John D. Rockefeller

John D. Rockefeller was born in 1839 in NYC. His father was of English and German descent and his mother was of Scots-Irish descent. When people speak of the Rockefellers, it’s because of John. John D. Rockefeller not only built an empire, but he did so with humble beginnings.

His mother was very religious and disciplined, and had a major influence on John. At church he was encouraged to make as much money as he could, and then give away as much of it as he could. This really resonated with him, and from his first job as an assistant bookkeeper at the age of 16, he would donate a portion of his small earnings to his local church.

He was very good at what he did. He was very systematic in his approach to everything, and he was very surprised at how slow and inefficient his older bosses were.

Once he had reached his 20’s, John took a loan of 1000$ from his father, and threw himself into the risky business of commodity trading. He made some more money there, but then, with the oil boom happening, he saw great opportunity in the oil industry.

Starting in 1859, the oil boom in Pensylvania was under way, and everyone wanted a piece of it. However, by the time John got to Pensylvania, the drilling market was already saturated, and it became a risky business.

John would let others go through the hassle of finding the oil and drilling it, and he would just buy it off them to refine it. Refining the oil was something that not a lot of people were doing. That’s where the study money was to be made.

In 1863, John and some partners opened an oil refinery in Cleveland, and they made sure to be very efficient with it. John’s team of chemists and engineers not only optimized the refining process, but also found numerous useful byproducts which were not yet discovered. In fact, only 60% of the oil refined was put to good use (kerosene), while the other 40% was put to waste. John changed that and started selling the by-products as well.

Rockefeller used “monopolistic practices” to force his competitors to bankruptcy. Those who did not give up and fought back, were subject to Rockefeller’s “price wars”. This consisted of dropping their (Rockefeller’s) price of oil so cheap (to as much as 80% of its original value!), that even he would not make a profit. However, he was in a position where he could hold this negative balance sheet much longer than his competitors, and so he would outlast them to their bankruptcy. Thus, John had bought the majority of all his competitors’ refineries (from 26 companies in the region down to 4). The heads of those 4 resisting companies were later invited to join the company, and hence combining the brightest minds in the field.

In 1870, John formed Standard Oil of Ohio to replace his previous partnerships.

With By the time John was 40, his oil company owned 90% of the world’s oil refining industry. At this point, Standard oil has not simply become a national monopoly, but rather an international one. This was only possible with the use of immoral business tactics (which can be read in more detail on Wikipedia), which were ongoing.

In 1911, the supreme court of the US declared that Standard Oil was a monopoly. This one big company was divided into 34 separate entities (famous descendants alive today are Chevron Corp, ExxonMobil, and BP), hence making room for competition.

Rockefeller kept his stake in all of those companies, and the companies’ combined net worth ended up making him even richer than before. By the end of his lifetime, this man was worth between 300-400B (accounted for inflation).

Quotes by John D. Rockefeller

“I don’t want a nation of thinkers, I want a nation of workers”

“Her judgment was always better than mine. Without her keen advice, I would be a poor man”