Failed Colossus: Strategic Error at the Pope Manufacturing Company, 1878-1900

In business, failure is normal. The shuttered storefront, the vacant lot, the empty factory bear silent witness to the difficulty of succeeding in any capitalistic venture. This is particularly true of firms trying to master an emerging technology. To succeed, the right innovation must be combined with the means to profitably produce, sell, and service it. When success proves elusive, it is often hard to determine whether technological design or management strategy failed. Thus, examining entrepreneurial failure in the face of rapid technological change often requires a blurring of the distinction between business and technological history.

This article examines such a failure in a once successful enterprise. The Pope Manufacturing Company of Hartford, Connecticut, was founded in 1876 by Albert A. Pope. After briefly importing English bicycles, Pope began manufacturing his own, with spectacular results. By 1895 his empire encompassed two bicycle firms, a rubber-tire works, a steel-tube mill, and an automobile factory. In 1899 Pope broke up this empire and incorporated its bicycle factories into a new industrial combination, the American Bicycle Company, which collapsed less than three years later.

Scholars in recent years have developed models of technological change that interpret innovation as a social phenomenon. ¹ New technologies not only influence social customs, mores, and attitudes, but are in turn influenced by them. The process is fluid, dynamic, and interactive. This model, most often applied to the sociology of a nation or culture, can also be used to examine the sociology of an individual firm. For the business organization, mastery of a technology is an elusive, three-partner dance. It must mold an innovation into a sellable product. In doing so, its corporate culture affects, and is affected by, the technology it is promoting. But at the same time, various segments of society, themselves agents of social change, interpret the new product. At a minimum, the firm needs to understand and (if possible) manipulate the societal context of its innovation. Master the dance and success is achieved; stumble, and failure is inevitable.

Pope stumbled twice. First, he failed to grasp and respond to the social transition of the bicycle from an expensive, semicustomized luxury item to a relatively undifferentiated consumer good. Second, he failed in the difficult and expensive process of developing and producing automobiles. His failure was a great irony, for the same corporate culture that led the Pope Manufacturing Company to such spectacular success proved incapable of adapting to the changing realities of the bicycle market and the unique requirements of the emerging automobile trade. In classic Greek tragedy, the very virtues that animate the hero result in his downfall. This story suggests that Pope's success in innovation may itself have sown the seeds of his company's later destruction.

Origins of the American Bicycle Industry

A Parisian machinist, Pierre Lallement, developed the first successful bicycle in 1863. Lallement based his velocipede on the draisienne, or hobbyhorse, invented by the Baron von Drais de Sauerbrun of Germany in 1817. While the draisienne was moved by pushing with the feet directly against the ground, Lallement's machine incorporated cranks and pedals attached to the front wheel. Lallement travelled to America in 1866, patented his velocipede, and entered into a partnership to produce them. Sales were disappointing, and Lallement soon returned to Paris. A Brooklyn carriage maker, Calvin Witty, bought the patent in 1869 and used it to collect royalties during a brief velocipede craze that flared up in 1869 and 1870. Witty, in turn, sold the patent in 1877. ²

The top speed of Lallement's machine was limited by the diameter of its carriage-style front driving wheel. The development of wire-spoke wheels allowed an increase in diameter and, therefore, speed. Two Britons, James Starley and William Hillman, invented a method of maintaining uniform spoke tension, facilitating their 1871 introduction of the Ariel, the first high-wheeled, or ordinary, bicycle. The center...