The Salesman's Apprentice
On February 17, 1874, in Campbell, New York, a boy was born who would transform the very notion of what a business machine could be. Thomas John Watson Sr. entered the world during America's Gilded Age, when the country was rapidly industrializing and fortunes were being made by men who could see around corners. His father, Thomas Watson, was a lumber dealer and farmer of modest means. His mother, Jane Fulton Watson, came from Scottish stock and possessed the kind of stern practicality that would later manifest in her son's relentless pursuit of perfection.
Watson's early years were unremarkable by the standards of future titans. He attended a one-room schoolhouse in Campbell, where he proved an adequate but not exceptional student. What distinguished young Watson was not his academic prowess but his early fascination with people—how they thought, what motivated them, and most importantly, how they could be persuaded. At seventeen, he took his first job teaching at a country school for $25 a month, but the classroom could not contain his restless ambition.
In 1892, Watson made the decision that would set the trajectory of his life: he became a traveling salesman for a local hardware store. The transition from teacher to peddler might have seemed like a step down to some, but Watson understood something fundamental about American commerce that many of his contemporaries missed. The future belonged not to those who made things, but to those who could sell them—and more importantly, to those who could build organizations that sold them at scale.
By the Numbers
Watson's Early Career
$25Monthly salary as a schoolteacher (1891)
$10Weekly salary as hardware salesman (1892)
$1,200Annual income by age 25 (1899)
18Months at Painted Post business school
Watson's natural talent for salesmanship quickly became apparent. He possessed an almost supernatural ability to read people, to understand their needs before they fully understood them themselves. But more than that, he had the discipline to systematize his approach. He kept meticulous records of every customer interaction, every sale, every rejection. He studied patterns, refined his pitch, and most importantly, he never took no for an answer—at least not the first time.
In 1895, Watson joined the National Cash Register Company (NCR) in Dayton, Ohio, as a salesman. NCR was then under the iron-fisted leadership of John Henry Patterson, a man who would become Watson's mentor, tormentor, and ultimately, the template for his own management philosophy. Patterson had built NCR into a dominant force in business machines through a combination of aggressive sales tactics, employee motivation programs, and what could charitably be called creative competitive practices.
I learned more about business in five years with Mr. Patterson than most men learn in a lifetime.
— Thomas Watson Sr.
Under Patterson's tutelage, Watson absorbed lessons that would define his entire career. Patterson believed that salesmen were born, not made, but that even born salesmen needed constant training, motivation, and supervision. He instituted daily sales meetings, created elaborate incentive programs, and demanded that his salesmen dress impeccably and conduct themselves with military precision. Most importantly, Patterson understood that selling was not just about the product—it was about selling the company, the brand, and ultimately, a vision of the future.
Watson excelled in this environment. By 1899, he was earning $1,200 annually—a substantial sum for a 25-year-old—and had been promoted to manage NCR's Rochester territory. But Watson's real education came not from his successes, but from watching Patterson's methods up close. Patterson was a master of corporate theater, staging elaborate conventions where top salesmen were celebrated like conquering heroes. He understood that people needed to believe they were part of something larger than themselves, something important and meaningful.
The Making of a Manager
In 1903, Watson's career took a dramatic turn when Patterson selected him to run a secret subsidiary called the Watson Cash Register and Second Hand Exchange. The company's ostensible purpose was to sell used cash registers, but its real mission was far more controversial: to destroy NCR's competitors through predatory pricing and other aggressive tactics. Watson threw himself into the assignment with characteristic intensity, establishing a network of "knockout" companies designed to undercut competitors' prices and steal their customers.
The strategy worked brilliantly—perhaps too brilliantly. By 1912, NCR controlled an estimated 95% of the cash register market, and the federal government had taken notice. Watson and Patterson, along with 28 other NCR executives, were indicted under the Sherman Antitrust Act and charged with criminal conspiracy to restrain trade. The trial, which began in 1913, was a sensation. Watson, now 39 and NCR's general sales manager, found himself facing the possibility of prison.
By the Numbers
The Antitrust Crisis
95%NCR's market share by 1912
30NCR executives indicted
$5,000Watson's fine
1Year prison sentence
On February 13, 1913, Watson was convicted and sentenced to one year in prison and fined $5,000. The conviction was later overturned on appeal, but the damage to his relationship with Patterson was irreparable. Patterson, paranoid and increasingly erratic, began to view Watson as a threat to his own position. In 1914, after nearly two decades with NCR, Watson was unceremoniously fired.
At 40, Watson found himself unemployed and professionally tainted. But this setback would prove to be the making of him. Within months, he was approached by Charles Flint, a financier who controlled a small conglomerate of business machine companies called the Computing-Tabulating-Recording Company (CTR). Flint needed someone who could impose order on his chaotic collection of enterprises, which included a time clock company, a scale manufacturer, and most importantly, a small tabulating machine business founded by Herman Hollerith.
I need a man who can sell ice to Eskimos and make them glad they bought it.
— Charles Flint
Watson joined CTR as general manager on May 1, 1914, at a salary of $25,000 per year—a fortune at the time. The company he inherited was a mess: three disparate businesses with different cultures, different customers, and different technologies. Annual revenues were approximately $4 million, and the company employed fewer than 1,300 people. But Watson saw something that others missed: the potential for these businesses to be more than the sum of their parts.
Building the Machine
Watson's first priority was to impose the kind of systematic management he had learned at NCR. He instituted daily sales meetings, created standardized training programs, and began the process of building a unified corporate culture. But Watson understood that culture could not be imposed from above—it had to be cultivated, nurtured, and constantly reinforced.
In 1915, Watson introduced what would become one of his most famous innovations: the company slogan "THINK." The word appeared on signs throughout CTR offices, on employee notebooks, and eventually on products themselves. It was more than just a motivational slogan—it was a statement of corporate philosophy. Watson believed that thinking, systematic and disciplined thinking, was the key to solving any problem.
The "THINK" campaign was typical of Watson's approach to management. He understood that symbols and rituals were not mere window dressing—they were powerful tools for shaping behavior and building loyalty. He instituted company songs, elaborate sales conventions, and a complex system of awards and recognition. Employees who met their quotas received pins, plaques, and public recognition. Those who exceeded them were inducted into the "Hundred Percent Club," an honor that came with substantial financial rewards and social status within the company.
By the Numbers
CTR's Early Growth
$4MAnnual revenues when Watson joined (1914)
1,300Employees in 1914
$16MAnnual revenues by 1920
10,700Employees by 1920
But Watson's real genius lay in his ability to see the future of business machines. While his competitors focused on improving existing products, Watson was thinking about entirely new applications. The tabulating machines that CTR had inherited from Hollerith were primarily used for census work and basic statistical analysis. Watson envisioned a world where these machines would handle payroll, inventory, accounting, and eventually, every aspect of business operations.
In 1924, Watson made the decision that would define his legacy: he changed the company's name to International Business Machines Corporation—IBM. The name was audacious for a company that was still primarily domestic and generated most of its revenue from time clocks and scales. But Watson understood the power of aspiration. The name IBM was not a description of what the company was—it was a declaration of what it intended to become.
The Depression Gamble
The stock market crash of 1929 and the subsequent Great Depression presented Watson with the greatest challenge of his career. While most companies were cutting costs and laying off workers, Watson made a decision that seemed almost recklessly optimistic: he continued to invest in research and development, maintained his workforce, and even expanded production capacity.
Watson's reasoning was characteristically systematic. He believed that the Depression would eventually end, and when it did, companies would need more sophisticated business machines to manage their operations efficiently. Moreover, he recognized that the federal government's response to the Depression—particularly the Social Security Act of 1935—would create an enormous demand for data processing capabilities.
I have observed that people who worry about the future usually create one that's worth worrying about.
— Thomas Watson Sr.
The Social Security contract, which IBM won in 1936, was worth $750,000 annually and required the company to process records for 26 million workers. It was the largest data processing contract in history at that time, and it validated Watson's faith in the future of business machines. More importantly, it demonstrated IBM's ability to handle projects of unprecedented scale and complexity.
Throughout the 1930s, Watson continued to expand IBM's international operations, establishing subsidiaries in Europe, Asia, and Latin America. By 1939, IBM had operations in 78 countries and employed more than 20,000 people worldwide. Annual revenues had grown to $39 million, making IBM one of the largest business machine companies in the world.
By the Numbers
IBM's Depression-Era Growth
$750,000Annual value of Social Security contract (1936)
26MWorker records processed for Social Security
78Countries with IBM operations by 1939
$39MAnnual revenues by 1939
But Watson's most important decision during this period was his commitment to research and development. While other companies were cutting R&D budgets, IBM was investing heavily in new technologies. The company's Endicott laboratory, established in 1934, became a center of innovation in electromechanical computing. Watson understood that technological leadership was not just about having the best products today—it was about ensuring that you would have the best products tomorrow.
The War Years and Beyond
World War II transformed IBM from a successful business machine company into an essential component of the Allied war effort. The company's tabulating machines were used to manage everything from military logistics to the Manhattan Project. Watson, despite his advanced age—he was 67 when the war began—threw himself into the war effort with characteristic intensity.
IBM's contributions to the war were both visible and invisible. The company's machines processed military payrolls, tracked supplies, and analyzed intelligence data. Less publicly, IBM equipment was used in some of the war's most sensitive projects, including the development of the atomic bomb. Watson insisted that IBM provide its services to the government at cost, forgoing millions of dollars in potential profits.
The war also accelerated IBM's technological development. Working with Harvard University, the company developed the Automatic Sequence Controlled Calculator (later known as the Harvard Mark I), one of the first programmable computers. The machine, completed in 1944, was 51 feet long, 8 feet high, and contained more than 750,000 components. It could perform complex calculations in seconds that would have taken human operators hours or days.
The war has taught us that machines can think faster than men, but they cannot think better than men unless men think first.
— Thomas Watson Sr.
Watson's leadership during the war years cemented his reputation as one of America's most important business leaders. In 1945, he was awarded the Medal of Merit, the highest civilian honor the United States could bestow. But perhaps more importantly, the war had positioned IBM at the forefront of the emerging computer revolution.
By 1950, IBM's annual revenues had grown to $214 million, and the company employed more than 30,000 people worldwide. Watson, now 76, remained actively involved in the company's operations, but he had begun the process of transitioning leadership to his son, Thomas Watson Jr. The transition was not smooth—the two men had very different personalities and management styles—but Watson Sr. understood that the future belonged to a new generation of leaders who could navigate the complexities of the computer age.
By the Numbers
IBM's Post-War Dominance
$214MAnnual revenues by 1950
30,000Employees worldwide by 1950
51Length in feet of Harvard Mark I computer
750,000Components in Harvard Mark I
Watson's final years as IBM's leader were marked by the company's entry into the computer business. The IBM 701, introduced in 1952, was the company's first commercial computer and marked the beginning of IBM's dominance in the emerging computer industry. Watson, despite his age, remained deeply involved in the development of the new technology, insisting that IBM's computers be as reliable and well-engineered as its traditional business machines.
Thomas Watson Sr. died on June 19, 1956, at the age of 82. At the time of his death, IBM was generating annual revenues of more than $700 million and employed more than 70,000 people worldwide. The company he had built from a collection of small businesses had become one of the most powerful and influential corporations in the world.
