Almon Strowger was one of two undertakers in a small town near Kansas City in the 1880’s. He had a good reputation and a nice business. Then, things started to change for the worse. He noticed that his business was dying off dramatically. His close reading of the local obituary notices revealed that he was not getting the usual amount of business. In those days, homes were equipped with telephones that were on shared party lines. People often listened in on their neighbor’s conversations, too. To facilitate connections between callers, there was an operator who worked a cord switchboard at the local telephone exchange. When there was a death to report, a call came into the operator who patched the call through to one of two local undertakers on an “every other one” basis. Or so Strowger thought…
What Strowger uncovered in his research was that his competitor was dating the telephone operator, hence giving him the inside track to most of the funeral business in town. Needless to say, this state of affairs greatly frustrated Strowger and he complained to the local telephone company authorities…to no avail. His business did not improve. The operator ultimately married Strowger’s competitor and continued to keep most of the funeral business in the family.
Finding no hope with the status quo, Strowger switched strategies. By burning the midnight oil and using hat pins and electromagnets, he cobbled together a device that by-passed the operator allowing subscribers to directly connect to one another. On March 12, 1889, he filed his patent application and it was issued to him on March 10, 1891 as patent No. 447,918. He had invented the Telephone Switch. Strowger went on to form the “Strowger Automatic Telephone Exchange” late in 1891. Strowger’s first customer was the telephone company in LaPorte, Indiana with 75 subscribers. Strowger continued making improvements on the telephone switch over the years. He added feature after feature to make the phones more reliable, easier to use and less time consuming to operate. Conversations over Strowger Switches were private and did not require any human intervention to operate.
Strowger bragged that his systems were “cuss-less, out-of-order-less and wait-less.” With all of this functionality, it is not surprising that the Strowger Switch became the standard technology platform upon which the US and British telephone systems were based on until the 1950’s and 1970’s respectively. Strowger eventually sold his company and patent to the Bell Company which later became AT&T, Verizon, GTE and Lucent.
There are many lessons to be learned in this story:
• Know your external environment. Strowger kept abreast by reading the obituaries – he knew that he was losing market share. He also learned that the operator was linked to his competitor
• Have a back-up plan when disruption occurs. When his complaints to the local telephone company went unaddressed, Strowger set out to develop technology that would neutralize his competitor’s primary advantage – the operator’s discretion
• Learn what the market wants and needs. Strowger was relentless in his quest to perfect person-to-person communications
Be flexible and open to the possibilities. Strowger did his research, uncovered a need, innovated, and sold a solution where there were no competitors…quite a switch!