By Bryan Caplan
I heartily recommend David Plotz’s The Genius Factory: The Curious History of the Nobel Prize Sperm Bank. It staddles genres, but you can see it as a work of business history. Robert Graham, the founder of the “Nobel sperm bank,” first made his fortune in the eyeglass industry. By the standards of old-fashioned eugenicists, he was a pretty nice guy… but that’s not saying much. When Graham entered his second career as a sperm banker, the world laughed at him. Yet in the end, Plotz gives Graham credit where credit is due: Whatever his failings, he revolutionized the sperm banking industry by demoting the doctor in favor of the consumer:
Robert Graham strolled into the world of dictatorial doctors and cowed patients and accidentally launched a revolution. The difference between Robert Graham and everyone else doing sperm banking in 1980 was that Robert Graham had built a $70 million company. He had sold eyeglasses, store to store. He had developed marketing plans, written ad copy, closed deals. So when he opened the Nobel Prize sperm bank in 1980, he listened to his customers. All he wanted to do was propagate genius. But he knew that his grand experiment would flop unless women wanted to shop with him. What made people buy at the supermarket? Brand names. Appealing advertising. Endorsements. What would make women buy at the sperm market? The very same things.
What did this mean in practice?
[Graham] marketed his men. Graham’s catalog did for sperm what Sears, Roebuck did for housewares. His Repository catalog was very spare – just a few photocopied sheets and a cover page – but it thrilled his customers. Women who saw it realized, for the first time, that they had a genuine choice. Graham couldn’t guarantee his product, of course, but he came close: he vouched that all donors were “men of outstanding accomplishment, fine appearance, sound health, and exceptional freedom from genetic impairment.”
Graham’s consumer-oriented entrepreneurship got women’s attention:
Before the Repository, fertility doctors had ordered, women had accepted. Graham cut the doctors out of the loop and sold directly to the consumer. Graham disapproved of the women’s movement and even banned unmarried women from using his bank, yet he became an inadvertent feminist pioneer… Mother after mother said the same thing to me: she had picked the Repository because it was the only place that let her select what she wanted.
The Nobel bank never held more than a small market share, but it sent shockwaves through the industry:
Where Graham went, other sperm banks – and the rest of the fertility industry – followed. California Cryobank, Xytex, Fairfax Cryobank, and the other major sperm banks started expanding their donor descriptions from a few lines to dozens of pages and recruiting the most gifted men they could find.
Other sperm banks, recognizing that they were in a consumer business, were soon publicizing their ultrahigh safety standards, rigorous testing of donors, and choice, choice, choice. This is the model that guides all sperm banks today.
Verily, “commodification” is a beautiful thing.