Dirty tricks among high-tech businesses? I recently came across the original Machiavellian play book for start-ups, and it’s more than 200 years old.
Two of my 1794 heroes were the steam pioneer James Watt and Holbeck engineer Matthew Murray. Both made engines for the textile mills of northern England – in effect the processing power to transform raw wool, flax and cotton into finished cloth. Later, their inventions went mobile to haul the first railway trains.
But the villain of this piece is Watt’s son, also called James, who in 1794 joined his father’s partnership with Matthew Boulton. Within a few years the upstart Leeds foundry of Fenton, Murray and Wood proved a serious competitor to Boulton & Watt’s more famous Soho works in Birmingham.
The stories of Watt’s feud with Murray are the stuff of Leeds legend, but to understand just how blatant it was you have to revisit the original sources, the letters and newspaper advertisements of the protagonists themselves.
Here, in his own words and those of his contemporaries, we can piece together the business wisdom of James Watt Junior.
1. Reach out to your competitors – In 1799, Watt’s employees Abraham Storey and William Murdock visited Leeds and called on Fenton, Murray and Wood, whose purpose-built Round Foundry was under construction. Murray recounts in the Leeds Mercury of 20 July 1803:
Mr. Storey, Manager of their Foundry, and Mr. Murdock, Superintendent of the Workmen at Soho, some time back visited our Works at Leeds, and from their assuring us of Messrs. Boulton, Watt & Co.’s friendly disposition were admitted into every part of the Manufactory by Mr. Wood and myself ; they were permitted to take Patterns and Specimens of our Workmanship, and we know that upon their return to Soho many of our Improvements were immediately adopted, and the engines made after that by them were in part constructed on our Plans.
Boulton confirmed this in a letter to Watt Junior: “”Murdock & Abraham are now returned from their excursion highly delighted and full of panegyricks upon Murray’s excellent work.”
2. Be generous with your hospitality – Boulton goes on: “They were admitted into every part of Murray’s maufactory & spent two evenings with him and by virtue of a plentiful dose of ale succeeded in extracting from him the arcana and myseteries of his superior performances.”
The return visit, according to Murray, was not so cordial:
Mr. Murdock, upon taking his leave of us, expressed a wish that as they and we were certainly the best Engine Makers in the Kingdom, we should always be upon good terms, and that if ever I should go to Soho, they would be very glad to show me all their Works.
I did go to Soho, and was refused admittance into their Manufactory of Steam Engines.
3. Be a flexible employer – There seems to have been a flow of workers between the two rival businesses, and when one of Boulton & Watt’s finest moved from Birmingham to Leeds, Watt Jnr travelled north to lure him back into the fold with an offer of increased pay. Yet having re-engaged the defector he was in no hurry to have him back at Soho:
Halligan has signed the agreement… If I mistake not he has it in his power to benefit us most materially, as he has been extremely attentive to all that is going on in the Foundry here and has picked up much valuable information. He is to remain with Murray as long as we may direct and to make application to try his hand at the green sand [the casting method at which Murray works clearly outdid Watt's].
4. Steal with pride – Watt had a further task for Halligan: to obtain the private correspondence of another defector, named Hughes:
He has promised to endeavour to get at old Hughes’s letters upon Wednesday night when the youth goes to the play and it is supposed may leave his letters in his working clothes. I confess that this is not very probable from the caution he observes and if it does not succeed, must have them examined whilst he is drunk or sleeping to ascertain whether they are worth taking.
A later letter reveals that Watt did get sight of the correspondence, but found nothing in it of use.
5. Expand into adjacent industries – as in those industries that happen to be adjacent to your competitor’s premises. Watt to Boulton on 12 June 1802:
I have been surveying the environs of this rival Establishment & making enquiries respecting the property & tenure of the neighbouring lands, with a view to seeing whether we could purchase anything under their very nose that might materially annoy them & eventually benefit ourselves. I find there are about 2 acres of Land next to Murrays works, which may be purchased, but the price probably will be £5 to 600 per acre. I shall learn the exact terms. There is a Malthouse which projects into their premises, which they have in vain endeavoured to purchase at a moderate rate. It is in the possession of a Widow, who is aware that it would be of some advantage to them & therefore asks a high price. This would enable us to overlook their whole Yard & holding it we might dictate our own terms.
Boulton & Watt eventually bought a 1.5 acre plot next to Murray’s works in order to prevent them expanding, though the widow at the malthouse asked too high a price.
6. If you can’t innovate, litigate – Murray had patented a number of improvements to steam engines, but Boulton & Watt challenged these, claiming that some were not original. It seems that Murray made the mistake of packing too many innovations into a single patent, so that when one element was questioned the whole patent would be lost. Murray declined to defend the Boulton & Watt challenge, saying he “did not think proper to defend it with such rich and powerful Opponents”.
Instead Murray kept his focus on his customers: “But the World I believe cares very little about Messrs. Boulton and Watt stealing my Inventions, or my stealing theirs; what people want of us are good engines…” He offered a 100 guinea wager that he could build a better engine than Boulton & Watt, to be judged by a jury of 12 other engine makers. The challenge was not taken up.
In the long run both businesses prospered.
Murray went on to provide the engine for the World’s first commercially successful steam railway, at Middleton Colliery, near Leeds. He died in 1826, his firm outliving him until it went out of business in 1843.
Boulton and Watt lasted 120 years, making steam engines until 1895. Curiously James Watt Senior, not Murray, is commemorated by a statue in Leeds’ City Square.