Posted by Adam Mossoff, guest-blogging:
The Sewing Machine Combination -- A Fountainhead of Innovation:
http://volokh.com/archives/archive_2009_05_03-2009_05_09.shtml#1241239478
In this last of the purely historical posts, I'll discuss the success
of the Sewing Machine Combination, not just in ending the Sewing
Machine War but also in serving as a fountainhead for further
innovation by its members.
Altough the Sewing Machine Combination was repeatedly attacked in
court and in the popular press as a �grinding, pitiless monopoly� that
engaged in �oppressive conduct,� it served a vital commercial function
beyond simply resolving the Sewing Machine War. Even more important,
it freed the sewing machine manufacturers to get down to the business
of making and selling sewing machines. This was especially true with
respect to Singer, who found motivation for his business acumen in
�the dimes, not the invention.� Thus, he and his business partner,
Edward Clark, were able to use the legal and commercial freedom
secured to them by the Combination to create and to profit from
several innovative marketing and business strategies.
First, Singer recognized very early on that the success of the sewing
machine was predicated on his convincing the public that his new
sewing machine was not merely a repeat of the past failures of prior
inventors. He thus pioneered mass marketing and advertising; in
essence, he was the nineteenth-century equivalent of Billy Mays and
the "as seen on TV" approach to advertising. One historian has noted
that, at that time, Singer's mass marketing techniques represented an
entirely �new concept of selling.� This entailed a concerted and
sustained marketing campaign directed to bringing his sewing machine
to the public�s attention and to convincing them of its practical
virtues. He traveled the country, giving free demonstrations at fairs,
carnivals, and in rented halls. In addition to these free
demonstrations, he performed renditions of Thomas Hood�s [1]Song of
the Shirt, reminding his audiences of the toils from which
seamstresses would be freed by his new invention.
But Singer also recognized that he had to do more than just sell the
public on the practicality of his sewing machine, he also had to
address the prejudice that women were incapable of working machinery,
or, if they could, that it was improper and unwomanly for them to do
so. Driven by his own pursuit of fortune, and thus setting aside
[2]his own personal bigotry, Singer hired women to demonstrate his
sewing machine, as well as teach other women how to use it. One of
I.M. Singer & Co.�s first employees was Augusta Eliza Brown, who was
hired in 1852 for solely these purposes.
Demonstrations of the sewing machine by Ms. Eliza and other women not
only disproved the widespread belief that women could not work
machines, they also played an important role in Singer�s new concept
of splashy, eye-catching marketing. In 1852, Edward Clark wrote to a
company agent that �we have got possession of a front window under our
office [in Boston] at the moderate rent of one thousand dollars a
year, and a nice little girl is operating a machine in it, to the
great entertainment of the crowd.�
In addition to his innovative marketing campaign, Singer and Clark
also pioneered novel business practices to increase the company�s
sales and profits. A significant barrier to the widespread adoption
and use of the Singer Sewing Machine was its price: It cost $125,
which may not seem like much today, but in the 1850s, the average
American family earned less than $500 per year. In response to this
problem, Clark invented a new business method for selling their sewing
machines: the installment-purchase program. The company�s newspaper,
the I.M. Singer & Co. Gazette, explained the purpose of Clark�s
rent-to-own sales program:
Why not rent a sewing machine to the housewife and apply the rental
fee to the purchase price of the machine? Her husband cannot accuse
her of running him into debt since he is merely hiring or renting
the machine and under no obligation to buy. Yet at the end of the
period of the lease, he will own a sewing machine for the money.
This was the first such installment-purchase program in American
history, and it was a brilliant solution to the price problem in
selling Singer Sewing Machines. In combination with Singer�s novel
marketing schemes, this program should have had a tremendous impact on
I.M. Singer & Co.�s bottom line. It did indeed have an impact,
tripling the sales of Singer Sewing Machines from 1855 to 1856, but
such successes were tempered by the massive expenses imposed on the
company by the now-raging Sewing Machine War. Sales of Singer Sewing
Machines were dismal from 1853 to 1855, which, in comparison to the
explosion in its sales following the formation of the Sewing Machine
Combination in 1856, is perhaps a result of the uncertainty
surrounding the Singer Sewing Machine caused by the legal dispute
between Singer and Howe, and then the start of the full-scale Sewing
Machine War in 1854.
Following Potter�s creation of the Sewing Machine Combination in
November 1856, Singer and Clark�s innovative efforts at
commercializing their patented invention began to realize their full
potential. In fact, the year after the Combination was created, Clark
invented another new business method to further secure I.M. Singer &
Co.�s place in the soon-to-be exploding sewing machine market: he
conceived of a trade-in plan in which I.M. Singer & Co. would accept
any older version of a Singer Sewing Machine, or any competitor�s
sewing machine, in exchange for a $50 credit toward a new Singer
Sewing Machine. Again, this was a brilliant marketing stratagem, as it
killed two birds with one stone for I.M. Singer & Co. First, it
reduced the price of a new sewing machine, increasing overnight the
number of purchasing consumers (and revealing an implicit
understanding of elasticity of demand on the part of Clark). Second,
it effectively prevented the rise of a second-hand market for used
sewing machines that would compete with sales of new sewing machines.
Singer and Clark�s innovation in both creating a sewing machine market
and then securing I.M. Singer & Co.�s place as a dominant firm within
this new market is a palpable example of the commercialization
benefits secured by property rights in patented inventions. With the
end of the Sewing Machine War and the formation of the Sewing Machine
Combination in 1856, I.M. Singer & Co. immediately began reaping the
fruits of its labors. Despite the severe economic recession of 1857,
the members of the Combination flourished, including I.M. Singer &
Co., whose sales almost doubled from 1857 to 1858. And, despite the
tremendous economic and political tumult of the Civil War, sewing
machine manufacturers continued to experience tremendous sales growth,
helped in part by the fact that their machines were clothing Union
soldiers. During the war, I.M. Singer & Co., which was renamed the
Singer Manufacturing Company in 1863 (see the postscript below for an
explanation of this), watched its sales grow each year from 16,000
machines in 1860 to 23,632 in 1864.
As a result of its constant focus on innovation, made possible by its
patented inventions and its participation in the Sewing Machine
Combination, the Singer Manufacturing Co. eventually overtook Wheeler,
Wilson & Co. in 1867 as the top-selling sewing machine firm. By 1876,
the Sewing Machine Combination�s records reveal that the Singer
Manufacturing Co. sold more than double the number of sewing machines
than that of its closest competition. When the Sewing Machine
Combination terminated in 1877, the Singer Manufacturing Co.�s sales
accounted for more than half of the total sales of sewing machines,
and the company controlled 75% of the world market for sewing
machines. In sum, Singer and Clark�s commercial innovation, made
possible by Singer�s patented improvements to the sewing machine, not
only ensured the success of Singer Manufacturing Co., it was largely
responsible for the success of the American sewing machine industry
writ large. By all accounts, Singer�s company was the most successful
sewing machine company, and it justifiably served as the public face
of the Sewing Machine Combination.
In my next couple posts, I will discuss some of the policy insights we
may draw from this historical case study of the incremental invention
of the sewing machine, the first patent thicket, the first "patent
troll," and the first patent pool. In so doing, I'll also discuss and
respond to some of the issues raised by commentators over the past
week.
POSTSCRIPT: Some readers may be wondering about the 1863 name change
of I.M. Singer & Co., to the Singer Manufacturing Co. This was a
result of Singer�s characteristic intemperate nature -- and his
polygamy. After forming their business partnership in 1851, Clark and
Singer worked very well together until 1860, when a public scandal
erupted after one of Singer�s wives, Mary Sponsler, discovered Singer
with one of his other wives, Mary McGonigal, in the middle of Fifth
Avenue in New York City. Following this confrontation, Singer nearly
choked Mary Sponsler to death, and he then fled to Europe for a brief
respite from the public uproar. He eventually returned in 1863 to
marry another woman, Isabella Boyer. Clark was of high birth and he
could not abide by such behavior. Following Singer�s return in 1863,
they formally dissolved the I.M. Singer & Co. partnership. Clark then
incorporated the Singer Manufacturing Company, with Clark in control
of the company and its assets and Singer receiving guaranteed income
from his ownership of 40% of the stock.
References
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1. http://volokh.com/archives/archive_2009_04_26-2009_05_02.shtml#1241022254
2. http://volokh.com/archives/archive_2009_04_26-2009_05_02.shtml#1241143978
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3. file://localhost/files/guestblogger-WomanSewing.JPG
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