An interesting snapshot of Business History: Tesla's Brilliance and Limits

by GOOD via 
In 1883 a young Serbian scientist named Nikola Tesla was working for the European division of the Continental Edison Company. He was a brilliant inventor, and Charles Batchelor, a plant manager and a personal friend of Thomas Edison, persuaded him he should seek his fortune in America, giving him a letter of introduction to Edison himself. Which began a life of woe and tribulation that lasted until Tesla’s death.

When Tesla met Edison in New York, he hired him on the spot immediately. Tesla worked eighteen-hour days, finding ways to improve the primitive Edison dynamos. Finally he offered to redesign them completely. To Edison this seemed a monumental task that could last years without paying off, but he told Tesla, “There’s fifty thousand dollars in it for you — if you can do it.” Tesla labored day and night on the project and after only a year he produced a greatly improved version of the dynamo, complete with automatic controls.

He went to Edison to break the good news and receive his $50,000. Edison was pleased with the improvement, for which he and his company would take credit, but when it came to the issue of the money he told the young Serb, “Tesla, you don’t understand our American humor!,” and offered a small raise instead. Tesla’s obsession was to create an alternating-current system (AC) of electiricity. Edison believed in the direct-current system (DC), and not only refused to support Tesla’s research but later did all he could to sabotage him.

Tesla turned to the great Pittsburgh magnate George Westinghouse, who had started his own electricity company. Westinghouse completely funded Tesla’s research and offered him a generous royalty agreement on future profits.

The AC system Tesla developed is still the standard today — take credit for the invention, claiming that they had laid the groundwork for him. His name was lost in the shuffle, and the public came to associate the invention with Westinghouse huimself. A year later, Westinghouse was caught in a takeover bid from JP Morgan, who made him rescind the generous royalty contract he had signed with Tesla.

Westinghouse explained to the scientist that his company would not survive if it had to pay him his full royalties; he persuaded Tesla to accept a buyout of his patents for $216,000 — a large sum, no doubt, but far less than the $12 million they were worth at the time. The financiers had divested Tesla of the riches, the patents, and essentially the credit for the greatest invention of his career.

The name of Guglielmo Marconi is forever linked with the invention of radio. But few know that in producing his invention — he broadcast a signal across the English Channel in 1899 — Marconi made use of a patent Tesla had filed in 1897 and that his work depended on Tesla’s research. Once again Tesla received no money and no credit.

Tesla invented an induction motor as well as the AC power system, and he is the real “father of radio.” Yet none of these discoveries bear his name. As an old man, he lived in poverty.
In 1917, during his later impoverished years, Tesla was told he was to receive the Edison Medal of the American Institute of Electical Engineers. He turned the medal down. “You propose,” he said, “to honor me with a medal which I could pin upon my coat and strut for vain hour before the members of your Institute. You would decorate my body cand continue to let starve, for failure to supply recognition, my mind and its creative products, which have supplied the foundation upon which the major portion of your Institute exists.”

In a life perspective, this is a very sad story of bad decisions and bad luck. In business, it is I guess normal most especially to this day. It may not be as cut throat as during that time but I assume it is as draining if not more. It just goes to show that even if you have a brilliant Idea, it is the execution that matters more, plus the packaging. And if you packaged it poorly, someone else will and probably Public Relations kicks in and the rest is History.

Business is really getting more and more complicated especially today where there are now Internet Businesses mushrooming here and there.

“Many harbor the illusion that science, dealing with facts as it does, is beyond the petty rivalries that trouble the rest of the world. Nikola Tesla was one of those. He believed science had nothing to do with politics, and claimed not to care for fame and riches. As he grew older, this ruined his scientific work; Not associated with any particular discovery, he could attract no investors to his many ideas. While he pondered great inventions for the future, others stole the patents he had already developed and got the glory for themselves.”
-Robert Greene
Changes only happen when we go against everything we're used to doing
-Paulo Coelho
An interesting snapshot of Business History: Tesla's Brilliance and Limits An interesting snapshot of Business History: Tesla's Brilliance and Limits Reviewed by Vernon Joseph Go on Friday, February 04, 2011 Rating: 5

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