#254 John D. Rockefeller: The Founding Father of the Rockefellers
Founders
The Rise and Reckoning of a Business Titan
This chapter examines John D. Rockefeller's journey to becoming America's wealthiest individual after Jay Gould's death, highlighting his discomfort with the label of being the richest. It also discusses the dissolution of Standard Oil and how this event ultimately contributed to his status as one of the world's first billionaires while he navigated his responsibilities as a business leader.
What I learned from reading John D: The Founding Father of the Rockefellers by David Freeman Hawke.
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[0:07] He transmitted messages in code and secrecy covered all of his operations.
[0:39] Rockefeller compared himself to Napoleon.
[2:20] He could think quicker and along more individual and original lines than any of them.
[2:35] It is always hard to successfully control what you don't understand.
[3:32] Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248)
[7:27] By the time I was a man — long before it —I had learned the underlying principles of business and the rules of business as well as many men acquire them by the time they are 40. I needed no one to advise me about the nature of transactions with which I had been carrying on since childhood.
[8:59] Random Reminiscences of Men and Events by John D. Rockefeller. (Founders #148)
[10:55] You should try to expose yourself to experiences that are slightly ahead of your skillset or understanding and you should do so constantly.
[13:48] A veteran of long-distance provider MCI, Price came to Amazon in 1999. He blundered early by suggesting in a meeting that Amazon executives who traveled frequently should be permitted to fly business-class. Bezos often said he wanted his colleagues to speak their minds, but at times it seemed he did not appreciate being personally challenged. “You would have thought I was trying to stop the Earth from tilting on its axis,” Price says, recalling that moment with horror years later. “Jeff slammed his hand on the table and said, ‘That is not how an owner thinks! That’s the dumbest idea I’ve ever heard.’ — The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone (Founders #179)
[18:42] He saw that posted rates, supposedly fixed, could also be negotiated. All was not as it seemed on the outside.
[20:45] He was the greatest borrower I ever saw.
[22:12] What if the president of a bank refused to make me a loan? That was nothing. That made no difference to me; simply meant that I must look elsewhere until I got what I wanted.
[26:07] Hard Drive: Bill Gates and the Making of the Microsoft Empire by James Wallace and Jim Erickson (Founders #140)
[26:41] Lost from view is the Rockefeller that Cleveland knew in the 1860s— a vigorous, alert gentleman with a quiet, but extraordinary personality.
[29:10] Small egos do not build giant companies.
[30:23] When Money Was In Fashion: Henry Goldman, Goldman Sachs, and the Founding of Wall Street by June Breton Fisher. (Founders #255)
[33:10] The customer-experience path we've chosen requires us to have an efficient cost structure. The good news for shareowners is that we see much opportunity for improvement in that regard. Everywhere we look we find what experienced Japanese manufacturers would call muda, or waste.* I find this incredibly energizing. I see it as potential-years and years of variable and fixed productivity gains and more efficient, higher velocity, more flexible capital expenditures. — Invent and Wander: The Collected Writings of Jeff Bezos (Founders #155)
[34:54] Other refiners groused about these restrictions, but in general they accepted them as facts to live with. Rockefeller refused to do so.
[38:55] Last Train to Paradise: Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean by Les Standiford. (Founders #247)
[40:15] You don’t want turnover on your core product team. Knowledge compounds. Don’t interrupt the compounding. — Softwar: An Intimate Portrait of Larry Ellison and Oracle by Matthew Symonds (Founders #124)
[47:47] 1. You raise money so you can increase production. 2. Use your increased production to get better rates on transportation than other refiners. 3. Use your increased profits —because you have better transportation —to buy your competitors. 4. You continue to find secret sources of income.
[55:23] Most simply doubted that Rockefeller's plan would work. John, it cannot be done, they said.
[56:13] It was ruthless efficiency and hyper competence.
[1:00:07] Rockefeller loves secret allies.
[1:00:31] The secret ownership of other companies was so well preserved that often a refiner enraged by Standard’s ruthless tactics would refuse its offer to buy him out and sell instead to a local competitor—unaware that he had in fact sold out to Standard.
[1:02:01] He believed that Standard Oil stock is the most valuable thing in the world to own and always bought more of it.
[1:05:57] Check out how Rockefeller turns an expense into a profit center: Standard purchased a half interest in Chess, Carley & Company, the largest distributor of refined oil to the South and Southwest. Together they purchased a number of the newly introduced bulk tank cars. Chess-Carley shipped turpentine from southern pine forests to Cleveland, where the cars were emptied and the turpentine was sold in the local market. The tank cars were then filled with kerosene and sent back to Louisville for distribution. In a single swoop the huge expense of shipment by barrels had been eliminated.
[1:09:22] He proceeded in the same steady, methodical way that a farmer plowed a field.
[1:13:47] The danger Potts and the Pennsylvania railroad posed to his creation convinced Rockefeller that the time had come to pick a fight with the world's largest industrial corporation.
[1:23:20] Rockefeller would have horse-drawn carriages drive up and down the streets and sell oil directly.
[1:28:28] I think it is fair to say that the strong men who were competitors in the oil refining business, the aggressive men in the best financial condition, and the most intelligent, indeed the class of men who would be most likely to survive in the competitive struggle, were the men who were most likely to take up our idea of cooperation.
[1:33:09] Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons by Edward J. Renehan Jr.
[1:35:38] Jay Gould was the single most unsettling force ever to appear on the American industrial scene.
[1:36:22] Among wheelers and dealers of his day Gould had no peer.
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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth
Be like Gareth. Buy a book: All the books featured on Founders Podcast
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