Reborn in America, I am a legendary short seller on Wall Street.

Chapter 276 A Big Deal from General Electric
Charles Coffin, the new president of General Electric, is easy to impress.

He had a broad forehead, bright but not overly intimidating eyes, a firm jawline, and lips that were always habitually pursed into a thin line that showed decisiveness, but there was often a subtle, relaxing smile at the corners of his mouth.

His gray hair was neatly combed, and his beard was carefully trimmed, adding to his sense of composure.

Today, Charles Coffin, the first president of General Electric, accompanied by the company's chief technology officer Elihu Thomson, production manager Irwin Young, and two administrative secretaries, entered the Madison Exhibition Center in search of a special "invention".

Coffin has been having a lot of worries lately, but the most important one is the decline in General Electric's stock price. The old shareholders from Edison Electric Light Company and his former employer expressed strong dissatisfaction with the stock price falling below $40 on Saturday, because it means that the new company's stock price has fallen below their cost price.

For a high-profile new technology company, this stock price is practically a death sentence for General Electric.

But what surprised Coffin even more was Mr. Morgan's statement. He actually made a public statement expressing his "distrust" of General Electric. When Coffin read this news in the newspaper, he was struck dumb!
Fortunately, in the afternoon, Mr. Morgan's secretary came in person to clarify Morgan's true meaning—this was just a trap set for "short sellers" and had nothing to do with General Electric itself.

In addition, Mr. McKinley specifically reminded himself that he had to attend today's exhibition because a special businessman there would be selling a small electric motor that "could change the landscape of home electricity use."

Coffin didn't dare to delay and arrived at the Columbus Exhibition early this morning with his men.

As he walked through the crowded area, his tall stature gave him an advantage; he could see over the heads of the crowd to the new industrial inventions displayed at each booth, and he could also see the people behind the booths.

Upon reaching booth number one, he quickly noticed a small copper motor, no bigger than a breadbox, quietly running in a corner, driving a tiny fan blade to spin at high speed. Behind this unusual invention, a blond, blue-eyed young man was giving him a genuine smile.

The moment their eyes met, Coffin knew that this was the person Mr. Morgan had recommended for him to make contact with.

"This way, my colleagues!" Coffin called out to his men.

Coffin was a very easy-going and amiable boss who never acted superior to his subordinates, so the atmosphere at GE was always very harmonious.

The group walked up to Larry's booth and stopped. Coffin bent down, looked at the small motor that was humming slightly, and felt the cool air blowing from the belt-driven fan. A look of surprise appeared on his face.

Previously, he thought his secretary, McKinley, was just asking him to cooperate in a "performance" to boost the stock price, and that he only needed to sign off on some random "new product." But when he actually stood in front of this small electric motor, his business acumen was immediately triggered.

What he saw was not just a machine, but more like a possibility that could disrupt the existing industrial power structure.

"Can I see its construction?" Coffin turned to Larry and said, a smile spreading across his face.

At the same time, technical director Elihu Thomson also stepped forward, staring at the small motor with undisguised surprise on his face!

“I’d be more than happy to do that! As long as you like this electric motor.” Larry smiled, turned off the motor switch, and after it stopped, handed the other person a screwdriver. “You can do it yourself, no problem, don’t be shy!”

Seeing Larry hand over the screwdriver, Coffin and Thomson exchanged a glance. Thomson then took the screwdriver, skillfully removed a few screws, and gently removed the motor housing, revealing the delicate copper coils, the uniquely designed armature, and the compact magnetic circuit system inside.

“Incredible…” Coffin bent down to examine it closely, his usually composed face unable to hide his astonishment. He gestured with his hands to indicate the size, and couldn’t help but exclaim.

"Its size is less than one-fifth that of a standard industrial motor... Mr. Thomson, what do you think?"

Technical Director Elihu Thomson, himself a brilliant inventor, pulled out a magnifying glass and meticulously examined every detail. His fingers hovered over the coils without touching any components, but his eyes held the burning passion of a technologist witnessing a brilliant design.

“Mr. Coffin, look here,” Thomson said, pointing to the rotor’s winding pattern, his words quickening with excitement. “This winding method is very unique and greatly reduces magnetic circuit losses. And this armature, its balance is excellent, which explains why the vibration and noise are so low at high speeds, and its efficiency is certainly much higher than that of ordinary DC motors.”

As he spoke, Thomson took a deep breath, turned to Coffin, and his tone became extremely certain, "The energy conversion efficiency of this motor has likely reached a level that our existing products can hardly match. If we apply its miniaturization concept to our small machine tools, its market prospects are..."

Coffin nodded, trying to interrupt Thomson with his eyes.

Praising the benefits of the electric motor in front of the inventor makes future acquisitions more difficult, doesn't it?

But Thomson was too excited to notice; he went on to analyze the potential applications of this small electric motor.

"Based on its high efficiency and low vibration characteristics, this motor is ideal for applications requiring smooth operation, such as precision mixing equipment in laboratories or ventilation systems in offices that require a quiet environment. Its compact design also makes it possible to integrate power into space-constrained equipment."

Other GE executives also gathered around, staring at the small motor with expressions of curiosity and seriousness on their faces.

Coffin listened to Thomson's analysis, his eyes growing brighter. He knew that GE needed this kind of innovation to tap into the emerging miniaturized and home appliance markets.

“Sir… Oh, I’m sorry, I don’t know your name. My name is Charles Coffin.” Coffin looked at Larry apologetically.

“Larry Livingston!” Larry replied with a smile.

“Your invention is truly… excellent!” Coffin said as sincerely as possible.

“Let me correct you!” Larry laughed and pointed to the motor, then said, “Its inventor was Mr. Nikola Tesla.”

When Larry said this, several GE executives looked surprised. They exchanged glances, unsure how to respond given the history of conflict between GE and Westinghouse. Only the technical director, Thomson, remained engrossed in the electric motor, wanting to touch it but daring not to, a look of pure fascination on his face.

"Mr. Tesla is truly a genius inventor! This small motor is one of the most ingenious products I have ever seen. If we can cooperate, I think the new General Electric can offer Mr. Tesla a satisfactory price."

Coffin set the tone for the subsequent talks. He affirmed the quality of Tesla's products and revealed a "business is business" attitude.

Larry nodded. "If this invention is fortunate enough to be produced and developed by General Electric, what do you plan to do?"

Coffin pursed his lips, thought for a few seconds, and then said, "...I'm not sure. I believe it will show broad application prospects, but, as my technical director just said, what I'm thinking of right now is ventilation equipment, or precision mixing equipment..."

Before Larry could finish speaking, he slapped his hand on a milky-white machine next to him with a smile.

Coffin's eyes narrowed as he fixed his gaze on the strange machine, and he stopped talking.

“This is a cash register. You might have seen it at Macy's or some other retail stores in the West…” Larry chuckled as he casually tapped a few keys on the electric cash register and pressed the checkout button. A crisp “ding” rang out, and the drawer popped open. The printer paper clicked and spit out the receipt.

Coffin's eyes widened immediately; he understood Larry's meaning almost instantly.

What kind of fan? What kind of blender?!
This is the rambling of a poor imagination when faced with a product that spans centuries!
If the power source can be miniaturized, the potential of this thing is almost limitless!

This small motor is like bringing a power-generating factory to your desktop, making many previously unthinkable products possible!

Larry, seeing the General Electric staff staring at the electric cash register, speechless, chuckled and spoke for them.
“Mr. Coffin, the value of this motor lies not in how fast it spins, but in its ability to set a new standard for the home appliance industry. I believe that in the future, there will be all kinds of electric assistants in the home, and we can work together to customize this standard.”

Coffin looked at the cash register and slowly nodded.

Meanwhile, Technical Director Thomson noticed the electric cash register and immediately focused his attention on the new machine, his face once again showing a look of shock. "I'm thinking... this little thing might really help us... open up the home market," Coffin said slowly, his eyes fixed on Larry.

Larry laughed and said, "It should be more than that; it will at least ensure that you have enough outlets for your homes when you're installing the community's electrical network!"

Coffin raised an eyebrow. "You already know we're...from General Electric?"

Larry nodded and smiled. "Yes! But my recommendation of this electric motor isn't based on third-party information, but because Mr. Tesla and I firmly believe... this thing will change the world, and naturally it will be valuable to your company!"

After a long pause, Coffin finally nodded.

After a long pause, Coffin finally spoke, "...Why don't you name a price? Or rather, can you replace Mr. Truss?"

“Sure! But this thing isn’t for sale… If you really like it, I have an idea: how about we do a tiered licensing fee plus a long-term technology alliance?” Larry said with a smile.

"I'd like to hear the details!" Coffin asked calmly, as if he had known this outcome was inevitable.

So, in front of other GE executives, Larry shared his idea.

Simply put, Larry's idea is to establish a tiered franchise partnership model.

First, it's a licensing agreement, not a sale. Larry and Tesla's fund will retain ownership of the motor's miniaturization technology and the right to further develop it, while granting General Electric exclusive rights to manufacture and sell it in the North American home appliance market.

General Electric, on the other hand, can leverage its manufacturing and distribution advantages to produce motors and quickly establish product barriers in downstream product lines.

Secondly, the benefits and risks are linked. General Electric does not need to pay a heavy, one-time patent buyout fee. Instead, based on actual production and sales, a fixed royalty fee is required for each product using this motor.

This is equivalent to directly linking Larry's earnings from motors to General Electric's sales volume; the more downstream sales, the more upstream profits.

Third, tiered incentives, or tiered billing. Larry planned to set a target output. Once GE's annual output exceeded a certain threshold, the royalty could be automatically reduced by a certain percentage.

This approach maximizes manufacturers' initiative; the more they produce, the lower the cost per unit. However, the later stages rely on high volume, and Larry and Tesla's funds will also benefit more—this is the principle of low profit margins and high sales volume.

Fourth, establish a technology alliance. Larry and Tesla will become "special technical advisors" to General Electric. General Electric will have priority access to information and authorization for any subsequent iterative upgrades to electric motors based on this core technology.

This is a long-term alliance to jointly define the power standards for the next generation of home appliances. Larry envisions that compressors, fans, and other home appliances will be able to use this combined electric motor. There will certainly be differences between different motors, but these differences will not affect Larry and Tesla's technology patents.

As Larry presented his plan clearly and calmly, Charles Coffin was also engaged in a meticulous calculation. He remained outwardly calm, but his mind raced, assessing the long-term benefits and risks behind each clause Larry proposed:

If we're talking about the idea of ​​"licensing rather than selling out...exclusive rights to home appliances in North America".

This proves that the young man is very smart.

His decision to retain licenses in other areas demonstrates that his vision extends beyond the immediate present. While GE's exclusive rights to the motors are limited to North America, this is precisely the battleground where we need them most and can best leverage our strengths. They receive patent fees for every unit sold, ensuring a profitable outcome for them, and Tesla's research can also benefit from this positive feedback.

Their feedback resulted in better electric motors, which, according to the agreement, would benefit GE first.

"Pay-per-item pricing, tiered incentives..."

That's a brilliant idea. Their tactic is simple: they want us to produce more.

In this way, Tesla wouldn't just be a hands-off manager; he would also pay attention to product quality and market feedback. If costs can be reduced, GE can better scale up production, and they will also receive more licensing fees.

Of course, a buyout would be the best option for GE, but they probably wouldn't agree to it.

Well, deep binding might be a good thing for both.

"Technology alliance, priority upgrade..."

This is where the real value lies! GE gained more than just a set of patents. Subsequent improvements to the motor, whether making it bigger or smaller, or fitting it into different machines, could potentially open up new projects with even greater profit potential.

If we can maintain a technological lead in producing these electric motors, we won't have to worry about selling them. Moreover, there are currently no similar products on the market. Once these small electric motors are produced, they will naturally inspire inventors and factories to use them to create new inventions.

After thinking for a long time, Coffin was completely convinced. He was not only amazed by the ingenious Tesla electric motor, but also by Larry Livingston's devilish patent usage concept.

The young man in front of me is offering a new approach to simply licensing production. The focus is not on tiered licensing fees, but on how his solution can most effectively promote interaction between manufacturers and inventors.

Livingston and Truss used their technology to secure a ticket to a vast market by relying on the giant ship of General Electric; while General Electric was able to use the manufacture of motors to create a brand-new business model, an electric era that had never been imagined before, apart from electric lights and power grids.

In this sense, there are new "infinite possibilities"!
Yes, this is not just a task that can be done, but one that must be done beautifully. This could even set a new paradigm for future collaborations between GE and other independent inventors.

"Cough cough!"

Coffin coughed lightly, using the moment to conceal a barely perceptible smile of approval at the corner of his mouth.

However, before confirming, he wanted to make one last attempt: "Mr. Livingston, what if we buy it outright? You and Tesla would get a large sum of money immediately."

Larry smiled. "...If we intend to sell, then, to be fair, we will bring together Westinghouse Electric, General Electric, and other European companies that are researching electrical applications for auction. Of course, that will be quite a spectacle."

Larry's words were clear: if GE didn't accept the offer, the product might end up in the hands of a competitor.

There's no need to sell patents; Larry just needs to present them with the same conditions—that is, this franchise and co-production—and countless companies like General Electric will rush to cooperate.

This is a warning, but it also states the truth.

Coffin chuckled coldly, then nodded resignedly, saying, "Alright! Mr. Livingston, let's talk about your idea of ​​a 'fixed franchise fee,' exactly how many cents?"

"The minimum purchase volume for the first year is 5000 units. The patent fee is $1.5 per unit. Any excess will be calculated at $1 per unit. If the cooperation lasts for three years, or if the total production volume of these motors exceeds 5 units, the royalty rate will be reduced to $0.8 per unit!" Larry slowly explained his plan.

This means that in the early stages of the agreement, or before the motors are mass-produced, Larry and Tesla's fund could earn between $2.25 and $3.25 in bonuses annually. This is just the initial phase; as production volume increases, the shortfall in fees will be compensated for.

Without selling the patent, this will bring a stable annual income to the patent holder, and will not hinder the subsequent development and resale of the motor.

Coffin thought for a moment, then nodded to Larry, "We can discuss the details now!"

(End of this chapter)