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

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

Founders

Episode 254

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

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading John D: The Founding Father of the Rockefellers by David Freeman Hawke.

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

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[0:07] He transmitted messages in code and secrecy covered all of his operations.

[0:39]  Rockefeller compared himself to Napoleon.

[2:20] He could think quicker and along more individual and original lines than any of them.

[2:35] It is always hard to successfully control what you don't understand.

[3:32] Titan: The Life of John D. Rockefeller by Ron Chernow. (Founders #248)

[7:27] By the time I was a man — long before it —I had learned the underlying principles of business and the rules of business as well as many men acquire them by the time they are 40. I needed no one to advise me about the nature of transactions with which I had been carrying on since childhood.

[8:59] Random Reminiscences of Men and Events by John D. Rockefeller. (Founders #148)

[10:55] You should try to expose yourself to experiences that are slightly ahead of your skillset or understanding and you should do so constantly.

[13:48] A veteran of long-distance provider MCI, Price came to Amazon in 1999. He blundered early by suggesting in a meeting that Amazon executives who traveled frequently should be permitted to fly business-class. Bezos often said he wanted his colleagues to speak their minds, but at times it seemed he did not appreciate being personally challenged. “You would have thought I was trying to stop the Earth from tilting on its axis,” Price says, recalling that moment with horror years later. “Jeff slammed his hand on the table and said, ‘That is not how an owner thinks! That’s the dumbest idea I’ve ever heard.’ — The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone (Founders #179)

[18:42] He saw that posted rates, supposedly fixed, could also be negotiated. All was not as it seemed on the outside.

[20:45] He was the greatest borrower I ever saw.

[22:12] What if the president of a bank refused to make me a loan? That was nothing. That made no difference to me; simply meant that I must look elsewhere until I got what I wanted.

[26:07] Hard Drive: Bill Gates and the Making of the Microsoft Empire by James Wallace and Jim Erickson (Founders #140)

[26:41] Lost from view is the Rockefeller that Cleveland knew in the 1860s— a vigorous, alert gentleman with a quiet, but extraordinary personality.

[29:10] Small egos do not build giant companies.

[30:23] When Money Was In Fashion: Henry Goldman, Goldman Sachs, and the Founding of Wall Street by June Breton Fisher. (Founders #255)

[33:10] The customer-experience path we've chosen requires us to have an efficient cost structure. The good news for shareowners is that we see much opportunity for improvement in that regard. Everywhere we look we find what experienced Japanese manufacturers would call muda, or waste.* I find this incredibly energizing. I see it as potential-years and years of variable and fixed productivity gains and more efficient, higher velocity, more flexible capital expenditures. — Invent and Wander: The Collected Writings of Jeff Bezos (Founders #155)

[34:54] Other refiners groused about these restrictions, but in general they accepted them as facts to live with. Rockefeller refused to do so.

[38:55] Last Train to Paradise: Henry Flagler and the Spectacular Rise and Fall of the Railroad that Crossed an Ocean by Les Standiford. (Founders #247)

[40:15] You don’t want turnover on your core product team. Knowledge compounds. Don’t interrupt the compounding. — Softwar: An Intimate Portrait of Larry Ellison and Oracle by Matthew Symonds (Founders #124)

[47:47] 1. You raise money so you can increase production. 2. Use your increased production to get better rates on transportation than other refiners. 3. Use your increased profits —because you have better transportation —to buy your competitors. 4. You continue to find secret sources of income.

[55:23] Most simply doubted that Rockefeller's plan would work. John, it cannot be done, they said.

[56:13] It was ruthless efficiency and hyper competence.

[1:00:07] Rockefeller loves secret allies.

[1:00:31] The secret ownership of other companies was so well preserved that often a refiner enraged by Standard’s ruthless tactics would refuse its offer to buy him out and sell instead to a local competitor—unaware that he had in fact sold out to Standard.

[1:02:01] He believed that Standard Oil stock is the most valuable thing in the world to own and always bought more of it.

[1:05:57] Check out how Rockefeller turns an expense into a profit center: Standard purchased a half interest in Chess, Carley & Company, the largest distributor of refined oil to the South and Southwest. Together they purchased a number of the newly introduced bulk tank cars. Chess-Carley shipped turpentine from southern pine forests to Cleveland, where the cars were emptied and the turpentine was sold in the local market. The tank cars were then filled with kerosene and sent back to Louisville for distribution. In a single swoop the huge expense of shipment by barrels had been eliminated.

[1:09:22] He proceeded in the same steady, methodical way that a farmer plowed a field.

[1:13:47] The danger Potts and the Pennsylvania railroad posed to his creation convinced Rockefeller that the time had come to pick a fight with the world's largest industrial corporation.

[1:23:20] Rockefeller would have horse-drawn carriages drive up and down the streets and sell oil directly.

[1:28:28] I think it is fair to say that the strong men who were competitors in the oil refining business, the aggressive men in the best financial condition, and the most intelligent, indeed the class of men who would be most likely to survive in the competitive struggle, were the men who were most likely to take up our idea of cooperation.

[1:33:09] Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons by Edward J. Renehan Jr.

[1:35:38] Jay Gould was the single most unsettling force ever to appear on the American industrial scene.

[1:36:22] Among wheelers and dealers of his day Gould had no peer.

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

Introduction

To Rockefeller, business resembled a form of war. It seemed natural for him to open a letter with the words, "I'm in the midst of a hard battle today." He transmitted messages in code, and secrecy covered all of his operations. "That's all too true," he admitted. "But I wonder what general ever sends out a brass band in advance, with orders to notify the enemy that on a certain day he will begin an attack," he said. Rockefeller, the field marshal, laid down strategy and relied on his general staff to carry it out. When tactics for a battle had been set, orders went out to "fight it out on this line."

It surprised none who knew him well, that in old age, Rockefeller compared himself to Napoleon. The revelation came while vacationing in France, not far from a spot where Napoleon had won a great victory. A casual remark from a companion led to an extraordinary soliloquy, Rockefeller's longest on record. This is what he said. "It is hard to imagine Napoleon as a businessman, but I have thought that if he had applied himself to commerce, he would've been the greatest businessman the world has ever known. My, what a genius for organization. He also had, what I always regarded as a prime necessity for large success in any enterprise, that is, a thoughtful understanding of men, and ability to inspire in them confidence in him, and confidence in themselves. See the men he picked as marshals, and the heights to which they rose under his inspiration and leadership. It is by such traits as these that men get the work of the world done.

It is all a battlefield. Napoleon, without the able marshals that he had about him, would not have been the master of his age. He went into a battle with the knowledge that his marshals could be depended on. That, in a given situation, they could be relied upon to do the necessary thing. Their devotion to him, coupled with their enthusiasm, that's another great attribute, and the qualities with which his influence upon them brought out, won the fight. Another thing about Napoleon was his virility. He was virile because he came direct from the ranks of the people. There was none of that stagnant blood of nobility, or royalty, in his veins. That's where he had the advantage over the monarchs of Europe to begin with. He could think quicker, and along more individual and original lines, than any of them. The men whom he had to combat didn't understand either him or the people, and it is always hard to successfully control what you don't understand. Napoleon didn't play that game.

And then, coming direct from the people, he had their sympathy. He appealed to their imaginations. Europe had not yet been educated to the fact that it could get along without any kings at all. Leaders of their own kind were few, and that made it easier for Napoleon to rise to the heights with which he attained. A Napoleon would be impossible in our day. There are too many able and ambitious rivals to hold and check one who aimed too high."

That is an excerpt from the book I'm going to talk to you about today, which is John D. The Founding Father of the Rockefellers, and it was written by David Freeman Hawk. Okay. Before I jump into the book, I need to tell you how this fits into everything else that you and I have been talking about. About a month ago, I reread... I spent an insane amount of time rereading the most popular biography of Rockefeller that's ever been made. It was Episode 248. It was Titan. I found the book that I hold in my hand in the bibliography of Titan.

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