Black about heat; temperature and the properties of steam itself. After studying steam engines for a period he became the only person with enough knowledge to improve on the steam engine at that time. Even though Newcomen had already developed the steam engine before James Watt, it was about to be improved substantially without even knowing the results it would have on the industrial revolution...
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As Watt was fixing the machine he was intrigued on how much fuel it burned. He then thought about ways to reduce the fuel consumption and found out it was mostly caused by the pistons and other metal work heating cooling, always requiring extra heat.
James Watt then constructed a new steam engine with an insulated main cylinder that allowed the metal work to stay constantly hot reducing the fuel by almost 75%...