Wireless Communication

Posted by PITHOCRATES - December 18th, 2013

Technology 101

When a Current passes through a Wire it creates an Electromagnetic Field around the Wire

Wireless communication.  A pretty amazing technology.  Allowing ships at sea for the first time in history to communicate with people on land.  While at sea.  Using Morse code.  Those dots and dashes that take a little translation to understand.  But we could translate anything we said into Morse code.  Most people may even know the universal distress signal.  SOS (· · · – – – · · ·).  Which sent ships racing to the ship in distress.  Instead of simply disappearing from the face of the earth.  Something we owe a deep gratitude for to Nikola Tesla.  Or Guglielmo Marconi.  Depending on which side you’re on in the great patent dispute.  Was Tesla first?  Or was Marconi?  Suffice it to say they were both great inventors.  And the world is a better place because of them.

Electromagnetic field and waves.  Fascinating technology.  But one that is a little difficult to understand.  Because they’re invisible.  You can’t see them.  But we can use them to do incredible things.  If you enjoy using a smartphone you can thank electromagnetic field and waves.  For this technology is what makes wireless communication work.

When a current passes through a wire it creates an electromagnetic field around the wire.  Which can induce a current in an adjacent wire.  This is how transformers work.  By electromagnetically coupling one circuit with another.  Wireless radio transmission is similar.  Only the two circuits are pretty far apart from each other.  Being far apart, though, requires a lot of power.  And the further apart the two circuits are the more power they require.

A Radio Transmitter takes the Source Signal and Modulates it on the Carrier Frequency

When you tune into your favorite radio station you’re tuning into the carrier frequency of that station.  Which is just a powerful sinusoidal wave at one frequency they pump out on an antenna.  If you listened to just this carrier frequency you would hear a single, constant tone.  Sort of like the sound you hear on the television when they show a test pattern.  It’s not interesting or entertaining.  But it is powerful.  And the antenna they broadcast on can create one powerful electromagnetic field.  Such that the antenna on any radio receiver in or near the same city that radio transmitter is in can tune into that frequency and ‘hear’ it.  Basically with a tuner that allows only the station frequency you want to hear to pass.  While blocking the myriad of other carrier frequencies in the atmosphere.

These two antennas are the two circuits electromagnetically coupled together.  The transmitter is basically sending a current into the transmitter antenna to ‘vibrate the air’ while the receiver antenna ‘picks up those vibrations’ and induces an electric current.  And the more powerful the transmitter the farther you could pick up those ‘vibrations’.  Ships at sea had powerful transmitters.  Powered by large generators driven by their powerful steam engines.  Which allowed these signals to travel from the middle of the Atlantic to a shore receiver.  But if you did not have access to a power source you could ‘plug into’ you greatly reduced the effective range.  Because you had to use batteries.  Walkie-talkies kids play with have a small battery.  So they can’t be too far from each other to talk to each other.  The first light-weight solid state radio the Army used—AN/PRC 77 (aka ‘prick-77’)—had a much greater range.  About 5 miles.  And a much, much heavier battery.  It was so heavy that soldiers wore it like a backpack.  Which was another reason to not want to carry it.  The other being that the enemy tried to shoot the people with the radio.

Of course, these radios just didn’t transmit those carrier frequencies.  For that wouldn’t be any fun for kids.  Or useful for soldiers in combat.  And it’s just not pretty music.  No, it’s what we ‘add to’ the carrier frequency that is fun, useful and pretty.  A radio transmitter takes the source signal (voice, music, data, etc.) and modulates it on the carrier frequency.  To better understand what this means without any technical explanation listen to the Rod Stewart song Mandolin Wind.  After he sings, “I don’t have much.  But what I’ve got is yours.  Except, of course, my steel guitar.  Ha, ’cause I know you don’t play.  But I’ll teach you one day.  Because I love ya” there is a brief steel guitar solo (starting at 2:36 on the above link).  It’s a rapid picking of strings as he slowly fingers different frets.  Changing the frequency of the rapidly picked strings.  Reproducing the ‘slower’ melody on the ‘faster’ vibrating strings.  This is basically what modulation is.  Imprinting a low-power signal (voice, music, data, etc.) onto a high-power signal (a carrier frequency).  The receiver then demodulates the original signal from the carrier wave.  So we can hear or use it.

Having Cellular Towers all over the place Greatly Reduces the Amount of Power our Mobile Devices Need

The AN/PRC 77 and walkie-talkies are half-duplex devices.  They use the same carrier frequency to transmit and receive.  So only one person can talk at a time.  Which required people to say ‘over’ when they finished what they were saying to let the other person know they could start talking.  When the person said all he or she was going to say they said ‘out’ to let the other person know they were done with this communication (they NEVER said ‘over and out’.  That was only in movies with poor military consultants).  It was a great system.  Far better than earlier battlefield communications.  Such as the telegraph.  Or the messenger.  It changed the way we fought wars.  But it didn’t translate well to cellular phones.  Because this isn’t the way we talk in social situations.

Also, people just aren’t going to throw something heavy like an AN/PRC 77 on their back when they leave the house.  For the thing weighed nearly 14 pounds.  Because of the batteries.  And what would this funny way of talking and this heavy weight give you?  The ability to talk to someone 5 miles away.  There’s a reason why people don’t use these half-duplex devices for our mobile telephones.  Because there’s something better.  Cellular technology.  Where they made the use of mobile devises more user-friendly by greatly expanding the cellular infrastructure.  That thing our mobile devices talk to.  Instead of requiring a powerful transmitter and receiver (and a large antenna) in our mobile phones we built cellular towers all over the place.  So we are no further than 5 miles (approximately) from a cellular tower.  Which is all the distance our wireless signal needs to travel.  For once it reached a tower your call switched over to the landline system.  And could reach anyplace in the world.  Even to another mobile device.  As long as it is within 5 miles (approximately) of another cellular tower.

Having cellular towers all over the place greatly reduces the amount of power our mobile devices need.  Allowing a small and very light battery to power them.  Making these mobile devices very light weight.  In fact, the batteries are so light that these devices can transmit and receive on two carrier frequencies.  Allowing full-duplex communication.  Where both people can talk at the same time.  Just like in casual conversation.  They are so user friendly and convenient that today many people use their mobile phone far more than any landline telephone.  Something that would no doubt bring great satisfaction to Nikola Tesla and Guglielmo Marconi if they were alive today.  Who have given us the gift of wireless communication.  Well, at least one of them.

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Electric Power, Alternating Current, Transformers, Magnetic Flux, Turns Ratio, Electric Panel and Circuit Breakers

Posted by PITHOCRATES - February 6th, 2013

Technology 101

AC Power is Superior to DC Power because it can Travel Farther and it Works with Transformers

Thanks to Nikola Tesla and his alternating current electric power we live in the world we have today.  The first electric power was direct current.  The stuff that Thomas Edison gave us.  But it had some serious drawbacks.  You needed a generator for each voltage you used.  The low-voltage of telephone systems would need a generator.  The voltage we used in our homes would need another generator.  And the higher voltages we used in our factories and businesses would need another generator.  Requiring a lot of power cables to hang from power poles along our streets.  Almost enough to block out the sun.

Another drawback is that direct currents travel a long way.  And spend a lot of time moving through wires.  Generating heat.  And dropping some power along the way due to the resistance in the wires.  Greatly minimizing the area a power plant can provide power to.  Requiring many power plants in our cities and suburbs.  Just imagine having three coal-fired power plants around your neighborhood.  The logistics and costs were just prohibitive for a modern electric world.  Which is why Thomas Edison lost the War of Currents to Nikola Tesla.

So why is alternating current (AC) superior to direct current (DC) for electric power?  AC is more like a reciprocating motion in an internal combustion engine or a steam locomotive.  Where short up & down and back & forth motion is converted into rotation motion.  Alternating current travels short distances back and forth in the power cables.  Because they travel shorter distances in the wires they lose less power in power transmission.  In fact, AC power lines can travel great distances.  Allowing power plants tucked away in the middle of nowhere power large geographic areas.  But there is another thing that makes AC power superior to DC power.  Transformers.

The Voltage induced onto the Secondary Windings is the Primary Voltage multiplied by the Turns Ratio

When an alternating current flows through a coiled wire it produces an alternating magnetic flux.  Magnetic flux is a measure of the strength and concentration of the magnetic field created by that current.  When this flux passes through another coiled wire it induces a voltage on that coil.  This is a transformer.  A primary and secondary winding where an alternating current applied on the primary winding induces a voltage on the secondary winding.  Allowing you to step up or step down a voltage.  Allowing one generator to produce one voltage.  While transformers throughout the power distribution network can produce the many voltages needed for doorbells, electrical outlets in our homes and the equipment in our factories and businesses.  And any other voltage for any other need.

We accomplish this remarkable feat by varying the number of turns in the windings.  If the number of turns is equal in the primary and the secondary windings then so is the voltage.  If the number of turns in the primary windings is greater than the number of turns in the secondary windings the transformer steps down the voltage.  If the number of turns in the secondary windings is greater than the number of turns in the primary windings the transformer steps up the voltage.  To determine the voltage induced onto the secondary windings we divide the secondary turns by the primary turns.  Giving us the turns ratio.  Multiplying the turns ratio by the voltage applied to the primary windings gives us the voltage on the secondary windings.  (Approximately.  There are some losses.  But for the sake of discussion assume ideal conditions.)

If the turns ratio is 20:1 it means the number of turns on the primary windings is twenty times the turns on the secondary windings.  Which means the voltage on the primary windings will be twenty times the voltage on the secondary windings.  Making this a step-down transformer.  So if you connected 4800 volts to the primary windings the voltage across the secondary windings will be 240 volts (4800/20).  If you attached a wire to the center of the secondary coil you can get both a 20:1 turns ratio and a 40:1 turns ratio.  If you measure a voltage across the entire secondary windings you will get 240 volts.  If you measure from the center of the secondary and either end of the secondary windings you will get 120 volts.

The Power Lines running to your House are Two Insulated Phase Conductors and a Bare Neutral Conductor

This is a common transformer you’ll see atop a pole in your backyard.  Where it is common to have 4800-volt power lines running at the top of poles running between houses.  On some of these poles you will see a transformer mounted below these 4800-volt lines.  The primary windings of these transformers connect to the 4800-volt lines.  And three wires from the secondary windings connect to wires running across these poles below the transformers.  Two of these wires (phase conductors) connect to either end of the secondary windings.  Providing 240 volts.  The third wire attaches to the center of the secondary windings (the neutral conductor).  We get 120 volts between a phase conductor and the neutral conductor.

The power lines running to your house are three conductors twisted together in a triplex cable.  Two insulated phase conductors.  And a bare neutral conductor.  These enter your house and terminate in an electric panel.  The two phase conductors connect to two bus bars inside the panel.  The neutral conductor connects to a neutral bus inside the panel.  Each bus feeds circuit breaker positions on both sides of the panel.  The circuit breaker positions going down the left side of the panel alternate between the two buss bars.  Ditto for the circuit breaker positions on the right side.

A single-pole circuit breaker attaches to one of the bus bars.  Then a wire from the circuit breaker and a wire from the neutral bus leave the panel and terminate at an electrical load.  Providing 120 volts to things like wall receptacles where you plug things into.  And your lighting.  A 2-pole circuit breaker attaches to both bus bars.  Then two wires from the circuit breaker leave the panel and attach to an electrical load.  Providing 240 volts to things like an electric stove or an air conditioner.  Then a reciprocating (push-pull) alternating current runs through these electric loads.  Driven by the push-pull between the two bus bars.  And between a bus bar and the neutral bus.  Which is driven by the push-pull between the conductors of the triplex cable.  Driven by the push pull of secondary windings in the transformer.  Driven by the push-pull of the primary windings.  Driven by the push-pull in the primary cables connected to the primary windings.  And all the way back to the push-pull of the electric generator.  All made possible thanks to Nikola Tesla.  And his alternating current electric power.

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The Horse, Waterwheel, Steam Engine, Electricity, DC and AC Power, Power Transmission and Electric Motors

Posted by PITHOCRATES - December 26th, 2012

Technology 101

(Original published December 21st, 2011)

A Waterwheel, Shaft, Pulleys and Belts made Power Transmission Complex

The history of man is the story of man controlling and shaping our environment.  Prehistoric man did little to change his environment.  But he started the process.  By making tools for the first time.  Over time we made better tools.  Taking us into the Bronze Age.  Where we did greater things.  The Sumerians and the Egyptians led their civilization in mass farming.  Created some of the first food surpluses in history.  In time came the Iron Age.  Better tools.  And better plows.  Fewer people could do more.  Especially when we attached an iron plow to one horsepower.  Or better yet, when horses were teamed together to produce 2 horsepower.  3 horsepower.  Even 4 horsepower.  The more power man harnessed the more work he was able to do.

This was the key to controlling and shaping our environment.  Converting energy into power.  A horse’s physiology can produce energy.  By feeding, watering and resting a horse we can convert that energy into power.  And with that power we can do greater work than we can do with our own physiology.  Working with horse-power has been the standard for millennia.  Especially for motive power.  Moving things.  Like dragging a plow.  But man has harnessed other energy.  Such as moving water.  Using a waterwheel.  Go into an old working cider mill in the fall and you’ll see how man made power from water by turning a wheel and a series of belts and pulleys.  The waterwheel turned a main shaft that ran the length of the work area.  On the shaft were pulleys.  Around these pulleys were belts that could be engaged to transfer power to a work station.  Where it would turn another pulley attached to a shaft.  Depending on the nature of the work task the rotational motion of the main shaft could be increased or decreased with gears.  We could change it from rotational to reciprocating motion.  We could even change the axis of rotation with another type of gearing.

This was a great step forward in advancing civilization.  But the waterwheel, shaft, pulleys and belts made power transmission complex.  And somewhat limited by the energy available in the moving water.  A great step forward was the steam engine.  A large external combustion engine.  Where an external firebox heated water to steam.  And then that steam pushed a piston in a cylinder.  The energy in expanding steam was far greater than in moving water.  It produced far more power.  And could do far more work.  We could do so much work with the steam engine that it kicked off the Industrial Revolution.

Nikola Tesla created an Electrical Revolution using AC Power

The steam engine also gave us more freedom.  We could now build a factory anywhere we wanted to.  And did.  We could do something else with it, too.  We could put it on tracks.  And use it to pull heavy loads across the country.  The steam locomotive interconnected the factories to the raw materials they consumed.  And to the cities that bought their finished goods.  At a rate no amount of teamed horses could equal.  Yes, the iron horse ended man’s special relationship with the horse.  Even on the farm.  Where steam engines powered our first tractors.  Giving man the ability to do more work than ever.  And grow more food than ever.  Creating greater food surpluses than the Sumerians and Egyptians could ever grow.  No matter how much of their fertile river banks they cultivated.  Or how much land they irrigated.

Steam engines were incredibly powerful.  But they were big.  And very complex.  They were ideal for the farm and the factory.  The steam locomotive and the steamship.  But one thing they were not good at was transmitting power over distances.  A limitation the waterwheel shared.  To transmit power from a steam engine required a complicated series of belts and pulleys.  Or multiple steam engines.  A great advance in technology changed all that.  Something Benjamin Franklin experimented with.  Something Thomas Edison did, too.  Even gave us one of the greatest inventions of all time that used this new technology.  The light bulb.  Powered by, of course, electricity.

Electricity.  That thing we can’t see, touch or smell.  And it moves mysteriously through wires and does work.  Edison did much to advance this technology.  Created electrical generators.  And lit our cities with his electric light bulb.  Electrical power lines crisscrossed our early cities.  And there were a lot of them.  Far more than we see today.  Why?  Because Edison’s power was direct current.  DC.  Which had some serious drawbacks when it came to power transmission.  For one it didn’t travel very far before losing much of its power. So electrical loads couldn’t be far from a generator.  And you needed a generator for each voltage you used.  That adds up to a lot of generators.  Great if you’re in the business of selling electrical generators.  Which Edison was.  But it made DC power costly.  And complex.  Which explained that maze of power lines crisscrossing our cities.  A set of wires for each voltage.  Something you didn’t need with alternating current.  AC.  And a young engineer working for George Westinghouse was about to give Thomas Edison a run for his money.  By creating an electrical revolution using that AC power.  And that’s just what Nikola Tesla did.

Transformers Stepped-up Voltages for Power Transmission and Stepped-down Voltages for Electrical Motors

An alternating current went back and forth through a wire.  It did not have to return to the electrical generator after leaving it.  Unlike a direct current ultimately had to.  Think of a reciprocating engine.  Like on a steam locomotive.  This back and forth motion doesn’t do anything but go back and forth.  Not very useful on a train.  But when we convert it to rotational motion, why, that’s a whole other story.  Because rotational motion on a train is very useful.  Just as AC current in transmission lines turned out to be very useful.

There are two electrical formulas that explain a lot of these developments.  First, electrical power (P) is equal to the voltage (V) multiplied by the current (I).  Expressed mathematically, P = V x I.  Second, current (I) is equal to the voltage (V) divided by the electrical resistance (R).  Mathematically, I = V/R.  That’s the math.  Here it is in words.  The greater the voltage and current the greater the power.  And the more work you can do.  However, we transmit current on copper wires.  And copper is expensive.  So to increase current we need to lower the resistance of that expensive copper wire.  But there’s only one way to do that.  By using very thick and expensive wires.  See where we’re going here?  Increasing current is a costly way to increase power.  Because of all that copper.  It’s just not economical.  So what about increasing voltage instead?  Turns out that’s very economical.  Because you can transmit great power with small currents if you step up the voltage.  And Nikola Tesla’s AC power allowed just that.  By using transformers.  Which, unfortunately for Edison, don’t work with DC power.

This is why Nikola Tesla’s AC power put Thomas Edison’s DC power out of business.  By stepping up voltages a power plant could send power long distances.  And then that high voltage could be stepped down to a variety of voltages and connected to factories (and homes).  Electric power could do one more very important thing.  It could power new electric motors.  And convert this AC power into rotational motion.  These electric motors came in all different sizes and voltages to suit the task at hand.  So instead of a waterwheel or a steam engine driving a main shaft through a factory we simply connected factories to the electric grid.  Then they used step-down transformers within the factory where needed for the various work tasks.  Connecting to electric motors on a variety of machines.  Where a worker could turn them on or off with the flick of a switch.  Without endangering him or herself by engaging or disengaging belts from a main drive shaft.  Instead the worker could spend all of his or her time on the task at hand.  Increasing productivity like never before.

Free Market Capitalism gave us Electric Power, the Electric Motor and the Roaring Twenties

What electric power and the electric motor did was reduce the size and complexity of energy conversion to useable power.  Steam engines were massive, complex and dangerous.  Exploding boilers killed many a worker.  And innocent bystander.  Electric power was simpler and safer to use.  And it was more efficient.  Horses were stronger than man.  But increasing horsepower required a lot of big horses that we also had to feed and care for.  Electric motors are smaller and don’t need to be fed.  Or be cleaned up after, for that matter.

Today a 40 pound electric motor can do the work of one 1,500 pound draft horse.  Electric power and the electric motor allow us to do work no amount of teamed horses can do.  And it’s safer and simpler than using a steam engine.  Which is why the Roaring Twenties roared.  It was in the 1920s that this technology began to power American industry.  Giving us the power to control and shape our environment like never before.  Vaulting America to the number one economic power of the world.  Thanks to free market capitalism.  And a few great minds along the way.

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Nikola Tesla, Sheldon Cooper, Inventors & Entrepreneurs, Compromise & Tradeoff, Theoretical & the Practical, GM and Hostess

Posted by PITHOCRATES - December 4th, 2012

History 101

Geniuses strive for Theoretical Perfection which often doesn’t work in the Market Place

There have been a lot of brilliant inventors that gave the world incredible things.  Nikola Tesla gave us the modern world thanks to his work in electromagnetic fields.  Giving us the AC power we take for granted today.  Electric motors.  The wireless radio.  Etc.  But as brilliant as Tesla was he was not brilliant in making money from his inventions.  He died broke and in debt.  And, some say, insane.  Though he was probably more like Sheldon Cooper on The Big bang Theory.  As one character on the show called him, “The skinny weirdo.”  Tesla had an eidetic memory (often called a photographic memory).  And probably suffered from obsessive-compulsive disorder (OCD).  Which when added to genius can be mistaken for crazy genius.

So Tesla and the fictional Sheldon Cooper have some things in common.  Genius.  And some odd behavioral traits.  As well as something else.  Neither was rich.  Their genius did not make them rich.  Which is a common trait of all brilliant inventors.  Their genius gets in the way of practicality.  They strive for theoretical perfection.  Which often doesn’t work in the market place.  Because perfection is costly.  And this is what separates the theoretical geniuses from practical engineers.  And entrepreneurs.

The internal combustion engine is a technological marvel.  It has changed the world.  Modernized the world.  It gave us inexpensive modes of transportation like cars, trucks, ships, trains and airplanes.  But the engine is not theoretically perfect.  It is a study of compromise and tradeoff.  Providing a final product that isn’t perfect.  But one that is economically viable.  For example, pistons need to compress an air-fuel mixture for combustion.  However, the piston can’t make such a tight seal that it can’t move up and down in the cylinder.  So the piston is smaller than the cylinder opening.  This allows it to move.  But it doesn’t contain the air-fuel mixture for compression and combustion.  So they add a piston ring.  Which contains the air-fuel mixture but restricts the movement of the piston.  So they add another piston ring that takes oil that splashes up from crank case and passes it through the ring to the cylinder wall.  The heat of combustion, though, can leave deposits from the oil on the cylinder wall.  So they add another piston ring to scrape the cylinder wall.

Selling a ‘Low Price’ is a Dangerous Game to Play Especially if you don’t Know your Costs

Every part of the internal combustion engine is a compromise and tradeoff.  Each part by itself is not the best it can be.  But the assembled whole is.  A theoretical genius may look at the assembled whole and want to add improvements to make it better.  Adding great costs to take it from 97% good to 99% good.  While that 2% improvement may result with a better product no one driving the car would notice any difference.  Other than the much higher price the car carried for that additional 2% improvement.

This is the difference between the theoretical and the practical.  Between brilliant inventor and entrepreneur.  Between successful business owner and someone with a great idea but who can’t bring it to market.  The entrepreneur sees both the little picture (the brilliant idea) and the big picture (bringing it to market).  Something that a lot of people can’t see when they go into business.  The number one and number two business that fail are restaurants and construction.  Why?  Because these are often little picture people.  They may be a great chef or a great carpenter but they often haven’t a clue about business.

They don’t understand their costs.  And because they don’t they often don’t charge enough.  A lot of new business owners often think they need to charge less to lure business away from their competition.  And sometimes that’s true.  But selling a ‘low price’ instead of quality or value is a dangerous game to play.  Especially if you don’t know your costs.  Because as you sell you incur costs.  And have bills to pay.  Bills you need to pay with your sales revenue.  Which you won’t be able to do if you’re not charging enough.

If Business Operations can’t Produce Cash a Business Owner will have to Borrow Money to Pay the Bills

The successful small business owners understand both their long-term financing needs.  And their short-term financing needs.  They incur long-term debt to establish their business.  Debt they need to service.  And pay back.  To do that they need a source of money.  This must come from profitable business operations.  Which means that their sales revenue must make their current assets greater than their current liabilities.  The sum total of cash, accounts receivables and other current assets must be greater than their accounts payable, accrued payroll, accrued taxes, current portion of long-term debt, etc.  And there is only one thing that will do that.  Having sales revenue that covers all a business’s costs.

The successful business owner knows how much to charge.  They know how much their revenue can buy.  And what it can’t buy. They make the tough decisions.  These business owners stay in business.  They see the big picture.  How all the pieces of business fit together.  And how it is imperative to keep their current assets greater than their current liabilities.  For the difference between the two gives a business its working capital.  Which must be positive if they have any hope of servicing their debt.  And repaying it.  As well as growing their business.  Whereas if their working capital is negative the future is bleak.  For they won’t be able to pay their bills.  Grow their business.  Or service their debt.  Worse, because they can’t pay their bills they incur more debt.  As they will have to borrow more money to pay their bills.  Because their business isn’t producing the necessary cash.

Those restaurants and construction companies fail because their owners didn’t know any better.  Others fail despite knowing better.  Like GM, Chrysler, Hostess, just about any airline, Bethlehem Steel, most print newspapers, etc.  Who all entered costly union contracts during good economic times.  Costs their revenues couldn’t pay for in bad economic times.  Which was most of the time.  As they struggled to pay union labor and benefits they run out of money before they could pay their other bills.  As their current liabilities exceeded their current assets.  So instead of producing working capital they ran a deficit.  Forcing them to incur more debt to finance this shortfall.  Again and again.  Until their debt grew so great that it required an interest payment they couldn’t pay.  And now they are no longer with us today.  Having had no choice but to file bankruptcy.

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Thomas Edison, Patents, Intellectual Property Rights, Nikola Tesla, George Westinghouse, DC, AC and the War of Currents

Posted by PITHOCRATES - March 27th, 2012

History 101

Thomas Edison protected his Intellectual Property Rights with over 1,000 Patents

Thomas Edison was a great inventor.  A great entrepreneur.  But he wasn’t a great scientist or engineer.  He was home-schooled by his mom.  And didn’t go to college.  But he read a lot.  And loved to tinker.  He grew up in Port Huron, Michigan.  At one end of the train line that ran between Port Huron and Detroit.  Where he sold newspapers and other things to commuters during the Civil War.  Then he saved the life of some kid.  Pulled him out of the way of a runaway boxcar.  The kid’s dad ran the train station.  Out of gratitude for saving his son’s life he taught the young Edison Morse Code.  And trained him to be a telegraph operator.  He mastered it so well that Edison invented a better telegraph machine.  The Quadruplex telegraph.  Because he liked to tinker.

What made him a great entrepreneur and not a great scientist or engineer is that his inventions had a commercial purpose.  He didn’t invent to solve life’s great mysteries.  He invented to make money.  By creating things so great that people would want them.  And pay money for them.  He also had an eye on production costs.  So he could build these things the people wanted at affordable prices.  For if they were too expensive the people couldn’t buy them.  And make him rich.  So his inventions used technology to keep production costs down while keeping consumer interest high.  Because of the profit incentive.  But the POSSIBILITY of profits wasn’t enough to push Edison to set up his invention lab.  Where he employed a team of inventors to work full time inventing things.  And figuring out how to mass-produce inventions that made everyone’s life better.  He needed something else.  Something that GUARANTEED Edison could profit from his inventions.  The patent.  That gave the patent holder exclusive rights to profit from their invention.

Inventors and entrepreneurs spend a lot of money inventing things.  They do this because they know that they can file a patent when they invent something that people will buy.  Protecting their intellectual property rights.  So they alone can profit from the fruit of all their labors.  And Edison was one of these inventors.  One of the most prolific inventors of all time.  Filing over 1,000 patents.  Including one on the incandescent light bulb.  Which was going to replace gas lamps and candles.  And provided a need for another new invention.  Electric power distribution.  Something else he spent a lot of time tinkering with.  Producing electrical generators.  And an electric power distribution system.  Which was going to make him an even richer man.  As he held the patents for a lot of the technology involved.  However, he was not to become as rich as he had hoped on his electric power distribution system.  Not for any patent infringements.  But because of a mistreated former employee who had a better idea.

Thomas Edison and George Westinghouse battled each other in the War of Currents

Nikola Tesla was a brilliant electrical engineer.  But not a great entrepreneur.  So he worked for someone who was.  Thomas Edison.  Until Edison broke a promise.  He offered a substantial bonus to Tesla if he could improve Edison’s electric power generating plants.  He did.  And when he asked for his bonus Edison reneged on his promise.  Telling the immigrant Tesla that he didn’t understand American humor.  Angry, Tesla resigned and eventually began working for George Westinghouse.  An Edison competitor.  Who appreciated the genius of Tesla.  And his work.  Especially his work on polyphase electrical systems.  Using an alternating current (AC).  Unlike Edison’s direct current (DC).  Bringing Edison and Tesla back together again.  In war.

Direct current had some limitations.  The chief being that DC didn’t work with transformers.  While AC did.  With transformers you could change the voltage of AC systems.  You could step the voltage up.  And step it back down.  This gave AC a huge advantage over DC.  Because power equals current multiplied by voltage (P=I*E).  To distribute large amounts of power you needed to generate a high current.  Or a high voltage.  Something both DC and AC power can do.  However, there is an advantage to using high voltages instead of high currents.  Because high currents need thicker wires.  And we make wires out of copper or aluminum.  Which are expensive.  And the DC wires have to get thicker the farther away they get from the generator plant.  Meaning that a DC generating plant could only serve a small area.  Requiring numerous DC power plants to meet the power requirements of a single city.  Whereas AC power could travel across states.  Making AC the current of choice for anyone paying the bill to install an electric distribution system.

So the ability to change voltages is very beneficial.  And that’s something DC power just couldn’t do.  What the generator generated is what you got.  Not the case with AC power.  You can step it up to a higher voltage for distribution.  Then you can step it down for use inside your house.  Which meant a big problem for Edison.  For anyone basing their decision on price alone would choose AC.  So he declared war on AC power.  Saying that it was too dangerous to bring inside anyone’s house.  And he proved it by electrocuting animals.  Including an elephant.  And to show just how lethal it was Edison pushed for its use to replace the hangman’s noose.  Saying that anything as deadly as what states used to put prisoners to death was just too deadly to bring into anyone’s house.  But not even the electric chair could save Edison’s DC power.  And he lost the War of Currents.  For Tesla’s AC power was just too superior to Edison’s DC power not to use. 

Nikola Tesla was a Brilliant Engineer who Preferred Unraveling the Mysteries of the Universe over Business

George Westinghouse would get rich on electrical distribution.  Thanks to Nikola Tesla.  And the patents for the inventions he could have created for Thomas Edison.  If he only recognized his genius.  Which he lamented near death as his greatest mistake.  Not appreciating Tesla.  Or his work.  But Edison did well.  As did Westinghouse.  They both died rich.  Unlike Tesla.

Westinghouse could have made Tesla a very rich man.  But his work in high voltage, high frequency, wireless power led him away from Westinghouse.  For he wanted to provide the world with free electric power.  By creating power transmitters.  That could transmit power wirelessly.  Where an electric device would have an antenna to receive this wireless power.  He demonstrated it to some potential investors.  He impressed them.  But lost their funding when they asked one question.  Where does the electric meter go?  Free electric power was a noble idea.  But nothing is truly free.  Even free power.  Because someone had to generate that power.  And if you didn’t charge those using that power how were you going to pay those generating that power?

Edison and Westinghouse were great entrepreneurs.  Whereas Tesla was a brilliant engineer.  He preferred unraveling the mysteries of the universe over business.  Tesla probably suffered from obsessive-compulsive disorder.  Think of the character Sheldon Cooper on The Big Bang Theory television sitcom.  He was a lot like that character.  Brilliant.  Odd.  And interested in little else but his work.  He lived alone.  And died alone.  A bachelor.  Living in a two-room hotel room in the last decade of his life.  Despite his inventions that changed the world.  And the fortunes he made for others.  Sadly, Tesla did not die a rich man.  Like Edison and Westinghouse.  But he did live a long life.  And few men or women changed the world like he did.  A brilliant mind that comes around but once in a millennium.

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Music, Radio Transmitters, Radio Receivers, CD Players, Compression, MP3 Players, Internet, YouTube, Live Streaming and Music on Demand

Posted by PITHOCRATES - February 29th, 2012

Technology 101

The Roaring Twenties brought Electrical Power and Broadcast Radio into our Homes

We take music for granted today.  We can listen to pretty much anything we want to.  At any time.  In any place.  In the home.  In the car.  At the gym.  It’s nice.  You can listen to some of the most beautiful music at your convenience and leisure.  It wasn’t always like this, though.  During the time Edvard Grieg composed his masterpieces few could listen to them.  Unless you attended a live performance.  Which weren’t that readily available.  Unless you lived in a big city.  Where a symphony orchestra could include some of his music in a performance.  But you had to listen to what they played.  And what they played was the only music you were familiar with.  Unless you had a friend with a piano.  Who could read sheet music.  And was a concert-level pianist.  Again, something not that common.

But today you can click on a computer link and listen to almost any obscure piece of music there is.  From Grieg’s beautiful Bådnlåt (At the Cradle), lyric piece for piano, Op. 68/5.  To something really esoteric like Sparks’ As I Sit Down To Play The Organ At The Notre Dame Cathedral.  You can listen to them.  You can buy them.  Download them to a portable MP3 player.  And take them anywhere.  Just imagine trying to do this in 1899.  Going to the lake.  And wanting to listen to Grieg’s new lyric piece for piano.  Opus 68.  Number 5.  At the Cradle.  Unless you took a piano and a concert-level pianist with you that just wasn’t going to happen.  But this all changed.  Beginning around the dawn of the 20th century.

Nikola Tesla had recently won his war with Thomas Edison.  His AC power replaced Edison’s DC power as the standard.  And in the 1920s we were electrifying the country.  We began to generate and transmit AC power across the land.  To businesses.  And to homes.  Where we could plug in the new electrical appliances coming to market.  We were working on another new technology during this time.  Something that could plug in at home to the new electrical power.  The radio.  This technology had something to do with electromagnetic fields and waves.  Transmitted between antennas.  One on a transmitter.  And one on a receiver.  As long as the transmitter and the receiver were tuned to the same frequency.  The first use of this new technology was in the form of a wireless telegraph.  Which few people had in their homes.  These were more useful to communicate with others who were not connected by telegraph lines.  Like ships at sea.  Where we sent Morse code (those dots and dashes that spelled words).  Which worked well.  As long as all the ships didn’t tried to communicate at the same time on the same frequency.  But transmitting speech or music was a different manner.  Because everyone talks more or less in the same band of frequencies.  And notes played on one violin tend to play at the same frequency on another violin.  So if some radio transmitters broadcasted different concerts at the same time you wouldn’t hear a nice concert on your radio.  You’d hear a cacophony of noise.  To get an idea what that would sound like open up three or four browser windows on your computer.  And play a different song on YouTube in each.  What you hear will not be music.  But noise.

In the Eighties we traded our Phonograph Needles for Laser Beams in our CD Players

Of course, this didn’t stop the development of commercial broadcast radio.  For we tune radio transmitters and radio receivers to the same resonant frequency.  The transmitter transmitting at one frequency all of the time. While the radio receiver could tune in to different frequencies to listen to different radio broadcasts.  When you turned the radio tuning dial you changed what resonant frequency your receiver ‘listened’ to.  Which was basically a filter to block all frequencies but the tuned frequency from entering your radio.  We call that frequency the carrier signal.  Typically just a plain old sinusoidal wave form at a one frequency that we imprint the information of the speech or music on.  The transmitter takes the music waveform and modulates it on the carrier signal.  Then broadcasts the signal on the broadcast antenna.  The receiver then captures this signal on its antenna.  And demodulates it.  Pulling the musical imprint from the carrier signal.  And restoring it to its original condition.  Which the radio than amplifies and sends to a speaker.  I left some steps out of the process.  But you get the gist.  The key to successful broadcast radio was the ability to transform the source signal (speech or music) into another signal.  One that we could transmit and receive.  And transform back into the source signal.

The Roaring Twenties was a Neil Armstrong moment on earth.  It was one giant leap for mankind.  For it was in this decade that the modern world began.  Thanks to Nikola Tesla and his AC power.  Which allowed us the ability to plug in radios in our homes.  And power the great radio transmitters to get the signal to our houses.  Tesla, incidentally, created radio technology, too.  Well, Tesla, and Guglielmo Marconi.  (Patent disputes flared between these two greats about who was first.)  Great technological advancement.  Created during a time of limited government and low taxes.  That unleashed an explosive amount of creativity and invention.  The Eighties was another such decade.

The Eighties launched the digital age.  The world of bits and bytes.  1s and 0s.  Digital watches.  Clocks.  Calculators.  PCs.  And, of course, our music.  For the Eighties gave us the compact disc.  The CD.  Music that didn’t wear out like our vinyl records.  And didn’t pop or hiss with age.  Because a CD player didn’t have a phonograph needle.  That rode the groves on our vinyl records.  It had something far more futuristic.  A laser beam.  That reads information encoded into the CD.  Information encoded onto a reflective layer through a series of pits.  During playback the laser either reflects or doesn’t reflect.  This information is than processed into a series of 1s and 0s.  Then converted into the analog waveform of the source material.  And becomes music again.

The Eighties gave us the Digital Age which led to the Internet and Music on Demand

This process is similar to the process of broadcast radio.  Not in any technological way.  But by changing a source signal into something else.  And then converting it back again.  In the case of the CD we sample an analog signal (i.e., an audio recording).  By taking ‘snapshots’ of it at regular intervals.  Then convert these snapshots into a digital format.  And then transfer this digital information to the reflective layer on a CD.  Those 1s and 0s.  When we play it back the laser reads these 1s and 0s.  Then converts these digital snapshots back into the original audio signal.  Sort of like modulating and demodulating a signal.  Only instead of modulating we’re converting from analog to digital.  Then vice versa.

The quality of the digital format depends on how much information each snapshot contains.  And the interval we sample them at.  Larger chunks of information taken in short intervals contain a lot more information.  And improve the quality of the sound.  But it will also take up a lot of space on those CDs.  Limiting the number of songs we can encode on them.  Which lead to compression.  And MP3s.  Which worked on the premise that there’s a lot of music in music.  But we don’t necessarily hear all of that music.  Some sounds mask out other sounds.  Certain frequencies we barely hear.  So while the CDs tried to reproduce the music as faithfully as possible, we learned that we could discard some of the information in the music without reducing the quality of the music much.  This saved a lot of space on CDs and portable MP3 players.  Allowed faster downloads on the Internet.  And live streaming.

The Roaring Twenties changed our world.  Modernized it.  And gave us many things.  Including broadcast radio.  And music in our homes we never had before.  And the Eighties also changed our world.  Further modernizing it.  Giving us the digital age.  That led to the Internet.  And music on demand like we never had before.  Where we can listen to anything.  No matter how obscure.  It’s now all available at our fingertips.  To listen online.  Or to buy and download to a portable device.  From Grieg to Sparks.  And everything in between.

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The Horse, Waterwheel, Steam Engine, Electricity, DC and AC Power, Power Transmission and Electric Motors

Posted by PITHOCRATES - December 21st, 2011

Technology 101

A Waterwheel, Shaft, Pulleys and Belts made Power Transmission Complex

The history of man is the story of man controlling and shaping our environment.  Prehistoric man did little to change his environment.  But he started the process.  By making tools for the first time.  Over time we made better tools.  Taking us into the Bronze Age.  Where we did greater things.  The Sumerians and the Egyptians led their civilization in mass farming.  Created some of the first food surpluses in history.  In time came the Iron Age.  Better tools.  And better plows.  Fewer people could do more.  Especially when we attached an iron plow to one horsepower.  Or better yet, when horses were teamed together to produce 2 horsepower.  3 horsepower.  Even 4 horsepower.  The more power man harnessed the more work he was able to do.

This was the key to controlling and shaping our environment.  Converting energy into power.  A horse’s physiology can produce energy.  By feeding, watering and resting a horse we can convert that energy into power.  And with that power we can do greater work than we can do with our own physiology.  Working with horse-power has been the standard for millennia.  Especially for motive power.  Moving things.  Like dragging a plow.  But man has harnessed other energy.  Such as moving water.  Using a waterwheel.  Go into an old working cider mill in the fall and you’ll see how man made power from water by turning a wheel and a series of belts and pulleys.  The waterwheel turned a main shaft that ran the length of the work area.  On the shaft were pulleys.  Around these pulleys were belts that could be engaged to transfer power to a work station.  Where it would turn another pulley attached to a shaft.  Depending on the nature of the work task the rotational motion of the main shaft could be increased or decreased with gears.  We could change it from rotational to reciprocating motion.  We could even change the axis of rotation with another type of gearing.

This was a great step forward in advancing civilization.  But the waterwheel, shaft, pulleys and belts made power transmission complex.  And somewhat limited by the energy available in the moving water.  A great step forward was the steam engine.  A large external combustion engine.  Where an external firebox heated water to steam.  And then that steam pushed a piston in a cylinder.  The energy in expanding steam was far greater than in moving water.  It produced far more power.  And could do far more work.  We could do so much work with the steam engine that it kicked off the Industrial Revolution.

Nikola Tesla created an Electrical Revolution using AC Power

The steam engine also gave us more freedom.  We could now build a factory anywhere we wanted to.  And did.  We could do something else with it, too.  We could put it on tracks.  And use it to pull heavy loads across the country.  The steam locomotive interconnected the factories to the raw materials they consumed.  And to the cities that bought their finished goods.  At a rate no amount of teamed horses could equal.  Yes, the iron horse ended man’s special relationship with the horse.  Even on the farm.  Where steam engines powered our first tractors.  Giving man the ability to do more work than ever.  And grow more food than ever.  Creating greater food surpluses than the Sumerians and Egyptians could ever grow.  No matter how much of their fertile river banks they cultivated.  Or how much land they irrigated.

Steam engines were incredibly powerful.  But they were big.  And very complex.  They were ideal for the farm and the factory.  The steam locomotive and the steamship.  But one thing they were not good at was transmitting power over distances.  A limitation the waterwheel shared.  To transmit power from a steam engine required a complicated series of belts and pulleys.  Or multiple steam engines.  A great advance in technology changed all that.  Something Benjamin Franklin experimented with.  Something Thomas Edison did, too.  Even gave us one of the greatest inventions of all time that used this new technology.  The light bulb.  Powered by, of course, electricity.

Electricity.  That thing we can’t see, touch or smell.  And it moves mysteriously through wires and does work.  Edison did much to advance this technology.  Created electrical generators.  And lit our cities with his electric light bulb.  Electrical power lines crisscrossed our early cities.  And there were a lot of them.  Far more than we see today.  Why?  Because Edison’s power was direct current.  DC.  Which had some serious drawbacks when it came to power transmission.  For one it didn’t travel very far before losing much of its power. So electrical loads couldn’t be far from a generator.  And you needed a generator for each voltage you used.  That adds up to a lot of generators.  Great if you’re in the business of selling electrical generators.  Which Edison was.  But it made DC power costly.  And complex.  Which explained that maze of power lines crisscrossing our cities.  A set of wires for each voltage.  Something you didn’t need with alternating current.  AC.  And a young engineer working for George Westinghouse was about to give Thomas Edison a run for his money.  By creating an electrical revolution using that AC power.  And that’s just what Nikola Tesla did.

Transformers Stepped-up Voltages for Power Transmission and Stepped-down Voltages for Electrical Motors

An alternating current went back and forth through a wire.  It did not have to return to the electrical generator after leaving it.  Unlike a direct current ultimately had to.  Think of a reciprocating engine.  Like on a steam locomotive.  This back and forth motion doesn’t do anything but go back and forth.  Not very useful on a train.  But when we convert it to rotational motion, why, that’s a whole other story.  Because rotational motion on a train is very useful.  Just as AC current in transmission lines turned out to be very useful.

There are two electrical formulas that explain a lot of these developments.  First, electrical power (P) is equal to the voltage (V) multiplied by the current (I).  Expressed mathematically, P = V x I.  Second, current (I) is equal to the voltage (V) divided by the electrical resistance (R).  Mathematically, I = V/R.  That’s the math.  Here it is in words.  The greater the voltage and current the greater the power.  And the more work you can do.  However, we transmit current on copper wires.  And copper is expensive.  So to increase current we need to lower the resistance of that expensive copper wire.  But there’s only one way to do that.  By using very thick and expensive wires.  See where we’re going here?  Increasing current is a costly way to increase power.  Because of all that copper.  It’s just not economical.  So what about increasing voltage instead?  Turns out that’s very economical.  Because you can transmit great power with small currents if you step up the voltage.  And Nikola Tesla’s AC power allowed just that.  By using transformers.  Which, unfortunately for Edison, don’t work with DC power.

This is why Nikola Tesla’s AC power put Thomas Edison’s DC power out of business.  By stepping up voltages a power plant could send power long distances.  And then that high voltage could be stepped down to a variety of voltages and connected to factories (and homes).  Electric power could do one more very important thing.  It could power new electric motors.  And convert this AC power into rotational motion.  These electric motors came in all different sizes and voltages to suit the task at hand.  So instead of a waterwheel or a steam engine driving a main shaft through a factory we simply connected factories to the electric grid.  Then they used step-down transformers within the factory where needed for the various work tasks.  Connecting to electric motors on a variety of machines.  Where a worker could turn them on or off with the flick of a switch.  Without endangering him or herself by engaging or disengaging belts from a main drive shaft.  Instead the worker could spend all of his or her time on the task at hand.  Increasing productivity like never before.

Free Market Capitalism gave us Electric Power, the Electric Motor and the Roaring Twenties

What electric power and the electric motor did was reduce the size and complexity of energy conversion to useable power.  Steam engines were massive, complex and dangerous.  Exploding boilers killed many a worker.  And innocent bystander.  Electric power was simpler and safer to use.  And it was more efficient.  Horses were stronger than man.  But increasing horsepower required a lot of big horses that we also had to feed and care for.  Electric motors are smaller and don’t need to be fed.  Or be cleaned up after, for that matter.

Today a 40 pound electric motor can do the work of one 1,500 pound draft horse.  Electric power and the electric motor allow us to do work no amount of teamed horses can do.  And it’s safer and simpler than using a steam engine.  Which is why the Roaring Twenties roared.  It was in the 1920s that this technology began to power American industry.  Giving us the power to control and shape our environment like never before.  Vaulting America to the number one economic power of the world.  Thanks to free market capitalism.  And a few great minds along the way.

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LESSONS LEARNED #72: “Moms are a lot like CEOs. Only with more responsibility, longer hours and less pay.” -Old Pithy

Posted by PITHOCRATES - June 30th, 2011

A Genius may have a Brilliant Idea, but it’s an Entrepreneur that brings it to Market

A CEO is a lot like an entrepreneur.  They’re both a cut above the rest.  And can do what few can do.  Bring two worlds together.  The theoretical world inhabited by great thinkers and inventors.  And the practical world inhabited by people who act.  Who take the things the great thinkers and inventors create and give them to us.   There is a difference between the people that inhabit these worlds.  And most can only live in one or the other.  But CEOs and entrepreneurs can live in both.  That’s what makes them special.  Thinkers and inventors possess a genius of theoretical creativity.  But they can do little with their idea.  The action people can build great things (cars, airplanes, buildings, power plants, cell phones, etc.) but only from a construction plan.  Someone else has to have an idea and think and create the construction plan before they can build.  These are the two worlds.  The genius.  And the builders.  And it is the CEO and entrepreneur that bring these two worlds together.

Nikola Tesla was a genius.  A brilliant theoretical thinker.  He created the world in which we live.  But do you know who he is?  What he created?  Probably not.  Unless you’re a Croat.  Because there are probably a lot of statues of him in Croatia. Because he was born there to Serbian parents.  He eventually moved to America.  Got a job with a guy name Thomas Edison.  Who didn’t appreciate his genius.  Or his one particular ‘crazy’ idea.  But George Westinghouse did. 

That ‘crazy’ idea is the AC power we use today.  Thomas Edison was building DC power plants and a DC electric grid.  Despite all the failings of DC distribution (DC power doesn’t travel far requiring lots of generating plants, different voltages have to have their own generating plant, large power loads require very thick and expensive copper wires, etc.).  There was already a DC electrical infrastructure.  And it was Edison’s.  Which he wanted to expand because it would pay him well.

But Tesla’s AC system was better.  Because it could use transformers.  One power generating plant could provide power at a variety of voltages.  You just needed a transformer to get the voltage you wanted.  Also, electrical power is the product of voltage and current.  High power, then, requires either a high voltage or a high current.  High currents require thick, expensive copper wires.  So high voltage was the way to go.  It allowed power to travel farther over thinner wires.  Therefore, it required fewer generating plants.  And a single electric grid (not one for each voltage).  AC power was much more economical than DC power.  And George Westinghouse saw that.  And took Tesla’s brilliant idea and built the AC power generation and distribution system we use today.

The Business of Beautiful, Estée Lauder

You see, Tesla was at home in the lab.  He was a scientist.  Not a salesman.  That’s why he wasn’t an entrepreneur.  Because, just like being a CEO, you need sales skills to be an entrepreneur.  Because you are the number one sales person in your business.  And Edison and Westinghouse were great salesmen.  That’s why they brought a lot of Tesla’s great inventions to market.  And why Tesla did not.  He was just not a sales person.

But Estée Lauder was.  She was always selling.  And creating.  She was the classical entrepreneur.  Her uncle was in the chemistry business making beauty products.  Which fascinated her from a young age.  He taught her the chemistry.  Taught her how to make the products.  How to use the products.  And she did.  Loved them.  And started selling them.  With a passion.

She started creating her own products.  Using her own kitchen as her laboratory.  When not tending to her two sons.  She demonstrated how to use her products.  Gave away free samples.  And sold.  She was always selling.  She started out small.  By herself.  From these humble beginnings she grew to dominate the industry.  She was relentless.  She worked herself to the premier counter space in department stores by redefining the way cosmetics were sold.  Starting with Saks Fifth Avenue in New York.  She visited each counter to ensure they were meeting her high standards.  She gave away free samples.  She demonstrated.  She touched.  Personally applying products on customers.  That’s why when you walk into a department store you’ll see the Estée Lauder counter first.  And you’ll see all the counters selling the same way.  Giving away free samples.  Demonstrating products.  Showing how to apply products.  The Estée Lauder way.

One Smart Cookie, that Mrs. Fields

Debbi Fields liked to bake cookies.  She married young at 19.  To a Stanford graduate.  And aspiring financial consultant.  And about a year later decided to go into the cookie business.  After an incident at a party with her husband and a lot of his snobby associates.  She apparently mispronounced a word.  Said ‘orientated’ instead of ‘oriented’.  A snob pointed out her faux pas.  Sending her home in tears.  Didn’t much like that experience.  And decided to be something more than a ‘just’ a housewife.  Not that there was anything wrong with that.  And she would love being a housewife.  She would raise 5 daughters.  And add another 5 stepchildren in a second marriage.  But the snobs in her husband’s circle did look down on that particular institution.  It was so old fashioned.  It wasn’t progressive.  It wasn’t what people in their circles did.  So they acted like real asses.

Yet they liked her cookies.  Loved them.  Her husband would take them to work.  Where they were a big hit.  Soft and chewy.  Gourmet.  They were different.  When she asked them if she should go into the cookie business, they said it was a bad idea.  The conventional wisdom said crispy cookies were the way to go.  People didn’t want to buy soft and chewy.  They said as they stuffed their mouths with soft and chewy cookies.  And there were others who told her not to do it.  Even her husband doubted her.  But he loved her.  And would support her. She had no business experience.  But she was a hard worker.  And believed in what she was doing.  She got a bank loan to open a cookie store.  Not so much because the banker believed in the business idea.  But because of the good character of her and her husband.  Whatever the outcome, the bank was willing to take a chance.  Because, success or fail, they knew they would repay the loan.

She opened her first store in a mall food court.  Did not sell a single cookie.  Until she used the Estée Lauder sales method.  She gave away free samples.  People tried.  And people liked.  Soft and chewy was a hit.  She grew the company.  Added more stores.  And made a lot of money.  She was very hands on to maintain the quality.  Again, like Estée Lauder.  She visited her stores.  To make sure they maintained her high standards.  Which is why she refused to franchise.  She was too worried about losing that quality.  Which is what made Mrs. Fields cookies better than the competition.  Her husband computerized her operation.  Adding a computer at each store.  All wired to the Internet and tied into her headquarters.  It was state of the art technology.  Allowing more growth.  While retaining full control.  The growth was fast.  Too fast.  The hands-on management didn’t work well with so many stores.  The debt started to pile up.  And then a recession hit.  Her expensive gourmet cookies became too expensive.  And people stopped buying them.  To save the company she had to sell 80% of it.  And the new owners changed the business model.  Franchised stores.  And bumped Debbie Fields from CEO.  But she remained chairman of the board.  And though only a minority shareholder, the business Debbie Fields created continues on.  Her only mistake was being so successful so fast.  And if you’re going to have a fault that’s not a bad one to have.  By the way, don’t forget that she did all of this while raising 5 daughters.  Which probably made the running of the multi-million dollar business the easy part of her life.

Entrepreneurs, CEOS and Moms

Entrepreneurs and CEOs.  They’re a different breed.  They can be both brilliant thinkers like Nikola Tesla.  And aggressive sales people like Thomas Edison and George Westinghouse.  Such as Estée Lauder.  And Debbie Fields.  These mothers dominated their industries.  And set the bar for everyone else.  Lauder built an empire that dominates still.  Fields use of technology to streamline operations is a model for business efficiency at Harvard Business School.  Two of America’s most successful entrepreneurs and CEOs.  And both were moms first.

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FUNDAMENTAL TRUTH #11: “Before you condemn capitalism, imagine a world without professional sports, movies, cell phones and tampons.” -Old Pithy

Posted by PITHOCRATES - April 27th, 2010

PEOPLE HAVE SOME strong opinions about capitalism.  Both good and bad.  So what is it?  What is capitalism?

Merriman Webster OnLine defines it as:

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

To explain this let’s start by explaining what it replaced.  In fact, let’s go further back.  A few hundred years when life truly sucked by our standards.  During the Middle Ages, people barely lived.  People worked very hard and had little time off.  When they did they usually spent it sleeping, being sick, dying or being dead.  You grew or killed what you ate.  You built your own house.  You made your own clothes.  You died probably no further than a short walk from where you were born.  And you worked your whole life somewhere in between.

Think of peasant or serf.  That’s what most were.  Tied to the land.  You had no choices.  If you were born on the land you worked the land.  Until you died.  The land owned you and someone owned the land.  You worked the land at the grace of the owner.  You helped produce his food and, in return, he let you have a small parcel of land to grow your food.  There was a bond of loyalty between landlord and tenant.  Land and protection in exchange for backbreaking, never-ending labor.  Doesn’t sound good until you consider the alternative.  Death by famine.  Or death by murder at the hands of roving bands of outlaws.

Improvements in farming led to more food production.  Eventually, there were food surpluses.  This meant not everyone had to farm.  Some could do other things.  And did.  They became specialists.  Artisans.  Craftsmen.  Cities grew in response to commerce.  People went to market to trade for things they wanted.  Then they started using money, which made getting the things they wanted easier (it’s easier to go to the market with a coin purse than with a sack of grain or a side of beef).  Life got better.  People enjoyed some of it.

THUS BEGAN THE rise of a middle class.  Those city folk making things or doing something.  They were good at what they did and people gladly paid for what they did.  These specialists then improved what they did and thought of new things to do.  They created things to make their work easier.  These individual specialists grew into manufacturing shops.  The cost of production only limited their output.  And banking solved that problem.

Alexander Hamilton, one of America’s Founding Fathers, was a capitalist.  And he thought big.  Money is nice but what can it get you?  A few things for the home?  Something for the wife?  Maybe some new farm tools.  Good stuff, yes, but nothing big.  Lots of little sums of money all over the place can buy lots of little things.  But when you pool lots of little sums of money you get one big-ass pile of it.  That money is now capital.  And you can do big things with it.

And that’s what banking has given us.  People with ideas, entrepreneurs, could now borrow money to bring their ideas to market.  And this is, in a nutshell, capitalism.  The free flow of ideas and capital to make life better.  Making life better wasn’t necessarily the objective; it’s just the natural consequence of people mutually partaking in a free market.

BUT WHAT ABOUT the Soviet Union?  Didn’t they do big things, too?  They built jetliners.  They had a space program.  They had factories.  They did these and other things without capitalism.  They did these things for the good of the people, not for profits.  Isn’t that better?

Talk to someone who wiped their ass with Soviet-era toilet paper.  Let me save you the trouble.  It didn’t feel good.  Unless you enjoy the feel of sandpaper back there.  And to add insult to injury, you had to wait in line to get that toilet paper.  If it was available.

When you think of the Soviet economy you have to think of stores with empty shelves and warehouses full of stuff no one wants.  This is what a command economy does for you.  Some bureaucrat, not the consumer, determines what to sell.  And one person simply cannot figure out what a hundred million plus want.  To get an idea of how difficult this is, pick a movie that 4 of your friends would love to see.  Pick a couple of guys and a couple of girls.  For diversity.  And remove the possibility of sex completely from the equation.  Now pick.  Not so easy, is it?  Now try to pick a movie a hundred million people would love to see.  Can’t do it, can you?  No one can.  Because people are diverse.  One size doesn’t fit all.

Soviet president Mikhail Gorbachev asked Margaret Thatcher how she made sure her people had enough food to eat.  The Soviets were having difficulty feeding theirs.  In fact, they were importing grain from their archenemy.  The United States.  The answer to Gorbachev’s answer was that Thatcher did nothing to feed her people.  The free market fed her people.  Capitalism.

As far as those other big things the Soviets did, they acquired a lot of the knowledge to do those things through an elaborate network of espionage.  They stole technology and copied it.  And they were the first into space because their captured Nazi rocket scientists did it before our captured Nazi rocket scientists did.  (The seed of the space industry was the Nazi V-2 rocket that reigned terror on London and other cities during World War II).

(Lest you think that I’m ripping on the Soviet/Russian people, I’m not.  Just their economic system during the Soviet era.  Their people have suffered.  And persevered.  It was them after all who first threw back Napoleon in Europe.  And it was them who first threw back the Nazis in Europe.  They gave us Pyotr Ilyich Tchaikovsky, Sergei Rachmaninoff, Leo Tolstoy, Fyodor Dostoyevsky, Mikhail Dolivo-Dobrovolsky and, of course, Maria Sharapova to name just a few of the greats.  Good people.  Just sometimes bad government.  As in most nations.  Even in the U.S.)

SO WHAT IS the basic difference between capitalism and a command economy like that of the former Soviet Union?  Probably the freedom to take and accept risk.  Bankers take a risk in loaning money.  They analyze the risk.  If the return on the loan is greater than the risk, they’ll make the loan.  It’s their call.  And they’re pretty good.  Their successes are far greater than their failures.

Some loans are riskier than others.  There’s a greater chance of failure.  But it could also be the next, say, Microsoft.  Or Apple.  If so, even though there’s great risk, the potential of reward is so great that people will want to loan money.  They’ll buy junk bonds (high risk/high yield) or an initial public offering of stock.  They’ll risk their money for a greater return on their investment.  If it pays off.  And they don’t always do.  But good ideas with potential typically find financing.  And investors typically make more money than they lose.  It’s a pretty good system.  Capitalism.

WHEN YOU HAVE risk takers who choose to participate in the free flow of ideas and capital, great things happen.  Modern AC electrical power that we take for granted is invented (thank you Nikola Tesla for the genius and George Westinghouse for taking the risk).  You develop modern commercial jet aviation (thank you Boeing for the 707, 727, 737, 747, well, you get the picture).  You transform the world when you add impurities to semiconducting material and sandwich them together (thank you John Bardeen, Walter H. Brattain and William B. Shockley for the transistor).

These great things, along with others, give us professional sports (stadiums, transportation to and from the stadium, jetliners to take teams to other stadiums, oil exploration and refining for jet and car fuel, etc.).  They give us movies (financing, cameras and production equipment, special effects, theaters, popcorn, DVDs for home viewing, etc.).  They give us cell phones (cellular towers, switching networks, compact and long lasting batteries, interactive handheld devices, voicemail, email, texting, etc.).  And they liberated women to do whatever they want wherever they want by making feminine hygiene protection portable and plentiful (mass production, rail and truck transport, retail and vending outlets, etc.) and by providing convenient privacy (public toilet facilities with vending machines and disposal bins). 

Imagine any of these things provided by the same people who renew our driver’s license.  Do you think any of it would be as good?  Or do you think it would be more like Soviet-era life?  There’s so much we take for granted in capitalism because we can.  It’s a system that works on basic human nature.  It doesn’t require sacrifice.  It doesn’t depend on consensus.  It just needs the free flow of ideas and capital.  And great things follow.

www.PITHOCRATES.com

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