Business History

President Jimmy Carter had a brother, and this brother LOVED beer. Billy Carter was a big 1970s celebrity and a struggling brewery decided to bet on him to revive its fortunes. Together they created Billy Beer and launched a huge ad campaign. The beverage was a global sensation... except nobody including Billy liked the taste. Billy Beer was a flop.  

Billy Beer was emblematic of American brewing at the time. It was all bad beer and gimmicky marketing. Coincidentally, it was Jimmy Carter who would change that. He signed a new tax law that kickstarted the craft beer revolution which brought us some of modern America's most popular brews. 

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Before 1450, books were written out by hand. It was slow and expensive. But Johannes Gutenberg borrowed a ton of money to create a printing press that could crank out Bibles and pamphlets and documents in huge numbers. Science, politics and philosophy were all up-ended. 

For example, the Catholic Church seized on the invention to sell special certificates absolving people of their sins - a move that made money, but caused a permanent schism in Christianity.   

And Gutenberg too found himself in trouble - when a financier sued the inventor to reclaim his loan, plus interest.  

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Jay Gould became hugely rich without ever really making a product or offering a service to benefit his customers. Other "Robber Barons" in the 19th century forged steel or pumped oil to make money - but Gould preferred to manipulate the stock market or bribe judges and politicians to generate a profit. 

Even when he was fired from the railway company he mismanaged, he used this inside information to profit from the soaring share price. No one liked Jay Gould - indeed many people physically assaulted him because of his awful behaviour - but his real legacy was the raft of laws America passed to try to prevent such a businessman ever rising to power again.   

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Business History will be back on July 22nd - but here's an episode from another Pushkin Industries show we're sure you''ll enjoy, Cautionary Tales.

A giant chemical plant near the small village of Flixborough, England, is busy churning out a key ingredient of nylon 6, a material used in everything from stockings to toothbrushes to electronics. When a reactor vessel fails, the engineers improvise a quick-fix workaround, so the plant can keep up with demand. Before long, the temporary patch - a small, bent pipe - becomes a permanent part of the factory, and the people of Flixborough unknowingly drift towards disaster.

Listen to more Cautionary Tales whenever you get your podcasts. 

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John Meriwether assembled the smartest team on Wall Street. In the 1980s, he combed Harvard and MIT for geniuses to join him at Salomon Brothers and make the investment bank a fortune with arbitrage - the trick of buying an asset cheap in one place and quickly selling it for a profit in another. 

When he parted ways with Salomon Brothers, Meriwether took his "nerds" to set up a hedge fund. They prospered - making themselves and their clients rich. Two employees even picked up a Nobel Prize. But Long Term Capital Management operated in the real world - where projections and charts and formulas can't protect you from political chaos and economic turmoil. 

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Shopping used to be adversarial. Shoppers and store owners would bargain and haggle over prices. What one person got for $1, the next guy bought for £1.25. And there were no returns. It was unfair and stressful - and made shoppers distrustful that they were getting a good deal. John Wanamaker changed all that. 

Wanamaker thought about being a preacher before setting up as a clothes merchant. So he built a retail empire built on fairness and trust. Price tags appeared in his stores - promising everyone would pay the same. And if you weren't happy - you could return your purchase. This was so unusual that Wanamaker even won the praise of a US President.  

AND to see Joseph Monroe Bennett's magnificent moustache for yourself go to: https://archives.upenn.edu/exhibits/penn-people/biography/joseph-monroe-bennett/

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Why have so many tiny start-ups come from nowhere to take down huge established corporations? Is it because the incumbents were dumb? Harvard Business School professor Clayton M Christensen decided to explore these David versus Goliath battles - and came up with a theory to explain why seemingly solid businesses suddenly lose market share... disruptive innovation.  

In his hit book, The Innovator's Dilemma, Christensen explored how flawed products from small companies can suddenly catch on, disrupt the market and steal customers from established corporations. Christensen - a life-long Boy Scout - was an odd champion for "disruptive innovation", but his ideas have totally changed the business landscape.

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At a time when women couldn't vote or freely enter the workplace, Ida Tarbell took on the richest man in America and triumphed. Ida grew up in the Pennsylvania oil fields of the 1870s, and saw how John D Rockefeller and his company Standard Oil bought or bullied independent firms. Ida's neighbors and even her own father were in Rockefeller's sights.     

In adulthood, Ida joined a new movement in journalism. She was a "muckraker" - looking to dig up dirt on the greedy and unscrupulous monopolies of the Gilded Age. She wrote a 19-part investigation of Standard Oil that became a nationwide hit and forced the US government to act and break Rockefeller's empire apart. 

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Benjamin Franklin had a full life - he was a scientist, statesman, and a Founding Father. But we're looking at the huge impact he had as a writer of best-selling business books. Franklin first picked up the pen as a poor, downtrodden teenager to write satire, but as he became richer and more successful he instead shared his entrepreneurial insights with the public.   

His sayings about time-wasting, thrift and the rewards of hard work were revolutionary. And both his admirers and critics claim his writings caused a profound global shift in how we think about work and wealth. 

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Two-hundred-and-fifty years ago George Washington was fighting the Revolutionary War against the British, but Robert Morris doing something just as vital. He was raising money for the fighting and buying the gunpowder, tents, food and uniforms Washington's army needed. 

Morris had been a merchant before the revolution, so didn't see why he shouldn't personally profit from his work supplying the colonists' struggle. He emerged from the war as a rich man and owned huge tracts of land. But the turbulent final years of the 18th Century saw Morris go first into substantial debt and then fall into utter ruin.     

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