Ideas on how to become rich - How to become a billionaire, part 6

Ideas on how to become rich - How to become a billionaire, part 6

In this series on how to become a billionaire, I have looked at various companies and their histories and their beginnings, and we have seen many ways and paths to making lots of money by creating viable businesses that last and that have many good ideas. We had a look at Ford, GM, Google, and Walmart. In this final post on how to become a billionaire, we will look at General Electric in general... and someone in particular. No, it's not Jack Welch, although you can read some of his quotes and ideas here: Some great ideas by Jack Welch.

Read: How to become a billionaire - General Electric and how to create a future billion dollar company

The General Electric Company is a multinational American technology and services conglomerate. In the 1960s, aspects of U.S. tax laws and accounting practices led to a rise in the assembly of conglomerates. GE, which was a conglomerate long before the term was coined, is arguably the most successful organization of this type that makes a lot of money.

I am going to focus here on the history of General Electric, but in particular on the person who began it and set it on the long path to success. Most people associate GE with Jack Welch, who undoubtedly was very important and instrumental, but it is to the earliest founder that we must look for inspiration on how to become rich. That man, the earliest founder, was none other than Thomas Edison.

Yes, the rich man whom we are going to learn from is none other than Thomas Edison. The inventor. Read on!

Thomas Alva Edison (February 11, 1847 – October 18, 1931) was an American inventor and businessman who developed many devices that greatly influenced life around the world, including the phonograph and the long-lasting, practical electric light bulb. “The Wizard of Menlo Park”, he was one of the first inventors to apply the principles of mass production and large teamwork to the process of invention, and therefore is often credited with the creation of the first industrial research laboratory. Edison is considered one of the most prolific inventors in history, holding 1,093 U.S. patents in his name, as well as many patents in the United Kingdom, France and Germany. He is credited with numerous inventions that contributed to mass communication and, in particular, telecommunications. His advanced work in these fields was an outgrowth of his early career as a telegraph operator. Edison originated the concept and implementation of electric-power generation and distribution to homes, businesses, and factories - a crucial development in the modern industrialized world. This was one of the key points that made him very successful.

Edison's major innovation was the first industrial research lab, which was built in Menlo Park, New Jersey. It was built with the funds from the sale of Edison's quadruplex telegraph. The quadruplex telegraph was Edison's first big financial success, and Menlo Park became the first institution set up with the specific purpose of producing constant technological innovation and improvement. This is a key idea in becoming rich, and establishing a future multi billion dollar company. Edison was legally attributed with most of the inventions produced there, though many employees carried out research and development work under his direction. His staff was generally told to carry out his directions in conducting research, and he drove them hard to produce results. The large research group, which included engineers and other workers, based much of their research on work done by others before them.

Nearly all of Edison's patents were utility patents, which were protected for a 17-year period and included inventions or processes that are electrical, mechanical, or chemical in nature. (Clearly, one point to note is that patents play a role in making companies rich, and in particular, utilities and technologies companies who want to make a lot of money or become billion dollar companies probably need to have patents.) About a dozen were design patents, which protect an ornamental design for up to a 14-year period. Like most patents, the inventions he described were improvements over prior art. The phonograph patent, on the other hand, was unprecedented as the first device to record and reproduce sounds. Edison did not invent the first electric light bulb, but instead invented the first commercially practical incandescent light. Several designs had already been developed by earlier inventors including the patent he purchased from Henry Woodward and Mathew Evans, Moses G. Farmer, Joseph Swan, James Bowman Lindsay, William E. Sawyer, Sir Humphry Davy, and Heinrich Göbel. Some of these early bulbs had such flaws as an extremely short life, high expense to produce, and high electric current drawn, making them difficult to apply on a large scale commercially. In 1878, Edison applied the term filament to the element of glowing wire carrying the current. Edison took the features of these earlier designs and set his workers to the task of creating longer-lasting bulbs. By 1879, he had produced a new concept: a high resistance lamp in a very high vacuum, which would burn for hundreds of hours. While the earlier inventors had produced electric lighting in laboratory conditions, Edison concentrated on commercial application, and was able to sell the concept to homes and businesses by mass-producing relatively long-lasting light bulbs and creating a complete system for the generation and distribution of electricity. This was one of the keys to his success and he made a lot of money.

In just over a decade Edison's Menlo Park laboratory had expanded to occupy two city blocks. Edison said he wanted the lab to have "a stock of almost every conceivable material". Over his desk, Edison displayed a placard with Sir Joshua Reynolds' famous quote: "There is no expedient to which a man will not resort to avoid the real labour of thinking." With Menlo Park, Edison had created the first industrial laboratory concerned with creating knowledge and then controlling its application. This made him a lot of money via R and D.

Edison patented an electric distribution system in 1880, which was essential to capitalize on the invention of the electric lamp. On December 17, 1880, Edison founded the Edison Electric Illuminating Company. The company established the first investor-owned electric utility in 1882 on Pearl Street Station, New York City. It was on September 4, 1882, that Edison switched on his Pearl Street generating station's electrical power distribution system, which provided 110 volts direct current (DC) to 59 customers in lower Manhattan. Earlier in the year, in January 1882 he had switched on the first steam generating power station at Holborn Viaduct in London. The DC supply system provided electricity supplies to street lamps and several private dwellings within a short distance of the station. On January 19, 1883, the first standardized incandescent electric lighting system employing overhead wires began service in Roselle, New Jersey.

Edison's true success, like that of his friend Henry Ford, was in his ability to maximize profits through establishment of mass-production systems and intellectual property rights. This dampened the success of less profitable work by others who were focused on inventing longer-lasting high-efficiency technology. George Westinghouse and Edison became adversaries because of Edison's promotion of direct current for electric power distribution instead of the more easily transmitted alternating current (AC) system invented by Nikola Tesla and promoted by Westinghouse. Once again: Edison's true success, like that of Ford, was in his ability to maximize profits and make a lot of money through establishment of mass-production systems and intellectual property rights.

The key to Edison's fortunes was telegraphy, with which he earned a lot of money and made his company grow and grow. With knowledge gained from years of working as a telegraph operator, he learned the basics of electricity. This allowed him to make his early fortune with the stock ticker, the first electricity-based broadcast system. Edison patented the sound recording and reproducing phonograph in 1878. Edison was also granted a patent for the motion picture camera or "Kinetograph". He did the electromechanical design, while his employee W.K.L. Dickson, a photographer, worked on the photographic and optical development. In 1891, Thomas Edison built a Kinetoscope, or peep-hole viewer. This device was installed in penny arcades, where people could watch short, simple films. On August 9 1892, Edison received a patent for a two-way telegraph. In April 1896, Thomas Armat's Vitascope, manufactured by the Edison factory and marketed in Edison's name, was used to project motion pictures in public screenings in New York City. Later he exhibited motion pictures with voice soundtrack on cylinder recordings, mechanically synchronized with the film. Officially the kinetoscope entered in Europe when the rich American Businessman Irving T. Bush (1869–1948) bought from the Continental Commerce Company of Franck Z. Maguire and Joseph D. Bachus a dozen machines. Bush placed from October 17, 1894 on the first kinetoscopes in London. At the same time the French company Kinétoscope Edison Michel et Alexis Werner bought these machines for the market in France. In the last three months of 1894 The Continental Commerce Company sold hundreds of kinetoscopes in Europe (i.e. the Netherlands and Italy). The first kinetoscopes arrived in Belgium at the Fairs in early 1895. The Edison's Kinétoscope Français, a Belgian company, was founded in Brussels on January 15, 1895 with the rights to sell the kinetoscopes in Monaco, France and the French colonies. The main investors in this company were Belgian industrialists. On May 14, 1895 the Edison's Kinétoscope Belge was founded in Brussels. The businessman Ladislas-Victor Lewitzki, living in London but active in Belgium and France, took the initiative in starting this business.

Edison was active in business right up to the end. Just months before his death in 1931, the Lackawanna Railroad implemented electric trains in suburban service from Hoboken to Gladstone, Montclair and Dover in New Jersey. Transmission was by means of an overhead catenary system, with the entire project under Edison's guidance. To the surprise of many, he was at the throttle of the very first MU (Multiple-Unit) train to depart Lackawanna Terminal in Hoboken, driving the train all the way to Dover. This was one truly great American inventor, business man and very rich and wealthy person who made the beginnings of the great General Electric possible.

The usual questions apply: how can we use these nuggets of information and all these good ideas to become rich? The ideas are all there and we can emualate Edison. At the same time, do read and review all the other various companies and how they made their billions, as well as their company histories, to find out ideas on how to become a billionaire.

Just a quick reminder:

Summary and general points on how to become rich the way billionaires made their money

1. Usually the starting point is a great idea or a great concept, and usually that has nothing to do with making money initially, but providing a service or some product that is needed or will soon be needed.

2. If not a great idea, then it usually turns out to be that the person who eventually became very rich started working very hard and very young. Most millionaires and some billionaires became rich this way, working their way up the corporate ladder.

3. The company gets listed on the stock exchange. That's why the next few posts will deal with looking at various case studies of billionaires and their companies, and mostly focuses on the companies that make the billionaires possible. In other words, the businesses. The various businesses that took different routes, but ended up rich and prosperous and made their shareholders rich and in some cases billionaires.

4. The company expands by wise strategic moves and by excellent leadership - or in some cases luck and fortune. This differs from company to company and in some cases mergers and acquisitions are the order of the day, whereas in some other cases some companies do not merge with other companies but instead expand their range and power via products and reach.

5. The billionaires in question become very rich because of their control of a great company that makes a lot of money.

Hope you loved that reminder on how to become rich.

More great ideas to come in future posts here on this money making site. Thanks for reading the various ideas, case studies and plans, and cheers!

Ideas on how to become rich