The Story of Nikola Tesla

Scammed by Thomas Edison, abandoned by JP Morgan

Nikola Tesla was the greatest inventor of his era. He died penniless and alone, swindled by both Thomas Edison and JP Morgan.

Tesla was born in 1856 in a mountainous region of Croatia. His father was a Serbian-Orthodox priest, learned. But Nikola got his gifts from his mother. Though she’d never attended school, Duka Tesla had a knack for building appliances. She also had a remarkable memory.

Nikola’s gifts were apparent from an early age. For one thing, he had a photographic memory, like his mother. He also had a talent for numbers, performing integrated calculus in his head with such ease, teachers thought he was cheating.

His childhood was not always easy. In his teen years, he contracted cholera, a severe case. For 9 months, he was bedridden. Periods of sickness marked his life. They also served as inspiration. In his feeble, altered state, Nikola sometimes saw lights, visions, inventions.

Nikola’s father had wanted him to follow him into the clergy. But as his son lay sick, he made a promise. If Nikola recovered, he could go to engineering school. He was at the Austrian Polytechnic in 2 years.

As an aside, Nikola later ascribed his recovery to reading the works of Mark Twain. The men later became friends, spending time at Tesla’s lab.

“Your son is a star of first rank.”

That was the commendation Nikola’s father received from the dean after his son’s first year of university. Nikola was a relentless student, working 3am — 11pm, 7 days/week. Teachers worried he would, literally, work himself to death.

It did continue with such success. At the end of Nikola’s second year, he developed a dangerous addiction: gambling. He frittered his tuition. He eventually got the money back, but the psychological damage was done. Nikola had a breakdown, dropping out of school.

There was a period of wilderness. Tesla worked as a draftsman, played cards on the streets, tried to restart his studies, got a job. By 1884 he’d worked in Prague and Paris as an engineer. It was time to try to make it in America.

Tesla arrived in NYC with 4 cents in his pocket, and a letter addressed to Thomas Edison from a mutual acquaintance. “My Dear Edison: I know two great men and you are one of them. The other is this young man!”

As Tesla later told it, when they met, the tycoon proposed a bet. If Tesla could improve upon his Direct Current plants, Edison would pay him $50K. Telsa succeeded. Edison refused to pay: “When you become a full-fledged American, you will appreciate an American joke.”

There was no love lost between the men. When Edison died, Tesla offered the only negative comment to the NYT. When he wasn’t paid, Tesla quit. He dug ditches until he was contacted from Western Union. They’d heard about his work on “Alternative Currents.”

At the Western Union lab, Tesla flourished. He designed AC motors and power systems — many that seemed to have appeared in his mind fully formed. He patented his work, too. Soon, George Westinghouse, a fellow inventor reached out. He wanted to make Tesla a rich man.

In exchange for the use of his patents, George offered Tesla $60K and royalties based on the electricity he was able to sell. With Telsa’s AC system, George believed he could finally unseat the graceless Edison. He succeeded, but it almost bankrupted him.

The cost of building Tesla’s motor and a financial panic put George in a tough spot. He asked Tesla to waive his right to royalties. Millions of dollars, an insane amount in the era. Could Tesla give that up? It was not only money, but influence. The chance to be a titan.

He did. George had always dealt honestly with him, unlike Edison. It was not the only time Nikola lost out on grand riches. In 1901, he approached JP Morgan.

In Tesla’s mind, Marconi had ripped him off. Inventor of the radio? What a joke. Hadn’t his own “Tesla Coils” made it possible to send and receive radio signals? Hadn’t he filed for patents first, in 1897?

He would outdo Marconi, he told himself. Nikola envisioned a grand tower that could send and receive “vibrations” around the world. He just needed the money.

He took prospective investors to the Waldorf-Astoria, wining and dining them. Even the imposing figure of JP Morgan was charmed. He agreed to provide $150K of seed capital (~$4M today) to get the project off the ground.

Progress was slow, but Tesla’s ambitions only grew. He returned to JP Morgan with an even *bigger* plan, asking for more money. Morgan refused. In 1901, Marconi successfully transmitted the first “message” over radio. The letter “S.”

It took Tesla a while to realize he was in a losing battle. Over the next 5 years, he sent over 50 letters to JP Morgan asking for money, all while investment poured into Marconi’s project. After JP Morgan died, Nikola began writing to his son.

Nikola’s later years were bizarre and more than a little sad. Throughout his life, Nikola held a deep reverence for women, claiming he was not worthy of their affection. He never pursued relationships for that reason. He was often alone.

As he aged, he grew closest to pigeons. He fed them every day and cared for several. He even spent $2K nursing one back to health. He was said to have loved a white pigeon with almost human affection. When she died, Nikola came to believe his life’s work was complete.

Tesla died in Room 3327 of the Hotel New Yorker. For the last years of his life, he had relied on the charity of his old friend’s organization, the Westinghouse Company.

If you liked this story, you might enjoy my newsletter The Generalist. I cover tech from idea to IPO, with plenty of digressions like this along the way.

Tech from idea to IPO at readthegeneralist.com. Investing in chaotic-good founders at charge.vc

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