20 Times Big Companies Rejected Inventions That Made Others Rich

Ferruccio Lamborghini was an Italian millionaire who got rich making tractors and heaters. By 1958, he already had several 250 GT Ferraris. Ferrari was using the same clutch units as Lamborghini’s tractors, just marked up. He took this discovery to the founder of Ferrari, Enzo Ferrari, in Maranello, Italy. Enzo Ferrari reportedly told him: “The clutch is not the problem. You know how to drive a tractor, but you don’t know how to drive a Ferrari.” Lamborghini hired away a Ferrari engineer from the company and set up his own competing marque, Automobili Lamborghini, in 1963.

At age 21 in 1927, self-taught inventor Philo Farnsworth beamed the first all-electronic TV image from a laboratory in San Francisco. The head of RCA, David Sarnoff, dispatched an engineer, Vladimir Zworykin, to study Farnsworth’s work. Sarnoff offered to purchase Farnsworth’s patents, but Farnsworth was more interested in royalties, which Sarnoff would not grant. “RCA doesn’t pay royalties,” he is said to have told him, “we collect them.” For nearly nine years, RCA contested the patent, arguing that Zworykin was the true inventor. In 1939, the courts found in Farnsworth’s favor and forced RCA to grant a royalty license, its first ever.

Physicist Chester Carlson invented xerography, a dry copying process using static electricity, and pitched it to IBM, whose CEO Thomas Watson Sr. preferred cheap carbon paper. Years later, Haloid, the company soon renamed Xerox, offered IBM a joint venture on its new plain-paper copier. IBM’s consultants estimated that the copier would sell no more than 5,000 units over its lifetime and concluded that the project was too expensive, so IBM refused. Haloid-Xerox developed the copier on its own, and it became one of the most profitable products ever manufactured in America.

Nikola Tesla proposed AC motors and transformers in 1884 while he was an engineer at Edison Machine Works in New York. These could send electricity dozens of miles, while Edison’s DC system only reached around a mile. Edison, who had too much money tied up in his own DC power plants, turned down Tesla’s offer. Tesla left Edison in 1885 and sold his AC patents to another industrialist, George Westinghouse. The Westinghouse company’s AC system powered the 1893 Chicago World’s Fair, establishing AC as the global standard.

In 1876, Alexander Graham Bell’s financier, Gardiner Greene Hubbard, asked the American telegraph giant Western Union if it would purchase Bell’s new telephone patents. Western Union president William Orton declined because he viewed voice conversations as acoustically inferior to the permanent written record a telegram provided. Bell and Hubbard founded their own firm, which eventually became AT&T. Litigation over patents pushed Western Union out of the telephone business by 1879.

Soichiro Honda, a Japanese machinist from Hamamatsu, sent 50 sample piston rings to Toyoda Automatic Loom Works, which would become Toyota, and hoped that they would sign him on as a supplier. Only three met quality standards, and the rest were rejected for bad metallurgy. Instead of arguing, Honda went back to school to study metals. He learned from his mistakes and was eventually awarded the contract. In the years following the Second World War, he sold his piston ring business to Toyota and started Honda Motor Co. with the proceeds.

In 1938, Hungarian journalist László Bíró patented the first practical ballpoint pen in Budapest. It used a tiny ball bearing to roll quick-drying ink onto paper without smearing. Bíró tried selling it to Underwood, an American manufacturer of typewriters, but they didn’t think the prototypes were reliable, clean, or cheap enough to replace fountain pens. He went into exile in Argentina when World War Two broke out. The Frenchman Marcel Bich bought his patent rights in 1950 and formed Bic.

Chester Carlson spent most of the 1940s pitching Eastman Kodak, the world’s leading manufacturer of film and paper, based in Rochester, New York, to license his new dry copying process, xerography. Kodak executives dismissed it, arguing that their wet photostat chemical process was better, and that copying with static electricity was crude and wouldn’t make money. Over 20 other companies also rejected him, until finally Battelle Memorial Institute and Haloid, which became Xerox, took the idea and created the Xerox 914 copier.

In 1933, engineer Edwin Howard Armstrong patented wideband FM radio, which offered far superior clarity over AM and was virtually free of static. But David Sarnoff, head of RCA, did not like it. He had Armstrong’s experimental FM antenna on top of the Empire State Building dismantled and also pressured government regulators to move FM out of its original frequency band, rendering early FM sets useless. Armstrong mortgaged everything to fight RCA in the courts, then killed himself in 1954. After his death, his estate won patent settlements against RCA, and FM became the worldwide standard for audio.

In 1923, the radio inventor Lee de Forest showed his sound-on-film system called Phonofilm to Adolph Zukor, the boss of the studio that later became Paramount Pictures. Zukor and other studio heads rejected it, saying moviegoers didn’t want dialogue, and that it was too expensive to wire theaters with sound equipment. Warner Bros. went solo two years later with a competing sound-on-disc system called Vitaphone. In 1927, they released “The Jazz Singer,” which forced the rest of Hollywood into sound.

In 1920, physics professor Robert Goddard attempted to sell liquid-fueled rockets to the US Navy and Army. Military officials rejected the idea, saying rockets weren’t precise or reliable enough to supplant heavy artillery, and that it wouldn’t be possible to control liquid fuel safely. The New York Times lampooned his mathematical calculations, arguing that rockets wouldn’t work in a vacuum. Goddard instead secured private support from the aviator Charles Lindbergh and the Guggenheim Foundation, launching the first-ever liquid-fueled rocket in 1926. German scientists later read through Goddard’s patents while designing the V-2.

John Ericsson was a Swedish engineer who in 1837 mounted a submerged screw propeller on a 45-foot boat and successfully towed one of the Admiralty’s own barges down the Thames. The British Admiralty had its doubts, mostly because they were worried stern-mounted propellers would make ships impossible to steer, but also because they were already relying on paddle-wheel steamships. Ericsson went to the US, and his propeller ended up on a US warship, while screw propellers rendered paddle warships obsolete all over the world. A British engineer, Francis Pettit Smith, also developed propellers around this time.

In 1895, Guglielmo Marconi, a 21-year-old Italian inventor, successfully transmitted wireless telegraph signals over a mile across the hills at his family’s estate near Bologna, Italy. He wrote to Italy’s Ministry of Posts and Telegraphs requesting funding for his invention, but officials refused even to see him, saying there was no commercial or military application for sending messages through the air without wires. The next year he went to England and formed the Wireless Telegraph & Signal Company, which went on to build a global radio and maritime-safety empire.

Almon Brown Strowger was an undertaker in LaPorte, Indiana, when he started suspecting that a rival undertaker’s wife, who was working as a telephone operator, was rerouting his funeral calls to her husband. In 1889, he developed an electromechanical automatic dial switch that would remove the operator from the equation altogether. He tried to sell it to Bell, which dominated the market at the time, but they said the technology was too complicated and figured people wanted the human touch. Strowger ended up selling it to smaller independent phone systems, and their lower prices eventually forced Bell to adopt the same technology.

In 1907, James Murray Spangler, an asthmatic department-store janitor living in Canton, Ohio, constructed a portable electric suction sweeper from a fan motor, a broom handle, and a tin box. When he approached some carpet-sweeper companies about producing it, they passed. They argued that the existing hand-cranked models did their jobs well enough and that people would not want to have expensive, dangerous machines with motors in their houses. Spangler took one of his own prototypes to his cousin, who showed it to her husband, leather-goods manufacturer William Henry Hoover. He purchased the patent rights to Spangler’s design and formed the Hoover Company.

In 1844, painter-turned-inventor Samuel Morse sent the first long-distance telegraph message, “What hath God wrought?” between Washington, D.C., and Baltimore on an experimental line paid for by Congress. Morse and his partners then proposed selling the master patent to the government for $100,000 so that the Post Office could build and operate a nationwide telegraph network. Postmaster General Cave Johnson thought the system wouldn’t bring in enough revenue to recoup its costs, and Congress refused. So Morse went to private backers, establishing what would become Western Union.

In the late 1880s, the German-American inventor Emile Berliner patented the flat disc record that could be mass-stamped from a single master, as opposed to Edison’s wax cylinders. However, Edison had no interest in the flat format since he believed that cylinders offered steadier groove speed and allowed users to record their own voices at home. Eventually, Berliner partnered with the Victor Talking Machine Company, and flat records eventually dominated the marketplace. Edison later introduced his own disc format, the Diamond Disc, but it failed, and in 1929 he closed down his phonograph business.

In 1856, 18-year-old chemistry student William Henry Perkin was attempting to make the anti-malarial drug quinine from coal tar in London when he made a purple goo by mistake. He discovered it stained silk with an astonishing colorfastness, and patented it as “mauveine,” the world’s first synthetic dye. British dye companies dismissed it, saying no synthetic could ever be better than natural dyes such as plant indigo. Perkin went into business for himself, and mauveine became a sensation that started the synthetic chemical industry around the world.

British Royal Air Force officer Frank Whittle offered the British Air Ministry a design which combined a gas turbine with jet propulsion. They turned it down. Their chief scientific advisor, a man named A.A. Griffith, demonstrated mathematically that gas turbines were highly inefficient and that no metal available at the time could withstand the heat inside a jet engine. So Whittle, too poor to pay the 5 pounds required to renew his master patent, let it lapse. But then he began finding private backers, and in 1937 ran the first successful turbojet bench test in history, around the same time Germany’s own jet program was independently emerging.

In 1934, Bell Labs engineer Clarence Hickman built a fully working telephone answering machine and call recorder using magnetic tape and demonstrated it to AT&T executives. The company didn’t want it, but instead ordered the research stopped and the prototypes locked away. Decades later, archival research unearthed internal memos revealing that company executives worried that if people knew they could be recorded, they’d become self-conscious and make fewer calls, which would reduce revenues. They were also worried about the legal ramifications of recording conversations that might resemble wiretapping. After World War Two, independent companies in Europe and Japan got back into the business of magnetic recording and developed the answering machine and tape recorder industries.

This content was created with the help of AI.