#83 Thomas Edison, Nikola Tesla, George Westinghouse, and the Race to Electrify the World

What I learned from reading Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World by Jill Jonnes. Jeff Bezos on The Electricity Metaphor for the Web's Future ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

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• 0:00David Senra?

  Great indeed is the power of electricity. And in the final decades of the 19th century, three titans of America's Gilded Age were among the Promethean few who dreamed of the possibilities hidden in this force of nature. Its awesome power visible only in the wild rumble and slash of electrical storms. Each titan was determined to master this mysterious fluid. Each vied to construct an empire of light and energy on a new and monumental scale. Each envisioned radiant enterprises that would straddle the globe, illuminating the night and easing forever the burden of brute labor. This is the story of the nascent years of the electric power industry and the rise

• 0:45David Senra?

  of a new technology that completely transformed society. A tale told largely through three visionary figures: their triumphs, their blunders, and their caustic feuds. Alright, so that was an excerpt from the book that I read this week and the one I'm going to talk to you about today, which is "Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World" by Jill Jones. So this one paragraph just gives you an idea of the time that this entire story is set in. It says, "The miracle of the Great Atlantic Cable flashed telegrams across the coldest depths of the ocean, where once letters from J. P. Morgan's father..." J. P. Morgan actually plays an important role in this story.

• 1:30David Senra?

  I didn't know that going into the... before I read the book. "...once letters from J. P. Morgan's father in the London office took weeks to arrive. Now telegrams pulse through in mere minutes. The railroads had become mighty, creating new cities where there had been only marshland or prairie. And in just the past year, they had laid an astounding 10,000 miles of track." The 1880 census, that's where the story begins, and it's going to go all the way up until the early 1900s. Census showed 50 million Americans. "J. P. Morgan, unlike many of his old-money peers, relished this new temper of the times. He admired men like Edison, who were bold, ambitious, hard-working, and confident."

• 2:12David Senra?

  So not only does J. P. Morgan play a role, which I'll expound on later on in the podcast, in financing some of these electrical companies, but he also had the first... his house was the first... Private home in New York City that was lighted up and actually wired for electricity. And one of the the main takeaways of this story that I was thinking about is how important it is to study like that, you know, the electrical industry is now massive and we could not imagine living without it. But at the very beginning, things look very different. And so humans have the tendency to look at how things are now and extrapolate in the future that it's

• 2:53David Senra?

  just gonna be the same. And obviously, that's not the case. And so here is how individual houses were able to have electric lighting at the beginning of this industry. And think about how different this experience is, taking place in JP Morgan's house, as it is in where you live. It says they were they were run by generators. It says the generator had to be run by an expert engineer who came on duty at 3:00 PM and got up steam so that anytime after 4 o'clock on a winter's afternoon, the lights could be turned on. Now think about that. We flip a switch. They had an actual person in the house, and he had to be an expert engineer. He says, this man, so it starts at 4 o'clock, this man went off duty at 11:00 PM. It was natural that the family should often forget to watch the

• 3:35David Senra?

  clock. So then 11:00 PM, all the lights turn off. He says the lights would die down and go out. Then there was a careful groping about in the sudden murk to light candles and kerosene lamps. So that's just some of the hoops that they jumped through because obviously, at this time, what was common, you had either lit candles, or you lit gas-powered lamps. A lot of people complained, they wouldn't, they'd have gas-powered lamps in their house and it produced headaches and other kind of like issues with your health. Candles obviously sometimes started fires. So the the light bulb was a huge step up. And so people would jump through hoops to be able to get access to this new technology. And what I found interesting was

• 4:19David Senra?

  Once it was wired up, Morgan had, obviously, with any new technology, he had all kinds of problems. So like, sometimes they would bury the electrical lines underneath his floorboards and then put like a rug on top. There'd be like, small fires or like, burning. So they, and then they had to rewire the house over and over again. But he was just so happy that he wound up being a good, like, early salesman for the Edison Electric Company, which is the one he financed, one of the ones he financed, I should say. But this paragraph just reminds me, this is like, the influencer marketing in the early electrical industry. "The banker they're referencing, Morgan, was subsequently so delighted with his electricity that he gave a reception and about 400 guests came to the house and marveled at the convenience

• 5:01David Senra?

  and simplicity of the system. Two of the guests, California Gold Rush millionaire Darius Ogan Mills and his son-in-law, New York Daily Tribune publisher Whitelaw Reed, promptly contacted the Edison Electric Illuminating Company to have their own house electrified." So we see that obviously happen a lot, where there's people we admire, they start talking about other products, and very soon, we say, "Hey, we want that product as well."

• 5:26David Senra?

  And then I just want to, we're gonna jump in and we're gonna go back and forth. So this is gonna be a little different, because normally I focus on just one person, right? And I originally, when I was reading the book, I'm like, "Okay, well, maybe I'll do separate episodes, all about the book, one based on Edison." We take each person at a time, because they're hugely important, hugely fascinating people. And then, the more I got into the book, I was like, "No, you know what? I'm just gonna make this maybe, even if the podcast is a little longer, they're just, the dynamic between all these, these three, is so fascinating. It was like, this belongs in one podcast, in one story, in one sitting." So, with that said, I do want to read this part, and we're gonna jump around between the people, obviously, why this period, in my opinion, was so important.

• 6:12David Senra?

  So it says, "But for the visionary capitalists, electricity possessed other, more practical allures. Already, this astonishing invisible agency had birthed two radically new technologies, the telegraph and the telephone, that had forever compressed and altered the age-old realities of time and distance. The most far sighted were tantalized by even greater electrical prizes. Who would further harness electricity to light the nation's streets, its dim factories, and all those millions of households, dramatically transforming man's age-old sense of day and night?"

• 6:49David Senra?

  Like I was just referencing, once the sunset, if you didn't have candles, you didn't have lamps, that was the end of your day. Of even greater moment in these commercial times, who would harness electricity to operate work-saving machines, mechanisms artfully reinvented to liberate humankind from the hard toil of farm and factory? He who could unleash the full, only dreamed of potential of electricity and control this awesome invisible power would become wealthy and powerful indeed. Was it any wonder the war of electric currents would be so fiercely waged? So that's actually what this book is about. That term there, the war of electric currents.

• 7:33David Senra?

  That is what the battle between the entrepreneurs, Edison with his direct current, and then Westinghouse and a few other people, and then obviously the inventions of Tesla with the alternating current. And now, before I continue talking about Edison, I want to take a slight tangent, a slight right turn here. Because I always talk about this idea that books are the original links. They lead us from one idea to another, or one person to another, much like the modern web does. And in this book, and this kind of relates to what we're doing here, right? In this book, a lot of people, a lot of early entrepreneurs, inventors, tinkerers in the electrical industry,

• 8:15David Senra?

  were going off of and inspired by people that came before them, right? So when I talk about founders, podcasts, people in person, I was like, listen, what does Elon Musk, Jeff Bezos, and Steve Jobs have in common? And the answer is they all learned and studied from entrepreneurs that came before them and that influenced their ideas in business and how their life turned out, right? Well, a lot of the early inventors in the electricity field, excuse me, were influenced by Faraday, Michael Faraday, who you might have heard of. And this book, Empires of Light,

• 8:53David Senra?

  Talks a lot about Faraday, so I'm only gonna read like two paragraphs from about him, just so you have an understanding, understand who he is. He's hugely influential. And this caused me to find biographies on him, and he's gonna appear in a future Founders Podcast. He's not technically an entrepreneur, but he thinks like one and he acts like one. So let me just read this part before I get into Edison. And Edison was hugely influenced by Faraday. So this is one quote from a biography on Faraday. He says, "Such was the prodigality of his output and the diversity of his skills that modern chemists, no less than physicists, engineers, and material scientists regarded him as the founder of their subjects. Some sciences and technologies owe their very existence to his work. He bequeathed

• 9:35David Senra?

  to posterity a greater body of pure scientific achievement than any other physical scientist, and the practical consequences of his discoveries have profoundly influenced the nature of civilized life." So it says, and then this is, is this a quote from him?

• 9:55David Senra?

  Okay, yeah, this is Faraday. He says, "A philosopher should be a man willing to listen to every suggestion but determined to judge for himself. He should not be biased by appearances, have no favorite hypothesis, be of no school and indoctrination, have no master. Truth should be his primary object." And then in turn, so all Edison and a bunch of other these, maybe even Tesla, were inspired by Faraday. Faraday was in turn inspired by Benjamin Franklin. He says, Faraday liked to quote Benjamin Franklin. So they were asking like, what is the, before I read you the quote, like he would create like a new chemical process, or a new electromagnetic realm, and then people would inevitably, over

• 10:39David Senra?

  and over again, when he'd make some kind of discovery, be like, what is its use? Like, I don't understand. And it says, Faraday liked to quote Benjamin Franklin, who had famously replied, "What is the use of an infant?" The answer of the experimentalist is, "Inever to make it useful." So saying it's our job to make these discoveries useful and practical, and that's exactly what they were doing. They were, the book talks about, they were experimenting, there's records of humans experimenting with electricity for a couple thousands of years. And in some cases, there'd be progress, then nothing would happen for 500 years, so somebody else picks it up. And then 200 years, and then finally, in the late 1800s, we have huge amounts of progress. All right, so this is what motivated Edison to work on electrical lighting.

• 11:24David Senra?

  At this time, he's in his mid-30s. He's already super, super famous. One of the most famous Americans living easily. And this actually worked to his benefit in starting his company. He said Edison, so he was, at first, his friend was trying to get him to go check out like these new electrical dynamos and these experiments with lighting. And he was like, no, I'm too busy, too busy. Then eventually he goes and he's blown away. And he says Edison was now a fire with excitement. Ever the competitor, he turned to his host, William Wallace, and said, "I believe I can beat you making the electric light. I do not think you're working in the right direction."

• 12:05David Senra?

  So something that Jill, the author, talks about a lot is Edison's extremely cocky. And I covered this a little bit because if you, longtime Founders listeners remember, I think it's like Founders, episode number two. I did the Thomas Edison biography, The Wizard of Menlo Park. And they talk about that a lot in there. He was extremely confident in his own abilities. So he says Edison rushed back to his research workshop to throw himself into creating a better and more practical electrical light. This is electrical light, this is actually an important part. "He worked feverishly, threw out the possibilities of this new field. It was all before me," this is a quote from Edison. "I saw the thing had not gone so far," meaning the industry still knew, "but that I had a chance.

• 12:49David Senra?

  I saw what had been done and had never been made practically useful. The intense light had not been subdivided so that it could be brought into private housing." So that's an important part. It's like you've got to lower that. It's too bright. And he understood at the very beginning, of course, people are going to want an alternative to candles and kerosene lamps. Like, electric light was really important. And this brings me to a point. I guess I wasn't exactly think about, talk about this, but Jeff Bezos has this great, there's this video on YouTube where he's saying, it's like an 18-minute talk. I took notes on it. I'll actually link my notes in the show notes. So you can read them if you want. And it also links to the video.

• 13:32David Senra?

  But Jeff's like, listen, a lot of people, and this talk is like 15 or probably 15 years old, right? And in it, Jeff is like, a lot of people think like the early, the analogy for the internet revolution that we're going through right now is the gold age. He's like, no, I don't think that's the right metaphor. And he gives all these examples from history of how he thinks about it. And he says, it's, the growth of the internet is going to be, is going to look closer to the growth of the early electricity industry, which is really interesting. And because Jeff is like, they're not, people were not saying, hey, like, why are my house for electricity? They were, they said, why are my house for lighting?

• 14:11David Senra?

  And he's saying, essentially, the killer app of the electric industry before was the lightbulb. And this is what Edison is working on right now, where we're at in the book. He's like, well, I actually think that I could be doing this better. I can make it more practical, which is obviously what he endeavored to do for all his inventions. And he winds up succeeding because he gets the patent. He winds up fighting patent wars for like, I don't know, there's probably hundreds, if not thousands, of lawsuits trying to stop people from infringing on his patent. And it's upheld all the way up to the Supreme Court, if I'm not mistaken. And so Edison gets the patent for the first, I think it's incandescent bulb. So that's what he's working on here.

• 14:53David Senra?

  He says, "The man who came up with the best arc light system might well make a fortune stealing away even that 10% of the gaslighting business." And he's saying, so even on the tiniest, and that's, he's just talking about streetlights. So even if you could just take 10% of the gaslighted streetlights, you already have a fortune. So they knew from the very beginning, the size and the magnitude of the industry. "But the man who could subdivide the light to take it indoors and tame it into a gentle glow," which is what the lightbulb does, right? "And power it with a dynamo," which that doesn't happen anymore, at least not in the way they did it back then, "he would be the true Promethean, the blazing electrical pioneer, the hailed benefactor of humankind, and he'd become wealthy to boot.

• 15:35David Senra?

  The race to illuminate with electricity the houses and offices of America was on."

• 15:43David Senra?

  Okay, so we're gonna stick with Thomas Edison for a little while because Jill, the author, she starts out talking, she basically built a foundation to understand how each individual thought about electricity, one by one, gives us some background, and then the story unfolds and how they interact with each other. So this is just, I'm gonna do a brief introduction to Thomas Edison. He says, "Thomas Edison had announced he was becoming a full-time inventor in early 1869, so now we're going back in time, okay? The previous six years had been spent drifting from city to city as a Western Union operator, while he was continually devising improvements in telegraphy," remember, they just referenced,

• 16:23David Senra?

  to set the stage for the time we're in, "the two huge improvements with human communications, one of those, telegraph. And he was soaking up technical books on telegraphy and electricity. He's a lifetime voracious reader and learner. Once committed to full-time inventing, Edison had done well enough with such clever items as an electric copying pen. But he really hit the jackpot in late 1974, when he sold rights to his quadruplex telegraph system to Western Union and Wall Street manipulator Jay Gould for $30,000." Give you an idea at the time what that $30,000 mean, like a typical laborer, like, let's say, when the electrical industry is up and about, they have tons of people laying

• 17:06David Senra?

  the wires, or like, you know, working people in the field, they would make about $12 a week.

• 17:15David Senra?

  Okay, so this says, "This was a, this was heady success for a small-town boy from Port here on Michigan, whose father had muddled along in various grocery, real estate, and truck farming enterprises. Edison had received very little formal education, being taught mainly by his mother. His boyhood revolved largely around his many ingenious efforts to make mechanical things or brew new chemistry experiments, including one that produced an explosion that wrecked a corner of a building and burned Edison and some of the boys." When Edison was 13, he joined the Grand Trunk Railroad as a newsboy. He impressed his bosses as a hard-working, entrepreneurial, and intent-on-self-improvement.

• 17:55David Senra?

  Those are really good traits to have, those three: hardworking, entrepreneurial, and obviously focused on self-improvement. He spent $2 to join the new Detroit Public Library, which was two days of his pay at the time. This gives you an indication of how hungry he was for knowledge. So he spends two days' pay to join the Detroit Public Library and proceeded to read his way through the shelves. It was during these railroading years that Edison became partially deaf. Now, I didn't remember this part. I knew he was partially deaf because he has some funny lines about being partially deaf saves him from like the cacophony, I think is the word he used, of like the ridiculous like everyday talk that people have.

• 18:35David Senra?

  But the reason I want to bring this to your attention is because I think there's a lot of things that we can't control that happens to us in life, but we can control the frame of mind in which that we look at these things. And he took a positive spin on a very negative event. He says, "Ever the optimist, Edison viewed his deafness as an advantage, a built-in buffer against outside distractions that helped him concentrate on whatever he was doing. Edison's avid curiosity about all things mechanical had led him to befriend the local telegraph operator wherever he was. When Edison turned 16 in 1863, his natural flair for banging out and receiving Morse

• 19:17David Senra?

  code, which was honed by 18-hour bouts of practice, earned him his slot as a junior operator. The Civil War was going on at this time, and telegraphers were in great demand. So sometimes you're at the right place at the right time. Timing is really important in these things." And so Edison was launched into the world of telegraphy, invention, money, and getting ahead.

• 19:49David Senra?

  So now, this is Edison's approach to work, and the power of inspired work, and the different paths you can take. So when Edison was onto a problem, there was no day or night, just hours in which he, in which to work, as his long-suffering, neglected wife and two small children well-knew. So I bring that up because, so obviously, we're, we want to grab the best ideas from a life, a lifetime of experience that these entrepreneurs have, right? But we also want to learn from their mistakes. Now, it's great to work on something you're passionate about, to love it so much that you want to dedicate a lot of time to it. Very few people in life find something like that.

• 20:30David Senra?

  But it's, to me, in my opinion, like, I wouldn't, like, family is extremely important. So, I don't think neglecting your, your wife and your small, two small children, he winds up having six children. And, you know, he's basically sacrificed his family life for invention. You have to be who you are, it's just, for me, that, that, that's a bad trade. Because it winds up, some of his kids wanted being estranged, and they're basically saying he's a crappy father. Edison could rarely pull himself away long enough to dine at home, instead of fueling himself on yet another slice of apple pie. That was a really weird thing that I learned, that he sustained himself just to be eating apple pie. So, now he's, oh, and this, this is a sign of his cockiness, remember, he toured William

• 21:15David Senra?

  Wallace's shop? And it says, "A mere week since the tour of Wallace's shop, Edison pronounced with his characteristic hubris to the reporter from the New York Sun, that he, Edison, would be the one to succeed with the electric light where others had failed. He, Edison, would be the Prometheus," they use that word so many times in this book, "who would define the secrets of this mysterious agency and light up America and the world." He had, in one inspired week, just invented the first practical incandescent light bulb. So that is partially true, but partially not true. He had got one set up in one week, yes, but then it would, he would, the search for the right material, I think it was a filament is what they're called. Took a very long time after that.

• 21:59David Senra?

  So the basic idea was there after one week and he had to run numerous, maybe countless is the better word, experiments to try to find the filament that wouldn't burn out and that could actually last. He says, "I have," and this is Edison, and he's not going to give too much details because he hasn't secured the patents yet, but he says, "I have obtained it, the light through an entirely different process than that from which scientists have sought to secure it. They had all been working in the same groove." And so that's the power of inspired work on a different path. Realizing, okay, well, everybody's running the same experiments, they're working the same groove, maybe let me attack this same problem and find a solution in a different manner. And that's what he did.

• 22:43David Senra?

  This is just Faraday inspiring Edison. Edison was a voracious and penetrating reader, hungry for knowledge and possessing an amazing memory. So it says Edison had avidly consumed all three volumes of British scientist Michael Faraday's book, and that book's called Experimental Researches in Electricity and Magnetism. Faraday became an immediate hero, a poor London boy who rose to the top ranks of science on brains and hard work alone. To Edison, Faraday had been living proof that the secrets of nature could be revealed through a determined experiment and astute observation. Beloved as Edison was by an awed and respected public, his cocky ways and phenomenal early

• 23:22David Senra?

  success had deeply irked his many scientific and inventing rivals, especially the gentlemen of academia. So this is also, you'll see, Westinghouse has to deal with this, Tesla definitely has to deal with this. A lot of people did not like him belittling their work, understandably so. But I just wanted to bring this part because I had this, in so many of these episodes, I had this section that I tongue-in-cheekly called "Critics Don't Know Shit." And it's not that saying that you should ignore all criticism, it's just that it is inevitable. I don't think I can think of one example of the biographies that I've read and covered

• 24:05David Senra?

  on the podcast where people, at the very beginning, told the entrepreneur, the founder, the inventor, "No, it's not going to work. Oh, you're going to fail. Why are you doing this? Why are you trying to be different? It's just a part of human nature. Human nature does not change. This happened hundreds of years ago. It'll happen hundreds of years in the future." You're gonna see this where you have, what they just said, the gentleman of academia, where like Edison's a liar, like this is ridiculous. And so let me give you a quote, and this is just silly nonsense. And we know this is silly nonsense because we're living in the world that Edison helped partially birth. So this guy named, I'm not even gonna say his name, it doesn't matter, he scoffed in a public lecture. What a cocky, and I

• 24:48David Senra?

  wrote, who is the cocky one? And you'll understand why I wrote that after you hear this sentence he says. "We have heard a great deal of late of Mr. Edison's discovery of a means of indefinitely dividing the light. I cannot tell you what his method may be, but I can tell you that any system depending on incandescence light will fail." So how, like they're saying he's cocky, right? How cocky is it to say, I don't know what, how he's doing it, or what even, what the details are, but I'm just gonna make this pronouncement that nope, it's never, it's impossible. Like you just have no idea if it's impossible. So I bring that up because inevitably, whatever you're working on, sometimes it's customers, sometimes it's your own family, sometimes it's friends, sometimes it's strangers

• 25:29David Senra?

  on the internet. You're gonna experience criticism. It's just what humans do. They just like to babble on about stuff they know nothing about. And it's best for you to just ignore it. I mean, if there's some element of truth, then listen. But oh, is that true? And if it's, if you find it to be true, then hopefully you can use that as helpful information that's actually useful criticism. But if it's just some people saying, oh no, this is impossible, I have no details, I haven't looked into it at all, I'm just talking, then then ignore them. Edison is telling, this is something I talk about a lot. I talk about this in, with friends and family, that one of my favorite quotes is, "Action expresses priority." So your actions actually tell the world what is actually important to you. There's a lot of people that say, oh, I want to start a business, I want to lose weight,

• 26:13David Senra?

  I want to do X, Y, and Z. And then you look at their actions and it's like, oh, you don't actually want to do that, you're just playing, it's a fairy tale in your mind. So Edison is telling us with his actions what to do, and that's avoid distractions. Edison, who had always been easily available to any reporter looking for a story, now put off all requests. Now, what's taking place at this time is, he's got the light bulb working, but he doesn't have the filament working. So he's like, alright, I'm avoiding distractions, I cannot entertain reporters like I normally do, because I gotta solve this problem. Okay, so he's raised a little bit of money. Obviously, these are hugely capital intensive businesses.

• 26:50David Senra?

  But he's getting a lot of pushback. And this section made me think of a quote that I've been actually thinking about a lot lately. And it comes from the podcast I did on Jim Clark, founder of Silicon Graphics, Netscape, other companies. One of the craziest stories, if you haven't gone out and listened to it, go back and listen to it. Jim Clark, it's based on Michael Lewis's book, The New New Thing, The Silicon Valley Story. But he has a quote in there that I've been recently thinking about where, at the time, Jim was like trying to raise more money and people were like waffling. I think, let's say, he needed $20 million. I don't remember the exact number. But he's like, you know what, I'm not, they're like, oh, you know, they were trying to make some concessions

• 27:33David Senra?

  or basically dilly-dallying, for lack of a better word. And Jim's like, you know what, forget it. I'll put up the money myself. I'll do it. And then this inevitably resulted, as kind of predictable, then they became extremely interested because then they had FOMO. They're like, oh no, we're gonna miss out. He's gonna just do it himself, so we'll do it. And then the part that stuck out to me is what Jim said about it. He was raised in a small southern town in Texas, so he has like a really interesting way to think about things. And he says, "To do anything great, you need pigs and not chickens." Right? And this is one of my favorite metaphors, and Thomas Edison is experiencing the same thing. He needs pigs, not chickens. So it says, "Jim Clark liked to say that human beings, when they took risks, fell into one of two types: pigs or chickens."

• 28:18David Senra?

  And this is a quote from Jim. He says, "The difference between these two kinds of people is the difference between the pig and the chicken in the ham and eggs breakfast. The chicken is interested. The pig is committed. If you're gonna do anything worth doing, you need a lot of pigs." So obviously, the pig gave his life and the chicken just laid an egg. So we see an echo of that.

• 28:45David Senra?

  About 150 years early, before Jim experienced the same thing, he says, this is now Edison talking. He says, "We were confronted by a stupendous obstacle. Nowhere in the world could we attain any of the items or devices necessary for the exploration of the system. The directors of the Edison Electric Light Company would not go into manufacturing. Thus, forced to the wall, I was forced to go into manufacturing myself." So you don't want to spend the money on manufacturing? Forget it, I'll do it. Since capital, and listen, listen to the words Edison uses here. "Since capital is timid, I will raise and supply it. The issue is factories or death." So Edison is a pig. He's committed. The people that have funded him up until this point are chickens. You need, if you're going to do something great, you need pigs, not chickens.

• 29:29David Senra?

  To show he was not kidding, Edison had boldly established a light bulb factory out of Out at Menlo Park, which by the end of the year was turning out several hundred bulbs daily. This was controlled and financed by Edison himself, who sold electric stock and borrowed whenever he could. So he's fully in. He's like, "Listen, we're not like, if we don't do this, we die, so we have to do it." Oh, so this is something just crazy to me. This has not really nothing to do with any of the three that we're studying today, but it was a reminder to me about that there's always, always opportunities for entrepreneurs that are always focused on improvement, because there's a lot of problems in our life that

• 30:13David Senra?

  there's like the adaptability of humans is one of the greatest traits of our species, right? But it could also lead to this point where like you just, you settle for good enough. Like this is, and if you focus on, hey, we don't have to focus on good enough, we can actually always focus on improvement. That's where there's a lot of opportunities to start new companies, to products and new services, right? And one of this was, I thought about, like, I've been thinking about Henry Ford a lot lately, because I just covered his book a few weeks ago. And how much of an improvement the automobile was compared to how people got around on horses or with their own feet. So this is the main setting for the story we're talking about today is in New York City and Pittsburgh, right? But mainly New York City because that's where they started lighting up everything first.

• 30:57David Senra?

  And this is the, this is the environment that these people were living in in the 1800s in New York City. Working largely at night when the city was much, when the city's much maligned street cleaning crews spread out to remove the two to three million pounds of horse manure left behind each day by the city's 150,000 horses. So think about this, before the invention of the automobile, the primary way to get around the city was horses, horse drawn carriages. And humans thought it was fine to have three million pounds of horse crap in the city streets every day. People live like that. They're like, this is the best solution. This is, this is good enough. And so I think for entrepreneurs, always focus on improvement, you realize that there's

• 31:42David Senra?

  no such thing as good enough. We can always improve and find out new, find out new ways. And eventually, of course, like New York City does not have, or any other cities does not have 150,000 horses dropping a bunch of crap everywhere now. And that's because entrepreneurs, tinkerers, inventors, experimenters, found a better way to transport our bodies around. Moving on, some traits that I've obviously learned from Edison, among others, is patience and persistence overcomes all. He said, for four years, now we've jumped ahead in the story, Edison had worked as hard as ever has he had on any one project. And he was understandably nervous that it would actually perform as promised. Edison was now 35 years old, and while his face still looked as youthful as ever, his

• 32:24David Senra?

  brown hair had turned gray in the years since he had blithely and innocently promised to light up all of Lower Manhattan with his, with his light bulb. So think about that. He, he got a lot of initial traction after one week. Took over four years to finally find the filament.

• 32:41David Senra?

  That's persistence. And this is what Edison wanted, or as I would say, like, everybody needs to know their why. Like, why are you doing what you're doing? Like, what is your why? So this is Edison's why. "Before him, the great inventor saw only more glory and great fortune, which to Edison translated into utter freedom to exercise his prodigious gifts as an inventor." He explained, "My one ambition is to be able to work without regard to the expense. I want none of the rich man's usual toys. I want no horses or yachts. I have no time for them. What I want is the perfect workshop." And that is actually a belief held by a lot, by, I would say, Edison, Tesla, and Westinghouse.

• 33:24David Senra?

  In fact, I was just watching a talk Steve Jobs gave back in like the late 90s. And he talked about how he was influenced by Bill Hewlett and David Packard, specifically the fact that they wrote down the principles of their company. It's called the HP Way. I actually read that book and did a podcast on it. You can find it in the Founder's Archive. But he talks about, he's like, "The first thing they said in the HP Way is that we have to make a profit." That's the very first thing. They weren't, and they said, "They have to make a profit so they can go on building other products." And I like that as opposed to building a product to make a profit. It's like, no, no, we're gonna make profits so we can make products that make the world better.

• 34:09David Senra?

  That's how Edison thought about it. That's how Tesla thought about it. That's how Westinghouse. Westinghouse winds up being a very wealthy man. He has like $50 million by the time he dies, in early 1900 money. But he focused solely on like, building products for the good of humanity. And I would argue that same thing with Steve Jobs. Like, you can go and look at the house he lived in, or like, the fact that he, I don't think he ever sold stock. I know they borrow against it, they do all the other stuff, but he wasn't in it, he was in it for the right reasons. And to me, the right reason is to build the best product possible. Now, a byproduct of building the best product possible is you're gonna have, assuming you're running your business correctly, you're gonna have profits. But what are you gonna do with your profits? And for Edison, Tesla, Tesla winds up making a little bit of money too, and I'll get to

• 34:54David Senra?

  that in a minute. It was always just so they could invent and make more products. I feel like there's a theme there that between Edison and Tesla and Westling House and Hewlett and Packard and Jobs that I think is important to realize. It says, I mean, even think about what Jeff Bezos is doing. He's taking, he's liquidating about a billion dollars a year in his Amazon stock and he's putting it into Blue Origin. He's, I mean, he could spend that billion dollars on all kinds of ridiculous consumption, you know? And he's like, no, I want, like, I've had a passion since I was five years old about space and rockets and I feel like that's my obligation to humanity.

• 35:37David Senra?

  All right, so now we're going to Tesla. What a character this guy is. Nikola Tesla was truly possessed by only one great passion: the mystery of all things electric. So, let's see, it says, "settled into a strenuous schedule that began at 5:00 a.m." Now, this is, so he's gonna start working for Edison's company in France. Now, this is his schedule. He's such an interesting person. So, "He settled into a strenuous schedule that began at 5:00 a.m. Every morning, regardless of the weather," Tesla explained, "I would go from where I resided to a bathing house on the river Seine." Seine, I don't know how to pronounce that. "Plunge into the water, loop the circuit," which means swim laps, "27 times, and then

• 36:22David Senra?

  walk an hour to reach the factory where the company was located. It was a considerable coup for a young man whose whole soul resonated to the little-known mysteries of electricity. Here he was in the expanding Edison empire." So, he starts working there. He says, "It quickly showed he was a reliable troubleshooter capable of solving most electrical tangles. However talented Tesla was as an engineer, he was also a decidedly odd fellow." So, he's a misfit. What a surprise. "Tesla was prey to strange habits and phobias. He silently counted each step he took as he made his early morning walk down to the factory.

• 37:03David Senra?

  Every activity had to be divisible by three, hence the 27 laps each morning." Before eating or drinking anything, he felt obliged to calculate its cubic contents. He deeply disliked shaking hands with anyone. He had a violent aversion against the earrings of women. Whoa. Pearls above all freaked him out. That's weird. I would not, and then this is Tesla talking. I would not touch the hair of other people, except perhaps at the point of a revolver. And the mere sight of a peach brought on a fever. What? This is Tesla. I was intended for my very birth for the clerical profession, and this thought constantly oppressed me.

• 37:48David Senra?

  So he talks about why he left his native Serbia, that he was very, his Serbian family was very against his experimentation. So it says, this is Tesla in high school. This is more critics, obviously. Tesla, a prodigy in math and physics, felt even more deeply and revocably enthralled to the still nascent science of electricity. He alarmed his professors with his voracious and exhausting appetite for work, especially if it had to do with electricity. It is impossible for me to convey an adequate idea of the intensity of feeling I experienced in witnessing my physics teacher's exhibitions of these mysterious phenomenon. So this is where he's falling in love with his life's work.

• 38:32David Senra?

  And he worked on this up until he died in his 80s. Every impression produced a thousand echoes in my mind. I wanted to know more of this wonderful force. And I'm going to share a lot of quotes with you from Tesla. He's got a very poetic way of speaking. So he goes, this is important, though. So his teacher gives a demonstration of this thing called a Graham machine. And Tesla, this is another example of like critics, where Tesla realizes, well, let me just read this to you, actually. So, let's see, it says, notice Tesla, this is, here's a quote from Tesla, says, sparking badly, talking about the Graham machine.

• 39:14David Senra?

  And I observed that it might be possible to operate a motor without these appliances. Meaning all these moving ports that they needed to to alternate to current. But my professor declared it could not be done and did me the honor of delivering a lecture on the subject. At the conclusion, he remarked, Mr. Tesla may accomplish great things, but he certainly will never do this. It would be the equivalent of converting a steadily pulling force like that of gravity into a rotary effort. It is a perpetual motion scheme, an impossible idea. And he's saying this in public, like, how, why would you do that? Initially deeply embarrassed by such a public rebuke, Tesla, the dreamer, could not resist.

• 39:55David Senra?

  However, thinking about the pointlessness of the sparking communitators, I don't know what those things are. He winds up actually accomplishing this very feat that his professor says is impossible. And he winds up selling a variation of this idea to Westinghouse, which we'll cover later. And it took years and years and years. I'm skipping ahead in the book, but this is Tesla's response to solving the problem that he worked on for more than five years. And this is Tesla talking to his friend about it. He says, Isn't it beautiful? Isn't it sublime? Isn't it simple? I have solved the problem. Now I can die happy. Now, keep in mind, he's a very young man. But I must live. I must return to work and build the motor so I can give it to the world.

• 40:40David Senra?

  No more will men be slaves to hard tasks. My motor will set them free. It will do the work of the world. And what he's talking about, the work he's talking about is AC, it's alternating current. He was integral in bringing this new technology to life, unfortunately, as we'll see later in the book, like, he never captured nearly, he dies basically penniless, and he never captured the value that he actually provided to the world. He was not a good businessman, unfortunately. But I want to bring up that point because he actually dreamed, a daydreamed.

• 41:21David Senra?

  Obviously, it didn't happen all at once. He was thinking about this problem and working on it for many years. But he saw the solution in his mind. Then he says, I have to build it. So that's what I mean. He's got a very, I've never come across a person like Nikola Tesla before. That's basically what I'm trying to say. Okay, so now we're, I'm just going to give you some early responses to electricity.

• 41:44David Senra?

  People were pessimistic about it and they called it like witchcraft. This is one quote, "We are not yet in the habit of observing machines that function without apparent cause." Remember electricity is largely invisible, right? "Their occult workings baffle us. The secret of their existence escapes us." The naive and enthusiastic Tesla was soon explaining his wonderful alternating current induction motor, that's what he was talking about, and full system to these new colleagues and bosses. This is happening at Edison's factory, but remember Edison is dedicated to direct current. Assuming that they, of all people, would appreciate it. At a time when the understanding of electricity was still quite primitive, polyphase alternating current was a quantum leap and difficult to grasp.

• 42:29David Senra?

  So that's what Tesla's working on, okay? Tesla's exuberant and idealistic plan to liberate the world from drudgery was not at all obvious, even to those working in the field. What they knew and understood was direct current electricity, where the electrons flowed only in one direction and created little magnetic field. So Tesla, Tesla creates a lot of enemies within the industry because like this is, he's basically saying this is dumb. There's a much better way to do it. Direct current, it's not going to, it's not going to last because it was limited. You'd have to build, the reason they started in New York City, because you needed population density. So they build like the, the stations and each individual station could electrify houses

• 43:13David Senra?

  and offices anywhere from a half a mile to a mile radiance. But after that, you had to build another one where alternating current, you could actually build the factories that are producing the, the power much closer to the actual fuel source. And that's how we do it today. You see the electrical lines either running like, you know, on these wires in the road or they're buried underground, but they travel very long distances. And so Tesla's like this, like you're not going to be able to spread. And he, he framed it in like idealistic terms. He's trying to free humans from drudgery. Liberation is what he constantly used. He's not going to be able to do that over long distances under a current. You have to use my current. So this is surprising, but still true to this day.

• 43:56David Senra?

  And also an insight into what it's like building a company in new industry. And this is a quote from one of Edison's managers. He says, "People generally did not at all appreciate the need or value of electricity. They had to be educated to its use. Suitable manufacturing methods, as well as adequate ways of distributing the manufactured product, had to be devised." So what they're saying is not only you have to create the product, but you have to create every single process as you need in this nascent industry, including distribution. Customers did not, and check this out, this is such a great quote, "Customers did not exist. They had to be created."

• 44:37David Senra?

  A litany of insufficient capital, shipments that needed to be sped, this is some of the problems that they're having in New York, laying all this electrical wire. So it's a litany of insufficient capital, shipments that needed to be speeded up, fickle clients of isolated plants, that's the direct current plants, problematic and erratic machines, and poor quality supplies. Many of these difficulties were resolved fairly easily, but others were major embarrassments and threatened grave financial consequences." So, you know, every day, they had more fires and more chaos to deal with. This is Tesla on meeting Edison. He finally comes to America, because he realizes, like, if he's obsessed with electricity, that's where electricity is happening.

• 45:21David Senra?

  He needs to go there. At the time, like I said, he was working at Edison's factory in Europe, in France. He says, "The meeting with Edison was a memorable event in my life. I was amazed at this wonderful man, who without early advantages in scientific training, had accomplished so much. I had studied a dozen languages, delved in the literature and art, and had spent my best years in libraries, reading all sorts of the stuff that fell into my hands," meaning he had a broader education. "And then I felt most of my life had been squandered." He's like, "Maybe I made a mistake. Maybe I didn't need to look what Edison's accomplishing." But he realizes, "No, no, the fact that I spent all this time having a broad set of

• 46:04David Senra?

  life experiences is actually better," because he was able to see the deficiencies in Edison's systems. But he says, "But it did not take long before I recognized that that was the best thing I could have done," meaning constantly exposing himself and learning about new things.

• 46:22David Senra?

  So this is, I left my note to myself. I don't know, no one is always right. No one is perfect. Let's see what that meant. It says Tesla pointed out that a central station based on alternating current dynamos could liberate, there's that word again, electricity from the one mile shackle of Edison's DC plants. Moreover, his AC induction motor would surely be superior to those operating on DC. Oh, this is what, now I understand my note. Edison, when Tesla's telling Edison this, Edison responded very bluntly that he was not interested in alternating current. And then this is Edison being extremely wrong. That's what it meant about no one's perfect. There was no future to it, and anyone who dabbled in that field

• 47:06David Senra?

  was wasting his time. And besides, it was a deadly current, whereas direct current was safe. So obviously Edison, we know, because the world we live in is AC powered, that Edison was wrong. And these two do not, they don't mix well. Tesla and Edison are very much like oil and water. And Tesla leaves and he starts his own company and he says, Tesla lasted less than a year as Edison's employee in New York. In truth, he and Edison were like oil and water, each amused and annoyed by the other. Far worse, believed Tesla was Edison's approach to science. And there's a quote from, now this is really interesting, because

• 47:46David Senra?

  there's multiple ways to succeed in any complex endeavor, right? And so this is Tesla saying that he doesn't like Edison's approach. He said, if Edison had a needle to find in a haystack, he would proceed at once with the diligence of the bee to examine straw after straw until he found the object of his search. His method was inefficient in the extreme, for the immense ground had to be covered to get anything at all unless blind chance intervened. And Tesla suggests to us a different alternative. He says, a little theory and calculation could have saved him 90% of his labor. Edison, in turn,

• 48:29David Senra?

  dismissed Tesla as a poet of science, whose ideas were magnificent, but utterly impractical. So that's two very different people. And again, they could both, they're both very smart, make a lot of inventions, succeed at life, and take different approaches.

• 48:50David Senra?

  Now I'm going to talk a little bit about the dramatic ups and downs of the life of Nikola Tesla.

• 48:55David Senra?

  And he says, "I have lived through a year of terrible heartaches and bitter tears. My suffering is being intensified by material want." So he has no money at this time, he's starting his own company. Scraping by in the cold winter, Tesla was reduced, many a day, to working in a New York labor gang. And he just has such a strange... I'm going to eventually cover a biography of just of his, because his life is so interesting, just a little bit I learned about it from this book. And so, he's in this like, labor New York gang, and he's doing physical work, and then one of the people he's working with realizes this guy has like a hell of a mind behind. And so, he sets up a meeting for a potential patron.

• 49:37David Senra?

  And he just does, he does an experiment where he rotates, he's like, figures out how to command the electromagnetic field and make... Well, let me just read this. "He placed the egg on the table, and to their astonishment, it stood on end. But when they found it was rapidly spinning, their stupefaction was complete." So he has, he was a very, like a flair for the dramatic, and he would do these lectures or these experimentations, and that's where he wound up building most of his reputation to make him famous. "No sooner had they regained their composure than they delighted Tesla with their question, 'Do you need any money?'" Of course he needs money, he has no money at this time. "Nicholas Tesla's life was taking another one of its dramatic turns. After the betrayal of his partners, his winter of paparism..."

• 50:22David Senra?

  I skipped over a part. He started a company, they did a little bit of financing, and then they just steal, stole all of his work and kicked him out. Nikola Tesla was once again launched on his long-deferred electrical dream, and that electrical dream is to bring alternating current to the world. Finally, he would be able to build the whole AC system he had dreamed of for so long. Okay, so now we got to the part about George Westinghouse. And I just want to give you a little bit of background to him. All right. And this is the time he starts realizing, hey, I'm going to work in this industry as well. He says, "By 1884, at just 37, he had already assembled a formidable empire and fortune in the freewheeling world of railroads, the most important and ruthless corporate force in America."

• 51:06David Senra?

  So he was already, before he started working in the field of electricity, he was already a well-established and really successful entrepreneur. "At the age of 22, he introduced his most momentum invention, a revolutionary air brake that allowed the engineers of a passenger train, for the first time, to quickly and safely stop all the cars." Westinghouse had had a struggle finding anyone willing to back this novel and expensive venture. And so far, far wiser when he finally did introduce his air brake, he staunchly refused to give the railroads licenses, saying only he would manufacture them in his small Pittsburgh work. So, one, I want to stop and tell you what the alternative was before he invented the air brake system. So let's say there's something on the track, and at the time, the rail, the train had to stop.

• 51:50David Senra?

  The engineer had to go back in every single car and brake it manually, one by one by one. And so the air brake system used compressed air to do that all at once, so the whole train would stop. So, then the second part, I think, is really important to notice. He's like, when he did introduce his air brake, he didn't sell licenses, right? He's saying that he is going to own them. He will manufacture them, right? This reminded me, so there's a lot of, I've read two books on Howard Hughes. Howard Hughes is one of the most famous people that ever lived, movies made about him. And all I could think of after studying him is, we should, there should be books written about his dad, not him.

• 52:34David Senra?

  I mean, what he did in aviation was impressive and other things, yeah. But like, one of the greatest business decisions of ever, one of the greatest strategic business moves of ever, has got to be Howard Hughes Senior, when he founded Hughes Tool Company, which is the vehicle for which printed money, hundreds of millions, if not billions of dollars, and that his son controlled later on after Howard Hughes Senior died, was, he came up with a way to, he developed a drilling bit, right? That would enable... Oil speculators to drill deeper and to access hidden fields of oil, right? And they're like, "Oh, I want to buy it, I want to buy it." It's like, "No, no, you're not going to buy this from me. I'm going to own it. I'm going to lease it to you." So which means you're going to pay me every month, right?

• 53:19David Senra?

  And I'll service and do repairs. And what happened is his breakeven happened really fast. I don't remember, let's say a month or two after. And so everything after that was pure profit. And Hughes Tool Company has got to be one of the most profitable companies that ever existed. It's gotta be. I mean, he printed profits for like 40 years of astounding, just an astounding measure. So Westinghouse is doing the same thing here. He's like, "No, no, I'm going to control this. You're not going to manufacture it. I'm going, like, I'm not going to sell you licenses. I'm going to manufacture them. I'm going to make them myself and I'm going to control that." Says, "When Westinghouse felt the railroads, however powerful, were treading on his turf,

• 54:00David Senra?

  he intervened forcefully, threatening patent lawsuits, usually in person. Having seen his first patents expropriated by the railroads that this happened in his early, before the invention that he had before the air brakes, he got screwed over. So they took his patents and his first company consequently dwindled away. Westinghouse assumed a lifelong ferocity when it came to his products and patents." So he just learned from it. He also discovered railroad signaling. So it's another business that he built. In 1881, he began buying up promising patents, most important ones that controlled electric circuits set off by trains, thereby activating signals. So they needed to know when trains are coming and to switch tracks or whatever the case was.

• 54:43David Senra?

  By combining these with his own improvements and inventions, Westinghouse soon dominated this new field. He said, "The oil lamps used in the signaling system were problematic and existing electric companies were unhelpful with solutions." So this is the genesis of the idea of, "Hmm, maybe I should get involved in this other, this new industry." When Westinghouse surveyed the state of the electrical art as embodied by Edison and his competitors, it did not much excite him, except as a sure way to develop a large enterprise, so he saw an opportunity. The physical, and he saw the exact same thing that Tesla saw. He says, "The physical limitations of Edison's direct current central station was more than evidence. The future foretold an insatiable demand for small, direct-current central stations,

• 55:24David Senra?

  serving mile-square areas and individual, isolated plants." So he knew that there was going to be a lot of demand for Edison's new system, but eventually knew that he's going to run out because you, it's, there's, America's largely rural at this time. Like, you can't, what was working in New York City in 1880 is not going to work for the vast majority, but it will with AC. And then this is Westinghouse's greatest advantage, and then we're going to contrast Edison and Westinghouse a little bit here, too. So it says, this is Westinghouse, a direct quote from Westinghouse, "My early greatest capital was the experience and skill acquired from the opportunity given me when I was

• 56:04David Senra?

  young to work with all kinds of machinery, coupled later with the lessons and that discipline to which a soldier is required to submit." So, he was, um, when he was a young boy, he would, he was exposed, also his family worked in building machines, and so he was constantly tinkering, so he was constantly obsessed to see how things worked and constantly improve it. And at the same time, the Civil War is going on, and he tries to go, when he was like 15 years old, he'd go, he runs away, tries to join the Civil War, he goes back because his parents aren't going to let him. Two years later, I think, maybe three years later, maybe 16 or 17, maybe 17 or 18 at the time, and he winds up serving and fighting for the North in the Civil War. And so he, his childhood was formed by these two twin factors.

• 56:48David Senra?

  This idea that, "I can make machines, I can create things that other people use," which is an extremely powerful idea, "and he also had discipline instilled in him, the soldier's discipline when you're fighting a war." So he combined these two into a career.

• 57:03David Senra?

  He was very much a man to contend with, the founder of four successful companies. Unlike Edison, who preferred to use only his own patented work, Westinghouse already had long and reasonably happy experience with purchasing other inventors' better ideas and improving them in his own shops. That's his MO. Westinghouse was nowhere near as famous as the flamboyant Edison. He usually refused requests for interviews and stories, and he explains why. "If my face becomes too familiar to the public, every bore or crazy schemer will insist on buttonholing me." So he wanted his privacy. In private, however, he was intensely compelling, fortright, blunt, and often charismatic. He could charm the bird out of a tree.

• 57:43David Senra?

  And now here's a story from one of his employees. And this is part of the reason I've come away from this book, very much admiring of Mr. Westinghouse. Why am I calling him Mr. Oh, Mr. Westinghouse, George, I'm calling by his first name. And definitely going to read his biography.

• 58:02David Senra?

  And turn it into a future founder's episode. And this is one of the reasons. So this is one of his employees talking. They're trying to like wheel, let me give you some background here. They're taking like equipment they need and supplies they need from one of his factories and moving it. And they're doing it by wheelbarrow. The wheelbarrow falls, there's like a runway, it's like cement. And the wheelbarrow falls off and into the mud. And so everybody's like, other employees are laughing and like just laughing at how helpless this guy is, right? His employee. And then Mr. Westinghouse sees what happens. He says, "Mr. Westinghouse appeared in his long-tail coat and hi-hat. He removed his gloves, took hold of the wheel, and lifted it onto the slab. He said nothing. It made a lasting impression on me.

• 58:46David Senra?

  Here was a boss whose first impulse was to help, to set things right, and at the same time to drive home a powerful but unspoken lesson. They were all working together from top to bottom. George Westinghouse, like Edison, thought money was important only as a form of stored energy, to use as he wished in his work and expand his businesses. He was interested not in being rich, but in helping the world. He strove incessantly to deliver better, more reliable products. But he had another goal also." My ambition is to give as many persons as possible an opportunity to earn money by their own efforts, he once explained. And this has been the reason why I have tried to build up corporations,

• 59:28David Senra?

  which are large employers of labor and to pay living wages, larger even than other manufacturers pay, or that the open labor market necessitates. That is very Fordian. Very much. If you didn't tell me that was a quote by George Westinghouse, I could easily think that was a quote by Henry Ford. Because all he focused on was service. And that's what Westinghouse is saying. He's like, listen, I want to make money. But I want to make money as a way to expand the amount of service that I give to other people. And that's the point of the businesses that I'm creating. And I think, like, why would he say that? And it's because missionaries believe. They have a deep belief in what they're doing. They're sacrificing their time, sometimes their safety,

• 1:00:12David Senra?

  to spread the word of what they believe in. And I think it's really important to realize that that scales up and down. And in fact, on an individual level, it only takes one person to really, really believe in an idea. And as long as that person is unrelenting and willing to not give up, they can motivate and gather other energy from those around them and push that idea forward. And so this is what he does. They invent the modern transformer, the electrical transformer. He says, "The opposition by all the electric..." And this is happening within his own company. So the reason, I should give you some background. George is realizing exactly what Tesla realized, that AC is the future. And so, but everybody in this early industry

• 1:00:57David Senra?

  was trained in direct current. So like, no, no, just focus on what's already out there. And it took Westinghouse to have this unrelenting belief in AC. And he's like, even the opposition, he overcomes the opposition of his own company. So this is, "The opposition by all the electric part of the Westinghouse organization was such that it was only Mr. George Westinghouse's personal will that put it through. No one, besides Westinghouse, understood the tremendous breakthrough represented by the AC transformer, a machine that could take high voltages that had traveled long distances and stepped them down for safe use in entire factories or homes, undeterred by the chorus of naysayers at his own company."

• 1:01:39David Senra?

  So what do you believe in? What do you believe in so much that you're willing to dedicate? And to say, no, no, I understand that you may not understand this, but let me explain to you why I believe this is true. I think it's a very important like to pause and really think about like, what am I working on? What am I doing? Do I have this deep belief? Because it's, it's, it's one of the rarest things in life to be able to work on something you truly, truly believe in. And I think as entrepreneurs, like we are unbelievably like lucky to be able to do that. Most people don't do that. I was just listening to Arnold Schwarzenegger talk. He talked about like the importance of making a full commitment in whatever you're doing in life, right? And so he's like, I don't know where he got the number, but he's like 74% of all Americans

• 1:02:23David Senra?

  hate the job that they have. And he's like, the reason they hate the job they have is because they're just accepting whatever jobs available. They didn't actually sit down and think, what do I want to do in my life? What do I believe in? And for Arnold, he's like, I wanted, I made a full commitment to become Mr. Universe, the winning of the bodybuilding contest. And then when I was done that, I made a full commitment to become a movie star, even though everybody told me, no, you're silly. People can't even understand your accent, et cetera, et cetera. And then when he was done that, he said, I made a full commitment to, to being in politics. He said, I knew my why, and I centered that. And everybody says like, you can't even pronounce the state of the, of the, that you want to be governor of. He's like, it doesn't matter. Like I made the full commitment. I believe this. He was a missionary in every single endeavor that he did. I don't know.

• 1:03:08David Senra?

  I think that you see that with Westinghouse, you see with Tesla, you see with Edison, you see with all of them. It's extremely important to be, to make yourself aware of that and then spend some time thinking about like, how does this apply to my own life? All right. So this is Edison on Westinghouse, and this is the beginning of the war of the currents. So Thomas Edison already has a successful DC company. And I say successful in like quotes, because they're, these are capital intensive businesses. They have to take on high levels of financing, high levels of debt, and there's all kinds of like global financial panics that caused them to, in some, in many cases, like had to reorganize, raise more monies and go bankrupt. These are, so they're successful in the sense that they're, they're spreading the product, but financially, not, not, not so much.

• 1:03:52David Senra?

  Thomas Edison smoked his cigar and stewed, deeply incensed to learn that the Westinghouse Electric Company was invading the field of incandescent lighting. Westinghouse was altogether another matter, meaning there's a lot of other people that like little companies that try to pop up and in some cases even infringe on Edison's patents, but he never had an adversary of the same level of quality of person as Westinghouse. So he says, "Westinghouse was altogether another matter, a formidable rival with immense achievement and access to major capital. He was not a man to scoff at, deride, or dismiss. The Pittsburgh industrialist was reputed to be a real fighter who, once decided, pursued a course of actionful bore." In other words, he makes full commitments to what he's going to do.

• 1:04:37David Senra?

  Whatever new project he launched, he was looking to be the best. Like Edison, he thoroughly enjoyed working in the noisy, dirty shops among his men, inquiring about the state of their projects and infusing everyone with his own zest. Here were the first angry rubblings in the coming hostilities that would become to known as the War of the Electric Currents. Okay, so there's one thing that's very confusing because at the very beginning, everybody, "Okay, DC makes sense, DC." Then once AC, Westinghouse starts installing them, he grows extremely fast, people realize, "Oh, wait, this is like a better option." Edison was extremely stubborn and he kind of ignored what was obvious.

• 1:05:20David Senra?

  And I don't know why, it was confusing to me, to the point where he even bought, there was like European companies that were developing AC motors and stuff at the same time and AC systems, and he even bought an option for one of their systems, but then he refused to use it. So he could have sold, like, he starts getting outsold later on by, even though he had a head start, by Westinghouse's AC system, and he just never did it. And so like my question I wrote down to myself is like, "Why stay with the DC system given its location's shortcomings, right?" It says, "Wondered somebody worked, this is a quote from somebody who worked for Edison." It says, "Edison genuinely feared that poorly designed and installed AC systems would impede

• 1:06:04David Senra?

  the broad adoption of electric power." That's what his stated reason was. One suspects of further cause, stubborn pride of authorship. Every aspect of the Edison DC system had been created from scratch by Edison or his colleagues. It is easy to imagine him balking and incorporating the inventions of others. So in other words, like what the author's suggesting here is it's ego, right? And I think that's very important because all like the idea that you're going to accomplish something great without a deep seeded belief in yourself. It's just that's of course you have this deep belief in yourself. Now, sometimes it's called ego. Sometimes obviously it can be taken too far.

• 1:06:47David Senra?

  And in this case, I think Edison definitely took it too far. But I bring that up because it's inevitable that we all have these same blind spots in our life. And just realizing when you see, I guess my point is like you can see it's a lot easier to identify flaws in other people than it is in ourselves. And just knowing that, okay, that person has flaws. Undoubtedly, I have flaws. Where are they? What am I, what am I papering over? What am I ignoring? What is my ego not allowing me to see? Because it could cause dire financial, in terms of business, like dire financial consequences for yourself. It definitely did for Edison. Edison would have been, I mean, he still did relatively well financially for himself. He has a lot of other inventions, other businesses, but he could, I mean, he was the first one

• 1:07:32David Senra?

  in the field. He owned the freaking patent for the light bulb. If he had just gone with, and he, I don't want to step over my point, but I guess it's not like a, it's not like this is like a brand new, I mean, this happened 150 years ago, but he winds up like, gee, General Electric, that came, that was a forced merger, which I'll talk about later on the podcast, between Edison and another AC company. And it was forced by JP Morgan, actually. You know, General Electric is still around today, but, so he's going to be forced into doing something he doesn't want to do. But if he had just adopted it earlier, like he could have.

• 1:08:07David Senra?

  It was his for the taking. Imagine being at the very, very beginning of one of the most important industries ever created, ever, and not fully taking advantage of that opportunity, that once in a thousand lifetime opportunity because of ego, worrying about ego or authorship, or having to incorporate... Because remember, Edison didn't look at himself like an entrepreneur, he looked at himself as an inventor. So, it's gonna be hard for him to say, like, "Oh, wait, this person invented something better than I did." Now, an entrepreneur, if you were an entrepreneur, you'd be like, "Oh, no, I don't care. Like, that's a better option. Let me go, and let me actually... That's way better. That's a better product. Let me adapt to that." So, it's frustrating.

• 1:08:52David Senra?

  There's a lot of parts in this book where it's just like, "Edison, come on, man." So, this idea of businesses that create FUD, fear, uncertainty, and doubt against their competitors, very, very common, very old tactic. This is Edison creating FUD against Westinghouse. He says, and he's trying to... He hits on this idea that AC current is deadly, that you're gonna kill everybody. He says, "The quickest, most painless death can be accomplished by the use of electricity, and the most suitable apparatus for the purpose is the class of dynamo electric machine which employs intermittent currents." That's AC. "The most effective of those are known as alternating machines manufactured principally in this country by George Westinghouse."

• 1:09:35David Senra?

  So, he's directly attacking Westinghouse here. "The passage of the current from these machines through the human body, even by the slightest contacts, produces instantaneous death." It's a hell of a way to compete, huh? Saying, "If you use my competitor's product, you're gonna die." He lashed out publicly, issuing what surely stands as America's longest and most splendid howl of corporate outrage, an 84-page Edison diatribe. He basically wrote a book, a small book on this, and it was called "Warning," all capital letters with an exclamation point. "It served as the first official public salvo in the most unusual and caustic battles in American corporate history. Edison, with his DC system, was making his first open attack against Westinghouse and AC in the War of Electric Currents."

• 1:10:22David Senra?

  While Edison and Westinghouse are competing, Tesla is inventing. As Nikola Tesla returned to his seat, the assembled electricians comprehended uneasily and somewhat resentfully that a new titan had risen unbiden among them, eclipsing much of what they had done, making irrelevant many of their dearest labors. So this is what I was talking about earlier, how Edison would do, or excuse me, Tesla would do these, these public displays of what he did, and they called it, the author called it earlier, Quantum Leap, and that's the, making these like, these AC motors without the, I think, I think they're called brushless AC electric dynamos, actually.

• 1:11:05David Senra?

  But that's a way to, to like, simplify the, the motors needed to make AC travel long distances. And so, this, this public demonstration becomes extremely famous. Everybody's reading about it in the, the early electric industry, like, trade journals. And so, Westinghouse does the opposite of what Edison does. It's like, oh, this is genius, this guy's, has already invented something better than what my company has, so he goes and buys it from Tesla.

• 1:11:41David Senra?

  And this is, um, this is Tesla, um, describing to us, uh, what he thought of Westinghouse. It says, Tesla very much admired Westinghouse's qualities as a businessman. He said once, "No fiercer adversary than Westinghouse could have been found when he was aroused. An athlete in ordinary life, he was transformed into a giant when confronted with difficulties which seem insurmountable. When others would give up in despair, he triumphs." Had, and this is the greatest, one of the greatest sentences in the entire book. Had he been transferred to another planet with everything against him, he would have worked out his salvation.

• 1:12:25David Senra?

  In my opinion, the only man on this globe who could have taken my alternating system under the circumstances, then existing and win the battle against prejudice and money and power. So he's saying Westinghouse was the only one. So I wrote a note to myself, be a wolf, survive anywhere you are dropped. Because think about what Tesla just told us about Westinghouse. He said, had he been transferred to another planet with everything going against him, he would have worked out a solution. So what I mean about being a wolf and surviving anywhere you drop. I use podcasts a lot to learn about what I would consider like just completely different lives than my own, right? And so I listened to this, this outdoor podcast by an author and podcaster and TV host named Steve Vannella. It's called Meat Eater.

• 1:13:10David Senra?

  It's very fascinating because I know nothing about like the natural outdoors. I don't hunt. I don't know anything about like, I just, it's like a foreign world to me considering. And it's so weird when I think about it because like most of human existence was much closer to like Steve Vannella's existence than my own, right? Where I live in a city, you know, deal with the, like we have the internet, we have all these like, we just, we kind of, we basically like built our own world within our, the natural world, right? That's kind of separate from it. And so I wind up find like, and Steve is like a student of history. So he goes and talks about like how different species exist and it's just, I, I find his podcast fascinating and because it's a world I'll never probably exist in.

• 1:13:52David Senra?

  So I was listening to, and he interviews a lot of like, I guess the US government has a lot of like people working for them that have, that manage like wildlife populations and, and, and like the, then the national parks and all this other stuff. So I was listening to one where they're move, they had to move around, they, they track and monitor like how much of any given animal is in an area and if like, to make sure they don't go extinct, right? And what happens is they were talking about how they had to move, I don't remember the name, let's just say it was an elk, right? You said to move elk population a couple hundred miles and you do that, they have like a, let's say a small group of like a hundred and you build this huge fenced in area, right? The fence is so big, they can't even see the fence.

• 1:14:35David Senra?

  And eventually you keep removing parts of the fence. So over months and months and months.

• 1:14:41David Senra?

  Eventually, you're easing them into it. Where you relocated them to an area that have food and water and things they need to survive. And then eventually you remove pieces of the fence and they start expanding out. And as they expand out, the population increases. And so then you have these pods of elks. I don't know what they're called, what groupings of elks are called. But in the environment they were just moved from, they're still growing. And now this new environment, they're still growing. So basically splitting them up and now that allows them to create more, right? And so that was interesting that they had to be so protective of them. Because there's so many things that hunt them. And then Steve or somebody else on the podcast, they're like, oh, you've done this with the wolf population in the American Northwest, right?

• 1:15:24David Senra?

  And you've moved them, do you have to do the same? He was asked a question, like, do you have to do the same process? Where you like set up this huge fenced in area where there's food and everything else? And the guy's response, I'll never forget, he's like, no. He's like, you can drop wolves anywhere and they'll immediately start surviving. Like basically they're infinitely adaptable over hundreds of thousands, if not millions of years to do what they're put on the planet to do. And I think there is an analogy there for entrepreneurs. I always talk about how I learned a lot from, like, if you listen to the words of, I think, like entrepreneurship and hip hop have a lot of similarities. And there's this, Jay-Z has a line that came out like 15 years ago or 20 years ago that

• 1:16:09David Senra?

  I always think about. And he says, put me anywhere on God's green earth and I'll triple my worth. Meaning like he'll understand like how to identify opportunities. And he's basically saying, in that scenario, he's the wolf. Doesn't matter where you drop me. I'll figure it out and I'll thrive. I'll figure out what resources are there. I'll figure out how to get what I need. I'll figure out how to combine those resources and to make them more valuable over time. And that's all you're really doing when you're building a product or doing a business. So I think in this case, going back to Tesla's quote, had he been transferred to another planet with everything against him, he would have worked out his salvation. Be a wolf, survive anywhere you're dropped. Westinghouse is going to survive anywhere you drop them. Okay.

• 1:16:52David Senra?

  Oh, and Westinghouse just has a lot of good personality traits that I want to focus on. So they're having this bitter battle. They don't even know each other.

• 1:17:02David Senra?

  And Westinghouse is like, this is stupid. So in the middle of war, Westinghouse just writes Edison a personal letter. So he wrote a personal note to Thomas Edison. And he's like, I want to propose peace here. He says, I believe there has been a systematic attempt on the part of some people to do a great deal of mischief and create as great a difference as possible between the Edison Company and the Westinghouse Electric Company, where there ought to be an entirely different condition of affairs. So they're like, let's just talk this out. We don't have to do this. We don't have to like, there's plenty of room for everybody in the business. And I think Edison rebuffed him, so it didn't work out. But I think about any time that I've had personal conflict,

• 1:17:42David Senra?

  there's something very human. When you, let's say you have a fight with a friend or a business associate, anybody else, like, I think it gets really, it makes it a lot worse if you just stop talking or ignore it. And sometimes you have to take a step back. Let's let time like get everybody to calm down. But almost every other time, you could just be like, listen, let's just sit down and talk about this, man. This is stupid. Let's figure out why we're having a problem and let's just come to some kind of solution. I think this personal touch is extremely important in human endeavors. So next time you find yourself in conflict, once you, as long as you're not letting anger or emotion blow your judgment, just be like, let's sit down and talk calmly and I bet you we can figure this out. And in most cases, you can. And that's what Westinghouse is trying to do.

• 1:18:26David Senra?

  Edison rebuffed him and part of the reason he probably rebuffed him is because AC was winning by a long shot. And here it says, "Westinghouse emphasized his company's huge success. The 1888 Edison Annual Report showed Central Station orders totaling 44,000 lights." Okay, so they did 44,000 lights the whole year. In October of 1888, his firm's orders was 48,000 lights. So he did more in October than Edison did in his entire year. And Edison had a huge head start on him. Because again, other people saw the same exact thing that Tesla and Westinghouse saw, that the AC was going to be, it was going to win out.

• 1:19:03David Senra?

  Edison does win a few battles. This is not like, you know, this war goes on for quite a bit of time.

• 1:19:10David Senra?

  So it says Edison could feel happy about the drop in copper prices. So light bulbs need copper at the time. And there was a, what he's talking about there is there was like a, a, a small group of people try to corner the market on the world's copper prices and try to basically create a monopoly so they could jack up prices. That affected Edison for a little bit and it didn't really affect Westinghouse as much because AC required less lighting or less copper. I don't know the exact details. Obviously, I'm not well versed in all the materials, but that, that was actually, that monopoly was penetrated and broken up and it was actually done by like market forces, like scrap dealers or whatever the case was. But anyways, the, the price dropped. So that's what they're talking about there.

• 1:19:55David Senra?

  His clear cut light bulb patent win in the courts that happened over and over again. And Tesla's humbling in the world of making things work. So what they're talking about is Westinghouse bought Tesla's AC system, whatever you want to call it. But after a year, he left Westinghouse because they couldn't, they couldn't make it work. He makes it work later on. They just couldn't at this point in the story. There was also the unexpected appearance of a new and powerful player. All through the war of electric currents, both Edison and Westinghouse were continually in the public eye, whether through their proxies or firsthand. Notably absent from this very public fray was the other major AC company, the Thomas Houston Company.

• 1:20:37David Senra?

  So the Thomas Houston Company winds up, it's run by, check this out. If you think about, think about where you're at in life. Hopefully you're working on things that, that you want to, but maybe like a lot of people, you're, you're in a spot where you're like, man, I know I could do better. The guy that runs Thomas Houston, you know what he did before he runs Thomas Houston? And remember Thomas Houston merges, they went up around 75% of the market into General Electric. He sold shoes. He was a shoe salesman. My point being is like where you're at now is not indicative of where your life will always be. You're perfectly capable. You're a human. You're an adaptable person. You can learn new skills. You could do whatever you want to do that you set your mind to.

• 1:21:20David Senra?

  This guy went from selling shoes to running the largest electric company in the world.

• 1:21:26David Senra?

  Come on, that's amazing. Edison, obviously, is going to be forced into merging with him. He doesn't like the guy. Westinghouse doesn't like him either. But nonetheless, I thought the fact that he sold shoes before he started an electric company is quite inspiring.

• 1:21:42David Senra?

  So, there's this huge, really, a lot of the public relations battle in the War of the Currents, according to this book, is really one-sided. Edison was really attacking Westinghouse. And Westinghouse is really smart. And he's like, just, this is a lesson, what we're going to focus on here, is don't play the other person's game. So, Westinghouse hires this guy named Heinrich, who's a former reporter. He's basically saying, "Hey, I need positive PR. I want positive PR. I don't want you going out attacking other people, okay?" And so, Heinrich reads a story about, same thing, they're attacking AC and Westinghouse, and Heinrich is getting mad. So, he runs up to, Heinrich is getting mad. Heinrich runs up to Westinghouse's office. He's pissed off.

• 1:22:27David Senra?

  He's like, and he bursts in the door, like, "Can you believe this is happening?" And this is Westinghouse saying, he says, "He saw that Heinrich was agitated and what he was clutching, the newspaper. The Pittsburgh industrialist cocked his great head and asked Heinrich, 'Well, what's the hurry?'" And then Heinrich says, "Don't you think we ought to say something against these slanders and false statements? Heinrich would always remember how Westinghouse eyed him for a few seconds. Westinghouse smiled. Heinrich, "They tell me you're quite a whist player." Whist is like, something like bridge, some kind of like game. "Is that so?" Heinrich admitted a fondness. "Well, then, you know the meaning of the expression, 'Don't play the other fellow's game.'"

• 1:23:12David Senra?

  Heinrich found this thought puzzling. What did this, what did the game whist have to do with Edison? Westinghouse explained, "Now, seriously speaking, all this opposition to the alternating current is doing our business a great deal of good." We are, he's understanding there's no such thing as bad publicity. We are getting an invaluable amount of free advertising. As a practical, commercial proposition, the alternating current system is so far superior to the direct current that there's really no comparison. By keeping up this agitation about the deadly alternating current, they are playing our game and we are taking the tricks. They hope that by their power, their influence, they can accomplish the arrest of the march of progress.

• 1:23:58David Senra?

  This, by the very laws of nature, cannot be done. As to the attacks made against me personally, of course they hurt, but my self-respect and conscience do not allow me to fight with such weapons. Meaning, he knows that he's in the right. Because I feel that my moral reputation and my business reputation are too well-established to be hurt by such attacks. By letting others do all the talking, we shall make more friends in the end than if we lower ourselves to the level of our assailants.

• 1:24:29David Senra?

  I mean, I don't know how you can come away from this, reading this book or listening to this podcast without a lot of respect for the mind and philosophy of George Westinghouse. So, one of the ways that Edison decides to fight the war is by trying to get, at the time, New York State, or it might be New Jersey, let's say it's New York, is saying, you know, we're going to outlaw, they have the death penalty, they don't want to hang people anymore, so they're asking people to come up with different, like more humane ways of killing people. And they come up with the idea of the electric chair. And so Edison wanted to, he was contacted as like an expert on electricity, so he says, "Oh yeah, the perfect thing to kill people is Westinghouse's machines."

• 1:25:14David Senra?

  And this is more evidence that there's no such thing as bad publicity. Because they're using these machines now to kill people. And he says, despite Edison's war against alternating current, the month of September in 1890, soon after the first botch electrocution. So they use the machine, they think the guy's dead after like 12 seconds. They pronounce him dead and then he comes back to life. He was never really dead, obviously. And so they had to keep electrocuting him and it was like a very gross and like public spectacle and it made news everywhere, right? So that's what they mean by botch electrocution.

• 1:25:52David Senra?

  At the exact same month this happened, there was a banner sales month for Westinghouse Electric Company. In four short years since it was established, total annual sales soared from $150,000 a year to more than $4 million. So he's clearly winning this war. Now, he's doing a lot of sales, but he has a lot of debt. These are capital intensive businesses, like I said earlier. And so there's two or three great recessions, if not depressions, that happened during this time. And they, you know, sometimes they start overseas and they spread to America. Sometimes they start in America, that's spread elsewhere, like many banking crises tend to do. And so at this, at this point, he needs a lot of money to pay off all his debt because they're calling in loans because a lot of these banks are having runs on the banks

• 1:26:36David Senra?

  and they need money to have, to satisfy their depositors. So this is another example, if you're going to do anything great, you have to, you need a lot of pigs, whatever I referenced earlier, Jim Clark's idea. And so he's trying to raise money. The bankers are seeing an opportunity of weakness and they try to like, they're like, oh yeah, we're going to give you money, but we want to make sure that your company is properly managed. Okay. So this is, this is Westinghouse forcing them to change from being chickens to pigs. The phrase properly managed reflected an ominous turn of events. Believing Westinghouse cornered, one of the bankers saw an easy chance to gain partial control of this highly valuable industrial property. He said to his colleagues, Mr. Westinghouse weighs so much on experimentation. How ridiculous is that? And pays so liberally for whatever he wishes in way of service and patent rights.

• 1:27:19David Senra?

  That we are taking pretty large risk if we give him a free hand with the fund he has asked us to raise. We ought to at least know what he is doing with our money. When the bankers demanded a voice in management, Westinghouse explained in a genuine and pleasant way that this was impossible. He had always run his own companies. They were flourishing before this immediate need to pay off electrical creditors, and he had no intention of being second guessed or told what to do. The two sides went back and forth at some length until Westinghouse said he must have an answer. Either they were providing a loan, no strings attached, or they were not. So they said they won't. To their astonishment, instead of being staggered, he rose with a smile remarking,

• 1:28:02David Senra?

  "Well, thank God I know the worst at last." It was not Westinghouse, impetuous as ever, who was shaken, but the overreaching bankers. Westinghouse told several jokes, bade the silent bankers good day, and left the room. They had just witnessed the deservedly famous Westinghouse courage. So he goes and he finds other financiers. And he's like, "My business is good. You can look at the numbers. We just raised a lot of debt." And obviously, most businesses, you shouldn't be doing that. In the case of what they're actually inventing in this case, it might, probably, it sounds to be, had to be, like, there was no other way. And he winds up finding people, he recapitalizes the company. This happens to him actually twice.

• 1:28:45David Senra?

  And at the very end, like 25 years, 20 years in the future from where we're at now, maybe a little less, they wind up do successfully bankrupting the company and installing, like a, like a, I wouldn't say adult supervision, because the guy's like 50 years old at the time, but they do make him have management, and he winds up leaving the company. I'll talk more about that later. But before he recapitalizes, he also has to, he goes to Tesla, and he's like, "Listen, I set up this agreement with you. You get royalties." And this, Tesla basically gives up the royalties to save Westinghouse.

• 1:29:27David Senra?

  And here's, I'm going to read to you the description of how this event happens. And it's kind of, it's sad from Tesla's perspective, because he didn't have a lot of money, then he has this huge success, makes a little bit of money, and he winds up, this is, this, this decision he's going to make right here is going to wind up costing him close to $20 million. And, you know, he needed that later in life. He did not have a good later life. So, their meeting, he says, "Elaborated upon the crisis and asked Tesla to repudiate his contract and forego his patent royalties." Tesla described this critical episode in his own life. "Your decision," said Westinghouse, "determines the fate of the Westinghouse Company." "Tesla says, 'Suppose I should refuse to give up my contract. What would you do then?'" "Westinghouse replies, "'In that event, you would have to deal with the bankers,

• 1:30:12David Senra?

  for I would no longer have any power in this situation. "And if I give up the contract, we will save your company and retain control, so you can proceed with your plans to give my polyface system to the world.'" "Westinghouse replies, "'I believe your polyface system is the greatest discovery in the field of electricity.'" "Westinghouse explained, "'It was my efforts to give it to the world that brought on the present difficulty, but I intend to continue, no matter what happens, to proceed with my original plans to put the country on an alternating current basis.'" "Mr. Westinghouse," said Tesla, "you have been my friend. You believed in me when others had no faith. You were brave enough to go ahead and pay me. When others lacked courage, you supported me. When your own engineers lacked vision to see the big things ahead,

• 1:30:53David Senra?

  what you and I saw. You have stood by me as a friend. The benefits that will come to civilization from my polyface system mean more to me than the money involved.'" "Mr. Westinghouse, you will save your company, so you can develop my inventions. Here's your contract, and here is my contract. I will tear both of them to pieces, and you will no longer have any troubles from my royalties. Is that sufficient?"

• 1:31:21David Senra?

  That's a hell of a level dedication that Tesla had to bringing electricity to the world. I think our goal should be to work in an industry that excites us like electricity excited Tesla. Here's an example of that. "Tesla understood that many branded him a visionary for his deep belief in time, that in time, energy would be easily extracted from the universe around us. He pointed out, 'We are whirling through endless space with an inconceivable speed. All around us, everything is spinning. Everything is moving. Everywhere is energy. There must be some way of availing ourselves of this energy more directly. Then with the light obtained from that medium..." With the power derived from it, with every form of energy obtained without effort, from the store ever exhaustable That's an interesting way to describe it. Humanity will advance with giant strides.

• 1:32:06David Senra?

  The mere contemplation of those magnificent possibilities expands our minds, strengthens our hopes, and fills our hearts with supreme delight. With that, Tesla bowed modestly and stood beaming as the audience rose to its feet and thunderously clapped in amazement at what they had just seen and heard. This is one of his world famous demonstrations of new inventions that he was making at the time, too.

• 1:32:32David Senra?

  This is the beginning where Edison is going to be starting to be forced to merge. Westinghouse's determined quest for money continued. Thomas Edison might well have been grained great pleasure from Westinghouse's financial woes, were he not much in the same predicament. That's what I meant about, these are businesses that created unbelievable values to the world, but as far as profit at this point in time, not so much. The previous summer's reorganization, meaning they had to raise the payoff debt, too, so they reorganized, was not, after all, such a great arrangement. So, the Edison Electric Company is being, the president is this guy named Villard. He said, "Villard was well aware from his previous efforts to merge Edison's company with rival firms that Thomas Edison bristled at such talk.

• 1:33:16David Senra?

  The inventor had angrily dismissed the notion that mergers would solve any problems. As for merging with Thomas Houston, that was absolute anathema. Edison had already denounced its men for having boldly appropriated and infringed every patent we use. Moreover, Edison fervently believed that were he to combine with any of his hated rivals, his inventive fertility would drive up. If you make the coalition, my usefulness as an inventor is gone. My services wouldn't be worth a penny. I can only invent under powerful incentive. No competition means no invention."

• 1:33:54David Senra?

  But here's the problem with this. He doesn't want to merge, but he only held 10% of his own company's stock. Villard once again began secretly talking to Charles Coffin. This is the former shoe salesman, whose business brilliance had steadily forged Thomas Houston into a major electrical power.

• 1:34:12David Senra?

  So they continue talking. Philard goes to JP Morgan. JP Morgan was one of Edison's first financiers. And they do something here.

• 1:34:27David Senra?

  I couldn't even imagine what this is gonna, what this felt like.

• 1:34:33David Senra?

  They're gonna merge the company and they don't even tell Edison.

• 1:34:38David Senra?

  They don't even tell them.

• 1:34:40David Senra?

  They do it because they control everything, so they just do it. And then he finds out secondhand.

• 1:34:47David Senra?

  Says, "And it was so that JP Morgan, whose house had been the first in New York to be wired for electricity by Edison, but 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." So what they mean by that is the new merged company is they dropped Edison's name and they just call it General Electric. And they had to do this because obviously, I mean, you didn't have to do it that way. I think that's terrible. It's just not good at all. Like interpersonal human relations, I mean, but they had to do this because

• 1:35:28David Senra?

  DC was getting its ass kicked. AC was, had won the war and Edison was refusing to give up. So now the combined company controls 75% of the market and they sell both DC and AC systems. And at this point, effectively, the war for electric currents is over. AC has won. I do want to update. There's, well, I'm gonna tell you more individually about the lives of Westinghouse, Edison, and Tesla after the end of the war, because obviously now it's just the beginning of a whole new industry. Everybody's kind of competing on the same,

• 1:36:11David Senra?

  like they're offering similar products. Before I do that, I just want to remind you that My podcast has no ads, so if you want to support yourself and this podcast at the same time, please sign up for the Misfit feed. You can find that link directly in the show notes below. You tap it, within 10 to 20 seconds, you can access all, half of the podcasts I do are for free, like this one, and half are reserved exclusively for Misfits. So if you want to make a commitment, go deeper into the minds of these great entrepreneurs, benefit from their experiences, their ideas, download them into your brain, and support, I would say you support the podcast, but really you're supporting yourself first and foremost.

• 1:36:53David Senra?

  So support yourself by becoming Misfit. This in turn supports me, allows me the time and effort that it takes to make these podcasts. So if you get value out of the work, if you're learning from this podcast, please do click that link and sign up. It's unbelievably fast, and I would really appreciate it. Alright, so let's talk about Westinghouse after the war. And this is somebody that worked for him, and it says, "I have never met a human being who could keep track and direct as many things simultaneously as him. He had a foresight in this that was almost uncanny to me. Every new idea was almost immediately analyzed by him and acted upon before you realized what was in his minds."

• 1:37:35David Senra?

  As Westinghouse traveled relentlessly among his many businesses, he continued his lifelong practice of seeking out brilliant inventors or engineers, buying their patents, and then collaborating with them to create better industrial versions. So that's kind of his MO about how he started all his companies. When he was younger, he'd invented himself, and then later on, he would just partner with them. It's just some philosophy on life, just some random things, little nuggets of wisdom I think we can learn from Westinghouse and apply to our own lives. And they're saying, "How can you go to sleep after such a busy day?" And then he goes, "I never think of the past. I go to sleep thinking only of what I'm going to do tomorrow. With this constant forward thinking, Westinghouse squandered no mental energy on what might have been."

• 1:38:19David Senra?

  So this is the part of the story where there's another financial panic. This is in the early 1900s now, and this is where he's going to lose his company. And I just want to read the part like how he responds to it. It's again, there's a lot of things in life that are, that are going to happen to us. Most of which are not out of our, or most of which are not under our control, but we can't control how we, we, um, we react to this. And he's having this conversation when this, this really sad and unnerving day. And he's talking to that Heinrichs guy, the guy that was doing his PR. And he wants to get the word out to the press about what's going on. And this is, this is Westinghouse. He says, "Do not forget to make it very emphatic to them that this receivership is not the

• 1:39:04David Senra?

  end of the company. The company is fundamentally as sound and solid as ever." At the time, they're doing like, I don't know, like 30 million in revenue. They just have a lot of debt. "The company is fundamentally as sound and solid as ever, and it will emerge out of this unfortunate situation in greater and more prosperous concern than ever." He's actually right about that. "The bankruptcy was a great shock to both insiders and outsiders, but with money so tight, Westinghouse saw no alternative. He treated it as matter of factly. I grant to you," and this is the part I want you to remember and internalize for your own life. "I grant you, this is not pleasant," he told one friend, "but it isn't the biggest thing in the world. All large businesses," I would say all businesses, "has its ups and downs." This sentence is super important.

• 1:39:48David Senra?

  "The crisis through which we are passing is only part of our day's work." He's remaining calm and realizing, hey, there's going to be ups and downs, and I just got to work my way through it. So they, they, they bring in this other guy named Robert Mather. They wind up pushing him off the, the board correct entirely, but then they want him to come back. And he says, "They made various lukewarm overtures to bring the great endossois back into some kind of active management, but he disagreed with their whole corporate philosophy." This is another thing I think we can learn from him. "He saw himself as interested in progress and profits and the welfare of his men, while they were only interested in profits." The loss of his electric company was a cruel blow, but Westinghouse was at heart

• 1:40:32David Senra?

  an optimist, a doer and a builder. He still had his four other major American companies and his insatiable desire to improve the world. And he was an entrepreneur till the day he died. At a time when many Americans had had come to view the nation's industrialists and financiers as little better than robber barons, Westinghouse was a notable exception. This is how he was viewed: "An honest industrialist who sold the best product for the best price, who relished competition and valued his workers, and who deserved his hard-earned fortune." So when he dies, he winds up having like thousands of his employees coming out and to his funeral. And I think this is just an important thing. One lesson he taught everybody

• 1:41:14David Senra?

  in this time, he says, "A corporation can have a soul." And this is the last quote from Westinghouse in the book. And he says, "One day, one day towards the end of his life, he was on a train whose air brakes helped avert a derailment at a bad track washout." So he turns to the person next to him, he says, "If someday they say of me, 'That with my work I have contributed something to the welfare and happiness of my fellow men, I shall be satisfied.'" So I love that. That's, that's the, like, the northern lady, the North Star, rather, that guided him. It was like, "I just want to contribute something to the welfare and happiness of my fellow men." And of course, capture some of that.

• 1:41:56David Senra?

  Edison was distraught after, after General Electric reform. He said, "You know what? I'm just gonna, I'm gonna work on something so big that they'll forget that I was ever associated with the electric industry." Winds up doing like, spending years and a lot of money on this failed iron ore build, uh, business. But he goes on and creates, surprisingly, the movie business. Says Edison had to set up a primitive movie studio. And by 1904, with the Edison Studios, uh, made it, they made a movie called The Great Train Robbery. Did early movies begin to move beyond skits to real stories? This was a revelation, soon

• 1:42:37David Senra?

  copied by others flocking to the business. And there's all these other, um, machines and inventions that were basically in the early motion picture industry. And he winds up consolidating this. He says, he had a bunch of, as came to be like, standard for the industries Edison operated. And he had a lot, a lot of patent wars. But he wins, like he won the light bulb patent war. Long drawn out patent wars. He emerged triumphant as the holder of the key motion picture patents in 1907. So he sets up this thing called the Motion Picture Patents Company, which was essentially a movie trust. It guaranteed fees worth a million dollars a year to Edison. How crazy is that? When one former colleague expressed concern to Edison about his financial status, he wrote back cheerfully, "My three companies, the Phonograph Works, the National Phonograph

• 1:43:22David Senra?

  Company, and the Edison Manufacturing Company, which makes motion pictures and machines and films, are making a great amount of money, which gives me a large income." So as he turned 60, Edison was flourishing. While Westinghouse had become a great industrialist, building even bigger and heavier machines, Edison was almost unwittingly developing a whole other sector of the American economy, one that was far less capital intensive and far more glamorous, the entertainment industry. So it winds up working out for him in the end. He didn't get nearly what he wanted out of the electrical industry, but he took that, didn't give up, and kept going.

• 1:43:58David Senra?

  Tesla unfortunately fared, I would say, worse out of both Westinghouse and Edison. And this is a little bit about Tesla. "His dreams were big, far beyond the imaginings of his peers, and very expensive. Tesla's idealistic and generous renunciation of his AC royalties was beginning to haunt him. At $2.50 per horsepower, one can quickly calculate that Tesla had nobly forfeited a princely and heartbreaking sum of $17.5 million in royalties." And that's just the American induction motors.

• 1:44:39David Senra?

  At that time, they've generated 7 million horsepower that he gave up. So you would have made more than that, assuming he would have got the patents in Europe as well.

• 1:44:53David Senra?

  And I'll close on this. To this day Nikola Tesla remains a brilliant but eggnamatic figure, a scientist, inventor, dreamer, and visionary. He did find patrons later in his life. He was allowed to live in, like, he lived the rest of his life in New York City, lived in hotels and whatever the case was, but he did not have a lot of money. Electricity had, so it says, "To this day, he remains a brilliant but eggnamatic figure, a scientist, inventor, dreamer, visionary." Electricity had created many, many millionaires, but Tesla, who made possible the electric age, was never one of them. Still, he did live to see his AC system straddle the globe. Remember, that was his original goal. Illuminating nation after nation, empowering millions of motors. Almost 60 years after he had stepped

• 1:45:38David Senra?

  shore in New York, dreaming a big dream of electrifying the world, the dream had more than come to pass.

• 1:45:51David Senra?

  I will leave the story here. As you can see from the length of this podcast, I had a lot of notes. There's a lot. I really, really enjoyed this book. When it was over, I felt, like, I always talk about that feeling. You know, when you get to the end of a great book, there's this weird melancholic, I don't know even the name of the feeling. It's like you're, you're very satisfied you got to the end, but very sad at the same time that it, that it, that it ended. I really think Jill, and her name, it's spelled J-O-N-N-E-S. I'm pronouncing it Jones. I have no idea if that's how you pronounce it. But if you want the rest of the story, support, you can, here's how you can support the author, yourself, and the podcast simultaneously. I leave a link in the show notes for every

• 1:46:36David Senra?

  book that I cover. You click that link. It's an Amazon affiliate link. If you click that link and buy the book using that link, Amazon sends me a small percentage of the sale and no additional cost to you. It's a great way to support the author, who did an unbelievable lot of work, that we can learn a lot from. Support yourself by reading a great book. There's very few better uses of your time than, especially if you're obsessed with entrepreneurship like I am, and like millions and millions of people all over the globe.

• 1:47:03David Senra?

  Hard to find, other than outside of your own work, a better use of your time than reading about entrepreneurs of the past, learning from their mistakes, stealing their good ideas, which in some cases took 70 years for them to figure out, and you also support the podcast at the time. So it's a win-win-win. And you'll just get a fantastic story. You can click that link, or you can just go to amazon.com/shop/Founder'sPodcast. You will see not only this book, but every single other book that I've ever reviewed for this podcast. And if you go to there, you'll see which book I'm working on. It's like a way to have a sneak preview to see what next week's podcast is about. I usually post that

• 1:47:42David Senra?

  and put it on the list a week in advance. What else? If, oh, Misfit Feed. If you're ready to take it to the next level, if you're serious about studying, doing the same thing that Thomas Edison did, doing the same thing that Steve Jobs, Jeff Bezos, Elon Musk, literally almost every single, I would say every single entrepreneur that we've covered, if you're ready to do what they've done, and what they showed you with their actions, they thought was a good idea, which is continue to study entrepreneurs that came before you, more importantly, learn from entrepreneurs that came before you, you're missing out. You're missing half of the episodes that I've done by not signing up for the Misfit Feed. So the value that

• 1:48:23David Senra?

  you'll get is incalculable. The value of ideas that people spent their entire lives figuring out, that you can then just download into your brain and very quickly, it's worth, who knows what these ideas will be worth over your lifetime, as you continue to dedicate your time and effort into whatever you're working on, whatever craft that you're pursuing. So please, support, again, that's another thing where you're supporting yourself. You're supporting me and allowing me to spend all the time that it takes to make these. And I still, you know, I don't know if there's another podcast on the planet that's coming out on a weekly basis that prepares more than I do. You know, having to read hundreds of pages, taking notes, going back and looking,

• 1:49:07David Senra?

  and trying to make something that, one, that hopefully you find entertaining, but, you know, because I think entertainment is the way, it's like the Trojan horse, make this entertaining, and at the same time, you'll learn a lot. So, please, if you've learned from my work and you value my work, consider doing that, and I would really greatly appreciate it. So, you know where to get the books, you know where to get the Misfit feed, I mentioned earlier, if you leave a review, how to do that. Oh, and if you want, I'll leave a link. I take a lot of notes on talks by entrepreneurs, so if you want to, like, I'll leave the link, I'm just gonna leave the link for the Jeff Bezos one, because his ideas on comparing and contrasting the internet industry with the electrical industry, I think is important,

• 1:49:50David Senra?

  especially because we are in the very beginning of this internet revolution that we're living through, that's affecting all areas of our life. And Jeff is one of the smartest people I've ever come across, and he just, the way he thinks about things, and his presentation was just fantastic. I not only read my notes, but I'll link to the whole, in the notes, I link to the whole talk, and it's worth the 18 or 20 minutes it takes to watch it. So, please tell your friends about the podcast. Thank you very much for listening. Thank you very much for your support, and I will be back next week with another biography about an entrepreneur.