First Patents and Contracts
In October 1868, while working in Boston, Edison got his first patent for an invention, the electrographic vote recorder. This was a device that allowed legislators to vote yes or no instantly by tapping one of two switches. Unfortunately, he was told by congressmen in Washington that "if there is any invention on earth that we don't want here, it is this."
This failure led Edison to explore possibilities in the field of the telegraph. He moved to New York City in 1869 and created an electrical firm with two colleagues, Franklin Pope and James Ashley. He also received his first invention contracts from a major firm, the Gold and Stock Telegraphing Company, in the spring of 1870. He was assigned to develop a telegraph to compete with the Morse system and a facsimile printer of a successful stock ticker.
The new assignments brought a measure of financial freedom, and Edison organized two new companies with business partners: the Newark Telegraph Works and the American Telegraph Works, both in 1870. Newark Telegraph Works lasted until 1872, when Edison's partner moved to New York City. American Telegraph Works was bought by Gold and Stock in 1871; relations had deteriorated between Edison and his business partners by this time.
In 1870, Edison moved to Newark in order to operate several telegraph manufacturing shops. In the shops, he continued to work on contracts and manufactured electrical products for companies in New York City, especially Gold and Stock. And when Western Union bought Gold and Stock in May 1871, Edison was careful to build a new relationship with them. In the shops, he supervised workers for the first time and came to be known as a demanding employer.
While in Newark, Edison continued to work on his own inventions. He also began to build a reputation in the business world. His most famous invention of this period is the quadruplex telegraph in 1874. The device was simple but had the potential to change the telegraph market. It was capable of sending two messages simultaneously in both directions. Although Edison was under informal contract with Western Union to sell all of his invention patents to them, things went awry when a financier named Jay Gould began showing interest in the quadruplex.
For months after Edison revealed his new invention, Western Union did not bother to contact him about signing a contract for it. When they finally sent him a letter in January 1875, Edison informed them that he had sold the contract to Jay Gould. This news sparked a patent fight and a court battle over the quadruplex. Gould lost the court fight (and his hopes of taking over Western Union's share of the telegraph market), but nobody came away pleased with Edison.
During the early 1870s, Edison came into himself as an inventor and a businessman. Unfortunately, this process did not happen smoothly. He made great mistakes during this period, both in choosing partners and in conducting business transactions. At first, he tended to pick business partners from his associates in the telegraph business, only to become angry when they used their superior business acumen to earn a greater share of the business revenue. And his fiasco with the quadruplex cast a shadow over his reputation. One biographer says, "While his reputation as a maverick grew, so did his status as a talented inventor."
Despite these mistakes, Edison learned valuable lessons about the relationship of business to invention. He began to correct some of his monetary mistakes and educate himself on the business world. His experience with the vote recorder, for example, taught him that inventions needed a market in order to be successful. After his humiliating experience in Washington, Edison learned to do thorough market research and to give careful consideration to the economic potential of his inventions. Edison was not the free-spirited inventor that some historians have made him out to be. He was a businessman, and he did not bother with inventions unless he believed they would make money someday.
His manufacturing shops in Newark were a predecessor for his Menlo Park laboratory. At the Newark shops, Edison created the job environment he would have liked for himself: a loose structure, with an emphasis on innovation and hard work. He rewarded workers who were loyal and creative, but he made great demands of all of his employees. Only twenty-four years old, Edison could stay up until all hours of the night and put great energy into products being manufactured at the shops. He expected his workers to do the same. Later on, Edison brought this same employer persona to his laboratories in Menlo Park and West Orange.
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