What you should know about the Model T

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The Ford F-series pickup trucks were first released 50 years ago and since that time, more than 40 million have been sold, or an average of about 800,000 per year.

In each of those 50 years, it has been the best-selling truck on the market and was also the number one or two best-selling vehicle overall. An amazing product success story.

But how did it start? Henry Ford’s first company was built around his quadricycle, which was a precursor to the automobile. Ford was a great inventor, but not much of a marketer. Ford’s Detroit Automobile Company filed for bankruptcy in 1899.

Undeterred, Ford went at it again with the Henry Ford Company. Guess what? Cool engineering, but no business sense. Bankruptcy in 1901.

Conventional wisdom, which we love to challenge, would say to Ford, “Give it a rest, get a real job.” But Ford just couldn’t walk away.

Two strikes, but there was Ford again, starting the Ford Motor Company. Needless to say, it worked and the first Model T rolled off the production line in 1908.

The Model T was only available in black (it was the cheapest paint color) and the first year’s model cost about $850. Ford’s genius was the assembly line operation he built and was constantly improving. By the end of the Model T’s production run 20 years later, the cost of the car was under $400.

During those 20 years, there were 15 million Model T’s sold. Not bad, but let’s adjust this number for the change in population over the last 100+ years. In the time of the Model T, the U.S. population was about 80 million, compared with 330 million today.

So, those 15 million sales would have been more than 60 million in today’s population. (Obviously, this is an over-simplified calculation, but it does make a point about the dominance of the Model T.) On an annual basis, the adjusted sales number would have been 3.0 million, compared to the puny 800,000 in average annual sales for the F-Series.

Nothing was going to get in the way of Henry Ford’s vision of bringing automobiles to the masses. Not even two bankruptcies. Ford was lucky since the turn of the century was glorious time for invention.

Once Ford had his feet under him, he was nearly unstoppable. When factory turnover of staff became an existential risk to his business, Ford doubled daily wages and held part of it as deferred compensation, to be paid after the employee completed a year of service. The new wage was enough so that his employees could do something else as well – it was enough so employees could afford a Model T.

In previous posts, we have talked about the need for any startup to have a Crazy Guy (“guy” referring to a man or a woman in this case). The Crazy Guy combines new energy with a maniacal drive toward the goals of the company.

Crazy Guys are also smart, shrewd, and motivate others by example. Without a Crazy Guy, I do not think a startup venture ever can make it.

Ford was an archetypical Crazy Guy. Smart, driven, and flawed. But his unrelenting energy combined with his insight, changed the world. He didn’t let a couple of pesky failures slow him down. We should all be so lucky.

Key Takeaways

• Never doubt the resolve of a true entrepreneur. Henry Ford, Wilbur and Orville Wright, Bill Gates and Paul Allen, Steve Jobs, Oprah Winfrey, Mr. Beast, Susan Wojcicki, the list is long. This people don’t give up.

• Ford made his fortune not by inventing the automobile, but by improving the production process so that the automobile could be afforded by the masses. Why be first when being second let’s you do it much better? Ever hear of a company called Apple?

• His first two failures must have been devastating to Ford. It appears he did learn from failure (one of our favorite themes) and his third company stands as a global icon more than 100 years later.

Things I think about

The Tesla Model Y was the best-selling car in the US in 2023. But it ranked fifth in overall vehicle sales, behind three pickup trucks and an SUV. (Yes, the Ford F-series was the number one selling vehicle.)

Recommended Reading

The People’s Tycoon
Henry Ford and the American Century

Edison
Complete bio by famed author Edmund Morris.

Losing the Signal
The untold story of the rise and fall of Blackberry.

The Rot Economy
Blog post from technology contrarian Ed Zitron on how big tech only cares about profits, not innovation.

Thinking in Bets
Poker champ turned consultant teaches us how to evaluate risk.