of investigation were described as requiring complete knowledge of everything that had ever been done before in such a field as automatic telegraphy. Books and periodicals describing all that these other experimenters had done and all these other people had attempted.

Starting point is 00:38:06 And indeed, all records of previous experiments and automatic mechanisms were acquired. And one of his employees is describing Edison at this point. I came in one night and there sat Edison with a pile of chemical books that were five feet high. This is kind of what my house looks like, but they're just biographies of entrepreneurs. He studied them night and day. He ate at his desk and slept in his chair. I don't do this, thank God, because I have a family, but I'm glad I do have a family because I think I would. And so another thing about Edison is like the cautionary tale aspect is I think especially, you know, I know a ton of entrepreneurs. We're obsessive people. And I think

Starting point is 00:38:39 having guardrails on your obsession is necessary because it's very likely that you'll over-optimize. If the history of entrepreneurship is any indicator of such, I think it's highly likely that you'll over-optimize your professional life to the detriment of your personal life. Edison definitely did that. His kids are in this book, and I don't know if I'm going to read this to you later or not, but his kids are in the books, and we didn't know our dad. He didn't spend any time with us, that kind of stuff. And if somebody is smart and is driven as Edison made this mistake, then what's the likelihood that you and I won't?

Starting point is 00:39:11 It's very likely they will. So again, cautionary tale to some element. I came in one night and there sat Edison with a pile of books. It was five feet high. He studied them night and day. He ate at his desk. He slept in his chair. In six weeks, he had gone through all the books, made 2000 experiments, produced a solution that could do the one thing that he wanted. And so this gets the attention of Jay Gold. Gold's a huge supporting character in this book. I think listening to 258, you'll get an idea of Gold. I'm just going to give you a couple of things from him. Jay Gold had taken over the ownership of this other company called the Automatic Telegraph Company,

Starting point is 00:39:46 and he bought the company because he wanted his new telegraphic patents, and this is the instrument that he's going to use to wage war with Western Union. Gold had determined to force his way into the rich telegraphic field. This is very fascinating how he realized it was really important because Gold had a lot of this idea where you can identify an opportunity because you have deep knowledge about one industry and you see that there is an industry developing in parallel to that industry that you know about, so you can kind of get there before anybody else. I don't know if that was very clear.

Starting point is 00:40:15 Let me read this and hopefully it becomes clear. Gold had determined to force its way into the rich telegraphic field. Gold began to build up an independent and competing telegraph system whose real object was to harass and raid Western Union's empire until they'd be forced to pay him his price. By acquiring this company, Gold had also acquired the services of Thomas Edison and the rights to his automatic patents, a powerful pawn in the campaign for the conquest of the nation's telegraph system. Edison, at this point, was completely oblivious to any of this. All he was focused on was trying to make the best invention possible, trying to make the telegraph more functional and hopefully build a business

Starting point is 00:40:48 around that he didn't understand what a lot of these like robber baron characters were doing and so what i was referencing there i thought this was a section i was i was actually confused but gold makes the point later on in the book that as he's developing that it was very common for telegraph lines to be laid next to railroad tracks, but the railroad tracks came first. And so he's heavily invested in railroads and he's noticing this parallel technology shoot up. He's like, oh, I'm going to dominate the railroads. I might as well dominate that too. At one point, Edison describes all the stuff that's happening in his life that he doesn't understand is strange financial warfare, which is a great way to think about it. But he also learns a little bit about that. And we'll get to that in one second on the very next page.

Starting point is 00:41:25 But this is why, like, it's very highly, if you were a young person interested in technology, you'd be doing exactly what Edison was doing at this point. It's like, why would you work on the telegraph? And I've tried to explain this to you earlier, and I don't know if it was clear, but this is pretty clear. The importance of the telegraph in 1850 to 1880, before the day of the telephone, was the mighty impetus it gave to the American economy can scarcely be measured nowadays. So it's the importance of the telegraph, the mighty impetus it gave to the American economy can be scarcely measured nowadays.

Starting point is 00:41:55 Okay, that wasn't actually very clear at all. That's actually a little weird writing. Basically what they're saying is that the entire information economy is running on the telegraph, just like the entire information economy today runs on the internet. So if you're working on the internet, highly likely you would work through the telegraph at this point. So eventually Edison has a vague idea of what all these people are doing and why these telegraph companies are being bought and try to be merged with one another,

Starting point is 00:42:20 because Western Union is kind of relentlessly monopolizing the entire industry. So it says, I'm going to read this paragraph to you, and I'm going to read what I think you and I could take away from it. Although Edison invariably posed as a country boy who knew little about the ways of the wicked world, he had already appreciated how inventors patents, even this is a really important phrase here, even without operational value. So he had already appreciated how inventors patents, even without operational value, could be used as pawns or bargaining measures by moneyed patrons of applied science. If you think about what is happening behind his thinking, he's asking, what is an asset that you have inside your company that is valuable to other people? And so gold actually gives him $30,000 for his invention. And Edison's like, holy shit, this is amazing. But again, I think this is hopefully the last time I mentioned gold because he's all over this book. But this is, again, fascinating the way that gold's mind worked.

Starting point is 00:43:18 It says it was said, but at the time when the news came out that Edison had been lured into gold's camp, the stock of Western Union fell sharply under heavy short selling by Jay Gold so that he that he gained. So gold gains in a single day, 20 or 30 times that which he paid the young inventor. So he used he convinced Edison, hey, I will give you $30,000. Edison's like, oh, crap, that's a lot of money. I'll take it. Gold uses that news to drive down Western Union stock. Obviously, he short sold it. And so he makes 20 or 30 times in one day what he gave to Edison. And then I'll wrap up this section just with one paragraph, because this explains to you and I, like, first of all, Edison is 27 years old at this point in the story.

Starting point is 00:43:59 But why is Jay Gold and Western Union fighting over Thomas Edison? Like, what is happening here? And so it says, why did the great barons contend with each other in the courts for possession of Edison's quadruplex? It was not only a superb invention, but one of the most important contributions to the telegraphic art and would bring dominance of the great industry to whoever owned it. So the last decade that he's been in York, it has been, he starts out with no money, right? Then makes a lot of money, then goes down. It's like there's these peaks and valleys that are happening. He's under incredible financial stress. He gets like a payday and this is where he's like, okay, I need to change course. Now he's almost 30 years old. He's like, I need,

Starting point is 00:44:39 I'm getting out of New York and I'm going to the middle of nowhere, New Jersey, and I'm going to build a laboratory of science at Menlo Park. And so there's a few authors that have stated that they actually think his creation of Menlo Park was just a significant invention because it was like the first of the laboratories to pursue like practical commercial applications of research. And that was all it did. And Edison arrived at that just by following his natural bend. It's like, this is just what I want to do. I want to wake up. I want to invent all day long, not worry about money, not worrying about manufacture, and then do that until I'm tired. I'll take a nap and I'll just get up and do the same thing

Starting point is 00:45:16 over and over again. And so this is a quick description into like his frame of mind for doing this. My note is after a decade of financial struggle, he wants to build a library. This is the Menlo Park part of Edison's, not library, laboratory. This is the Menlo Park part of Edison's life. He turned back on the threshold of the hidden world of electronic science and turned back, abandoning these perplexing experiments to devote himself to other more immediately rewarding investigations. So what they're talking about there is that this is where, again, I think the focus of a Ford, a land and a jobs is going to yield superior economic results in your lifetime for sure. He would invent something. And then once he figured it out, he kind of like jump onto the next thing. Like he's going to vent the phonograph, which just think about it's like phonograph is like the first way that you could have recorded audio in

Starting point is 00:46:02 the world. He invents it and then doesn't try to commercially exploit his invention for like 10 years. And by that time, there's all these other competitors. He's making a lot of non-economic decisions, which may be better for the world, but weren't better for his financial outcome. He was by no means a poor person, but the difference in wealth that like a Ford or Jobs and a Land had access to, it'd be like 50 times, a times more than, maybe even larger than Edison did. So that's what they're talking about there. But it says, at this stage of his career, he was prosperous again, but he was also determined to bring about a sweeping change in his way of life. This is actually smart what he's doing. It's like, you got to build a company that you

Starting point is 00:46:37 actually like to enjoy working in. He had built companies he didn't enjoy working in. He must, at all costs, quit business, he said, and manufacturing and live in some quiet retreat where he could give himself entirely to the vocation he loved. Inventive research. And so that is the why behind Menlo Park. And then a few pages later, I write, this is interesting and a course to be avoided. So they're talking about, hey, why the hell did you set up Menlo Park in the middle of nowhere? And because to Edison, it's like, why do you need distractions? So he brings people out there. They build like little houses. They have like a little

Starting point is 00:47:08 scientific community, but there's nothing for like the wives and the kids to do. And so it says, this became a community devoted to experimental science. What would these people do to entertain themselves

Starting point is 00:47:16 here in the quiet backwater? They would invent things, Edison said. And after that, they would invent more things. So that gives you a perfect insight into like what was important to him, not realizing that other people are not going to share said. And after that, they would invent more things. So that gives you a perfect insight into

Starting point is 00:47:25 like what was important to him, not realizing that other people are not going to share his obsessive 24-7 nature on inventing. Now, he is also a very charismatic person. And so he's able to convince people to share his mission. But also in many cases, it actually goes against what's actually good for them. And so this is what I mean when I got to this section. I was like, uh-uh, nope, not doing this. John Ott, who served under Edison for half a century, at the end of his life described the sacrifices that some of Edison's old co-workers had made and commented on their reasons for doing so. My children grew up without knowing their father, he said. When I did get home at night, which was seldom, they were in bed.

Starting point is 00:48:06 Why did you do it? He was asked. Because Edison made your work interesting. He made me feel that I was making something with him and that I wasn't just a workman. And then in those days, we all hoped to get rich with him. So this is more about Menlo Park and why Edison did this. And he loved it. The years at Menlo Park from 1876 to 1881 were by all odds the happiest and most fruitful of Edison's life. He was in his early 30s and at the very height of his creative powers. The business

Starting point is 00:48:31 of inventing was humming along. He was in the happy condition of being at liberty to absorb himself in a whole variety of inviting studies. Here he could allow himself to meditate, permit his mind to wander, even to play without fear of interruption. When he wished to inform himself on some special subject of moment to him, he would gather together a great mass of books, lay them out on the floor, flinging himself down among them, and then pour over them for hours on end, after which he would go back refreshed to the manual part of his task. And so one thing he works on is he actually finds a way to record voice and then replay it back at a later time. This is eventually going to take form in a product called the phonograph,

Starting point is 00:49:08 but he also had like a primitive way to actually transmit human voice over a long distance. And it was actually under the heading in his notebooks of something called the telephone repeater. The most interesting part of this section though is not that. What's most interesting is that who he tried to sell this technology to and why they would not buy it. So he says he approached Western Union people with the idea of reproducing and recording the human voice, but they saw no conceivable use for it. And there's an exclamation point at the end of that sentence by the author. And so you think about this, it's like Western Union was a telegraph monopoly. They did not want to believe or maybe it was impossible

Starting point is 00:49:46 for them to believe. This is really a lesson on human nature if you think about it. So they don't want to believe or they don't want to see or maybe they can't see anything that would disrupt that. So if you're inventing something or your new product renders another product obsolete, probably the worst place to go and sell that product is to a person that has economic incentives that your product does not continue. I talked about this on episode 200 with James Dyson, because he's like, what the hell is going on here? I built a technologically superior vacuum. I go to the vacuum cleaner companies and they don't even see it. They're like, this is crap. And he realized like, oh, my vacuum is bagless. It does not have a bag and these dudes sell 500 million dollars worth of

Starting point is 00:50:26 bags every year of course they don't want they can't see what is against their economic incentives and so that's when he realized like i got to do this myself so this is when he invents the phonograph i'm going to skip over that part because what he does is he sets it aside so it's like the lack of focus or a different area of focus i guess one way to think about it and he starts getting this idea that he's eventually going to invent, which is the electric light bulb, right? And this is one way to describe that. One undertaking particularly gripped his imagination. It was described as being that of dispelling night with its darkness from the arena of civilization. Dispelling night with its darkness from the arena of civilization is what

Starting point is 00:51:05 you and I call the electric light. So Edison's going to need a ton of money to build out the entire electrical system, right? And so he's going to link up with Morgan and Vanderbilt and all these other people in a minute. But I just want to pull out something that's very interesting. It is mentioned a few times previously in the book, but I hadn't drawn your attention to it. And it's the fact that it says he had an air of supreme confidence with which he sought to imbue everyone around him, including interested capitalists. So he was very good at selling others on his ideas, including selling people like investors on the fact that, hey, you should give me money to pursue this invention because we can turn it into a company. And the note of myself on this page is passion is infectious., Danny Lewin $500,000 check story. So

Starting point is 00:51:46 Danny Lewin was the co-founder of Akamai, and I read his biography years ago. It's called No Better Time. And the reason this came up now is because Danny Lewin is also widely believed to be the first person killed in the 9-11 attacks. He was in first class on one of the planes, stood up to try to do something when they were hijacking and he was stabbed to death. He was only 31. But in his biography, it talks about that he completely believed in what he was doing. And once you believe in something, it's easy to transfer that belief to other people. So I just want to read a section from this book called No Better Time.

Starting point is 00:52:20 And it says, So that's what I meant about the transferring of the belief, which is extremely powerful, which is exactly what is happening in this where we are in the book with Edison. Right. He's transferring his belief in electric light to people that he needs help with. Right. On the spot, Friesen pulled out his checkbook and handed Danny a check for a half a million dollars. And when I read that book four years ago, whenever it was, the note of myself on there was passion was worth half a million dollars and more. And so you go back to the Edison book, he had an air of supreme confidence with which he sought to imbue everyone around him, including interested capitalists. And so this is when he starts partnering up with Vanderbilt. This is Vanderbilt's son, because Cornelius had just died and left, I think, like 95% of his money to his oldest son, and J.P. Morgan.

Starting point is 00:53:29 There's a lot more detail in the other podcast I did on episode 83, which is Empires of Light. That entire book is just about this point in Edison's life. So it goes into way more detail in the book. I hold my hand, but I want to pull out a few things here, because I think they're important for you and I to understand, because he gets kind of screwed over multiple times by partners. In effect, the Western Union people were buying rights, but not an existing invention, but in an unknown quantity, a promise, Edison said. Their money was invested in confidence in my ability to bring it back again.

Starting point is 00:54:00 Undoubtedly, these financiers were taking risks with their capital, though for people as wealthy as the Vanderbilts, who at that time was the richest man in America, it was only peanuts. So it's a collection of very rich people he's raising money from. One is the Vanderbilt. J.P. Morgan is the one organizing all this, which I'll get to in a minute. But some of them were also like the founders and executives in Western Union, who were extremely rich at the time. Behind this whole venture stood J.P. Morgan, who kept his name off the board of directors, but had his partner serving as director of the new company.

Starting point is 00:54:25 And they also made the company bank with Morgan's firm. So his name might be off of it, but he is very much in control. Edison believed that the chances of ultimate success of his project were vastly greater because of the Morgan connection. The launching of the Edison Electric Light Company by such sponsors is noteworthy also that it inaugurates a phase of increasingly close close relations between big business and technology in this company so think about how crazy this is remember the words that you and i are talking about right now they were written in 1959 and he's like this is a phase of increasingly close relationship relations between big business and technology in the company or excuse me in the country even more

Starting point is 00:55:04 so today and so before i move ahead i want to read this section from Empire's Light, because this is how this story ends. And so it was that JP Morgan, whose house had been the first in New York to be wired for electricity by Edison a decade earlier, now erased Edison's name out of corporate existence without even the courtesy of a telegram or a phone call to the great inventor. Edison's biographer, Matthew Josephson, which is the guy that wrote the book that holding my hand wrote Morgan to Morgan, it made little difference so long as it all resulted in a big trustification, big trust for which he would be the banker. Edison had been in the vocabulary of the times Morganized. And that was something that pops up in these books over and over again,

Starting point is 00:55:44 would prey on weak finance, financially weak. If they needed his money and the money of his investors, then he would take over, in many parts, take control of the company, combine them with other companies. This happened so much that there was a term for it. That term was Morganized. And that is the beginning of General Electric. The book goes on for quite a while, how difficult you can imagine trying to build the electric industry from scratch. There's just two lines. Actually, I was just having this conversation with my daughter this morning before school. So it says, he seemed to be meeting with fresh difficulties at every step.

Starting point is 00:56:15 That's sentence one and then sentence two. No great end can be obtained without considerable doubt and tribulation. So really the summary of what's happening all across these like set up like 20 pages is problems are the rule, not the exception. And so the conversation I was having with my daughter this morning, it's just like, you know, being upset about something going on in her life, or maybe you don't like whatever's happening at the moment. It's just like, that is an everyday thing. You were concerned and worried about this today. I was like, you just have to really, I actually quoted the podcast. I go, problems are just opportunities and workflows.

Starting point is 00:56:46 It gives you an opportunity to use your brain to solve it. But don't think that because you solve this problem or now you've overcome whatever's taking place in your life, that that is the end. It's highly likely and a near certainty that you'll just have another problem the next day or next week. Life, we always, on the podcast,

Starting point is 00:57:02 you and I always talk about the business's problems and that companies are just effective problem-solving machines. Life is problems. Everybody has problems in their lives. So the point I was trying to make to her is like, you shouldn't try to eliminate problems completely because that's futile.

Starting point is 00:57:14 You should just get good at problem-solving. And then if you enter every day, it's like, okay, most likely you're going to encounter something today that I don't like, or there may be a problem. They're the rule, not the exception. Do not let it upset you. Just handle it and then move on to the next. And so there's a small analogy between the conversation I'm having with my 10-year-old daughter that Edison is describing

Starting point is 00:57:31 in the book about, holy damn, how difficult what he's trying to do. And in many cases, I wonder, I haven't come across this in the book, but I have to wonder, like he dips out. So he leaves Menlo Park, goes to New York because that's where he has to do this right and it's a big struggle and then he winds up leaving and getting kind of upset and selling all his GA stock later on and then going and doing mining and all this other stuff that he does the rest of his life right but I wonder if he could go back and just be like I should have never left Menlo Park and whether that's like a partnership with somebody else develops it a license agreement I don't know what it, but he gave like his life and soul again.

Starting point is 00:58:08 And I don't think he wanted to be in New York. And I highly suspect that if you and I could talk to him today, he'd be like, yeah, I should have done that. I should have stayed where I was because I was happy. And so what I want to do is get into like his mindset as he's setting out to do this. And it's a multi-year process. Even at the beginning, he's like, okay, I figured it out. But then he doesn't really, he hasn't figured it out completely. And so he'll have like a promising experiment

Starting point is 00:58:28 and then he'll like have a fall, like a setback. And what I found most fascinating is this section where he talks about like he was inspired by a Victor Hugo novel. So it says, this is now a quote directly from Edison. The electric light had caused me great amount of study and required the most elaborate experiments, Edison said. I was never myself discouraged or inclined to be hopeless of success, but I cannot say the same for all of my associates.

Starting point is 00:58:48 He was like a man possessed. After every reverse or disappointing trial, of which there were many, right, he worked on day and night compulsively. One of Edison's favorite books was Victor Hugo's Toilers of the Sea. In the book, the hero of the book, Gilead, described by his neighbors as both crafty and laborious and believed by them to be in communication with supernatural powers. That could be a description of how Edison was viewed at this time.

Starting point is 00:59:12 Because he's already world famous from the, not only was he world, like he was world famous from the invention of the phonograph and the electric light just takes him to like other levels of fame. So they believed by them to be in communication with supermariner power, set out alone to extricate a small steamship from a reef in the English Channel. So he is taking the metaphor that he's reading in this story as what's taking place in his life at this point. So it says this hero sets out, tries to get this reef,

Starting point is 00:59:40 or tries to get this ship that's stuck on a reef in the English Channel on which the ship has been stranded. In his long effort, he must contend against the immeasurable forces of nature, the sea, the tides, the storm, to reach his goal. By his courage, his powers of endurance, and his mechanical skill, the hero of the book assumes for us the symbolic figure. The steamship that he is bent on saving, of course, symbolizes progress. So Edison too strove on. So Edison seeing parallels with where he is in life,

Starting point is 01:00:15 with the story that he's reading about, actually motivates him to go on. And then this point is full of very, like some of the best Edison quotes you'll ever come across. His enthusiasm was infectious. At such moments, he would say proudly, the trouble with other inventors is that they try a few things and quit. I never quit until I get what I want. And then another great quote, remember, nothing that's good works by itself. You've got to make the damn thing work.

Starting point is 01:00:48 He winds up testing maybe thousands, maybe tens of thousands of different materials for the filament that's inside of a light bulb. And I just thought Edison's worldwide search for filament for his light bulb actually leads to some surprising ends. And so it says another agent of Edison's was sent on a similar mission to the West Indies in Central America, but he died of yellow fever. That's the second person he sent out, right? The third person was this guy named Frank McGowan, who was dispatched from Menlo Park at Edison's expense to explore the upper Amazon River, journeying by canoe to the wildest regions on Earth. McGowan was gone 15 months, the newspapers carefully following such reports of his harrowing adventures. After having survived the hazards of life among the men and beasts of the Amazon, McGowan at last came back to New York, was given a large sum of cash by Edison's secretary,

Starting point is 01:01:31 and celebrated his safe arrival by going to a cafe. Then he walked off in the night towards the west side docks, never to be seen or heard of again, thus creating one of the great police mysteries of the 80s that is the 1880s by the way and if you think about it this guy's got a pile of money let's flash back to what was what was edison worried right worried about right he gets that what 30 or 40 thousand dollars can't sleep because he's in this like dingy boarding house convinced somebody's gonna wind up coming and killing him for the money which is very likely the outcome maybe this guy's drunk and he fell off into the water and drowned, that we don't actually know, but he's walking around with a sack full of cash, he's super famous, and he leaves the cafe or leaves the bar and he's never

Starting point is 01:02:13 seen again. So the story of Edison's electric adventures is just a series of peaks and valleys, peaks and valleys over and over again, and one thing that Edison had to contend with was not only was it very frustrating if he found like a dead end and he couldn't get it to work the way he wanted to, he also had to manage the expectations of not only his employees, but also his investors. And he was remarkable at always putting together like this front. And it's probably true that he absolutely believed that whatever difficulties they were going through at the point at the time were temporary and that they'd figure it out. And I think the best description of this is that quote by Marc Andreessen, he says, if you're starting a business or running a startup,

Starting point is 01:02:46 you only experience two emotions, euphoria and terror, and almost nothing in between. And so that's also occurring with his backers, his financial backers, which was a big pain in the ass to Edison. Hope and pessimism alternated in the minds of Edison's financial sponsors during the transitional stage between the invention and its development. And so I mentioned earlier how he managed and why people liked him working when he was a young man in his 20s. We see that's still the same case at arguably

Starting point is 01:03:16 the most important part of his life, which is when he's in New York trying to make his electrical system work, right? And so it says to the young electricians, it was wonderful to see Edison working by their side, all covered with grease and suit. What they enjoyed most was his attitude of caring nothing for what others thought of him and paying no attention to frills and fancy. So what they're talking about is like, New York has the highest population in the United States at this point. He is super famous and he's working in the streets of New York. So he's constantly haggled, constantly harassed. People are following around almost like some kind of like messianic character. And when there's an issue, they would just like dig up the lines and he'd jump in and try to figure out what the hell is going on. And so that's what they mean. It's like he paid no

Starting point is 01:03:55 attention to frills or fancies. This reminded me very much of Sam Zimuri and the huge advantage he had over his competitors. I just reread that book, The Fish That Ate the Whale. If you haven't listened to it, it's episode 255. One of my favorite books I've ever read. But Sam did this where his competitors are in an office in Boston trying to run their fruit company, right? And he's actually in the fields in Honduras with his workers. Sam knew his business and an intimate detail from A to Z that his competitors could only wish to know theirs. And Samuri was a very hard dude and a taskmaster. He was by no means easy on his employees, but they respected

Starting point is 01:04:29 him because they knew he worked just as hard, if not harder than they did. I think Steve Jobs picked up on that too when he came back to Apple and he's like, wait a minute, the CEO of Apple, Gil Amelio, is described as a turnaround expert. And he's like, how can you be a turnaround expert when you're sitting, Jobs said something like, when you're sitting in your office, eating lunch alone on China, that looks like the, from Versailles. And so if you compare it in contrast to the way Gil worked with his employees at Apple and the way Steve did, Steve was in there every day. In fact, that made me think of this quote. There's a book called Creative Selection. I did a, I've read it. I've read this book three times. Anybody building a product should read it. It's written by one of the programmers that

Starting point is 01:05:08 worked directly under Steve, but our work with Steve rather in the demo to him multiple times. I did a bonus episode. I'll go back and figure out where it is and I'll leave it in the show notes. But what was fascinating, let me just read this whole section because I think this gives you an indication of like what Thomas Edison's doing here, what Samson Murray was doing, what Edwin Land did and Steve Jobs did. So reading from the book, create a selection right now. Steve was the center of all the circles. He made all the important product decisions. From my standpoint, as an individual programmer, demoing to Steve was like visiting the Oracle of Delphi. The demo was my question. Steve's response was the answer. While the pronouncements from the Greek Oracle

Starting point is 01:05:42 often came in the form of confusing riddles, that wasn't true with Steve. He was always easy to understand. He would either approve a demo or would request to see something different next time. Whenever Steve reviewed a demo, he would say, often with highly detailed specificity, what he wanted to happen next. This is the part, this one paragraph is what made me think of this excerpt when I got to where I'm at in the Edison book. He was always trying to ensure the products were as intuitive and straightforward as possible, and he was willing to invest his own time, effort, and influence to see that they were. Through looking at demos, asking for specific changes, then reviewing the changed work again later on,

Starting point is 01:06:21 and giving a final approval before we could ship, Steve could make a product turn out like he wanted. That's absolutely fantastic. Can't recommend that book enough. It's really fun to read and you can read it in a weekend. There's no reason not to. So I want to bring to your attention, I mentioned earlier, he's like, oh, I'm involved in business and manufacturing. That was annoying. So then he reversed course, goes to Menlo Park, right? Then five, 10 years later, whatever it was, he reversed his course again, this time in the other direction. And this is why I said earlier, I have a feeling that he should have just stayed him or he, he would have, if you could ask him now, he'd, he would say, you know, I should have stayed at Menlo Park because really what I'm about to read to you

Starting point is 01:06:55 is like, this is a sign that you picked the right profession. And he says he could pretend that he was giving up inventing for some years because of the pressure of business affairs. So that is the actual making, like he invented the electrical lights electrical lights now how do you like actually scale the company and do all that stuff right so that's what he's talking about like they're now he's not inventing anymore and now he's doing like the practical application or the business application of his invention i guess but he could no more stop observing things or experimenting than he could stop breathing so that line is why I think he might have wanted to stay in Menlo Park. He could no more stop observing things or experimenting than

Starting point is 01:07:30 he could stop breathing. And I think a main theme of this book and the conversation I think you and I are having today is the fact that founders are learning machines. And part of being a learning machine is just always being curious about the world around you. And so there's a guy named Charles Kettering. A lot of founders I talked to don't actually know who he is. I did a podcast on him a long time ago. It's episode number 125. The reason he is important to study is because he was called the 20th century's Ben Franklin. If that piques your interest, go back and listen to episode 125. It was on his autobiography, if I remember correctly. But this is Kett, as everybody called him Kett. This is Kett now looking back on what Edison was able to accomplish.

Starting point is 01:08:08 And I think what he's describing is, again, why founders are learning machines and why it's so important to just keep trying things. It was because Edison was always looking for things, as Kett said, that he inserted a straight wire into an incandescent light bulb and found he could pull a current of electricity out of a vacuum, thus discovering an inexhaustible source of free electrons. I want to read his quote one more time. It was because Edison was always looking for things that he inserted a straight wire into an incandescent light bulb and found he could pull a current of electricity out of a

Starting point is 01:08:43 vacuum, thus discovering an inexhaustible source of free electrons. And so eventually there's this rather dark period in Edison's life where they call it the War of the Currents. I covered it all the way back. There's an entire book called Empire of Light on it. I read it. It's episode 83. Edison's rather disgusted, and so he goes back to New Jersey. But I actually think this interaction that Edison has with the famous explorer Henry Stanley gives you and I who Edison was as a person and what was important to him. And it brought a smile to my face when I read it. Henry Stanley was a sternly religious little man who believed that God had brought him safely through the jungle.

Starting point is 01:09:15 He visited the Edison laboratory and spoke a few words into the talking machine. Then he turned to the inventor and said, Mr. Edison, if it were possible for you to hear the voice of any man known in the history of the world, whose voice would you prefer to hear? Napoleon's, replied Edison without hesitation. Oh, no, no. I should like to hear the voice of Jesus, our savior, said Stanley. Oh, well, laughed Edison. You know, I like a hustler. And that is where I'll leave it for the full story by the book. If you buy the book using the link that's in the show notes, you're a podcast player. You'll be supporting podcasts

Starting point is 01:09:52 at the same time. Every link that I've mentioned, every show or episode or anything else, any other book that I've mentioned in the podcast is also available at founderspodcast.com. The more books you buy, the more you read. Make sure you sign up for the ReadWise app. It is the app I use to store all my notes and all my highlights. It's how I can remember all the stuff I read. And it is by far the best app I pay for. I have an official partnership with ReadWise, so they'll give you 60 days free to try it. If you go to readwise.io forward slash founders. That link, as always, is below and at founderspodcast.com.

Starting point is 01:10:20 That is 267 books down, 1,000 to go, and I'll talk to you soon.

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Founders - #267 Thomas Edison

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