As We May Think

"Almost forgotten today, he essentially invented the world as we know it: not so much the things in it, of course, but the way we think about innovation, what it means, and why it happens." -- G.P. Zachary.

Vannevar Bush was born on this day in 1890 in Everett, Massachusetts. He was that rare combination of entrepreneur, visionary and mechanic -- a person whose handiwork has left profound marks on the scientific, governmental and economic features of the 20th century landscape, and whose bold technological paradigms continue to have an impact on the information age.

After receiving his Ph.D in engineering from Harvard-MIT, Bush spent World War I developing a magnetic submarine locator for the U.S. Navy, but became frustrated with the red-tape which not only interfered with Bush's design process but resulted in only 3 devices being installed in Navy ships before the Armistice. It was then that he realized that an engineer who did not understand politics and economics and the effect of new scientific advancements on existing political and economic institutions would never amount to anything. He returned to MIT after the War and, applying his appreciation of politics and economics, plunged into both research and administration, helping to make MIT a major center for electrical engineering in the process.

While at MIT in 1935, Bush designed and built a machine for calculating complex differential equations, perhaps the first practical forerunner of all modern computers. Called the Differential Analyzer, the machine looked something like a printing press, weighing 100 tons, and to program it one had to employ screwdrivers and hammers -- but it was most effective in ballistics research, permitting the rapid calculation of artillery firing tables accounting for variables such as temperature and wind.

Also while at MIT, Bush was the driving force behind the commercialization of a great deal of technology, virtually pioneering the concept of the "university spin-off company," co-founding Raytheon Manufacturing to build radio tubes as well as a half dozen other companies which eventually not only made him a wealthy man but gave him years of first-hand entrepreneurial experience.

In 1939, Bush moved to Washington to head the independent Carnegie Institution, and the following year became the chief of Franklin Roosevelt's National Defense Research Committee. Judging that the lack of coordination between science and government was a national security risk, he used his influence to obtain government funding for science research (unheard of at the time), particularly in the area of nuclear physics. Advocating the replacement of the outmoded tradition of having the government run factories, he was the architect of the system of awarding federal contracts to business and actively promoted cooperation among government, business and academia to encourage scientific advancement.

By 1941, Bush was administering all Allied defense research with his red-tape-cutting, slash-and-burn style, playing a supervisory role in the development of everything from radar to sulfa drugs to the atom bomb. Einstein may have convinced Roosevelt that it was important, Oppenheimer may have directed the Manhattan Project, but it seems that, for better and for worse, Bush was the only man willing to herd all the cats necessary to permit the Manhattan Project to be born.

By continuing to press for governmental cooperation and the judicious use of federal funds for science after World War II, Bush kept the scientific infrastructure in place which led to the development of such programs as the Internet (through the Advanced Research Projects Agency, which he conceived) and NASA.

Bush retired from scientific administration in 1955, but by that time he had begun yet another career as a theorist. In his 1945 Atlantic Monthly article, "As We May Think," Bush described a hypothetical device called a "memex," a means for harnessing the information explosion through a universal library which could be designed to allow its owner to link in some automated fashion associated pieces of information, creating "trails" of thought which could then perhaps be shared by others. Bush's exploration of the possibilities of linking information is not only a forerunner to Ted Nelson's idea of "hypertext," but would appear to have been the germ of the idea behind the organization of Tim Berners-Lee's World Wide Web; in addition, in the same article he proposed such concepts as a machine which could type one's words as they were spoken, and a cyclops camera, to be worn on one's head for recording what one sees.

Vannevar Bush died on June 28, 1974 in Belmont, Massachusetts.

Golden Arches

Dick McDonald, co-founder (with brother Mac) of the original McDonald's drive-in fast-food hamburger stand in 1948, was born on this day in 1909.

Brothers Dick and Mac McDonald were tired of paying car hops and dishwashers at the hamburger restaurant they owned in 1940, so on the eve of the car boom in suburban Southern California, they designed a new kind of restaurant, with a small standardized menu, unprecedentedly fast service (under a minute), low prices (15-cent hamburgers, 10-cent french fries), no waitresses and no tipping -- fast food, to go, for a go-go-go culture. By 1952, the reborn McDonald's restaurant was so successful that it was featured on the cover of American Restaurant magazine and could boast 6 million hamburgers sold.

Mac, as operations chief, came up with the idea for a no-frills burger assembly line (inspired ultimately by Henry Ford's assembly line for the Model T) that came to be McDonald's, just as Henry Ford's vision of a car-clogged American countryside was coming to fruition after World War II.

While Mac was designing the burger assembly line, Dick was the marketing whiz. Dissatisfied with an architect's rendering of the proposed restaurant, Dick sketched the "M" which became the world famous "golden arches" -- at once historically the symbol for money used by Karl Marx as well as the symbol for "millions," now erected in bright yellow neon around the world, transformed into a symbol for American economic imperialism by the end of the 20th century as McDonald's marched triumphantly into 91 countries.

Before that could happen, though ... in 1955, Ray Kroc bought the rights to franchise and develop McDonald’s drive-ins in the U.S., and in 1961 came back for the entire package – trademarks, test secrets, and the McDonald’s system, along with the worldwide franchise rights -- for $2.7 million. The McDonald brothers kept their original store in San Bernardino, renaming it Mac's Place (since they no longer owned their own name), but the restaurant was eventually put out of business by the megalomaniacal Kroc, who opened a McDonald's across the street.

For his own part, Dick McDonald never seemed to mind the fact that $2.7 million in hindsight looked like a discount price, or the closing of his San Bernardino place -- what he minded was the rewriting of history: "Suddenly, after we sold," said McDonald, "my golly, he elevated himself to the founder."

Dick McDonald died on July 14, 1998 in Manchester, New Hampshire.

Holly Whyte and Small Urban Spaces

"I end then in praise of small spaces. The multiplier effect is tremendous. It is not just the number of people using them, but the larger number who pass by and enjoy them vicariously, or even the larger number who feel better about the city center for knowledge of them. For a city, such places are priceless, whatever the cost. They are built of a set of basics and they are right in front of our noses. If we will look." -- William H. Whyte.

During his lifetime, Holly Whyte probably received his greatest notoriety as an anthropologist of American business through the publication of his best-selling appraisal of corporate culture, The Organization Man (1956), but it is a testament to the breadth of his creativity that he is now celebrated as one of the great 20th century scientists of urban spaces.

Born on this day in 1917 in West Chester, Pennsylvania, Whyte studied English at Princeton and won a collegiate playwright contest. After college, he worked for Vick Chemical as a marketing staffer until 1941, when he joined the Marines, serving as an intelligence officer at Quantico.

He came on board Henry Luce's Fortune magazine in 1946 and wrote articles on the corporate executive milieu, collected in Is Anybody Listening? How and Why U.S. Business Fumbles When it Talks with Human Beings (1952) and The Organization Man. The latter was an analysis of how modern corporate institutions stress safety and security at the expense of the kind of entrepreneurial risk-taking that made the American Industrial Revolution such an unprecedented financial and technological success. Coming on the heels of Riesman, Denney and Glazer's The Lonely Crowd (1950), Sloan Wilson's The Man in the Grey Flannel Suit (1956), Mills' The Power Elite (1956) and other fictional and non-fictional laments of the stifling effects of conformity, Whyte's book became a best-seller, enabling Whyte to retire from Fortune and take up his second career.

As an urbanologist, Whyte's approach was to study what worked, in the field, and use his findings as a means for evaluating the de novo concoctions of urban planners. His first campaign, against "urban sprawl" (a term he coined) in 1957, led to the passage of open-space legislation in several states, enabling cities to purchase vacant land on their perimeters to help stem the tide of unbridled development.

While working with the New York City Planning Commission, Whyte initiated the "Street Life Project," in which Whyte and students from Hunter College took to the streets to observe and film what was happening in under-used city plazas and crowded sidewalks. Among his conclusions, described in his influential book, The Social Life of Small Urban Spaces (1980), were that cities were inherently messy places, but that this was their advantage over the pristine, distrustful environments of the suburbs; that maximum commerce or "schmoozing" could be cultivated within cities by accommodating "honky-tonk," anything that invested sidewalks with hustle and bustle, creating a lively, inviting environment for city-dwellers; and that, in fact, we have a moral responsibility to create physical spaces that facilitate community interaction.

Although his observations were sometimes twisted by planners, his point of view with regard to the value of city life was embraced by American city planners and led to many of the urban regeneration projects of the 1990s.

Whyte died on January 12, 1999 in New York City.

The Irrepressible Mrs. Woodhull

With her sister, Tennessee Claflin, Victoria Claflin (better known as Victoria Woodhull) was notorious for chipping away at social taboos involving religion, sex, business and politics. She was an ethical gadfly with a tarnished pedigree, a screwball pioneer where pioneers were not invited or even tolerated, and it is only in hindsight that we can appreciate some of her adventures, since they represent the first bold gestures toward the multifarious identity of the 20th century American woman.

Born on this day in 1838 in Homer, Ohio, Victoria grew up on the run; her father having been accused of insurance fraud, he brought his family along as he wandered throughout the Midwest posing as a faith healer. At 15, she married a Chicago physician of questionable character, Canning Woodhull, and they proceeded to move from coast to coast, Victoria supporting Canning's bad habits and her retarded son Byron with sewing jobs and as a spiritual healer in the mold of her huckster father.

At 26 Victoria divorced Canning, and joined Tennessee to travel as faith healers and clairvoyants. They had brushes with the law, including being accused of running a whorehouse in Cincinnati, but generally they survived by their wits. Victoria remarried in 1866 to Col. James H. Blood, a Civil War vet who introduced her to socialism and free love, and 2 years later they moved to New York in answer to the suggestion of the spirit of Demosthenes, whom Victoria claimed appeared before her in a hotel room in Pittsburgh.

In New York, Tennessee was asked to perform a healing massage on tycoon Cornelius Vanderbilt. Soon, with Vanderbilt's assistance, the sisters were speculating successfully on Wall Street, opening their own brokerage house in 1870. Woodhull, Claflin & Co. was the first woman-owned enterprise of its kind, and was a moderate success. Around the same time, Woodhull became captivated by the utopian ideas of Stephen Pearl Andrews. Together with Blood and Tennessee, Woodhull and Andrews promoted their ideas in Woodhull and Claflin's Weekly, along with running translations of George Sand and the first American appearance of Marx and Engels' Communist Manifesto -- this despite the fact that Woodhull was a Wall Street tycoon.

Around the same time, Woodhull announced her candidacy for president, and began to give speeches which were an interesting melange of progressive politics and bold assertions of sexual independence for women. Benjamin F. Butler arranged to let Woodhull speak on women's suffrage before Congress, a move which caught Susan B. Anthony and Elizabeth Cady Stanton by surprise and caused them to invite her to speak at the National Woman Suffrage Association convention.

Her participation in the convention allowed critics to conclude that women's suffrage would lead to pernicious free love and the breakdown of the family. Rather than quieting the critics, she continued to advance the cause of free love in bold terms, stating in an 1871 speech that she had "an inalienable, constitutional and natural right to love whom I may, to love as long or as short a period as I can, to change that love everyday." With support from Susan B. Anthony and the rest of the suffragettes drifting away, she convened her own Equal Rights party convention, which nominated her for president and African-American leader Frederick Douglass as vice president. Douglass ignored the honor, and like Anthony, supported Grant's re-election in 1872.

Soon afterward, her successes began to fall apart: with expenses mounting (even Canning Woodhull had joined the eclectic household in New York by this time), she and her extended family were evicted from her New York mansion, the brokerage house was in a shambles, and Woodhull was sued for her debts.

Lashing out at those who she perceived were exercising their sinister indirect influence on her financial affairs and who would seek to co-opt her radical reform crusade with half-measures, she gave a speech accusing moderately reform-minded preacher Henry Ward Beecher, a former lover of Woodhull's, of having an extramarital affair with another woman, and published an account of it in the Weekly. She was arrested on the eve of the election for peddling obscenity, and spent election day and a month more in a New York jail cell. Released on bail, she put out another issue of the Weekly; was reindicted; and went on the lam, speaking around the country about the Beecher affair. The obscenity charge was later dropped, and Beecher's mistress published a full confession of the tale.

Blood continued the Weekly until 1876, when he and Woodhull divorced; and the following year Woodhull moved to England (in part to avoid giving testimony in a dispute over Vanderbilt's will). There she met and married a wealthy banker, John Martin, against the objections of Martin's family (the story provided the basis for Henry James' story, The Siege of London). In 1892, Woodhull again declared herself a presidential candidate, to considerably less attention, and visited the U.S. from time to time to speak on eugenics, women's suffrage, public health reform and government assistance for science and the arts. She died on June 10, 1927 in London.

No Place Like Home

California savings and loan magnate Howard F. Ahmanson was born on this day in 1906 in Omaha, Nebraska.

One of the towering names in Southern California business, Ahmanson's Home Savings & Loan loaned money to more home buyers than any other S&L, and was one of the driving forces behind the Southern California housing boom after World War II. He started in insurance, and became wealthy during the Depression by dealing in foreclosures. In 1947 he bought a modest little S&L, Home Savings of America, for $162,000, and through additional acquisitions and internal growth he managed to create the nation's largest S&L, with more than $1 billion in assets by 1961.

It was his instincts as a salesman, however, that steered him to success. Realizing that Depression-era depositors were looking for stability in their chosen savings institution, Ahmanson cultivated an image of permanence for Home Savings by commissioning the construction of over 60 monumental stand-alone edifices for the branches of the S&L around Southern California -- a contrast to the dingy rented storefronts occupied by other S&Ls. Designed by California painter/architect Millard Sheets, Ahmanson's Home Savings buildings, with their massive, exaggeratedly dignified gold-accented exteriors, expansive courtyards containing bronze, accessibly-modern sculptures of playful nuclear families (by Albert Stewart), grand mosaic murals by Sheets himself and grandiose marble interiors, became instantly identifiable fixtures of the Southern California landscape, and were undoubtedly influential on the design of stand-alone buildings for banks and other financial institutions as the car 'burbs sprouted drive-in business districts. (Perhaps as a form of retribution, in 2000 the Santa Monica Landmarks Commission refused to grant landmark status to the Home Savings branch at 2600 Wilshire, calling it a "mediocre" example of "Italian Fascist architecture.")

TV commercials featuring earnest ex-comic straight-men such as Harry Von Zell and George Fenneman telling future homeowners that there was "no place like Home" rounded out the Home Savings image of dependability.

When Ahmanson died on June 17, 1968 in Los Angeles, the S&L had assets of $2.5 billion; in 1999, it was acquired by Washington Mutual Savings. Ahmanson's son, Howard, Jr., is a major California philanthropist, sometimes called the "paymaster to the political right" for his support of Christian conservative think-tanks -- a West coast Scaife, as it were.

Gutenberg

"Artists, sailors, children -- and inventors. Lord, protect your most innocent sheep!" -- Felix Blueblazes.

It is hard to imagine what the last 550 years would have been like without the mountains of printed babel (not unlike what you're reading now, only on paper) which have accumulated as a consequence of Johannes Gutenberg's innovations: individual metal stamp-molded type letters, easily mass produced and reusable, combined with a pressing machine like one previously used principally for squashing grapes, the metal letters painted with an oil-based ink and pushed onto paper to create multiple copies of a page of text which would have taken a scribe several days and a wrist-splint to have created by hand.

Impossible, in fact. Gutenberg's invention is likely the single most widely influential creation in a 1,000 years of workshop tinkering. Suddenly, for the first time since the invention of writing, "the word" was available in mass quantities. It could be shouted (and more importantly, repeated) out from between stiff leather covers, down highways and trade routes. For the poet, more editions offered more chances at immortality; for the scientist, the cost of research was reduced dramatically as formulas and ideas could be exchanged quickly, relatively cheaply and with a guaranteed uniformity; and for the entrepreneur, the press meant greater saturation of the marketplace with handbills and sales circulars. Even the church, initially unnerved by the ease with which any heretic could publish his blasphemies, found a use for Gutenberg's contraption.

The "entrepreneur" is not the central character in Gutenberg's story, however, for the story of Gutenberg and his press is not about the lone innovator who forged a media empire, but another one about how the money guys used their muscle to squeeze the idea-man out of the fruits of his dreams and sweat. (What did you expect? Whoever said Hearst or Murdoch ever invented anything?)

Almost everything we know about Gutenberg comes from litigation records. Trained as a metallurgist, Gutenberg earned his living making and selling tourist trinkets to pilgrims in Strasbourg. He noticed, however, that the hottest item going among pilgrims were "indulgences," elaborately hand-illuminated pieces of parchment which were a kind of medieval Roman Catholic "get-out-of-hell free" card, sold by the church to the fretful faithful -- much to the horror of later reformers such as Martin Luther. Manual painting of these indulgences took time; woodblock printing, occasionally used for illustrations, was time-consuming and impractical for text. In his workshop during the 1430s, Gutenberg secretly toiled away at a method and apparatus which would allow for the inexpensive mass production of indulgences; but as he toiled, Gutenberg realized the greater import of his project and began to work on a printed Bible and a Psalter -- to be mass-produced, but at the same time to incorporate the artistry of the illuminated manuscript.

In October 1448, he persuaded a wealthy financier, Johann Fust, to loan him completion funds. Like all venture capitalists, Fust was looking for a quick return on his investment, and like all inventors, Gutenberg was interested in perfection; and like many venture capital deals, Gutenberg and Fust ended up in court. At about the time of their completion, Fust gained control of Gutenberg's beautiful Bible and two-colored Psalter, as well as all of the instruments of their creation (except for Gutenberg himself). True, Gutenberg hadn't paid back the 2,026 guilders plus interest -- but he had stood on the precipice of his putative fortune, only to have it and his life's work taken away from him. Fust and his new partner published the Gutenberg Bible in 1456.

As Fust and a hundred imitators launched the Gutenberg Age, a patron in Mainz took pity on Gutenberg and gave him some printing tools with which to tinker, but there is no evidence that it ever amounted to much. Blind and frail at the end of his life, Gutenberg was named a ward of the local government and given a yearly allowance of cloth, grain and wine. He is thought to have died on this date in 1468 in Mainz, Germany at the age of 74 or so.

Flagler's Fortunes, Part II

In 1901, North Carolina songbird Mary Lily Kenan became the third wife of Standard Oil/Florida real estate millionaire Henry M. Flagler -- she was 34, and he was 71. In 1913, after Flagler died following a fall at their palatial estate, Mary Lily Kenan Flagler became the wealthiest woman in the U.S., with an estimated fortune of almost $100 million.

Three years later, Kenan married an old college sweetheart, lawyer Robert Worth Bingham -- who happened to be deep in debt. Although he had signed a prenuptial agreement giving up all claims to Mrs. Flagler's fortune, she was very generous with her new husband, giving him a trunk filled with $1 million and paying off his debts.

Shortly after their marriage, however, Bingham began to spend considerable time away from home, coinciding with his engagement of a physician to treat Mary Lily for heart trouble with injections of cocaine and morphine. After Mary Lily was found dead in her bathtub at age 50, scarcely a year after her marriage to Bingham, Bingham showed up with a signed codicil to her will giving him $5 million.

The Kenans contested the codicil and accused Bingham of murder, going so far as to exhume Mary Lily's body for an autopsy; and although the scandal raged through the tabloids and the courts for some time, both Bingham and the Kenans were able to enjoy splendid shares of Henry Flagler's fortune, estimated in total in the hands of their heirs at $500 million by 1995.

For his own part, Bingham seems not to have suffered much from the scandal. With Mary Lily's inheritance, he purchased the Louisville Courier-Journal (1918) and became a leading Kentucky kingmaker. After supporting Franklin Roosevelt in the 1932 presidential campaign, Bingham was rewarded by being nominated to serve as U.S. ambassador to Great Britain. The only opposition to his nomination came from partisans in his own backyard, as Kentucky congressman Andrew May demonstrated in a speech against Bingham on the floor of the House:

"When that distinguished police court lawyer takes his seat on one side of the table, a seat once occupied by the immortal Ben Franklin, and when Lloyd George and Ramsay MacDonald take their seats on the other side of the table, we will have just about as much chance in that crowd as a wax cat would have in a battle with an asbestos dog in the bottomless pits of hell."

Bingham ultimately served as ambassador until his death in 1937.

Flagler's Fortunes, Part I

Oil man, real estate developer and prodigious party-hat-wearer Henry M. Flagler was born on this day in 1830 in Hopewell, New York.

A successful grain merchant, in 1868 Flagler joined with John D. Rockefeller to establish the partnership that would become Standard Oil; Rockefeller always gave him credit for some of the key ideas that helped to launch the petroleum behemoth. By 1876, however, Flagler turned his attention to family matters, taking his tubercular wife Mary to Florida on doctor's orders. She died in 1881, and shortly thereafter Flagler married his wife's nurse, Ida Shourds, and returned to Florida to speculate in land.

In 1888, Flagler built his first Florida hotel, the 540-room Ponce de Leon in St. Augustine, followed a few years later by another luxury hotel, the Royal Poinciana on Palm Beach Island. Ultimately, his strategy was to build a trans-Everglade railway, stringing together each of his lavish resorts from Jacksonville to Miami to the Keys, catering to wealthy New Yorkers.

Flagler also knew how to throw a party, and his hotels became known for their bacchanalian excesses; at some of the famous drag costume balls at the Poinciana, Flagler would lead the pack dressed as Marie Antoinette (albeit with an ever-present mustache and cigar).

Within this heady atmosphere, Ida Flagler began to break down mentally, and Flagler hesitated little before having her carted off to a New York sanitorium and taking a new mistress -- this time a classical singer and pianist, 37 years his junior, named Mary Lily Kenan. Divorce was not legal in New York in those days, however, so Flagler changed his residence and used all of his political capital (as well as some well-placed "contributions") to persuade the Florida legislature to pass a law permitting divorce on the grounds of "incurable insanity." In 1901, after providing for Ida with a settlement of $2.3 million in securities and property, Flagler married the 34-year old Kenan, giving her a wedding gift of $3 million and a palatial mansion, "Whitehall," on Lake Worth in Palm Beach.

After another decade of outrageous parties, Flagler died a few days after being knocked down a flight of marble stairs by a pair of pneumatic doors that Mary Lily had installed at Whitehall. At his funeral, Mary Lily Kenan Flagler was touted as the wealthiest woman in the U.S., with a fortune of between $60-100 million.

But that wasn't the end of the story . . .

Woman in the Counting-House

"(Women) are on trial. They feel they must do twice as much as is demanded of them to hold their own in the world they have set out to conquer." -- Natalie Schenck Laimbeer.

Born to a socially prominent Brooklyn-Long Island family on this day in 1882, Natalie Schenck was schooled in working for charitable and educational causes at an early age. When she was 15, she collected $25,000 in dimes (that's 250,000 dimes, folks!) for an American Red Cross Cuban relief effort through a highly-publicized chain letter program. Her efforts also resulted in the little post office at Babylon, Long Island getting choked with mail.

Natalie eloped with the dashing Capt. Charles Glen Lee Collins of the British Army in 1904, but soon after giving birth to their son they were divorced. Collins, it seems, was under the impression that Natalie's father was wealthy, but although Spotswood Schenck was long a fixture on Wall Street, he was merely moderately provisioned. (Collins was later a wanted man on theft and forgery charges, and left debts of nearly a half million dollars in his wake.) In 1909, Natalie married William Laimbeer, a Wall Street banker, and in 1912, while raising 2 new daughters and her son, she became manager of the Bureau of Home Economics of the New York Edison Company, giving public lectures on the benefits of electricity in the kitchen. In 1913, she and her husband were in a terrible auto accident -- Laimbeer's car was struck by a Long Island Railroad train, killing William and two other passengers, and leaving Natalie severely injured.

Despite her injuries and the loss of her husband, proving yet again her extraordinary energy, during World War I she volunteered for the U.S. Food Administration (headed by Herbert Hoover) devising plans for canning food. Although William Laimbeer had left her in a financially stable situation, she desired more for her children, and in 1919, in her first wage-earning position ever, she entered the male-dominated world of Wall Street herself as manager of the U.S. Mortgage and Trust Company's "women's department," the division of the bank responsible for the few female clients of the bank.

Although the move was primarily a marketing effort, Natalie Laimbeer proved to be a sharp and efficient administrator, and within 6 months she was promoted to assistant secretary in charge of setting up the women's departments in a number of U.S. M & T's Manhattan branches as a new era of financial services tailored for women began to emerge.

In 1925, Charles E. Mitchell at National City Bank, Wall Street's largest bank, offered Laimbeer the position of assistant cashier, the first executive position National City ever offered to a woman. While the New York Times realized her achievement was significant and gave it some coverage, it chose to focus on her chosen interior decoration for her office rather than on her skill as a banker. Soon afterward, Laimbeer founded the Association of Bank Women to nurture the advances made by her female peers at other banks.

Poor health led to her retirement from National City in 1926, but in the 2 years prior to her death she also kept her hand in Wall Street as the financial editor for The Delineator and a contributing writer to the New York World. She passed away on October 25, 1929, the day after the "Black Thursday" that signaled the beginning of the Stock Market Crash of 1929.

The Elevator Pitch

[The following is an epitome of a talk I delivered to two separate sections of a course entitled “Fundamentals of Business Communication” at the University of Pittsburgh’s College of Business Administration this morning.]
. . . [Your professor] asked me to come here and speak this morning on two things. She wanted me to describe to you how my career has developed, and she wanted me to give you my insights, as a former venture capital lawyer and as someone who has been involved in the development of new businesses, into what a venture capitalist is looking for in a presentation from a company looking for investment.

I understand you’ve been given an assignment to prepare a short hypothetical presentation asking for money from a venture capitalist. That kind of presentation, in my world, is typically called the “Elevator Pitch” – because it shouldn’t be any longer than it would take to ride up in an elevator with someone in a relatively short building. In the real world, we’re often talking about a pitch that lasts no more than 60 seconds, or perhaps 2 minutes at the most.

At first I didn’t think the two topics I’d been asked to talk about today had much to do with each other, but I’ve decided that they have a lot to do with each other. The “Elevator Pitch” to a venture capitalist is just one species of short communication designed to express something about what you want out of life – whether it’s a job or a place to live or a lifetime companion. While some of the tips we’re going to go over today are specific to the venture capital pitch, others have broader applicability to the kinds of statements of desire you may have occasion to make in the future. Based on my experience in developing opportunities for myself, I want to suggest to you that the “Elevator Pitch” should not be considered an empty classroom exercise, but a lifetime tool to help you open doors for yourself – especially if you are open to the spontaneous generation of opportunities that come up where you least expect them to . . .

. . . Now, about the “Elevator Pitch” itself: why does it need to be so short? When I was first informed about “Elevator Pitches” and the fact that they can run as short as 60 seconds, I was a bit offended at first. I mean, what we’re talking about here is potentially a multi-million dollar investment. Shouldn’t we have a chance to take our time on this, warm our listeners to our subject, tell a little bit about our life story?

I think there are a number of reasons why venture capitalists like to keep these presentations short. One of them can be found in the nature of communication itself.

Each of us, in our own way, grows up thinking we are the center of the universe, and that every little fact about ourselves is fascinating. We keep photos of our memories, yearbooks, trophies on the shelves, we put posters on our walls that are meant to express something about what we like and who we are, we keep journals. We’re fascinated by ourselves.

And what about the rest of the billions of other people who live on Earth? Well, not so much. Most of them will never know anything about you, and even if they have a chance to, most will probably choose not to pay much attention. It’s nothing to do with you. They’re just busy being fascinated by themselves.

Much of our communication with other people on this planet is a navigation across the great divide between you saying “I’m fascinating,” and someone else saying “I’m not interested.” In dating, there is a tacit understanding that you can talk about yourself as long as you’re willing to listen to someone else talking about themselves. Advertising? Advertising is clever, because it is a message about me dressed up to appear to be a message about you. Journalism? That’s a message about something else, held up as important to both you and me, but that is often merely a camouflaged message about me.

Most commerce, in fact, takes place somewhere on that plane between “I’m fascinating” and “I’m not interested.” Particularly where the type of communication is strategic by its very nature, there is a tendency to push away superfluous information. We’re trying to transact business here, we say -- let’s get to the bottom line. When you stop in a convenience store to buy a pack of gum, you don’t want to know the life story of the cashier, you just want to pay for the gum and be done with it. Gum . . . money . . . let’s move on.

A venture capitalist is like that. He or she knows you’ve come to ask him or her for money. And he has to invest some money – a little known secret, but we’ll get to why in a moment – so there’s a reason for him or her to be there listening to you. But the nature of the business is such that hundreds of companies and business ideas are out there looking for cash, and the VC is just looking to keep the pitch as painless as possible. It’s not so much that he or she will decide to make an investment based on a 2 minute hearing, but if in 2 minutes he or she can’t think of a good reason to hear more about your proposition, he or she is just going to have to leave it there, for the sake of efficiency. Eventually, if he or she has an interest in investing, he or she will want to know your life story and more . . .

. . . At this point, maybe it makes some sense to go through some of the elements of a good venture capital pitch from the standpoint of the venture capitalist.

I mentioned earlier that a venture capitalist has to invest money. It’s not always apparent to a first-time entrepreneur that this is the case, but it is typically true. A venture capitalist has typically gone out and raised money from individuals and institutions on the premise that he or she has an expertise in investing that money in private companies in some sector, and that by doing so he or she can earn higher than average rates of return on investment. Thus, the “Elevator Pitch” that a venture capitalist has had to give to his or her investors becomes a factor that limits the scope of investment that can be considered by that venture capitalist. At the same time, however, the venture capitalist can’t simply put the money in the bank and let it collect interest – the investors are looking for greater returns than that. So, there is a reason why the venture capitalist might want to talk with you.

We’ve discussed brevity as an essential component of a good “Elevator Pitch.”

Another is tailoring your message to your audience. You have to be able to anticipate what the venture capitalist is going to be interested in, and plan your communications accordingly, and this takes research. You have to assume that if they don’t see how it relates to them, they’ll tune out immediately. Many venture capitalists have narrow investment guidelines, and if you go in without understanding them, you’ll just make them feel like you’ve been wasting their time.

One of the most important elements of the good “Elevator Pitch” to a venture capitalist is being tangible. If you walk into a VC and say, “I have a piece of technology that is going to change people’s lives” – well, obviously that’s a little thin. For that reason, there are several subjects that should be covered in a VC “Elevator Pitch”:

• What is your product or service?
As an introductory matter, you should preferably be able to get this concept out in one easy-to-understand sentence. There used to be a concept in Hollywood, when people would come in to pitch an idea for a movie, called “high concept.” This basically meant that you should be able to describe this movie in one simple sentence. “A big guy grows up in the North Pole thinking he’s an elf, but then he leaves for New York City to look for his real father. Think Jim Carrey, or maybe that Will Ferrell.” After grabbing someone with your one-line description, you can take some time to develop the idea for your listener, but if you can’t get the idea out quickly and concisely, some VCs will believe your idea is just too complicated to be workable.

• Who is your market?
Your VC may be an expert in the software field, and you may be pitching a software idea, but if the market for your idea is just a thousand people living in Red Wing, Minnesota, then the VC isn’t going to be interested. You need to be able to demonstrate, preferably through market research or other statistical evidence, that there is a volume of potential buyers for your product or service that will justify a major investment.

• What is your revenue model?
Plainly and simply, how do you intend to make money on your idea? It may be a great idea, but unless I understand how it is you’re going to get someone to pay for it, I’m not going to be interested in risking the capital on it.

• Very importantly – who is running your company?
The general rule is that smart people invest in other smart people, and not so much in products or services. Generally, a VC is looking for a management team with a prior track record of success. Unfortunately, in this setting, it is rare for first-time entrepreneurs to obtain venture capital financing these days. If they do, it is because they have surrounded themselves with enough “grey-hairs” to give a VC some confidence that there is adult supervision in the company.

• Who are your competitors?
An important rule of thumb here – you always have competitors. If not, then the venture capitalist is going to wonder whether there is even a need for your product. If the inventor of the telegraph walked in to some 19th century financier’s office, even he couldn’t say there were no competitors for what he wanted to fund. People were communicating back then, right? They were doing it with Pony Express, Wells Fargo wagons, shipboard mail. There was a real need for long distance communication, demonstrated by current methods. Be sure and remember this in your own presentations.

• What is your competitive advantage?
Ah, see, now this is where you can show your confidence. "People use the Pony Express today, but I have the telegraph. Now we won’t have to worry about highway-robbers or lost letters or battle pay or thirsty horses. And it's 99% quicker. Think of the efficiencies." There is a concept in technology known as technology adoption, and it is often a difficult hurdle in getting your product accepted in the marketplace. The thing to remember here is that you’ve got to figure out the reason why people are going to switch from the old way and do it your way. Innovation is not it’s own end, in the eye of the venture capitalist.

• And finally, what do you want?
You’ve got to make the ask. You want money, so tell them how much. Tell them what it’s for. But remember, you may want other things, so don’t forget to ask for them, too. Don’t forget to ask for a relationship – “look, I know we may not be at the right stage for your portfolio, but we really respect your opinion in this industry, and we’d like to know if we can come back in 6 months, as we’re developing this business and pick your brain.” People do like to be helpful, as long as they don’t think you’re taking advantage of them. Or what about referrals? – “if this isn’t something you’d be interested in, and we hope that it is, we would welcome the opportunity to talk with you about other groups that might be interested.”

Grab your listener’s attention, and show them how passionate you are about your product or service. No one wants to invest in someone who doesn’t have the fire in his or her belly. But be careful about being too cute – if your presentation is mostly about grabbing attention, a trained venture capitalist is going to suspect that your proposal is all flash and no substance. Make sure your mode of communication doesn’t overshadow your genuine proposition.

Practice. An “Elevator Pitch” is an oral presentation, and it is not simply a recitation of your business plan’s executive summary. A good executive summary is laid out in a certain way to attract attention on the printed page, and if you try reading that aloud, it is not going to have the desired effect. Practice your “Elevator Pitch” in front of an objective listener – even if they don’t know anything about your topic, by quizzing them and getting their reactions, you can often correct the simplest errors of emphasis or vagueness.

Finally, develop consistency among the members of your team. There’s nothing worse than having some member of your team speaking out of turn. Everyone needs to be “on message,” and that must be “the same message” across the board . . .

. . . What did we just do? We went through the elements of one type of “Elevator Pitch” – the kind you might give to a venture capitalist.

Again, I would suggest that during those rare opportunities when fortune shines on you, when someone else is willing to find you fascinating for a short period of time, the “Elevator Pitch” is a technique that you should be able to call upon to help you get what you want out of this life -- an opportunity to show your passionate interest in something or to express a thoughtful desire. Your challenge, I believe, beyond the realm of this classroom, is to be prepared for those little miracles – to treat them with the honor and respect they deserve, by being prepared to address your aspirations in a brief yet tangible, tailored and passionate way when the time comes.

Willis H. Carrier

Willis H. Carrier (born on this day in 1876 near Angola, Indiana) has a lot to answer for, apparently.

Sociologists regard the introduction of air conditioning in the U.S. as a major turning point in the evolution of the American lifestyle, transforming this once gregarious, outdoorsy, collaborative, porch-sitting population into an isolative, flabby, suspicious, couch-potato race of snarling lone wolves. Then, of course, there was the revelation in 1984 that chlorofluorocarbons used in refrigeration systems were largely responsible for the receding of the Earth's ozone layer, leading to an increase in global warming (ironically), skin cancer, cataracts and suppressed immune systems. On the other hand, as Molly Ivins puts it:

"As anyone who has ever suffered through a brutal summer can tell you, if it weren't for Carrier's having made human beings more comfortable, the rates of drunkneness, divorce, brutality and murder would be Lord knows how much higher. Productivity rates would plunge 40% over the world; the deep-sea fishing industry would be deep-sixed; Michelangelo's frescoes in the Sistine chapel would deteriorate; rare books and manuscripts would fall apart; deep mining for gold, silver and other metals would be impossible; the world's largest telescope wouldn't work; many of our children wouldn't be able to learn; and in Silicon Valley, the computer industry would crash."

Whew -- even if some of that is disputable, it's hard to dispute the positive impact Carrier's ideas have had on our culture.

A Cornell engineer, Carrier went to work for Buffalo Forge Company, where within a year he had designed a pumped ammonia system for controlling temperatures and humidity in a Brooklyn printing company, where fluctuations in heat and humidity were causing the misalignment of colored inks.

Next Carrier turned his thinking to cooling the spindles of a Carolina cotton mill, and in 1911, after a flash of genius while waiting for a train on a foggy night, Carrier developed the "rational psychometric formulae" -- equations for determining the relationship between temperature, humidity and dewpoint -- which became the basis for all fundamental calculations in the air conditioning industry. Short-sighted Buffalo Forge dismissed its entire engineering department in 1915, leaving Carrier and 6 engineer friends to form Carrier Engineering Corporation, dedicated to achieving whatever temperature and humidity levels were required by its industrial customers.

In 1922, Carrier invented the centrifugal refrigeration machine, the first practical method of conditioning air in a large space, using non-toxic, non-flammable chlorofluorcarbon refrigerants. As he had early on predicted, Carrier's designs would soon be used for human comfort, not just for industrial purposes. In 1924 Carrier installed centrifugal chillers in the J.L. Hudson Department Store in Detroit, and soon thereafter put them in the Palace, Texan and Iris movie theaters in Houston, causing the box office receipts in those theaters to jump off the charts during a heatwave; some even suggest that Carrier indirectly fostered the rise of the entertainment industry, which had always been hobbled by slacking attendance during hot summers.

Weathering the Depression with the assistance of enormously patient bankers, Carrier unveiled the "Weathermaker" air conditioner for private home use in 1926, and in 1939 he introduced a system for air-conditioning skyscrapers. Although World War II interrupted the advance of air conditioning, by 1995, Carrier Corp. sales topped $5 billion, even as the company began to produce the first chlorine-free, non-ozone-depleting residential air conditioners. Carrier himself passed away in 1950, just as the great lurch forward in the propagation of air conditioning was occurring.

Shrewdness and Gumption

Younger readers of the Guinness Book of World Records during the 1960s and 70s probably reserved a special chamber in their tortured little psyches (one shared with that image of Margaret Hamilton riding her bicycle through a Kansas twister in The Wizard of Oz) for that photo of Hetty Howland Green, branded by the McWhirter brothers as the "world's worst miser" -- that one where she is marching through Manhattan cloaked in a drab black dress and hood, clutching greedily at some variety of commercial paper like Simon Legree clutches Little Nell’s mortgage.

While it is true that she achieved terrifying new extremes of avarice while preserving her investment corpus (letting her son go lame and suffer a leg amputation rather than taking him to a doctor, goes one example), undoubtedly inhabiting a pathologically compulsive plane, history has been unfair to the Witch of Wall Street.

"Her talk about things in general is full of quaintly original sayings, New England shrewdness and 'gumption.' She is 'down' on trusts, lawyers, professional reformers and 'new woman' fads. She believes in the bicycle but draws the line at bloomers." -- H. Tyrell, Demorest (May 1897).

Henrietta Howland Robinson was born on this day in 1834 in New Bedford, Massachusetts. At an early age she was given opportunities to understand and even control the flow of finance in ways for which most men -- let alone the fiscally-marooned women of her time -- had little appreciation. She was, to put it plainly, a financial genius. To be a little fairer than the McWhirters, perhaps her realization that men resented her control over her own finances not only drove her to dominate her own considerable wealth with a vengeance, but to hoard it as well.

Her Quaker father taught her to value plain living and profitable investments, getting her to read the stock market reports to him as soon as she could make out numbers. Finishing school in Boston did not break her spirit, and after inheriting the million-dollar fortunes of her parents and her maiden aunt, she spurned the attentions of fortune-seeking suitors, settling on a man of independent means, Vermont trader Edward Green -- but not before getting him to sign a prenuptial agreement whereby she would not be responsible for his personal debts.

She bore Green two children while wheeling-and-dealing in the London financial markets, favoring real estate and railroads rather than more ephemeral stock investments. Within a few years, Green had spent himself into penury, and Hetty separated from him, building her $5 million dollar inheritance into a fortune of $25 million by the time she left Green through reinvestment and providing high-interest loans to desperate entrepreneurs.

Taking plain living to an extreme, she wore the same shabby greenish-black dress, washing only the hem to conserve water and soap; conducted her business from the inside of a vault at the Chemical National Bank; stayed in dingy apartments; and heated her oatmeal dinners on radiators. While visiting a friend, at the age of 82 Hetty suffered a stroke arguing with her friend's cook over the merits of using skim milk in a recipe instead of whole milk, and died shortly thereafter, on July 3, 1916, in Manhattan.

Although her one-legged son Ned was a spendthrift and her daughter Sylvia was a financial neophyte, Hetty had resolved to keep her entire fortune in the family, leaving the two of them $100 million. When Ned died, Sylvia was the guardian of a $200 million estate, which she bequeathed "like someone throwing handfuls of money from a tall building" (according to one Time-Life writer), apportioning it among hundreds of charities, churches and universities.

Let's Make a Deal!

I'm pleased to report that John Edwards has left the Oak Creek police (see previous post, "A Few Bugs Here and There" ) and has joined Fortress Investment Group as a "part-time global dealmaker."

Oddly enough, Edwards' experience is becoming commonplace, perhaps an emerging typical narrative arc for a lawyer-turned-politician. Even the hapless Dan Quayle can now call himself an investment banker as an advisor at Cerberus Global Investments (named for a three-headed dog that guards the gates of hell), a post he's held since he left the politics game in 2000.

I guess it beats pretending to practice law.