Long before the days of Bill Gates, Thomas Edison offered a good lesson in the economics of technical innovation.
On Oct. 15, 1878, Edison opened the doors to the Edison Electric Company. But the prolific inventor didn't get the company off the ground by himself.
Edison Electric was, in part, funded by wealthy investors like J.P. Morgan, who thought Edison, the inventor of the telegraph, was a wise investment.
Though electric light had eluded inventors for over 50 years, Edison had vowed that he would create the first incandescent lamp. He quickly made good on his promise. His company was soon flush with profits, and competitors hoping to cash in on the burgeoning market were springing up everywhere.
Under the tutelage of Morgan, Edison adopted the aggressive tactics of vertical integration -- buying his rivals and transforming his company into a model modern enterprise.
Without anti-trust laws to put the breaks on the feeding frenzy, Edison's shop, re-christened the General Electric Company, dominated the field with just one major competitor, the Westinghouse Company.
Source: History.com
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