Today, we have an exciting tale about one of history’s greatest inventions.
It’s also a story about one of history’s biggest business blunders.
On March 10, 1876, Alexander Graham Bell spoke to his assistant, Thomas A. Watson, who was in the next room, 20 feet away. Using his new invention, he said, “Mr. Watson, come here. I want you.” With that statement, the world’s first telephone call had just taken place.
Only by hours did Bell beat former Oberlin College physics professor and inventor, Elisha Gray to the patent office to establish his rights over Gray’s, as both invented a telephone.
Bell had little money and was struggling financially when an odd twist of fate led to the first public showing of his telephone at the U.S. Centennial Exhibition in Philadelphia that June.
Bell was at the train station to see his fiancée Mabel Hubbard off to Philadelphia.
She mistakenly thought he was going with her and as the train left without him, tears streamed down her cheeks. Bell saw this and his heart sank.
So they could be together, he rushed ahead to another station and caught that train. He had no baggage, bought a ticket on the run and just jumped on board.
But having arrived in Philadelphia, Bell arranged to exhibit his telephone at the Exposition. It was a hot Sunday afternoon and the judges were tired and about to cancel Bell’s demonstration. Just then, Dom Pedro, Brazil’s Emperor asked to see a demonstration.
As Bell spoke into the transmitter, Dom Pedro held the receiver to his ear and loudly exclaimed, “My God, it talks!” Others quickly gathered around to hear for themselves and their reaction set off a mania where people by the thousands wanted to hear it as well.
Bell’s exhibit dominated the rest of the Exhibition and made headlines.
Three years earlier, so that Bell could afford to work on this instrument, his future father-in-law, Gardiner Hubbard along with another investor, George Sanders provided funding.
It was time to capitalize on this widespread interest. When Bell married Hubbard’s daughter, while they were on their honeymoon, Hubbard and Sanders took the patents to Western Union.
Western Union had a monopoly on the telegraph, the predominant form of instant communication and had the vast resources to introduce the telephone worldwide.
They met with Western Union president William Orton and offered to sell the patents for $100,000 but Orton thought the instrument had too many limitations and saw it as basically a toy. In one of history’s biggest business blunders, he turned them away.
As a result, the investors formed the Bell Telephone Co. and created a network, as they leased telephones to customers. The telephones began taking over the instant communication market.
Responding quickly, Western Union introduced its own telephone using Elisha Gray’s technology and Thomas Edison’s design. A legal battle ensued and eventually the little Bell Telephone Co. prevailed.
That victory was a giant step in what became the enormous success of the Bell Telephone Co. and its successor, AT&T which would dominate global communications for the next century.
It also sealed the long and painful decline of Western Union, a decline that began when Mr. Orton rejected the proposal to buy Bell’s telephone patents.
In 1908, in a bit of irony the now giant AT&T bought control of Western Union. However, it soon divested itself of that ownership to avoid anti-trust action.
Success Tip of the Week: If someone presents a new idea to you, keep an open mind. Even if its commercial potential isn’t obvious today, it may become readily apparent tomorrow and you’ll be glad you didn’t close the door on it or offend the presenter.
In the next KazanToday, The cancelled wedding that induced a family to help the homeless.