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Archive for the ‘History’ Category

King Gillette Pioneered the World’s Most Lucrative Sales Model

Friday, September 25th, 2009

by: Geoff Ficke

Today we know Gillette to be one of the world’s most successful and highly respected consumer product brand names. The Gillette safety razor is ubiquitous in homes all over the world. The Company is now owned by Proctor & Gamble and continues to introduce new shaving innovations on a regular basis.

King C. Gillette was a travelling salesman, a bit of a bon vivant and a very ambitious entrepreneur. During his travels he fortuitously made the acquaintance of William Painter. Mr. Painter was the inventor of the Crown Cork bottle sealer. His invention was the impetus for the Crown Cork & Seal Company, hugely successful to this day. The inventor was almost messianic in his belief that the key to any successful invention was the ability to repeatedly re-sell the product to the same users. Mr. Gillette became enamored of the concept of “planned obsolescence” and began his quest for an invention that he could commercialize.

One day in 1895 while shaving Mr. Gillette had an idea. At that time shaving was an ungainly affair. The process required a bowl of drawn water, soap, brush, and a straight razor that needed to continually be stropped to maintain sharpness. King Gillette’s brainstorm was to design a razor that held a disposable steel blade. He would sell the razor as a fixture and the blades as refill products, over and over to the same customers.

There was a technical problem, however, that Gillette had to overcome. At that time it was considered near impossible to create a small metal blade that would hold a sharp edge for multiple shaves and be inexpensive. It took six years and the engineering skills of MIT graduate William Nickerson to create the technology to mass-produce disposable razor blades.

King Gillette was nothing if not dogged. However, it took the entry of the United States army into World War I to popularize the Gillette Safety Razor.

Mr. Gillette’s company was able to secure a contract with the government to distribute Gillette Safety Razors to every soldier. By the end of the war 3.5 millions razors and 32 million razor blades had been distributed to soldiers in the field.

When the Armistice to end the war was signed and the American soldiers returned home they imported the Gillette shaving habit with them. There was immediate demand created across the country for Gillette products. The future success of the company was assured and the Gillette brand became a cornerstone of the American consumer product marketplace.

My consumer product marketing consulting firm reviews hundreds of products each year. Recently we had the opportunity to analyze a wonderful beauty product accessory. The inventor had done a wonderful job of crafting the prototype and the features and benefits of the item were of excellent utility. However, the item was a one-time sale. There was no consumable, resale item included in the offering.

We advised the inventor of this obvious, limiting deficiency in the project. Retailers are reluctant to carry single items. Sales would initially spike and then dramatically slow as market penetration occurred. We offered to create a liquid “activator” product to be used in conjunction with the implement. The “activator” would be the razor blade, the hardware implement the equivalent of the Gillette razor.

The “activator” was inexpensive to produce, had huge perceived value, completed and embellished the marketing story and offered retailers and the inventor the opportunity for a steady repeat sales stream. The product is now sold in thousands of beauty salons across the United States and in Europe.

The Gillette sales model is now so common that we take it for granted. “Planned obsolescence” is ubiquitous and insures brand loyalty for many years. The key to building a successful brand that consumers treat as generic is often to mate a fixture or implement with a consumable item. Gillette often gives away the razor to insure that the consumer must purchase their proprietary razor blades or cartridges. Ambitious entrepreneurs should always seek to extend their products reach by incorporating King Gillette’s model.

A Religious Sect Accidentally Created A Great American Industry

Friday, September 25th, 2009

by: Geoff Ficke

During the Civil War years of the 1860’s the Seventh Day Adventists opened the original Western Health Reform Institute in Battle Creek, Michigan. This religious group was keenly interested in healthy living and undertook some of the earliest research on the benefits of foodstuffs naturally derived from Native American crops. The result was their creation of the earliest breakfast cereals.

For the rest of the 19th century the Seventh Day Adventists consumed their breakfast cereals made from oats, corn, wheat and sorghum. They never really attempted to fully commercialize their recipes for these cereals.

Their original health institute became the famous Battle Creek Sanitarium. One of the doctors at the sanitarium was named W. K. Kellogg. Dr. Kellogg, a devoted follower of the Seventh Day Adventists, was keenly interested in healthy diet and the effect of diet on sick patients. While seeking a foodstuff to replace bread in the diet of his patients, he stumbled into an answer that created an iconic American industry.

Dr. Kellog was boiling a pot of water that contained wheat. His attention became diverted and the wheat overcooked, thus softening. He removed the softened wheat and let it dry. When he returned later he found that the overcooked wheat had begun to turn brittle. He began to break apart the wheat and it broke off into little flakes. Amazingly, the wheat flakes had a most enticing taste. Dr. Kellogg had accidentally invented the process essential to mass-produce wheat cereals and corn flakes.

Today we know the Kellogg Company as one of America’s great brand names and purveyors of numerous popular breakfast cereals. The Kellogg Company was later followed by C. W. Post and General Mills in making the prepackaged breakfast cereal industry one that is uniquely American.

Dr. Kellogg spent the rest of his life seeking to create healthy products that would improve and extend life. However, the accidental discovery of the process necessary to produce dry cereals is his great legacy. Every day millions of people all over the world start their day with a tasty, nutritious bowl of cereal that owes its provenance to an overcooked pot of wheat.

Many great inventions and product improvements owe their existence to accidents, mistakes that open new doors and plain dumb luck. The key to commercially profiting from these errors is to always keep an open mind in the face of the unexpected. Dr. Kellogg was looking for a new type of bread. His mistake in overcooking a pot of wheat has contributed to making his name one of the most famous in the world.

The Historic Link Between Tulips and The Sub-Prime Mortgage Debacle

Saturday, September 12th, 2009

by: Geoff Ficke

Almost every living individual is being effected adversely in some way by the international economic meltdown we are experiencing today. The genesis of this severe financial downturn is attributed to the United States government encouraging the expansion of homeownership to people who would have historically been deemed unworthy of obtaining credit. The banking systems participation and eagerness to leverage credit risks by extending loans to people with poor credit histories is the principal cause of the current sub-prime mortgage crisis.

Historically, the bursting of the credit bubble follows a long and dubious line of similar scandals. Greed, hubris and suspension of common sense and disbelief are always present before the hen comes home to roost after the gravy time has ended. The panic of 1908 in the United States, the worldwide Great Depression and the implosion of the technology stock bubble in the late 1990’s are memorable examples of euphoric periods followed by great loss and assignation of blame as to the causes of these financial busts.

These peaks and troughs in economic fortune are not unique to modern times. One of the earliest documented financial crazes was the Dutch Tulip Mania in the 17th century. The Dutch, being a tiny, mercantile nation, surrounded by larger, stronger empires were the earliest creators of trade policies and sophisticated financial products. One of their most creative vehicles was the introduction of the futures market.

Tulips were introduced into the Dutch economy and agronomy early in the 17th century. They quickly became prized for their beauty and the floral engineering that created many unique, exotic varieties of tulips. An exchange mechanism developed for speculation in the valuations of the various strains of bulbs. By 1637 a full-scale mania had erupted in evaluating future tulip bulb harvests.

Records from that period are sketchy, but it is known that a single Viceroy Tulip bulb was valued under contract for between 3000 and 4200 Dutch florins in 1637. Contrast this with the annual wage of a skilled Dutch craftsman of 150 florins per year. Isn’t this a definitive example of excessive senseless mania?

The Dutch referred to such trading contracts as “wind trade”. This was because no one ever actually took possession of the tulip bulbs. They simply owned a piece of paper, a contract that documented their claim on the tulip bulbs. Does this example of financial engineering ring any bells today in our current distressed situation?

The popularity of the tulip trade, and the amazing returns, mostly paper gains that were realized by the early speculators created a stampede of inexperienced, gullible speculators. Noblemen, farmers, sausage makers, chimney sweeps and day laborers began to speculate hoping to turn a few florins into exponentially huge investment returns. Of course, the last investors in, were the most harshly abused by the implosion of the tulip bulb speculative bubble. This is true in all bubble cycles.

The British economist Charles Mackey wrote a tome in the 18th century cataloguing the history of the Dutch Tulip Mania. His “Extraordinary Popular Delusions and the Madness of Crowds” remains in print to this day. Business schools and economists refer to Mackey’s study of the herd mentality of people during manias. Nevertheless, though Extraordinary Popular Delusions is still studied, its lessons have hardly been taken to heart.

The greed and hubris that are always present in manias too often define the human condition. People tend to see someone profit from an enterprise and try to emulate their perceived success. This engenders ever more people attempting to participate in the affair and the result is a panic, a mania, a bubble, then disaster.

The no money down payment, zero document loans, offered in the last decade created a completely different type of borrower and lender. The borrowers have no skin in the game. They get to possess a home in which they have no equity. As long as their condition is stable they can maintain possession. However, if their fiscal condition recedes, or the value of the property declines, they are in deep trouble. Foreclosure is a reasonable action for them to undertake to simply walk away from a gamble that did not work out for them.

The lenders have suspended proper underwriting standards in order to induce entry into these risky home sales transactions. They have little skin in the game, because they have conceived exotic packaged investment vehicles where mortgages are bundled and sold to investment speculators all over the world. The owner of the mortgage is actually unknown to the mortgagee, or even the originator of the loan. The loan originator collects their fees and offloads the loan obligation from their balance sheet. The risky transaction is now someone else’s responsibility.

As a result we have endured a period of fake prosperity built on credit swaps, personal irresponsibility, corporate irresponsibility and governmental corruption. The mania of our time is cheap credit. This bubble has burst, and every homeowner faces shrinkage in the valuation of their property because of the greed of speculators and the attempt of government to secure homeownership for people who should be renters. Community banks and credit unions that have maintained high lending standards are being hurt because of the recklessness of the giant money center banking institutions.
Retirees and prudent investors have seen their savings and investments slaughtered because of the inane greed and corruption of others.

The 1990’s technology stock bust decimated a generation of people who came to believe that investing in the internet was the new “Holy Grail” for prosperity. Startup companies with no sales, no balance sheets and inexperienced management were given huge market valuations. Investors were advised that the tech boom was just in the first or second inning of this nine inning game. Brokerage firms provided guidance on equities that they actually made markets for. This bit of double dealing lead to constant buy calls on tech firms stock that insiders knew had no prospects for success.

The Dutch Tulip Mania, the Mississippi Company, the South Seas Company, the South African Milk Culture craze and the many modern crazes, Ponzi schemes and asset bubbles that we continue to experience are testament to man’s inability to control emotions. Greed, power and wealth are aphrodisiacs for many. We are imperfect beings, susceptible to herd mentality, even when we have knowledge of history’s lessons and could apply these to spare ourselves the pain of participating in activity that will assuredly lead to great pain and loss. Discipline, responsibility and thrift are essential to long term success.

Imagine What Would the World Be Like Without the Simple Screw

Thursday, September 10th, 2009

by: Geoff Ficke

We take the simplest devices for granted in our modern technologically advanced world. We turn a tap and water is delivered, hot, temperate and cold. We hit a wall switch and darkness is overcome by light. We open the refrigerator door and peer into a compartment that contains climate controlled stored foodstuffs. These conveniences are omnipresent in the developed world in the early 21st century.

And yet, we reflect little on the simplest, most important inventions that make all forms of product possible. Consider the humble screw. Yep, the little fastening vehicle that is ubiquitous in every tool-box, do it your self pre-pack, or kitchen catchall drawer. The ability to affix two opposing elements or surfaces together and insure that their attachment is permanent is essential to the structural integrity of virtually every non-consumable product we use today.

No one knows who invented the screw. We do know that wooden screws were in use during the time of Christ. They were widely used in the Middle East in pressing grapes for wine, olive oil production and woodworking. The applicable uses for screws really did not change much until the 18th century. Englishman James Ramsden invented the first “screw cut lathe” to mass- produce steel screws in 1770. This advance made screws more economical and their usage in industrialization processes began to increase exponentially.

In the 1930’s, Henry Philips, in response to the booming automobile industry’s need for closer tolerances, invented the Philips Head Screw. This square headed screw was a significant advance as it enabled machine tools to apply more torque to the screw head, thereby providing much tighter fit and finish between conjoined parts.

Billions of screws are now used every year in millions of applications. Screws of all sizes and metallic composition are essential to every product that we manufacture. As useful and universal as the common screw is in our lives, we never really reflect on it’s importance, it’s efficiency, it’s economy and what the world would be like without these ingenious little linkage devices.

There is a contemporary lesson here. The simple screw has made life easier and more comfortable for every consumer. Jobs are created to produce screws, distribute screws and utilize screws. Prosperity is enhanced by the usefulness of this simplest of inventions.

Many entrepreneurs and inventors seek to improve life and profit commercially by creating new innovative products. The lesson we can all learn from the plebian screw is that sometimes the most valuable, most useful concepts are the simplest. It is not necessary to re-invent the transistor or discover a new system of water desalinization to profit. Looking into your universe of work, family or play and finding a simple improvement that will benefit consumers is the easiest path to commercial success.

In my consumer product development and marketing consulting company , Duquesa Marketing, we review hundreds of product submissions each year. The best, most commercial are inevitably the simplest. They offer the most utility for the greatest number of consumers. These concepts typically do not require re-educating the consumer, which can be a difficult and expensive proposition.

So keep it simple and apply the simple “screw” test to determine simplicity, facility, cost effectiveness and applicability. This is a wonderful template that can be transferred from an ancient product to modern inventions to determine prospects for success.

The Great Warrior King That Always Thought Outside of the Box

Thursday, September 10th, 2009

by: Geoff Ficke

Prospective entrepreneurs are always encouraged to think outside of the box when striving to commercialize their idea for a new business. The ability to see things differently and identify a niche for a product is so essential. Unfortunately, there is no book, course or advice that enables a person to perfect this skill. Some of us stumble into an opportunity. Others are introduced inadvertently to an idea in their line work or at home. Many other successful entrepreneurs do develop an ability to see things a bit more weirdly than the rest of us.

There are many historical examples of great people that achieved great things by thinking differently. Alexander the Great was such a success. Alexander was a warrior at 14, general at 18 and king of tiny Macedonia at 20. He conquered most of the known world before his death at the age of 32.

An example of his unusual thought process was his approach to solving the famous 4th century problem of the Gordian Knot. Outside the Temple of Zeus, at Gordus, stood an oxcart with an unusually complicated knot attached to the hitch. The world famous Gordian Knot was made of densely packed comer bark and there appeared to be no beginning or end to the confusing mass. Oracles of the day proclaimed that Zeus had promised that whoever could unravel the knot would rule the world.

Adventurers from all over the world ventured to Gordus to try solving the puzzle of the Gordian Knot. None ever succeeded. Alexander planned for his encounter with the knot as if he were strategizing his famous military campaign against the Persian King Darius.

Alexander spent hours pondering the Gordian Knot. He realized that success in unraveling the knot would further trumpet his reputation as the world’s greatest warrior. Success would motivate his troops and sow fear in enemies.
Finally, after interminable study, Alexander stood. He reached for a great axe and with violent suddenness, swung mightily. Striking the immense knot dead center, it fell open like a pear. The gnarled bulk of the knot fell to the ground and the oxcart was freed for the first time in centuries.

Alexander saw a problem that had vexed men for centuries. He applied a creative, innovative, indeed the simplest approach to the task. The puzzle of the Gordian Knot did not come accompanied with a fixed set of rules that had to be followed in order to claim success. The puzzle of the Gordian Knot simply required the oxcart be freed of the massive tangle. Alexander understood that conventional approaches to the problem, followed for centuries by all others attempting to untie the knot, was not relevant or of any import.

Alexander the Great said that his greatest victory was his success in solving the problem of the Gordian Knot. This achievement confirmed for the whole world that this man was gifted, clever, an outside the box thinker (a term certainly not used during the Alexander’s time).

Successful entrepreneurs think differently. They are problem solvers. Novel features, utility and new benefits must be included in any product offered in today’s competitive market. Just as Alexander the Great addressed the puzzle by looking at the problem differently, entrepreneurs need to address their development hurdles by identifying and filling needs that others have not yet seen.

The Invention of the Wheelbarrow Is What Made the Great Castles and Cathedrals Possible

Tuesday, September 8th, 2009

by: Geoff Ficke

Virtually every modern household has a basic wheelbarrow stored away. The use of the wheelbarrow is ubiquitous in construction and basic home chores. The design, form and function of the wheelbarrow has not appreciable changed for 700 years. And yet, this simple tool is one of history’s great advances in creating labor productivity.

No one knows who invented the wheelbarrow. The Chinese used crude, primitive sorts of wheeled carts, similar to the modern unit, as early as the 1st century. It wasn’t until the 13th century, however, that the type of wheelbarrow we now recognize and utilize was known to be in common use.

The forward and centered placement of the wheel made the modern unit more practical to use. One man could leverage and control much more weight with the new version. Historically it took two or more men, using flat stretchers to move heavy material loads. This made construction very labor intensive and slow.

Use of the wheelbarrow was an efficient new method of speeding the construction of the great edifices constructed all over Europe in the Middle Ages. It is quite possible that many of the architectural wonders we enjoy to this day would look very different, and have much smaller scale without the employment of the basic wheelbarrow. Notre Dame, St. Pauls Cathedral, or Windsor Castle would most assuredly not be the wondrous edifices that amaze and thrill us if not for the simple, but essential use of this mundane tool.

The invention of the wheelbarrow resulted from the simple rearrangement of already existing components. The wheel existed. The barrow existed. The principles of leverage were well known. Nevertheless, these elements were not co-mingled in one unit and perfected to become the useful advance in labor saving and productivity that we use to this day until someone creatively addressed this need.

The 21st century presents the creative, entrepreneurial class many opportunities to address and solve real needs. There has never been a better time for the commercialization of new products and services. All over the world inventors, engineers and companies are striving to discover answers and solutions to health, energy, resource, agriculture and material needs. The rate of innovation accelerates each decade. The world is a better place for this bustling outpouring of energy, courage, investment and creativity.

The simple wheelbarrow is a metaphor for progress. This most basic of tools has performed yeoman work for centuries. This invention is a model for modern inventors. Identify and solve a basic need that is present in your personal, social or work universe. Answering real needs with simple solutions can provide the path to fame, fortune and personal satisfaction.

The consumer is the ultimate beneficiary. Life is improved each time a new product is introduced that offers better features and benefits than are currently available. A modern truism is this: “Never the greatest, only the latest”. Novelty and fresh takes on old products are always in demand.

How To Invent A Billion Dollar Product and Personally Gain Very Little

Friday, September 4th, 2009

by: Geoff Ficke

In 1930, a young engineer was sent by his supervisor to spend time working on the floor of a Minneapolis auto body shop. The reason for the working visit was to review the performance of his employer’s principal product, industrial grade sandpaper, in actual use as a car door was being sanded. The young mans name was Richard Drew.

While in the repair shop, young Mr. Drew was exposed to a rougher work environment than he was used to. The floor of the shop was loud, dirty, and, well, quite profane. A good deal of the profanity was related to the difficulty the repairmen experienced while attempting to perfectly match paint panels and striping to auto bodies. They quite simply had no rudimentary tool, other than a steady hand and line of sight to make perfectly smooth straight lines that did not overlap.

Richard Drew was curious and began to consider options to simplify the process of crisply painting multiple color paint to auto bodies. His invention was ingenious, elegantly simple, and is a standard in every “do-it-yourselfer’s” toolbox to this day. He created “masking tape”. There is almost no paint job done in a home or business that does not employ masking tape to protect and finish edges.

Arthur Fry was also seeking a simple answer to a personally vexing problem. Mr. Fry was continually losing his place in his church hymnal when he attended Sunday services at his church. He hated bending, or “dog earing” pages. He did not want to mark or damage the hymnal in any way. Book-mark’s would simply fall out of the hymnal.

He was also, a Minneapolis area resident, and decided to seek a solution in his place of employment. Mr. Fry went to a colleague, Spencer Silver, who was working on a type of new glue with minimal adhesion properties. He borrowed a bit of Spencer’s prototype glue and applied a bit to the edge of a small square of paper. When applied to paper, the glued square attached snuggly, but was easily removed without damaging the host paper.

In the 1970’s, Fry and Spencer’s employer, trademarked their invention and began attempting to market the product. At first there was little consumer interest. Then in 1979, almost ready to give up, the Company decided to widely sample the product in office supply stores. The response was overwhelming. The Post It Note was born.

Masking tape and Post It Note were commercialized internationally by the giant (today) 3M Company of Minneapolis. Employees Richard Drew, Arthur Fry and Spencer Silver had invented much needed and valued consumer products that have generated billions of sales and profits for 3M. However, all three were all simply employees of 3M.

In most Company’s, certainly mature ones, employees sign releases that assign all rights to their work product to the employing Company. Drew, Fry and Silver had signed such releases and were rewarded accordingly by 3M. However, they were rewarded as employees, not entrepreneurial inventors. A bonus and a raise will always be appreciated, but there was no profit participation available for their great advances.

These men were working and creating on the Company’s time, using Company resources and had released all rights to their work to 3M. They had good jobs, working for a great Company – but – had no further claim on the profits generated by their creativity.

Imagine the wealth and fame that these inventors might have enjoyed if they had commercialized these products themselves. Not every one has an entrepreneurial constitution. In fact, most people should not leave gainful employment to pursuit the chimera of launching a product or business. However, the opportunity to create the next masking tape, or Post It Note is seized everyday, here in America, by someone.

As an entrepreneur you totally expose yourself to the vagaries of the market. As an employee you enjoy a corporate cocoon with protective layers of resources and assets readily at hand. But think about it. If you could invent the next new product advance, with hope of commercial success, would you be pleased with a bonus and a raise – or – seek the opportunity to fully harvest and control your product and your destiny? I know what I would do.

Winston Churchill’s Famous War Cry Is Fully Applicable for Today’s Entrepreneurs

Thursday, August 27th, 2009

by: Geoff Ficke

“What Is Our Aim? Victory, Victory at all Costs..!

Winston Churchill’s Famous War Cry Is Fully Applicable for Today’s Entrepreneurs

Arguably, the courage and moral leadership provided to the western world by Winston Churchill was the key instrument essential to keeping World War 2 from ending early, and ever so badly for the cause of freedom. The ability to use words as a tool for effecting an outcome was never so vividly displayed, before or since. A demoralized and near beaten people took heart, did not quit in the face of overwhelming losses and turned an imminent route into ultimate victory. This lesson is vital for entrepreneurs to apply to their struggle to gain traction and successfully compete in contemporary markets roiled with competition.

Churchill had spent most of his career as a maligned backbencher in the British Parliament. A prodigious writer, journalist, historian and social commentator, Sir Winston had railed for years about the poor preparation and fecklessness the British military and political castes in the face of the largest, most obvious tyranny in history, Nazism. He was the butt of jokes. Called Sir Whiney. The power structure in Britain had buried this most brilliant of strategic thinkers and visionaries.

Nevertheless, Winston Churchill had the confidence of his convictions and more importantly, a rational, fully rounded understanding of history and the lessons to be learned from studying the past. He studied history and learned from it. He did not just hope that things would go well, or entertain delusions that reason could trump fanaticism. Churchill’s great strength was his crystal clear view of the reality his world faced.

“”What is our aim?…Victory, victory at all costs, victory in spite of terror; victory, however long the road may be; for without victory, there is no survival”. Churchill spoke these words to the British House of Commons on May 13, 1940, after being recalled as Prime Minister, a last gasp hope given little chance of success. At the time the German Luftwaffe was bombing London nightly. German U-Boats had closed shipping lanes, thus disrupting delivery of crucial supplies of war material. The United States was isolationist and almost 20 months away from entering the war; and only then, after the attack on Pearl Harbor by the Japanese. This small island nation, with almost no natural resources was essentially surrounded. France, Belgium, Holland, Poland, Austria, Czechoslovakia, indeed all of western Europe was directly controlled by Hitler’s Nazi hordes. Great Britain’s future seemed dim at best.

This famous quote, heard at the time by the British public while hiding in bomb shelters and in darkened homes over primitive crystal radio sets, provided a turning point for the population. Did the nightly bombings stop? Was food more readily available? Were the shipping lanes more open? Was the Royal Air Force or the Royal Grenadiers any closer to stopping the Nazi’s and returning to the European mainland?

The answer to each of these questions was an obvious: NO!
However, Winston Churchill’s daily chats, broadcast into British homes and pubs, connected with the core of the British spirit. Slowly confidence returned. Resolve was rebuilt. Fight replaced “Peace with Honor” and cowardice. The nation was paying for a generation of neglect, but a corner had been turned and a proud people, with a luminous history, now believed that victory could be earned. It would be a long fight, costly in blood and treasure. The vivid word pictures painted nightly by Churchill motivated an inner spirit that had been slaked by the comforts of modern life and a fantasy that wild-men and terrorists could, or ever would be rational.

Every entrepreneur, no matter the level of success attained, can apply the lessons of history to their quest. Quit and your opportunity dies. Vision is an essential element of success. If you are outworked, failure is assured. The heights to be scaled will be very high, but the reward when the summit is conquered will be very sweet. Obstacles are many, difficult and ever changing. The odds are stacked against success. If it were easy every one would be a success, and a look around any environment provides clear proof that success is elusive for many.

Winston Churchill was the ultimate entrepreneurial leader. Initially, words were virtually his only weapon. His ability to motivate and re-activate spirit was crucial in Britain hanging on, fighting back and finally allying with the United States to turn the tide and win freedoms greatest victory.

The ability to communicate a vision was crucially important to Churchill’s success, and is equally important to every budding entrepreneur’s opportunity to overcome the naturally occurring hurdles imposed by a capitalist marketplace. Drive, belief, passion, courage and creativity are not just seminar or self-help jargon words. They are the building blocks for success that have been essential to win at war, business, politics and life.

I encourage my students and clients to study history. The sins of the past can be more readily overcome if we know what those sins actually were. Sir Winston Churchill is the alpha example of a pro-active leader, facing seemingly insurmountable odds and overcoming with pluck and grit. Each of us, entrepreneur or not, have much to learn from his glorious example.

The 15th Century Florentine Genius We Borrow From To This Very Day

Monday, December 8th, 2008

by : Geoff Ficke

If you ask any seasoned world traveler to name the most beautiful place they have ever visited, they will most certainly include the Italian city of Florence at the very top of their list. Florence is one of the most desirable travel destinations in the world. The city, like most of Italy, is a veritable living museum of culture, art, architecture, cuisine and style. To wander the streets, bridges, churches and museums of this glowing city is one of life’s great treats.

Viewed from the Tuscan hills surrounding Florence, the ancient city hugs the banks of the River Arno, and the endless blanket of tiled rooftops of the old town seem to flow as one single undulating layer of colored matting. Conspicuously, the horizontal center of the city is stunningly pierced by the soaring dome of the Basilica Santa Maria del Fiore. The dome dominates the surrounding warren of streets densely packed with shops, churches, homes and public venues. It is one of the most famous visages in the world.

The construction of the dome was one of the great architectural, mathematical and engineering accomplishments of the Middle-Ages. The techniques perfected to achieve the perfect symmetry of the Basilica’s dome are the basis of modern construction engineering. We owe much to the design entrepreneur who gifted the Florentine’s and us, with the famous cupola.

Filippo Brunelleschi was initially a master goldsmith. How he developed the unique architectural skills he is most famous for is still a mystery. He was revered in the Florentine region for his metal works, sculpture and relief pieces. He had also built several mechanical clocks, one of which was said to include an alarm.

The nave and the sacristy of the Basilica Santa Maria di Fiore had been completed for years. However, the center of the edifice was vacant, essentially a doughnut hole. The plan was always to cover the space with a soaring dome. Massive construction was not unknown in the Middle-Ages. The ancient Romans had created the Forum, the Pantheon and the Coliseum among many examples of grand scale building. The knowledge and technical skills that the Romans had perfected 15 centuries earlier had somehow been lost as the Great Plague and the Dark Ages had descended upon the developed world.

Brunelleschi and his close friend, the great artist Donatello, had travelled to Rome and studied the many ancient ruins and buildings crafted when the Empire was at its zenith. Upon returning to Florence in 1418, he learned that there was a competition underway to reward the inventor of a novel mechanical hoist with a large cash prize. The hoist would be utilized to complete the dome of the Basilica by accelerating the lifting of great tonnage of building materials to heights of hundreds of feet.

Brunelleschi submitted a detailed drawing of his hoist machine. His work in building mechanical clocks had immersed him in the study of gears and bearings. The mechanical hoist that the inventor had designed was powered by two oxen. Ingeniously, Brunelleschi had invented a reversible gear so that the oxen could continue to walk in the same direction, and a simple levered gear could be engaged to lift or lower the hoist. This made it possible to reload the carry platform, and raise it, and lower it in about 10 minutes. He won the prize and the commission to build the hoist that would be instrumental in completing the dome of the Basilica.

The mystery of how to support the great weight of the dome, especially at such great height, was still to be solved. Brunelleschi’s ingenious solution required no centering construction, buttresses or support walls. He used a herringbone pattern of laying stone, thus dispersing pressure and diminishing the weight the lower levels of the building would have to support. In addition, rather than supporting the curvature of the dome with an internal skeleton and a hidden barrier wall, he created a girdle of rings to hold the construction with much less weight. The result is the soaring open cupola that from inside the Basilica seems to rise like a majestic gateway to the heavens.

In 1423 the eminences of Florence staged another contest to encourage the invention of a lateral mechanical hoist. This device was deemed essential to completing the work on the dome as once construction materials were lifted to the high work platforms they had to be offloaded and moved to specific work areas. Brunelleschi submitted the winning design for a device that was called the “castello”. This invention included an ingenious series of gears and rails and is considered the progenitor of the modern “tower crane” used in building skyscrapers today.

It is estimated that the Brunelleschi inventions handled the movement of 70 million pounds of construction materials in the 15th century creation of the dome of the Basilica Santa Maria di Fiore. The lost Roman tradition of building on the grandest of scales was rediscovered by this son of Florence. Modern business and construction projects have benefitted in other ways from the management skills perfected by Filippo Brunelleschi.

For instance, Brunelleschi was the first architect known to precisely draw to scale the detail of his project specifications. He was the uncrowned father of the blueprint. Before his utilization of precisely plotted plans construction was undertaken using lines of sight, plumbs and stakes.

Brunelleschi also was the first documented project manager known to write specific business plans detailing the assumptions he based his budgets upon. Today no serious manager would start or expand an enterprise without crafting a detailed plan for use as a roadmap.

Filippo Brunelleschi filed the first known patent for his mechanical hoist. He was intent on protecting his invention and fully intended to enjoy maximum commercial benefits from its deployment and use by others. This man was the model for the modern inventor.

Brunelleschi is credited with many other inventions. He created the artistic concept of linear perspective. His military fortifications and shipbuilding improvements were considered unique. The world he left behind at death in 1446 was a much more progressive, beautiful place because of the contributions of this self-made genius.

Entrepreneurs, inventors, business people and artists can learn much from the life and work of Filippo Brunelleschi. His curiosity led him to Rome and the study of lost, ancient construction techniques. The ability to apply advanced mathematical, engineering and architectural techniques to seemingly intractable construction problems has gifted the world with the crowning glory of Florence, the Dome of the Basilica Santa Maria di Fiore. Modern management tools such as the protection of intellectual property by filing for patent protection and writing customized business plans were pioneered by this great Florentine and are utilized to this day. The perfection of engineering plans by using plotting and blueprints enabled builders to project, budget and design more advanced intricate construction.

We tend to think that modern ideas are always the most advanced. Studying history often reveals that there is really not a lot that is truly new, just refined and improved at the margins. Grand building projects are undertaken in modern times. However, a visit to Florence and study of the great buildings of the Renaissance provide proof that great vision and craftsmanship of the past stand up well to anything modern man can construct, even allowing for the great leaps in technology we enjoy today. Men like Filippo Brunelleschi were the visionaries of their time and I believe that he would be on the cutting edge of creativity if alive and working today.

Carrier Pigeons Helped Create The Worlds Most Famous Banking Fortune

Thursday, November 20th, 2008

by: Geoff Ficke

Whether in business, warfare or affairs of the heart knowledge, the more the better, is often the most crucial element in determining event outcomes. The ability to know what the competition for a business deal is strategizing is potentially game changing. A General upon learning details of a rivals battle plan gains immense advantages in plotting counter-strategy. Knowledge is often not quantifiable, but it is invaluable.

One of the most famous and consequential uses of real time knowledge occurred in Europe in 1815. Early in the 19th century information obtainable through communication channels about distant events was painstakingly slow to arrive. Roads were rough, unfinished, really little more than cart paths. There was no wire transmission or speedy organized courier services for delivering messages over vast distances. Word of the outcome of a battle, treaty or an important political affair could takes weeks or months to arrive where the result was most keenly anticipated.

The Battle of Waterloo is possibly the most famous military engagement in history. The battle site, the tiny, remote Belgian village of Waterloo, is synonymous today with one’s “final act”. Waterloo became Napoleon Bonaparte’s denouement. His inglorious defeat by the British forces, commanded by the Duke of Wellington, expedited his exile to the tiny island of Elba and the decline of France as a military power for almost a century.

Prussian, Austrian and Russian armies had allied to fight with the British against Napoleon. All of these great armies, moving across vast swaths of Europe terrain needed extensive provisioning, arming and logistic support to maintain troops as they girded for the great battle. This was an incredibly expensive enterprise. Massive funding was required to support the campaign.

The Rothschild banking family was already famous across most of Europe for providing a secure funding source for national governments. The Rothschild’s had established five branches of their enterprise. The largest, most important were based in Paris and London. The final Napoleonic war was largely funded by Nathan Rothschild of the family’s London branch. This house had provided large sums to both the British and the French. The Rothschild’s were famously indifferent to rulers and governments. Nathan Rothschild once famously remarked, “The man who controls the British money supply controls the British, and I control the British money supply”. His goal was to profit no matter whom was in power or won a war.

Nathan Rothschild knew that early knowledge of the winner at Waterloo, details of the battle, the severity of the loser’s defeat would be invaluable in financially manipulating markets to profit from the result. The family had invested heavily over the decades in field agents that forwarded tips and messages, fast packet ships and trained carrier pigeons to speedily deliver notes.

The arrival of the carrier pigeons in London with specific battle results from Waterloo provided Rothschild the information he needed to begin to plant rumors. Initially he spread the word that the British had lost. Investors began to adjust their bond and security positions in reaction to this negative news. Rothschild took opposite positions, and then, he strategically released the actual truthful news that Wellington had vanquished Napoleon. This enabled the family to profit on both sides of the trades. It is estimated that the Rothschild family extrapolated an increase in wealth of 20 times their pre-war capital.

The foresight to train a winged air force of carrier pigeons proved fortuitous and extremely profitable for the banking house of Rothschild. The edge they enjoyed in receiving real-time information, and spectacularly profiting from the knowledge, became legendary and only increased the perception that they were a family of financial Merlin’s. Their power and wealth has multiplied exponentially in the past 200 years and has been maintained to this very day.

In modern business and finance, the ability to glean information about competitor’s plans, information that will affect asset valuations and marketing strategies is invaluable. Governments spend billions of dollars trying to steal state and commercial secrets. Private investigators are used every day to scope out the fidelity and affairs of married spouses. Information is power.

Entrepreneur’s can learn an important lesson from this chronicle about the Rothschild’s use of carrier pigeons. If your project has true commercial value it must be protected. You must assume that there are people working at the same time on a similar opportunity. Time is not your friend.

Whether you can uncover a competitor’s plan or an adversary learns your project’s details, the first owner of knowledge stands to maximize profit. Placing second in this process is a sure path to losing the crucial first to market product advantage. The Rothschild’s earned fabulous riches from simply learning the outcome of a battle before competitors. In order for entrepreneur’s to successfully profit from their efforts they must harvest every bit of relevant and available knowledge as quickly as possible.

Knowledge is invaluable, but it must be secured and utilized with diligence and due haste.