#254 John D. Rockefeller: The Founding Father of the Rockefellers

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Jun 27, 2022

This discussion dives into John D. Rockefeller's rise as a titan of the oil industry, showcasing his strategic mindset and the importance of secrecy in business. Listeners will explore his complex character and his early life lessons on integrity and ownership, drawing parallels to modern entrepreneurs. The narrative also reveals the intricate power dynamics within partnerships and Rockefeller's ruthless tactics that solidified his dominance. Ultimately, it examines his journey to unprecedented wealth and the challenges he faced in navigating his legacy.

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ANECDOTE

Rockefeller's Napoleonic Comparison

Rockefeller compared himself to Napoleon, highlighting his organizational genius and understanding of men.
Like Napoleon, he saw business as a battlefield, emphasizing the importance of a strong team and clear strategy.

ADVICE

Seek Constant Challenges

Expose yourself to experiences slightly beyond your current skillset.
Continuously seek challenges to accelerate learning and growth.

ANECDOTE

Bezos's "Owner" Mentality

An MCI veteran at Amazon suggested business-class flights for executives, but Bezos rejected it.
Bezos slammed his hand, saying, "That is not how an owner thinks! That's the dumbest idea I've ever heard."

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Random reminiscences of men and events

John D Rockefeller

This book is a personal account of John D. Rockefeller's life and career, focusing on his encounters with influential people in the business world, particularly those involved in the Standard Oil Company. It includes reflections on his early partnerships, the development of the oil industry, and various business principles. Rockefeller shares stories of his daily and intimate companionship with his partners and associates, highlighting the importance of relationships and pivotal moments in his career. The book also touches on philanthropy and the challenges of giving, as well as Rockefeller's views on the happiness and moral responsibilities of wealthy individuals.

The Everything Store

Jeff Bezos and the Age of Amazon

Brad Stone

The Everything Store is a revealing and definitive biography of Amazon.com and its driven founder, Jeff Bezos. The book chronicles Amazon's journey from its humble beginnings as a mail-order book seller to its transformation into a global retail and technology giant. Brad Stone enjoyed unprecedented access to current and former Amazon employees and Bezos family members, providing a detailed, fly-on-the-wall account of life at Amazon. The book highlights Bezos's relentless pursuit of new markets, his innovative ventures such as the Kindle and cloud computing, and how he transformed retail in a manner comparable to Henry Ford's impact on manufacturing.

Titan

The Life of John D. Rockefeller, Sr.

Ron Chernow

This biography by Ron Chernow provides an in-depth look at John D. Rockefeller, Sr., the founder of Standard Oil and one of the most influential figures in American history. Drawing on unprecedented access to Rockefeller’s private papers, Chernow reconstructs Rockefeller’s troubled origins, his single-minded pursuit of wealth, and his profound religiosity. The book also delves into Rockefeller’s philanthropic efforts, including his generous donations to the Rockefeller Foundation, the University of Chicago, and Rockefeller University. Chernow’s narrative synthesizes Rockefeller’s public and private lives, revealing a complex and multifaceted individual who was both a ruthless businessman and a devoted philanthropist. The book captures a pivotal moment in American history, documenting the post-Civil War shift from small businesses to giant corporations and featuring cameos by notable figures such as Ida Tarbell, Andrew Carnegie, and J.P. Morgan.

John D.: The Founding Father of the Rockefellers

David Freeman Hawke

This biography, the first to make use of materials in the Rockefeller Archives, delves into the life of John D. Rockefeller, exploring his rise to becoming the richest man in the world. It examines his business practices, personal values, and the contradictions of his character, such as his aversion to losing money and his generosity in giving it away. The book provides a comprehensive look at Rockefeller's role in the oil industry and his impact on corporate history.

Hard Drive

Bill Gates and the Making of the Microsoft Empire

Jim Erickson

James Wallace

This book is a detailed exposé of Bill Gates' life and the early days of Microsoft. The authors follow Gates from his childhood as an unkempt thirteen-year-old computer hacker to his present-day status as the most powerful and feared player in the computer industry. The book provides a balanced analysis of Gates' business triumphs and his driven personality, including his singular accomplishments, brattiness, arrogance, and hostility. It also delves into the intense atmosphere at Microsoft, the company's strategic positioning, and key events such as the partnership with IBM and the development of MS-DOS and Windows[1][3][5].

Invent and Wander

The Collected Writings of Jeff Bezos

Jeff Bezos

Walter Isaacson

This book provides a rare glimpse into how Jeff Bezos thinks about the world and where the future might take us. It spans topics across business and public policy, from innovation and customer obsession to climate change and outer space. Written in a direct, down-to-earth style, it offers readers a master class in business values, strategy, and execution, covering principles such as the importance of a Day 1 mindset, long-term thinking, customer obsession, and the role of culture and failure in innovation.

Softwar

An Intimate Portrait of Larry Ellison and Oracle

Matthew Symonds

Larry Ellison

In 'Softwar,' journalist Matthew Symonds offers a detailed and intimate portrait of Larry Ellison and Oracle. The book explores Oracle's often bumpy path to industry dominance and delves into the private life of Ellison, including his troubled upbringing and his relentless drive. With unlimited insider access granted by Ellison himself, Symonds captures the intensity and recklessness that have made Ellison a legend in the software industry. The book also includes a new and expanded epilogue discussing Oracle's struggle to win control of PeopleSoft and features Ellison's own commentary and criticisms on Symonds' reporting.

Last Train to Paradise

Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean

Les Standiford

This book chronicles the extraordinary story of the construction and operation of the railroad from Miami to Key West, often referred to as 'Flagler’s Folly'. It details the engineering challenges, the personal struggles of Henry Flagler, and the impact of the railroad on Florida and Key West. The narrative also includes a gripping account of the devastating 1935 hurricane that destroyed much of the railroad. The book blends historical facts with engaging storytelling, capturing the era and the characters involved in this monumental engineering feat.

When money was in fashion

June Breton Fisher

This book tells the story of Henry Goldman, a pivotal figure in the development of modern investment banking. It explores his career at Goldman Sachs, his contributions to financial history, including making Sears, Roebuck Co. the first publicly owned retail operation, and his complex relationships with influential figures like Albert Einstein. The narrative delves into the challenges faced by Henry Goldman, including his support for Germany during World War I and his later denunciation of Hitler's atrocities.

Dark Genius of Wall Street

The Misunderstood Life of Jay Gould, King of the Robber Barons

Edward J. Renehan Jr.

This book by Edward J. Renehan Jr. offers a nuanced view of Jay Gould, often reviled as Wall Street's greatest villain. It highlights his strategic brilliance and contributions to modern business, while also exploring his personal life and the societal context of his time. The biography provides insights into Gould's rise in the railroad industry and his complex business tactics.

What I learned from reading John D: The Founding Father of the Rockefellers by David Freeman Hawke.

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Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com

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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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Be like Gareth. Buy a book: All the books featured on Founders Podcast