The titans of capitalism are clever types, but that is not enough. The big fortunes, the companies that really become giants of their industry, almost invariably are born just when a technological revolution is beginning.
John D. Rockefeller was born in Richford, New York, in 1839. His professional career began in 1855, in Cleveland, as an accountant at a commercial firm. He worked hard these first few years, enough to be able to pay substitutes who went to the front during the civil war. In 1865, just before the end of the war, Rockefeller became sole partner of his company after buying it at auction casting its partners. At age 26, with a decade of experience behind him, he began investing in the business that would make him the richest man on earth.
At that time, the first US oil wells were discovered in Pennsylvania. It was a stroke of luck: the war had caused serious damage to the New England whaling fleet, and kerosene (also a recent invention) was a perfect substitute for lamps and lighting. Cleveland was the closest city to the new oilfields with access to the railroad and ports of the Great Lakes.
Rockefeller, by chance of fate, was in the right place at the right time to build a refinery. He was young, ambitious, tenacious and brave; A bright businessman. He was also someone who had the immense fortune that the business that was to define the world economy for the next century and a half exploded right next to his office just as he began his career after he had fought off the civil war.
If we look at the biographies of other great men of the Gilded Age, the golden years of American capitalism during the second industrial revolution, we find similar stories. Jay Gould (Railroad Tycoon) was born in 1836, also in New York, and was also freed from military service. Andrew Carnegie (steel) was born in 1835 in Scotland, but his family emigrated to Pennsylvania as a child. He worked as a railroad during the Civil War for the Pennsylvania Railroad.
J.P Morgan (finance) was born in 1837 in Connecticut, and also got rid of his obligation to fight by paying substitutes while working in London as a banker. Jacob Shiff (finance) was born in 1847, and arrived as an immigrant to New York in 1865, at the end of the war. Henry Clay Frick (steel) was born in 1849 in Pennsylvania, and did not go to war for being too young.
It is no coincidence: there is a whole generation of legendary businessmen who share in their biography the fact of being born in the 1830s and 1840s, not serving on the front during the civil war, and starting their business just as the United States began its Inexorable march toward becoming an economic superpower.
It is not necessary to go back to the nineteenth century, however, to see similar phenomena. Bill Gates, founder of Microsoft, was born in 1955. Paul Allen, his partner, is from 1953. Steve Jobs, founder of Apple, is from 1955. Steve Wozniak is from 1950. Flanking this generation, there is a group of pioneers a little more (Nolan Bushnell, Atari, born 1943, Clive Sinclair, 1940, Alan Sugar, Amstrad, 1947, Jack Trammiel, Commodore, 1928), who came to personal computing before it was actually viable.
After them we have the generation of internet entrepreneurs (Musk, Paypall, 1971, Larry Page and Sergey Brin, Google, both 1973, Jeff Bezos, Amazon, 1964, Richard Barton, Expedia, 1967, Michael Dell, 1965, Travis Kalanick, Uber, 1976, Peter Thiel, Palantir, 1967, Pierre Omidyar, Ebay, 1967), who were able to set up their business and thrive on the infrastructure created by their predecessors.
Again, there is a clear pattern. Microsoft and Apple are the heirs of years of R & D investment by the US federal government, Intel, IBM, Hewlett-Packard, Xerox, Texas Instruments and Bell Labs, which launched their companies just as semiconductors and memory prices fell to the point of being viable consumer products.
They were in the right place at the right time, neither before nor after. The Internet generation launches its business 20 years later, when Gates and Jobs computers are powerful enough to connect competently to the internet, another project of the United States Department of Defense. Those who were fortunate enough to launch their entrepreneurial career exactly when a new industry hatched started with advantage.
Of course, the achievements of all these titans of industry and finance are undoubtedly huge, and they only reached the top after defeating hundreds of competitors. John D. Rockefeller, Jay Gould, Jeff Bezos and others were always brilliant guys, who have worked hard to stay where they are. It is also undeniable, however, that his career is marked both by his talent and the moment in which they were born.
The titans of capitalism are clever types, but that is not enough. The big fortunes, the companies that really become giants of their industry, almost invariably are born just when a technological revolution is beginning. More than innovative, they are inevitable companies: the oil boom was going to happen yes or no in the 1860s, computers were going to dominate the world in the 1980s, and the internet needed a search engine/advertising agency in the 2000s.
The merit of the Gates, Rockefellers, Pages, Brins and so on is to have made it easy to nudge, to have exactly what IBM needed at the right time or a particularly ingenious algorithm before anyone else, not to make a wonderful invention out of nothing.
A product like the iPhone is the result of dozens of previous developments, from unbreakable crystals through wireless communications, software, semiconductors, touch screens, sensor miniaturization, logistics, mining and a whole etcetera that a horde of engineers at Apple added in only a product. In a sense, someone was going to invent it sooner or later. Steve Jobs and his team did the best.
Innovation, in fact, is never the result of a company or a person. The context, the infrastructure, the world where a company moves, grows and develops its products are a crucial part of its success or failure. We must forget the myth of the heroic entrepreneur, solitary genius who emerges out of nowhere to dominate an industry, and think more about how any industry, new or old, is the result of decades of innovation, infrastructure, accumulated knowledge and accumulated inventions.