#190 Henry Ford and Thomas Edison

Before Edison left, he had a suggestion.

The best part of the California trip had been the drive from Los Angeles to San Diego, free from any demands but their own whims.

While Edison didn't enjoy public appearances, he did savor time spent with friends away from the crushing daily concerns at work.

Surely Ford and Firestone felt the same.

Why not embark on future car trips, picking a general area and route and then going along as they pleased?

They could camp.

Perhaps John Burroughs would come along and point out all sorts of interesting plant life and birds as had been the plan in 1914 during the aborted visit to the Everglades.

Henry Ford was immediately in favor.

And besides recreation, the trips would suit business purposes too.

The 3 men were pragmatic enough to realize that they couldn't go anywhere, particularly as a group without attracting constant notice.

Their California adventures had just proven that newspapers couldn't get enough of Edison's and Ford's adventures.

Everywhere else in the country, reporters would vie for an opportunity to write about local visits, And thanks to the recent development of wire services, their stories would appear in newspapers all over the US.

Edison and Ford and Firestone gave themselves a nickname.

They would be the vagabonds, annually joining much of the rest of America exploring the country by car.

What better way for such rich famous men to demonstrate their kinship with ordinary Americans?

We are really just like you.

Their main goal was to have a good time, but few business magnets in America had a shrewder understanding of marketing than Edison, Ford, and Firestone.

If rank and file consumers like what they saw and read about, as they surely would, then sales of cars and light bulbs and phonographs and tires would directly benefit too.

Alright.

So that excerpt is explaining the why behind the book that I'm gonna talk to you about today, which is the Vagabonds, the story of Henry Ford and Thomas Edison's 10 year road trip, and it was written by Jeff Gwynn.

And real quick, just before I jump back into the book, sometimes I have, like, ideas about the podcast or new things I'm doing.

And anytime that pops up, I'm just gonna put them at the end of, any particular episode.

So at the end at the very end of this podcast, there's just some new updates and ideas I have.

So if you're interested, make sure, you you can listen to that at the very end.

Let me go and jump into the beginning of the book.

Really, the way to think about, I would say the the author was just talking about how shrewd a marketer, Ford, Edison, and and Firestone were.

And I think Ford's probably the the the greatest of all marketers out of the the 3 of them.

And you can really think of Henry Ford as, like, the original influencer.

He would definitely do very well with social media.

And so this is a little bit about that.

It says Ford generally accepted the responsibilities of his celebrity.

He worked diligently to cultivate it, realizing early on that his personal fame heightened demand for Model T's.

Most summers for a decade, Henry Ford set out on auto trips visiting remote towns and small communities.

And you can think of these trips, which is what the entire book is about, not only as, vacation, they get to hang out with friends they don't get to normally see because everybody's busy.

But it is primarily the reading of the book is, I think, the primary, reason more so than all that was the fact that it gave them, publicity for their business for their respective businesses.

But it's particularly with Henry Ford, it shows what you can do with my product.

Hey.

Look.

Here's another reason you wanna buy in addition to the free publicity.

So it says on every, on every trip, Ford was accompanied by friends, sometimes other business magnets or else government officials, including, I think, 2 presidents, if I'm not mistaken, or 1 president, and then they they met another one.

High ranking Ford staff members and high ranking Ford staff members.

His road companions always included the tire tycoon Harvey Firestone and the much beloved inventor Thomas Edison.

Edison was the only living America American whose fame rivaled Ford's own.

So both Ford and Edison are obviously extremely famous and well known independently.

They get together, of course, the press and the the general public are gonna be curious of what they're, what they're going, what they're up to.

And that's the so this book is it goes in sequential order for from 1914 to 1924 when the trips end.

Now throughout the book, they talk about obviously the trips they're taking, but then the author has a bunch of digressions and these little stories that give us insights into, the personality and business, like, what's going on in their businesses between Firestone, Ford, and Edison, and that's most of what I'm gonna focus on today.

It's most of what I personally found, interesting.

And this is about Henry Ford's one idea.

And when I got to this section, it made me think of a quote.

I'm gonna read it to you from this book.

I covered all the way back on founders number 118.

It's written by Charles Sorensen, which is like Henry Ford's like, almost like right hand man for 40 years.

The name of the book is My 40 Years at Ford, and I'll get there in one second.

And it's about this idea that I love.

It's like you Henry Ford had basically one idea.

And the reason I love that is because you only really need one idea in life to become wildly successful and and build the life that you want.

So it says Henry Ford introduced a car that transformed American consumerism and travel.

Previously, automobiles were exclusively for the rich, costing 1,000 of dollars for purchase and considerably more for upkeep but Ford's Model T changed everything.

Thanks in great part to Ford's innovative assembly line, Model T's were mass produced on a previously unimaginable scale.

In competitors' factories, it took workers several hours to assemble an individual car.

At for at the Ford plant, a completed Model T rolled out the line every 2 and a half minutes.

And so that was Henry Ford's one idea.

It took him probably what?

2 decades?

Close to 2 decades from having the idea to actually figuring how to do the idea and that's, hey, everybody everybody else is building cars for rich people.

I wanna build a car so inexpensive that everybody can afford it.

And so that leads me to the quote and it that that paragraph just said, you know, thanks in part to Ford's innovative assembly line.

So that's when I read that part, I was like, oh, that reminded me of what Charlie Sorensen said in 40 years of Ford.

And this is the quote.

Henry Ford had no ideas on mass production.

He wanted to build a lot of autos because that's the only way he could get to his one idea.

Right?

He was determined, but like everyone else at the time, he didn't know how.

In later years, he was glorified as the originator of the mass production idea.

Far from it, and this is the most important line in this entire paragraph.

He just grew into it like the rest of us.

And I just love that idea that you have.

Okay.

I have a goal.

I have some dream, a product I wanna build.

I'm not sure yet.

I know what I wanna do, but I don't know how to do it.

And so I know I'm gonna have to experiment.

I'm gonna have to go through many trial and error and, you and then usually a long period of time, but I'll eventually get there.

And that is really the story of Henry Ford's one idea.

There was also something popped in my mind when I when it they start when this author starts comparing Ford's, advantage once he's up and running to what his competitors, you know.

You guys are taking hours to do one car.

I can do one every 2 and a half minutes.

Remind me what Andrew Carnegie that's a very old idea.

And Andrew Carnegie, back in the 1800 was obsessed with investing in new technology.

If there was a new machine, a new process that would help him produce steel more efficiently, he would always invest in that.

And usually, the old timers in his business would would criticize him for this.

And so the way I would I would summarize Andrew Carnegie's idea and how he applied this idea to his business is that you invest in com you invest in technology, the savings compound, and sometimes that investment in technology is a difference between a profit and a loss.

And so I think it was in his autobiography he talks about, hey.

If I didn't have these machines, if I didn't have the new process, some years, that was the the the efficiency I gained from investing in technology sometimes was the year between me actually making a profit where the people that were criticizing me, the people, usually older gentlemen, they were in the business before me, actually had a loss because they they failed to invest in technology.

And I think Carnegie had a very important realization there that the the that you have to invest in tech technology because the the savings are said another way, the advantages compound.

And the fact that Ford spent so much time figuring out how to make a car as cheap as possible and as fast as possible, I'm gonna go in and we detail that in a minute, Gave him a massive advantage.

You can't compete with somebody.

If it takes you 5 hours to make a car and he does in 2 and a half minutes, you're gonna lose.

Model T's were also utilitarian.

Fancy options that drove up the price were conspicuously absent.

Ford passed on the savings to its customers.

At the time of its introduction, the Model t sold for as little as half what other cars cost.

From there, Ford continued tinkering with the manufacturing process, aggressively seeking, ways to cut production expenses and model t prices even more.

I can't remember because I've done, what, like, 5, 4 books on on Henry Ford.

But in one of them, it said it got to the point where, he stopped advertising completely because he the only advertising he would do was constantly lower the price of the Model T.

When he lowered the price of the Model t, that was newsworthy, and then he'd get a bunch of free advertising because newspapers and radio and everybody else in the the country would pick up and let customers know, oh my god.

Now that, you know, the the the, Model T used to be $550.

There's a picture of let me find it.

There's a picture in this book of a Model t ad, and it says $295.

I thought if I remember correctly, and I don't.

I'm not entirely sure, but I think he got that price on to, like, $250 if I'm not mistaken.

So let's go back to the way he thinks about this and his obsession with eliminating waste and aiming for simplicity.

Aiming for simplicity is a direct quote of his from his autobiography.

He talked about it over and over again.

So it says he would find ways to cut production expenses and Model T prices even more.

The oh, here it is.

The best example of Foster, the popular joke that could that you could buy any Model t that you liked as long as the color was black.

Few realized that Ford insisted the cars come in that color because black paint dried quickest, Meaning, Model Ts could be whipped through the assembly line and off to dealerships at an even faster pace, saving additional time in labor related dollars.

And then the savings not only compounded for Ford, the company, but also the the Ford customer.

Model t savings for owners only commenced with the initial purchase.

Since it was only £1200, the model t weighed half as much as their competitors, and the cost of body repairs repairs and replacement tires was accordingly less.

When Ford introduced the Model T, this is bananas.

When Ford introduced the Model T, Americans owned approximately a 194,000 cars.

6 years later, that number increased to 2,000,000.

So that's 10 x in 6 years.

Ford controlled almost half the automobile, market at that time.

The Model T alone would have established Henry Ford as a household name, but he further cemented his reputation as a friend of the working man with a stunning announcement.

In an era when factory line workers were lucky to earn $2 a day for their labor and they had to work 10 hour shifts 6 days a week, Ford pledged to pay $5 a day and reduced workdays to 8 hours.

Everyone in America was talking about it.

And I think that's just another example of, Ford being gifted at at marketing, which is really surprising that he was so good at marketing when he realized he was very much a loner, very much a part of a part of society, not in society, I guess, is what I'm trying to say there.

And a very strange person which I'll get in, like, on an individual level.

Very very bizarre person.

As far as learning, if you wanna learn how to build I think for like setting Henry Ford, at least this is my interpretation of reading a bunch of books on him.

Very gifted, very few people in history that that you'd that you could study that could tell you more about building building companies.

He had a lot of good ideas, but also one of the strangest just I I don't I wouldn't wanna be his friend is what I'm telling you and I'll go into more detail on that there's other examples in the book too where it's just like he's just a bizarre person.

Let me go into more of, like, the origination of Ford idolized Edison.

They wanna becoming best friends even though they were Edison was a good deal older than him, and this is the origination of that.

This what I'm about to read you happened in 18/96, and think about how crazy it is.

The Model T comes 12 years later, so it's just a reminder not to quit.

Over the years, as Ford founded and failed with 2 auto manufacturing companies before succeeding with his 3rd, he endlessly reminisced about the meeting and Edison's words of encouragement.

He's working for Edison at the time.

He's introduced Edison because somebody that knows Edison says, hey.

This Ford guy has a way to to make an internal combustion engine.

Reminder that most cars at this time were either steam powered, which didn't work well at all, all or electric, which also didn't work well at all.

And so Edison says, young man, that's the thing.

You have it.

Keep at it.

Ford's admiration for Edison blossomed into virtual worship as a result.

Throughout his own, throughout his own business successes, as his hard work and belief in himself cultivated with the model t, Ford warmed himself with memories of that encounter with his hero.

And one thing that's also surprising when you analyze their careers is Ford was much, much wealthier.

Ford was a cannier businessman than his hero and much wealthier.

Part of this is because Ford also didn't need to invent his market.

He only needed to expand him expand them.

And I wanna also say Ford stuck with what he was working on.

The whole thing and there's examples later in the book where just Edison jumps around too much.

So he had a very hard he he had a lot of, great inventions, a lot of contributions to, to humanity in general, but he had a hard time capturing that value, more on their friendships and I guess why they why they were able to be friends and what they had in common.

Edison had few close friends.

He always suspected that anyone seeking friendship had ulterior motives.

But Ford was already far richer than Edison and almost as famous.

There were other things in common.

They found themselves in complete agreement about the evils of Wall Street and the crass men there who cared only for profit and not for the public.

Both were poor boys who had made good, neither had a college degree, and both were disdainful of those who believed classroom education was superior to hands on work experience and common sense.

Like Edison, Ford did not have many friends.

Ford was a prickly man and also a complicated one.

That's an understatement.

Burning to make the world better for humanity as a whole while not enjoying personal contact with most individuals.

Edison being, a notable exception to that.

Ford said, I think mister Edison is the greatest man in the world.

So the 4th member of the Vagabonds is John Burroughs, the author and naturalist.

And it was a little surprising that he could develop such a close relationship with Henry Ford given that he criticized cars.

He didn't want people, like, polluting nature.

And so this is really on how they were able to become friends.

And then you see also see, you know, the complicated nature of Ford.

He did not believe in charity, but with his friends, he was unbelievably generous.

So it says Ford never doubted his own and this is more about his personality too.

This is repeated over and over in every book that you'll read on Henry Ford.

He never doubted his own beliefs and decisions.

Forbid he forbid disagreement from employees and would ignore any outsiders.

Ford's hobby was work.

He devoted almost every waking minute to it.

But Ford loved birds all of his life and whenever possible set a time set aside time to observe them.

So Burrows is an expert on the study of birds and nature in general.

Ford sent a message to America if old so he went up giving, Burrows a model t.

He did this on several occasions and then would also publicize that.

So it's an another form of advertising if you think about that.

And so he I would say with almost everything, he has ulterior motives.

So it says, Ford sent a message to America.

If old fashioned John Burroughs love to ride in them, how much more might younger, more progressive individuals savor the kind of outdoor adventures made possible by car ownership?

As for Burroughs, he learned years earlier, during his tramps with Teddy Roosevelt, that having a famous patron greatly expanded his audiences for books and public lectures.

So he's doing the exact same thing with his relationship with Ford that Ford, Firestone, and Edison are doing, on on this 10 year of vagabonding these auto trips throughout throughout America.

There was more.

Burroughs confided to Ford that he feared losing his family farm where he was raised.

Relatives living there struggled to meet the hefty mortgage payments.

Ford bought the property outright and deeded it to Burrows.

Ford's generosity towards his few close friends was boundless.

And it's really hard to understand the the scope of Henry Ford's wealth.

He owns a 100 I think, if I say year 1919, if I'm not mistaken, he owns a 100% of the Ford, Motor Company.

I think it would be valued at, like, $500,000,000 in $1919.

It's just outrageous.

This is more about the benefit of being around great people, how they will inspire you.

This reminds me, you know, so, Ford is able to do this in person.

So very few people are gonna be able to make relationships with somebody's influential as Thomas Edison.

It reminded me of this this, podcast I saw a long time ago with with Elon Musk, where he talked about, you know, he sought he didn't have any many mentors in life.

This is when he was in his early twenties.

So he sought mentors in a historical context, and he did that by reading biographies.

And so being around Thomas Edison greatly inspired Ford, just like reading about great people inspires me and you.

So it says Ford twice came close to selling the business.

This is the actual successful Ford Motor Company, the third one.

It was as though Ford believed he achieved what he could.

Edison all but Edison always sought the next great thing, and failures like mining innovation and concrete housing didn't deter him.

He never lost belief in himself.

When he and the inventor quickly became the closest of friends, Ford felt energized again, thanks in great part of Edison's inspiration.

For all of Ford's professional life, he had to overcome skepticism from other successful men.

He had always been the outsider, the one with crazy ideas and clumsy social graces.

Edison sympathized because in the early years of prominence, he was criticized for some of the same traits.

The inventor not only accepted Ford for the rough edges rough edged men that he was, he recognized in him the fine qualities that offset the carmaker's obvious flaws.

Ford was aware that Edison was one of the very few people who genuinely liked him and he was profoundly grateful for it.

So this is Henry Ford on Experts and why he felt that way.

And I'm gonna bring this there's so many examples in this book that I'm gonna point out to you because I think it's really important.

Like, this fundamental belief in his his own ability, never doubting himself, these are all very, very positive traits, especially in the when everybody else from the outside is telling you, no.

You're wrong.

You're wrong.

Internal compression engine is not gonna work.

You can't.

You have to build cars for rich people.

All the stuff they told Henry Ford that wound up he was right about, and they were wrong.

It just took a lot of time and determination to to for to for that to play out, to realize that he's right.

The problem is that trait never left him even when the circumstances change.

So later on, when people after, I think he sells, like, 15,000,000 Model T's, people are realizing, okay.

Now a lot more people have car ownership.

Now we want choices.

And this is we covered this, back it was in the early 100, somewhere in that those episodes where I did I think it was, like, a 10 or 12 part series on all these early automobile, founders, the people that actually built the car industry in America.

And so what we saw there was Alfred Sloan, Billy Durant, people like that, Walter Chrysler.

They took advantage of the gap that Henry Ford left because he never he he just thought, okay.

I'm gonna make the model t forever.

I've already figured this out.

I don't have to change.

So, again, it's just really hard.

There's no this is not black or white.

It's just so hard to realize when self belief is valuable, like, relentless self belief is valuable and when it's actually a liability.

Henry Henry Ford was always a man of strong opinions and one who absolutely trusted his own instincts.

He especially disdained anyone identified as an expert.

Quote from him, if I ever wanted to kill opposition by unfair means, I would endow the opposition with experts.

No one ever considers himself an expert if he really knows his job.

Now he's probably right about He's essentially saying there's always more to learn.

When prominent better educated men had and their hired experts insisted that future of the automobile market was limited to manufacturing expensive cars for the wealthy, Ford believes that the real potential lay in sales of a modest but dependable vehicle to the growing American middle class.

So he's right about that at the beginning.

There would be less profit in individual transactions, but the sheer number of sales would yield greater cumulative returns.

Ford was proved right and he reveled in it.

So he has this wild success, but then it went to his head.

His e this is really the dangers of an unchecked ego because then he thinks, okay.

I did this myself.

I'm the reason that the company is successful.

And a lot of people make the argument that Ford would have never been successful without his the person that was running the company with him, James Cousins, which I'll go into right here.

But, again, say reminder the dangers of an unchecked ego.

Their relationship nearly approximated one of equals until the Model t established inarguable market dominance and then Ford began gradually to resent Cousins as only a glorified bookkeeper.

The feeling was mutual.

Cousins believed that Ford became so convinced of his own brilliance that he forgot others also made critical contributions to his company success.

Ford felt encouraged to offer his opinion on all sorts of non car related subjects and had no doubt about his sagacity regarding everything else.

I'm gonna that I'm gonna define that term.

I had to look it up myself.

I've seen it before.

Couldn't remember what it what it meant.

So in case this might be helpful to you, so that means the ability to make good judgments.

So let's go over that.

Ford felt encouraged to offer his opinions on all sorts of non car related subjects, and this is the dumbest thing he ever did, and had no doubt about his ability to make good judgments regarding everything else.

And so he starts publishing, essentially, like, a newsletter about a lot of his anti semitism.

He railed on this this global Jewish, worldwide conspiracy that he was convinced of.

Started talking about politics and war and all other stuff.

And so Cousins says, what are you doing?

Cousins confronted him, insisting that the owner's personal politics had no place in an internal company publication.

Ford disagreed.

It was his company.

Cousins quit the next day.

He went on to a distinguished political career versus mayor of Detroit and later as US senator.

But with Cousins gone, so was the only check on Ford's increasing proclivity to say exactly what he pleased and damn the consequences.

And this is he winds up it's not so he starts doing this with an internal pub, company, publication.

Right?

And then he starts he buys his own newspaper, And he spends, I think he loses, like, $5,000,000 over, like, 8 years trying to to make this company or this this newspaper successful.

And it was just full of just just bizarre I mean, here's a problem when I say, like, let's study Henry Ford for his great ideas about building companies and nothing else.

Because this guy winds up being one of the few people one of the few Americans.

He gets awarded and this is not something you want not an award or distinguishment you want.

He's one of the few Americans that has awarded, this made up award.

I forgot what it's count what what it's called.

But it's a made up award by Adolf Hitler.

And if I'm not mistaken, in Mein Kampf, Hitler talks about how great a man Ford was because they shared these same like, this this hatred for Jews and this convinced.

They were both convinced that, Jewish control of banking and and money supply was they they were essentially there's a secret cabal of Jews running the world, and Henry Ford would print this in his newspaper.

Examples in this book are just crazy.

This is why the demand for an inexpensive car would skyrocket if you could make one that's reliable and cheap, which is the the wave that Henry Ford rode.

The average American rarely ventured more than 12 miles from home because that was the distance a horse and wagon could comfortably cover from there and back in a day.

So in the year 1918, they decide because they do different routes every year.

They're like, okay.

We're gonna go down to the South.

We're gonna try to publicize and and get more interest and more people buying Ford cars in the South.

I'm only gonna read one section here.

This blew my mind.

Resentment over the civil war still lingered in both the north and south.

So they're making the point that a lot of people would do, especially as the years progressed, people might drive from, like, New York.

Could go to New York from San Francisco on on, like, a very primitive highway, but very few people tend tend to go from, like, New York to Atlanta.

And this is part of the reason why.

Resembina of the Civil War still lingered in both the North and the South.

That conflict conflict this is this blew my mind.

That conflict had concluded only 53 years earlier.

Edison was a teenager when the first shots were fired, and Ford was born a few weeks after the Battle of Gettysburg.

So right now in this 1918 trip, they're as close to the civil war as we are to the year 1970.

So on these trips, a lot of times, the cars should break down.

That's why so like, at the very beginning when they start vagabonding, a lot less people do it.

As the cars become more more reliable, more people do it.

And one thing to admire about Henry Ford is he would do a lot of the work himself.

In one example, he gives, like, this poor farmer, a Model T, says, hey, you can park the Model T in the barn.

They try to put the Model T in the barn.

It doesn't fit.

So Ford and another guy, they went spending hours, extending the entrance to the barn, doing all the work themselves.

And so this is another example.

They break down and they bring it to a mechanic.

They're somewhere in in the south.

The mechanics are go.

This is you know, I can't fix this.

And Henry it's essentially Henry.

I'll do it myself forward.

The mechanics in town pronounced the damage was unrepairable.

Of a placement fan would have to be sent for.

Considerable considerable delay was inevitable.

Certainly a day at least.

Ford listened to the mechanics then asked if he could borrow some of their tools.

Using his own knife and their soldering soldering iron, he poked holes in the broken bits of the fan, stitched them together with thin wire, then soldered soldered the wires in place.

The punctured point of the radiator was also soldered tight.

The ignition was switched on and the Packard ran perfectly.

Ford's repair work took 2 hours.

And so we see 2 things there.

4, again, Henry, I'll do it myself, Ford.

But also, he just doesn't he he wants to figure and that's a positive trait.

He wants to figure things out for himself.

Mechanics said it's impossible.

Gonna be at least a day.

Ford's like, yeah, I think I can do it.