Think Molecule, Not Atom

When formulating a new venture, consider the bond between invention and business model discipline – aka, Innovation.  The birth of the Ford Motor Company story serves as a prime example.

How many of you have ever heard of James Couzens?  Without James Couzens, you probably would not have heard of Henry Ford.   James Couzens completed Henry Ford. Ford, the visionary engineer, was anything but diligent – he was a spaced out dreamer (often seen catching a nap), wondering around the work place ‘planting’ seeds of ideas with his larger than life, magnetic personality.  James Couzens was a tireless, often unpopular, ultra-productive work machine showing uncanny attention to detail, especially in anything related to finance (fancy name for business model).  Henry and James bonded like hydrogen to oxygen, and therein lay their “collective entrepreneurial” genius.  Couzens was there with Ford, right from the beginning of the now legendary auto company.  Ford took care of engineering and product development, Couzens took care of ‘the business model – revenue drivers, cost drivers, and risks – i.e. he played the dual role of the modern CFO, partner to Ford (innovation and growth) and steward to the shareholders (execution and cash flow to keep the lights on).  The pair suffered through failure after failure in the early days – including Couzens having to raise money from his schoolteacher sister to keep the company afloat.

Ford’s hero remained Thomas Edison, but perhaps due to Couzen’s influence, he did grow to admire the master of operational efficiency, John D Rockefeller of Standard Oil.  Operationally speaking, though, Ford did very little “hands-on work” himself, it seems, he had plenty of other right hand men, namely Harold Wills, a brilliant engineer.  Ford’s contribution was seeing the forest from the trees, coaching and cheerleading like heck.

Ford, Couzens, Wills, et al. started out in circa 1902 in a field (auto manufacturing) that was considered by many to be a fad  – and an overcrowded fad at that – there were more than 3,000 car companies started between 1895 and 1905 – yes, 3,000! The Ford Motor Company was started officially on June 17th, 1903 (third or so try for Ford).   Most of these car companies simply put together parts made by third parties.

Ford Motor Company’s first product, the Model A, was arguably a piece of crap that had to be shipped anyway (and serviced later) to keep the company afloat.  The Model B was something larger and more sophisticated, trying to get a higher profit margin by cramming more features, regardless of what consumers really valued – guess Clayton Christensen wasn’t born yet to teach the perils of the ‘arms race’ strategy vs. disruption.

But seemingly “out of the blue”, Ford had a vision that would change the world – he realized people needed a low-cost car – meaning it had to be gasoline powered (vs. steam or electric, the other feasible choices at the time.  Ironically, Ford’s own wife, Clara drove an electric car.   He also realized the engineering challenges that the low cost car had to master – be tougher and more dependable than existing cars (higher quality or value/price ratio), while still turning a profit (or Couzens would have his butt!).  Finally, he realized the importance of branding – Ford had to own the car segment (aka become a platform), like Coca-Cola, Heinz, etc.  He was ‘lucky’ in his timing, but luck is preparation meets opportunity.

“I will build a motor car for the great multitude – It will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s greatest open spaces” – Henry Ford.

Ford wasn’t just selling a car – he was selling a dream of a better future – for virtually everyone!

model-t

Low cost, durability, ease of driving and maintainability were the selling points. The key technologies (there is often technology involved in major paradigm shifts of life improvement) included the use of vanadium steel, the two-speed “planetary” transmission, and the flywheel magneto – bottom line, Ford introduced a $850 car better than a $2,500 car – the timeless model “T”.  First introduced in 1908, at its height in the 1920’s, the model T was synonymous with “car” and accounted for 2/3 of all automobiles sold in the US (so many were the orders, that the assembly line was eventually required, to complete the innovation) – necessity, always the mother of invention.

So as you’re building your new venture team, ask yourself – are you recruiting, engaging and motivating talented people around you? – Where are your Couzens and Willis?  Are you building the next machine that will change the world?  Come to think of it, this is a story that was also repeated at Apple (starting with the Apple II, as the Apple I was also…not so impressive) – the parallels between Ford and Jobs, Couzens and Markkula, Wills and Wosniak are uncanny.

So, are you going to make a dent in the Universe or not?  Why not you? That formula served Henry Ford, Steve Jobs and many others quite well.

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One comment

  • One thing that you mentioned that I believe is really important it to match any invention with user needs. Low cost, durability, ease of driving and maintainability were user needs that Henry Ford’s dreams addressed. To make a dent in the Universe, figuring out the deep user needs and bringing solutions for these user needs with a viable business model is key

    Jean-Claude Junqua

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