Abstract: Promotion, not Manufacturing: Nikola Tesla's Business Strategy, 1885-1905

W. Bernard Carlson

Abstract

This paper investigates the business strategy used by Nikola Tesla to introduce his inventions. Previously, historians have assumed that most nineteenth-century inventors earned money by establishing new companies to manufacture and market their creations. While Thomas Edison and Alexander Graham Bell certainly pursued this manufacturing-oriented strategy, Tesla instead pursued a promotion-oriented strategy. Rather than set up new companies to manufacture his creations, Tesla promoted his inventions to investors and the public and then sold the patents to manufacturers. While this promotion-oriented strategy is still employed today, we know little about this strategy in a formal and analytical sense. To explore promotion as a strategy, this paper examines how Tesla worked on the AC motor and then wireless power between 1885 and 1905. Overall, in narrating Tesla's approach to the business of invention, I show that he was not a technical wizard who lacked business sense but rather a talented inventor who demonstrated creativity not only in the laboratory but also in the ways he promoted and funded his research.