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 user 2010-11-24 at 9:11:03 am Views: 92
  • #24248

    When you need a bandage, you reach for a Band-Aid.When you’re in the mood for gelatin, you eat Jell-O.When you need to copy a document, you look for a Xerox — thanks to Joe Wilson.Wilson saw an opportunity, ignored naysayers and put his stamp on the revolutionary machine.The result was the Xerox 914 — unveiled in 1959 as the first easy-to-use copying machine.In the process, Wilson turned a family business into Xerox Corp. , a corporate giant that had $18 billion in sales in 2009.”I believe that the story of Joe Wilson is one of the great industrial stories of all time,” said Horace Becker, a retired vice president for research and development at Xerox, who in the 1950s was chief engineer of the 914 project. “He just provided the overall major direction and the fertile soil, and we were able to go out and dig and plant and harvest.”Joseph Chamberlain Wilson was born in 1909 in Rochester, N.Y. He graduated from the University of Rochester with a degree in economics and by 1933 had an MBA from Harvard.

    Wilson’s Keys
        * Adopted xerography’s revolutionary technology.* “Great rewards come to those who see needs that have not been clearly identified by others, and who have the innovating capacity to devise products and services which fill these needs.”Amid the Great Depression, he managed to find a job with Haloid in 1936. This was a small manufacturer of photographic paper and equipment that was founded by his grandfather J.C. Wilson. By 1944, Joe was vice president, overseeing all operations, and he took over as president when his father retired.

    Peace At A PriceWith World War II over in 1945, the company’s military orders shriveled. Facing stiff competition, the firm needed a new product.”They were making sensitized paper in direct competition with a gigantic company,” noted Becker. “His competitor was Eastman Kodak (EK) down the street.”According to “Joe Wilson and the Creation of Xerox,” a book by Charles Ellis, higher wages and silver prices were also hurting Haloid’s bottom line. Revenue surged to $9.7 million in 1949 from $3.9 million in 1940, but the firm’s profit margin grew by only 30%.Wilson had a choice: Watch Haloid die or reinvent the company.

    Time for new ideas.
    “Joe was not an engineer; he was a financial guy running a company that he recognized had no future,” Becker said.Wilson instructed his R&D director, John Dessauer, to inform him of any promising technologies.Soon, Dessauer led him to a copying technology called xerography, electrophotography or simply dry writing. Invented by patent lawyer Chester Carlson in 1938, xerography didn’t need chemicals or carbon paper to make copies. It used static electricity, light and powder to transfer images to other paper.Carlson showed his discovery to General Electric (GE), IBM (IBM) and RCA, but none showed much interest in developing xerography for commercial purposes.Carlson’s device did spark interest from the Battelle Memorial Institute, a research firm, and they signed a royalty-sharing contract in 1944 to advance the technology.Having heard from his R&D whiz about xerography, Wilson saw light in Haloid’s future. So in 1947 he pressed ahead, buying rights from Battelle to make a copying machine with Carlson’s method.Two years later, Haloid had rolled out its Model A copy machine. Only one problem: The product bombed. It was nonautomatic, involved too many steps and made fuzzy copies.

    New Name
    As Wilson aimed to improve the machine, Haloid gained a tighter grip on the process. In 1950, the company reached a deal with Battelle to become the sole licensing agent for all patents based on xerography.Now Wilson ramped up spending. The rest of the decade his firm shelled out $12 million — worth $88 million today — to make its next copy machine based on xerography.That was more than it earned in that period, so Wilson used stock and loans to buy patents. He was so locked in on his target, he came up with a variation on xerography to reflect the new direction, changing his company’s name to Haloid Xerox in 1958 and to just Xerox in 1961, Ellis wrote.

    Up Against It
    Haloid was running into resistance with its next xerography-based copier, the 914.Becker says the static came from three fronts:

    • A study conducted by consulting firm Arthur D. Little warned that 5,000 copy machines would flood the market.

    • Bell & Howell, a former maker of motion picture equipment, called the 914′s design flawed.

    • Everyone else seemed to be saying nobody wanted the product.

    Then there was competition, said Becker: “Two people basically — Thermofax produced by our friends at 3M (MMM) and another outfit, Verifax, made by Eastman Kodak.”Their copy machines retailed for $350, with copy sheets costing 19 to 25 cents.Those devices were sure cheaper than Wilson’s would have cost. He spent $2,000 to make each 914, so Xerox rented the machines for a modest monthly fee. Included in the price was a certain number of free copies. Customers could run off additional sheets at a nickel each.

    Wilson introduced the 914 on TV in September 1959, then put it on sale in March 1960.The 650-pound machine could make one copy every 26.4 seconds, or 136 an hour, at the push of button. As the name implied, it could handle originals up to 9 by 14 inches. Copies were higher quality than those of Thermofax and Verifax.The 914 stepped on the document-copying industry’s pedal. With such speed, sales zoomed along with publicity. Fortune magazine dubbed the 914 “the most successful product ever marketed in America.”

    By 1962, Xerox had sold 10,000 machines, or double what the Little study had predicted. From 1960 to 1965, sales surged 900%. “We were part of a revolution,” Becker said. “I would never have gotten a chance to be a soldier leading that revolution if Joe Wilson did not have the courage to say proceed.”

    In “How to Make Money in Stocks,” IBD founder William O’Neil wrote: “It takes something new to produce a startling advance in the price of a stock.”For Xerox, the 914 was the N in CAN SLIM. That new element helped Xerox break out of a classic cup-with-handle base in June 1960 and soar more than 1,200% in just over 3 1/2 years.The stock cleared another base in June 1963 and soared more than 600% in a little over three years.Joe Wilson died in 1971. Nine years later he was inducted into the Junior Achievement U.S. Business Hall of Fame.

    Man To Remember
    His name is on Wilson Commons and Wilson Boulevard at the University of Rochester and part of the city’s Joseph C. Wilson Magnet High School. In 1963, Wilson and his wife established the Marie C. & Joseph C. Wilson Foundation to help charitable causes.”Joe Wilson had an eye for innovations, the patience to research them and the temerity to back them,” said Usha Haley, a professor of international business at Massey University in New Zealand.She added: “In retrospect, his business actions look rational. In actuality, they were inductive leaps and bets on future promise.”