The Foundations of Success: Lessons from Rockefeller

What I learned from rereading Random Reminiscences of Men and Events by John D. Rockefeller. 

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Notes and highlights from the episode: 

It has not been my custom to press my affairs forward into public gaze. (Bad boys move in silence)

My favorite biography on Rockefeller John D: The Founding Father of the Rockefellers by David Freeman Hawke. (Founders #254)

Secrecy covered all of his operations.

Taking for granted the growth of his empire, he hired talented people as found, not as needed. — Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248) 

We had been frank and aboveboard with each other. Without this, business associates cannot get the best out of their work.

Rockefeller said Jay Gould was the best businessman he knew. Jay Gould books and episodes: American Rascal: How Jay Gould Built Wall Street's Biggest Fortune by Greg Steinmetz (Founders #285) and Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons by Edward J. Renehan Jr. (Founders #258) 

"If I have to choose between agreement and conflict, I'll take conflict every time. It always yields a better result." — Jeff Bezos

It's a pity to get a man into a place in an argument where he is defending a position instead of considering the evidence. His calm judgment is apt to leave him, and his mind is for the time being closed, and only obstinacy remains

I like doing deals with the same people. You get to know each other and build a mutual sense of trust. Today, a lot of what I do originates from associations that go back ten, twenty, thirty, even forty years. — Am I Being Too Subtle?: Straight Talk From a Business Rebel by Sam Zell.

Writing a check separates conviction from conversation. — Warren Buffett

We had with us a group of courageous men who recognized the great principle that a business cannot be a great success that does not fully and efficiently accept and take advantage of its opportunities. (Do everything and you will win)

Such was Rockefeller's ingenuity, his ceaseless search for even minor improvements. Despite the unceasing vicissitudes of the oil industry, prone to cataclysmic booms and busts, he would never experience a single year of loss. — Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248)

Last Train to Paradise: Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean by Les Standiford. #247 Henry Flagler (Rockefeller’s Partner)

Rockefeller on the impact Henry Flagler had on the beginning of Standard Oil: He always believed that if we went into the oil business at all, we should do the work as well as we knew how; that we should have the very best facilities; that everything should be solid and substantial; and that nothing should be left undone to produce the finest results. And he followed his convictions of building as though the trade was going to last, and his courage in acting up to his beliefs laid strong foundations for later years. (Build a first class business in a first class way)

Young people should realize how, above all other possessions, is the value of a friend in every department of life without any exception whatsoever.

When you recruit A players you don't tell them here's 5 things I want you to focus on. Here's your top 10 priorities. NO. You've got one priority. Destroy that priority. Do it more than anybody else possibly will. (Henry Flagler’s main priority was controlling the cost of transportation.)

Larry Ellison: 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) 

We were accustomed to prepare for financial emergencies long before we needed the funds. (Keep a fortress of cash)

It is impossible to comprehend Rockefeller's breathtaking ascent without realizing that he always moved into battle backed by abundant cash. Whether riding out downturns or coasting on booms, he kept plentiful reserves and won many bidding contests simply because his war chest was deeper. — Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248)

I learned to have great respect for figures and facts, no matter how small they were.

This casual way of conducting affairs did not appeal to me.

As our successes began to come, I seldom put my head upon the pillow at night without speaking a few words to myself: "Now a little success, soon you’ll fall down, soon you’ll be overthrown. Because you’ve got a start, you think you’re quite a merchant; look out, or you will lose your head—go steady." These intimate conversations with myself had a great influence on my life. I was afraid I couldn’t stand my prosperity, and tried to teach myself not to get puffed up with any foolish notions. (If you go to sleep on a win you’ll wake up with a loss)

I hope they were properly humiliated to see how far we had gone beyond their expectations. (Chips on shoulders put chips in pockets) 

98 percent of our attention was devoted to the task at hand. We are believers in Carlyle's Prescription, that the job a man is to do is the job at hand and not see what lies dimly in the distance. — Charlie Munger in Buffett: The Making of an American Capitalist by Roger Lowenstein. (Founders #182) 

Rockefeller on Standard Oil stock: Sell everything you've got, even the shirt on your back, but hold on to the stock.

All business proceeds on belief: Trying to run a company without a set of beliefs is like trying to steer a ship without a rudder. — Four Seasons: The Story of a Business Philosophy by Isadore Sharp (Founders #184)  

Rockefeller on his “unintelligent competition”: We had the type of man who really never knew all the facts about his own affairs. Many kept their books in such a way that they did not actually know when they were making money or when they were losing money.

A few weeks later, the newspapers announce his new partnership—revealing who had backed his bid—and the news that Rockefeller is, at twenty-five, an owner of one of the largest refineries in the world. On that day his partners “woke up and saw for the first time that my mind had not been idle while they were talking so big and loud,” he would say later. They were shocked. They’d seen their empire dismantled and taken from them by the young man they had dismissed. Rockefeller had wanted it more.  — Conspiracy by Ryan Holiday 

At best it was a speculative trade, and I wonder that we managed to pull through so often; but we were gradually learning how to conduct a most difficult business.

A blueprint for success in any endeavor: Low prices to the customer. Root out any inefficiency. Pay for talent. Control expenses. Invest in technology.

We devoted ourselves exclusively to the oil business and its products. The company never went into outside ventures, but kept to the enormous task of perfecting its own organization

The fastest way to move a dial is narrow the focus. People naturally resist focus because they can’t decide what is important. Therein lies a problem: people can typically tell you after some deliberation what their top three priorities are, but they struggle to decide on just one. What is too much and what is too little focus? Do you ever even discuss this? Most teams are not focused enough. I rarely encountered a team that employed too narrow an aperture. It goes against our human grain. People like to boil oceans. Just knowing that can be to your advantage. When you narrow focus, you are increasing the resourcing on the remaining priority. —  Amp It Up by Frank Slootman 

Two people can run the same business and have vastly different results: Perhaps it is worth while to emphasize again the fact that it is not merely capital and "plants" and the strictly material things which make up a business, but the character of the men behind these things, their personalities, and their abilities; these are the essentials to be reckoned with. 

When it comes to competition, being one of the best is not good enough. Do you really want to plan for a future in which you might have to fight with somebody who is just as good as you are? I wouldn't. — Jeff Bezos in Invent and Wander: The Collected Writings of Jeff Bezos

Don't even think of temporary or sharp advantages. Don't waste your effort on a thing which ends in a petty triumph unless you are satisfied with a life of petty success.

Study diligently your capital requirements, and fortify yourself fully to cover possible set-backs, because you can absolutely count on meeting setbacks.

Do not to lose your head over a little success, or grow impatient or discouraged by a little failure.

Know your numbers. You need to know your business down to the ground.

Money comes naturally as a result of service (Henry Ford)

Don’t do anything that someone else can do (Edwin Land)

The man will be most successful who confers the greatest service on the world.

Commercial enterprises that are needed by the public will pay. Commercial enterprises that are not needed fail, and ought to fail.

Dedicate your life to building something that contributes to the progress and happiness of mankind.

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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