John Deere: Emerging Market Entrepreneur

John Deere's ability to connect with people and understand the developing world around him led to his success as an entrepreneur.

The images of John Deere, country blacksmith, are both iconic and enduring. He’s immortalized through advertising and images from the last 100 years. Milestones from his life are captured through artists’ renderings. Though often idealized and generalized, the images are fairly accurate. But they also leave out much of the John Deere story. Deere’s skills as an entrepreneur, adept at taking risks and acting on trends and information, matched his talents as a blacksmith.

Relocation. Again.

John Deere lived from 1804 to 1886.  Much of his success was built from his ability to listen, to take risks, to build relationships with people of different backgrounds and opinions, and then to act.

Deere worked in at least ten Vermont towns over the course of his early career, taking on jobs at factories and a wagon shop. He lost two blacksmith shops to fire, finally relocating to Grand Detour, Illinois, in the winter of 1836. He likely chose Grand Detour because it was founded by people like him, settlers from Vermont seeking opportunity. Amos Bosworth, a former employer, was there. Soon, Deere’s wife Demarius and their children arrived. Extended family made the journey with Demarius as well, her sister, brother-in-law, and children.

Deere’s trip to Illinois took six weeks, made by “canal boats and lakes” and then by wagon inland to Grand Detour. He passed through Chicago, a city with big dreams, but still only 3,000 residents getting their start on the frontier.

For Deere, the move west was about new opportunities in a sparsely settled state, a place where his blacksmith skills were in demand. Illinois became the twenty-first state in 1818, followed by seven more before Iowa became the twenty-ninth state in 1846. Not long after, John Deere was looking even further west.

Artist Walter Haskell Hinton depicted some of the pivotal scenes of John Deere’s career in a series of paintings in the 1930s. This one depicts the first train to cross the Mississippi River.

The country was getting smaller as the result of significant infrastructure investments, particularly in bridges, rivers and railroads. Those improvements also changed the landscape and posed real business problems for Deere’s growing plow company.

In 1845, the Illinois State Legislature incorporated the Dixon Dam and Bridge Company, its main purpose initially to erect a toll bridge and a “good and sufficient dam across the Rock River.” During the fall and winter of 1846 and 1847, contractors built a toll bridge across the river at the foot of Ottawa Avenue, connecting the north and south sides of nearby Dixon, but adding a cost to land travel.

The damming of the Rock River created another significant hurdle as Deere worked to bring in supplies and ship finished plows to areas not easily reached by wagon. Geographical challenges also derailed efforts to bring the railroad to Grand Detour. For Deere, a complete restructuring of the business, including relocation, became necessary for continued expansion. It started with a new partnership with former Vermonter, Leonard Andrus.

John Deere and shop mechanic Robert Tate came to an agreement to partner on a new plow factory, soon inducing John Gould, an accountant in Grand Detour, to join them. As they surveyed sites, the Deere & Andrus partnership was dissolved, the two splitting their sales territories so as not to directly compete — at least on paper. The terms of the agreement spoke volumes of Deere’s strategy. Tate would assume the firm’s existing business and all lands to the east of central Illinois. Deere, shrewdly, took all territories to the west. John Deere would build his business on the emerging American west, the new frontier.

That summer, the Illinois & Michigan canal was completed, providing a direct water link between the Great Lakes and the Mississippi River. In time, it would help shift the center of Midwestern trade from St. Louis to Chicago. On May 13, 1848, Deere and Andrus officially closed their business, and in mid-June Deere and Tate signed their new agreement.

City of Mills

Factory in 1849. The original 1848 factory is the small building, which was rented while the three-story building was under construction. This artists rendition is one of three similar sketches. One says 1837, one says 1847, and one has no date. According to Deere, the mason made a mistake when putting 1847 onto the building, but the error was too expensive to keep, so it remained.

Moline became the Deere family’s new home in the fall of 1848. All eight of them, including six children between the ages of four and eighteen, moved into a house being rented by Robert Tate and his wife. Eleven-year-old Charles Deere remembered that “his share of the discomfort was to occupy a bed made up on a trunk in the hall.” There was a post office, the makings of a school, and a general store. Church services were held in people’s homes, all located below the Moline bluffs.

Gold was discovered in Coloma, California, in January 1848. It took time for the news to travel, but over the next 15years, hundreds of thousands of people found their way to California. By 1848, Chicago had grown to 20,000 people. Less than two-hundred miles southwest, a town named Moline was joining a list of newly incorporated towns and villages along the Mississippi River.

Plow ad, 1858

Moline circa 1846, two years prior to Deere’s arrival, was a loose collection of entrepreneurs and immigrants from the eastern part of the country and other countries. Deere’s new partner, Robert Tate, was an Englishman who first arrived in the United States in 1831. In Moline they met Napoleon Buford, a former Kentuckian living in neighboring Rock Island. Among his business was a partnership with Scotsman James Fergus. Together they ran a foundry. Moline had a flour mill built by David Sears, and a lumber mill built by Spencer White. Sears was appointed Moline’s first postmaster in 1844.

John Deere met with all of them on his first visit to Moline. Surrounded by timber and coal, Moline is nestled between the Mississippi and Rock Rivers. Moline’s boosters were busy, working to bring the railroad to the area and to raise funds to build the first railroad bridge across the Mississippi. The railroad would forever alter the landscape. Westward track expanded from 2,760 miles in 1840, to 8,600 miles in 1850, to 28,900 miles in 1860.

John Deere’s relocation of his business to the gateway to the new American west was more than coincidental. The signs of growth and settlement were all around him. And the 1850s, a period of unprecedented westward migration, put Deere in the right place at the right time.

Emerging Markets, Emerging Technologies

News moved slowly in the 1840s, but local newspapers kept people informed of everything – from political news, to weather, to departures and arrivals of residents and their guests. And after February 1854, when the railroad reached Moline, there were many visitors. The completion of the Chicago and Rock Island railroad bridge, connecting Illinois to Iowa in 1856, literally bridged the east to the west.

Farmland was being claimed across the state, and the prospects of an innovative plow manufacturer like John Deere were never better. In the 1850s, the number of farms in Illinois alone doubled to 143,000. The cash value of crops in Ohio, Indiana, Illinois, Michigan, and Wisconsin exceeded $1 billion in 1860, a 40 percent increase over 1850. Investment in farm machinery followed. The value of implements and machinery on farms increased 156%, to $245 million, between 1850 and 1860, and the cash value of farms more than doubled.

The John Deere Plow Manufactory, successor to Deere, Tate & Gould, which dissolved in 1852, continued to grow in both size and complexity. From a workforce of 16 building 2,136 plows in 1849, employment grew to more than 50 people producing 14,000 plows in 1857. The John Deere named had earned a strong reputation for quality products. “If I should buy any Moline plows,” said Missouri hardware and implement dealer Joseph Jaeger, “I would buy none but Mr. John Deere’s because that plow has a large reputation in the country.”

In 1860, Deere was one of more than 2,000 plow makers operating in the United States. Plows were big business nationwide. Agricultural equipment accounted for one percent of the nation’s total industrial output in 1860, with plows making up over 16 percent of that output. But manufacturers were still local, with a few, mostly based in Pittsburgh, having regional distribution. The uniqueness of soil types, high cost of production, sales and delivery, were barriers to overcome. There were also still plenty of blacksmiths who continued to build and repair all types of farm machinery, including plows. This is where Deere again set himself apart.

Consistency in production was perhaps the biggest challenge to manufacturers. Equipment was crude, from saws to grinding and polishing wheels. Power, which was generated from the river, was unpredictable. The performance of implements was as unique as the one-off designs. Deere’s vision, though, was to build in quality through consistency. That way, customers knew what they were getting every time. It’s why Deere’s first patent, in 1864, was for a molding process. His goal was consistency in process to create consistency in product. It set him apart.

A Diverse Workforce

Relationships were critical on the frontier. There was no national currency. Gold and silver coins were rare, and counterfeit bank notes were common. States printed their own currency, and many transactions were based on credit, or on barter arrangements. Deere employees were often paid from goods in the general store. But John Deere made it work.

From the 1850s, Moline was a diverse community, comprised of migrants and immigrants. Easterners from Vermont, New Hampshire and New York settled in Moline, while neighboring Rock Island was largely settled by southerners. As the riverfront manufacturing district grew, so too did the need for skilled labor, and for the procurement of supplies from outside of the United States. For Deere, that meant building a relationship with the nearby Bishop Hill Colony, a Swedish settlement in north-central Illinois.

Steel was being shipped from England. Surely having an Englishman, Robert Tate, as a partner, was critical to that arrangement. Workers were arriving from Sweden and Belgium. Andrew Friberg worked as the plow works foreman until leaving for a rival in the 1860s. Hjamer Kohler began working as a translator for Deere in 1868, translating letters from Sweden, and translating advertisements and articles for Swedish newspapers. It was later said that when the train stopped in Moline, the engineer would yell “Johnny Deere town,” because it was the only English that would be understood by the passengers coming to Moline for work. By the 1870s, Swedish was the predominant language at the John Deere Plow Works.

Unlike his father, Charles Deere attended school and was trained in business. He was the right man to take Deere & Company into the next generation.

The Next Generation Takes Over

John Deere was essentially retired by the 1860s, continuing his community and political activities until his death in 1886. The business was sold, not handed over, to son Charles. Unlike his father, whose technical education came at the forge and whose business acumen came from experience, Charles attended school and was trained in business. He was the right man to take Deere & Company into the next generation.

But for John Deere, oft remembered as a blacksmith, it was his ability to connect with people and to understand the developing world around him, that drove his success. John Deere the blacksmith had truly become John Deere, entrepreneur.

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John Deere: Emerging Market Entrepreneur

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