Tuesday, September 30, 2008
Monday, September 29, 2008
Today we honor Frank Lloyd Wright (1867-1959) for his achievements in design and architecture.
Born in Wisconsin, Wright's formal education extended just two college semesters beyond high school. After leaving the University of Wisconsin in 1887, Wright moved to Chicago where he joined the Architectural firm Adler & Sullivan as an apprentice. The Great Chicago Fire of 1871 had left the city nearly in ruins, and plenty of work for the firm and Frank.
Frank's creativity soon moved beyond that of Adler & Sullivan. He began working for private commission - behind the backs of his employer - to implement design ideas of his own. After losing his job with the firm, Wright opened a private business from his home designing houses. It is in this time that Wright designed many of the houses in Oak Park, Illinois.
Over his career, Frank's designs ranged from houses to schools to museums. His most familiar design is that of the "prairie" house - of horizontal lines. Today, his work can be seen in both the city and country - e.g. the Guggenheim Museum in New York City, and FallingWater near OhioPyle, Pennsylvania.
Thanks to Frank's pursuit of personal interest, we are all better off.
Thursday, September 25, 2008
John Deere (1804-1886) developed a new plow that allowed farmers in Illinois to till tough clay-like soil. When he left his family to seek his fortune, he quickly learned that new pioneers were struggling with the tough soil of the "West" (ie: OH, IL, IN, KS, MO). Basically, the clay-like soil made farmers have to stop to clean the plow every few steps. Needless to say, this was not very productive. Deere soon discovered a way to battle the tough soil. The trick was to have highly polished steel and a moldboard with a new shape (picture above). The superior plow contributed to the increased food production of that time. Of course, he is largely remembered ad the founder of the agricultural machine producing giant that bears his name, but it all started as a simple blacksmith trying to find a better way to serve his customers. Click here for the long version of how he invented the plow.
John Deere on Wikipedia
John Deere biography
Cool Time Line
Wednesday, September 24, 2008
Tuesday, September 23, 2008
Wal-Mart is evil. Wal-Mart has no soul. Wal-Mart kills the “Mom and Pop” shops. Wal-mart…well, Wal-Mart is the devil.
So how can Wal-Mart’s founder, Sam Walton be a HERO? Am I crazy?
Wal-Mart offers lower prices. Wal-Mart is wildly successful. Wal-Mart has a cost-advantage. Oh…there it is.
Sam Walton began with a single store, and concentrated on building a better mousetrap in the retail industry. He stayed open later, bought from the lowest-cost suppliers and consequently offered lower prices. This, of course, brought in customers. This increased volume allowed Walton to negotiate even lower prices, and his empire began to grow. He used ideas like volume discounting, extended hours and self-service to streamline the retail process and provide goods at a lower cost than his rivals.
This commitment to discounting allowed Walton some early success, but other retailers followed similar strategies in the 1960’s, and Walton was at that time, just one of many discount retailers. Walton remained committed to the idea of discounting and providing goods at a lower cost than any competitor and this focus led him to many innovations.
Walton was one of the first retailers to embrace computerization. It was this dedication to efficiency through access to information that led to Wal-Mart’s use of an innovation that is now known as “Just-in-Time” inventory control. The idea behind Just-in-Time inventory control is that by providing goods to a store immediately as the need arises, inventory costs can be lowered dramatically. This, of course, requires a great deal of information, but Walton’s early commitment to computerization made accessing this level of information possible. Walton’s strategy of centralizing his store locations between communities and providing a single large store, rather than several smaller ones also allowed him to access lower costs and consequently provide lower prices.
Sam Walton’s desire for innovative ways to cut costs remains in place at Wal-Mart even after his death. Starting in 2005, Wal-Mart began using suppliers who were willing to incorporate radio-frequency identification (RFID) tags into their shipping containers. These RFID tags emit a signal that can be scanned by and inventory management system. This technology allows inventory management to become even more streamlined, lowering costs even further. RFID tags have quickly become standard practice for all large retailers because of the incredible savings they provide.
Recent events have placed Wal-Marts labor practice under scrutiny. But to those who look to criticize Sam Walton’s labor practices, he is also credited with being an early provider of profit sharing, stock options and employee discounts.
Walton’s approach is not beloved by all (see above), but its success cannot be denied. Walton was named the richest man in the U.S. from 1985 to 1988. And nothing signals success like imitation. Retail giants like Home Depot, Barnes & Noble, Blockbuster and Target have built their empires following many of the ideas and innovations of Walton and Wal-Mart.
Many studies have been undertaken to attempt to determine whether or not the presence of a Wal-Mart means an increase or decrease in employment or an increase or decrease in small business opportunities, with varied conclusions being drawn. But one thing that cannot be denied is that Wal-Mart has brought lower prices to a large portion of the country, and Walton’s business practices have become standard practice in many other companies in many other industries, which only expands his influence. Simply understanding that people want lower prices and finding innovative ways to provide them made Sam Walton a Hero of Capitalism.
Sam Walton – one of Time Magazine’s 100 most influential people of the 20th Century.
Sam Walton Biography
Monday, September 22, 2008
Friday, September 19, 2008
Today we pay tribute to Soichiro Honda (1906-1991) for his contribution to the world's auto industry.
Honda left school in 1922 at age 15 to pursue a career in auto-mechanics. As an apprentice, he learned the ins and outs of the gasoline engine. As a professional, he honed his skills with precision, refining piston action to produce a higher quality, higher performance engine.
After retiring from mechanics, Honda started the Honda Motor Co. in 1948. He first applied his efforts to motorcycle manufacturing, which proved extremely successful in the Japanese market. However, he realized little success with his first cars - introduced in 1957.
In the 1970s, Honda's cars swept the world market. Honda's innovative engines quickly toppled the "gas guzzlers" of the day. Cars like the Accord and Civic simply out-performed nearly everything Detroit had to offer. In 1982, Honda began manufacturing cars in the U.S. Honda Motors has since become an industry leader.
With little formal education, and a huge ambition, Honda's pursuit of self interest brought all of his dreams to fruition and made each of our lives better.
Joy of Manufacturing - Honda Worldwide
Soichiro Honda - Wikipedia
Thursday, September 18, 2008
Sax was born in 1814, the son of a Belgian instrument maker. He learned from his father the intricacies of instrument-making and became something of a clarinetist himself. After years of tinkering with existing horns, Sax designed a family of instruments, in two groups of seven (seven instruments suited for orchestral use and seven for band use) that would bridge the gap between woodwinds and brass instruments. While he succeeded in this technical goal, he had mixed luck promoting the instrument. Orchestras were set in their ways and did not want this new invention to disrupt their traditional line-ups. He faced legal maneuvers by instrument makers, a couple of bankruptcies, and even threats on his life. Luckily his instruments fared better with French military bands, but arguably the important point is that they survived long enough to play a leading role in the development of America's indigenous music.
There's no reason to believe that Sax had the goal of creating an icon of sensuality and soulful self-expression, but we can all be thankful for his role in opening a musical platform for the likes of Coltrane, Parker, Henderson, Rollins, and so many others.
Adolphe Sax on Wikipedia
NPR Interview with the author of "The Devil's Horn"
Harvard Biographical Dictionary of Music
Wednesday, September 17, 2008
Today the L'Oreal Group still holds to Schueller's philosophy of "research and innovation in the interest of beauty." This international company had over 17 Billion Euros in sales in 2007 and employs thousands of people worldwide. All the wealth created by The L'Oreal Group is a direct result of Schueller's personal profit motive.
With all that said, this is the first somewhat controversial Hero we've honored. Can a Nazi supporter be a Hero of Capitalism? Can personal convictions trump capitalistic tendencies? I'll be sure to put my two cents on this in the comments, and I welcome the opinions of all the readers in the comments section as well.
Schueller on Wiki
L'Oreal on Wiki
L'Oreal Group Website
Tuesday, September 16, 2008
Bradley originally taught himself lithography and print making with his best known work being a likeness of clean shaven Abraham Lincoln. However, once Lincoln grew his famous beard, Bradley's print making business struggled.
The young entrepreneur began to work on making an American board game similar to an imported game he had played with friends. This new game used a top that spun to indicate the number of squares to move, a first in American board games. Bradley was also the first to redefine the purpose of the board game. In his first game, The Checkered Game of Life, Bradley continued the tradition of using the game to impart moral advice to those playing, but he also defined success in the game by looking at how much wealth each player was able to create and obtain.
Bradley found success when he used his troubled business to print copies of this new game. Within two days, he sold all the copies he had printed and sold another 40,000 copies of the game in the first year alone.
With his invention of The Checkered Game of Life, Bradley also formed Milton Bradley Company, a successful game production company. Now owned by Hasbro, Inc, Milton Bradley and his company are responsible for other successful games like The Smashed-Up Locomotive, Candy Land, and Battleship.
The financial success Bradley enjoyed because of his invention allowed him to become an advocate for education, especially kindergarten.
Bradley's game board invention remained a success and was updated in 1960 to become The Game of Life. His emphasis on morals and the creation of wealth as well as his entrepreneurial spirit helped Bradley create a game millions of people have enjoyed playing and created the opportunity for Bradley to pursue his passion of reshaping education.
National Inventors Hall of Fame: Milton Bradley
History of Toys: Inventors-Milton Bradley
Wikipedia entry on Milton Bradley & Milton Bradley Company
Monday, September 15, 2008
In baseball, teams that play in large media markets have an inherent structural advantage over those who play in smaller markets. Initially this difference manifested as higher attendance and more revenue from local broadcast deals. But as the economics of baseball grew, this difference became more pronounced, the owners tried to correct this problem through increased revenue sharing. Of course large market teams acted to protect their revenue streams, and consequently found even greater revenues available to them through innovations like luxury boxes and vertical integration into national television networks. Salaries continued to grow for players, and soon many of the smaller market teams found themselves priced out of the market for the established talent.
The Oakland Athletics are one such small market franchise. But rather than simply cutting costs and accepting losses, a culture of innovative and creative thinking began to emerge under general manager Sandy Alderson. Like a small company that streamlines and specializes to effectively compete with larger adversaries, the A’s looked to find competitive advantages that would allow them to compete for less. When Alderson left Oakland to work for the Commissioner of baseball, his young protégé Beane took over.
Beane began to base personnel decisions on rigorous statistical analysis. This analysis including using metrics which other teams have long ignored. Through the popularity of Moneyball, Beane has often been credited with “inventing” statistics like on-base percentage and OPS (a metric that combines a player’s ability to get on base with his ability to hit for power). But Beane did not invent these metrics; he simply recognized the need use them, allowing him to spend his limited resources more effectively.
Beane is a pioneer for using statistical analysis to recognize that an underpriced resource existed. He then exploited this market imperfection to construct several teams that competed on a fraction of the payrolls of large markets teams like those in New York, Boston and Los Angeles.
His approach has spread rapidly, both through its popularization via Moneyball, but also from the dissemination of his protégés to the front offices of many other teams. Beane’s Athletics have fallen on harder times in the last few years, as his advantage disappeared as the market corrected, but he continues to identify other underpriced (or overpriced) resources. Despite the recent lack of success on the field, Beane’s most recent strategy appears to be to trade pitchers who are approaching their free agent years for multiple prospects. This approach has loaded Oakland’s farm system with many high-ceiling prospects, and many talent scouts expect another period of success for this small market franchise in the near future.
Beane’s innovative approach has allowed many more small market teams to field competitive teams, at least in the short run, and has kept the interest level in baseball at a high level, despite the structural inequalities that many expected to ruin the sport.
Friday, September 12, 2008
Thursday, September 11, 2008
Today we honor Peter Goldmark (1906-1977) for his accomplishments in T.V. and recording technology.
Born in Hungary, Goldmark immigrated to America following the completion of his doctorate at the University of Vienna. As an engineer, Goldmark landed his first position in the U.S. at CBS Laboratories in New York, NY. Though he is responsible for developing the first color television technology, Goldmark is best known for his contribution to the music industry.
In 1948 Goldmark introduced the public to the long-playing (LP) record - otherwise known as the 33-1/3 vinyl. The LP made it possible to store up to 40 minutes of music and produced a better quality sound than anything prior. The LP "revolution"ized the music industry - so to speak - as Goldmark's invention hit the scene at the onset of - and largely aided - the "Rock n Roll" explosion. The LP proved an easier means of listening to, recording and marketing music of the day. As a result Goldmark's LP quickly became and remained the music industry's standard well into the 1980s.
Rock on Peter Goldmark.
Goldmark on Wikipedia
Goldmark in BusinessWeek
Wednesday, September 10, 2008
Jones got his start, fittingly, in a garage. Hired to clean the shop, he paid attention to the mechanics and became adept at rebuilding and enhancing autos himself. In his early life he would invent a snowmobile, a mobile x-ray machine, and an automated ticket dispenser. He mustered over 60 patents in his lifetime, but the majority of them had to do with refrigeration for transportation. With a business partner he co-founded Thermo King to market his invention. To this day the company is a major name in refrigerated vans and trucks.
In Jones' time refrigeration wasn't new and neither was the desire for refrigerated shipping. Refrigerator units had been placed in trucks and trailers before to no avail; vibration and inefficiency did them in. Legend has it that Jones' partner, Joe Numero, put him up to this task after a golf match in which refrigerated trucking was mentioned as desirable by one friend (in the trucking business) and unfeasible by another (in the refrigeration business). Numero had recalled an earlier discussion where Jones had mentioned his desire to invent air conditioning for cars. What Jones and Numero accomplished highlights the fact that successful entrepreneurism isn't the product of good ideas alone. It comes from an alignment of those ideas with tangible needs and many intangibles, including luck.
Fred Jones Wiki
Background on Refrigeration
Background on Thermo King
Patent 2,303,847 - "Air Conditioner for Vehicles"
Tuesday, September 9, 2008
Arnold Beckman was a chemist who had a knack for finding better ways to measure. He is especially noted for his "acidmeter," which allowed precise measurement of PH levels. He is remembered for many inventions, but today we honor him for turning his consulting business into Beckman Instruments. Beckman Instruments started in 1950 after buying out another company. At that time, it employed about 450 people. In 2004, Beckman Coulter employed more than 10,000 people and raised revenues of $2.4 Billion.
Beckman's pursuit of personal profit led to a company that makes us all richer. Every time one of us has medical lab work done, chances are Beckman contributed to making that test better. His legacy at Beckman Coulter continues to improve the biomedical testing and diagnostic industry.
Arnold Orville Beckman
Arnold Orville Beckman on Wikipedia
Arnold and Mabel Beckman Foundation
Monday, September 8, 2008
Frank J. Zamboni (1901-1988) was a successful business man, used to adapting business plans to fit changing times. In 1949, he did just that with his invention of the Ice Rink Resurfacing Machine, now commonly known as the Zamboni.
Zamboni, his brother, and his cousin owned an ice rink in Paramount, California. The men constructed a dome over the top of the rink to help protect it from the sun, but the ice still became chipped from regular use.
In order to make the ice smooth again, three to five workers were needed to scrape the top layer of the ice, sweep away the shavings, wash down the surface, mop the ice, and then spray a final coat of water on the ice. This process often took an hour and a half to complete. In 1942, Zamboni began work altering a tractor so that the tractor would scrape and smooth the ice faster and more efficiently. Seven years later, Zamboni patented his Ice Resurfacer.
This new invention allowed for the ice to be smoothed in 15 minutes. Zamboni continued to alter his machine and helped ice skating rise in popularity as it become easier and cheaper to keep the ice in pristine condition. His invention can be seen in hundreds of ice rinks today, and his original ice rink and factory remain vibrant businesses today.
MIT's Inventor of the Week-Zamboni
National Inventors Hall of Fame- Profile Zamboni
Zamboni.com- The Zamboni Story
Friday, September 5, 2008
I’m a sports guy, so I’m going to use my first couple of posts to pay tribute to a few sports figures who, by thinking about the game in a different manner, advanced the game in some significant way.
My first hero is therefore Branch Rickey (1881-1965). Branch Rickey was a long-time baseball man who played briefly in the major leagues and managed for a little while longer, before graduating to the front office. As the business manager for the St. Louis Browns in the late 1920’s, Rickey is credited with inventing the system that is now known as the minor leagues, in which formerly independent teams affiliated themselves with a parent club from the major leagues.
But fans of baseball know that this is not why Branch Rickey is so famous. Rickey is best known for his time as the President and General Manager of the Brooklyn Dodgers. During this time, Rickey signed Jackie Robinson to be the first African-American player in the major leagues. Robinson debuted in 1947 and was named the Most Valuable Player of the league in 1949. In signing Robinson, Rickey revolutionized the labor market for major league baseball players. Robinson’s and the Dodgers' success prompted other teams to change their labor practices.
Credit has been given to Rickey for having an ideological motivation behind his integration of baseball. This may or may not be true, but what we do know is that, by taking this bold step, he proved himself to be a better manager than all of his peers. He identified an underutilized resource, the many talented players trapped in the Negro Leagues, and accessed the resource to improve his team. The Dodgers’ early success was noted by rival GMs and integration spread rapidly around the league. The teams that integrated the fastest outperformed those that delayed(1), and this success guaranteed full integration across all of baseball’s franchises. (The Boston Red Sox (1959) were the last to integrate)
Branch Rickey was an innovator. His innovations ranged from training methods and equipment to the minor leagues, to a revolution in the labor market for players. When Rickey finally left baseball in 1955, he left the game in radically better shape than he found it. Baseball is today a multi-billion dollar industry, and Rickey’s minor league system today consists approximately 245 teams in towns across the United States. Branch Rickey has often been identified as a hero for integrating baseball. But for all of his accomplishments, Branch Rickey should also be recognized as a Hero of Capitalism.
Rickey’s Hall of Fame Bio
Rickey’s Baseball Reference Page
Lee Lowenfish, Branch Rickey: Baseball's Ferocious Gentleman
(1) Brian L. Goff, Robert E. McCormick and Robert D. Tollison, Racial Integration as an Innovation: Empirical Evidence from Sports Leagues, The American Economist Review, Vol 92, No. 1 (March, 2002)
Thursday, September 4, 2008
Cornelius Vanderbilt (1794–1877) was one of America's first and most accomplished heroes of capitalism. Vanderbilt began life on a humble Staten Island farm and rose to be the wealthiest American at the time of his death.
Wednesday, September 3, 2008
Harry Markowitz laid the foundation for the modern day study of finance. As a student of economics at the University of Chicago, Markowitz developed and published papers outlining the importance of diversification and risk analysis.
In 1952, Markowitz published a paper titled "Portfolio Selection." In this paper, Markowitz put forth the idea of diversifying a portfolio of stocks to produce optimal returns with respect to the level of risk involved. From this theory he developed the Markowitz Efficient Frontier – as it came to be called – which illustrates the set of portfolios that result in the greatest expected return per given level of risk.
Markowitz’ work in portfolio theory set the stage for further development in the study of finance and earned him a 1/3 stake in the Nobel Prize – alongside William Sharpe and Merton Miller. Markowitz’ theory - and extensions of his theory (e.g. the Capital Asset Pricing Model) - are still very relevant today – both in the classroom and on Wall Street. His ideas opened the door for an industry of financial specialists, analysts, and the like.
Cheers to Harry Markowitz!
Harry Markowitz - Business Week
Harry Markowitz - Wikipedia
Tuesday, September 2, 2008
In 1973 Fred Smith's company, Federal Express, introduced overnight parcel delivery to the US. A hub and spoke logistics system, based in Memphis, commenced delivery operations to 25 cities. It took over two years for the company to start making money and it's a wonder Federal Express succeeded. 1973 saw the Arab oil embargo, long-standing and burdensome regulations in the airline and trucking industries, and Postal Service monopolies on mail boxes and letter deliveries. But good ideas die hard, and with over $80 million in venture capital and $4 million of Smith's inheritance from his father, Federal Express outlasted most of these challenges and inspired the rest of the delivery world to follow its lead.
And how different the world is today. What Fred Smith and Federal Express (now FedEx) unleashed was a logistics revolution, the results of which are ubiquitous in modern life. Anything from textbooks to electronics are available from hundreds of countries around the world, affordable to anyone who "absolutely, positively needs it overnight."
Fred Smith is doubly heroic because his position as a successful innovator gave him and his company clout to push for airline deregulation in 1978. On top of this acute achievement, Smith is an ardent free-trader and proponent of policies which make hospitable the environment for future entrepreneurs.
Disclosure: I am a former part-time employee of FedEx.
- FedEx Profile
- FedEx Timeline
- BusinessWeek Profile
- BusinessWeek Interview
- Hour-long interview with Charlie Rose covering entrepreneurship, Smith's bio, and public policy
Monday, September 1, 2008
Today we honor Johannes Gutenberg (~1400-1468), the inventor of the wood and metal movable type printing presses (note:there is some recent controversy over whether Gutenberg actually invented the printing press). The printing press allowed Gutenberg to start mass-producing books, which until this printing press had been hand copied or printed on a movable clay press.
The Gutenberg's movable printing press (picture on our banner above) caused the price of books and printed material to drop dramatically. This allowed the transmission of knowledge to move at a much greater pace.
Though Gutenberg created vast amounts of wealth for others through cheap books, he died a relatively poor man. Ultimately, Gutenberg was not legally savvy and lost possession of certain printing rights, which was the beginning of a downward spiral. Gutenberg's legacy of pursuing personal profit made us all richer with the invention of wood and metal movable type printing presses.
Gutenberg on Wiki
Gutenberg on About Inventors
"Gutenberg and Mainz" by Eva-Maria Hanebutt-Benz
- December (23)
- November (20)
- October (23)
- Chester Greenwood
- Frank Lloyd Wright
- John Deere
- Nikola Tesla
- Samuel Walton (1918 – 1992)
- James Buchanan Duke
- Soichiro Honda
- Antoine-Joseph "Adolphe" Sax
- Eugène Schueller
- Milton Bradley
- Bill Beane
- Andrew Carnegie
- Peter Goldmark
- Fred M. Jones
- Arnold Orville Beckman
- Frank J. Zamboni
- Branch Rickey
- Cornelius "The Commodore" Vanderbilt
- Harry Markowitz
- Fred Smith
- Johannes Gutenberg
- August (1)
- June (6)