When Edison subsequently revised the estimated annual expenses for the lab upward 50 percent to $90,000, Villard declined the invitation to invest. This left Edison without outside financing—and without outside guidance. By beginning—and then completing—construction of the lab complex prior to arranging the commitment of investors, Edison made sure that the project would go forward without compromises, exactly as he had dreamed, whether others believed in him or not.
At precisely the time he was readying his lab, circumstances forced him to return to the one older invention he had been least interested in working on again: the phonograph. In the early 1880s, he had been embarrassed by the mechanical problems of the tinfoil phonograph, its modest sales, and the damage to his reputation. In 1884, Off-Hand Portraits of Prominent New Yorkers said that “the failure of the phonograph did much to destroy the popularity of Mr. Edison.” But by 1887, a new rival, the American Graphophone Company, whose wax-coated cylinders could be removed without damage to the recording, which was not possible when using tinfoil, was poised to make a success where he had met with failure. Edison, who was as competitive as anyone, could not abide the prospect of being passed by others. The fact that his old nemesis Alexander Graham Bell was a member of the three-person group that had invented the graphophone raised Edison’s ire to the point that he could think of nothing else but joining battle.
Edison’s phonograph patents offered no protection, as they had been filed tardily, after foreign patents had been obtained by others. After reviewing the legal issues, Edison explained to Edward Johnson, “We cant [sic] stop anybody.” The Graphophone Company, for its part, approached Edison with conciliatory offers that were unnecessary given its strong legal position. The company flattered him as the “real” inventor of the talking phonograph (one of the earliest graphophone recordings ended with this concise autobiography: “I am a graphophone and my mother was a phonograph”). It offered to turn over the graphophone and its improvements to him, to pay the costs of any additional experimental work that might be needed, and to grant him half interest in the merged companies, gratis. Company officials tried to persuade Edison’s London representative, Colonel Gouraud, to consider a senior position in their company and to approach Edison about accepting a “complimentary” equity position, were Edison willing to approve use of the Edison name on the product.
Edison would never agree to share the mantle of Papa of the Phonograph with anyone else. He fired off a tart note to Gouraud: “Under no circumstances will I have anything to do with Graham Bell [or] with his phonograph pronounced backward.” Edison claimed to have come up with a wax-cylinder machine that was better than Bell’s and pointed out he was already building the factory that would enable him soon to “flood” the market with them at “factory prices.”
Gouraud congratulated Edison for coming up with a “practical” machine and announced he would side with Edison and drop his proposed affiliation with the American Graphophone interests. He was considerate of Edison’s feelings and did not mention that it was only the goad of competition that had motivated Edison to return to his work on the phonograph. Alfred Tate, a senior manager who worked for Edison at this time, would later confirm that it had been the Graphophone Company’s overtures to Edison that had “shocked him into action.”
Edison spoke dismissively of Bell and his Graphophone associates, whom he described as “pirates attempting [to] steal my invention.” After being rebuffed, the American Graphophone Company dropped the polite ritual of paying tribute to the Wizard. A story made the rounds about the time when Charles Sumner Tainter, Bell’s colleague and the principal inventor of the graphophone, was asked about future collaboration with Edison. Tainter had replied, “Thomas A. Edison can go to Hell! He hasn’t got anything that he didn’t steal from me.”
Edison personally did not have the financial resources to build out his manufacturing capacity and distribution system so that he could go head to head against the Graphophone Company, which had a sizable lead in the race to get machines to market. For a single, promising business opportunity like this, he could still get the attention of the wealthy angel investors who had passed up his earlier invitation to fund Edison so he could play in his new laboratory. A group of four agreed to come to Orange to see a demonstration of Edison’s “perfected” phonograph.
When his guests were gathered around him, Edison spoke into the tube and recorded a speech he had prepared. He then stood back confidently to listen to the playback. The words could not be heard, however, over a continuous hissing sound. Edison was visibly perplexed; the machine had worked perfectly only fifteen minutes earlier. He changed the wax cylinder, made another recording, and played it back. The hissing returned. Alfred Tate described the scene.
Edison was bewildered. There was no possible way in which he could account for such a result. Again and again he tried to get that instrument to talk, and again and again it only hissed at him. The time of our guests was limited. They had apportioned one hour for the demonstration, ample time had the instrument functioned. Mr. Dolan and Mr. Cochrane had to catch a train for their homes in Philadelphia and their time for departure came while Edison still was engaged in a futile effort to reproduce his own voice. Most courteously these gentlemen promised to return to the laboratory when Edison had discovered and corrected the obscure defect in the instrument. They left. But they never came back.
The malady was eventually traced back to the ill-timed decision by one of Edison’s assistants to swap, just before the guests arrived, a critical part used for reproducing the sound. He thought he had installed a superior part but it was just a bit wider than it should have been, producing disaster.
The flubbed demonstration turned out to have irreversible ramifications. Edison would not have another opportunity to obtain funding to support his own phonograph company. He was subsequently saved from financial ruin by a member of the nouveau riche, Jesse Lippincott, who had made a fortune making glassware and had lately taken an interest in the thrills of building up the phonograph business. His North American Phonograph Company, which took on the distribution of Edison’s phonograph, would prove to be woefully undercapitalized. Edison, however, could not be picky; financially, he was out of options and agreed to the arrangement through gritted teeth. (Lippincott’s company simultaneously distributed the Graphophone, too.)
Ezra Gilliland played an instrumental role in the negotiations between Lippincott and Edison. Because Gilliland enjoyed an unusually close personal relationship with Edison, he spoke with more candor than other business associates. The Edison phonographs that were produced in trial manufacturing runs were riddled with defects, and Gilliland did not hide his displeasure. The machines that Gilliland had looked at “would not compare favorably with the graphophone.” He went on to warn Edison about steering clear of shoddy business practices: “I have never felt that you would put it upon the market in that condition.”
Edison needed to hear straight talk about problems, but unfortunately Gilliland was soon out of the picture, his relationship with Edison ending abruptly on bad terms. The split came when Edison discovered that Gilliland had negotiated a side deal with Lippincott at the time that Gilliland was representing Edison’s interests in the negotiations with Lippincott’s North American Phonograph Company. In consideration of Gilliland’s transfer of his “agency” rights for the phonograph that Edison had given him earlier, Gilliland and Edison’s attorney took two-thirds of the $125,000 cash that Lippincott paid for the distribution rights to the phonograph. The two men arranged for the payment to themselves without telling Edison.
Lippincott was unaware that Edison had not been consulted and happened to mention the details of the deal to Edison only after it was completed. When the press heard about the affair, it depicted Edison as a dupe who had been “razzle-dazzled” out of $250,000 by Gilliland, his trusted confederate. Edison was shocked by the revelation and responded with a lawsuit, but was unsuccessful in pressing his claim that th
e money paid for agency rights was properly due him. The episode made Edison even more withdrawn. With Gilliland, he had allowed business matters and personal life to commingle, and it had come to this regrettable end. (He would not let down his guard again until late in life, and then, only with a friend whose much greater wealth removed concern that Edison would be taken advantage of: Henry Ford.)
Having retained control over design and manufacturing, Edison was responsible for delivering the finished product to Lippincott. The inventor, now settled in his completed lab, could not resist tweaking the final design, and tweaking it some more. Even though Edison announced the completion of his “Perfected Phonograph” in May 1888, he continued to tinker, supervising 120 lab personnel who were pursuing sixty separate experiments related to the phonograph. The remainder of the year passed, and he still was not satisfied and refused to release the first machines for sale.
It was not until the spring of 1889 that Edison reluctantly began to ship the Perfected Phonograph. Even then he grumbled privately he had been so rushed that the battery design remained unsatisfactory. He did not seem concerned, however, about what would happen when customers made the unpleasant discovery that the batteries in their new phonograph were the same ones that Edison privately told Batchelor were “not of much value.” (The graphophone, which had gone on sale eighteen months earlier, had a more reliable source of power—a foot treadle—but it too had its own shortcomings.)
Upon its release, Edison’s Perfected Phonograph was immediately scooped up by the individuals who leaped to be among the first to possess newly available technology. The governor of Wyoming purchased three phonographs so he would have one on hand for dictating correspondence wherever he happened to be. A distributor in New York noticed the beginnings of the extended workday for executives, as the phonograph made dictation at home feasible. Recordings made in the evening could be brought to the office in the next morning for transcription by a “type-writer” (the person shared the same name with the machine).
Unfortunately for the North American Phonograph Company, and for Edison, the Perfected Phonograph was far from perfect, and not really functional. The wax cylinders were fragile, the mechanical works prone to breakdown. The phonograph required a resident expert to keep it properly adjusted. The Atlantic Monthly said that “trusting its manipulation to the office boy or the typewriter girl, that is out of the question for the present.” The intelligibility of the recorded voice was unpredictable, “something of a lottery.”
Edison, however, was exasperated by the complaints of customers, whose own incompetence he blamed for failing to get satisfactory results. After the first reports of defects came in, he dictated to Charles Batchelor four single-spaced typewritten pages in response to a single field report, ending his reply with “I could go on for a week answering this kind of a letter.” What was the point, he wondered aloud, when the complaining customer was someone “who does not know how to work the machine”?
While Edison continued to use his own human amanuensis for dictation, he installed a phonograph in the office of Alfred Tate. “I was the ‘dog’ on which this novel method was tried out,” Tate wrote in his memoirs. For Tate, using the phonograph to carry out his work was an exercise in frustration. He noticed that acids in the wax coating on the cylinders corroded the steel stylus, making playback unreliable. He also did not like having to stand in one place, speaking into the tube, preventing him from pacing the office to “clarify and accelerate thought.” Whenever he shoved the phonograph aside and called in a stenographer to take a letter, Edison would choose that moment to happen by, poke his head in the door, and say disapprovingly, “Aha! Shoemakers’ children never wear boots.”
Eight thousand Edison machines with the defective steel styluses were returned to the factory, arriving without protective packing material. They were in such poor shape that they could not be refurbished and had to be junked. Quality problems afflicted the graphophone, too. Lippincott’s company tottered on the precipice.
All was not bleak, however. Everyone who tried out the phonograph—everyone but Edison, that is—was struck by its beautiful reproduction of music, which it handled far better than the sound of the human voice. The same article in the Atlantic Monthly that had pointed out the machine’s shortcomings as a device for office stenography also heaped praise on its ability to magnify musical sounds without distortion. Although there were very few recorded songs available for sale, the reports from the field showed avid interest among consumers. At the first convention of phonograph dealers in 1890, one distributor reported that one customer was “a crank on the subject,” spending as much as $100 a week for musical cylinders (about $2,000 in current dollars).
Tate and other Edison associates did their best to persuade Edison of the commercial potential of a phonograph marketed for entertainment purposes, but Edison was so attached to his original notion that the phonograph was best suited to office dictation that he could not let go of it. He also did not give the business issues as much attention as the technical issues. As always, nothing gave him as much pleasure as notching more patents to his name, and with his vastly larger lab space and staff working at his behest, the temptation to accumulate patents by the bushel was irresistible. In the course of three years, 1888–1890, he was granted seventy-six related to the phonograph alone.
Tate speculated in his memoirs afterward that Edison was reluctant to accept the phonograph as a machine for playing music because he did not want his phonograph associated with wind-up music boxes. Edison was dedicated to bringing out “useful” inventions, a mission that would be sullied by its association with something as frivolous as Victorian “toys” marketed to adults.
Children’s toys, however, were a different matter. Even as the North American Phonograph Company was spinning down the drain, Edison also worked on a separate venture: a talking doll. He had licensed rights to the concept when he had invented the phonograph a decade earlier and nothing had come of the deal. Now he had the laboratory of his dreams and all things seemed possible. In the spring of 1890, in the factory he had built adjacent to the laboratory he employed hundreds of girls for recording, again and again, the nursery rhymes for each doll. He had not yet come up with a way of reproducing a recording from a master, so each cylinder had to be recorded individually. He and toy distributors looked forward eagerly to Christmas season sales. Advance orders far outstripped the factory’s capacity.
These dolls, the first-generation ancestors of Chatty Cathy, did not prove capable of being very chatty. Every one was tested at Edison’s factory before being shipped, but in the course of the journey to stores, the internal organs of almost every single doll suffered injuries that left it capable of emitting nothing but discordant squeaks. One dealer found that of the first 200 dolls sold, 188 were returned. At that point, he told prospective customers that his remaining stock of dolls was for sale only on an as-is basis, without guarantee. He then learned what the modern parent knows all too well: The hot toy of a given season must be obtained by any means necessary (and in any condition). His customers continued to buy up the doll.
After the 1890 Christmas season had passed, and the tears of disappointed children dried, Edison shrugged off blame and distanced himself from the party that was least responsible, the company to whom he had licensed the marketing rights. With the loss of Edison’s name, the company died and the talking dolls’ fiasco was complete. On a parallel track, the North American Phonograph Company similarly failed to survive while handling Edison’s far-from-Perfected Phonograph. The Phonograph Company’s principal owner suffered, too. Lippincott fell behind in his payments to Edison, suffered a paralyzing stroke, and died soon after.
These ventures were the first ones that Edison mounted after building his new laboratory complex. Their unhappy endings suggest that Edison was mistaken in thinking that expanded space, new equipment, and large technical support staff were everything he would need to succeed in his ambition to eclipse his ow
n earlier achievements in Menlo Park.
Two years before, soon after the lab had begun operations, Edison had declared publicly that his inventions should be judged only on the basis of commercial success. This had come about when a reporter for the New York World had asked him a battery of questions that threw him off balance: “What is your object in life? What are you living for? What do you want?” Edison reacted as if he’d been punched in the stomach, or so the writer described the effect with exaggerated drama. First, Edison scanned the ceiling of the room for answers, then looked out the window through the rain. Finally, he said he had never thought of these questions “just that way.” He paused again, then said he could not give an exact answer other than this: “I guess all I want now is to have a big laboratory” for making useful inventions. “There isn’t a bit of philanthropy in it,” he explained. “Anything that won’t sell I don’t want to invent, because anything that won’t sell hasn’t reached the acme of success. Its sale is proof of its utility, and utility is success.”
He had been put on the spot by the reporter, and had reflexively given the marketplace the power to define the meaning of his own life.
CHAPTER EIGHT
BATTLE LOST
BY THE EARLY twentieth century, Edison had earned a reputation as “the world’s greatest inventor and world’s worst businessman.” The phrasing, attributed to Henry Ford, is memorable, even if both characterizations as greatest and worst are too extreme to be accepted literally. The range of Edison’s technical interests was enormous, but it is hard to separate cleanly his accomplishments from those of his assistants. His standing as a businessperson is not aptly described in extreme terms, either. He never passed through bankruptcy, nor lost ownership of Glenmont or his Orange laboratory. In fact, he was a genuine millionaire at the time of his death in 1931. Still, Ford was correct, Edison was the “world’s worst” businessperson if one compares what Edison himself earned from his most significant inventions to the far larger sums earned by his contemporaries who profited from Edison’s original work. The dismal commercial beginnings of Edison’s phonograph business provide materials for one case study; the shaky start of electric light service provides materials for another.
The Wizard of Menlo Park Page 18
