Friday, January 16, 2015

Isaac Singer -- Entrepreneur or Pirate?

I find this story fascinating....


Elias Howe was forced to defend his sewing machine patent in court cases that lasted from 1849 to 1854.

Isaac Singer perfected a facsimile of Howe's lockstitch machine and began selling it.

Isaac Singer

Isaac Singer wasn't the only patent pirate. In 1856, five sewing machine manufacturers (Grover, Baker, Singer, Wheeler and Wilson) all accused each other of patent infringement. They met in Albany, New York to duke it out. One of them was a lawyer and he proposed that, rather than squander their profits on litigation, they pool their patents. (a lawyer advising against litigation? What did I tell you?  Like science fiction, eh?...)

They created the first patent pool, a process which enabled the production of complicated machines without legal battles over patent rights. They agreed to form the Sewing Machine Combination, but for this to work, they had to secure the cooperation of Elias Howe, who had successfully defended his patents. Terms were arranged whereby Howe would receive a royalty on every sewing machine manufactured.

As sewing machines began to be mass-produced, Howe earned considerable royalties ($2 million) for his invention. Howe contributed much of the money he earned to providing equipment for the 17th Connecticut Volunteer Infantry of the Union Army during the Civil War, in which Howe served during the Civil War as a private in Company D and regimental postmaster from August 14, 1862, to July 19, 1865.

Later, a massive plant was built near Elizabeth, New Jersey. Up to then, sewing machines had been industrial machines, made for garments, shoes, bridles and for tailors, but in 1856, smaller machines began to be marketed for home use. However, at the then enormous price of over $100, few sold.

Singer invested heavily in mass producing interchangeable parts (a concept developed by Samuel Colt and Eli Whitney for their firearms). He was able to cut the price of his sewing machine in half, while at the same time increasing his profit margin 530%.

Singer was the first to put a home sewing machine on the market.  Thanks to his mass production, the price of "the turtle back" came down to $10. BUT THE BREAKTHROUGH MOMENT in the home sewing machine industry came when Singer's partner, Edward Clark, pioneered installment purchasing plans and accepted trade-ins, causing sales to soar.

Of course, you know I'm setting you up for the really INTERESTING part of this story...which is -- who was Isaac Singer??

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