Much of modern business can trace its path back to one person.
This young lad👇
🧵 Who was he?
In 1879, at 35 years old, he operated the largest coal reseller business in Dayton, OH.
He was not your ordinary coal operator. He differentiated himself by making a specialized product out of an ordinary commodity. Then, when he had something special, he advertised it.
Regardless, there was a problem. His Coalton, OH store was unprofitable despite no competition.
Upon buying and installing two cash registers his store immediately became profitable.
The cash register was such a revelation that he bought more for his other stores. His business thrived more than ever.
That experience convinced him on the benefits of the cash register.
Unfortunately, everything was against a business selling cash registers at the time. There was virtually no demand for cash registers.
Store owners could not justify the cost of the machine, which in today’s dollars would be roughly $1,000.
Employers were also scared. A cash register could signal to employees that they were seen as untrustworthy.
James Ritty, the cash register’s inventor, couldn’t handle the challenge of creating the market. He sold his patent to Jacob H. Eckert who formed National Manufacturing Company. Eckert failed too.
By 1884, only 300 cash registers had been sold.
This guy, on the other hand, felt he was up to the task.
He bought control of National Manufacturing Company that year, creating National Cash Register. Quickly, however, he became the butt of jokes for purchasing a business that created a product no one wanted.
But he vowed to show them wrong.
How did the guy generate demand for such a hated product? He took advertising and selling to a new level.
Prior to 1884, advertising was practically non-existent in any industry. Ads consisted of announcements that goods were on hand ready to be bought.
This gentleman’s ads gave reasons how the purchase of a register would make money for the purchaser. He constantly sent prospects direct mail and print advertising. His advertisements were simple, attention grabbing and most importantly sold the need.
He also spent more money, time and effort than anyone before him developing and executing on advertising. This was because he believed advertisements paved the way for his agents to sell.
Before him, salesmen were “slovenly, disorganized, ill-prepared, and uncommitted to either the company or product.” They almost seemed to stand in the way of sales.
The man brought salesmanship to the level of science. To ensure that all salesmen communicated the benefits of the register properly, he gave them scripts to memorize.
Commissions were set to incentivize instead of deter salesmen to sell more and more registers in good times or bad. Programs, communication and quotas were given to help motivate salesmen at all times.
In addition, he thought that pooled knowledge was better than hoarded knowledge. So he invented the conference idea and carried it to extraordinary lengths. These conferences served to further educate, motivate and inspire his sales force to continually improve their skills & previous performance.
And what about those harsh slave factories of the 1800s? In those days factories were crude, disorganized, dirty and dangerous. Working environments were merely places where people served tools, not places where tools served people.
This guy started with a dingy factory, too. His factory was located in an unsavoury section of Dayton called Slidertown - named for the fact that “everybody and everything on the downgrade had a habit of sliding into this section.”
The man, however, learned that kindness paid in dollars as well as in disposition. He introduced one thoughtful innovation after another and a systematic effort was made to raise the quality and tone of the working force.
Included was building a factory that was the very antithesis of an ordinary factory. It was outfitted with wall-to-wall glass windows to allow plenty of light into the working areas. Ventilation systems were created to provide workers with clean air every 15 minutes, and rooms for dining were built, where employees could purchase decent meals at or below cost.
He even developed the greatest business university in America. He attracted ambitious and capable men. His system quickly taught executives how to run a successful business. From 1910 to 1930 it was estimated that 1/6th of US business executives were former executives.
- Tom Watson - Founder of IBM
- Henry Theobald of Toledo Scale Co. - today the largest provider of weighing instruments
- Jacob Oswald of Roto-Speed Co. - manufacturer of a stencil duplicator (predecessor of a printer)
- Charles Kettering & Edward Deeds - Founded Delco, responsible for several innovations in automobile electric systems. Deeds also was a part in helping the Wright brothers with their airplane company.
- Hugh Chalmers of Chalmers Motor Company
He also inspired, influenced and became a model for Roscoe Iddings. Roscoe’s company Fyr-Fyter dominated the fire extinguisher space for 40 years using the man’s selling and manufacturing methods.
Business would be different today without this guy.
But who was he?
John H. Patterson.
Next time you see a cash register, a scale, a computer, a car start up, an airplane or a fire extinguisher - thank John H. Patterson.
If you want to learn more about John H. Patterson check out the book
I did a write up on Roscoe Iddings below: https://www.thewoodshedd.com/posts/2021-02-14-fyr-fyter
Here is the video version:
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