When we think about business, we might conjure thoughts of large corporations, sole entrepreneurs, or mid-sized offices; we think about the American Dream and working hard to deliver a great product. Most of all, we think about money – the foundation and purpose of nearly every business ever built. What we don’t always think about is the role business has played in shaping our history, and vice versa. History and business are inexorably intertwined, as major business players have opportunities to shape history and innovators have opportunities to take advantage of historical circumstances – evidenced by the following eight historical business facts you probably didn’t know until now.
1. Thomas Edison created Hollywood
No, Edison didn’t found Hollywood – far from it. His firm, Motion Picture Patents Company, owned patents to movie cameras and projectors that allowed it to control the early film industry. Essentially, MPPC could leverage high royalty fees or patent infringement lawsuits to shut down any unwanted studio production as well as determine which theaters could screen which films. MPPC hired enforcers to actively police the use of its patented technology, causing many independent filmmakers to flee the East Coast for Southern California in the early 20th century; the area proved to have excellent weather and access to great film locations, but the migration was made in large part because Edison’s patents couldn’t be enforced in California.
Edison wasn’t all bad, of course: he not only paved the way for the motion picture industry through camera and projector innovations, his company was also the first to standardize film screening fees so theaters could play films based on quality rather than budget.
2. Albert Singer did not invent franchising
Singer is largely credited with the invention of the franchise business model when he licensed other companies to sell Singer sewing machines in the 1850s. However, Singer didn’t invent franchising; much like Henry Ford didn’t actually event the automobile but a way to make its production more efficient and affordable for the masses, Singer revolutionized the world of retail by formalizing franchise agreements with other companies that allowed them to profit simply by marketing and carrying Singer products.
So, who actually invented franchising? It’s impossible to know; however, historical documents do demonstrate that rights were given to individuals to sell specific goods at certain festivals in France during Medieval festivals. Later, German brewers granted bars exclusive rights to peddle their most popular brews.
3. Wal-Mart changed America’s cities forever
Mega-retailer Wal-Mart’s launch in 1962 was the dawn of a new age in not only retail merchandising but also cities throughout the entire nation. Over the next 40 years, the number of single-store retailers dropped by more than 55 percent. Most of those that survived moved to strip malls, often near big chains such as Wal-Mart. Once-busy Downtown USA became a network of vacant storefronts as retailers closed or moved on to greener pastures – literally, as the malls that housed them sprung up on the outskirts of residential areas and in the suburbs. Today, small towns that have been able to retain downtown retail sales are often considered tourist destinations and largely cater to that audience with art and antiques, rather than supplying local residents.
4. McDonald’s started by serving hot dogs
In 1937 brothers Richard and Maurice MacDonald opened a hot dog stand called the Airdrome in Arcadia, California, then moved their eatery to San Bernadino in 1940 and renamed it to McDonald’s Barbecue. The brothers ran quite a successful operation, but they were always on the lookout for ways to improve. This, in 1948 they made a rather risky move to temporarily close, then reopen with a new menu comprised of hamburgers, fries, and milkshakes. They also incorporated the assembly line concept into fast food. Their risks paid off: the brothers were able to open nine more restaurants and sell 21 franchises before ultimately selling the entire business to franchisee Ray Kroc.
Kroc is often credited with building the McDonald’s empire, and deservedly so; however, history shouldn’t overlook the important decisions made by the MacDonald brothers. They’re the ones who laid the foundation for McDonald’s success by recognizing opportunities and incorporating strategic “production” and sales/franchising strategies, and they also demonstrated the value of the end game, or big prize: they sold McDonald’s to Kroc for $2.7 million in 1961, a value worth $21.5 million today.
5. Campbell’s Soup Company created the green bean casserole recipe
Green bean casserole is so ubiquitous at holiday feasts that one can easily imagine the Pilgrims serving the dish at the First Thanksgiving. However, the recipe was developed by the Campbell’s Soup Company in 1955 in a bid to sell more soup. The company created a team to create an easy recipe comprised of ingredients most Americans had in their pantries. The result: a pairing of green beans with cream of mushroom soup (Campbell’s, no less) that quickly became a holiday staple since it pleased both cooks and guests.
The Campbell’s/green bean casserole story is an excellent example of adding value for customers and how that value lends itself to increased sales. It’s also an early example of a “viral” campaign in that word spread from household to household until the entire nation knew what green bean casserole was and how to make it.
6. Zildjian: from 400-year-old sounds of war to easy listening
Famed cymbal maker Zildjian is a nearly 400-year-old company that originated near Constantinople in 1622. Its founder, Avedis I, was an alchemist who was trying to develop a way to turn less-valuable metals into gold. In doing so, he developed a secret process for treating metal alloys that allowed them to ring for a long time when struck – all the while withstanding damage. Sultan Osman II caught wind of the cymbals and employed them not only in his bands and ceremonies, but also to scare Ottoman enemies on the battlefield. He also gave the Avedis the name “Zildjian.”
Today the Zildjian company is going stronger than ever, with a focus on musicians. Many of the greatest drummers today employ Zildjian cymbals in their kits, playing every genre of music from heavy metal to easy listening. The lesson? There’s no substitute for quality and innovation.
7. Bubble wrap was intended to be wallpaper
Where would we be without bubble wrap? Amazon alone would have to deal with countless broken merchandise returns if not for the shock-absorbing protective properties of the highly-addictive poppable plastic sheets. But bubble wrap was never intended for its current use; co-creators Marc Chavannes and Al Fielding initially developed the material when they attempted to create a textured plastic wallpaper in1957. The product wasn’t well-suited for wallpaper, so the pair spent three years trying to find a marketable use for it. Finally, inspiration struck when Chavannes was on a plane in 1960; the inventor observed that the plane behaved as though it were “floating on bubbles,” and he had his “aha!” moment.
Today, it seems as though every shipping company, online retailer, and mail order catalog retailer in the world depends on bubble wrap to help deliver products intact. Again, the story of bubble wrap serves as a testament to the ability to recognize opportunity.
8. IBM left billions on the table over a single decision
The history of MS-DOS is full of twists, turns, and inconsistencies, making it one of the most interesting path-to-market stories of the digital age. This much is known: IBM initially intended to incorporate DRI’s operating system into its early-1980′s digital computers. However, something turned IBM off during a meeting and the company sought other suppliers. Enter Microsoft, which was aware of a third-party operating system called Q-DOS – Quick and Dirty Operating System. In a nutshell, Bill Gates proposed the idea of purchasing and customizing Q-DOS for IBM’s personal computers, and IBM agreed. Microsoft rewrote the program and renamed it MS-DOS (and IBM subsequently rewrote it, which is why both companies maintain copyrights).
The deal worked out well for both companies, but Microsoft ended up with the better end over a single decision made by IBM’s executives: instead of asking for more money, Microsoft wanted the ability to sell the operating system to other companies. IBM again agreed, and Microsoft remained in control of the MS-DOS license – the same system Gates later built Windows on and is responsible for launching a multi-billion-dollar business that has placed software and products in nearly every developed country home over the past three decades.
Microsoft’s long-term outlook proved to be extremely profitable, while IBM’s short-sightedness amounted to the loss of potentially billions in business for IBM. Of course, there was also inherent risk; does any great opportunity come without it?
The next time you’re thinking about business matters, take time to consider how business affects history and how history affects business. How can your business take advantage of opportunities created by contemporary culture and circumstances? How can you learn from entrepreneurs of the past to make your business more efficient and profitable?
This article was syndicated from Business 2 Community: 8 Historical Business Facts You Didn’t Know Until Now
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