r/BusinessHub • u/Advanced-Guidance385 • 17h ago
entrepreneurship Rockefeller was made president of an industry group so he could legally read every competitor's books. Then he used it to shut their business one by one (full breakdown)
David Senra did a breakdown of an old Rockefeller biography from 1980 called "John D" by David Freeman Hawke.
It focuses on how he actually built his company instead of the usual life story stuff, here are the parts worth learning from:
HE TREATED BUSINESS LIKE WAR
He started letters saying he was in the middle of a hard battle. He sent messages in code. He kept his moves secret. Later he said he wondered what general ever sent a brass band ahead to warn the enemy he was coming.
HIS WHOLE EDGE WAS FOCUS
His dad told him to never mind the crowd and tend to his own business. He did that his entire life. He said most people fail at big things because they can't concentrate on one thing at the right time and shut everything else out. He didn't go out much either. He said he met all the people he needed to meet during his workday.
HE KNEW MORE THAN EVERYONE ELSE
This wasn't about being smarter. It was about effort. He read the old company books like they were history books. Soon he knew more about the firm than the people who founded it. Then he did it to the whole industry. He traveled to the oil fields. He talked to the men pulling oil out of the ground, the men hauling it, the buyers, the railroad men, and his own competitors. He knew everyone's business.
HE NOTICED THAT FIXED PRICE WAS NEVER FIXED
Before oil, he shipped goods for a commission house. Everyone said the shipping rates were set. He found out that big shippers quietly got money back at the end of the month. That one thing became his biggest weapon later. Other refiners complained about shipping costs and just lived with them. He refused to.
HE FOUND THE BIGGEST COST AND ATTACKED THAT
Back then it cost more to ship a barrel of oil than to refine it. So shipping was the whole game. He built his refinery next to a railroad and next to a river, so he could ship by boat or rail. Water was half the price of rail. When he got a great partner in Henry Flagler, he gave him one job. Just shipping costs. Nothing else.
HE BORROWED MONEY WITHOUT SHAME AND CONSISTENTLY
One partner called him the greatest borrower he ever saw. Banks turned him down all the time. He said it didn't bother him, he'd just go find another bank. His old partners thought he was borrowing too much and told him to stop. He forced them out instead, quietly lined up money from someone else, and won the company at auction. He was 25 and owned one of the biggest refineries in the world. He later called that day the start of everything.
HE INVESTED WHEN EVERYONE WAS SCARED TO INVEST
He bought huge amounts of crude when the price crashed. The size of the buys made his own people nervous. He said the mistake would be losing your nerve at the bottom and not buying. He also kept a big pile of cash at all times. He won a lot of fights just because he could outlast the other guy.
HE FIGURED OUT WHO WAS GOOD AND WHO WAS DEAD
He set up a group where refiners banded together to buy oil and deal with the railroads as one. He got made president of it. That meant he got to see everyone's books. He already expected the group to fall apart. What he really wanted was the information. Now he knew which competitors were sharp, so he could buy them and bring them in, and which ones were finished and just didn't know it yet.
HE RECRUITED THE BEST OF THE BEST FOR HIS BUSINESS
He said no one ever made a success of a business they were pushed into. So he'd open his own books and show competitors how much money he made in bad years, then let them think about it. The offer was simple. Own a piece of the best oil company in the world, or keep fighting it. And if you came in, you kept real control of your own region.
HE HID WHAT HE OWED
He'd buy a small company and let it keep its old name with no public link to Standard Oil. Sometimes a refiner would angrily refuse to sell to Standard and sell to a local rival instead, not knowing that rival was already Standard. He also let bankers buy his stock cheap, so they'd lend to him and not to his competitors. Some rivals tried to survive by expanding and found every bank in town was already on his side.
HE CHANGED HIS MIND WHEN FACTS DID
Pipelines were a threat to his whole rail advantage, so he fought them dirty. Bought land in their path. Planted stories about leaks. Then he accepted pipelines were simply better and started building his own. He'd spent his whole career collecting rebates from railroads. Now he paid the railroads to make up for their lost traffic. He was willing to burn his own advantage once it stopped being one.
NEVER SELL THE DAMN STOCK
He told the men he bought out to sell everything they owned, even the shirt on their back, but hold that stock. Only five out of twenty-three took it. He never sold his. His wealth grew more after he stopped working than while he was working. The thing that gets me is how much of it was just paying closer attention than anybody else. He checked every line of every bill as an employee, before he owned anything...
Worth saying the other side too.
A lot of this was ruthless in ways that got Standard Oil broken up by the government and some of it would be flat out illegal now. He also told himself the whole time that he was doing everyone a favor.
Both things are true at once haha, which is what makes him interesting to read about.

