If you're looking for some reading that is both entertaining and of great business value, and if you don't mind lugging around 700 hardcover pages, I strongly recommend Titan, Ron Chernow's riveting new biography of John D. Rockefeller Sr. I'm certainly not the first to point out the many interesting and timely parallels between the life of the great oil baron and Microsoft's Bill Gates. It's hard to ignore the facts that both men got in on the ground floor of a critical new industry, both managed to wipe out their direct competition and become the world's richest man and both wound up defending themselves before the US Congress and fighting intense antitrust pressure.
But now that I've read the book, I realize that the parallels and lessons actually run much deeper. Here are some of the things I've been thinking about:
Shifting sources of power. It's easy to forget that the initial great demand for oil was driven by kerosene, used mostly for lighting in homes. It took another 30 years for the gasoline market to take off. Similarly, the first major demand for PC software was triggered by personal productivity; the real opportunity, communications, didn't emerge for more than a decade.
Misplaced public scrutiny. As with Microsoft today, most of Rockefeller's critics focused on various tie-ins and other exclusionary business practices. Much less attention was paid to Standard Oil's blatantly predatory tactics. The company repeatedly used highly targeted price cuts to kill off weaker rivals. Similarly, Microsoft's strategy of using freeware where competition exists - browsers, audio/video and e-mail, for instance - and relatively high prices where it doesn't (office software) always has been much more dangerous than its forced bundling or similar tactics.
Mostly happy consumers. Both Standard Oil and Microsoft could honestly say they served their customers well by offering high-volume, low-cost products. Indeed, both companies' critics consisted mainly of government officials, the media and their trampled competitors. Serious customer complaints were and are relatively rare.
Wrong details, right idea. Many of the most widely circulated accusations against Standard Oil turned out to be incorrect. On the other hand, the underlying public view that not all the company's gains were fairly won has held up well over time. Remember that as Microsoft defends itself against various specific media and competitor claims.
Antitrust legislation was only part of the answer. In the end, huge new discoveries of oil in Texas, Asia, the Middle East and elsewhere had as much to do with ending the Standard Oil monopoly as government intervention did.
On the other hand, the breakup of the Rockefeller empire into Exxon, Mobil, Amoco, Chevron, ARCO et al. clearly helped usher in a new competitive era.
One of the great things about the Chernow book is that it seems to strike just the right balance: "neither too sympathetic nor too sharp", in the author's words.
Indeed, the evidence suggests that laws were broken and government action was warranted. But that fact only partially diminishes the achievements of a man who built what was, at least arguably, the 20th century's greatest industry and who became, unarguably, the world's greatest philanthropist.
When the 21st century nears its end, I wonder if people will be saying pretty much the same things about William H. Gates III.
Interested in buying Chernow's book? You'll find links to online bookshops from our online Shopping page. (Dymocks is listing the book for $55.)