Facebook and the Importance of Being Unimportant

By Edward Tenner 

Many companies make things you'd never discuss at a cocktail party, yet are indispensable for other things that you would.

The fall of Facebook's shares to 20 percent below the stock's initial IPO price doesn't necessarily say anything about the company's long-term prospects, but it does point to a paradox. Dull stocks often perform better than the hottest high-tech offerings, as the AP pointed out months before the IPO. Yet, to my knowledge, there is no dull-stock index or managed fund.
Within dull industries, there is a select group that is both uninteresting and essential. These companies make things you'd never discuss at a cocktail party, yet they are indispensable for other things that you would.
For example, fashion is interesting, but sewing thread is not. In the garment industry, thread is unimportant (the highest quality thread is a tiny part of the cost of a finished garment) yet crucial (the best thread breaks less often in high-speed production sewing, reducing costly downtime).
Indeed, the Coats and Clark sewing thread firm was the largest manufacturing company in Great Britain in 1900. The industry was cited by the economist Hubert Henderson in his classic book Supply and Demand as an example of "the importance of being unimportant."
The profits of the 19th and early 20th century’s threadocracy, as it was called, were so ample that they financed the careers of the most diverse heirs in an atmosphere of cultivated leisure.

Great, unimportant products can be massive as well as delicate. Can anything sound duller than a blast-furnace ventilation valve?

The urbane art historian Lord Kenneth Clark was the grandson of a weaver’s supplier who had the idea of selling cotton thread on a wooden spool; of his parents, the second generation, Clark wrote that “in that golden age, many people were richer, there can have been few who were idler.” Friedrich Engels’s father originally sent him to England to manage a sewing thread factory he owned in Manchester. Enriched by the firm’s patent on a thread-polishing process, Engels financed not just his own writing but Karl Marx’s. Henri Cartier-Bresson’s family produced the finest thread for couturiers, still sought after on the web. Even the family of the American novelist Louis Auchincloss was tied by marriage to the Coats, and his grandfather was at one point an importer of their thread.
Great, unimportant products can be massive as well as delicate. Can anything sound duller than a blast-furnace ventilation valve? The magnificently whiskered Austrian Hanns Hörbiger created one that reduced expenses so significantly that the company he founded now has worldwide sales of over $1 billion. Success enabled him to retire to develop unorthodox cosmological ideas (the Cosmic Ice Theory), but the family probably is best known outside Central Europe for Hanns's son Paul, who created the unforgettable role of the porter of Orson Welles's apartment building in The Third Man, a superb actor who nonetheless must have been aided in his career by his financial independence, as Kenneth Clark was.
And then there was Howard Hughes, one of the 20th century’s most interesting people. But, like those photographers and writers supported by their families’ spinning machines, Howard was sustained by Toolco, the company founded by his father, a non-practicing attorney, wildcatter, and inventor who developed the first successful two-cone drill bit, a Historic Mechanical Engineering Landmark. A tool bit, like sewing thread, is a small part of an extremely expensive operation. A design that improves productivity and is protected by patents permits ample profit margins.
When Thomas Edison died in 1931, many writers lamented the end of the age of the great, independent inventor. Yet the Depression was a surprisingly prolific time for great, unimportant inventions.

The Depression was a surprisingly prolific time for great, unimportant inventions.

Consider the O-ring, an indispensable part of mechanical and aerospace engineering. The idea of a rubber seal was not new, but designing one durable enough to stand up to heavy use had been an elusive goal.
It was a Danish-American inventor and pioneer of braking systems, Niels Christensen, who sensed correctly that the challenge was to design the right relationship between the rubber seal and the groove that held it. He found a ratio of about 1:1.5 to be ideal, yet his steel company employer fired him and other manufacturers were not interested in his invention until he persuaded the Army Air Corps to consider it during the Second World War. The O-ring became almost universal in aircraft design. (Unfortunately for Christensen, the government bought the patents and licensed them without charge to manufacturers, so that Christensen’s heirs ultimately realized only a small fraction of the invention’s value.)
In the postwar years, Watergate also revealed the power of a dull invention. One of Richard Nixon's friends and supporters, Robert Abplanalp, was a machine shop owner who had made his fortune with what became the standard aerosol valve. He was following in the footsteps of the German-American Brooklyn inventor George Schrader, whose valve design is probably still used on your own automobile and bicycle tires. (Schrader, true to the eccentric inventor stereotype, left the business to pursue philanthropic ventures like improving the lot of Icelandic horses.)
One paradox of the great, unimportant invention is that it doesn’t pay if it’s too far ahead of its time. Consider the ubiquitous safety valve. When properly inspected and maintained, it prevents excessive pressure in boilers and other vessels from destroying houses, schools, and industrial buildings. The present variety was invented by a French physician, Denis Papin, in the late 19th century, but he never realized a cent from it—nor from his invention of the first steamboat, which the valve helped make feasible.

A design that improves productivity and is protected by patents permits ample profit margins.

The strategy for today’s inventors is not the single, essential-but-unimportant idea but a set of related patents that make a license from the inventor necessary to a large industry. The world’s most prolific inventor, an Australian named Kia Silverbrook, whom I met at a TED conference, holds at least 4,438 U.S. utility patents—already four times Thomas Edison’s lifetime total of 1,093. (Silverbrook has a large professional research and development staff, but of course, so did Edison.) Silverbrook and his scientific and engineering team are best known for a new inkjet printing technology, Memjet. Systems of hundreds or thousands of patents of critical details may have replaced the single Abplanalp-style invention from a small machine shop.
There are two major catches to the dullness investment strategy. First, many of the great, unimportant inventors seem to be private people, justifiably paranoid about larger competitors’ designs on their intellectual property. Second, they also understand that being considered dull would limit the payoff from a public offering, so it can be hard to find great, boring public companies. Perhaps some new form of investment vehicle will resolve these paradoxes and open opportunities to the public to own a part of the Next Little Thing.
Edward Tenner is author of Why Things Bite Back: Technology and the Revenge of Unintended Consequences and Our Own Devices: How Technology Remakes Humanity, a visiting scholar in the Rutgers School of Communication and Information, and an affiliate of the Princeton Center for Arts and Cultural Policy Studies.