Part IThe Story
The Store Was Closed on Sunday
On the night of Sunday, April 14, 1912, the John Wanamaker department store in Manhattan was closed. The fact is small and dull, the sort a historian sets down almost apologetically, and it has been quietly dismantling a legend for decades. On the roof of that store sat a Marconi wireless station. Hundreds of miles out in the North Atlantic, the Titanic was going down. According to the story David Sarnoff told for the rest of his life, he sat at the key on that roof, alone, for seventy-two hours. He took down the names of the living and the dead while a city waited on his fingertips, and he left his post only when the last name had come through.
It is a magnificent story. It has a lone young immigrant, a catastrophe, a new technology, and a nation that briefly cannot hear anything except what one man chooses to pass along. It is almost certainly not true, or not true in the way he told it.
Tom Lewis, in Empire of the Air, noted the closed store: Sarnoff probably could not have reached his equipment until Monday. Evan Schwartz questioned whether Sarnoff, by then a manager of telegraphers, would have been working a key at all. The more careful accounts have him leading two other operators at the Wanamaker station in an effort to confirm the ship's fate. He was one of several dozen operators along the coast who may have heard transmissions from or about the Titanic, and given where he sat, whatever reached him was probably a retransmission of messages first picked up by ships at sea. He was a relay. Later he described himself as the source.
What nobody disputes is the wanting. The twenty-one-year-old on that roof, or in the hours after it, already understood something his elders at American Marconi did not. The man who hears the signal matters less than the man the public believes heard it. Wireless in 1912 was a point-to-point business: one operator, one recipient, dots and dashes passing between ships and shore like private letters. Sarnoff's genius, and his vice, was to see that the value lay in the crowd listening in. That held for radio. It held for television. It held for his own biography, which he broadcast with the same commercial instinct he brought to everything else.
He spent the next six decades building the most powerful communications company in the United States. He founded the National Broadcasting Company. He drove the development of electronic television and then compatible color. He insisted, after the Second World War, on being addressed as "General." He was buried with the star. And in the strange accounting that tends to follow men like him, the empire he built has dissolved into a brand name licensed to manufacturers of tablets and television sets. Its headquarters bears another company's logo. Its most famous mascot, a small terrier listening to a gramophone, now presides over luxury lofts in Camden, New Jersey.
The question raised by the empty store on that Sunday night never quite goes away: was he at the key, or did he only make sure everyone thought he was? The honest answer is both, at different times, and he did not always know the difference himself.
By the Numbers
The Sarnoff Ledger
64 yearsFrom office boy at American Marconi (September 30, 1906) to retirement as RCA chairman (1970)
300,000Claimed listeners for the July 2, 1921 Dempsey–Carpentier broadcast he helped stage
$100K → ~$50MZworykin's 1928 estimate for a working television system vs. its approximate final cost
$5,563,198.48Gross profit of the March 1929 RCA stock pool in which Sarnoff participated, over seven days
1.78M vs. 120,000Sarnoff's forecast of 1956 U.S. color TV sales vs. the actual total
$6.28BWhat General Electric paid to reacquire RCA in 1985, fifteen years after he retired
A Boy Drilled in Scripture
Before there was a roof in Manhattan there was a village called Uzlian, in the Minsk Governorate of the Russian Empire, in what is now Belarus. The New York Times obituary called it a "bleak little village" and called his father, Abraham, "a desperately poor itinerant trader." The family endured the Cossack raids and repression that shaped Jewish life across the Pale. From the age of four, David was drilled in the Torah and the Talmud, because his parents hoped he would become a rabbi. He spent much of his early childhood in a cheder, memorizing scripture.
That detail is worth holding onto. A child learning sacred texts by heart is being trained as a transmitter. His job is to receive a fixed body of words and reproduce them faithfully for others. The Torah boy of Uzlian would grow into the man who decided, more than anyone else in America, what words and pictures went out to millions of homes at once. The rabbinate his parents imagined became something stranger and more secular, though perhaps not entirely different in kind.
Abraham went first, emigrated to the United States, and raised money to bring the family over. In 1900, nine-year-old David crossed with his mother, Leah Privin, three brothers, and a sister. They settled briefly in Albany, then in New York City. He sold Yiddish newspapers before and after his classes at the Educational Alliance on the Lower East Side, the settlement house where immigrant children were turned, with varying degrees of success, into Americans. He took English lessons. He delivered telegraph messages. In 1906, when he was fifteen, his father was incapacitated by tuberculosis, and the boy became the head of the household.
He had planned on newspapers. A chance encounter put him instead in an office boy's job at the Commercial Cable Company. Here the record splits, as it often does with Sarnoff. One account says that when his supervisor refused him leave for Rosh Hashanah, he quit. Another says he was fired for asking. Either way, the boy who had been raised for the synagogue chose the High Holy Days over the job. On September 30, 1906, he started as an office boy at the Marconi Wireless Telegraph Company of America, the struggling U.S. subsidiary of a British firm.
He was fifteen. Shortly afterward he found a way to introduce himself to Guglielmo Marconi, the Italian inventor whose name was on the door, and the relationship that grew from that meeting opened doors inside the company. It is a very Sarnoff move: when a young man has no credentials, he gets as close to the most famous person in the building as he can, and lets proximity do the work.
Over the next thirteen years he rose from office boy to commercial manager. He learned the technology on the job and in public libraries. He served at Marconi stations on ships, at Siasconset on Nantucket, and at the Wanamaker store. In 1911 he installed and operated wireless equipment on a ship hunting seals off Newfoundland and Labrador. From that ship he relayed what is described as the first remote medical diagnosis: the ship's doctor, by wireless, treated a radio operator at Belle Isle who had an infected tooth. The image is wonderfully unglamorous. A man in a sealing vessel among the ice floes, tapping out instructions about a toothache to another man on a rock in the Strait. It was point-to-point communication at its most intimate and useful. Sarnoff would spend the rest of his life trying to get beyond it.
After the Titanic, Congress mandated continuous staffing of commercial shipboard radio stations, and Marconi's revenues swelled. Sarnoff rose with them, to chief inspector and then contracts manager. He demonstrated the first use of radio on a railroad, the Lackawanna's link between Binghamton, New York, and Scranton, Pennsylvania. At the Marconi station in Belmar, New Jersey, he permitted, and watched, a young engineer named Edwin Armstrong demonstrate a regenerative receiver. And at the Wanamaker station he used H. J. Round's hydrogen arc transmitter to broadcast music.
Music, not messages. The equipment was the same and so was the roof. Only the idea of the audience had changed.
The Memo That Cannot Be Found
The most famous document in the history of American broadcasting may not exist.
The legend goes like this. Sometime in late 1915 or 1916, Sarnoff wrote to Edward J. Nally, American Marconi's president, proposing a "radio music box": a household device that would receive music and lectures sent out from a central transmitter, the way a phonograph played a record, except that the record would be in the air and free. The memo is cited as the founding prophecy of broadcasting. In it, the young commercial manager sees what the engineers cannot. Radio is not a telegraph without wires. It is one voice speaking to many.
The prophecy, as later recited, is so clean that it invites suspicion, and it got some. The 1915 memo has never been found. Louise Benjamin, searching with the curator of Sarnoff's papers, did turn up a misfiled 1916 document that mentions a "radio music box scheme," the word scheme then meaning simply a plan. There is also a twenty-eight-page memo of 1920 from Sarnoff to Owen D. Young, laying out at length the possibilities for broadcasting. By 1920, though, other ventures were already experimenting with radio for the public, and Benjamin observed that the document shows Sarnoff's superiors were already aware of what broadcasting might become. A 1920 prediction is not a prophecy. It is a good read of the room.
So the honest version is more interesting than the myth. Sarnoff saw early, though perhaps not alone and perhaps not as early as he later said. What set him apart was persistence. He kept writing memos. Nally put off the 1916 proposal because the First World War had swollen the company's ordinary business. Sarnoff spent the war years as commercial manager, overseeing the factory in Roselle Park, New Jersey, and waiting. When the war ended and the company was remade, he revived the proposal. He was ignored again, and then he stopped writing and started staging.
On July 2, 1921, Jack Dempsey fought Georges Carpentier for the heavyweight championship in Jersey City. The broadcast was not originally Sarnoff's idea, and the credit is worth getting right, because he rarely did. A Madison Square Garden employee named Julius Hopp conceived it as a charity fundraiser: theaters and halls across the region would charge admission to hear the fight relayed from ringside. Hopp approached J. Andrew White, acting president of the National Amateur Wireless Association, which the company had inherited from American Marconi. White agreed to recruit volunteers and enlisted Sarnoff for money and technical support. A temporary longwave station went up in Hoboken under the call letters WJY. White and Sarnoff telephoned commentary from ringside, a man named J. Owen Smith read it over the air from typed transcripts, and something like 300,000 people listened.
It was a strange and slightly comic arrangement: a fight described by phone, typed by a stenographer, and read aloud by a third man to a crowd that had paid admission to sit in a theater and stare at nothing. It worked anyway. That winter, demand for home radio equipment took off. By the spring of 1922, the popular appetite Sarnoff had been predicting in memo after memo had arrived, and his standing inside the company rose with it. On June 1, 1922, the company's equipment catalog carried a four-word title that served as a manifesto: Radio Enters the Home.
What the Dempsey broadcast taught him was more than the existence of a market. It taught him that the right event, demonstrated at the right moment, outweighs any number of memos. He would come back to that lesson at a World's Fair in 1939, and again in the color war of 1951. And he would not easily forget the next part of the lesson either: people tended to remember him as the man at the microphone, even when someone else had built the station.
The company Sarnoff is so often said to have founded was not founded by him. He arrived at the Radio Corporation of America the way he arrived everywhere, by staying in the building while the ownership changed around him.
RCA was the product of wartime nerves. When the United States entered the First World War in April 1917, the government took over most civilian radio stations, and many Navy officers hoped to keep a peacetime monopoly on radio once the fighting ended. Congress refused. The Navy was particularly uneasy about handing high-powered international stations back to American Marconi, whose stock was mostly in foreign hands at a time when Britain already controlled the undersea telegraph cables. Worse, Marconi was preparing to buy most of General Electric's output of Alexanderson alternators, the massive transmitters that had proved superior for transatlantic work.
In April 1919, two naval officers, Admiral H. G. Bullard and Commander S. C. Hooper, called on GE's president, Owen D. Young. Young was the kind of executive who turns a geopolitical problem into a corporate structure. The officers asked him to suspend the alternator sales, which would leave GE with no buyer. Then they offered a solution: GE should buy American Marconi itself and form an "all-American" radio company. Young agreed. On November 20, 1919, American Marconi became the Radio Corporation of America. Its officers had to be U.S. citizens, and most of its stock had to be held by Americans. It was promoted as a patriotic gesture, and President Wilson appointed Admiral Bullard to sit in on its board meetings and present the government's views.
The staff stayed. Nally became RCA's first president. Young became chairman. Sarnoff became general manager. A web of cross-licensing agreements followed, with AT&T, United Fruit, and Westinghouse, which held Armstrong's regenerative and superheterodyne patents. When it was finished, GE owned 30.1 percent of RCA, Westinghouse 20.6, AT&T 10.3, and United Fruit 4.1. RCA was a patent trust with a flag sewn on.
A photograph taken in 1921 at the RCA wireless station in New Brunswick, New Jersey, shows a tour of distinguished visitors. Albert Einstein stands near the front, Charles Proteus Steinmetz next to him. In the front row, second from the left, is David Sarnoff, thirty years old and not a scientist, standing among the scientists. He was always in the front row.
Two lessons from those early years shaped his thinking. The first came from the sky. RCA's founding ambition was "worldwide wireless," and its centerpiece was Radio Central at Rocky Point, Long Island: twelve antenna spokes radiating from a central hub, designed, in the period's language, "to transmit messages to all points of the world from a single centrally located source." It was dedicated on November 5, 1921, with two of the twelve spokes finished and two 200-kilowatt alternators installed. The first transmissions drew replies from seventeen countries. The other ten spokes were never built. In 1924, Westinghouse engineer Frank Conrad showed Sarnoff that a low-powered shortwave station in East Pittsburgh could be heard in London on a simple receiver using a curtain rod for an antenna. The cathedral was obsolete before it was completed. The alternators whose control had prompted RCA's creation turned out to be the past.
Sarnoff seems to have absorbed this completely. For the rest of his career he moved toward what scaled, and he showed little sentiment about the expensive machinery that had brought him there.
The second lesson concerned money. RCA's stations were bound by AT&T's reading of the cross-licensing agreements, which held that only AT&T could sell commercial airtime. RCA's broadcasting therefore had to be commercial-free and funded by equipment sales, and the cost of programming soon threatened to exceed the profits on radios. AT&T, meanwhile, had built the first network around its New York station, WEAF, using long-distance telephone lines to link stations. In 1926 it decided broadcasting did not fit a telephone company. It moved its stations into a subsidiary called the Broadcasting Company of America and then sold the subsidiary to RCA for $1,000,000. The right to sell advertising came with it.
From those assets came the National Broadcasting Company, owned 50 percent by RCA, 30 percent by GE, and 20 percent by Westinghouse. Network service began on November 15, 1926. As many as twelve million people are estimated to have heard the premiere. NBC soon split into two networks, the Red and the Blue. It had been promoted as a venture that would merely break even. It turned out to be extremely profitable, and it would help carry RCA through the Depression. Sarnoff did not found RCA. He did found NBC, and in the end that was the part that lasted longest.
Then came 1929. In January, RCA bought the Victor Talking Machine Company of Camden, New Jersey, then the world's largest maker of phonographs and records, along with its New World rights to the most famous trademark in the business: Nipper, the little dog with his head cocked toward the horn of a gramophone, under the legend His Master's Voice. Company announcements described a merger of equals. RCA management actually wanted Victor's dealer network and its large, efficient factories in Camden, and it promptly began planning to build radios on Victor's assembly lines while winding down production of Victrolas and records. RCA had acquired the most beloved image of listening in the commercial world and was mainly interested in the building behind it.
The same year contained something uglier. Congressional investigators working through what became the Pecora hearings later established that Sarnoff had taken part in a pool operation in RCA stock, a coordinated effort to inflate the price. In at least one instance, according to the record, he used his wife as a proxy to hide his involvement. The pool began buying on March 12, 1929, and finished seven calendar days later, with a gross profit of $5,563,198.48. Such operations were considered unethical even in the anything-goes market of 1929. The resulting outcry, over Sarnoff and executives like him, helped produce the securities regulations that followed.
He also negotiated the deals that created Radio-Keith-Orpheum. In October 1928, with the help of Joseph P. Kennedy, RCA merged the Film Booking Offices of America with the Keith-Albee-Orpheum theater chain to form RKO, a studio whose theaters could install RCA's Photophone sound system. RCA's stake rose from about a quarter in 1930 to about 61 percent in 1932. RKO went into receivership in early 1933 and stayed there until 1940. Not every network he wired together carried a signal.
On January 3, 1930, Major General James Harbord moved up to chairman and David Sarnoff, thirty-eight, became RCA's third president. Five months later the Justice Department filed an antitrust case against the patent pool. Sarnoff negotiated a settlement, accepted in 1932, under which GE and Westinghouse gave up their stakes, RCA kept its factories, and the two former parents were barred from the radio business for two and a half years. The Navy's patriotic subsidiary, assembled from a British company by a GE executive, now answered to the former office boy from Uzlian.
That same year he made another bet. RCA agreed to take space in a skyscraper not yet built, the centerpiece of a project in midtown Manhattan that was struggling to find tenants in a collapsing economy. The building at 30 Rockefeller Plaza became, in 1933, the RCA Building.
— David Rockefeller, on RCA's 1930 commitment to lease 30 Rockefeller PlazaThe salvation of the project.
Two Hundred Sets in the Dark
In 1928, a Westinghouse engineer named Vladimir Zworykin came to see Sarnoff about television. Zworykin had been trying, without much success, to build an all-electronic system. He had visited the laboratory of a young inventor named Philo T. Farnsworth, who had developed a device he called an Image Dissector, and had been impressed enough to have his own team build several copies for experiments. Now he told Sarnoff that a workable television system could be built in two years for $100,000.
Sarnoff funded him. He was almost certainly aware that Zworykin was underestimating the job. Nine years later, after legal battles, Depression budget cuts, and a sum that would eventually come to roughly $50 million, RCA had a commercial system.
The arithmetic explains a great deal about Sarnoff. He did not need Zworykin to be right about the cost. He needed Zworykin to believe in it enough to start. An honest estimate might have been rejected by a board that was still, in 1929, partly owned by GE and Westinghouse. An optimistic one got through. Paying for a dream at the price of its most hopeful version, while privately expecting to pay much more, is either the founding skill of industrial research or a form of controlled deception. In Sarnoff's case it was probably both.
When the Depression forced RCA to cut costs in the early 1930s, Zworykin's project was protected. By late 1935, Zworykin's photograph was on the cover of the trade journal Electronics, holding a prototype photomultiplier, a component that would make sensitive television cameras possible. On April 24, 1936, RCA showed the press a working iconoscope camera tube and kinescope receiver, the two pieces of all-electronic television.
Then there was Farnsworth. The record does not favor RCA here. Farnsworth, whom the engineer Hans Camenzind described as a fifteen-year-old Idaho farm boy when he conceived the idea, had demonstrated electronic television in his laboratory in 1927. He received patents in 1930 and gave extensive public demonstrations in Philadelphia in 1935 and 1936. Sarnoff fought to establish RCA as the inventor of television. Farnsworth was proved right, won patent infringement suits against RCA in 1940, and was awarded royalties reported at $1,000,000. Accounts differ on whether the money was ever fully paid. History, as one encyclopedia entry dryly notes, still often credits Sarnoff and RCA with inventing television. Camenzind, who later designed the 555 timer chip, gave his chapter on the case a title that left no doubt about his view: a farm boy "battles the same ruthless promoter."
The same: Camenzind's previous chapter set Edwin Armstrong, "the real inventor of radio," against "a charlatan and a ruthless promoter." Armstrong was the young engineer Sarnoff had watched at Belmar. In June 1922, Sarnoff had bought rights to mass-produce Armstrong's superheterodyne and taken first refusal on everything Armstrong invented afterward. RCA was the exclusive maker of superheterodyne sets until 1930. Then Armstrong invented FM radio, which sounded far better than AM, and Sarnoff, who recognized the quality, declined to back it. FM threatened AM and, more to the point, it would draw scientific and regulatory attention away from television. FM service was first authorized in 1940 at 42 to 50 megahertz. After the war Sarnoff lobbied the Federal Communications Commission to move it to 88 to 108 megahertz. Every FM receiver already sold became obsolete overnight. FM's growth stalled, and television went ahead.
It is the less flattering side of the man who could see where technology was going. He could see futures other than his own, too, and he was entirely willing to get in their way.
In April 1939, at the New York World's Fair in Flushing Meadows, regularly scheduled electronic television began in the United States. The first broadcast was the dedication of the RCA pavilion, introduced by Sarnoff himself. On April 30, opening day, President Franklin D. Roosevelt became the first sitting president to appear on television. The signal went out from W2XBS, Channel 1, the only NBC television station in existence, from a transmitter on top of the Empire State Building. There were perhaps 200 television sets in the New York area. An estimated 1,000 people watched.
The president of the United States, the most famous radio voice in the world, appeared on a few hundred screens in a few hundred rooms. Most of those sets were probably RCA's own TRK-5s, TRK-9s, and TRK-12s, sold that spring in New York stores. The audience was tiny. The precedent was enormous. And the FCC, which had not yet set technical standards for commercial television, suspected that RCA's broadcasts were an attempt to flood the market with sets and force the adoption of RCA's technology, and moved to limit them. The suspicion was reasonable. It was exactly what Sarnoff had done with radio. Commercial television was authorized on July 1, 1941, under a standard that differed from RCA's. RCA became the leading set manufacturer anyway, and NBC the first television network.
There is a claim, attributed to the British government scientist Brian Callick and repeated in Peter Hugill's Global Communication Since 1844, that in the 1930s Sarnoff belonged to a circle of émigrés from Russia, among them Zworykin, Isaac Shoenberg, and Simeon Aisenstein, who saw military uses for television, raised about a million pounds from American donors, and steered the work toward EMI-Marconi in Britain. That work, the account goes, advanced the cathode-ray tubes and VHF circuits that fed into British radar. A former British defense minister later told the BBC, "that's how we won the Battle of Britain." The story is hard to verify and too tidy to accept without reservation. It is also the kind of story that tends to gather around Sarnoff: half documented, half legend, and not obviously false.
The Star in the Coffin
He had succeeded a general as president of RCA. Fifteen years later he became one.
During the Second World War, Sarnoff served on Eisenhower's communications staff. He arranged expanded radio circuits so that NBC could carry news of the invasion of France in June 1944. In Paris he arranged the restoration of the Radio France station the Germans had destroyed, and he oversaw construction of a transmitter powerful enough to reach all Allied forces in Europe. On October 11, 1944, he received the Legion of Merit. In December 1945 he received the star of a brigadier general in the Signal Corps reserve, pinned on by Major General Harry C. Ingles, the Army's chief signal officer.
From then on, by his own instruction, he was General Sarnoff. Staff were told to use the title. He wore the star proudly and often. When he died, it was buried with him.
It is easy to find this funny, and a little funny it is: a corporate chairman demanding a military honorific in peacetime offices at Rockefeller Center. But consider who he was. He had been a Jewish child in a village on the receiving end of Cossack raids. He had grown up an immigrant newsboy on the Lower East Side, and he had worked for most of his career in a company created by the U.S. Navy expressly to keep radio out of foreign hands. For him, a general's star from the United States Army was no affectation. It was citizenship made visible, the final proof that he belonged.
RCA's wartime record gave the title some substance. RCA plants converted to military production shortly after Pearl Harbor, and the company ranked forty-third among American corporations in the value of wartime production contracts. In September 1942 it began a secret Navy project code-named Madame X, making vacuum tubes for the proximity fuse, which detonated a shell when it came near its target rather than requiring a direct hit. James Forrestal, the former Secretary of the Navy, said the fuse "had helped blaze the trail to Japan." The cornerstone of RCA Laboratories in Princeton had been laid in 1941, just before Pearl Harbor. Out of that building would eventually come compatible color television, the electron microscope, CMOS technology, and the liquid crystal display.
Sarnoff's war did not end in 1945. In 1943 he had written to Secretary of State Cordell Hull urging that radio broadcasting be part of postwar planning. In May 1947 he sent the same letter, revived, to George Marshall, pressing for a "Voice of America." He became RCA's chairman that year. In 1959 he served on the Rockefeller Brothers Fund panel on American foreign policy, and in June 1960 he published an essay in Life, "Turn the Cold War Tide in America's Favor," criticizing what he saw as a timid American response to Soviet psychological warfare and calling for an aggressive campaign to win the ideological struggle outright. His concerns, one source notes, were eventually seen as prescient. The boy from the Minsk Governorate had become one of the most forceful anti-Communists in American business.
At home there was another kind of loyalty. On July 4, 1917, Independence Day, Sarnoff married Lizette Hermant, the daughter of a French Jewish immigrant family who lived near the Sarnoffs in the Bronx. The marriage lasted fifty-four years. The Museum of Broadcast Communications calls it the bedrock of his life, and Lizette was often the first person to hear his ideas as radio and television became part of American home life. They had three sons. Robert went into the business and rose to the top. Edward ran Fleet Services of New York. Thomas became president of NBC's West Coast operations.
His nephew, the screenwriter Richard Baer, left the best surviving anecdote about Sarnoff's sense of family. In his 2005 autobiography, Baer recalled that his uncle telephoned an NBC vice president at six in the morning and told him to find Baer "a job by 9 o'clock." The vice president did. The story is funny and a little frightening, and it says a good deal about how Sarnoff ran things: like a general, and like the head of a family that had once depended entirely on a fifteen-year-old boy's paycheck.
Leadership Is Not a Laughing Matter
For two decades, NBC radio's roster of stars outdrew everything the Columbia Broadcasting System could put up against it. Then, in 1948, just as radio was giving way to television, CBS raided it.
William S. Paley, the president of CBS, was in many ways Sarnoff's opposite, which is why the rivalry is so revealing. Paley was reported to admire Sarnoff's empire-building and the Horatio Alger arc of his rise. Contemporaries judged that he lacked Sarnoff's intellect and technical vision. What he had was personal magnetism, and he used it on performers. After the war, the top federal income tax rate on earnings above $70,000 was 77 percent, while capital gains were taxed at 25 percent. Paley worked out an arrangement under which individual stars could set up corporations and have their income taxed at the lower rate. Then he courted them himself.
Sarnoff declined to match the offer. He considered the arrangement legally and ethically wrong. His performers saw it differently. Amos 'n' Andy, Jack Benny, Red Skelton, Edgar Bergen, Burns and Allen, Ed Wynn, Fred Waring, Al Jolson, Groucho Marx, and Frank Sinatra all went to CBS. In 1949, CBS boasted sixteen of the twenty top-rated programs. The shift carried over into television, where CBS stayed dominant for decades.
Sarnoff's public response, delivered at an RCA annual meeting, is the single most quoted thing he ever said:
— David Sarnoff, at an RCA annual meeting, on the defections of NBC's stars to CBSLeadership built over the years on a foundation of solid service cannot be snatched overnight by buying a few high-priced comedians. Leadership is not a laughing matter.
It is a good line. It is also the line of a man who has just lost, and it rests on a principle he had not always kept. The executive who refused Paley's tax arrangement as ethically wrong was the same executive who, nineteen years earlier, had run RCA stock through a pool in his wife's name. People's ethics are rarely consistent, and Sarnoff's seemed to tighten precisely where the matter touched his dignity rather than his wallet. Paying comedians through a corporate dodge would have made him a supplicant to entertainers. That he would not do.
Underneath the ethics was taste, and the taste was not hidden. His authorized biography, written by his cousin Eugene Lyons and approved by Sarnoff himself, actually boasted that no one had ever caught him watching one of the dozen or so most popular programs, and stated flatly that the popular programs had very little appeal for him. Consider what that means. The founder of the first American broadcast network, the man who did more than anyone to put a television in every living room, let it be known through his own family biographer that he did not care for what those televisions showed.
He loved the apparatus. He loved the tubes, the transmitters, and the compatible color signals, the beautiful engineering that carried pictures through the air. He was largely indifferent to the pictures themselves. Paley loved the pictures. In the long run, the pictures won.
Even within NBC, the indifference cut in odd directions. In 1949 NBC hired Sylvester "Pat" Weaver to take on CBS's ratings lead. Weaver changed the economics of television: the network would produce its own shows and sell commercial time to many sponsors, rather than leaving each program in the hands of a single advertising agency. He created Today in 1952 and Tonight in 1954. He believed broadcasting should educate as well as entertain and required NBC programs to include at least one sophisticated cultural reference per episode, which is how a segment of Verdi ended up performed in the comic style of Sid Caesar and Imogene Coca. Weaver left after disputes with Sarnoff, who judged his ideas either too expensive or too highbrow for the company.
Too highbrow. For a man who would not be seen watching popular programs. The contradiction can be resolved: Sarnoff's highbrow tastes were private, and his business was the mass. Resolved or not, it is still delightful.
Plug Here
On the back panel of a 1939 RCA Model 45EM tabletop radio there is a female jack, and next to it hangs a small paper tag: An inexpensive RCA Victor record player will make a fine Victrola of this radio. Plug here.
RCA had begun putting such jacks inside its consoles around 1937, as a way to unhook components during servicing. By 1938 they had moved to the rear panels of many desktop radios, labeled "Victrola," "Phono," "Pick-up," or "Television," so that customers could later attach a phonograph, or something not yet invented. That modest connector, designed in RCA's engineering departments, is still called the RCA connector. It survived the company that created it. It is probably the most widespread trace of Sarnoff's RCA left in the world, sitting on the back of cable boxes and stereo receivers, and almost nobody who uses one knows what the letters stand for.
The tag is also the clearest statement of how Sarnoff fought. Plug here. Build the socket for tomorrow into today's machine. Never ask the customer to throw away what he has already bought. When he could, make the new thing work with the old one, and make the old one quietly an RCA product.
The principle won his greatest corporate battle. On October 10, 1950, the FCC approved a color television standard developed by CBS. The system was electromechanical, and its signals could not be received by the millions of black-and-white sets already in American homes. Sarnoff sued in federal district court to suspend the ruling, lost, and appealed to the Supreme Court, which upheld the FCC. By every formal measure he had been beaten.
He had not been beaten in the laboratories. Sarnoff pushed his engineers to perfect an all-electronic color system whose signal could also be received on existing monochrome sets. CBS held its color premiere on June 14, 1951. A few days later, RCA demonstrated a fully working all-electronic compatible color system. CBS had a legal victory and very little else: no manufacturing capacity, almost no color programming, a signal that most American viewers could not receive at all, and sets priced at about three times the cost of black-and-white models. In October 1951, CBS color production was suspended for the duration of the Korean War. Every month that more Americans bought monochrome sets, the incompatible system lost more ground. CBS could not afford to broadcast color in prime time to an audience that could not see it. In August 1952, the reconstituted National Television System Committee recommended a system virtually identical to RCA's. On December 17, 1953, the FCC adopted it.
The FCC had chosen CBS. Sarnoff had chosen the installed base. The installed base won.
The victory came with a correction. At the moment of triumph, Sarnoff predicted that annual U.S. color television sales would reach 1.78 million in 1956. The actual figure was 120,000. The sets were expensive and hard to adjust, and there was little to watch in color. RCA's ownership of NBC proved crucial: the network was told to promote color programming, and in 1956 NBC introduced a peacock logo to advertise its color innovations. Color television sales did not overtake black-and-white sales in the United States until 1968. Sarnoff had been right about the destination and wrong about the timing by more than a decade. The ownership of the network was what allowed the company to survive his optimism.
The same pattern appeared in records. In 1948, Columbia introduced the microgroove 33⅓ rpm long-playing record. RCA Victor answered in 1949 with the seven-inch 45, the first of which, "PeeWee the Piccolo," was pressed on December 7, 1948, in Indianapolis, and backed it with a $5 million advertising campaign and inexpensive dedicated players. By 1954 the 45 had overtaken the 78 for pop singles. Columbia's LP took classical music and the album, and RCA Victor began issuing LPs in 1950 while Columbia adopted the 45. It was a draw that went in RCA's favor once a young singer arrived. In 1955, RCA Victor bought Elvis Presley's contract from Sun Records for $40,000, then an extravagant sum. In 1956 the label sold ten million Presley singles. One can only guess what the General, who could not be caught watching the top-rated programs, made of the man who would become RCA Victor's best-selling artist.
The government took its share of the winnings. In 1941 the FCC's Report on Chain Broadcasting ordered NBC to give up one of its two networks. The Supreme Court upheld the order, and on October 12, 1943, the Blue Network was sold to the candy maker Edward J. Noble for $8,000,000. It became the American Broadcasting Company. In 1954 the Justice Department filed a major antitrust suit against RCA for patent monopolization, and the 1958 consent decree required RCA to license its television and radio patents to domestic competitors royalty-free. The company that had begun as a patent pool spent its peak years being made to share. Every regulator who intervened in Sarnoff's career gave him another rival. He went on winning anyway.
His Master's Voice
In October 1964, at the Joint Computer Conference in San Francisco, the seventy-three-year-old General gave one of the most remarkable predictions of his career.
— David Sarnoff, address to the Joint Computer Conference, San Francisco, October 1964The computer will become the hub of a vast network of remote data stations and information banks feeding into the machine at a transmission rate of a billion or more bits of information a second… Eventually, a global communications network handling voice, data and facsimile will instantly link man to machine—or machine to machine—by land, air, underwater, and space circuits.
Read now, it is nearly perfect: the internet, roughly described, almost three decades early, by a man who had begun his career on a sealing ship in the ice. The radio music box, if it was ever written, was a guess. This was a vision. And RCA was already trying to make it real. It marketed the Spectra 70 line of mainframes, compatible in hardware though not in software with IBM's System/360. Its TSOS operating system was the first demand-paging virtual memory operating system on the mainframe market.
None of it saved the computer business. By 1971 RCA held 4 percent of the market, and staying competitive with IBM's System/370 was estimated to require another $500 million over five years. On September 17, 1971, RCA's board announced that it was closing the computer systems division and writing off $490 million. Sperry Rand's UNIVAC took over the business in January 1972, and UNIVAC did not even want the Spectra machines. It wanted the customer list. Sarnoff had once again been right about the destination. This time there was no NBC to cover the years in between.
By then he was no longer in charge. On January 1, 1965, Robert Sarnoff, his eldest son, born in 1918, became president of RCA, while his father stayed on as chairman. Robert added the title of chief executive in 1968. He was a different kind of man for a different decade, and he wanted to modernize. In late 1968 RCA introduced a new block-letter logo, replacing the old lightning bolt. Nipper and His Master's Voice were largely retired. The RCA Victor division became RCA Records. In 1969 the Radio Corporation of America changed its name to the RCA Corporation.
The name, the logo, and the dog all went within a year or so. And at the end of 1969, the elder Sarnoff, disabled by a long illness, was removed as chairman.
The next six years have the shape of a tragedy. Under Robert, RCA pursued diversification: Hertz rental cars, Banquet frozen dinners, Coronet carpeting, Random House, Gibson greeting cards. Wall Street wits said the initials now stood for "Rugs, Chickens & Automobiles." The engineering stayed excellent and the strategy did not. In October 1975, while he was out of the country, Robert was removed in a boardroom coup led by Anthony Conrad, who became president and resigned less than a year later after admitting he had not filed income tax returns for six years. His successor, Edgar Griffiths, considered the abandoned His Master's Voice trademark "a valuable company asset," and on October 31, 1976, RCA announced Nipper's return on T-shirts, coffee mugs, coin banks, stuffed toys, and, in 1981, on RCA's new CED videodisc. That system, in development since 1964, was the largest investment RCA ever made in a single product, more than color television, and it was obsolete before it reached stores. RCA abandoned it after losing around $650 million.
In December 1985, General Electric, which had created RCA in 1919 and been forced to give it up in 1932, agreed to buy it back for $6.28 billion, or $66.50 a share. The deal closed on June 9, 1986. It was the largest non-oil merger in history to that point. Despite early talk of a combined technology and entertainment giant, GE had wanted NBC and the defense businesses. Under Jack Welch it sold most of the rest. RCA Records went to Bertelsmann, the NBC Radio Network to Westwood One, RCA Global Communications to MCI, the consumer electronics brand to Thomson, and the semiconductor business to Harris. In 1988 the RCA Building was renamed the GE Building. Today it is the Comcast Building, owned by the cable company that later absorbed NBC. RCA Laboratories, where compatible color, CMOS, and the liquid crystal display were created, and where Herbert Kroemer developed the heterostructure physics that later earned him a share of the Nobel Prize, was donated to SRI International and renamed the David Sarnoff Research Center. On January 3, 2011, it was absorbed into SRI. The David Sarnoff Library, built by RCA in 1967 to tell his story, was dissolved in 2009: the exhibits went to the College of New Jersey, the archives to the Hagley Museum in Wilmington, Delaware, and a 1946 RCA Victor 630-TS to the New Jersey State Museum.
One scene from the Sarnoff years foreshadowed all of it, and it took place while he was still chairman. In the early 1960s, RCA Victor demolished its old warehouse in Camden. It reportedly held four floors of Victor's catalog going back to 1902: wax and metal masters, test pressings, lacquer discs, matrix ledgers, rehearsal recordings. The company kept the most important masters, among them Caruso, Toscanini, Gershwin, and Glenn Miller. Sergei Rachmaninoff's studio masters, for reasons no one has explained, were apparently not saved. A few collectors were allowed in beforehand to carry away what they could. Then, with collectors and RCA officials watching from a nearby bridge, the building was dynamited with masters still inside. The rubble was bulldozed into the Delaware River and a pier was built on top. When RCA tried to reissue Rachmaninoff's complete recordings for his centenary in 1973, it had to borrow copies from collectors.
A company that had bought Victor for its factories and its dealers, and never much cared for the records, buried the records under a pier. It was the Paley raids in another form: loyalty to the apparatus, indifference to what it carried. The nearby Victor Building 17, with Nipper rendered in stained glass in its tower, survived as a protected historic structure. In 2003 it became luxury apartments.
David Sarnoff retired in 1970 at seventy-nine. He died in New York on December 12, 1971, at eighty. His estate was estimated at a little over $1 million, an oddly modest figure for the man who ran RCA, and smaller than his share of a single week of stock manipulation in 1929. Lizette received $300,000, the household effects, and the house at 44 East 71st Street. Robert succeeded his father as chairman. He would last five years.
In 1999, the computer scientist David P. Reed formalized "Sarnoff's Law": the value of a broadcast network grows in proportion to the number of its viewers. It is the simplest of the network laws. Metcalfe's Law, which describes networks whose users can talk to one another, grows with the square of the number of users. Sarnoff's grows in a straight line, one listener at a time. It describes a voice and an audience, a master and the dogs who cock their heads toward the horn.
He is entombed at Kensico Cemetery in Valhalla, New York, in a mausoleum. Inside, set into the glass in place of a saint or a dove or a menorah, is a stained-glass vacuum tube. The star is in there with him. On a bright day, sunlight comes in through the tube from outside and falls across the stone, and nothing runs through it except the light.
Part IIThe Playbook
What follows is an attempt to extract usable principles from a career that was, at its best, a masterclass in turning technology into markets, and at its worst, a cautionary tale about the uses of narrative and the limits of contempt. Sarnoff is not a simple model. Several of these principles cut both ways, and the most valuable lessons may be the ones in which his strengths and his failures turn out to be the same habit seen from different sides.
The Sarnoff Playbook
- 1.Write the memo before the market exists, then keep writing it.
- 2.Stage the demonstration that ends the argument.
- 3.Fund the optimist's number; budget for the true one.
- 4.Compatibility beats superiority.
- 5.Own the pipe and the reason to buy the pipe.
- 6.Abandon the cathedral when the curtain rod works.
- 7.Protect the long bet in the worst year.
- 8.Treat the state as a co-founder, and a competitor.
- 9.Your legend is leverage until it becomes a liability.
- 10.Contempt for the product is a strategic vulnerability.
- 11.Being right about the destination is not being right about the date.
- 12.Succession is the last product you ship.
⚡
Sixty-Four Years on the Air
The arc of a career that began at an office boy's desk and ended with the company's dissolution.
1906
Joins American Marconi as an office boy on September 30, age fifteen.
1912
The Titanic sinks; the Wanamaker roof legend is born.
1916
The misfiled "radio music box scheme" memo, rediscovered decades later.
1919
American Marconi becomes RCA on November 20; Sarnoff becomes general manager.
1921
Dempsey–Carpentier broadcast over WJY; roughly 300,000 listeners.
1926
RCA buys AT&T's network for $1,000,000; NBC begins service November 15.
1929
Victor acquired; Zworykin funded; the March stock pool.
1930
Becomes RCA president on January 3.
1939
Television debuts at the World's Fair to some 200 sets.
1945
Receives a brigadier general's star in December.
1948
The Paley raids; NBC's radio stars leave for CBS.
1953
FCC adopts RCA's compatible color standard on December 17.
1965
Robert Sarnoff becomes president.
1969
Removed as chairman, incapacitated by illness.
1971
Dies December 12; RCA writes off its computer division for $490 million.
1986
GE completes its $6.28 billion acquisition and dismantles RCA.
Principle 1
Write the memo before the market exists, then keep writing it
Whatever the truth about the 1915 memo, the documented pattern is clear. From at least 1916, Sarnoff kept proposing broadcasting to superiors who kept deferring. Nally put it off because wartime business was too good. The new RCA management ignored the 1920 revival, all twenty-eight pages of it. Sarnoff did not take silence for an answer. He took it as a scheduling problem.
The value of the repeated memo was not the prophecy. Benjamin's research suggests his bosses already understood broadcasting's potential in the abstract. Its value was that it established Sarnoff as the person in the building who owned the idea. When the 1922 radio boom arrived, institutional memory pointed to him. He did not need to be the only person who saw it. He needed to be the person on record as having seen it, over and over, before it was obvious.
There is a less noble version of this principle, which is that a paper trail can later be curated into a legend. Sarnoff did that too. The honest version is still useful: if you see a future, write it down, date it, send it to the people with authority, and send it again whenever conditions change.
Tactic: Keep a running file of dated proposals to leadership on the one opportunity you believe in most, and resubmit it with fresh evidence every time the environment shifts.
Principle 2
Stage the demonstration that ends the argument
Memos did not create the radio market. A heavyweight fight did. The July 1921 Dempsey–Carpentier broadcast reached about 300,000 people, and that winter home radio demand surged. The April 1939 World's Fair broadcast reached perhaps a thousand viewers, but it put the president of the United States on television and staked RCA's claim to the medium. The June 1951 color demonstration, coming days after CBS's premiere, made CBS's legal victory irrelevant.
What these moments share is timing and theater. Sarnoff chose events the public already cared about, such as a championship fight, a World's Fair, or a president, and attached the new technology to them, so that audiences experienced the technology as access to something they wanted rather than as a technical curiosity. The fight did not need to sound good. It needed to be the fight.
He was also willing to borrow the event. Julius Hopp conceived the Dempsey broadcast and J. Andrew White recruited Sarnoff, who supplied money, technical help, and his voice. The lesson for operators is that you do not have to originate the stage. You have to recognize it and get onto it.
Tactic: Instead of launching your product on its own merits, find a moment your customers already care intensely about and make your product the only way to experience it.
Principle 3
Fund the optimist's number; budget for the true one
Zworykin promised a working television system in two years for $100,000. It took about nine years and roughly $50 million. Sarnoff, by most accounts, knew the estimate was low and funded it anyway.
This is one of the most consequential capital allocation decisions in American business history, and it sits on a paradox. Ambitious projects usually require a founder who underestimates the difficulty, because an accurate estimate would discourage everyone, including the founder. Yet the financier who believes the estimate will run out of patience in year three. Sarnoff's skill was holding both views at once: letting Zworykin believe while privately preparing to pay for the truth.
Optimism is a fuel. Realism is a budget. The mistake is to merge them, either by killing the optimist with your realism or by adopting the optimist's numbers as your own plan.
Tactic: When approving an ambitious R&D project, accept the team's estimate as the milestone plan but set aside a private reserve, three to five times larger, as the real commitment.
Principle 4
Compatibility beats superiority
The color war is the purest case study in Sarnoff's career. CBS had regulatory approval, a working system, and first-mover advantage. RCA had lost in district court and before the Supreme Court. RCA still won, decisively, because its system worked on the black-and-white sets already in American homes and CBS's did not.
◐
The Color War, 1950–1953
Why the regulatory winner lost the market.
| Factor | CBS system | RCA system |
|---|---|---|
| FCC status (Oct. 1950) | Approved | Rejected |
| Works on existing B&W sets | No | Yes |
| Manufacturing capacity | Minimal | Market-leading |
| Owned network to supply programming | Yes, but unwatchable for most | NBC |
| Outcome (Dec. 17, 1953) | Abandoned | National standard |
The same instinct is visible in the 1939 radio tag reading "Plug here," in the jacks labeled "Television" on radios sold before most Americans had seen a television, and in the decision to build radios on Victor's existing Camden lines. Sarnoff treated the installed base as an ally to recruit rather than an obstacle to overcome. A technically better product that requires customers to discard what they own is fighting its own buyers.
The darker mirror is FM. When Armstrong's better technology threatened RCA's plans, Sarnoff lobbied to move FM's frequency band and thereby made every existing FM receiver obsolete. He understood the power of compatibility well enough to destroy it deliberately when it served a competitor.
Tactic: Before launching a new technology, ask what your customers already own, and design your product so that it adds value to that investment rather than replacing it.
Principle 5
Own the pipe and the reason to buy the pipe
RCA made the radios. NBC gave people something to hear on them. RCA made the televisions. NBC was ordered to promote color programming so that people would buy color sets. RCA Victor made the 45 rpm players and pressed the Elvis records that gave people a reason to want them.
This vertical integration of hardware and content explains why RCA could survive mistakes that would have sunk a pure manufacturer. When color set sales came in at 120,000 instead of 1.78 million, NBC kept broadcasting in color for twelve more years until the market caught up. CBS, with no meaningful manufacturing, could not sustain its color system once it stopped making sets. The network was RCA's patience.
The lesson is not that every company should own everything. It is that the gap between a new technology and its mass adoption is where companies die, and the one that controls both supply and demand can choose to keep paying through that gap.
Tactic: If you sell infrastructure, invest directly in the content or applications that create demand for it, even at a loss, until the market can sustain itself.
Principle 6
Abandon the cathedral when the curtain rod works
Radio Central at Rocky Point was meant to have twelve antenna spokes and banks of 200-kilowatt alternators, the most impressive communications installation in the world. Two spokes were built. In 1924, Frank Conrad showed Sarnoff a low-powered shortwave signal from East Pittsburgh being picked up in London with a curtain rod for an antenna. The rest of the cathedral was never built, and the alternators whose control had led to RCA's creation became obsolete.
Sarnoff did not cling. The company moved to shortwave vacuum tube transmitters and kept running international communications for decades, later through satellites. The capacity to walk away from a monumental sunk investment when a cheap alternative proves itself is rarer than it sounds. Executives rarely get promoted for leaving their monuments unfinished.
The irony is that his successors forgot this lesson. The CED videodisc, in development from 1964 to 1981 and RCA's largest single product investment, was a cathedral built after cheaper, recordable videotape had already won. RCA lost around $650 million finishing it.
Tactic: Every year, identify your largest in-progress investment and ask what cheap, inelegant alternative would make it unnecessary, then go looking for evidence that someone has already built it.
Principle 7
Protect the long bet in the worst year
When the Depression forced RCA to cut costs in the early 1930s, Zworykin's television project was protected. It is an easy sentence to write and a hard decision to make. RCA had just become independent of GE and Westinghouse, RKO was heading into receivership, and the record business had nearly collapsed. Television had no revenue, no standard, and no customers.
The decision paid off in 1939, again after the war, and again in color. More importantly, the research culture it preserved became RCA Laboratories in Princeton, whose cornerstone was laid in 1941 and which went on to produce the electron microscope, CMOS technology, the liquid crystal display, and Nobel-level physics. Long bets are cheapest to protect when everyone else is cutting theirs, because the talent and the time you keep are what competitors are giving up.
Tactic: In a downturn, choose the single long-term project most likely to define your company in a decade and explicitly exempt it from cuts, publicly, so the team knows it is safe.
Principle 8
Treat the state as a co-founder, and a competitor
RCA existed because the U.S. Navy wanted an American radio company. An admiral sat in on its board meetings. Its patent pool rested on government-blessed cross-licensing. Its wartime work, from proximity fuses to restored transmitters in Paris, earned Sarnoff a general's star. He lobbied successive Secretaries of State to create what became the Voice of America.
The state also ordered NBC to sell its Blue Network, broke up the patent pool, limited RCA's early television broadcasts out of suspicion that RCA was trying to dictate standards, chose CBS's color system, and in 1958 forced RCA to license its patents royalty-free. Sarnoff fought the government in court, lost, and then won in the market. He also used regulators as a weapon, as in the FM spectrum move.
| Ally | Adversary |
|---|---|
| Navy creates RCA (1919) | Antitrust suit against patent pool (1930) |
| Wartime contracts and a general's star (1944–45) | FCC forces sale of NBC Blue (1943) |
| FCC moves FM spectrum at RCA's urging (postwar) | FCC adopts CBS color (1950) |
| FCC adopts RCA color (1953) | Consent decree mandates royalty-free licensing (1958) |
For any company building communications infrastructure, the government will never be neutral. It will be both partner and opponent, often at once, often within the same decade.
Tactic: Map every way your business depends on and could be constrained by government, and assign a senior person to manage that relationship as seriously as you manage your largest customer.
Principle 9
Your legend is leverage until it becomes a liability
The Titanic vigil. The radio music box. The claim to have invented television. The title "General," which staff were required to use. An authorized biography written by a cousin. Sarnoff curated his own image with the same strategic intensity he brought to frequency allocations, and for decades it worked. The legend made him the public face of broadcasting, gave him standing with presidents and regulators, and made RCA synonymous with the future.
The cost came slowly. Historians such as Lewis, Schwartz, and Benjamin took the myths apart one by one. Farnsworth won in court. Camenzind called him a charlatan in print. Today the corrections are part of Sarnoff's standard biography, and every accurate account of him has to stop and say this did not happen as he claimed. His real achievements, which were enormous and needed no embellishment, are perpetually discounted by the embellishments.
The principle for operators is not "never tell a good story." Narrative is a real asset. It is that the story should be built from verifiable material, because the audience eventually includes historians.
Tactic: Audit the founding stories you tell about yourself and your company, and remove any detail that you could not defend to a skeptical journalist with documents.
Principle 10
Contempt for the product is a strategic vulnerability
Sarnoff loved the transmitter and was indifferent to the transmission. His authorized biography boasted that he could not be caught watching popular programs. When Paley offered NBC's stars a tax arrangement and personal attention, Sarnoff offered principle and indifference. CBS ended up with sixteen of the twenty top-rated programs in 1949 and kept its dominance well into the television era. Pat Weaver, the most inventive programmer NBC ever had, left after disputes over cost and taste. The Victor masters were dynamited.
The engineer-founder's typical blind spot is believing that the infrastructure is the business and the content is a commodity flowing through it. Sometimes that is true. In consumer media, it was almost exactly backward. Audiences do not love networks. They love Jack Benny.
Sarnoff's "Leadership is not a laughing matter" is a fine line and a poor strategy. In entertainment, the laughing matter was the leadership.
Tactic: If you build a platform, spend regular, personal time with the creators and products that run on it, and treat losing a top creator as seriously as losing a top engineer.
Principle 11
Being right about the destination is not being right about the date
◷
Forecasts and Ledgers
Sarnoff's record as a forecaster: superb on direction, unreliable on timing.
| Forecast | What happened | Verdict |
|---|---|---|
| Radio as home entertainment (1916–1920) | Boom by spring 1922 | Right, on time |
| Television for $100,000 in two years (Zworykin, 1928) | ~$50 million, nine years | Right, late and costly |
| 1.78 million color sets sold in 1956 | 120,000; color overtook B&W only in 1968 | Right, a decade early |
| Computers as hub of a global data network (1964) | RCA exits computers with $490M write-off (1971) | Right, ruinously early |
The pattern is striking. Sarnoff's vision of the future was almost always correct. His sense of how quickly it would arrive was almost always too optimistic, and the difference between those two kinds of accuracy decided whether his bets paid off. Where RCA owned a mechanism that let it survive the delay, as NBC did for color, the forecast was vindicated. Where it did not, as in computers, a correct prophecy became a $490 million loss.
Visionaries tend to be judged on direction. Companies live or die on timing and on how much runway they have.
Tactic: For every long-range bet, estimate separately whether you are right about the outcome and how long you can survive if the outcome takes twice as long, and do not proceed if the answer to the second is "not long enough."
Principle 12
Succession is the last product you ship
Sarnoff built RCA as an extension of himself, and the company's identity was his identity. When his son Robert became president in 1965, the father stayed on as chairman. The handover was neither complete nor clean. Robert's response, once he had room, was to strip away his father's symbols, the lightning bolt, Nipper, and the very name Radio Corporation of America, and to diversify into rental cars and frozen dinners. Within six years of his father's death he was removed in a boardroom coup. A decade after that, the company was sold and broken up.
A founder who builds a cult of personality around a technical vision often leaves heirs with two bad choices: imitate a vision they do not share, or reject it and find something else. Robert chose rejection, and the company drifted. Griffiths' quick restoration of Nipper in 1976 was an admission that the symbol, and perhaps the identity behind it, had been more valuable than the people discarding it realized.
What Sarnoff never built was a set of principles that could outlast his personal judgment, something his successors could inherit without inheriting him.
Tactic: Years before you step down, write down the three or four commitments that should survive you, and test your likely successor by asking them to explain, in their own words, why each one matters.
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Part IIIQuotes and Maxims
In their words
— David Sarnoff, Joint Computer Conference, San Francisco, October 1964[The computer] will affect man's ways of thinking, his means of education, his relationship to his physical and social environment, and it will alter his ways of living… [These forces] will coalesce into what unquestionably will become the greatest adventure of the human mind.
— Eugene Lyons, David Sarnoff: A Biography (1966), the authorized biography Sarnoff approvedThe popular programs, to put the matter bluntly, have very little appeal for him.
— Tag on the rear panel of a 1939 RCA Model 45EM radioAn inexpensive RCA Victor record player will make a fine Victrola of this radio. Plug here.
— Sarnoff's Law, as formulated by computer scientist David P. Reed, 1999The value of a network grows in proportion to the number of viewers.
For the fullest account of the man and the company, see Kenneth Bilby's The General: David Sarnoff and the Rise of the Communications Industry, written by a retired RCA vice president of public affairs, and, for the version Sarnoff himself sanctioned, his cousin Eugene Lyons' David Sarnoff: A Biography. Read them alongside Tom Lewis and Evan Schwartz, who supply the corrections.
Maxims
- Keep the memo alive. An idea ignored twice is not a failed idea; it is an idea whose market has not arrived yet.
- Borrow the stage. You do not need to originate the event that proves your technology, only to be standing at the microphone when it happens.
- Pay for belief, budget for truth. Fund the optimist's estimate and quietly reserve for the real one.
- Plug here. Build the socket for tomorrow into the product you sell today, and never make customers throw away what they already own.
- Patience requires a revenue source. Owning the demand side is what lets you survive being early.
- Walk away from the cathedral. When a curtain rod can do the work of a 200-kilowatt alternator, stop building spokes.
- The regulator is never neutral. Expect the state to be your founder, your opponent, and your weapon, sometimes in the same decade.
- Build your legend from documents. Embellishments buy short-term leverage and long-term discounts on your real achievements.
- Love the cargo, not just the pipe. In any business that reaches the public, the people who make what flows through it are the leadership.
- Leave principles, not a portrait. A company built in one man's image tends not to survive him.
