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#248 Titan: The Life of John D. Rockefeller
1 hours 50 minutes 37 seconds
🇬🇧 English
Speaker 1
00:00
The life of John D. Rockefeller was marked to an exceptional degree by silence, mystery, and evasion. Even though he presided over the largest business and philanthropic enterprises of his day, he has remained an elusive figure. A master of disguises, he spent his life camouflaged behind multiple persona and shrouded beneath layers of mythology.
Speaker 1
00:22
He lingers in our national psyche as a series of disconnected images, ranging from the aggressive creator of Standard Oil, brilliant but bloodless, to the elderly man dispensing dimes and canned speeches for newsreel cameras. It's often hard to piece together the varied images into a coherent picture. This has not been for a lack of trying. Earlier in the century, Rockefeller inspired more prose than any other private citizen in America, with books about him tumbling forth at a rate of nearly 1 per year.
Speaker 1
00:57
He was the most famous American of his day. Yet even in his heyday of popular interest, he could seem maddingly opaque, with much of his life unfolding behind the walls of his estates. Rockefeller often seems to be missing from his own biographies, moving through them like a ghostly, disembodied figure. When Random House proposed that I write the first full-length biography of Rockefeller since the 1950s, I balked.
Speaker 1
01:24
How could 1 write about a man who made such a fetish of secrecy? When I told them that I couldn't write about Rockefeller unless I heard his inner voice, the music of his mind, as I phrased it, they brought me the transcript of an interview privately conducted with Rockefeller between 1917 and 1920. As I poured over this 1700 page transcript, I was astonished. Rockefeller, stereotyped as taciturn and empty, turned out to be analytical, articulate, even fiery.
Speaker 1
01:59
He was also quite funny with a dry Midwestern wit. This wasn't somebody I had encountered in any biography. I was now eager to do the book. Even with such massive documentation I had the frustrating sense that I was confronting a sphinx.
Speaker 1
02:16
Rockefeller trained himself to reveal as little as possible, even in private letters, which he wrote as if they might someday fall into the hands of a prosecuting attorney. The 20, 000 pages of letters that Rockefeller received from his more outspoken business partners proved a windfall of historic proportions. They provided a vivid portrait of the company's Byzantine dealings with oil producers, refiners, transporters, and marketers, as well as railroad chieftains, bank directors, and political bosses. Like many moguls, Rockefeller was either glorified by partisan biographers who could see no wrong or vilified by critics who could see no right.
Speaker 1
03:00
This one-sidedness had been especially harmful in the case of Rockefeller, who was such an implausible blend of sin and sanctity. The story of John D. Rockefeller transports us back to a time When industrial capitalism was raw and new in America, and the rules of the game were unwritten, more than anyone else, Rockefeller incarnated the capitalist revolution that followed the Civil War and transformed American life. He embodied all of its virtues of thrift, self-reliance, hard work and unflagging enterprise.
Speaker 1
03:37
That was an excerpt from the book that I reread and the 1 I'm gonna talk to you about today, which is Titan, the life of John D. Rockefeller by Ron Chernow. So I originally read this book a few years ago for episode 16. I didn't really know how to do a podcast back then, so I think it's too important of a book to understand the history of entrepreneurship to not redo again.
Speaker 1
03:54
The book is almost 700 pages. There's a lot to get to, so I'm going to jump right in. 90% of what I want to talk to you about today is going to be how he built standard oil. There's a few things in his early life that I think we have to cover first.
Speaker 1
04:07
So then it's easier for you and I to understand like why he might have made the decisions he did as he builds 1 of the most valuable companies the world has ever seen. I want to jump to 1 the sentence in the introduction that I think is extremely important, because this guy is 1 of Rockefeller's most important traits, and it says, once Rockefeller set his mind to something, he brought awesome powers of concentration to bear. And when I read that, It made me think of 1 of my favorite quotes from 1 of my favorite entrepreneurs Edwin land the founder of Polaroid if you read I've read 5 biographies on Edwin land. He talks about the importance of concentration over and over again I think this is probably his best quote on the importance of concentration And this is what land said my whole life has been spent trying to teach people that intense concentration for hour after hour can bring out in people resources they didn't know they had.
Speaker 1
04:55
And as you and I go through the way Rockefeller built Standard Oil, it'll become very obvious that he spent just as much time spent working, he spent thinking and concentrating on what he was actually doing. So I want to talk a little bit about his parents. He becomes like this blend between his mother and his father. He winds up having a deep hatred for his father and a deep unending love for his mother.
Speaker 1
05:17
Rockefeller's father was a snake oil salesman and a bigamist. He winds up having multiple families throughout his entire life and he loved money but hated work. So this is Rockefeller assumes the exact opposite posture as his father. So it says this is about his father throughout his life.
Speaker 1
05:32
He extended considerable energy on tricks and schemes to avoid plain hard work. And then sure now describes why understanding this part of Rockefeller's life is so important to understanding how he built his company. This marriage fused the lives of 2 highly dissimilar personalities setting the stage for all the future heartache, marital discord and chronic instability that would so powerfully mold the contradictory personality of Rockefeller. And his dad Bill is this crazy character throughout the entire book.
Speaker 1
06:00
What I mean by crazy. Well this is before Rockefeller was born. He marries Rock Rockefeller's mom. Her name is Eliza and decides to say hey we're going to move in this my lover.
Speaker 1
06:12
We're going to call her a housekeeper and I'm going to have babies by both of you simultaneously. So it says Bill roughly disabused Eliza of any high-flown romantic notions that she might have had about matrimony. Far from renouncing his girlfriend, Nancy Brown, he brought her into the camped house as a housekeeper and began having children alternately by wife and mistress. This affair wasn't the only indignity visited upon Eliza.
Speaker 1
06:36
She was often abandoned by Bill." This is so important because you realize Rockefeller was like an old man from a young age and part of this is that he felt when he goes and starts looking for his first job, which I'll spend a lot of time talking about. He felt like I have to take life seriously. I have to support. It's almost like he was a father of a family of 5 at 16 because his dad would constantly like run away.
Speaker 1
06:57
So it says it's not the only indignity visited upon Eliza. She was often abandoned by Bill. Bill remained a restless and defiant individualist who preferred life beyond the pale of society. And since it was unpredictable when Bill would be back or if he had ever returned, Eliza had to learn how to do a lot with a little.
Speaker 1
07:15
And so the 1 tool that she used for this was frugality. And this is something that this is a trait that she would instill in Rockefeller from a young boy that even in when he's in his 90s, he was so he's 97 years old. This trait never leaves him. So it says Eliza became extremely frugal and drilled her children in thrifty maxims such as willful waste makes willful want.
Speaker 1
07:37
And I have some crazy stories later on about just how frugal Rockefeller was even when he was 1 of the wealthiest people on the planet. So let's go to Rockefeller as a boy. There's 3 traits that are taking place on this on this page that he keeps with him through his entire life. He always praised the benefits of adversity.
Speaker 1
07:54
He was always thinking and he was always persistent. So it says, in contrast to his father's disdain for manual labor, John gloried in the rigors of country life, which he came to believe toughened him for later industrial struggle. His frugal boyhood hardened an already stoic nature and made him strong against later adversity. This is how his neighbors remembered him at this time.
Speaker 1
08:16
To other people, he often seemed abstracted. They remembered him with a deadpan face, walking along country roads, lost in thought, as if unravelling deep problems. He was a quiet boy. He seemed always to be thinking.
Speaker 1
08:28
He was a slow learner, but patient and persistent. Rockefeller would later describe himself accurately as reliable but not brilliant. A few pages later, there's more examples I wrote on this page, traits from his early life that he also used in building his business. We can see that there was something extraordinary about the way that this boy pinpointed goals and doggedly pursued them without any trace of childish impulsiveness.
Speaker 1
08:55
He is like 11-12 years old at the time. When playing checkers or chess he showed exceptional caution. Remember, this is just a metaphor for how he built and managed Standard Oil. When playing checkers or chess, he showed exceptional caution, studying each move at length, working out every possible counter move in his head.
Speaker 1
09:13
I'll move just as soon as I get it figured out, he told opponents who tried to rush him. You don't think I'm playing to get beaten do you? To ensure that he won he submitted to games only where he could dictate the rules. Despite his slow ponderous style once he had thoroughly mulled over his plan of action he had the power of quick decision.
Speaker 1
09:35
And really now that I've read this book 2 times, I don't want to oversimplify it, but really studying the way that he built his company, I was like, oh this is what happens when amateurs try to compete with a professional. He was so smart, efficient, and ruthless you just cannot believe it. And 1 thing that enhanced all those traits was the fact that John was a true believer. In his heart, 100% for the rest of his life, thought that God gave him a gift and his gift was making a lot of money so then he could give it all away.
Speaker 1
10:04
And the reason that's important is because true believers are not going to have like the normal self-doubts that others or maybe even his competitors will. And this is something he picked up when he was really young. So it says, early in life he learned that God wanted his flock to earn money and then donate money in a never-ending process. I was trained from the beginning to work and to save Rockefeller explained.
Speaker 1
10:25
I have always regarded it as a religious duty to get all I could honorably and to give away all I could. I was taught that way by the ministers when I was a boy." So we're still in the childhood but think about this. He's got traits that are beneficial for when you're building a business combined with a core belief that this is what God wants him to do, combined with a mother who put a lot of pressure on his shoulders from a very early age because her husband was running around the country half the year and then she never finds out but fathering and having other entire families. I lost count how many children he sired I don't know maybe 10, 15 he's got a gang of kids So let's go to that.
Speaker 1
11:04
He had his mother's ability to bear a large burden for long periods in an unruffled way. Many neighbors testified that the unflappable Eliza never lost her temper, never raised her voice, never scolded anyone, a style of understated authority that John inherited. I brought that point out because that's how he ran his business. No 1 ever saw him get angry.
Speaker 1
11:26
He never raised his voice. He wouldn't yell at employees. None of that. From his mother, he learned economy, order, thrift, and other virtues that figured so largely in his success at Standard Oil.
Speaker 1
11:38
Eliza trained her children to reflect coolly before making decisions. Her frequent maxim was, we will let it simmer. This was a saying that John employed throughout his business career. And this is important.
Speaker 1
11:50
She really did see her oldest son as gifted. She saw qualities in him still invisible to the world at large. Because she confided in him and gave him adult responsibilities, he matured rapidly and acquired unusual confidence. That's an understatement.
Speaker 1
12:04
As he put it, I know that in my own case, I have been greatly helped by the confidence imposed in me since early boyhood. He learned to see himself as a reluctant savior. That is not hyperbole. Not only reluctant saver of his family.
Speaker 1
12:17
He thought it was like the world's savior of the entire industry. The entire oil industry must be brought under my control for the good of the world. That is how he viewed it. So he says he learned to see himself as a reluctant savior, taking charge of troubled situations that needed to be remedied.
Speaker 1
12:33
So let's skip ahead to 1 of the times where his father comes, you know, his father would pop up randomly. They would never know what happens. Maybe he stays for a month, maybe he stays for a few days. But the ruthlessness that is very evident in Rockefeller's career, I believe was learned from his father.
Speaker 1
12:49
The bane of John's boyhood wasn't poverty so much as chronic worry about money. And it's easy to see how cash came to see like God's bounty, the blessed stuff that relieved all of life's cares. After the family spent anxious weeks or months running up credit bills and waiting for father's return, Bill would abruptly materialize, like a jolly Santa Claus, swimming in money. He would compensate for his long absence by extravagant shows of generosity with his children.
Speaker 1
13:16
For John, money became associated with these brief but pleasurable interludes when father was at home and the Rockefellers functioned as a true family." So remember this is his opinion of his father when he's still a child. He is not yet of the age where he's old enough to take the measure of the man that his father actually is.
Speaker 2
13:37
And so these are some of
Speaker 1
13:38
the lessons that his father's trying to drill into him as a very young age. To his son he conveyed the message that commerce was a tough competitive struggle and that you were entitled to outwit the other fellow by any means. He tutored John in a sharp, relentless bargaining style.
Speaker 1
13:55
And so 1 of the things that Rockefeller had to learn to overcome is the fact that everybody knew that his dad was, you know, a scam artist, that he lied all the time, that he abandoned his family. And so everybody in the town, in the neighborhood would obviously gossip about his father. And so John had to learn defense mechanisms to deal with that. And so he learns this as a kid, but later on, he was almost impervious to criticism.
Speaker 1
14:19
He would ignore... It's almost like he built his own world within the world and a lot of that was just because he didn't really care about society's opinions so said a boy was such a father needed to screen out malicious gossip and cultivate a brazen indifference to community opinion. This bred in him a reflexive habit of secrecy, a fear of the crowd, a deep contempt for idle chatter and loose tongues that lasted his entire life. When John was a child, Bill would urge him to leap from his high chair into his waiting arms.
Speaker 1
14:58
1 day, he dropped his arms, letting his astonished son crash to the floor. Remember, Bill lectured him, never trust anyone completely, not even me. Never mind the crowd, he told his son. Keep away from it.
Speaker 1
15:15
Attend to your own business. The boy who faced down the vicious talk of neighbors would be extremely well prepared to walk unscathed and even defiant through the turbulent controversies that later surrounded his life. This reminded me when I read the biography of William Randolph Hearst all the way back on Founders number 145. He was raised in an environment like this.
Speaker 1
15:36
I remember I told you that I went to visit his house. It's not even his house. It's called the Hearst Castle. It's in California.
Speaker 1
15:41
And 1 thing that was apparent when you read that biography is that Hearst did not like society. In fact, there's a quote from that book that says he didn't care about what people thought of him and he despised society. That's not an exact fit of the way I think about Rockefeller, but it's close. It's like an echo of that idea.
Speaker 1
16:00
And then there's this long section that just describes all the different work and that John was doing as a young boy. He's like 10 or 11 at this point. But I just want to pull out 1 sentence because I feel this sentence is really Rockefeller's MO that he uses for his entire career. Rockefeller analyzed work, broke it down into component parts, and figured out how to perform it most economically.
Speaker 1
16:22
2 more sentences spread out that give you an idea of how he was as a boy and how he was his whole life in my opinion. 1 was not supposed to dwell on insults, but keep one's sights fixed on the practical goal ahead. And then the second thing is, I have no recollection of John excelling at anything. I do remember he worked hard at everything, not talking much, and studying with great industry.
Speaker 1
16:47
And so he's a teenager, he's about to go on the job hunt, he wants to work full-time, he wants to support his entire family. 2 things before I get there. 1, he's all business even as a teenager. In an extremely peculiar arrangement, John, aged 15, was already lending small amounts of money to his father and charging interest.
Speaker 1
17:05
He was never sentimental when it came to business. He simply charged his father what the going rate was. And then second, an early example of this maxim that John would repeat throughout his life that success comes from keeping the ears open and the mouth closed. This is a neighbor describing how he was different from other teenage boys in the neighborhood.
Speaker 1
17:22
He sat quietly in his chair listening to what was being said. So for education, John took correspondence courses. You can kind of think like if you took like a college-level class to the mail is the way I would think about that. So he would take correspondence courses to supplement his education.
Speaker 1
17:36
He wanted to learn about business and bookkeeping. And then I want to get into 1 of the best days of his life and he's just, he says he's not brilliant. I would, I think he's just being humble because the way he goes about everything is just really, really smart. So he's taken this course and says it taught double entry bookkeeping and the essentials of banking, exchange, and commercial law.
Speaker 1
17:53
Now remember, this is the 1850s. These are very rudimentary, right? By the time his studies had ended, he had turned 16, And he was ready to flee the traumas of his family life by focusing his energies on a promising business situation. So he's in Cleveland and his full-time job is looking for a job.
Speaker 1
18:11
And so he says, I went to the railroads, to the banks, and to the wholesale merchants. At each business, he asked to speak to the top man. Then he got straight to his point. I understand bookkeeping and I'd like to get to work.
Speaker 1
18:22
Despite incessant disappointment, he doggedly pursued a position. This went on each day, 6 days a week for 6 consecutive weeks. He approached his job hunt devoid of any doubt or self pity. He could stare down all discouragement.
Speaker 1
18:40
I was working every day at my business, he said. The business of looking for work. That's just a really smart way to think about this. I put in my full time at this every day.
Speaker 1
18:50
He was a conformed exponent of positive thinking. And then these 2 sentences gives you a perfect idea of the kind of person that we're dealing with. When he exhausted his list he simply started over from the top and visited the businesses 2 or 3 times. Another boy might have been crestfallen, but Rockefeller, this is 1 of the most important sentences in the entire book in my opinion, but Rockefeller was the sort of stubborn person who only grew more determined with rejection.
Speaker 1
19:19
6 weeks later he finally finds a job and this is what he said about that. All my future seemed to hinge on that day and I often tremble when I ask myself the question, what if I had not gotten that job? And he takes it seriously for the rest of his entire life. This is job day.
Speaker 1
19:34
I don't care about my birthday, I care about job day. He turns it into a holiday to be celebrated for the rest of his life. For the rest of his life, he would honor September 26th as job day and celebrate it more than his birthday. So he's working for these merchants and their primary business is like produce and grain.
Speaker 1
19:53
I just want to pull out a couple highlights here because we see these personality traits that he keeps for his entire life. He is extremely precise, extremely disciplined, extremely frugal and extremely success obsessed rather work educated him work liberated him and work supplied him with a new identity. I learned to have great respect for figures and facts, no matter how small they were, he said. He chided his rivals.
Speaker 1
20:15
He hated, like, sloppiness. Many kept their books in such a way that they did not actually know when they were making money on a certain operation and when they were losing. He closely reviewed every bill, confirming the validity of each item and carefully adding up the totals down to a penny. He pounced on errors, even if it was just a few cents, and reacted with scornful amazement when the boss next door handed his clerk a lengthy, unexamined plumbing bill and said, please pay this.
Speaker 1
20:41
Rockefeller was appalled by such cavalier indifference. He displayed a bulldog tenacity that took people by surprise. This is a great, this is the way I think about him. The language that Chernow is about to tell you and I right here, it really, like the visual matches in my mind perfectly as I'm reading the book.
Speaker 1
21:03
He was pale and patient as an undertaker. He would wait until the debtor capitulated. He collected payment from people as if his life depended upon it. And 1 idea that you and I talk about over and over again because it pops up in these books and I think it's completely opposite of how People that are not founders entrepreneurs think is that belief comes before ability?
Speaker 1
21:23
You don't accomplish great things and then think that and then believe you can do it now You believed it way before that accomplishment ever came Right and so what he's about to say here keep in mind He is saying this this statement that he would repeat over and over again to everybody at this point He talked a lot more later in life. He would they call him the Sphinx But what the statement he's about to make he is making a dollar a day at this point in his life and he'd go around yelling, I am bound to be rich. Belief comes before ability. Rockefeller derived pleasure from work and never found it cheerless drudgery.
Speaker 1
21:57
The business world entranced him as a fountain of inexhaustible wonders. He was so obsessed that he was worried. He thought it was like almost like sinful so he tries he tries to set up a system so he doesn't so he works less and he fails at it. So says 1 day he decided to throttle this obsession.
Speaker 1
22:15
I made a deal with myself not to be seen in the office after 10 o'clock p.m. After 10 p.m. Within the next 30 days it is telling that the young man made such a pledge to himself and equally revealing that he found it impossible to obey So then they go into great detail about his Baptist upbringing, the way he thinks about religion. I just want to give you an overview so you understand.
Speaker 1
22:37
His life was family, church, and work. And that's it. And his religious beliefs informed his approach to work. It says Rockefeller never wavered in his belief that his career was divinely favored.
Speaker 1
22:49
When something good happened, he thought it was God intervening. He believed that. When Benjamin Franklin... So there's a lot of people, Rockefeller, like every single other person we studied, obviously studied people, great people that came before him.
Speaker 1
23:01
So he talks about what he learned from Benjamin Franklin a lot, Joan of Arc, Jesus obviously, Napoleon, these are people he mentions over and over again. So it says, when Benjamin Franklin was a boy, his father had pounded into his head the proverb that when you see a man diligent in his business, he shall stand before kings. Rockefeller often repeated this. And this is more in his belief system.
Speaker 1
23:22
He didn't think you just got rich and you stop working. It's like no, you work hard, God blesses you, you get rich and then you keep making money because the more money you can accumulate the more money you can actually give away which that's why he ran the largest business of his day but also the largest philanthropic enterprise of his day. Even those who amassed great wealth continued to labor since they worked for God's glory and not their own. The gravest sins according to Rockefeller were wasting time indulging in idle chatter and wallowing in luxurious diversions.
Speaker 1
23:50
He would preach that the man who would be rich must be thrifty. Rockefeller was convinced that he had a God-given talent for making money and was obligated to develop it. I know I'm repeating myself. I'm repeating myself because these kind of statements are in the entire book even after he is like a 40-year retirement he was like 97 he's still talking about this over and over again so if you were born and lived let's say from 1850 to a little bit after the Great Depression, you saw a ton of financial panics and depressions.
Speaker 1
24:20
So they're going through 1 right now. This is in 1857. And he's seeing, because he does the books for his employer, that they're not in a good economic position. And so Rockefeller's approach, like the thoroughness that he had to his job, which was very rare and unusual, is going to open up the opportunity to become a founder, to be able to work for himself.
Speaker 1
24:39
And so, you and I talk about this all the time, this is stacking opportunities, doing the best job I possibly can right now because I have no idea what opportunity this will open up 5 years from now, and once I get to that next opportunity, like you just see further and further. If you just keep taking your craft seriously, keep doing the best you can do, there's gonna be a series of unpredictable opportunities that you can grab that would not be available to you if you didn't do the first steps. And so Rockefeller would not have had the opportunity to become his own produce merchant if he didn't put every other bookkeeper and competitor to shame. So since
Speaker 2
25:09
in charge of the books,
Speaker 1
25:10
he could see that the firm had been nearly bankrupted by the economic slump and faced a bleak future. Rockefeller wasn't 1 to dawdle in an unprofitable concern. His career had few wasted steps and he never facilitated when the moment ripened for advancement.
Speaker 1
25:26
In 1958 he was approached with an attractive opportunity. This guy named Maurice Clark, who's a few years older than Rockefeller, worked down the street at 1 of Rockefeller's competitors. He's like, hey, why don't we team up and we open up and we do our own produce house? And the reason that Clark approached him is because of this.
Speaker 1
25:42
Rockefeller already had the reputation of being a young bookkeeper of more than ordinary ability and reliability and Clark proposed that they form a new partnership for buying and selling produce and Rockefeller is over the moon I was I was a great thing to be my own employer he said I swelled with pride and so when he was 95 this is how he looked back at this time in his life Oh how blessed the young men are who have to struggle for a foundation and a beginning in life I shall never cease to be grateful for the 3 and a half years of apprenticeship and the difficulties to be overcome all along the way. So again, that's another example. He's constantly praising adversity in early life as giving him strength to deal with all the stuff he had to deal with later on in his life. And it's perfect timing.
Speaker 1
26:28
They're going to have exactly 1 year in business before the Civil War breaks out and they're going to make, the Civil War makes Rockefeller his first fortune. But he's not matched up with, he's got Clark and then they take on this other partner called, with the last name of Gardner. They're not on Rockefeller's level. And so there's something I read in the biography of Joseph Pulitzer.
Speaker 1
26:48
I think it's Founders Number 135 if I remember correctly. But there's a line that was fantastic because Pulitzer did the same thing when he was starting out. And it said, Pulitzer was an annoyance to those less inclined to work. You could think of Rockefeller in the same way.
Speaker 1
27:01
Rockefeller was bound to clash with Gardner and Clark, for he approached his work with unflagging humorless energy. And this is such a fantastic little, like he's constantly repeating things to himself and like kind of controlling his inner monologue, and I love this. This is what
Speaker 2
27:16
he would tell himself at
Speaker 1
27:17
this point in his career. Your future hangs on every day that passes. Life was a serious business to me when I was young.
Speaker 1
27:23
He felt, and the reason is because he has to support his entire family. He can't fail. That's just not an option for him. He felt contempt for Clark and Gardner's easygoing ways and they found him both a killjoy but also a welcome and a grating presence in the office.
Speaker 1
27:38
So he's kind of you know maybe not somebody you want to be friends with but really good at their job is the way to think about that. When Gardner purchased an interest in a $2, 000 yacht Rockefeller roundly condemned this extravagance. Now this is crazy that this is happening because they're like 6 or 7, maybe 8 years older than he is. He's very early 20s, maybe 21 at the time.
Speaker 1
27:58
They're close to 30. And so Listen to what he does here. Gardner walks up to his desk. Hey John, a little crowd of us are going to take a sail on the yacht.
Speaker 1
28:05
I'd like you to have go along. I think it would do good for you to get away from the office and get your mind off business for a while. His young partner wheeled on him savagely. George Gardner, he sputtered.
Speaker 1
28:15
You're the most extravagant young man I ever knew. The idea of a young man like you just getting a start in life owning an interest in a yacht? You're injuring your credit at the banks, your credit and mine. No I won't go on your yacht.
Speaker 1
28:29
I don't even want to see it. Later on Rockefeller learned to camouflage his business anxiety behind a studied comm. I almost think of it like a mask. He could put on his mask.
Speaker 1
28:40
You had no idea what he was thinking. It's amazing how much self-control this guy had. So later on he'd camouflage this anxiety behind a steady calm, but during these years it was often graphically displayed. And so the business is doing really well, they're making a good profit, and he does something that's smart here.
Speaker 1
28:58
And so the way I describe, he would talk to himself every night before he goes to bed to make sure he's like okay I have a great start but don't mess this up. It's very common for people you know they're poor now they're comfortable they let their foot off the gas and the way I describe this is what he's saying is like if you go to sleep on a win You wake up with a loss. Rockefeller refused to let that happen to him. He went through the week cautioning himself with proverbs taught by his mother, such as pride goes before a fall.
Speaker 1
29:25
When he rested his head on a pillow at night, he warned himself, because you've got to start, you think you're quite a merchant. Look out or you will lose your head. Go steady. Are you going to let this money puff you up?
Speaker 1
29:37
Keep your eyes open and don't lose your balance." And so that's what he's saying at the point at this time in his life. This is what he's saying as an older man looking back at this point in his life. These intimate conversations with myself had a great influence on my life. I was afraid that I could not stand my prosperity and I tried to teach myself not to get puffed up with any foolish notions.
Speaker 1
29:58
And so he talks about it a great deal. The bottleneck at the beginning of his company or city the big being of his yeah, I guess company or career The bottleneck was always money. It was not opportunity, which is very fascinating because later on in life, you know, he talks He criticizes like bankers and Wall Street a lot So true now picks up on this like contradiction and if you study the early career with how he we talked about later on his Life he says for all his mistrust of bankers Rockefeller owed much of his rise to their assistance. The hardest problem all through my business career was to obtain enough capital to do all the business I wanted to do and could do given the necessary amount of money.
Speaker 1
30:33
Why is that important? Because as a partner in a produce house, Rockefeller was strategically positioned to profit from the Civil War. I talked a little bit about this when I studied his partner Henry Flagler last week, so I'm not going to repeat too much of that. It's in the podcast, the last podcast I did if you
Speaker 2
30:47
haven't listened to it But it says
Speaker 1
30:48
though only 21 at the outbreak of the war John was effectively in the position of a middle-aged father responsible for a family of 6 So I think it's important for 2 reasons 1. I can't fail I have too many people that are dependent on me right and number 2 you see this he's about to break up
Speaker 2
31:03
with his
Speaker 1
31:04
partners. And the reason is, because it almost might seem like a contradiction when you study his career, because he was like super frugal, down to a penny, did this his entire life, no matter how big his business is. But he was also default aggressive with the amount of money that he would invest and borrow into the the growth of his business. And so a few years into the Civil War it says their annual profits had soared to almost 4 times what they had earned during their first year.
Speaker 1
31:27
So then they had 1 year before the Civil War and then the Civil War takes their business out, and they were turning profit. I don't think Rockefeller ever had a single year of loss in his entire career. It's insane. But now that number is 4 times bigger, and this is the result.
Speaker 1
31:41
While he was still in his 20s, the Civil War had converted Rockefeller into a wealthy man, giving him the, this is so important because, again, think about this idea of stacking opportunities. I took my bookkeeping job, right, it's the only job I can get, I took it more serious than anybody else. This drew the attention of other people, right, the other people in the industry. It's like, oh, John's on another level, right?
Speaker 1
32:01
That opportunity, taking that opportunity seriously, led me to be invited into a partnership to be my own boss and own my own company, right? Then something out of my control, the Civil War, greatly increased the value of that opportunity. And the fact that I made so much money from that second opportunity is going to lead me to the third opportunity, which is oil. This is so important.
Speaker 2
32:24
While he was still in his 20s, the
Speaker 1
32:25
Civil War had converted Rockefeller into a wealthy man, giving him the funds to capitalize on a new industry, then flowering in the northwest corner of Pennsylvania. For all the substantial profits booked by Rockefeller during the war, they would be pocket change compared to the profits flowing from the rivers of black gold that were now gushing. And what is the demand that's going to be behind all this future profits?
Speaker 1
32:48
When we're talking about oil, we're not talking about the stuff that goes in automobiles yet. That actually happens when he's retired. We're talking about kerosene. We're talking about this is before the invention of the light bulb.
Speaker 1
33:00
In the 1850s, whale fisheries had failed to keep pace with the mounting need for illuminating oil, forcing up the price of whale oil and making illumination costly for ordinary Americans. That meant only the affluent could afford to light their houses every evening. Both urbanization and industrialization sped the search for an Illuminant that would extend day into night and so that's why later on he kind of rejected all his critics because he's like Before this this commodity right you only the rich people could afford to have light at night in their homes I made it so everybody could And I just want to pull up 1 paragraph to you before we get how he gets into oil which is very interesting because it starts out as a side business. It's this is what I've tried to explain a few times and I think Chernow does a better job than I did it just why it's so important to understand that this was a religious mission for him.
Speaker 1
34:02
It's not the same thing as most people starting businesses. So it says Rockefeller always viewed the industry through rose-tinted spiritual lens and this materially aided his success for his conviction was that God had given kerosene to suffering mankind gave him unswerving faith in the industry's future. That's important because we got to talk about the fact that he had a longer term perspective than all of his other competitors. I'll get to that later.
Speaker 1
34:26
Don't forget that part. It gave him faith, his unswerving faith in the industry's future, enabling him to persist where less confident men stumbled and faltered. And so his partner, Clark, has 2 brothers that are in the very beginning of the oil business. They're the ones that convinced them to make an investment.
Speaker 1
34:44
And so it says Rockefeller and Clark pledged $4, 000 for half the working capital of a new refining venture. This is the industry that he's going to monopolize. He's not going to monopolize it with these partners, though. Placing the 24-year-old Rockefeller squarely in the oil business in 1863 Of the initial 4, 000 investment, he said, it seemed very large to us.
Speaker 1
35:05
Very large. Although they were not dreaming that oil would ever supersede their main commodity business, they considered it a little side issue. Okay, so now we're in it. This is where I have a ton of highlights and notes because this is where he's going to start building his oil business.
Speaker 1
35:21
The spot chosen for the new refinery tells much in miniature about Rockefeller's approach to business. A mile and a half from downtown Cleveland, it seemed at first glance a weird place to put a new refinery. But for Rockefeller the inconvenience was outweighed by the fact that it would soon adjoin new railroad tracks. And why is that important?
Speaker 1
35:42
Because that gave him the ability to ship by water or over land. Rockefeller gained the critical leverage that he needed to secure preferential rates on transportation, 1 of the biggest themes of his entire career. Preferential rates on transportation, it's also why so many people hated him. Which is why he agonized, and this is really important too, this last sentence is really important because we've seen this over and over again in history of entrepreneurship which is why he agonized over plant locations throughout his career he agonized over them he did not outsource it to other people If it is of critical importance to your business, you have to do it yourself.
Speaker 1
36:19
This is why Sam Walton picked out the locations himself. He approved the first 130 Walmarts. We also saw this with Elon Musk when he was building SpaceX. He personally approved the first 3, 000 employees at SpaceX because they were critically important to his business.
Speaker 1
36:38
Let's continue on this page. There's a ton of things that are happening. No job is below you. We saw this with Harry Snyder, the founder of In-N-Out.
Speaker 1
36:44
Sell your byproducts, control that business process. If it's important to your business, try to bring it in-house. This is something Rockefeller does over and over again. And then we'll see that there's a saying that Charlie Munger says over and over again about the importance of betting heavily.
Speaker 1
36:58
That the world does not offer an unlimited source of great ideas. When you find 1, you've got to go all in and we see that Rockefeller believed that and it's actually going to cause his breakup with the partners in a few pages from now. So it says in the very early days Rockefeller was not detached from the practical side of refining as he was when his empire later grew and he withdrew to his office. He was often seen at 6.30 in the morning at the refinery going into the shop, helping roll out barrels, stack hoops, or cart out shavings.
Speaker 1
37:26
Since a residue of this is a byproduct part, since a residue of sulfuric acid remained after refining, Rockefeller drew up plans to convert it to fertilizer. The first of many worthwhile and extremely profitable attempts to create byproducts from waste materials. Very few other people remember this is the very beginning of the industry. So it's not like there's a lot of things they had to invent for themselves.
Speaker 1
37:47
Shaped by a childhood of uncertainty, he aspired to be self-sufficient in business, no less than in life. This is what it meant about control. If there's a business process, if there's an offender that was important to his business, he would find a way to do it himself. Rockefeller reacted to a perpetual shortage of barrels by deciding to build his own.
Speaker 1
38:05
When he was disgusted by a suspicious error in a plumber's bill, he told his partner, Let's hire a plumber by the month. Let us buy our own pipes and all other plumbing material. The refinery also did its own hauling and loading. Such was Rockefeller's ingenuity, his ceaseless search for even minor improvements, that within a year refining had overtaken produce as the most profitable side of the business despite the uneasing vicissitudes, can't pronounce that word, of the oil industry prone to cataclysmic booms and busts, he would never experience a single year of loss.
Speaker 1
38:43
That is insane. I almost feel like we should have a minute of silence thinking about how insane that is. If Rockefeller entered the refining business with some reservations, he soon embraced it as the big, bold opportunity that he had craved. Never 1 to do things halfway, he plunged headlong into the business and his enthusiasm overflowed into his home life.
Speaker 1
39:05
Sharing a room, this is before he's married or anything, he's sharing a room with his brother William. William's going to be 1 of his partners in Standard Oil for basically their entire lives. Sharing a room with his brother William, He often nudged him awake in the dead of night. I've been thinking out a plan to do so and so, he would ask.
Speaker 1
39:20
What do you think of this scheme? He's like 24, 25 years old when he's doing this. Keep in mind. Rockefeller leaped into oil with a zest reminiscent of his absorption in the Baptist church.
Speaker 1
39:30
I just wanna read 2 quotes from you from Charlie Munger both expressing the same idea 1 comes from poor Charlie's almanac The other comes from the book the towel of Charlie Munger He says the wise ones bet heavily when the world offers them that opportunity They bet big when they have the odds and the rest of the time they don't. It's just that simple." Second quote, you should remember that good ideas are rare and when the odds are greatly in your favor, bet heavily. And this is more about the early days of the oil industry. Really think about what's happening here is Rockefeller's early enough to build a compounding defensible advantage but late enough to know that this industry won't disappear.
Speaker 1
40:08
And so it says the business in the early years was sort of goldfield rush he reminisced. Great fortunes were being made by some of the first adventurers and everything was carried on in sort of a helter-skelter way. Rockefeller represented the second more rational stage of capitalist development when the colorful daredevils and pioneering speculators would give way to the men who had grown up in the hard school of life, calculating and daring at the same time, above all temperate and reliable, shrewd and completely devoted to their business." That is a great... It's amazing that that sentence can compress the idea and the traits that Rockefeller used for his business.
Speaker 1
40:49
He was calculating and daring at the same time. He was reliable, shrewd, and completely devoted to his business. By the time Rockefeller arrived in the oil regions, it looked as if oil would be more than a transient phenomenon. Look that way to him.
Speaker 1
41:04
He's gonna have a massive advantage over other people who only wanted to book short-term profits. This point is made on the very next page. Rockefeller succeeded because he believed in the long-term prospects of the business and never treated it as a mirage that would soon fade. He had an unfailing knack of knowing who would help or hinder him in his career.
Speaker 1
41:24
So he's having beef with his partners at this point. Let me repeat that. He had an unfailing knack for knowing who would help or hinder him in his career. He recruited the very best.
Speaker 1
41:32
His team was by far, his entire team as we go through this, you realize like, oh, all he's doing is recruiting other founders. So the management that ones are managing and running Standard Oil for decades were all people that had run their own businesses. And he not only did that for partners, but let's say you could beat him at something, whether you're an attorney or like a supplier, he's like, oh, this dude was better than me at that, okay, I'm going to go hire him. It was just really, really smart how he approached everything.
Speaker 1
41:59
So He's partnered
Speaker 2
42:00
with the Clarks at the point
Speaker 1
42:01
he said the Clarks were the first of many business partners to underrate the audacity of the quietly calculating Rockefeller who bided his time as he figured out how to get rid of them. And this is 1 of my favorite stories I'll get there in a minute. I just want to bring out something that's really important.
Speaker 1
42:19
1 of the best quotes from Michael Jordan I ever heard was that successful people listen. Those who don't listen don't survive long. Rockefeller would agree if he heard Michael Jordan say that. He listened closely to what other people said and filed away as much information as he could, repeating valuable information to himself until it was memorized.
Speaker 1
42:35
There was a humility in this eagerness to learn. As he said, quote, "'It is very important to remember "'what other people tell you, "'not so much what you yourself already know.'" So we're gonna see what him and his partners are fighting over and really we're gonna get to 2 things before we get there because this is something you and I talk about over and over again. It appears over and over again in entrepreneurship. Bad boys move in silence.
Speaker 1
42:57
Rockefeller was not going to tell adversaries what he was thinking or what he was going to do next, right? As part of Rockefeller's silent craft and habit of extended premeditation, he never tipped off his adversaries to his plans for revenge, preferring to spring his reprisals on them. He's about to do this to his partners. And why?
Speaker 1
43:15
Because Rockefeller's like this, you know, good Christian dude in his viewpoint, but he also has these things where it like kind of slips from time to time, where you can see that he has just this extreme distaste and disgust for people that don't take their work as seriously as he does. Rockefeller wanted to be surrounded by trustworthy people who could inspire confidence in customers and bankers alike. He drew a characteristic conclusion. The weak immoral man was also destined to be a poor businessman.
Speaker 2
43:44
And so he wanted you
Speaker 1
43:45
to take it seriously but he also wanted you to be bold. He did not come into this industry to take part. He came in to take over.
Speaker 1
43:52
His idea is like I'm just gonna control everything. Remember we talked about this over and over again how robber barons they just think a lot differently. It's like I don't know I don't want to buy up like all the competitors I want to control the whole industry so says Rockefeller disclosed an incident that cast light on his relations with his partners they were very angry when I borrowed money to extend our business of when I took to extend our business of refining oil they came to him Why have you borrowed a hundred thousand dollars? That's an insane amount of money by the way at this time.
Speaker 1
44:20
Why you have borrowed a hundred thousand dollars they exclaimed as if it was some sort of offense. So they had a hard time understanding. He's super frugal on 1 end of the spectrum, extremely frugal, not going to let the business waste a penny. But he's also, on the very other end of the spectrum, willing to spend and to borrow and to go big.
Speaker 1
44:38
I will borrow every single dollar the banks will give me because I believe, remember, he's got this messianic belief in what he's doing. He's this weird combination of extreme frugality and extreme boldness. You know, he's like, I can't believe they're upset. Like if I'm doing something bad.
Speaker 1
44:51
Yeah, I bought $100, 000 at a time where I think, you know, the average American would make something like $10 a week or something like that. Like, that's a lot of money. So it says, it was a stupendous sum, but all Rockefeller could see was that his partners lacked his audacity. His partners were irked by both Rockefeller's frugality and his extravagant spending, his tight-fisted control of details, and his advocacy for unbridled expansion.
Speaker 1
45:20
These are traits that may seem conflicting in their minds that actually work extremely well together. Daring in design, cautious in execution, it was a formula he made his own throughout his career. By 1865, Rockefeller was 25 years old and decided it was a time for a showdown with his partners. And this sentence I'm about to read to you is the 1 sentence I remembered from years ago.
Speaker 1
45:43
I actually remembered it differently, but it says, he wasn't the sort to persist in a flawed situation. So I had remembered that as he wasn't 1 to persist in a flawed situation. He was gonna either fix it or get out of it. So he has belief in what he's doing, belief in the future of the industry.
Speaker 1
46:00
His partners want him to slow down he refuses so this is where they figure out this is where the partnership is going to dissolve I'm actually gonna pick up a different book and read from it because I read the story there's this book conspiracy I think it did it for like founders number 33 or 32 I can't remember it's this book written by Ryan holiday And I think his description of what's about to happen in the book is actually really good. So I'm going to read from that right now. So it says there's a story about a young John D. Rockefeller who found himself stuck with bullying, corrupt business partners.
Speaker 1
46:24
He wants to break with them, but he can't because they control the votes. They're squeezing his business to death. They abuse him. They talk about forcing him out.
Speaker 1
46:32
What is he to do? Quietly, Rockefeller lines up financing from another oil man and waits. Finally, there is a confrontation. 1 of them tries to threaten him.
Speaker 1
46:41
Do you really want to break this up? Yes, he says, and calls their bluff. They go along knowing that their firm's assets will have to go to auction. They're sure they're gonna win.
Speaker 1
46:51
Rockefeller doesn't have that kind of money. He bids. They bid. He bids.
Speaker 1
46:56
They bid. Rockefeller wins the auction. A few weeks later, the newspaper announces his new partnership, revealing who had backed his bid and the news that Rockefeller at 25 years old is the owner of 1 of the largest refineries in the world. And this is what Rockefeller said about that.
Speaker 1
47:15
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. They were shocked. They had seen their empire dismantled and taken from them by the young man that they had dismissed. Rockefeller had wanted it more.
Speaker 1
47:34
Now back to Titan. Having emerged as his own boss, he would never again feel his advancement blocked by short-sighted, mediocre men. This is all about control and self-belief. He thought that most other entrepreneurs in the oil industry sucked.
Speaker 1
47:50
And he didn't want them on his team. And part of this again goes back to his just insane self-belief. Rockefeller had unyielding faith in his own judgment. And so this is a description where we are in not only the career of Rockefeller, but also in history.
Speaker 1
48:04
By the end of the Civil War, Rockefeller had established the foundations of his personal and professional life and was set to capitalize on the extraordinary opportunity beckoning him in post-war America. From this point forward, there would be no—this is such a great sentence to think about the way Rockefeller approached it. This is what's 1 of the things I most admire about him. From this point forward there would be no zigzags or squandered energy only a single minded focus on objectives that would make him both the wonder and terror of American business.
Speaker 1
48:35
This made me think of a paragraph I remember from his autobiography. I read that for Founders number 148 if you want to listen to it after this episode. And he said, 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.
Speaker 1
48:52
That task starts now. This is why Rockefeller is just in the right business at the right time. Remember, this is before the light bulb was invented. Thomas Edison is 18 years old at this point in the story.
Speaker 1
49:05
Says the war, the Civil War just ended, right? But it had stimulated growth in the use of kerosene. Why? Because it cut off supply of southern turpentine, which had yielded, which was a key ingredient, in a rival aluminum.
Speaker 1
49:17
So imagine you have a product and there's all these world events that are taking place where it's gonna knock out of 2, you have, there's 3 competitive products, you own 1 of them, right? Or you're about to monopolize the use of 1 of them and your other 2, quote unquote, competitors are knocked out by the war. So it says the war had stimulated growth and use of kerosene by cutting off supply of southern turpentine which had yielded an ingredient in a rival illuminant. The war also disrupted the whaling industry and led to the doubling of whale oil prices.
Speaker 1
49:47
Moving into the vacuum, kerosene emerged as the economic staple and was primed for a furious post-war broom. 1 thing Rockefeller was adamant about from the very beginning, no 1 will have lower costs than me and then I'll get into the point that you're building a business, stress is normal, it's just something that you got to work through. As a self-made man in a new industry, Rockefeller was not held back by president or tradition which made it easier for him to innovate. He continued to value autonomy from outside suppliers.
Speaker 1
50:17
That's just a fancy way of saying if that business process is important, I'm bringing in-house. At first, he had paid $2.50 for barrels before he showed in an early demonstration of economies of scale that he could manufacture them himself more cheaply. Soon, his firm made thousands of blue barrels daily for less than a dollar per barrel. So I was paying $2.50 from his outside supplier.
Speaker 1
50:40
Rockefeller was always convinced he could do things better than other people. He gets it down to a dollar. So $1.50 times a thousands of day. Remember we're in the 1860s.
Speaker 1
50:49
This is crazy. Other refiners bought and shipped. Oh, this is wild to me too. So you need timber right in your factory.
Speaker 1
50:55
So other Cleveland refineries would buy and ship timber to their shops where Rockefeller had the wood sawed in the woods, then dried in kilns, reducing its weight and slicing transportation costs in half. So now all the timber that I need, my Competitors are paying double, right? They're paying more than double for barrels. This is something he just keeps killing people on cost.
Speaker 1
51:21
And this is, I'll get to it later. I'll make the point later on because I know I have notes on this. But the idea is just like, you have lower costs means more profit. More profit means he starts buying out his competitors.
Speaker 1
51:31
It's just like this virtuous cycle that he uses over and over again. But this is like an insane, I can't stress this enough, he had like this insane attention to every single process where it's just like at 1 point they're like soldering, I think they're closing barrels or something like that. And he's like, well, how many drops of solder do you use? They're like 40.
Speaker 1
51:50
Have you tried using 38? They tried 38, it leaks. They tried a 39, it doesn't. And he's bragging about that later in life where he's just like, that 1 thing saved me hundreds of thousands of dollars a year because of the scale of my operation.
Speaker 1
52:02
He never, he's sitting, and he applies this at home too. I have highlights, I'm not gonna include in the podcast, but it's an old man sitting there watching like the people that work in his house cut like little pieces of wood for the fire. And he's like, well, how long is that? So they're like 14 inches.
Speaker 1
52:19
He's like, try 12. They try 12, they notice no difference. Just like, that's just the way he thought. And he applied that to everything.
Speaker 1
52:26
And then he talks about the stress of trying to build a business in a brand new industry. There's a ton of uncertainty. He says in this early period Rockefeller was a chronic warrior who labored under a great deal of self-imposed stress. I shall never forget how hungry I was in those days.
Speaker 1
52:39
I stayed out of doors day and night. I ran up and down the tops of freight cars when necessary. I hurried up all the boys. And I think later in life he talks about all the stress and anxiety during this period like even as the richest person on the planet it wasn't worth it.
Speaker 1
52:53
He's like I never recovered from all that stress. I recently learned this maxim from Sam Hinckley that I think is fantastic And he says you should always have the longest view in the room. That's exactly what Rockefeller did here. There were 2 types of oilmen.
Speaker 1
53:06
Those who thought the sudden boom was an unstable mirage and who cashed in their profits as soon as possible. And those like Rockefeller who saw petroleum as the basis of an enduring economic revolution. Having the longest view in the room benefits Rockefeller later on because a lot of his competitors that he buys out, they're so short-sighted, they just sell because they're like, okay, I can just make money right now. And there was so many of them that had that short-term thinking, which I think is completely natural to humans, by the way.
Speaker 1
53:35
And it's just that greatly benefited this just slow methodical march to complete industry domination that plays out in this book. We got to go back to just how stressed he was and the fact that his bottleneck is always going to be money and then eventually he's just going to get so much more money that that becomes like his main asset and that's what usually helps him put a lot of his competitors out of business. At this stage of his career he turned inescapably to the bankers. 1 can hardly recognize how difficult it was to get capital for active business enterprises at this time.
Speaker 1
54:05
In the beginning we had to go to the banks almost on our knees to get money and credit. When dealing with the banks he facilitated between caution and daring." This is wow. So kind of like the euphoria and terror you know entrepreneurial emotional roller coaster you and I always talk about. He often went to bed worrying about how he would repay his large volume of loans.
Speaker 1
54:22
Then he awoke in the morning refreshed by a night's sleep and determined to borrow even more. It's impossible to comprehend Rockefeller's breathtaking ascent without realizing that he had always moved into battle backed by abundant cash. Whether riding out downturns, because remember, you're talking over the first like 40 years, 30, I think he retires from Standard Oil like 40 years, I think he ran it for 30 or 40 years, I can't remember, There had to be, you know, 3, 4 major, you know, financial panics in there. And he takes advantage of every single 1 because he's got a ton of cash when everybody's kind of running away.
Speaker 1
54:54
It's impossible to comprehend Rockefeller's breath taking a scent without realizing he always moved into battle backed by an abundant cash, whether riding out downturns or coasting on booms. He had he kept plentiful reserves, so in good times and bad, right, and won many bidding contests simply because his war chest was deeper. That's really important because at this stage, remember, he's primarily a refiner, right? That's important because there was a finite number of competitors.
Speaker 1
55:20
So he could kind of wipe out the entire board and by the time other people jump in, he's just too powerful to stop. At 1 point, he controls like 90% of every single important part of his industry. The next nearest competitor is like 20 times less his size, to give you an idea of just the difference between the company he's building and the company all of his competitors are trying to build. And then we see again the benefit of impatience and really what I told you I think was on the Alexander the Great podcast, of what I learned about the intolerance of slowness.
Speaker 1
55:52
That's actually Alexis Rivas, who's the founder of Cover. I actually met him recently. I flew out to LA just to meet him, because
Speaker 2
55:58
I just love that description. It's 1
Speaker 1
55:59
of my favorite things anybody's ever said to me. He's completely intolerant of slowness. Rockefeller's the same way.
Speaker 1
56:05
1 is again impressed by the fantastic forward motion of his career. How quickly he evolved from humble supplicant to impatient businessman and that is also what caused him to break up with his partners because he saw this gigantic opportunity in front of him like hey calm down or slow down you know don't be so daring he would think things through he's very patient and like his the way he like master his plans and his conspiracies but once he was sure he just there was no breaks He just took off and so at this point. We're still not in standard oil They're going to eventually make the company official. They're going to sell shares This is still a partnership and now this is where in this is where what I meant was like Rockefeller's also smart about grabbing Partners that lack things that like to have skills that he lacks.
Speaker 1
56:47
So this is where he pulls in Henry Flagler, not gonna repeat anything I talked about last week, but this is really important because I think this is an illustration of what Charlie Munger says and the role that he really feels that he played for Warren Buffett. He's like, everybody engaged in complicated work needs colleagues. The discipline of having to put your thoughts in order with somebody else is a very useful thing. That's Charlie Munger saying.
Speaker 1
57:08
For all Rockefeller's self-assurance, he needed 1 associate who would share his daydreams, endorse his plans, and stiffen his resolve. And that indispensable alter ego was Henry Flagler. What's crazy to me is now having read that biography of Flagler and now having read Rockefeller's biography twice I just could not have like they're both extremely formidable people. Rockefeller assembled like the dream team of business.
Speaker 1
57:32
They would both be unbelievably gifted on their own and
Speaker 2
57:35
the fact that they were able
Speaker 1
57:36
to work together for 15 to 20 years, not fight and to actually help each other, it's just absolutely remarkable to me. So Flagler not only brings like backup but he also brings this really really um wealthy Cleveland family the Harknesses and so Harkness is going to give a hundred thousand dollars he also as precondition of his investment he wanted Henry to become treasurer and so Rockefeller welcomed this he needed money he wanted help he wanted talent and he's also got like an older more successful businessman at the time you know telling him it's like this what he says young man you can have all my money you want you're on the right track and I am with you and it says since Harkness was also a director of banks railroads mining real estate and manufacturing companies is like a little tycoon himself right the This tie ushered Rockefeller into a new universe of business connections. Rockefeller was just 27.
Speaker 1
58:29
And it talks about his focus on not only money but recruiting. Starting with Flagler's recruitment, Rockefeller began to assemble the team of capable executives who would transform the Cleveland refiner into the world's strongest industrial company. That is an insane sentence. The world's strongest industrial company.
Speaker 1
58:45
It's insane because it's true. Neither was interested in him or Flagler. This is also good. Neither was interested in modest success and they were both prepared to go as far and as fast as the marketplace allowed.
Speaker 1
58:56
Flagler, this is such a great description of him too, Flagler had been chastened by failure and was acquainted with the perils of complacency." Flagler was also default aggressive and well today they would say wildly unethical and so at this time remember there's like really no rules to this game like they're inventing the game I mean they're laying really the foundation of the game that you and I are playing today if you think about it. So Flagler keeps this quote on his desk, gives you an idea of who he is. Do unto others as they would do unto you and do it first. What makes Flagler's ethics or lack thereof consequential for Rockefeller's career was that he was the mastermind of many negotiations with the railroads.
Speaker 1
59:36
And that was the single most controversial aspect of standard oil history, because essentially they're just rigging the game in their favor. And why is that important? Because transportation assumed a pivotal place in the petroleum business for an elementary reason. Oil was a cheap standardized commodity.
Speaker 1
59:53
So transportation costs inevitably figured as a critical factor in the competitive struggle. And that's kind of an echo of an idea that that Buffett that Warren Buffett writes about in his shareholder letters. He's like, listen, if you're engaged in a commodity business, like you have to be the low cost provider. And so again, it goes into why they had this advantage, like how come they size is going to be a big part too.
Speaker 1
01:00:13
But why could they keep pressing the railroads into doing these kickbacks, right?
Speaker 2
01:00:38
So it says, bargaining power with the railroads. Armed with this potent weapon, Rockefeller obtained such
Speaker 1
01:00:38
excellent railroad rates. Fed by rail links, Cleveland also served as a natural gateway to western markets. Other Cleveland refiners evidently made the same calculation, so a few years later, the city now supported 50 refineries." He is, I think, 4 years into the oil business at this point.
Speaker 1
01:00:53
Now this is the way Rockefeller thinks. It's important for me to point this out to you. He says other Cleveland refiners figured that out. Okay we're making the same calculation.
Speaker 1
01:01:02
Cleveland's a good spot to post up. A lot of people believe that. The city now supports 50 refineries. Rockefeller looked at that as a problem to solve.
Speaker 1
01:01:12
And so Flagler and Rockefeller are going to figure out a way to have way lower costs than their competitors. As it says, with virtuosic brilliance, Rockefeller and Flagler played all the 3 major railroads against each other in seemingly endless permutations. They even managed to manipulate such notorious figures as Jay Gold. Rockefeller, when asked, I gotta read about Jay Gold, he's in all these books over and over again, Rockefeller when asked the name the greatest businessman he had ever met instantly cited Gold.
Speaker 1
01:01:41
Gold himself later asserted that John D Rockefeller had possessed the highest genius for constructive organization in American economic history. And so you can think of all these rebates and everything it's just like a network of secret companies. I'll go into a lot of detail but J Gold actually does a partnership with them. J Gold hatch a secret deal with Rockefeller and Flagler that gave them shares in a subsidiary company.
Speaker 1
01:02:01
Now this is a transportation company and it was the first major pipeline network that would serve the oil regions of Western Pennsylvania where at this point in time, I think it's almost the entire collection of oil in the world. As the years pass, you obviously find in California, Texas, towards the end of his career, they find it in Saudi Arabia, but it's like the most important center for oil in the world at this point. And so Gold's like, hey, let's make the pipeline, because not only can you ship by water and rail, now it's a new technology, and that's the way they reference it's a really important way to think about it's like now we have this new technology it was like forget rail forget water forget barrels let's just run in pipes and why is that important because that gave them more leverage to get rebates for the railroads and so because of this massive pipeline network they received a staggering 75 percent rebate on oil shipped through 1 railroad system. So 75% discount.
Speaker 1
01:02:57
You're shipping oil and you're paying a dollar. I'm shipping oil. I pay 25 cents. And then they go into, there's a lot more detail, there's a lot more people involved.
Speaker 1
01:03:05
I'm going to simplify this, but this is really the punchline here. The young Cleveland refiners, meaning Rockefeller and Flagler, secured covert rates that allowed them to ship crude oil to Cleveland and then refined oil to New York for only $1.65 per barrel compared to an officially listed rate, an advertised rate, is the way to think about that, of other railroads of $2.40. And why is that important? Because their competitors don't know this is happening so later on they're like you're going to be with these guys know you can't buy us are you are you insane like let's go head to head and then when they try to buy them out they show the books like oh Rockefeller and Flagler are making a profit at a price that causes me to go out of business.
Speaker 1
01:03:49
I have no choice but to sell. And this is a great description of this deal from the railroad's perspective and why Rockefeller was so happy about it. Never shy about his accomplishments. Rockefeller knew that he had broached a revolutionary deal.
Speaker 1
01:04:03
From that moment, the railroads acquired... And remember, railroads are the largest businesses in the country at this point. Oil is going to be second and then obviously overtake it. So, from that moment, the railroads acquired a vested interest in the creation of a gigantic oil monopoly that would lower their costs, boost their profits, and generally simplify their lives.
Speaker 1
01:04:22
An ominous fact for small, struggling refiners who were gradually weeded out in the savage competitive strife. But this is also another example of the importance of stacking opportunities because the only reason he was able to do this is not only was he smart to figure out, okay, I could ship by land to railroads, I could ship by water, I could also now ship by land to pipelines, but because he had run his business so efficiently, he was gigantic. He had to get big first to be able to get that and then this deal just makes him even bigger. Even before Rockefeller accepted his first rebate, he was the world's largest refiner, equal in size to the next 3 largest Cleveland refineries combined.
Speaker 1
01:04:58
In fact, it was the unparalleled scope of his operation that enabled him to cut this exceptional deal in the first place and so he is still rather unknown at this point in his career but people other people people in the know especially in the railroad industry remember Cornelius Vanderbilt is still alive at this point he's much older but he's seeing when Rockefeller's doing so he's like alright I'm gonna I gotta get on this guy's team once I'm making an investment That's gonna come later, but Rockefeller He just thought he was the best in the world I guess is the way to think that because they're like hey, let's let's Vanderbilt wants to meet with you. Come to his office in New York. And Rockefeller's like, no, you're coming to me. This point is worth underscoring.
Speaker 1
01:05:39
29 year old John D. Rockefeller demanded that 74 year old Vanderbilt, the emperor of the railroad world, come to him. This refusal to truckle, bend, or bow to others. This insistence on dealing with other people on his own terms, time and turf, distinguished Rockefeller throughout his career.
Speaker 1
01:06:00
And then I need to make a point to you Rockefeller did not invent the railroad rebate It was a common practice in other industries, right? He just applied it to oil So says it was a common practice in all descriptions of freighting not peculiar to oil It was used in merchandising grain in everything. He was just the first 1 to think, hey, let's do this for oil too. And then we see the personality of the founders embedded into the foundation of the company.
Speaker 1
01:06:24
He says, I hate frills. I like useful things, beautiful things. They're admirable, but frills Bore me very much. The way he built his business was really this way.
Speaker 1
01:06:34
No frills, no waste, and he's just focused on business and family. He detested waste. He was hyper competitive. His family socialized only within a small circle of family members, business associates, and church friends, and never went to clubs or dinner parties.
Speaker 1
01:06:48
Club life did not appeal to me said Rockefeller. I was meeting all the people I needed to meet in my day's work. Another great idea from him design a schedule that you can maintain for a long time. He worked at a more leisurely pace than many other executives, napping daily after lunch and often dozing in the lounge chair after dinner.
Speaker 1
01:07:05
By his mid-30s, he had installed a telegraph wire between his home and his office so that he could spend 3 or 4 afternoons each week at home planting trees, gardening, and enjoying the sunshine. Rockefeller did not do this in a purely recreational spirit but mingled work and rest to pace himself and improve his productivity." There's really no like work-life balance. To use the idea from Jeff Bezos, it's more work-life harmony. So it says, I'm not doing this just for pure recreational spirit, but I mingled work and rest to pace himself and improve his productivity It is remarkable how much we could all do if we avoid hustling and go along at an even pace Remember his description of his neighbors.
Speaker 1
01:07:43
He would just like slowly plod walking down the side of the road just sitting there thinking. That's kind of how he did his work too. Just step by step by step and then obviously he's got this huge advantage because he's developing 1 of the greatest monopolies the world's ever seen. In his rigidly compartmentalized life, each hour was tightly budgeted whether for business, religion, family, or exercise.
Speaker 1
01:08:04
Oh, he's a fitness buff. That was also something surprising, something I forgot. These daily rituals helped him deal with the unbelievable tensions that might otherwise have become ungovernable. He was under terrific strain in creating his oil empire.
Speaker 1
01:08:21
He fretted endlessly about his company. For years on end I never had a solid night's sleep he said. I was always worrying about how it was going to come out. I tossed about in bed night after night after night over the outcome.
Speaker 1
01:08:34
All the fortune that I have made has not served to compensate for the anxiety of that period." So I mentioned earlier this insane examples of his frugality. Number 1, he's already wealthy at this time. His 3 children were forced to share 1 bicycle. His son, John Jr., confessed that until the age of 8 he wore only dresses because he was the youngest child and all of his older siblings were girls.
Speaker 1
01:08:59
So he's going along trying to consolidate as much as possible. There is not only an economic depression that's about to happen, but also the prices drop of kerosene because there's such an overproduction. And so this is when he realized this is like, oh, what happens in my business is my business. But also what happens to the industry is my business.
Speaker 1
01:09:17
And this is where he thinks, I think there's a line in the book where he thought he's like, I have to instill order in this godless industry. Like that's the way he thought about it. So it says, rampant speculation had so overbuilt the industry that Rockefeller estimated 90% of all oil refineries were operating in the red. Go back to that what the author told us.
Speaker 1
01:09:34
So important that he had these gigantic cash reserves. And it was for a reason like this. 90 percent of oil refineries are operating the red. Remember he never he's always turning a profit.
Speaker 1
01:09:43
So he has another problem. And he's got a bunch of like this huge cash reserve. So it led to a rival in Cleveland, this guy named Alexander, to offer his interest for 10 cents on the dollar. Rockefeller obviously buys that up.
Speaker 1
01:09:53
Rockefeller started to doubt the workings of Adam Smith's theoretical invisible hand. So many wells were flowing that the price of oil kept falling, yet they went right on drilling. Rockefeller feared that his wealth might be snatched away from him. As someone who tended towards optimism, he said that he would always see opportunity in every disaster, so that's what that means by that.
Speaker 1
01:10:12
He studied the situation exhaustively instead of bemoaning his bad luck. He saw that his individual success as a refiner was now menaced by industry-wide failure and that it therefore demanded a systemic solution. This was a momentous insight, pregnant with consequences. Instead of just tending to his own business, he began to conceive of the industry as a gigantic interrelated mechanism and thought in terms of strategic alliances and long-term planning.
Speaker 1
01:10:40
This was the start of his campaign to replace competition with cooperation. So this is what I meant about these robber barons just out differently than we do. Competition was something to like a problem to solve. Cooperation made more sense to them.
Speaker 1
01:10:53
It's interesting that all these people were born in the same time, I think all in the 1830s, because this is how J.P. Morgan thought as well. Obviously Vanderbilt a little older than them. He thought that way back on Founders Number 139 when I read the House of Morgan, this line about J.P.
Speaker 1
01:11:08
Morgan, I never forgot. And it says, he saw competition as a destructive, inefficient force. I'm reading this to you because the way he saw it was the same way Rockefeller saw it. He saw competition as a destructive inefficient force and favored large-scale combination as secure.
Speaker 1
01:11:22
Once, when the manager of the Mowett & Chandon wine company complained about industry problems, J.P. Morgan suggested that he buy up the entire champagne country. That's just mind blowing. Like don't buy up your competitors, buy up the entire industry.
Speaker 1
01:11:40
And so that insight, the reason that Chernow says it's such a momentum insight is because this is what leads to the creation of standard oil because they're like okay we got a control we can't just control our company we got to control the oil industry to do that we need a lot of money and you know there's really no such thing as like gigantic conglomerates or like multinational corporations at this time They had to like skirt laws where you couldn't even own, like if you were, like your corporate structure was like say in 1 state, you weren't allowed to own assets in other states. It was just a completely different world than we live in now. The tricky part for Rockefeller and Flagler was how to supplement their capital without relinquishing control. The solution was to incorporate, which would enable them to share, sell shares to select outside investors, that's what makes them wealthy.
Speaker 1
01:12:20
"'I wish I had the brains to think of it said Rockefeller but it was Henry Flagler's idea and to give you an idea of Rockefeller's ambition he said the Standard oil company will someday refine all the oil and make all the barrels. It was his idea to make sure that they didn't have salaries. So since Rockefeller's decision was that the leading men would receive no salary, but would profit solely from the appreciation of their shares and rising dividends, which Rockefeller thought was a more potent stimulation for work. And on the same page, they talk about, you know, he did not want auspicious partners.
Speaker 1
01:12:55
He thought that if you're inviting competition, if people think you're making a lot of money. The office shared by Rockefeller and Flagler was somber and austere. Rockefeller never allowed his office decor to flaunt the prosperity of his business, lest it arouse unwanted curiosity. From the start, he owned more shares of Standard Oil than anybody else and exploited every opportunity to augment his stake.
Speaker 1
01:13:15
Now, this part was absolutely insane because it's it really is a testament to human behavior. So remember, this is going to be 1 of the most valuable companies in history, but they are offering shares to the public during an economic slump, an economic panic. So they're offering the opportunity to think about this way. They're offering the opportunity of a lifetime to investors and Investors are scared and there's also just some great writing rich investors did not line up to invest in Standard Oil It was an inauspicious time for new ventures.
Speaker 1
01:13:47
This is in 1969. There was this crash called Black Friday. Beyond that, the speculative and then not only that you have an economic, you have a huge economic collapse, but they're also it's like the very beginning of an industry. Right.
Speaker 1
01:13:59
Beyond that, the speculative aura of the oil industry still deterred many reputable quote-unquote businessmen. Rockefeller never forgot how his scheme was savagely derided. As Rockefeller recalled it, it was a course, meaning his idea, which older and more conservative businessmen shrink back from. Remember, the investment opportunity of a lifetime and they're running in the opposite direction.
Speaker 1
01:14:20
Not only are they running in the opposite direction, they're telling other people that Rockefeller is reckless and insane. What happens the very next year? Rockefeller managed to pay dividends of 105% during the first year of operations, despite 1 of the worst financial bloodbaths in the industry's early history. That's insane.
Speaker 1
01:14:38
This is such great writing here. The man with the craving for order was about to impose his iron rule on this lawless, godless business. As he scanned the field of battle, the first target of opportunity lay close to home, the 26 rival Cleveland Refiners. His strategy would be to subjugate 1 part of the battlefield, consolidate his forces, and then move briskly on to the next conquest.
Speaker 1
01:15:04
His victory over the Cleveland refiners would be the first but the most controversial campaign of his career. DeYear revealed both his finest and most problematic qualities as a businessman. His visionary leadership, his courageous persistence, his capacity to think in strategic terms, which to me is probably his most admirable trait, the 1 I'd like to copy and emulate the most, but also his lust for domination, his messianic self-righteousness, and his contempt for those short-sighted mortals who made the mistake of standing in his way." So the Cleveland Massacre is this event in history where he's going to swallow up almost all of his competitors, right? That leads him to start building the biggest monopoly, the oil monopoly in the world.
Speaker 1
01:15:51
There's a couple of things that have to happen first that I'm gonna go over, so I'm gonna read my note to you first and I think that'll help with the understanding of it. Number 1, Acquire an oil buyer, but don't let anybody know that you own it. He uses that over and over again. Number 2, and he'd buy other refineries, buy other businesses, and say, hey, we own it, you don't mention that to anybody at all.
Speaker 1
01:16:13
So number 1, acquire an oil buyer and don't let anyone know. Number 2, raise a ton of money as everyone else is scrambling for survival. So that's a quote from Warren Buffett's shareholder letters. He says we play offense while others scramble for survival.
Speaker 1
01:16:28
He runs the same playbook as Rockefeller in the sense that he always gets this massive cash reserve. So number 2, raise a ton of money as everyone else is scrambling for survival. Number 3, get lower prices for your company and higher prices for your competitors. It's not just enough.
Speaker 1
01:16:43
This is why this guy's so crazy. It's not just enough to have the lower cost than anybody else. He wants you to pay more. So it says Rockefeller engineered a covert acquisition of I'll just skip the name.
Speaker 1
01:16:52
It's a New York. It's 1 of New York's premier oil buyers. This gave Rockefeller a sophisticated purchasing agency at a critical moment. Why?
Speaker 1
01:17:01
Because oil prices were now being set on exchanges as opposed to just, you know, deals worked out individually. It's like, no, now we all see the same data, right? So that's why you had to buy the oil buyer. This move set a pattern of stealth that shadowed Rockefeller's career.
Speaker 1
01:17:14
He made the company feign independence of Standard Oil while it actually acted at it as its cat's paw. Bracing for the tumultuous events ahead, he boosted the firm's capital from $1 million to $3.5 million. Remember, this is during an industry-wide collapse. So I buy the oil buyer, I raise a bunch of money, now they all meet Rockefeller and the Standard Oil and they're like, hey, we're going to buy up all the refining, as many refining properties as we can in Cleveland.
Speaker 1
01:17:41
He says, this was the opening shot of a bloody skirmish that historians came to label as the Cleveland Massacre. The mayhem in Cleveland began when Rockefeller struck a clandestine deal with Tom Scott. Tom Scott is the overlord of the Pennsylvania Railroad. The Pennsylvania Railroad is 1 of the most important players in the oil industry because oil is all in Pennsylvania and he has a major transportation network to get the oil to other places right?
Speaker 1
01:18:06
This same year Vanderbilt discreetly invested $50, 000 in Standard Oil. How do you know it's a monopoly? Because Vanderbilt's giving you money. So Scott presents an audacious scheme that he devised, which proposed an alliance between the 3 most powerful railroads, his railroad being 1 of them, and a handful of refineries, notably Standard Oil.
Speaker 1
01:18:26
To implement this, Scott had obtained a shell organization. Some of this stuff is a little boring. It's important to know so I'm not going to tell you all the boring stuff But at this point think about this is like essentially they think Economic historians think that this is really the first Real holding company in American history That is what It just allows you to do things that other companies couldn't do because they were restrained by like state laws Okay, but it's called this it's the SIC. It's called the self-improvement company really this is this thing's gonna fall apart So I'm just telling you because what they're doing here this like sneaky rebates collusion, you know getting rid of competition It doesn't work because people find out about it, but he runs this playbook over and over again in different ways throughout his entire life.
Speaker 1
01:19:09
That's what I'm telling you. And people are so scared of it that from the time it was proposed to the time it was struck down and found out, that's when Rockefeller does the Cleveland Massacre. So Rockefeller wielded this threat as a weapon, right? So it says, under the term of this proposed PAC, the railroads would sharply raise freight rates for all refiners.
Speaker 1
01:19:30
But the refiners in the SIC, Rockefeller being 1 of them, would receive such substantial rebates, up to 50% off, that their competitive edge over rivals would widen dramatically. In the most deadly innovation, the members would also receive drawbacks on shipments made by rival refiners. That is, the railroads would give Standard Oil a rebate for every barrel shipped by other refiners. Why is that also important, right?
Speaker 1
01:19:57
Standard Oil would receive comprehensive information about all oils shipped by their competitors. Imagine competing in an industry and you're the only 1 that knows the capacity and the output of every, not only yourself, but every single other company in your industry. That is insane. So the way I summarize everything going on, because this goes on for quite a bit, and so I needed a way to compress this so I can take this idea with me in the future.
Speaker 1
01:20:22
Lower prices for me, higher prices for you. Valuable intel for me, none for you. And why was Rockefeller invited? Think about it.
Speaker 1
01:20:32
This opportunity opened up because of Rockefeller's size. This is a reward. Another example of stacking opportunities. This is a reward for previous operating excellence.
Speaker 1
01:20:41
This is insane how this all fits together. Listen if you don't want to read the whole book I can understand. 700 pages. I was telling my friend Liberty.
Speaker 1
01:20:47
I was reading this book. He's like, oh man It's a brick but read the first I would say 300 pages Cuz then you know, I'm way less interested in the last 40 years of his life You know when just he's not building his business anymore, but damn the first 300 pages book Oh read up until it might be like 350. I'll tell you what page Read up until he retires. It's just incredible.
Speaker 1
01:21:11
Why did the nation's leading railroads offer Rockefeller terms so generous as to render them all but omnipotent in oil refining? The railroads had engaged in such fierce price wars between each other that freight rates had sharply fallen. So they don't want to compete with each other either. They want collusion just like he wants.
Speaker 1
01:21:27
They want the same thing in their industry that he wants in theirs. That's the way I think about that. They needed somebody to arbitrate their disputes and save them from their own cutthroat tactics. Standard oil would act as a quote unquote evener for the 3 railroads and ensure that each received a predetermined share of oil traffic.
Speaker 1
01:21:41
So 1 of the biggest things that they're shipping at this time is oil. If we do a deal with Rockefeller, he owns the oil industry for all intents and purposes. He can say, hey, stop fighting for prices, right? You each get 25% goes here, 50% goes here, 25% here.
Speaker 1
01:21:57
I will distribute them evenly. So that's what they're talking about. That Rockefeller would become their official umpire. Rockefeller is not 1 to insist on the good graces of other people or rely on the good graces of other people.
Speaker 1
01:22:09
So he also puts pressure on the railroads. He puts pressure on the railroads because he says, I'll do pipelines. He says, I'll throw, I'll ship oil through water. What he also did was try to monopolize the collection of of tank cars so they eventually start shipping oil instead of barrels they put him in like these gigantic tanks right Rockefeller goes up and tries to buy the entire supply and then forces the railroads to lease them back from him.
Speaker 1
01:22:35
This is what I mean about Root Lake. It's such ruthless, it's hyper competence and ruthless efficiency. It's unbelievable. 1 other farsighted attempt at it, 1 other factor, excuse me, 1 other factor tempted the railroads to come to terms with Rockefeller.
Speaker 1
01:22:49
In a far-sighted tactical maneuver, he had begun to accumulate hundreds of tank cars, which would be in perpetually short supply. Oh my goodness, both refiners and railroads were struggling with excess capacity. Rockefeller's supreme insight was that he could solve his industry's problems by solving the railroad's problems at the same time, creating a double cartel in oil and rails. Instead of ruining the railroads, Rockefeller tried to help them prosper, albeit in a way that fortified his own position.
Speaker 1
01:23:24
And that leads us to the Cleveland masker. This is where Rockefeller is going to wind up being the world's largest oil finder at 31 years old. It's insane. Critics regarded this as a dress rehearsal for the grand pageant, the place where he first revealed his master plan to be implemented in a thousand secret, disguised, and indirect ways.
Speaker 1
01:23:44
While the SIC was alive, Rockefeller engineered his most important coup, the swift, relentless consolidation of Cleveland's refineries, which gave him irresistible momentum. The threat of the SIC was the invisible club that he waived over Cleveland's refiners, forcing them to submit to his domination between February 17th and March 28th. So we're talking what was that like a month and 10 days, month and 11 days between that is. So we're talking a month and 11 days, right?
Speaker 1
01:24:13
That is between the first rumors of the SIC and the time that it was scuttled, because they found out about it, Rockefeller swallowed up 22 of his 26 competitors. And this is how we'd pitch him. Rockefeller outlined his plan for a vast efficient industry under standard oil control. He would tell them about the impending capital increases of standard oil, I have more money than you, and then he would ask them point blank, if we can agree upon values and terms, do you want to come in?
Speaker 1
01:24:41
And so a lot of these, this is just 1 example, but they're like, okay, before, I need to examine your books before I sell my company to you right and this is where like his obsession with low cost and collusion You know really starts to pay dividends that afternoon He surveyed Standard Oil's ledgers and he was thunderstruck by the profits remember at 1 point in the industry 90% of them are operating in a loss, and this guy's got profits coming out of his eyeballs. And so he's like, listen, you can't compete with me. We already know it's a fata company. Come in, take the—he says, listen, I'm going to
Speaker 2
01:25:14
give you standard oil cash—or
Speaker 1
01:25:15
excuse me, standard oil stock. And a lot of these people were again go back to short-sightedness and short-term thinking. They took cash and the biggest mistake you can ever make in your life.
Speaker 1
01:25:24
But he says, listen, I will give you standard oil company. I'd say, excuse me, standard oil company, stock or cash. I advise you to take the stock. It will be for your own good.
Speaker 1
01:25:32
This is what 1 of his competitors said about Rockefeller. He knew that he and his associates had a better knowledge of the business and a better command of the business than anyone else. You never saw anyone as confident as he was. Take standard oil stock, he urged them, and your family will never know want.
Speaker 1
01:25:52
And since most of his competitors were losing money, he winds up buying the typical refinery. Costs him a quarter of their construction costs. And this is what I meant about ruthless. So you can really think about them as they're ruthless, they're aggressive and they're large.
Speaker 1
01:26:08
During the Cleveland massacre, Rockefeller savored a feeling of sweet revenge against some of the older men who had patronized him when he started in business. This was especially true of 1 of his original bosses. This is crazy. This is 1 of the guys who was working as a bookkeeper for who now got into refinery refining rather.
Speaker 1
01:26:26
After Hewitt came to Rockefeller's home to plead for mercy, Rockefeller told him his firm would never survive if it didn't sell out to Standard Oil. He made a cryptic statement that entered into Rockefeller folklore. I have ways of making money you know nothing about. Hewlett and his partners sold out.
Speaker 1
01:26:46
And a massive advantage that Rockefeller had that his competitors didn't is he was 1 of the first entrepreneurs in history to realize the value in economies of scale. Rockefeller borrowed heavily to build gigantic plants so that he could drastically slash his unit costs. It's funny because Rockefeller and Henry Ford wound up becoming friends much later in life when Rockefeller's a very old man. You could say that Ford figured out the same thing.
Speaker 1
01:27:07
Rockefeller borrowed heavily to build gigantic plants so he could drastically slash his unit costs. The volume of trade was what he always regarded as of paramount importance. Early on Rockefeller realized that in the capital intensive refining business, sheer size mattered greatly because it translated into economies of scale. During his career, Rockefeller cut the unit cost of refined oil in half, and he never deviated from this gospel of industrial efficiency.
Speaker 1
01:27:36
So that was at 31, right? He tries his first example of let's do widespread collusion. It's a secret plan. It falls apart.
Speaker 1
01:27:44
He's like, okay, then let's make it a public plan because other refineries other refiners didn't like the plan because they weren't invited in he's like I'll invite everybody in so he tries again and that's the thing about him being so persistent like oh you stop me 121 time 2 times 3 times that's fine get ready for my fourth my fifth my sixth my seventh my eighth attempt I'm only have to get in once and you're not gonna stop me every time is the way to think about what he's doing. And so eventually he gives up on the idea of just even asking others for permission. He's like, forget it, I tried another cartel, that failed too, he's 34 years old, so This is like 3 years of lapses where we were in the story previously. And he just says, like, forget it.
Speaker 1
01:28:20
I'm going to do this myself. And again, he's advantage he has is he's doing this during a financial panic. And he's just got more assets and money while everybody else is running scared. Scared.
Speaker 1
01:28:31
Rockefeller had clarified 1 thing in his own mind. Voluntary associations couldn't move with the speed, unity, and efficiency that he wanted. He was now through with ineffectual alliances and ready to bring the industry to heel under standard oil control. The idea was mine.
Speaker 1
01:28:43
The idea was persisted in spite of opposition of some who became faint-hearted at the magnitude of the undertaking." And what he means there is like, I'm controlling the whole industry. By 1873, he had crossed his own Rubicon and never looked back. Once embarked on this course of action, he wasn't a man to be hobbled by doubts. The mad dash for riches that followed the Civil War ended in a prolonged slump that ground on for 6 years.
Speaker 1
01:29:05
So you had this huge boom, then you have the bubble pop, and you got 6 years of economic depression is the way you can think about it. What happens during those times? Same thing happens all the time. The stock exchange shuts down.
Speaker 1
01:29:17
A bunch of bank failures. Widespread bankruptcies. Massive unemployment. Wages decreased by 25 percent.
Speaker 1
01:29:24
Eventually, this is how bad it got. It was cheaper to buy oil than it was to buy water. And so this is a fantastic historical analogy that Chernow gives us. Just as Carnegie expanded his steel operations after the 1873 panic, so did Rockefeller.
Speaker 1
01:29:40
He saw the slump as a chance to translate his master blueprint into reality. He would capitalize on rival companies selling at distressed sale prices. He slashed Standard Oil's dividend to increase its cash reserves. Standard Oil weathered the 6 year depression magnificently.
Speaker 1
01:29:57
A fact Rockefeller attributed to its conservative financial policy, an unparalleled access to bank credit and investor cash. And then what does he do when he buys your company? Rockefeller was equally secretive and asked them, the people he was buying, to continue operating under their original names and not divulge their standard oil ownership. They were instructed to retain their original stationary and keep secret accounts.
Speaker 1
01:30:22
And they also talked about this later. This is like the third time they mentioned it. I didn't mention it to you previously. They didn't like writing things down.
Speaker 1
01:30:29
So clearly, They didn't want people to find out a lot of this was like handshake verbal some of the stuff is gonna pop up on paper But they they they they look down upon that don't write it. Don't tell anybody Secrecy is extremely important to us and then because they would once you come into Standard Oil you make a lot more money He said hey stop don't be flashy Rockefeller warned that there were finders that joined Standard Oil not to parade their sudden wealth lest people wonder where they got the cash. And this was hilarious, because he'd interrogate them. And he's like, hey, You don't have any ambition to drive fast horses, do you?
Speaker 1
01:31:02
And I just put in the margin, laugh out loud, fast horses are like the Ferraris of their day. So this idea is like, you go out and buy a bunch of horses, you're racing up and down the street. It's so funny how human behavior is like consistent, right? We just use different technology.
Speaker 1
01:31:17
You know, it's like, oh look, I'm rich because I got faster horses, they're like better, you know, better, higher quality. Well, people are gonna wanna know where you got the money. And then he just keeps running this playbook, and this is what I mentioned earlier. It's like, oh, this is genius.
Speaker 1
01:31:28
His management team was founders. He just wanted people that had run, they were good enough to run their own businesses. Now you come in and you just add your skills to, like we're all focused on the same goal. Instead of you trying to make your, my company A competing with company B, it's like no, we're both jumping into company A and just making it better.
Speaker 1
01:31:45
He was not only purchasing refineries, but he was assembling a managerial team. The creation of Standard Oil was often less of a matter of stamping out competitors than it's seducing them to cooperate. And then he uses the same playbook when people people like, no, I
Speaker 2
01:31:58
don't want to come along. He's like, take
Speaker 1
01:31:59
a look at my books. When this guy hesitated, Rockefeller played his trump card. He invited them to inspect the Standard Oil books.
Speaker 1
01:32:05
When they later examined them, he was taken aback. Rockefeller could manufacture kerosene so inexpensively that he could sell below his production cost and earn a profit. So at this point in the story, the same playbook that he's running that he ran in Cleveland a few years later, he's doing the same thing. He's like, oh, you know, I want all the Pittsburgh refineries too.
Speaker 1
01:32:25
I'll just take them all. So this is of 22 Pittsburgh refineries in existence when Rockefeller struck his deal. Only 1 was still in existence 2 years later. And then how did he choose not only who to buy it's really the 1 idea applied over and over and over again for a long period of time Rockefeller was buying refineries and strategic railroad and shipping hubs Where he can negotiate excellent transportation rates.
Speaker 1
01:32:48
Why is that important? Because what did Warren Buffett say? When a company is selling a commodity, being the low-cost producer is all important. But 1 of his production costs is his transportation rates.
Speaker 1
01:32:57
He never took his eye off that. And so a few weeks ago on that Francis Greenberger podcast, it was episode 243, there's an idea in there I really like that Francis said, he's like, listen, once something works once, immediately start scaling it. Do not dilly dally. So as he's buying up all these refineries, he just keeps pushing.
Speaker 1
01:33:15
And so what he'll do is as Rockefeller, I should be clear, Rockefeller buys up refineries, he'll then use some of the people that ran those refineries as talent to go buy up other refineries. And he pushes them so fast as this is again another example of being in tolerance slowness. So it says, um, in September, 1875, Standard Oil formed the Acme Oil Company, a front organization to take over several local refineries under Archibald's guidance. So this is a guy running it.
Speaker 1
01:33:41
He's also going to run it with this guy named Camden. But the important part here is that how fast they move. Within months, he had bought or leased 27 other refineries, moving at such a pace, such a hectic pace, that he nearly drove himself to collapse and so he buys a refineries takes their talent gets them to go out and buy other refineries moves extremely fast that's not enough This is what he also he does a lot of people when they're when they're approached They don't want to sell to standard oil like they're getting too big. That's too dangerous.
Speaker 1
01:34:07
So what does he do? He did some of the people he bought refineries don't say don't tell them that you're with me go and buy try to buy their refinery as if you're going to compete against me. They don't. What I'm saying here is like the refiners that some of the refiners that he's buying don't know that they're selling to Standard Oil.
Speaker 1
01:34:26
They literally think that they're selling to a competitor of Standard Oil. Just so relentless. This is the end result. The completion of this campaign left Rockefeller still in his 30s, the sole master of American oil refining.
Speaker 1
01:34:39
It also meant that he had monopolized the world kerosene market. He was now living a fantasy of extravagant wealth and few people beyond the oil business had ever even heard of him and Part of this is that he actually had a belief in oil For the long term that 1 of being a massive advantage people are still doubting him even at this point So talks about like the mistakes that people are making where he's like listen I don't want to give you cash I want he's like I'm always he always wants to conserve his cash right because like his his biggest problem is bank or student has bankroll his his uh bottleneck like I said earlier it's just like it's always like how the hell do I bankroll this marathon buying spree that I'm on? And so he always offered the option of taking payment in either cash or stock, and he dreaded the choice of cash. And so he says if they chose cash, he often had to scramble among banks to scrounge up money by encouraging opponents to take stock.
Speaker 1
01:35:29
He can serve funds and also enlisted the allegiance of foes in his burgeoning enterprise. If you remember that podcast I did on the founder of UPS, it was episode 192. He his name is Jim Casey. He used this exact same strategy as well.
Speaker 1
01:35:42
Now, here's the problem. People this 1 decision. Do I want cash or do I want stock can literally change the life of your grandchildren? Immortified Rockefeller that so few trusting souls took standard oil stock They doubted that Rockefeller and his young Turks could realize their experimental plan.
Speaker 1
01:35:57
Um, this is such a crazy sentence American high society in the 20th century would be loaded with descendants of those refiners who opted for stock. Rockefeller would tell them, sell everything you've got, Even the shirt on your back, but hold on to the stock Think about why is he saying that because 1 he knew once this monopoly is built. There is no stopping it a few pages later brings up the fact that his long-term having the longest view in the room was a massive advantage for him and the demise of the railroads to some degree. Standard Oil also profited immeasurably from the revolution in oil transport as barrels gave way to tank cars.
Speaker 1
01:36:41
Why is that important? The railroads balked at investing in rolling stock that couldn't also transport general freight. So it's like I can't I'm not gonna buy this because this is only good for my oil customers. So Rockefeller stepped up boldly into this breach.
Speaker 1
01:36:56
He would build oil tank cars, which would he then would turn around and lease back to the roads for a special mileage allowance. What does that mean? For a kickback. I'm gonna pause here.
Speaker 1
01:37:07
Like, think about what's happening. This guy is relentless at finding points of leverage. This is also gonna lead him to build a giant pipeline network. It takes some time.
Speaker 1
01:37:17
Like, he was a little slow to that, but he's gonna wind up building a pipeline network as a defensive maneuver. And it strengthens his company because he owns almost all the tank cars on the biggest railroads. So it says, Standard Oil's position grew unassailable. At a moment's notice, it could crush either railroad by threatening to withdraw its tank cars.
Speaker 1
01:37:36
If you don't have tank cars you can't ship oil. If you can't ship oil your railroad is bankrupt. It's just amazing. He's got a handful of ideas.
Speaker 1
01:37:45
He just supplies them over and over again where he goes further than any reasonable person will and he's relentless Remember that playbook about hey, I'm gonna buy all refineries. No one's gonna know it's me He does the same thing for the pipelines. He buys up. He realizes.
Speaker 1
01:37:57
Oh, these guys are way ahead of us building pipelines fine We'll buy them right and then what happens The pipelines form the core of a new venture that pretended to be free of standard oil control. My refineries are set up so I can ship, buy water. Now I have the railroads to the point where I own all their tank cars I can bankrupt them if they get on my wrong side now I own the biggest pipeline network no 1 knows it's me and why is this important because this set him up to extract maximum advantage from both the railroads and pipelines so long as these 2 means of transport co-existed in the oil business. Rockefeller and his team are so bloody efficient and smart you just cannot believe it.
Speaker 1
01:38:41
And so let's go into more of his philosophy on how he runs his business in his life. He was schooled in secrecy. He trained his face to be a stony mask so that when when underlings brought him telegrams they couldn't tell from his expression whether the news was favorable or not. When I got to that part minding me what Enzo Ferrari I think is I've done 2 or 3 podcasts I think it had 3 podcasts on Enzo Ferrari But I think this is in episode number 98 He wore sung his entire life and so far we wear sunglasses everywhere because he didn't want people to be able to read his eyes Rockefeller did not want you to know what he was thinking.
Speaker 1
01:39:16
So much so that he disciplined himself so there was no facial expressions. This is crazy. 2 of his favorite ideas. Rockefeller equated silence with strength.
Speaker 1
01:39:25
Weak men had loose tongues and blabbed to reporters while prudent businessmen kept their own counsel. He would say success comes from keeping the ears open and the mouth closed. He made a habit of hearing as much as possible and saying as little as possible to gain a tactical edge. When angry, he tended to grow quiet.
Speaker 1
01:39:44
He liked to tell how a blustering contractor stormed into his office and launched into a tirade against him. Rockefeller didn't look up until the man had exhausted himself. Then he said, I didn't catch that. I didn't catch what you were saying.
Speaker 1
01:39:56
Would you mind repeating it? Much of the time, this is how he spent his time, thinking. Remember he's just alone in his office very similar to like Henry Singleton. Reserved a lot of time for thinking.
Speaker 1
01:40:06
He optimized for focus and concentration. Okay so it says much of the time he was closeted in his office. He paced his Spartan office hands laced behind his back. During meetings, he was a relentless, a restless, excuse me, a restless note-taker.
Speaker 1
01:40:22
He once asked rhetorically, do not many of us who fail to achieve big things fail because we lack concentration? The art of concentrating the mind on the thing to be done at the proper time and to the exclusion of everything else. He adhered to a fixed schedule. He would move through the day in a frictionless manner.
Speaker 1
01:40:40
He never wasted time on frivolous things. Even his daily breaks, the mid-morning snack or the post-lunch nap were designed to conserve energy and help him to strike an ideal balance between his physical and mental forces. As he once remarked, it's not good to keep all the forces at tension all the time. He was also a really good delegator.
Speaker 1
01:41:02
So highly did Rockefeller value personnel that during the first years of Standard Oil, he personally attended to routine hiring matters. Taking for granted the growth of his empire, he hired talented people as found, not as needed. I need to repeat that. Taking for granted the growth of his empire, he hired talented people as he found them, not as he needed them.
Speaker 1
01:41:23
He especially prized executives with social skills. The ability to deal with people is as purchasable a commodity as sugar or coffee, he said, and I pay more for that ability than any other 1 under the Sun. Many employees said he never lost his temper, never raised his voice, never uttered a profane or slang word and never acted discourteously. He defied many stereotypes of the overbearing tycoon.
Speaker 1
01:41:47
He was a fitness buff and he placed in the accounting department in his office a contraveillance like an exercise contraveillance that he pushed and pulled for exercise. And to make sure that he could trust his employees he tested them and then once he trusted them he just left them alone. At first he tested them exhaustively. Yet once he trusted them he bestowed enormous powers upon them and did not intrude unless something radically misfired.
Speaker 1
01:42:11
1 of the best ways to develop workers he said when you're sure that they have character and you think they have ability is to take them to a deep place, throw them in, and make them sink or swim. Part of the standard oil gospel was to train your subordinate to do your job. As Rockefeller instructed a recruit, this is very, this reminds me of Paul O'Fallow, the founder of Kinko's, back on Founders number 181. He talked about the importance of being on top of your business and not in your business.
Speaker 1
01:42:37
You need time to try to delegate as much as possible so you can actually be thinking long-term, strategic, like especially as the business grows, like your judgment is more valuable, right? It was different when he had 1 store, but when he had 200 stores, like every single little decision is really important. So it says, part of the standard oil gospel was to train your subordinates to do your job. As Rockefeller instructor recruit, has anyone given you the law of our office?
Speaker 1
01:42:58
No? It is this, nobody does anything if you can get anybody else to do it. As soon as you can, get someone whom you can rely on, train him in the work, and then sit down and think about some way for the Standard Oil Company to make more money. True to this policy, Rockefeller tried to relieve himself from the intricate web of administrative details and dedicate more of his time to broad policy decisions.
Speaker 1
01:43:22
He never did anything haphazardly." And he also said a very high bar for quality. Says, "...this passion for excellence originated with Rockefeller and radiated throughout the organization. The ethos of Standard Oil's operations around the world was John D. Rockefeller's personality writ large.
Speaker 1
01:43:39
How many times have we seen that over and over and over again in these stories? It's crazy. He was a matchless executive, an erring monitor of the stream of proposals channeled into him daily. He had an extraordinary reactive ability, a first-rate power of judgment when presented with options.
Speaker 1
01:43:54
For this reason, he resembles the modern chief executive more than he does his domineering industrial contemporaries. He extended rationality from the top of his organization down to the lowest rung. Every cost in the standard oil universe was computed to several decimal places. And why is that important?
Speaker 1
01:44:15
Because he knew the bigger that you are the more important attending to small details becomes. This is an example of that. After watching a machine solder caps to the cans he asked the resident expert how many drops of solder do you use on each can. I probably pronounced that wrong.
Speaker 1
01:44:28
Solder? Solder? 40 the man replied. Have you ever tried 38?
Speaker 1
01:44:32
No. Would you mind having some steel with 38? Let me know. When 38 drops were applied, a small percentage of cans leaked, but none leaked at 39.
Speaker 1
01:44:39
Hence 39 drops became the new standard instituted at all standard oil refineries. That 1 drop, said Rockefeller, still smiling in retirement, saved $2, 500 the first year. But the export business kept on increasing after that and doubled and quadrupled and became immensely greater than it was then. And the savings has gone up steadily since.
Speaker 1
01:45:00
1 drop on each can has amounted to many hundreds of thousands of dollars. He performed many similar feats, fractionally reducing the length of staves on the width of iron hoops without weakening a barrel's strength. He was never a foolish penny pincher, however. For example, he saved on repairs by insisting that Standard only build substantial plants even if that meant higher startup costs.
Speaker 1
01:45:26
So he's under a lot of stress, but he found a source of strength in his church. And really, I just want to bring this out really important because everybody needs this Rockefeller's 1 of the most formidable humans in history right and he still needs like a pep really just never discounted the value of inspiration he needed spiritual refreshment that's what he called going to church praising the ministry's role he once said he needed good preaching to wind me up like an old clock once or twice a week and how does he know he has a monopoly because he makes money in up and in and booms and he makes money in bus and this is the way he describes and he's like listen you guys should there's just a giant gap between his company being number 1 and number 2. It's just incredible, right? But the way he looks at it is like, why did you not do the same thing?
Speaker 1
01:46:07
That opportunity was available to all. I was just the 1 that grabbed it. He mockingly described his foe's attitude as follows. We have disregarded all advice and produced oil in excess of the means of storing and shipping it.
Speaker 1
01:46:19
We have not built storage of our own. How dare you refuse to take all that we produce? Why do you not pay us the high prices of 1876 without regard to the fact that the glut has He's just saying, he's just like, I'm a professional you're an amateur. Rockefeller had positioned himself exactly where he wished to be poised to profit from either surplus or scarcity and all but immune to the vagaries of the marketplace and the dangers of putting your business in the hands of somebody else, which was exactly what the railroads did for Rockefeller.
Speaker 1
01:46:52
He eventually realizes like pipeline, the pipeline technology is just so much more efficient. I'm going to move all of my volume over there. And this is really, I'm just going to give you because this goes on for a bunch of pages. I think my note does a good job of summarizing it.
Speaker 1
01:47:04
Incredible. I'm going to use my deal with the railroads as an asset to increase my position in oil, which is my true end. Right. By the time anybody realizes and can do anything about it, I've already moved on to a superior transportation method." This is more on how he worked and really why he is just worthy of serious study.
Speaker 1
01:47:24
Rockefeller was a unique hybrid in American business, both the instinctive first-generation entrepreneur who founds a company and the analytical second-generation manager who extends and develops it. He wasn't the sort of rugged self-made mogul who becomes quickly irrelevant to his own organization. Having created an empire of unfathomable complexity, he was smart enough to see that he had to submerge his identity in the organization. Many people noted that Rockefeller seldom said I.
Speaker 1
01:47:49
Don't say that I ought to do this or that, he preached to colleagues. We ought to do it. Never forget that we're partners. He preferred outspoken colleagues to weak-kneed sycophants and welcomed differences of opinion so long as they weren't personalized.
Speaker 1
01:48:02
By creating new industrial forms, Rockefeller left his stamp on an age that lauded inventors, not administrators. That he created 1 of the first multinational corporations selling kerosene around the world and setting a business pattern for the next century was arguably his greatest feat. As he said, our nation was in a state of transition from agriculture to manufacturing and commerce and we had to invent methods and machinery as we went along. I want to extend this point a few pages later.
Speaker 1
01:48:30
This is why he was such a rare talent. Rockefeller always sees a little further than the rest of us. This is 1 of his partners. He really was a Superman.
Speaker 1
01:48:37
He not only envisioned a new system of business upon a grand scale, but he also had the patience, the courage, and the audacity to put it into effect in the face of almost insufferable difficulties, sticking to his purpose with a tenacity and confidence that were simply amazing. In the last analysis, Rockefeller prevailed at Standard Oil because he had mastered a method for solving problems that carried him far beyond his native endowment. He believed that there was a time to think and then a time to act. He brooded over problems and quietly matured plans for extended periods.
Speaker 1
01:49:09
Once he made up his mind, however, he was no longer troubled by doubts and pursued his vision with undeviating faith. He was like a projectile that once launched could never be stopped, never recalled, and never diverted. And once he perfected it, he walked away. He had perfected the gleaming machinery of Standard Oil, and, his appointed task done, he felt he should pass the reins to younger men.
Speaker 1
01:49:38
The business had ceased to amuse him. It lacked freshness and variety, and he withdrew. So in 1897, Rockefeller walked away from the empire that had consumed his energies for more than 30 years. He entered retirement just at the birth of the American automobile industry.
Speaker 1
01:49:57
The automobile would make John D. Rockefeller far richer in retirement than at work. And that is where I'll leave it for the full story. Highly recommend buying the book.
Speaker 1
01:50:09
There's so much more in here. I spent nearly 50 hours digesting and researching this book this week. There is a link below if you buy the book using that link, you're supporting the podcast at the same time. The very best way to support founders is to give a gift subscription to a friend, family member, or colleague.
Speaker 1
01:50:25
As always, there's a link below in your podcast player and also available at founderspodcast.com. That is 248 books down, 1, 000 to go. And I'll talk to you again soon.
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