#307: The World's Great Family Dynasties: Rockefeller, Rothschild, Morgan, & Toyada

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Jun 12, 2023

Dive into the fascinating world of great family dynasties, exploring how success can lead to unexpected failures. Learn how legendary leaders like the Rockefellers and Rothschilds grappled with maintaining ambition across generations. Discover Toyota's strategic innovations that transformed the automobile industry. The conversation also highlights the intricate family dynamics within business empires, revealing both the brilliance and challenges that come with legacy. It's a captivating blend of history, strategy, and family intrigue.

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INSIGHT

Success Breeds Failure

Dynastic decline is often caused by enrichment and success, not failure.
Heirs often get distracted by a life of leisure, neglecting the family business.

INSIGHT

Founder Mentality

Great founders are intensely focused on building both business and family.
Unlike later generations, founders often embody a "the more you have, the more you want" mentality.

ANECDOTE

Rothschilds' Rise from Adversity

The Rothschilds turned adversity into an asset, building trust within their family and a strong network.
Mayer Rothschild prioritized relationships over short-term profit, even selling at a loss for key people.

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Sam Walton

Made in America

John Huey

Sam Walton

In 'Sam Walton: Made in America,' Sam Walton shares his personal and professional journey, from his early life in Kingfisher, Oklahoma, to the founding and expansion of Walmart. The book is a first-person account supplemented by quotes from friends, family, and colleagues. It highlights Walton's core values, such as the importance of hard work, customer satisfaction, and competitive pricing. The autobiography also provides insights into Walton's leadership style, his approach to business, and the lessons he learned throughout his career. The book was published posthumously in 1993 and offers a compelling and inspiring look at the life of one of America's most successful entrepreneurs.

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.

Zero to One

Notes on Startups, or How to Build the Future

Peter Thiel

In 'Zero to One,' Peter Thiel argues that true innovation comes from creating something entirely new, going from 'zero to one,' rather than incrementally improving existing ideas. He emphasizes the importance of vertical progress through technology and the benefits of monopoly in driving innovation. Thiel also discusses the need for long-term planning, the importance of finding the right co-founders, and the power law in startup success. The book challenges conventional wisdom and encourages readers to think critically and aim big to build the future[2][3][5].

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.

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.

Sol Price: Retail Revolutionary

Robert E. Price

Confessions of an Advertising Man

David Ogilvy

First published in 1963, this book revolutionized the world of advertising and became a bible for the 1960s ad generation. It covers topics such as how to manage an advertising agency, acquire and retain clients, build great campaigns, write potent copy, and navigate office politics. The book is filled with Ogilvy's pioneering ideas, inspirational philosophy, and practical advice, making it an essential blueprint for good practice in business.

The House of Rothschild

Volume 1: Money's Prophets, 1798-1848

Niall Ferguson

In this meticulously researched volume, Niall Ferguson explores the early history of the Rothschild family, detailing their ascent from the Frankfurt ghetto to become one of the most influential financial dynasties in Europe. The book delves into their strategic use of financial instruments and their extensive political networks, which enabled them to dominate international finance during the 19th century.

Founder

Amos Elon

This book provides a detailed portrait of Meyer Amschel Rothschild, who rose from humble beginnings in the Frankfurt ghetto to become a leading financier in Europe. It explores not only his life but also the societal context of his time, including the challenges faced by Jews in Germany and the emergence of modern capitalism. The book offers insights into Rothschild's innovative business strategies and his role in shaping European finance.

The House of Morgan

An American Banking Dynasty and the Rise of Modern Finance

Ron Chernow

This book is a rich, panoramic story of four generations of the Morgan family and their secretive firms that transformed the modern financial world. It traces the trajectory of J.P. Morgan’s empire from its obscure beginnings in Victorian London to the financial crisis of 1987. Chernow explores the family’s private saga, their involvement in major infrastructure projects, their influence on foreign policy, and their relationships with prominent figures like Charles Lindbergh, Henry Ford, Franklin Roosevelt, Nancy Astor, and Winston Churchill. The book is a masterpiece of financial history, awarded the 1990 National Book Award for Nonfiction and selected by the Modern Library as one of the 100 Best Nonfiction Books of the Twentieth Century.

The Hour of Fate

Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism

Susan Berfield

The Hour of Fate explores the pivotal clash between Theodore Roosevelt and J.P. Morgan, focusing on the Northern Securities case and the anthracite coal strike of 1902. These events marked significant milestones in the battle to regulate big business and establish labor rights in America. The book provides a nuanced portrayal of both men, highlighting their contrasting views on capitalism and government oversight.

Dynasties

David Landes

In 'Dynasties', David S. Landes explores thirteen family businesses, highlighting their successes and failures. He examines how family ownership has contributed to the success of many Fortune 500 companies, while also detailing how extravagance and poor management led to the downfall of others. The book offers a colorful history filled with surprising conclusions about the role of family in business.

What I learned from reading Dynasties: Fortunes and Misfortunes of the World's Great Family Businesses by David Landes.

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Listen to Invest Like the Best #292 David Senra: Passion and Pain.

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(4:25) Success causes failure. As the family develops power and prestige, the heirs find many interesting and amusing things to do rather than run their business.

(6:00) Those on the margins often come to control the center.

(9:00) Great industrial leaders are always fanatically committed to their jobs. They are not lazy, or amateurs. — Confessions of an Advertising Man by David Ogilvy. (Founders #306)

(9:50) For many of the great founders “Appetite comes with eating.”

(11:00)

Rothschild episodes:

Founder: A Portrait of the First Rothschild by Amos Elon. (Founders #197)

The House of Rothschild: Money's Prophets by Niall Ferguson. (Founders #198)

JP Morgan episodes:

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance by Ron Chernow. (Founders #139)

The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism by Susan Berfield. (Founders #142)

Rockefeller episodes:

Random Reminiscences of Men and Events by John D. Rockefeller. (Founders #148)

Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248)

John D: The Founding Father of the Rockefellers by David Freeman Hawke. (Founders #254)

(13:30) Mayer Rothschild thought that long term relationships were more valuable than immediate profit.

(15:45) Nathan Rothschild has extreme levels of self belief: When his prospective father-in-law asked for proof of his prospects, Nathan told him that if he was concerned about having his daughters provided for, he might just as well give them all to Nathan, and be done with it.

(19:00) The Rothschilds developed the technique of absolute direction to perfection.

(21:15) Wal-Mart stock is staying right where it is. We don’t need the money. We don’t need to buy a yacht. And thank goodness we never thought we had to go out and buy anything like an island. We just don’t have those lands of needs or ambitions, which wreck a lot of companies when they get along in years. Some families sell their stock off a little at a time to live high, and then—boom—somebody takes them over, and it all goes down the drain. One of the real reasons I’m writing this book is so my grandchildren and great-grandchildren will read it years from now and know this: If you start any of that foolishness, I’ll come back and haunt you. So don’t even think about it. — Sam Walton: Made In America by Sam Walton. (Founders #234)

(26:00) If you want to build a family dynasty you need to have a bunch of kids. This is the number one factor for increasing the chance that your family dynasty outlives you.

(29:45) Larry Ellison didn’t have the methodical relentlessness that made Bill Gates so formidable and feared. By his own admission, Ellison was not an obsessive grinder like Gates: “I am a sprinter. I rest, I sprint, I rest, I sprint again.” Ellison had a reputation for being easily bored by the process of running a business and often took time off, leaving the shop to senior colleagues. — Softwar: An Intimate Portrait of Larry Ellison and Oracle by Matthew Symonds. (Founders #124)

(36:13) A man always has two reasons for the things he does, a good one, and the real one. — J.P. Morgan

(38:00) Andrew Carnegie celebrated too quickly. He later admitted to Morgan that he had sold out too cheap, by $100 million. Morgan replied, “Very likely, Andrew.” — The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism by Susan Berfield. (Founders #142)

(38:35) Henry Villard had come to Morgan for help in taking over Edison's company. This was a mistake. Morgan was not by nature, a helper. He was a driver. He arranged a counter coup.

(41:45) Properly understood, any new and better way of doing things is technology. — Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel. (Founders #278)

(43:30) “It is impossible to create an innovative product unless you do it yourself, pay attention to every detail, and then test it exhaustively. Never entrust the creation of a product to others, for that will inevitably lead to failure and cause you deep regret.”

—Sakichi Toyada

(45:00) You should make an effort to make something that will benefit society.

(45:30) Sol Price: Retail Revolutionary by Robert Price. (Founders #304)

(48:50) Mailman is a Gmail plugin that allows you to control when and what emails should land in your inbox. https://www.mailmanhq.com

(58:30) Rockefeller believed that he would be rich and he believed that this was because God wanted him to be.

(58:45) Rockefeller’s competitors and associates were amateurs by comparison, and he saw them for what they were.

(1:01:00) Published railway tariffs were for the small man. They were not for major shippers who could play one railroad against another while promising steady cargo. (Rockefeller’s initial edge)

(1:03:15) His clincher was to offer the victim a look at the books of Standard. A potential seller was dumbfounded to learn that standard was able to sell at less than his own cost of production. They could kill him whenever they pleased.

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