The stories of lost opportunities
New ideas, as insane as they may sound, can make a bold investor rich
What do you think — how much money did the creators of Google need at the first stage of building their search system? We won’t burden you with figures — let’s just say that the company needed probably a one billionth share of what it is worth now, back when it was just an ordinary project.
However, there are more curious historical examples of how startuppers — let’s call these people the way they would be habitually called now — could not find the money to implement their ideas, which now seem obvious and practical to everyone.
Ahead of the progress
Beyond any doubt, thousands of years ago the unknown inventor of the wheel had a hard time promoting his most original idea of the time into the wider audience. And it’s not just the wheel; throughout the history of humankind, new technologies always drew scepticism with their seeming impracticality and prematurity.
At the same time, ingenious inventors who generated unique, way-ahead-of-their-time, ideas, were rarely able to implement their projects without outside financial assistance. Sponsors, philanthropists, patrons, business angels — these were equally ingenious people with a well-developed intuition. They risked their money, and they got monumental profits on their relatively small investment; they also became, in fact, an important part of the progress.
The principles of telephone communication, still in use today, were developed in 1860 by a German physicist called Johann Reis. This invaluable invention, however, originally did not receive any practical development. Respectively, no machines transmitting sound over wires in accordance with Reis’s theory existed.
Several years later, Alexander Graham Bell, a Scotsman inspired by this idea, decided to not only produce but also popularize the telephone at any cost. By the way, the apparatus already had a name — invented by Reis.
Alexander Bell believed that this method of communication would greatly simplify transmission of information over long distances and improve the quality of life for many people. Alas, few shared his beliefs at the time. The apparatus, patented in 1876, did not seem interesting, even to Bell’s likely most farsighted and progressive contemporary — Mark Twain.
“Weirdoes” become millionaires
Moreover, the famous American writer and journalist was even outraged at the invention: why would someone use something this useless, now that the people have already been using telegraph — which seemed the best communication channel, in Mark Twain’s opinion. Later he even publicly ridiculed the “weirdo” who agreed to invest much-needed five thousand dollars into Bell’s project.
This “project without future” brought Bell and his “weirdo” companions millions in profits over several years. By 1879, one share in Bell Company cost more than a thousand dollars! 1.5 million phone lines were active in the US in 1900. By 1922, when the inventor died, there were already 13 million phones in the US alone.
Sceptics vs. optimists. Or realists?
We can assert freely that a successful startup is based on a victory of optimism over scepticism. And sceptics are often backed not just by public opinion, but also by scientific authorities. For example, the famous British physicist William Thomson was confident — and ardently defended his opinion — that “Heavier-than-air flying machines are impossible”.
However, there are serious doubts about Thomson’s academic adequacy today: Lord William believed X-rays were a swindle and mystification, and radio “a useless invention that has no future”. This seems ridiculous today — but for that time, his opinion was a grave enough reason for many people to avoid investing into these projects. However, people who risked a small amount of money on these “unrealistic” projects, made not just fabulous profits but also made history.
Definitely, not every investment — in something new and probably weird — will make you a millionaire overnight. Moreover, there’s always the risk that you will not even recover the money you invested. However, sometimes you should listen to a person who suggests you invest in, say, a wireless computer mouse with a built-in phone and a shaver. Who knows — you may well be talking to the new Alexander Bell...