Why Edison's ideas took off and Tesla's didn't

The two famous inventors can teach you valuable lesson about the importance of winning backing for your innovations.

by Jeff Dyer, Nathan Furr and Curtis Lefrandt
Last Updated: 20 Aug 2019

Thomas Edison and Nikola Tesla were very different, but both were considered great inventors. Lacking sophisticated training in mathematics or engineering, Edison instead applied a famous work ethic to produce new ideas through brute trial and error, arguing that invention (or, to use his word, genius) is "one percent inspiration and ninety-nine percent perspiration."

He is credited with inventing the phonograph, the motion picture camera, the alkaline battery, and, most importantly, the electric light bulb and the accompanying distribution system for electric power. 

By contrast, Tesla grew up in Europe and showed early signs of genius. His ability to perform integral calculus in his head led his tutors to think he was cheating. He attended Joanneum Polytechnic in Graz, Austria, one of the world’s best technical institutions. 

After his studies, Tesla briefly worked with Edison early in his career. Although he admired Edison’s work ethic, Tesla had an opinion about Edison’s approach: "His method was inefficient in the extreme... I was almost sorry to witness his doings, knowing that just a little theory and calculation would have saved him 90 percent of the labor. But he had a veritable contempt for book learning and mathematical knowledge, trusting himself entirely to his inventor’s instinct and practical American sense." 

Tesla’s genius and education led him to develop the foundations for electric induction motors, wireless telegraphy, radios, neon lamps, and remote control. In fact, his inventions in three phase electric power and alternating current eventually enabled the global distribution of electricity as we know it. 

However, although Tesla’s ideas arguably were more brilliant, he was unable to commercialise them. He died virtually penniless in a hotel room in New York. In stark contrast, Edison died wealthy in his New Jersey mansion having won the Congressional Medal of Honor and having his birthday, February 11, designated as National Inventor’s Day. If Tesla’s ideas ultimately had more impact, then why was Edison so much more successful?

A big factor contributing to the differences in Edison’s and Tesla’s success was Edison’s ability to win backers, collaborators, and attention for his ideas — his ability to build and leverage innovation capital to turn his ideas into reality. 

For example, Edison worked purposefully to fashion an image of himself as a hardworking, hands-on inventor (in addition to his constant reference to hard work, he even once reportedly smeared soot on his hands and face before an interview to bolster that reputation). 

He also worked hard to build his social capital with other talented inventors and wealthy families and financiers like J. P. Morgan, the Vanderbilts, and the Rockefellers. Then when Edison developed a commercially viable light bulb, he was able to convince Morgan to advance him $30,000 for the Edison Electric Light Company. 

But his connections with people and actions to get attention for his ideas weren’t accidents; they were practiced habits that the inventor repeated over and over. 

By contrast, although Tesla was a brilliant inventor who developed technologies that have shaped the modern world, he lacked Edison’s skills at building and employing innovation capital. 

For example, after he developed his ideas for an induction motor that ran on alternating current (AC), Tesla tried unsuccessfully for several years to raise funds to commercialise it. He spoke of his frustration: "The utter failure of my attempts to raise capital for development was a major disappointment." 

Tesla was a visionary and was even described by Edison as someone whose "ideas are magnificent." But he was simply unable to attract the right talent and financial resources to successfully commercialise his ideas. 

Some have suggested that his personality traits were a contributing factor. He was reclusive and kept rigid habits (he worked each day from 9 a.m. to 6 p.m., ate dinner at the same restaurant each night, and had to be served by the same waiter). According to one Tesla biography, "Tesla was a visionary. But without the backing of the great entrepreneur and gifted engineer George Westinghouse, Tesla’s revolutionary inventions would probably have come to nothing."

Ultimately, Edison’s commercial victories over Tesla were due not to the superior quality of Edison’s ideas but to differences in the men’s ability to convince others to believe in them. We’ve all seen leaders who excel at winning backing for their ideas. But this ability isn’t simply due to charisma, luck, or some other undefinable quality. The capacity to inspire advocates and benefactors is a science and an art that generates something they have that others do not: innovation capital.

The Components of Innovation Capital

  1. Human Capital
    Forward-thinking, creative problem-solving, and persuasion abilities

  2. Social Capital
    Social connections with those who have valuable resources

  3. Reputation Capital
    A track record and reputation for innovation

  4. Impression Amplifiers
    Actions that generate attention and credibility for you and your ideas

  5. Innovation Capital
    The capacity to win the resources needed for innovation to flourish

Innovation capital isn’t like money or equipment. It is an intangible force, like political capital, that helps you assemble the means to implement your ideas. It comes from who you are (innovation-specific human capital), who you know (innovation specific social capital), and what you are known for (innovation specific reputation capital). 

It gets multiplied by what we call impression amplifiers — actions that get attention and credibility for you and your ideas. Innovation capital lies at the heart of your ability to convince resource holders to support your ideas. 

You have to earn and develop innovation capital by practicing specific behaviours and leveraging the right activities at the right time. People aren’t born with innovation capital; they must build it. And it’s far more critical to innovation than most of us realise.

This is an edited excerpt from Innovation Capital: How to Compete—and Win—Like the World’s Most Innovative Leaders, reprinted by permission of Harvard Business Review Press. Copyright 2019 Jeff Dyer, Nathan Furr, and Curtis Lefrandt. All rights reserved.

Image credit: Photo by Burak K from Pexels



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