October 20 in business history: an opera house priced at £3.5 million, a fourth gas tank, and a $259 e-reader
Three October 20ths - a Cleveland gas tank in 1944, the Sydney Opera House in 1973 and Barnes & Noble's Nook in 2009 - each turned on a number built to get a decision made, and show what the work found afterwards.
Three October 20ths, and three numbers that each did the same job. They got a decision made.
A gas company in Cleveland added a fourth storage tank for its wartime peak. A premier put a £3.5 million estimate on an opera house and started building. Barnes & Noble put $259 and a November ship date on its answer to the Kindle.
The work that followed showed what each number had really been measuring.
The tank built for the peak
At about 2:30 on the afternoon of Friday 20 October 1944, white vapour began leaking from Tank No. 4 at the East Ohio Gas Company's plant on East 61st Street in Cleveland. 1 Ten minutes later the tank exploded. A second went up about twenty minutes after that. 1
Tank No. 4 had been built in 1942 to hold reserve gas for the city's war industries. 1 The plant around it was among the most modern of its kind in the country. By 1940 part of it had been converted to liquefy, store and regasify natural gas. 2
The gas was held at minus 260 degrees Fahrenheit in four tanks. Three were spheres about 63 feet across. The fourth, the 1942 addition, was a cylinder. 3
The vapour ran along the gutters and into the catch basins, and from there into the sewers. 3 It came back up through the drains, lifting manhole covers and setting houses alight. Fire spread across 108 acres. 2
The fire killed 130 people, 98 of them East Ohio Gas employees, and destroyed 79 homes and two factories. 2 Other tallies put the dead at 131. 3
Afterwards the company worked to assure the public that the wrecked plant had held only 24 hours' worth of gas for the city. 3 The industry's answer came later. Above-ground low-pressure gas storage gave way to underground storage, and the fire led to new methods for holding gas at low temperature. 13
Decision mirror: On 16 January 2025 the Vistra battery plant at Moss Landing, California, caught fire and burned for three days. 4 The battery hall was a converted gas-fired power station with cells packed indoors, in a nickel-manganese-cobalt chemistry the industry has since moved away from. 4
A year on, the cause was still unknown and the state's investigation still open. 4 More than 15,200 battery modules had been de-energised for recycling, in what the Environmental Protection Agency calls the largest lithium-ion battery cleanup in its history. 4 The building is to be demolished to its foundation. 4
The estimate that started the work
On 20 October 1973 Queen Elizabeth II opened the Sydney Opera House. Construction had begun in March 1959, and the building was to have opened in January 1963. 5
The Queen said she understood its construction had not been "totally without problems". The final cost was A$102 million. 5
The estimate that launched the job, made in 1957, was A£3.5 million, or A$7 million, for a design that existed mostly as sketches. 5
Two of the biggest costs arrived after that estimate. Bennelong Point had never been properly surveyed; the ground turned out to be loose alluvium soaked in seawater. Carrying the podium took about 700 steel-cased concrete shafts, nearly a metre across. 6
The roof's shape had to be solved before it could be priced, and the solution came only when the shells were cut from sections of a single sphere. 5
The Opera House's own history says a more prudent plan would have been to settle the design before starting work. Premier Joseph Cahill was in a hurry. Seven months after construction began he fell ill at a meeting in Parliament House and died the next day. 6
"In a young country like ours we ought to be courageous," Cahill told the New South Wales parliament in March 1957. "We should pledge the future if need be." 6
By the middle of 1962 the estimate had reached A£13.7 million. 6 In February 1966 the architect, Jørn Utzon, resigned after a fifteen-minute meeting with the public works minister, and the state finished the building with a panel of Australian architects. 7
The state paid with a lottery. 496 draws selling 86.7 million tickets raised A$102 million between 1957 and 1986, thirteen years after the doors opened. 8
Decision mirror: Britain priced HS2, a high-speed line from London to Manchester and Leeds, at £37.5 billion in 2009 prices. 9 HS2 Ltd's own chairman conceded in 2019 that the early estimates had been "overly optimistic". His stocktake put the cost at £72.1 billion to £78.4 billion, in 2015 prices. 9
In October 2023 the Manchester leg was cancelled. In February 2025 the Commons public accounts committee reported that the transport department and HS2 Ltd still disagreed about the surviving London–Birmingham section. 10
The department's estimate was £45 billion to £54 billion, the company's £54 billion to £66 billion, both in 2019 prices, with inflation pushing the total toward £80 billion. 10
The price and the date
On 20 October 2009, at Pier 60 in Manhattan, Barnes & Noble showed the Nook. It cost $259, the same price Amazon had just set for its newest Kindle. 11
The device had a six-inch reading screen and a colour touch panel beneath it, Wi-Fi, AT&T's cellular network, and software that let a reader lend a book to one friend for 14 days. 11 It was also built to notice when a customer walked into one of the chain's 1,300 stores and push a coupon to the screen. 11
Pre-orders opened at 5:30 that afternoon, and the Nook would ship in late November. 11 By 1 December the ship date for new orders had moved to 11 January. 12
In April 2012 Microsoft paid $300 million for about 17.6 per cent of a new subsidiary holding the Nook business and the college bookshops. The post-money valuation was $1.7 billion. 13
In June 2019 Elliott Advisors bought the whole company, which then served 627 communities across all 50 states, at $6.50 a share: about $683 million including debt. 14
Decision mirror: Humane launched its AI Pin in April 2024 at $699, after raising more than $230 million. 15 By the summer, returns were running ahead of sales, and in October the company cut the price by $200. 15
HP bought most of Humane's assets for $116 million in February 2025, and the pins stopped working on 28 February. 15
Three questions for the day
- Which number in the plan you are about to approve was built to get a yes, and what would change if it doubled?
- What did your last addition to capacity assume that nobody has run at that size?
- What price or date have you already announced that the product has not yet earned?
References
- 1
- 2Cleveland Historical, "The East Ohio Gas Company Explosion"
clevelandhistorical.org
- 3Wikipedia, "Cleveland East Ohio Gas explosion"
en.wikipedia.org
- 4
- 5
- 6Sydney Opera House, "Construction begins"
sydneyoperahouse.com
- 7Sydney Opera House, "Utzon departs the House"
sydneyoperahouse.com
- 8
- 9Institute for Government, "HS2: costs and controversies," 5 October 2023
instituteforgovernment.org.uk
- 10
- 11The New York Times, "Live Blog: Barnes & Noble Unveils E-Reader," 20 October 2009
bits.blogs.nytimes.com
- 12
- 13
- 14
- 15
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