Standard Oil Part II (Extended Cut)

dude this is gonna especially kill you as someone that travels even for like two and three day trips just with a backpack oh it's so gonna kill me like you're never traveling that way again i know you're checking like car seats and backpacks i'll see you at baggage claim my friend oh my god who got the truth is it you is it you is it you who got the truth now is it you is it you sit me down say it straight another story on the way who got the truth welcome to season 9 episode 5 of acquired the podcast about great technology companies and the stories and playbooks behind them i'm ben gilbert and i'm the co-founder and managing director of seattle-based pioneer square labs and our venture fund psl ventures and i'm david rosenthal and i'm an angel investor based in san francisco and we are your hosts when we last left our hero villain yeah unclear we saw john rockefeller supporting the sherman antitrust act as

a piece of dead on the vine legislation with really nothing to fear from it today we will cover standard oil from 1890 through their spoiler alert breakup in 1911. and you're ruining the punchline uh we're gonna cover rockefeller's legacy and philanthropy and how today's world is a rockefeller shaped one in more ways than one we will also debate the finer points of where standard oil crossed the line between using legitimate business practices like operational efficiency and economies of scale into straight-up abuses of power to grow their massive massive profits you mean like bribing elected officials david i look i don't want to spoil anything here other than the breakup well uh there's also we should say there is a ludicrous amount of post-1911 oil industry history that we will uh find some way to dive into in the future uh on a dedicated sort of energy industry history special uh because

there's you know especially once you leave the us and get into the the uh the powers that be internationally i think it's a we could do six more episodes totally well we'll have to in the future we will well uh listeners we want to say thank you david what for yeah we have had a pretty crazy month here acquired uh the uh starting with the tsmc episode we have just been on i don't know what it is y'all like semiconductors but uh the show has been growing hugely uh so much good stuff is going on um and uh we we were talking beforehand like we really do want to keep our try and keep our intros shorter and just start getting right into the stories but uh two things today one is this we gotta say thank you to all you like this journey is incredible and in particular thank you to our old listeners for like spreading the gospel like we've really enjoyed this like slow methodical linear growth because it's i think it's

helped us hone the product of of acquired um but of course like an explosive growth spurt is always a fun thing so so thank you to those of you for spreading the word over the years and welcome to all the new folks yeah indeed and then uh two unrelated to the episode but uh special fun thing to talk about um we are about to have a new addition to the acquired family maybe uh a spin-off is how it is a spin-off yeah not an on-air edition though yeah not not an acquisition a spit-off no not on air um this is so crazy by the time you all hear this jenny and i will have had a uh uh presumably will have had a uh a little baby girl that we are expecting any day now honestly was like coming down to the wire of recording this is very nerve-wracking but this was almost a serious cliffhanger where we just did part one and then david disappeared literally friend a bunch of my friends were asking me like hey like

so excited for you and the you know the baby and all that but um you're gonna get recording for part two in before the video well david uh uh congratulations so excited for you and jenny i think uh we will be really fun to you know hear dad's stories on future shows and on twitter maybe maybe hear some crying baby in in future episode backgrounds um yeah we uh we can't wait i'm sure well last thing before we dive into part two here of the standard oil story is as always pilot our presenting sponsor for all of season nine pilot is the backbone of the modern financial stack for startups as you know they are backed by all-star investors themselves like sequoia index bezos expeditions and stripe they are truly truly truly the gold standard for startup bookkeeping if john d rockefeller were starting standard oil today he would not do the books himself he would have pilot do it stop doing your books

it's obvious outsource it you're not a books company uh yeah you're not a you're not a books company that's great you're not you're not an accounting company like any of you listening out there like point one percent of you run an accounting company so get pilot to do it instead uh that's so good all right now over to our conversation with co-founders wassim daher and jessica mckellar so we talked last time about what changed that enabled you all to build pilot as an actual technology company versus just a professional services provider as pretty much every startup bookkeeping service was before y'all what services does pilot integrate with and what does that look like from your customer's point of view yeah i mean one of the great things about pilot is first it doesn't matter what institutions you're using we know how to ingest and take good care of your financial stack now on top of that

one of the great things about pilot is that we do have the expertise for these deep integrations with tools as they evolve quickly you know stripe releases a new invoicing api we can get on that immediately so if you are taking advantage of these fintech solutions as they continue to evolve you're really going to want a partner that's able to keep up with that on the finance side that being said really it's sort of our problem how do we correctly reflect your business needs in your books and the good thing about pilot is you know you're talking to a person who understands you and your business and your needs and is taking care of translating that into what happens on the back end you don't have to worry about how to integrate with these institutions because that's our job and you can just sit back and let us handle that for you what a good example of what we've been talking about all season here which is

as a startup founder bookkeeping is not something you want to deal with that's pilot's job and you can be sure with you guys that you're not only going to be on top of all the latest api changes from stripe or plaid or whomever but you're just going to take care of the job yep you can learn more about pilot and whether they can help your company eliminate the pain of tax prep and bookkeeping by going to pilot.com acquired and thanks to asim and jessica all acquired listeners if you use that link you will get 20 off your first six months of service super excited as always to have them with us thank you and seriously as ben says it's a killer deal and stop doing your book gilbert doctor gilbert doctor stop doing your books have pilot do them for you well david uh this one we're gonna cover some companies that are are newer so we actually need to say this is not investment advice this is for

entertainment and educational purposes we may hold some of the companies that we're talking about but uh you know they're pretty old companies and they're super merged together at this point so the the incarnation that we'll be talking about of the esso company today on this show is extremely different than the company that uh many of you may hold or very intentionally not hold today all right so last we left our plucky uh anti-heroes i like anti-heroes i think that's what we're gonna go with uh ben as you said the sherman antitrust act had just passed everybody's having a good laugh about it the political money is still uh flowing around uh like hotcakes uh or uh uh fine wine uh which of course rockefeller didn't drink because he never had a drop of alcohol in his life and what was the language that everyone that that made everyone feel like the the legislation was doa yes the key modifier modifying clause in

the sherman antitrust act was in restraint of trade so everything all combinations were outlawed if they were quote in restraint of trade which was not defined nobody knows what that means uh it's like will ferrell like it's provocative it gets the people going uh okay so okay speaking of going standard oil is uh going um you know we said this at the end of part one like they've won they've like won capitalism they've won like america 90 market share like the whole kerosene market 90 belongs to them it's game over um but we did kind of hand wave over a bunch of stuff at the end of last time um one there was the uh you know some trouble brewing back uh in the home front back in the state of ohio so we're going to cover that and then the big thing that we really just spent like 15 seconds on last time was uh the whole you know like oh yeah jd retires what was going on with that why does he

just walk away and ride off into the sunset it's interesting like because because he stayed titularly like his name was still on the door oh yeah and he intended that like i think he actually did want to walk away right oh he did oh we will get into all of this but they thought it would be like bad for the shareholders maybe maybe we'll see all right so first let's cover the trouble on the home front uh back in ohio so right around literally like right as the sherman act was passing um state legislature members in ohio remember they're like they're pretty pissed at rockefeller and and at uh standard oil and like this goes all the way back to the cleveland massacre and like you know he he has a lot of enemies back home shall we say so the state attorney general guy named david watson he decides that he's gonna bring a case uh against esso um i don't think it was actually an anti-trust uh case uh

but he argues that the um it's not the case is that standard oil is in violation of the state corporation laws in that they are a ohio corporation but they are conducting illegal uh interstate commerce is is what they allege uh and what they like you know so it created this this trust structure that was so brilliant but this suit is like hey this is just a sham and a front you're not you don't like really transfer any assets here and you're actually breaking our laws so it takes a couple years but by 1892 the case reaches the ohio supreme court the state supreme court which rules against standard oil which means that the trust has to be dissolved like they look like this is the letter of what this means this ohio ruling is like game over uh you know but obviously that's not what happened so so how do they get around this this seems like a pretty big problem well turns out that our our standard oil

friends have an escape plan that they've already hatched that they have in their back pocket in just for this very occasion so they had figured out standard oil lawyers had figured out that in the state of new jersey now they have operations standard oil has operations in new jersey but there's no you know rockefeller and crew they're at 26 broadway in new york you know it started in ohio there's no real reason why headquarters you know they don't have any special attachment to new jersey but in new jersey there actually is a loophole in state corporate law at the time that did allow new jersey corporations to straight up hold stock in other out-of-state corporations no no even need for a trust structure like what ohio is suing them for new jersey just allows that was the reason why they needed the trust structure in the first place is because standard oil of ohio couldn't own any other standard oil companies that are

operating in any other states and they couldn't have operations in other states so it was like it's just this crazy remnant of the fact that we are the united states and every single state to date had basically said if you have a charter to operate a corporation in our state that's all the business you can do your total addressable market is our state so they've got this loophole in new jersey what do they do boom they just reorganize the whole thing and they transfer all the trust maybe trust you know the ohio assets all the assets um into uh the new standard oil of new jersey or again at least they make a public show of this they tell the courts they tell everybody like oh yeah yeah this is what we're doing you know whether they actually do this or not no we'll maybe see a little later in the episode uh doesn't matter though problem solved so as uh turnout writes in titan about this quote the 1892 overhaul was mostly

shadow play a charade to appease the courts the executive committee at 26 broadway of course the you know rockefeller and all the flagler and all the cronies was formally dissolved but the members lost only their titles and were soon converted by the nicest legal cunning into the presidents of 20 affiliated companies in standard parlance these men were now quote the gentleman upstairs or alternatively quote the gentleman in room 1400. nobody had to switch seats at the lunch table and rockefeller and his coterie ruled as absolutely as before fascinating and so you've got this standard oil of new jersey that by the letter of the law owns holy or near holy all these other you know at this point 20 some companies that are operating in all these other states and so the way that that sort of structurally looked is all the people who were the trustees of the standard royal trust are now the presidents of

all those companies and they're working remotely from manhattan yeah right they were they were ahead of the curve they were uh they were uh you know doing zoom meetings before before it was fashionable uh so this is great um but well great this is great for standard oil uh and this goes on for a while but uh slowly but but then noticeably over the years um everybody starts to notice that like something's a little different about rockefeller um you know he's always he's always been like aloof you know famously he would do meetings you know during meetings he would like lie down on a chase lounge and have his eyes closed and people would think he's asleep but then he would jump in these are like standard oil board meetings yeah yeah exactly but he's actually listening like intently to everything like he's always been a little weird you know in how he operates um but super like laser focused and engaged

in the business um and and he kind of starts like drifting away slowly and he seems weird he starts not coming into the office every day uh i think first he stops coming in on saturdays and uh then he like takes longer time off um he uh he starts missing the you know the sacred like executive committee or gentleman upstairs lunch meetings um so people like what's what's going on um and there really are two things happening to rockefeller at this time um you know one is sort of like short-term good but long-term bad uh and the other one is short-term bad but long-term good so so first the the long-term bad but short-term good one um i think you know chernow writes about this like he kind of doesn't have anything left to prove at this point like he's outwitted everybody he's built the greatest thing of all time you know he's like i was thinking about um uh of course we talked about you know

the jay-z rockefeller connection last time but it's like the black album with jay-z where he's like i'm retiring i'm done you know like what more literally what more can i say here uh turnout writes quote in explaining his retirement which this would lead to the rockefeller literature has always stressed his health and the heavy burden of his charities though another factor contributed as well he had perfected the gleaming machinery of standard oil and his appointed task done remember he felt like this was his divine you know uh duty from god he felt he should pass the reins on to younger men as gates who we'll talk about in a minute put it the business quote had ceased to amuse him it lacked the freshness and variety and had become merely irksome and he withdrew so what you're saying is rockefeller is really only like a zero to one guy and maybe like a one to ten guy and kind of like a ten to a hundred guy but maybe

not a hundred to a thousand guy i mean maybe more like not like a you know a thousand to million guy or perhaps i mean he's already at scale so it's most like he's not really a thousand to eleven hundred guy yeah i wonder if it's kind of like you know we'll talk about this much later in the episode but this thing this might be part of what you're seeing with all these big tech ceos now it's like bezos yeah what more can i do here guys like yeah and you know the public sentiment has to be weighing on rockefeller too where he's like look i believe in my heart of hearts that what i've done here is virtuous like i truly believe this is my calling and what god wants me to do i do believe that i've brought light to the world in a reliable cheap way i believe that i've provided a hundred thousand jobs good jobs for people and everyone hates me and like i don't think he was necessarily overly concerned with other people's view of

him like he was not a externally motivated man but that has to grade on you over time where you're you know working your ass off and you believe you're in the right at least the vast majority of the time and yet the world is either espousing incredible hatred toward you or begging you for your money constantly so yeah i mean yeah he's just like it's just kind of not fun anymore um so he what he wants we've alluded to this he wants and he tries to fully actually resign from the company uh he he talks to john archbald who he wants to take over um and says like you know look my heart's not in it anymore i'm ready to go have another chapter in my life um but archfold and some of the other executives they're like well you know your name on the like it really matters like i think it would be bad for the troops you know and we've just had these you know brushes with the government um i think it really would help things if

it just just entitle only you stay involved you remain you know the president titularly of standard oil and of course that means you remain like the an officer of the company and all the liability that comes with that and just keep the title man yeah just the title it's it's really to honor you oh god oh man i was going to save this uh little quip for later but i'll use it now of um you swim with the sharks you sleep with the fishes uh archfolded and flagler and all these guys they were they were something so this was a very very bad move for rockefeller and a freaking great move for all of the other execs especially archbold at uh at standard oil uh okay so you said charity and like everybody asking you know john d for his money um so this is the other piece of piece of this that that long term becomes just one of the greatest things to ever happen to america and the world i think um but he's like

he's really really struggling with what to do with his wealth and in particular all these causes you know remember he wants to do great work he feels called to god he wants to by god's he wants to make the money to then do great works with the money and he's been donating all along the way kind of in these smaller chunks but like to everyone at church on sundays to the church to to maintain it i mean he's been he's been charitable thus far yep and it's kind of trained um people around him who he gives to organizations who he gives to and now the general public who knows about this that oh hey you can just ask john d for money and he might give you money um and he's super stressed out about this like i wouldn't find that very stressful if just constantly alt and he's getting thousands of letters a week just asking for money he's not into the like cool billionaire stuff ideas like he doesn't really want it he

wants to donate and so he's finding it like incredibly challenging that what he wants to do is find uh like high return on society ways to give this money away that align with his beliefs so he's you know looking for um either good sort of christian values ways to give it away or at least not anything that's antithetical to his beliefs but like the last thing that he wants to do is say ah there's there's too much inbound i'm just gonna ignore it like no he this is his mission in life is to answer these please yep yeah chernow found this this great quote from him and uh i don't know if it was something he said to somebody or in his you know papers what not but uh i just really say it says a lot about what he was how he was feeling so this is directly from rockefeller about this time i investigated and worked myself almost to a nervous breakdown in groping my way without sufficient guide or chart

through the ever widening field of philanthropic endeavor it was forced upon me to organize and plan this department upon as distinct lines of progress as our other business affairs well important to note here is like the notion of a philanthropic organization does not yet exist in america like there's not a professional there's no gates foundation there's no playbook for like i'm going to start a 501c3 and employ people that work at this nonprofit that will figure out how to give the money away it's it's kind of random and scattershot the way that everyone donates and so there is like there's not a playbook of like cool i'll spin up this organization to give away my wealth yup and he's doing it all himself himself it's all on his shoulders uh so literally you know his um folks might might know who either were familiar before or you know gone and looked up and uh john d on the internet since our part one

his appearance like radically changes during this time so you know he was um you know kind of like uh like devil bill he had a lot of devil bill in him uh like a big guy you know very uh you know he's very like his personality is understated but like he was you know a presence uh he starts shriveling up he's losing weight he he gets um i think is it pronounced alopecia like he literally loses his hair all of his hair on his entire body not just like his head his eyebrows his mustache he always had a big bushy bushy mustache the rest of his body for the whole rest of his life his hair is gone and it's all just because of this stress that's weighing on him and frankly the incredible amount of work that he had done you know the the standard oil had some trying times for him that that uh he's not new to stress yeah but i i think this is really my interpretation here you know some i think comes from chernow

but um like he loved standard he loved every minute of standard oil i think if it were just standard oil i don't think any of this would have happened i really think the weight of this wealth and this philanthropy like what's like this albatross just like hanging around his neck and let me give a quick uh scope for a moment when you say the weight of his wealth let's talk about his wealth so far at this point in time and that we can check in later and update the numbers so uh in uh in 1890 he was generating 10 million dollars in annual income just from standard oil dividends from a variety of sources and there was like almost no you know the percentage of the population that is in that level today is like infinitesimal and and you know it's like 30x today like that though these numbers is just insane the other thing to think about is this is before the federal government enacted the income tax so this is 10 million

post-tax dollars uh he uh not even posted there's the the concept but it's like the notion of a post-tax dollar today just street money he really just has this like self-perpetuating wealth because he owns 257 000 of the 973 000 shares of standard oils so he owns a quarter of standard oil and he's generating these dividends at this point in time i think rockefeller was trying to keep it pretty modest these like 11 annual dividends but he himself was receiving 3 million in these annual dividends he had 24 million dollars invested outside of standard oil and things like railroads and real estate and steam ships and like a dozen of each of these types of companies he was in invested in banks like chase manhattan he had a very close relationship there and and and put a lot of money in there but like he i think by the time he actually retires he's worth about 200 million dollars yeah and right around this i think ah

gosh i think this happened after he retired it i don't have any i didn't write it down in my notes uh so i may get the timeline wrong but i think it was after he retired a roundabout way he ends up owning a significant iron mining and ore deposit operation uh that ends up getting rolled up into u.s steel when jp morgan rolls up u.s steel point not the bank the person rolls up uh u.s steel which is of course carnegie steel that he's rolling up into yep exactly and he makes 80 million on that transaction like 80 of his 200 million dollars of wealth come from this u.s steel roll-up that he was fortunate enough to have made an investment in this iron company it's just wild so he's got at this point of course owning a quarter of standard oil generating 10 million a year in annual income got all these investments across all these industries and then boom u.s steel happens to him too man strength leads to strength for

sure i guess it applies to people too not just institutions and one last comment on this rockefeller wealth you know i mentioned we're still in sort of this 1890 to 1892 time frame but i mentioned that that point when he's worth 200 million in in 1902 the gdp of the united states at that point was 24 billion dollars so even at that point this is like you know there's still a lot of there's still a decade before standard oil gets broken up and he owns a quarter of it uh he already has one percent of the us's gdp as his personal net worth oh wow already the richest man that will ever ex richest person that will ever exist in america including bezos suck all these people yeah well it'll be interesting to see how things play out in the next in the coming years uh but uh but yeah i mean crazy uh okay so he's got all this weighing on him you know he's sort of two he's trying to be the best of the greatest of

all time trying to be the goat the tom brady if you will in both business and philanthropy um finally in 1891 he he he not gives up but but says like i gotta find a a different way to make this work and he convinces a man named frederick gates who he had been working with on the university of chicago project which we'll talk about in a sec to come move to new york and and help him with the philanthropic uh endeavors that uh that he's undertaking and this is like um this is so novel like this ends up you know creating uh what leads to the rockefeller foundation you know a family office all the stuff about how we think oh yeah this is how it's done today this is where it starts like uh he he starts this whole thing he in gates um he writes a letter to to gates he says i am in trouble mr gates the pressure of these appeals for gifts has become too great for endurance i haven't the time or strength with all my heavy business

responsibilities to deal with these demands properly i am so constituted as to be unable to give away money with any satisfaction until i have made the most careful inquiry as to the worthiness of the cause these investigations are now taking more of my time and energy than standard oil itself either i must part with the burden or stop giving entirely and i cannot do the latter i mean this that's that sums it up right there it's crazy to me that he's looking at this as uh he's still the same old rockefeller he's obsessed with digging into every little detail knowing how the money is going to be used it's actually very similar to the the buffett comparison that we made earlier you think about the episode that we did with i think is berkshire hathaway part two when he starts uh donating some of his money like warren was obsessed with analyzing the return on an investment and so when he was

going to donate he was obsessed with understanding how could i maximize the impact of that investment which of course was this large burden for him and so that's why he ended up deciding actually i'm just going to go give it all to the gates foundation and they can figure out and i don't have to think about it whereas there is no there are no foundations yet so you have rockefeller here with a similar obsession with making sure that it every penny is deployed in the most optimal way the way he did his whole business career and how frustrating yeah well i think there's one key difference though between rockefeller and buffett i think they both have this outlook but buffett i think didn't and doesn't want like he doesn't have a genuine like want to be involved in it like he he has this outlook this he's like this is the way it should be but like i don't have a passion to do it myself rockefeller has the passion to do it

himself too like he's he's like i wanna run standard oil and i wanna like do this myself but i need help so he brings in gates and we should say like and what they go on to do they basically invent philanthropy yes yes they do like that is like like i think if they you know we're gonna have so much fun on this episode still to come but um i think if there's one thing to take away from this part too it's like part one was rockefeller and standard oil invented modern business the thing to take away here is like they invent philanthropy and coming out of that is like so many cornerstones of what modern life is for all of us or almost all of us that are listening that we just take for granted yeah and it's when we say invent philanthropy they invent these sort of uh systematic and organizational giving away of money they don't invent tithing you know like that's a biblical concept but but they

really do invent modern philanthropy yeah all right so let's get into it so the first big project well you know as ben as you said he had been giving all his life even going back to his bookkeeping days he was giving an amount and um the first significant project that uh he and the family uh do is actually spellman uh college was spelling seminary what becomes spelman college the um hbcu uh women's college in atlanta uh in the early 1880s they um they they they financed the building of that uh and um spellman uh i didn't know this said spelman spellman is the maiden name of his wife seti spellman yeah uh pretty amazing that that was the first like major project that they do and i think they already just to not over credit i think they already had like a few hundred people enrolled and they were raising money locally and they just had some debts and so rockefeller came in and just wiped out all the debt

funded it and then building the campus there too pretty wild i mean it is the first liberal liberal arts college for black women in america yeah totally amazing and also worth worth pointing out about rockefeller's character which i find fascinating because a lot of times you study people from this era and they just have such the you know they're a product of their time and so they have a very low opinion of people that aren't white men and rockefeller does have some less savory parts in reference to comments that he's made about sort of other ethnic groups here and there but he went from like pre-civil war being an abolitionist to a big supporter of lincoln to really like carrying that through and then putting his money where his mouth is and really advocating for the rights of black people after the civil war yeah it's almost silly to say this but like for a rich white guy of the time he's

remarkably not racist yeah he is like so much about him is remarkably modern given the time and um and you know he doesn't uh like he doesn't have a perfect track record on anything and he doesn't have a perfect track record on uh you know women and women's rights most glaringly i think they he and said he had five children uh one died very young or four children that survived to adulthood the three eldest were daughters and then i think junior was the youngest uh one son the daughters are like yeah you know like uh fine you can do stuff whatever but junior you're getting all the money and you're gonna be my successor very similar to the new york times story in that respect where the money flowed through the male lineage yep totally but as you say remarkably striking how close to modern um he was in his sensibilities um so that was that was spelman that was the first big project and then there's the university of

chicago uh which obviously is this amazing institution and achievement i think this project is really what put him over the edge psychologically though this was hard um so it started i didn't know anything about this history so um it started in the early 1880s there was this movement to build a true baptist university in america and remember rockefeller's baptist you know all the ivy league schools uh you know started as religious or quasi-religious institutions but they weren't baptist with the exception of brown brown had a lot of baptist influence and that's where junior rockefeller's son went um but it wasn't strictly baptist i don't think there was they wanted to build like a real baptist university and the ivy leagues at this point in time are becoming more and more secular like it's uh they're sort of the the baptist educational community is sort of worried about uh uh oh what's about to take off

is this sort of secular education movement and all the best and brightest are gonna flock to those types of institutions and remember you know what did we say the first time about the baptist they're evangelical they wanna like you know it's not about the wealth per se but it's a you know they want to recruit and so this movement is like we want to put this university in new york city like the par you know attract everybody the big city america post-war et cetera jd of course is the perfect benefactor for this so he gets involved uh it becomes a mess the guy who's running it um a guy running the the initiative a guy named augustus strong who's a baptist minister he ends up sort of scheming um rockefeller's oldest daughter uh bessie ends up marrying his son so they get like very involved but then the project falls apart and rockefeller withdraws his support awkward um it eventually does morph into

trying to build this project in chicago instead and the idea is that you know actually we think chicago's midwest like it was the west then like you know the frontier uh but it was the biggest city in the frontier i think it was already the second biggest city in america at that point that here was sort of new ground we can build this baptist university and then it'll be a model and a template and we'll build a bunch more baptist universities all over the country and two more benefits too one of which is it's really expensive to build stuff in manhattan and so it's a lot cheaper to get building materials out there and hire construction crews and then of course you have rockefeller who really wants to do these good works because he thinks they're the right things to do not because he thinks he's repenting for some business sins that he's done and he's like really really afraid of anything that looks like i'm

doing a charitable thing in order to curry public favor so they don't hate me for the business like anytime anybody would insinuate like well this is a good way for you to make up for all the standard oil stuff he would just like excommunicate them and so it was convenient that it was in chicago because he sort of felt like if it's in new york then people will sort of view it as me trying to influence the public to like me and i don't want to be seen as attempting to do that so you're saying like the opposite of what rockefeller wants might be something like um oh i don't know like leland stamford university or vanderbilt university or duke university all wonderful institutions i went to one of them uh but uh yeah these are uh these are people who want their names on the building so to speak and like for most listeners i bet you're like wait rockefeller started founded the university of chicago and that is

exactly what he was going for and it wasn't just universities right so like obviously probably some of you are thinking like well you're talking about how rockefeller pioneered philanthropy and all that but like you guys are missing something there was another wealthy white dude at the time who was pretty dang philanthropic andrew carnegie of course and they were big time rivals uh you know carnegie did something pretty amazing he created the american public library system oh i didn't know that yeah oh you know you know how there's like a library in every town in america like that's carnegie he created those libraries and fun i assume that was like taxes i guess it probably is funded by taxes like public libraries well i think they're you know government institutions uh today but um but they were created and sort of given to america and he also did uh internationally too um created a bunch

of library systems um by carnegie but uh you know one of the reasons for sure that he did that is like how do you make sure your name goes down in history get a plaque or a statue in front of a big building in every town in america with your name on it that was not rockefeller's stuff yeah this is at the time sort of a nebulous concept but he wanted what he was doing to really be like standard oil in that you know what did standard oil do they had all of these different operations you know in different states but also different companies remember they they bought up all these other companies and it wasn't that they like absorbed them wholeheartedly or you know wholesale a whole cloth um they kept operating these individual companies on their own with support from the mothership but they were expected to be profitable have good tight operations in a decentralized manner they would just have to pass a quality bar for

making sure that their they had good reliable product and then they would slap the standard brand on it yep and the standard brain what was what was standard itself it was about setting the standard it was about creating uh you know doing this sort of quote-unquote research to create the best processes that again just get disseminated out to the decentralized organization that's what he wants for philanthropy uh and so once he brings gates in they start thinking about this and they turn their attention to the state of medicine and health in america and in the world they do something pretty amazing so in 1901 they decided to set up the rockefeller institute for medical research in new york city this is amazing they buy a farm they buy a farm on the east side of manhattan uh uh overlooking uh overlooking the east river uh in the in the six like the upper 60s you know like literally in the middle of manhattan

there's this farm and they set up this research it's this medical research institution there uh and the idea is it's not gonna be it's gonna be pure basic research uh and sure now is this great great quote of rockefeller talking to it to his son to junior he says john we have money but it will have value for mankind only if we can find able men with ideas imagination and courage to put it into productive use rockefeller placed the scientists at this institution not the trustees in charge of expenditures and this was revolutionary this was the institute's secret formula gather great minds liberate them from petty cares and let them chase intellectual chimeras without pressure or meddling if the founders created an atmosphere conducive to creativity things would presumably happen so at this little research institution goes on to become rockefeller university ben had you heard of rockefeller

university before we did the research for this i hadn't and i've been blown away by the amount of medical research that's come out of it so a small sample this i'm just gonna like a read from wikipedia here if you go to the wikipedia entry for rockefeller university these are the things that have come out of this in no particular order first to culture the infectious agent associated with syphilis showed that viruses can be oncogenic which enabled the field of tumor biology identified the genetic defect associated with artheriosclerosis the leading cause of heart attacks in the u.s development of the practice of travel vaccination identified the phenomenon of autoimmune disease developed virology as an independent field developed the first peptide antibiotic crazy showed that genes are structurally composed of dna discovered blood groups just casual all the blood groups exist yeah developed methadone as treatment of

heroin addiction and devised the aids drug cocktail whoa really yes really uh so this this institute it wasn't until the 50s that it would become rockefeller university so during rockefeller's life he never created or intended to create a university with his name on it uh but um you know here's much later this is a quote from winston churchill talking about john rockefeller when history passes its final verdict on john d rockefeller it may well be that his endowment of research will be recognized as a milestone in the progress of the race for the first time science was given its head longer term experiment on a large scale has been made practicable and those who undertake it are freed from the shadow of financial disaster science today owes as much to the rich man of generosity and discernment as the art of the renaissance owes to the patronage of popes and princes of these rich man john

d rockefeller is the supreme type boom that is a pretty ringing endorsement winston churchill yeah winston churchill so like this you know this is very far from uh you know what all these other philanthropic folks had in mind it's also like diametrically opposed to the university of chicago project where that was like super high overhead you know uh big deal out of the gate a lot of pomp and circumstance and with the rockefeller university or what would become that it was it was almost like the lean startup yeah like you've never heard of it and they didn't make a big deal at the beginning and they didn't build a special campus and they didn't it was very much like let's get a bunch of really smart people the brightest in their field together we'll pay them good money and like we'll kind of see let them come here and work on what they want to work on we're not telling them what to work on uh

so uh in its you know hundred and ten hundred and twenty year history um there have been 38 nobel laureates that have either come through or been produced by the institute and then the university so there's all this basic research that they're doing they go even further so the first head of the institute who they recruited was this guy named simon flexner and flexner was a physician uh he had been he was teaching at penn and he'd been educated at johns hopkins which was really the only like real medical teaching institution in america at the time remember like this is you know we're talking about how modern rockefeller is and how modern standard oil is and how modern this philanthropy is remember his father you know bill uh was a doctor quote unquote like he was a like a witch doctor like that's what medicine in the practical sense looked like in america you know it was really closer to that at

this time still i mean at best it was homeopathy at best at best which rockefeller was actually sympathetic to himself for a long time but um so you know they gates and rockefeller in the family they work with flexner and they say how can we you know we've done all this research in this science how can we change how medicine is practiced so they go to hopkins they take the johns hopkins model which is four year you know what we know as medical school today four years post undergrad and they spread it out they don't go create another university to teach another medical school they go create medical schools at all the other universities in america uh with this model um you know before this other medical schools you didn't need a college degree there was no standardization there was like there was no faculty standards um so they go first to the yale university of vanderbilt then to all these other

institutions and they just give tens of millions of dollars so they just start medical schools to start medical schools in the model of johns hopkins uh and and this creates you know modern practical medicine as as we know it today then they go even further in the teens and twenties um you know after world war one uh they're concerned about like you know there's there's some practice matters but there's also a broad there's like public health is a thing so they go back to hopkins and they say we will fund creating a new school here attached to the medical school a public health school so they create the first like you know school of public health at hopkins and then they go to harvard and they do the same thing there so harvard did a school of public health uh and then they go again out to all the rest of the universities in the country and around the world uh and it's all behind the scenes like this so like

this is so rockefeller and so standard oil like you know and is this being sort of managed by frederick gates yeah gates and and now the rockefellers like junior gets very involved in this and ultimately takes it over um but senior and junior and gates the three of them together along with the staff that they're building uh they're driving all of this it's awesome so listeners as you can tell by now standard oil part two is really like rockefeller part two i mean we're dancing in and out of standard oil here but there's the scope of what the early you know or standard oil money allowed the rockefeller family to do is just unbelievable yep uh and then to you know sort of put a bow on all of this here in 1913 so they're thinking the whole time they're like how do we really institutionalize this you know seniors getting older uh they built up this office this is unique how do we how do we make this something that's going to

perpetuate indefinitely they set up in 1913 they get a charter from the state of new york i don't know exactly how this works i think it was a federal charter granted in the state of new york to create the rockefeller foundation which still exists to this day they give away hundreds of millions of dollars a year to causes from medicine to education to the arts to all sorts of things too if there's some public you know good cause in america or around the world like there's a good chance that it was funded at least at some point in time by the rockefeller foundation it's also because it's been privately held this whole time we also don't have an exact figure of like what the sum of all these different pockets of rockefeller family wealth are worth it's really i mean it's kind of astonishing that we don't but we don't like there have been scholars who have tried to pour into this and there are

estimates but it's uh it's tough yeah and this model you know endowments today from university endowments to all sorts of other charitable foundations uh this is this is the model they follow so um i think i think that's probably where we should leave it right ben um you know rockefeller standard early one business he's one philanthropy he's one like america there's kind of nothing more to see here right you know everybody lives happily ever after not quite not quite not quite i uh i was waiting for the right moment to use this in the episode i think this is the right time the one and only you know ben you've been on the the mafia movie uh and content kick you know the godfather and all that in your car abouts i think it's time to bring in the one um good part of godfather part three just when i thought i was out they pulled me back in yeah yeah you shouldn't have stayed you should not have left your name on

the door should not have left your name on the door john should we tell the story yeah let's do it all right here we go the breakup of standard oil so let's review a few numbers before diving into the breakup story so rockefeller had sort of handed over to archbold you know the day-to-day of of running the company that modest 11 dividend archbold's a pretty big shareholder all his friends are pretty big shareholders that ratcheted up to 31 in 1897 and then 33 in 1899 so we are cutting big dividend checks to all these uh these shareholders which rockefeller actually was not happy about that you like keeping it super modest keeping the cash in the business reinvesting it the share price so this is interesting it's not a publicly traded company and so we don't get to see the books but speakers do change hands but shares do change hands and so every day in the newspaper uh a share price is published

at which it's kind of the reference price that that people are are deciding to trade the share price went from one direct offering yes 176 dollars in 1896 to then three years later 458 dollars so the stock is running as they say so you've got this nice uh tesla like move there yes uh which not really like the number the the stock movement that we're seeing today in meme stocks is is just a totally different multiple than we're talking about here but unbelievable three year run from 176 to 458 you then sort of look at that dividend policy uh and you're like well how much of that you know is there in total from 1893 to 1901 they paid out 250 million dollars to shareholders keep in mind rockefeller is making 25 of that like he's upset but he's also making just a crap ton of money and so the the thing to sort of land on here is this is all before the automobile like this is all still the kerosene business

and there's this this like seminal point right around 1898 where cars start happening like it starts working we go from 800 cars in 1898 to then two years later 8 000 cars and so it's starting to happen standard oil is realizing wait a minute we finally can use this useless gasoline product and so even in his retirement rockefeller's real wealth ends up getting piled on top of his sort of paltry wealth that we talked about earlier from the uh mass market adoption of the internal combustion engine yep yep yep so right around that time when the automobile was taking off this is also the crazy thing you know like there's two um there's two parts to the breakup story that we're going to talk about here you know they're both good for everybody uh one is the breakup uh which is good very good and two is the automobile which is very good and they happen like right at the same like on the same parallel paths

so in 1897 right as this run-up in the auto industry is starting uh and right as jd had fully you know tried to walk away uh from the business uh good old state of ohio they bring charges again back to the top of the show here they're like okay you guys moved to new jersey but like still you're still like breaking our laws we still don't like you uh and so what they do is um somebody like a government official tries to go they get a hold of some old trust shares and they try and go redeem the shares of the trust to get they're like oh well uh you know if you did what you said you were gonna do i should be able to go get shares in standard oil new jersey and then there's a holding company of underlying you know all these other companies and they can't actually do it so they're like aha you guys you defrauded everybody so they bring a case rockefeller actually gets called to testify in this case

and he puts on this great show he pretends to be this like doddering old man who's senile and like can't remember anything it's amazing oh when he's on the stand it's like it's like he's like wandering through the mist oh i can't remember oh it's been uh it's it goes from like one of the sharpest brightest people to ever live in american history to seemingly having no recollection of really how anything kind of came together yep oh my god how did that how did that happen you know where are those trust shares gosh i don't know mr prosecutor uh the um uh the state doesn't actually win the case uh but it's it's again it's like kind of a distraction it starts to move public opinion which is what really counts the court of public opinion against standard oil uh but they win and everybody's like oh okay fine like you know we're gonna make it uh also oh this is just so good at the same time as this case is going

on there's a presidential election happening uh it was actually when it started in 1896 was the election and uh there's a really terrifying figure from standards a standard oil's point of view running for president here william jennings bryan the celebrated the og populist his thing was um america was going to get crucified on a cross of gold right that was his uh yep populism and silver that's like his uh like the two things i remember from american history about him oh motherhood and apple pie that and he was like around forever like somehow he showed up in like uh i was like how is this guy still alive like he was in the american national political scene for decades and decades and decades hmm still alive hmm just a striking choice of words there so brian loses uh of course he doesn't become president and who does become president the best person that like standard and all these other trusts like jp morgan and carnegie

and everybody could imagine william mckinley the celebrated conservative who's standard oil contributing republican from ohio yep yep good old boy standard contributed a cool quarter million dollars to his campaign everybody is just pumped uh his campaign manager mckinley's campaign manager a guy named mark hannah actually went to high school with john d back when he was going to high school before uh wild bill pulled him out uh and he's like deep deep in the in the family with these guys he sends a telegram when mckinley wins it literally reads god is in his heaven all is right with the world that's a gloating telegram if i've ever seen one oh my god there's fist bumping going on all over the place mckinley is just like literally sent from god here from standards perspective fast forward a couple years though all's good on the federal level but we start getting some trouble with the states again and this time it's not

ohio this time it is right close to the new new home the actual home in new york is in new york when the feisty new governor of new york starts making some noises about coming after the trusts in particular the oil trust with standard oil none other than theodore roosevelt the new governor of new york which i didn't realize like what he did before becoming president and i didn't realize he was involved in bringing this suit against standard oil was he was he was very involved it's like if if if uh rockefeller was bad there's a chance theodore roosevelt was batter oh he was the ultimate badass uh i literally like i was gonna save this for a minute from now but like oh my god once again andy sparks on twitter the best reminded me that theodore roosevelt a little like all the glee that we had in part one for rockefeller and standard oil and flagler and like these uh mafia dons and everything that

they're doing roosevelt you're gonna have just an equal glee on the other side he when he was campaigning um this is actually later in life when he was unsuccessfully running for president uh later in life uh he gets shot before a speech he literally gets shot in the chest oh that's right and he gives the speech anyway right and he's on the way to deliver the speech he's being driven he gets shot by a botched assassination attempt he's got a bullet in his chest the driver starts to divert and take him to the hospital and he's like oh no no young man i'm gonna give that speech he goes to the speech he goes to the the venue and he sort of starts the speech he's like i'd like everybody to be as quiet as possible i don't know if y'all realize that i was just shot and he gives the speech and then he goes to the hospital uh amazing i mean this is like oh teddy roosevelt's the best uh there's a great uh david mccullough biography

about him yeah i think is it mornings on horseback is that the oh i think that that might be it that sounds that sounds familiar uh i've been to his uh his uh his home his his uh estate oh where sagamore hill i think it's called it's on long island huh cool it's super cool there's like a uh you know this was before um teddy also had you know by modern standards a problematic figure in his all of his hunting and you know all of yeah as you say are there pelts everywhere uh my favorite is there's a trash can made of an elephant hoof oh my god crazy uh so um all right so this is the guy this is the guy that is gonna challenge this so standard and the business community in markhanna they come up with a brilliant genius solution to their new problems from roosevelt in the state of new york remember they like control the republican party at this point they get roosevelt nominated as the vice president on the ticket for

mckinley's re-election campaign in 1900 this will get rid of him this will get rid of him like send him to bvp you know it'll be like great for his political career but you're gonna get him out of new york and everybody knows vps do basic basically not right put him in the corner put him in the corner now of course mckinley wins in a landslide again problem solved everybody's high-fiving what year is this this is you know the fall of 1900 when um when uh the election happens it's all great mckinley gets re-inaugurated and in 1901 and then he gets shot and he dies oops uh uh unlike roosevelt he does not survive did the secret service exist yet like are they are they bad at their jobs or are they just not around yet that's a good question i don't know i don't know such a wild world and also that this would like continue for ever you know oh not forever but like you know what reagan just got shot right

like was he the last president to actually be it's a good question yeah they seem to catch them early now yeah goodness um obviously we don't i don't mean to make light of you know mckinley being shot and dying but um this is not good for like literally the worst nightmare suddenly public enemy number one or private enemy number one for standard oil is now in the white house yes now in the white house uh so tr i mean i'm sure everybody's upset about this assassination one up but like well once he you know gets done with mourning he's like oh you mf i've got you right where i want you now uh and he's about to get some serious ammo because right at the same time literally the same month that tr is inaugurated as president september 1901 a amazing pioneering woman journalist named ida minerva tarbell who's a writer for mcclure's magazine national magazine which can be important national magazine

uh starts working on a new project that she pitches to the editor mcclure uh the history of standard oil as a book to come out in serial form in the magazine now one might say ida has an axe to grind from uh her own past hmm yeah what was her past well we'll get into that one sec but this i mean this is amazing like uh this is the birth of investigative journalism uh as we know it today um uh daniel jurgen the great historian who wrote the prize which so many people have recommended after part one that we that we read uh we ben you you read a little bit of it yeah i quickly realized like oh this is like mostly about u.s saudi arabia relations and we are so not going to get to that in part two yeah so we'll have to do cover the prize and all you know the rest of the international oil history another time uh but he you know celebrated historian he calls this book the history of standard oil

quote maybe the single most influential book on business ever published in the united states uh amazing um she becomes i i am tarbell uh and her colleagues at mcclure at mcclure's become known as the muckrakers you know if you've heard the term muckraking journalists uh this is she's them um do you know who coins the term muckrakers ooh no i don't teddy roosevelt himself no way yes so great he gives a speech that he talks about about how great they are uh yeah so she was this amazing character now you said she might have some agenda uh shall we say some biases a little bit of personal history to color you know her point of view here yeah so where where is uh where is ida from uh you know she's like this this international woman she lives in paris for a while but she's you know based in new york she's writing for this aerial deck magazine uh but her her roots are actually somewhere sort of close to home in this story kind

of western pennsylvania area yeah yeah you know like the the wild you know east back in the day yeah she grew up in titusville and her dad was an oil refiner right not only did she grow up in titusville while the beginnings of the oil industry were happening her dad was a a producer like a driller uh who like got totally flattened by standard oil and was one of the leaders of the like riots uh like the rebellion against the south improvement company stuff and everything that was going on at that point in time and i don't know if you knew this not only her dad her brother goes into the oil business and her brother becomes a senior executive at pure oil which is like the most legitimate competitor to standard right i don't think we talked about this in part one uh part of the strategy was they got to like 90ish percent market share uh in refined oil uh products uh you know coming out of the us uh they

didn't want to get to 100 because they wanted to keep up some charade of competition totally it's like having bing out there in the search engines exactly sorry bing uh so the bing of standard oil was pure oil that they allowed to survive and guess who's a senior executive there william walter tarbell ida's brother by the way i do have the like actual stat that we pulled from pitchbook sent us this great tear sheet that standard oil controlled 91 of oil refinement in 1904 and 85 of even the final sales wow wow monopoly uh you said it uh so i you know she's got this uh agenda one might say um but she is a like very serious journalist so she spends a year just researching the history she wants to find like what is the real history like nobody's uncovered how this actually went down well and she starts by by going to titusville to rekindle her roots and remember what it was like and like stew

up some feelings of anti rockefeller before embarking on doing this totally so chernow writes from the perspective of nearly a century later ida tarbell's series remains the most impressive thing ever written about standard oil that is like high praise i mean yeah essentially like so much inc has been spelled but for for sure now to say this is the most impressive thing ever written i almost ordered the book by the way but i was like this is going to be way too hard to read well we'll just take chernow's word for it here i trust him he continues a tour de force of reportage that dissects the trust's machinations with withering clarity she laid down a clear chronology provided a trenchant account of how the combine had evolved and made the convoluted history of the oil industry comprehensible in the dispassionate manner associated with mcclure's she sliced open america's most secretive business and showed all

the hidden gears and wheels turning inside it it remains one of the great case studies of what a single journalist armed with the facts can do against seemingly invincible powers uh and this was just like this was such this is like a freaking nuclear bomb that goes off in uh in standard oil and and around the country like this captivates america it was like you know like right now like the the uh elizabeth holmes trial is going on and like theranos like that was nothing is nothing compared to this right it's like that trial meets like the half decade long uh you know pitchforks against facebook and the privacy plus the anti-amazon sentiment like there there were no equivalent companies to standard oil there were other trusts that rose up and and sort of were uh uh following their business practices but no one as big or as bad or as loathed by uh by america as the standard oil trust it runs for 19 monthly installments so

for like almost two years uh the i don't have the exact numbers here but the circulation of mcclure's like increased like it like triples or quadruples during this time like it grows by hundreds of thousands of people and remember it's national like this is new you know like in the past you like standard you know they didn't really care about the press right because it was all like you know local stuff or like you know whatever like we can crush all this so there's a delicious piece of irony in this being a national publication like we do have this unbelievable unprecedented period in the early 1900s where you have the like golden era of media of magazines of newspapers and when you think about it like well what's the media business model that was the winning one at the time it was advertising and so you got all these corporations and trusts that are making all this profit and what they're doing is they're

advertising to potential consumers in these publications who now have all these consumer eyeballs and they're like we gotta get like really epic stories to tell and so it's like literally the profitability of the business model that standard pioneered that is funding the organizations that are now coming after them and it's like oh the parallels today are so i was i was on um the wire cutter the other day which is fantastic love the wire cutter um you know owned by the new york times they have affiliate links on the wire cutter great acquisition great acquisition to amazon right like you know amazon facebook all the like the you know the press today is coming after these companies in many ways you know rightly so although not like they don't have their own agendas too uh they're taking advertising from them too like it's crazy so crazy so uh in the history tarvel uncovers and documents exactly how the

cleveland massacre went down uh which remember if you remember from part one we read a a quote sort of fictionalized quote of how standard approached the independent refiners in cleveland with like hey you got two choices here we can crush you where we can buy you out at like evaluation that we ascribe that quote came from oh yeah this history we wouldn't know these things like this whole all the stuff we said in part one like we wouldn't know without ida because the only other real account is rockefeller talking to his official biographer william o inglis which was never published during the time right toward the end of his life and like he doesn't he only sort of breaks character once or twice and he really doesn't like it's really not that interesting or not that spicy of a story and still he says you know what actually there's too much here you should just store it in the family archives and so like it doesn't

come out and it ends up just being a source for future biographers in the future after they get the family's permission so like it really is ida tarbell who discovered all the stuff that we've talked about i mean there's lots of big stuff that she uncovers the fact that there were secret subsidiaries that were nominally you know people thought were competitors of standard oil but were actually owned by standard oil um she finds out that they are still like currently at the time engaging in illegal practices with the railroads uh there's a whole bun there's a whole thing about how um uh they they sneak papers out of uh i think the cleveland office of standard oil uh showing that uh the railroads are sending information about competitors shipments to standard oil offices um that comes out in the piece so you were talking about the national and all that the the fact that this was a national

magazine standard and rockefeller when all this comes out even though the antitrust cases are going on they don't do anything you know their playbook they've never been faced with something like this before and the standard response is silence they don't they don't respond they don't mount a counter campaign even though there's a lot of stuff in in the in tarbell's history that's wrong that they very legitimately could have taken issue with yeah and it's interesting that like that strategy works until some boiling over point like it actually it reminds me a lot of apple like if you think back to antenna gate is a great example where like apple doesn't comment on rumors one way or another because if they say that a rumor is not true then it means that you know it it substantiates all the ones that they don't comment on but then you have something like antennagate where like it wasn't as big a deal but

it was a deal and so steve jobs flies back from vacation on hawaii with his family to hold a next you know same week press conference about it and it's like there there is some boiling over point where like if you don't say something it is way worse you hit the nail on the head like up to a certain point saying something makes you look guilty but then past a certain point not saying something makes you look guilty and standard past this point so not saying anything made them look super freaking guilty in the eyes of the public you know and to be fair they were guilty of a lot of stuff um so the other so that's how they respond to the the tarbell piece yeah then on the roosevelt pressure front you know the first roosevelt's first term goes by and and miraculously they managed to escape by nothing like major happens in terms of breaking on the anti-trust front even though roosevelt wants wants

it to uh so when he's running for election in the 1904 campaign which would be the first you know sort of mandate for him from the people standard tries to run the same playbook they've always run they cozy up to him and they're like teddy let's all be friends here we've got a lot of money you know this is big for you this is your first selection on a national stage you could really use our support how about we make some campaign donations and roosevelt's campaign managers they're like sure we could use the money we'll take the money and they do uh but at standard wasn't the only trust to do this all the other big trusts did this too um the best quote uh this is one of my favorite quotes in all of titan uh which is actually from henry frick who was an executive at u.s steel about what happens here uh chernow writes that uh frick summed up the situation best after the election with quote we bought the son of a

but he wouldn't stay bought wow and who's frick uh frick is uh i can't remember if he was running u.s steel at the point or if he was a senior executive at usdl so not not standard but uh not standard oil but uh yeah he's the one that like got rockefeller and and jun and rockefeller's son rockefeller jr on the board of directors of u.s steel uh yeah i think that's right they were all you know buddies yep um so after the election which roosevelt wins in a landslide um because he's got the support of business behind him uh now he's like all right i've got the mandate i'm gonna make this happen uh so right after he's reinaugurated in um in february 1905 the u.s the congress passes a unanimous resolution urging individual states to conduct antitrust investigations into standard oil and immediately a whole bunch of states bring cases including missouri which is where everything eventually ends up

going down great state of missouri uh they subpoena jd to come uh and testify uh in front of a grand jury in this this investigation he he obviously doesn't want to do this so he goes into hiding he literally goes on the lamb uh at the same time the state of ohio actually they go a step further they issue a warrant for rockefeller's arrest so crazy like it's the world's wealthiest man it's not like he's leaving the country or anything but he's just trying to like stay super low-key about where he is he disappears like literally there are there are process servers trying to serve him with the subpoena and the warrant for his arrest all over the country trying to track him down they're jumping over the fence of i think it's potantico hills where he like his residents in new york like there's some servant or something who sees this like person leap over the fence and fall and they're like can we

help you uh so he's like he won't even tell his family where he is like the standard oil executives don't know where he is uh it's amazing he just disappears for like two years um during this time he's sending letters with no return address like constantly to 26 broadway to archbold and to all the other directors of standard oil being like guys i actually want to resign like he's sending letter he's sending his letter of resignation like perpetually like every week it's crazy because at the same time he's like building all these medical universities and like medical schools that are attached to all these other colleges and and these thousands of letters are coming in asking for money and he's dodging the government because they keep trying to get him in court it's he's like a bond villain it's amazing it's crazy it's so great uh so uh archbold oh my god archfold this is the other place i was going to have to swim with

the sharks and you sleep with the fishes uh line um you know they refuse to let them resign they're like nah i don't know where you are sorry bud there's no freaking way well at this point those guys are a lot of them are sort of like defending themselves and throwing him rockefeller to the bus they're they're saying oh standard oil may have acted in this you know in this illegal way but like i certainly didn't you even have executives at standard oil talking and giving first party accounts to ida tarbell to tarvel yes to try and shield themselves exactly so the the primary guy who talked to tarbell and did this was a executive and i think a board member um named henry rogers and charnel finds this quote i think he gave this i think he said this to tarbell uh this quote from rogers says quote we told him rockefeller jd that he had to keep the title of president these cases against us were

pending in the courts and we told him if any of us had to go to jail he would have to go with us it's the freaking mafia it's amazing oh my god uh so this is it there's no you know rockefeller he can stay on the run he can stay on the lam as long as he wants but like the the jig is up it's like the this is like the end of the sopranos where i forget whatever the situation was but like tony's getting whacked here like standard oil is getting whacked we don't know if tony was whacked yeah right okay we don't know but i thought they didn't the show's producers say at some point and then they unset it oh and then they answered they said oh that's not exactly what i was referring to interesting interesting um so june of 1906 roosevelt directly directs the u.s attorney like he calls like in a secret nighttime meeting he calls the the u.s attorney general into his office and he's like i'm directing you to open a federal

antitrust investigation into standard oil and then on november 18 1906 that suit is filed in missouri suit again federal suit federal anti-trust suit against standard oil on the grounds you know what the grounds are they have violated the sherman antitrust they are in restraint of trade which is really interesting because it was definitely true in 1890 it was true through the 1890s but their dominance was fading at this point in like the late 19 aughts you were already getting into a situation where there was major foreign influence i mean there was lots of oil found in in russia and in the middle east you're starting to get discoveries in texas yep california and who was it that said that uh if there was oil found west of the mississippi they would drink all of it oh i i haven't heard that one there was some standard oil crony at one point that was so confident that there was no oil west of the mississippi that they

would drink it if anybody found any and like so standard oil strong suit was not texas and of course the permian basin would become where tons of oil ended up being found yeah tex uh texaco uh or what became texaco and gulf i think also came out of texas yep yep uh so there there were yeah the monopoly was fading anyway which probably was the other factor that made like there are three things one roosevelt bought the son of a but he didn't stay bought to uh tarbell uh and the microacres in public opinion and three like legitimately they weren't that you know they're still the most powerful company in the world but they weren't as powerful well yeah like so so i don't want to flash forward too far here but i do know that in 1911 when the federal anti-trust law when things go down when things go down which i'll i'll just leave there for a second their market share had eroded to 64 there were at least 147 other refining

companies competing with in the united states at that point john d had left the company and so you you do have this really interesting sort of scenario where like i don't know did it need to be broken up at that point are we are we chasing demons of 20 years earlier i think we'll hold on that for now but i think that's the that's the thing to sort of noodle on at this point yeah well we'll hold on just for a minute let's let's go there let's you know not a bunch of like crazy drama happens between 1906 and 1911 but it's all it's all a sideshow uh it just takes that long for all this to get to the supreme court um and then judgment day may 15th 1911 u.s supreme court chief justice edward white reads the decision and this is like standard oil v united states right yes like it's like this is the big one yeah and and standard in the well gosh what's the circuit below the supreme court federal court of appeals maybe some

appellate court i'm not sure i should know this as a child of two lawyers and my two jenny's two parents are also lawyers they'll be yelling at me listening to this uh anyway standard had lost standard lost every step of the way and then the final appeal of course is to the supreme court uh the supreme court upholds the decision of uh finding against standard oil they are indeed in restraint of trade uh and orders them uh i don't know if it was the supreme court that ordered this remedy or if this was what had been ordered at the lower courts and they upheld it uh to be irrevocably cannot undo this broken up into 34 separate companies and it has to happen within the next six months it's a fast time frame to be able to disassemble a company seriously especially because all of the you know previous um changes in corporate structure at standard oil it may or may not have actually happened like they said it happened if i like did

it really have but this no like they gotta do this this time there's some tech dad there's some legal debt to go and uh undo here did you read about rockefeller's reaction when he gets the news is this when he's on the golf course and a messenger just brings it on like a little piece of paper so for this is the best this is the best uh real quick before we get to that i want to thank pitchbook our second sponsor for this episode and all episodes in season 9. speaking of bringing data uh on the golf course you can access pitch book on the golf course on your mobile phone they've got this great app really anywhere that you need private or public company data it's right there and you're in your hands in your pocket on our tear sheet that we've been uh referencing this episode pitchbook was kind enough to prepare some great stats for us about the company most of you know this but they're the

leading financial data provider for vc private equity m a they've got over three million companies they've got a million and a half deals on that ninety six percent of clients rate them better than any other data provider for private company coverage uh obviously we use it for the show we've got a very special offer for you today and all other days that you are listening to this at least before the end of this season i assume that it expires at some point but if you go to pitchbook.com acquired you can get limited access for two weeks to all of this data so if you're about to do a fundraise for your company or maybe you're um you know an investor and you're interested in you know checking out a market landscape on some companies you're thinking about investing in something like that go check it out pitchbook.com acquired and our thanks to the wonderful people that we get to work with at pitchbook

they're seriously awesome they're the best they are okay so take us back to the golf course david so rockefeller he he had come out of hiding at this point one of the crazy things that happened in the interim between 1906 and 1911 was um roosevelt got really pissed about this there was a judge in chicago um that almost blew up the whole case he he subpoenaed rockefeller and was willing to uh because he wanted him to come you know testify and was willing to grant him criminal immunity uh if he came to testify so rockefeller was like i'll take that i'll take that deal oh and he couldn't be like tried again for double jeopardy then so this would have been the one he couldn't be criminally prosecuted sidebar would happen this is ridiculous what happened so he comes he does the whole daughtering old man thing again i don't know i've lost my way what who are you what's oil what's oil uh the judge gets nothing out of him but

he's so pissed at the end of the process i forget what the exact case was he levies a 29 million dollar fine on standard oil uh which is like by like an order like two orders of magnitude the highest fine ever given to a company ever at this point that's crazy yeah that's like is that over a billion dollars today i don't know it was a lot of freaking money i mean now only companies get fined all the time but this was i think it was one if not two orders of magnitude higher of an intervention than the government had ever done in private enterprise before so what does this do this sends the stock market plummeting uh because everybody's like oh crap the government's gonna start coming after all of these companies and they already knew the government wanted to but this is the first time it was like oh crap this has teeth uh and so there's a panic in the stock market oh does rockefeller rockefeller

rockefeller you know he buys the dip kodak that'd be the easy joke to make here but even more he bail he offers to bail out the freaking country so he rolls everybody's like because now he's come out of hiding oh is this the panic of 1893 this was in like 19 gosh i don't know 8 1909 sometime around then sometime between 6 and 11. got it but there's a huge panic and uh everybody's pressuring him like hey you're the wealthiest man in america you know say something you feel like when you know when there's a panic now and buffett comes out and reassures everybody never bet against america yeah it's never been against america rockefeller does buff it one better he comes out and he's like i'll backstop everything personally uh so he like averts you know he restores confidence in everybody just a great irony here that was like that's the best sideshow of this whole thing so at this point he can't be tried uh criminally yeah he's

gonna get off scot-free for the rest of his life and he's no longer i think by 1911 he actually had left standard oil well so when the breakup happens in december then he officially his resignation is in for is is accepted at that point time and then he rides off into the sunset the great thing we'll talk about this in a sec he just becomes this like like the happiest man on earth after this he's so happy he's golfing he's vacationing he's becoming more of a socialite all of his worries about philanthropy that albatross is off his shoulders he's created this institution he's done these great things for the world he doesn't have to worry about standard oil first literally he's got to get a jail card free for the rest of his life so messenger comes he's on the golf course on on the fateful may 15 1911. not a care in the world he's golfing actually with the local catholic priest in uh in terrytown

uh they were they were buds he loved this like private golf course that he owned because he could take people out and like restrict them from ever talking business and so he got to be like jovial and social exactly on his terms yeah like he doesn't talk business anymore he just like after after he gets to get out of jail free card literally he's the happiest man in the world slow on the golf course he gets the messenger running up ah the supreme court ruled against standard oil it's gonna be broken up this is how the legend goes he gets the news he turns to the priest smiling and he says father lennon whose name is lennon um have you some money and everybody in the golfing party is like uh geez john i mean i know this is bad that standard's gonna get broken but you're not gonna be bankrupt like you don't need you don't need the catholic priest here in terry you got some real estate assets at least that you can sell off

and like uh you know support yourself in your old age here seriously father lenin's like uh uh well what why do you ask john rockefeller says because if you did you should buy some standard oil stock right now and he's so right this is the great irony this is the best best thing that ever happened to standard oil's share price to not not at that exact moment of course at that exact moment the share price went tumbling uh but in the long run uh to rockefeller you know the whole the the line and it's true is that he made more money in retirement and after standard oil was broken up than he did while he was working so what happens uh and turnout writes here this was literally the luckiest stroke of rockefeller's career precisely because he lost the anti-trust suit rockefeller was converted from a mere millionaire with an estimated worth of net worth of 300 million in 1911 into something just short of history's first

billionaire so remember he owned a quarter of the company trust you know whatever the thing and he basically never sold shares he was always a buyer from other people anytime he had a dispute with a partner or another board member i'll buy you out and because his mafia cronies uh you know archbold and flagler i think flagler was gone at this point but you know also like they kept raising the dividend against his wishes he was just getting this geyser of cash every year and that was financing all the philanthropy and whatnot so yeah he wasn't selling he still owns a quarter of this ding thing uh when the breakup happens uh shares so it's broken up into 34 companies standard oil of new jersey the main one but then all the other you know operations in the various states and refining and when are separated out and when they get separated out i'm pretty sure they become publicly traded companies

and so the financials the books get opened and people can see what ludicrously good businesses these are well so yes you can see what the the the financials but also not just the financials the assets they own all sorts of crap in these things it's not just like the oil offered they own god knows what and everybody all these like secret assets and all these you know competitors and operations and upstream and downstream stuff that you know people thought were competitors but really weren't forests to build barrels and what did everything we talked about in in the first one railroad cars all this stuff ability to make take metals and turn them into pipes and plumbing operations and it's crazy yep so uh december 1st 1911 the breakup takes effect 34 companies they all get publicly listed i don't know if it was on the new york stock exchange order but on a stock exchange you know for the first time

uh i don't think immediately but over the next year uh standard oil of new jersey goes from a initial share price of 360 dollars a share to 595 dollars a share over your year one uh standard oil of new york goes from 260 to 580. standard oil of indiana goes from 3500 to 9500 uh a share and so on and so on whoa close to tripling yeah all of these companies literally newspapers across america because i mean this is like this is just selling papers here all this news they start running daily box scores i don't know if it was alongside the sports section or whatnot keeping track of rockefeller's net worth uh and um it's uh it's amazing so yeah i hope that uh i hope that that uh that catholic priest had some some money to go buy invested by the dip i love that that's the stock tip too he's like all right everyone's about to know what a great business this is oh jesus says by the dip as another one of the just amazing

things here um so of course you know we finally have to separate out these assets you know everybody on the executive committee they met for lunch every day you know the famous thing that were titularly the presidents of all the separate companies now they actually are so they can't meet for lunch anymore gotta separate out no more lunch meetings at 26 broadway instead at jd's suggestion you know sort of like voice from from the golf course he's like how about y'all meet for coffee at 10 30 instead so they continue meeting every day at 10th just giving the finger to the government it's like the old line about you know when a when a european you know monarch dies and and they say you know the king is dead long live the king the the monarch is dead long live the monarch standard oil is dead long live standard oil that is exactly what happens here and so it's interesting in thinking about why

at least in theory why the government wanted to break up standard oil it wasn't that they wanted to necessarily again in theory punish the owners of standard oil because that they wildly failed at it was literally like we want to increase competition and and theoretically it will benefit consumers but again i really want to underscore that for the vast majority of cases and let's take out the like weird supermarket stuff they were doing and some of the terrible things they were doing at the railroads like it really all was just a benefit to consumers yep so you ended up with like consumers generally pretty happy from all this standardization over the years competitors super pissed and now the shareholders of standard are all just wildly rich beyond their wildest dreams it's actually quite interesting to think about the people that like took the deal in the cleveland massacre if they had held like that would have gone really

well for them so chief justice edward white uh who you know presided over the verdict and you know read the decision he was actually like a very conservative figure and very business friendly um so he had actually been he had this sort of pet theory and this was a chance to like write this into law oh gosh i'm gonna blank on what what the term of it was but you know remember there was the the modifying clause on the sherman antitrust act was uh in restraint of trade and there's like what is that oh so this was an ability to define what restraint of trade is and i think his whole thing was like i think it was called like the reasonableness doctrine or the reason something like that um that uh he wanted to be like yeah in restraint of trade within reason and this is what you're talking about here it's like let's be reasonable about this like it's not actually that bad for customers yeah so interesting and roosevelt was

pissed about this because he wasn't the president anymore by the time this happened uh roosevelt and like tarbell and the muckraking crew and all the you know progressives they really like they wanted all the standard oil people to go to jail they wanted to throw a book they wanted to end this practice forever and of course that's not what happened and they wanted to make it so other people were afraid enough that they would never try it again in the future yep and it ended up being this like you know very middle not even middle ground like very business friendly you know sort of quote unquote conservative uh final approach to it the government had a really big investment in this where we talked about how standard oil is really the the first modern corporation roosevelt sort of set the playbook for the modern billionaire we talked about how he invented modern philanthropy this is also like massively expanding

the uh might of the justice department in a way that the u.s had never seen before because in the 1890s the entire justice department staff in washington was 18 lawyers oh yeah i remember reading about this in order to go after standard oil they massively massively staffed up and i i assume it just never went down from there so there is another reason too why the breakup um ended up being great for standard oil and for its shareholders and and probably you know i don't think the government was thinking about this probably at all as a um as a uh consequence of the breakup but i i think does speak to there's like a really important lesson here about the danger of too much um centralization and like uh consolidation of power in a single entity and that is that so you know we've alluded all along to the fact that um it was automobile sales and that going from kerosene to gasoline that was really gonna

take standard oil and the whole energy industry you know to the moon to the next level here um that's not what rockefeller and the cronies and all the people that were having lunch at 26 broadway or coffee that's not what they were built for they were that was like you know they weren't against it but that wasn't their that wasn't their game and as long as they were in charge and as long as standard oil was this singular monolithic you know in practice uh thing um a lot of the sort of young turks uh within the organization that were focused on this new market felt stifled so the breakup allowed these people the the new blood to rise to the top so chernow writes while the old guard at 26 broadway mourned the trust's passage some young turks at the operating companies were overjoyed one of these extraordinary mavericks dr william m burton of standard oil of indiana thought that roosevelt had performed an

inestimable service after the 1911 dismemberment he said it was felt all along the line younger men were given a chance burton patented an exceptionally valuable process in 1913 two years later for quote-unquote cracking crude oil that is for refining it so as to yield a far higher percentage of gasoline this discovery permitted standard of indiana to reap incredible windfall royalties and you know if you remember from we were looking up on the last episode what did standard of indiana become amaco amaco and it was all this like all these you know innovation was was alive and well again within the oil industry here and within all the standard sort of children um so you know that's what standard oil of indiana becomes amico yeah can can i talk about what we go through yeah let's talk about them all right so the the spin-outs of the 34 many of them you know you'll you'll know to say the least so the especially if

you grew up in america but even if you didn't like you'll know yeah yeah the first one was standard oil of new jersey but its name in the spin-out was not standard oil of new jersey it was the eastern seaboard standard oil or the acronym s.o which is a little cute wink wink nudge nudge by rockefeller and crew to say and we're still s.o i just love these our anti-heroes here like they just have characters like uh totally the whole thing reminded me uh i think this was when i was growing up maybe to um the so esso which i had no idea what that referred to until recently um the marketing slogan was uh put a tiger in your tank do you remember that oh no yeah it was so good uh and literally i mean like this breakup and allowing these companies to flourish puts a tiger in everybody's tank here yeah so esso becomes exxon standard oil of new york becomes mobile yep standard oil of indiana as we mentioned becomes amico standard oil of

california becomes chevron boom standard oil of ohio which became sohio then got bought by bp to become bp america the ohio oil company which became marathon and then also the speedway brand oh the atlantic refining company which got shortened to a ceo part of that was spun off and bought by sunoco and then the rest of it was acquired by bp and then ironically they sold that brand over to marathon so a lot of internal dealings here still continental oil became conoco which of course is now conoco phillips and the south penn oil company became pennzoil oh i didn't know that one i missed that one ah that's cool because yeah there were all these other oil products that they were developing and marketing yep man i didn't know pennzoil was a standard oil uh child and here's the craziest thing is if you trace it all the way back and you look at the standard oil of new jersey and stereo of new york exxon and mobile

together accounted for more than half of the whole standard oil business prior to 1911. so exxon mobil really is the like primary reconglomeration of the majority of the original standard oil yeah so fascinating so fascinating there's almost like an evil laugh that i wanna that i wanna have after that line cause it's it is you're right it's like it's like delicious and it's it's a century in the making yeah well in a sec here we're going to delight like should it be an evil laugh or like a we'll debate in a second all right let's put a bow on uh on this whole thing shall we i want to end with just like illustrating standards wealth here because uh uh or or more in particular rockefeller's wealth because we've talked about a few figures over time one of them was the 1902 audit that showed he was worth about 200 million then around 1911 the around 300 million well he actually with all the stock pops in the split up

and the uh move into the gasoline market for internal combustion engines his personal wealth by 1913 just two years after the breakup was 900 million dollars so in 2021 inflation-adjusted dollars if you literally just do the inflation math that's about 25 billion but the more accurate way to look at it would be to say actually that's like three percent of gdp which was still only 40 billion dollars relative of course to 21 trillion today so if you if you base it on gdp that figure is about 470 billion dollars yeah that's because i the figures i had in my mind and that i think are on wikipedia or in that sort of 300 to 500 billion adjusted net worth range yeah so like i i do think we should think about him like he was a 470 billionaire not in terms of purchasing capacity but in in terms of societal impact like the the the analogy doesn't scale all the way back like if you think about when the gdp of america was a thousand

dollars if someone had 500 of that like sure they controlled half the well half the wealth in the nation but they didn't have the purchasing power that someone who would have uh you know 10 trillion dollars today would have so it's an imperfect way of scaling it but you know there is no one who controls two to three percent of the nation's gdp in their pockets the way that that rockefeller did in 1913. so let's think of him like a 470 billionaire well and here's the thing he had already given away about half of his wealth at that point yes that's the nutty thing is you already had the rmir that there you already had the the what would become rockefeller university you already had the university of chicago you already had all these medical endowments it's wild and so you you look today like bezos and musk are about 190 200 billion you've got gates at 130 billion again from all the philanthropy about tied

with zuckerberg buffett these days has about 100 billion again from the philanthropy so like if you think that rockefeller he sort of had the potential to have like 7 800 billion in terms of the amount of sort of influence of the nation's wealth that he controlled which probably would be about all of the other moguls today combined right that is exactly where i'm going perfect well and that's the perfect analogy he kind of was that i mean yes there was carnegie there was uh jp morgan there was a generation earlier there was vanderbilt you know and and there was stanford out in the west and like all that yep for sure uh but uh but that's the scale like yeah nobody could touch rockefeller so we should transition into sort of the family generational wealth from here because there's a few interesting things about it so by the time of his death in 1937 uh his remaining fortune of course which

is largely tied up in various family trusts was estimated to be about 4. 1.4 billion in 1937 dollars so that's about one and a half percent of gdp it's about 315 billion of today's dollars the rockefeller family uh is now seven generations in uh there's about 170 errors according to forbes they have a fortune of about 11 billion in 2016. so obviously been doing a tremendous amount of philanthropy i do think that 11 billion it's kind of an unknown we can estimate it all we want but like there are multiple rockefeller family trusts and philanthropies and wealth management groups and you know it's amazing there is literally a business and a business ecosystem around the rockefeller family uh which is crazy i actually went to college with several of them rocco is a like a wealth management firm for the rockefeller family venrock the venture capital firm okay so this is what i wanted to talk about so obviously the rock is

rockefeller and for those not familiar who want a crazy tie from this episode to modern day venrock was one of the earliest investors in none other than apple computer that's right that's right it was just amazing how full circle this comes alongside arthur rock yep yep so this really bucks the trend of have you ever heard the phrase david's shirt shirt sleeves to shirt sleeves in three generations uh i didn't i didn't know the three generations part but i've heard shirts leave some shirts leaves yeah it's like the general idea that because of taxes and you know the fact that this is when you have errors and they have errors and they have errors this is a exponential distribution of wealth so it just everything keeps getting cut in smaller and smaller pieces pretty quickly that has not to mention that's the case yeah that's not the case but i think the other thing obviously not in every case

but it's pretty hard hard nobody would shed any tears but you know maybe you should like uh it's a hard psychological um set of cards to be dealt where you like you are born into a family that who trusts fund of right multi-billion but like still like it wreaks havoc on people's cycles totally how do you go live a regular life when you know you have that in the bank totally so i i just find it fascinating how like this the shirt sleeves to shirt sleeves thing hasn't really been true neither has the like there's been no real like major lawsuits that we know of or feuds or public scandals like they're out of the news it's this family with 170 errors that still you know wields billions and billions tens of billions of dollars at the very least um is involved in all these projects and you really never hear about them yeah you know again because like when we're talking about the philanthropy like

rockefeller didn't want his name on stuff so you know all these universities all this stuff you know you don't know that it's rockefeller money but then there's the one great exception of rockefeller center yeah so i got the list you ready yeah so this is like this is what i spent my last hour doing before we recorded so we talked about spelman college we talked about the university of chicago we talked about rockefeller university and all the unbelievable medical breakthroughs we talked about the grant that he made to johns hopkins that ended up funding the discovery of a cure for scarlet fever which is pretty cool from and then so here's this continues from 1915 to 1940 junior financed designed and directed the construction of a network of carriage roads through acadia national park and then refinanced the whole restoration of the park in 1947. so this really interesting thing where junior

whereas senior kind of left his mark in medical research like he decided that that was something that he could do that was you know not necessarily religious but moral and so it aligned well with his religious views and the stamp that he wanted to put on the world in fact carnegie he was rockefeller was so well known for being the medical donor that like when carnegie got approached with projects like this he would go i do believe you're looking for mr rockefeller so like that was rockefeller put his stamp there junior was an uh a naturalist like he really you know wanted to to endow parks and things like that so check this out junior was a huge part of the donation to restore and recreate colonial williamsburg for anybody that's been there yep that was the main uh funding of colonial the recreation of colonial williamspike yep congress in uh 1926 authorized the creation of the great smoky mountains national park but

there was no nucleus of federally owned land to actually develop it so junior contributed 5 million dollars in 1926 the us government then kicked in 2 million and private citizens from tennessee and north carolina pitched in to assemble the land for the park piece by piece then junior led the round the government participated basically yes then you've got abby aldrich rockefeller who i believe is she junior yeah talk about what i think you're going to talk about here the moma the momentum of modern art in new york city was her brainchild which the the the land that the moment was on the the building yeah the space those were those were the two those were the first rockefeller mansions in new york uh no way not i think they tore down the buildings and the moment is a new building there but that land was when the family first moved from cleveland to new york they they built two they they bought two mansions

next door to each other one for senior and one for junior uh right there and that land i think is now the moma wild well and then nearby there there's obviously rockefeller center which was a junior project uh rockefeller center is fascinating right because it wasn't it was a business project it was junior's like main business project and everybody thought he was crazy like who would want to be headquartered then he recruited to be an anchor tenant and rko like in the radio city music hall the reason it's called radio city is he recruited all the like radio like the media organizations to come headquarter there uh and um now not to mention nbc yup yup you know 30 rock like rock rockefeller center the ice skating rink senior loved ice skating oh yeah that was his winter thing instead of golf yes and i think ice skating even started earlier in his life i think it did it did yeah back in back in ohio because he was like a big

fitness buff but interestingly not for um vanity purposes for longevity purposes because he was very much like uh he wanted to live to be a hundred came close at 98 but he was you know very to put it exactly the way that i think he thought about it afraid of dying and so anything that was for health and longevity was sort of virtuous to him hbo and the uh silicon valley writers team could have a field day with rockefeller if they were to go do like a retro version of silicon valley all right so the party continues in 1945 junior donated eight and a half million dollars which i think is something on the order of 100 million today to just go buy the land for the u.n like this is you know right after world war ii that would become the the where they built the un building in new york that's awesome and just donated it he continues the area that is now grand teton national park was privately owned

until the 1930s when junior started buying up the land that would eventually uh he would donate to become much of the park especially the actual jackson hole area i really could go on too with like large areas of the redwood state park in california or embarcadero center like the buildings in san francisco no way yeah yeah again more of a business project less of a philanthropy necessarily but that is a that that was a rockefeller investment it's just amazing like the this family uh you know this man like and the company and company and then companies the foundation the institutions you know and then the family that he begat like like every aspect of like american life was touched uh and modernized like by the rockefellers it's insane yeah you're playing right into my what i try to say at the top of the show and what i was alluding to when uh our world is a rockefeller shaped one and in more ways than just standard oil

all right well there's definitely some playbook and other things that i want to talk about here but first let's talk about power so we reviewed i i think we probably did the seven powers justice in part one and we don't need to do it again but i do want to make a a point especially because we sort of teased it in the intro of where did they have legitimate business practices and where did they kind of run afoul where the initial power that they had in the business really came from like their operating excellence creating economies of scale innovating like clever production inventions and refining but then later on they clearly leveraged their scale position to like put competitors out of business screw over partners like the railroad try and gobble up as much of the value chain in really sort of nefarious ways and eventually they just straight up used racketeering and bribery to to to sort of ensure that their um their

very profitable business at 90 market share could continue one one fun little sidebar that i uh i missed in the notes on that um it literally was straight up bribery you know i think we've only talked about political campaign donations archville archbold was he was like he was really somebody uh he when he took over he actually put legislators on the payroll like not campaign donations just like you you get fifteen thousand dollars a year you you get twenty thousand dollars a year like to do what we want in perpetuity i think the best way to put it is probably they became unsatisfied with what they had accomplished and they just kept pushing yup it's almost like i i do wonder this is probably the the right transition point to what would have happened otherwise i mean what if the trust hadn't gotten broken up and i think we should examine it from standard oil shareholders perspective which i think

we're all gonna say like what would have been worse uh consumers perspective and then competitors perspective and and in part like maybe even before what would have happened if they hadn't been broken up maybe we should examine what would have happened if they hadn't gone into nefarious business practices like what what if they just were the leading innovator and they had the best operational excellence and they were operating at large scale so they could have legal scale dynamics out at play yeah you know it's funny my my thoughts on this i think there was like it's like a i don't know we're talking about boiling points earlier in the episode i think up into a certain point as we hopefully laid out in part one what they were doing was um i don't want to bring morals into it but it was a chaotic point in both american history and in the industry like it was chaos uh in the oil industry in the early days

and kind of you know is rockefeller's argument right like we would have all beat each other to death uh and maybe somebody maybe we would have emerged the winner eventually but we accelerate it's like um uh foundation you know for people who've read uh uh asimov's foundation right like the the whole premise is there will be like chaos for fifty thousand years or one thousand years if we have the selden plan to like get everybody through to the other side and it'll happen much faster and suffering will be alleviated that's what standard oil did in the early days i think i would say that there is a lot of merit to that but once that happened then they kept especially after after rockefeller left you know archbold and the other cronies they kept using those tactics even after they'd already crossed the point and that was bad they were insatiable it was like all the even even some of the more nefarious tactics

you're right probably led to good things for everyone especially for the the people who did end up taking standard oil shares rather than being run out of business but then at some point it doesn't accrue benefit to anyone in the ecosystems that took to keep pressing your advantage and the damning piece of evidence here uh i don't have the numbers in front of me but it's in titan it turnout quotes it's actually just a small part of the book i wish he'd spent more time on it at a certain point you know just like uber and you know lyft today are like you know the all monopoly or duopoly type businesses at a certain point they did start raising prices on consumers uh and in those early days you know it was great for consumers they kept prices artificially low etc etc but once they did wipe out all the competition and rockefeller was against this but the cronies started doing it uh they started

raising prices and exploiting monopolistic pricing power um so you know at a certain point i think it did become at least not as good for consumers consumer harmful yeah yeah yeah okay so what if the trust wasn't broken up yeah they probably would have it would have eventually become worse for consumers uh certainly well the competitors thing is interesting so we've already talked about shareholders it was great for for shareholders that they got broken up for competitors it's interesting to me that there was already a very legitimate competitive set emerging by 1906 and certainly by 1911 when they only they had less than two-thirds market share at that point yup i don't think competitors were having a hard time at this point in history because of the maturation of discovery and drilling technology that we realized there was just way more oil out there than we realized like you drill into the earth's

crust at under most countries in the world and you're going to find some oil and i think that would have eventually driven down their market share even if the uh government hadn't broken them up into 34 constituent parts so we thought uh we were debating like how do we grade this what it what analysis do we do you know we we talked a little bit about powers here but we mostly covered that in the last episode um you know we're going to end with a grade here uh in a minute but we want to add a special section for this episode which is uh one of our motivations for doing this series other than like it's a really freaking great story and we love telling good stories uh it's like duh this is happening again now you know with tech or let's at least say it's happening in social networking where they're being rolled up together it's happening in actually that's the chief offender well amazon too and e-commerce like those

yeah but not in this like rolling up way like facebook is the most direct comparable thing to standard oil apple has plenty of offenses in potentially abusing their app store privilege uh but i think that's a little bit of a different thing yeah certainly on the um anti-trust sentiment in the public though uh i think that expands to all of big tech right in the government and in the public uh not just social networking yep somehow not microsoft this time around but yeah yeah right they already had their their day in court um but yeah sorry we thought this was a really apt thing to do right now uh and uh so we thought for this section we would uh kind of just brainstorm and go through and catalog like all right what are the similarities and differences let's enumerate them between the standard oil story and the situation with big tech today um and this is the one i hadn't thought about this before we recorded but as you

were saying uh the market had already started to change by the time the breakup happened and the competitors were emerging in a way that nobody thought they could before and that was because of american condition i think that's happening now too are you saying that that the calibra is not going to win web3 i doubt it uh i seriously doubt it but yeah like if we rewind two to three years ago um i mean i even think like talk talking to lps about uh venture capital fundraising two to three years ago is where this this was like really cute there were conversations happening where a legitimate concern was like why should we invest in startups right now because big tech has settled big tech well and they're going to eat everything you know but between facebook and amazon and google and apple and all the returns are accruing to scale in a way that's never happened in this industry before and it's just going to happen

indefinitely any new market or idea of any import that comes along the best you're gonna be able to hope for is that facebook buys you for a couple billion dollars um like uh it seemed dire out there fast forward to today and like i don't know about you ben but i am wildly excited about investing in startups and not in big tech companies oh it feels like we're at the the same way that it was at the beginning of the mobile era it feels like this explosion right now in in particularly web3 and a lot of you know crazy wrong stuff out there but there's so much heat and energy and it's such a new paradigm yep and i think not only it's not just crypto and web 3.

look at like sas company like how many independent multi-billion or tens of billions of dollars public sas companies are there out there now like amplitude just went public totally there's a new five to ten billion dollar ipo every other day right now like a few years ago that would have been unimaginable so true and it's funny you said a few years ago uh the ben thompson article the end of the beginning which lays out this hypothesis uh and he has a really good analysis on it i think it's probably the best um the best analysis done on are we done creating new big tech companies forever uh that was january of 2020 oh wow hadn't been that long wow all right i think it's time is it is it it might be time for another acquired postulate i don't know what we're going to name this one ooh lay it on me and i'll decide all right new postulate heard it here first probably i'm sure we're not the first

people to say this anytime somebody declares the end of something like you know this game is over this market is over blah blah blah that is wrong that is the uh bottom of the market and is all going up from there because it is never the end what was the year that the uh inspector general of the the uspto said that everything's already been invented i don't know that one that's that's like one of these best apocryphal quotes ever so yeah that's that's a great yeah that's a that's a really good point i mean one let me make a more nuanced point uh and i sort of just realized all those lps in uh you know 20 oh my god i'm just thinking about this i love lps uh as a class but like 2016 2017 2018 when they were nervous and like worried about this and not wanting to invest in venture capital oh my god those were the best years to be investing in venture capital that's a great point that's a great point all right go for

well i want to make a little bit of an argument against regulation uh or at least the nervousness that regulation gives me regulation by definition will always limit innovation because it says you can do less stuff in the world yep it's prescriptive yes and a lot of times that's good a lot of times that stuff shouldn't be done uh people's creativity can lead them to do destructive things but it does seem to be the case that paradigms break monopolies and so we may not need legislation or the courts to do it and that these things will play themselves out like by the fact that 21 years after the sherman antitrust act standard oil's monopoly position was already unseated by the time the ruling came down i mean it's if if there's so much value destruction going on by a monopoly that we can't afford to wait it out that's you know that's one reasonable argument to either have law or courts change this

but paradigm shifts happen like new technologies happen and they will always unseat incumbents yep yep and in particular in this one it was the advent of electricity that unseated kerosene and the the uh creation of of the internal combustion engine and the massive desire for gasoline you know that sort of like undid the the invention of electricity because suddenly there was this massive market available but then right around the same time again oil's discovered freaking everywhere and we can drill it very easily everywhere so you sort of have this this massive destabilizing force driven by technology in our ability to go find this product elsewhere yep i like that so i guess where i'm going with that is um it may not always be necessary to go trust bust as long as we're willing to sort of wait it out and if there's coincidental timing of a new technology sea change which i think is the argument that is

at least so far kind of carried the day in terms of what's actually happened with big tech at least in america not in china but in america of um you know gosh these are like big hammers you gotta be really careful about wielding them uh and maybe it's better to let it play out a little longer before you you know bring the hammer down yeah this is why i was saying that facebook is the most similar thing to standard oil and just to be extremely blunt about it facebook buying instagram and whatsapp is a lot like standard oils cleveland massacre and um you know the subsequent roll-up of all these other refiners elsewhere oh the parallels are like exact right yeah like literally zuck goes to went to these founders back in the day and was like love what you're doing here's my competing product that i'm launching next week you know like yeah here is the ultimatum and i'm wondering if the internet and software makes it so

that acquisition is not the only way like growing horizontally via acquisition is not the only way to play standard oils playbook like should we be concerned about apple or about amazon's anti-trusty stuff that might look like standard oil in a different way that is not rolling up those are more sort of like platform concerns platforms either competing with the the vendors on them um or perhaps uh abusing their their position in the value chain to take too much of a rake or as bill gurley would say a rake too far uh uh you know obviously the 30 thing with apple those i think are are different than what we're talking about here with standard oil well if anything i think standard oil actually was a i don't know what's better what's worse depends on your perspective but to my perspective played these aspects better because they could have done they could have taken a rake too far on so many

things but as we talked about in the first episode like they weren't they didn't want to put all their partners out of business they could have crushed the railroads under their foot at any time but they didn't want to they wanted them to profit and thrive ooh maybe actually that's more like apple where like apple's keeping the take rate where it is they're going to take an insane amount of the profits of the work of these partners but they want to keep the partners around like apple's not gonna they're like well we don't want to go build every app so it's good to have a developer ecosystem building apps whereas standard oil was like not sure we want to actually be the railroads but it's really nice to extract as much value from them as we can yep well and i think that's where there's like a little like i don't know exactly i don't recall or if you don't even i don't know if i ever even knew the numbers

well enough to say in terms of their relationships with the railroads but i feel like i don't know apple maybe this is just sentiment but like god that 30 feels really unjustified whereas i don't think standard with the railroads and their other partners wanted the partners to feel like they were doing taking an unjustified piece of the pie uh they wanted them to know that they could at a moment's notice but uh i think they really did value like warm relations so to speak interesting all right before we move on to a couple fun little last tidbits i know you have been before we uh before we grade uh two more um similarities i wanna highlight uh resonances between the situ the standard oil and the big tech situation um one is like i'm just struck by that quote about um standard oil of indiana at the end and like that the the sort of young turks in the ranks thought it was great when the breakup

happened i think part of what was going on there is like the the old guard became so ossified in their view of like how the world worked and like weren't weren't seeing reality anymore you know and i think about not all the big tech companies but again to pick on facebook like this really seems to on the outside to be the case with facebook right now and like the facebook files and everything going on with the wall street journal like it really seems like leadership there you go whatever what's right or wrong like they're like like when the um when the tarbell articles came out and rockefeller and everybody was like oh we don't need to say anything here like they're playing this wrong you know and i wonder i bet there are a lot of people deep within the organization that are actually doing the work who are like we should be have a different strategy here but can't have their voices heard you know

um anyway that's one um the the other one similarly that i want to highlight is like the press you know like this sort of like dual the angelic and the sort of you know less angelic side of the press and people and journalists and their motivations you know this is playing out obviously real time in so many places in tech like yes the press is doing great super valuable incredibly important investigative work and yes they are also humans and the new york times hates facebook yes they're also humans with agendas uh like that was true then and it's true now at the end of the day all of this is a bunch of humans doing things that they are incentivized to do for whatever biological chemical reasons they're incentivized to do them yep yep so the standard trademark was doled out as a part of the breakup to the 34 child companies and each owns a different set of states that they can use it in many

of these states have a use it or lose it clause in their trademark and so in many of these states including california where chevron owns the standard trademark there is one or two gas stations that will carry the logo of the company you're familiar with but say the word standard and there's a great one in downtown san francisco that you can go drive by and be like wait i'm sorry what standard it lives it lives it's uh it's at a market in van ness right yup yup it's uh you jab and you're like whoa that should be a chevron station but it says standard on it so weird it's so so like such a fascinating like it's fun to like see a remnant of american history sort of like on on your commute the second one is a very interesting harbinger of what's to come uh the foundation the rockefeller foundation's assets starting all the way back with standard oil and then of course in what it was broken up into an enormous holding as

you can imagine is the oil companies in particular exxon mobil in december of 2020 just this last year the foundation pledged to dump their fossil fuel holdings so you have the the original oil money pledging divestment yeah interesting so that'll be fascinating to watch how that plays out so they haven't is it that they've pledged to do it but they haven't done i don't know what their time frame is yet i assume they're not going to just dump all of it on the market yeah probably not but to hear you know the the john d's descendants pledging you know it's it's this delicious dichotomy of of john d believing that we should hold on to the standard shares because they're going to be so valuable forever and hoard them and now you know finally we're at this moment in history where we're realizing how really terrible it is to burn all these fossil fuels and even the largest holder of the remnant

shares of the of the standard oil company is now saying it is time for us to get rid of these yeah it'd be super fun to find um we we meant to do this on this episode but it's there's too much other stuff to get in and we're not experts but maybe find some guests do a special episode on uh like i'd love to unpack this right because like the the oil industry you know like oh i would love to understand just current ownership structure like you know what's a cap table look like totally i mean specifically yes all that too but also from an environmental standpoint like yeah fossil fuels are bad but fossil fuels and oil upgraded the world technologically to where we are now you know like quality of life no doubt would not be what we have today if not for all the fossil fuels we burned right right so like what is i don't know what's the right way to think about this and we're not gonna change overnight that's the other thing

it's like should we all be using clean safe nuclear yes we should and it's gonna be a long time before that is the case yep so more more fun acquired energy stuff to come in the future yep well before we get to grading we want to tell you about our last sponsor of this episode nordvpn i'm sure by now you know the story of a friend of the show listener slack member tom oakman who started this company with his friends his childhood friends in 2012.

now a thousand employees 15 million people use it it's the world's fastest vpn i mean the the best way i can pitch this to you acquired listeners is if you're gonna use a vpn you should use this one it's a great one it's super fast and it's made by your fellow acquired listening compatriot awesome story of this being a bootstrapped company from lithuania uh just a just an amazing entrepreneurial success so our our special thanks to tom and the whole nord team you can sign up at nordvpn.com acquired and use the coupon code acquired at checkout also on vpns like the you know as we've been as nord's been a sponsor this season i've been thinking about it like vbns are like totally nice and great to have and i'm glad i have nord here in the us you can do lets you do awesome stuff like if you wanted to maybe like i don't know watch a out of market streaming sports event when you're when you're geographically in a city

that you know you couldn't otherwise like cool that's awesome all sorts of great stuff there are also places in the world where vpns are like mission critical critically important and like the difference between life and death like it's easy to forget that totally it is good stuff that they are doing all right grading um i thought a fun way to do this would be so the the very classic acquired episodes very early on especially were grading and acquisition so if you are the shareholder of a big company and you use some of the assets of that big company to buy the little company how good of a investment or use of those proceeds was it to go buy that little company i thought for this one it would be fun to say well i'm the shareholder or a shareholder of standard oil and let's say the government's not involved and i as the management team of the company are recommending that we break this up into 34 constituent parts

and like we're not being forced to do anything this is just the way that we are choosing to rearrange our corporate structure everyone's going to get a 34 a share in 34 different companies proportional to your share of ownership in the standard oil company and that is the transaction that uh that we are electing to make as a corporation are you saying it would be like uh i don't know if you're like a shareholder or a board director at amazon and do i want to hold amazon shares with everything or do i want aws shares and amazon exactly or spacex and you're like do i want to hold spacex shares and starlink shares or even going back to our ebay episode with paypal like how good of an idea was it to do the spin-off for shareholder value so i'm leading the witness here but i i don't think it's an a plus necessarily but it's definitely an a that they they did this it from a pure shareholder value perspective in uh um

in finally being able to uh open the books see how good of a business each of these things were and uh there's an open question in my mind of like what if you could just open the books of standard oil as a whole rather than break it into a bunch of little parts but there is no arguing with it was a great move uh again i'll say it and it sounds dirty saying it because it's just such a corporate capitalist phrase but great move for shareholder value to um break it up oh man this was the this was the og uh you know value unlock this is what you know investment bankers uh uh would be uh uh just salivating over uh today oh can you imagine the fees on this deal too you can make so many slide decks funny story i was talking to a a friend earlier today he'll laugh but he when he listens to this uh no identities or anything uh revealed here but um who was a investment banker back a few years ago uh who uh his group covered tesla

and he was telling me about uh the the 420 day the day that elon tweeted funding secured and just the mass chaos that that unleashed on wall street because like oh they were like who's doing the deal if it's already secure well once everybody figured out like oh the deal was in flux but then like just like the fee potential that like everybody's eyes lit up to like we gotta get in to be you know lead advisor on whatever this deal is gonna be and signing up different buyers and partners and like that this i can only imagine the situation if you were a banker and you heard that standard oil was considering a a spin out like it would have been that times 10. yeah i mean in in reality you actually had five years of preparation and lighting up the transaction to do so it was probably a little bit more organized but that actually wasn't covered much in in titan so i'm curious for a more financial history of the breakup to to

cover there's got to be like a uh barbarians at the gate of the standard oil breakup oh that would be so good all right so david what's what's your grade for you're a shareholder in standard oil this is for sure an a like on every dimension i mean we've already covered it like there's no there's no dimension where this is bad uh and it's i don't know it's probably borderline a plus like i don't know like this is a great for this type of transaction i can't think of anything better like this is great the way that you could actually calculate some kind of return on it is like you look at the uh appreciation and the ensuing decades of all the and compute some kind of irr on all the component parts uh and try and look at it versus the like previous 15-year irr on the appreciation of the actual shares of standard you get archbald and rogers and all that all those guys out of there and turn this these places into legitimate

operations like oscar it's fantastic young turks gasoline centers yeah all right what do you think i mean that's yeah it's an a i mean i don't think anybody's gonna argue that like uh like these companies went on to become the most valuable companies in the world until big tech you know all right so what does this portend for big tech breakups like should amazon spend out aws so i'm of the opinion that uh it it's indifferent with amazon like i don't think that there's any value that's being like first of all we know the size of both businesses uh i don't think the that it's them both being under one umbrella is creating drag for either one of the organizations like i think amazon knows how to move pretty fast with both of them but i also don't buy the like we're our own first and best customer thing in a way that is value creative on the scale of oh my god they're so much better together than they would be apart i

think that's always been a myth that amazon is the first and best customer of aws like i don't think that's actually true well it took a while to move over all the amazon stuff that was written not on aws awesome they were still using article until like last year yeah so i i actually think like ed i as a potential amazon shareholder i don't know if we should disclose or can disclose on the show uh i i'm whether i hold it or not i'm indifferent to uh or as a theoretical amazon shareholder i'm indifferent to uh you know whether it's one company or two i think we can well at least i have before i'm uh amazon is a i saw uh uh uncle stu uh stuartner uh uh uh slack community he uh he tweeted today with uh like his current uh evaluated uh holdings portfolio so like our bets are off now our events are off now we're in stonk land for an uncharted territory yeah amazon is uh i don't know if it's my biggest holding

compared to i think i think i have more bitcoin than amazon but anyway it's one of the top three for sure um yeah i i think i'm with you indifferent to maybe slight preference for a spin-off um i think i think it would probably unlock standard oil in you value but i'm probably that's probably just recency bias by just having done this episode here yep yep all right let's move on to carve outs yeah let's do it what do you got all right two for me uh the first one is uh the upcoming macbook pro with an m1x uh or an m2 or whatever i so desperately need this this is your like making it my carve out just to will it into existence sooner i was looking around for like what should be my carve out and i i looked at my computer and i was like well not that thing you're going to end up like never upgrading your computer because you're just holding out like i need it so i think i told you like a year ago that

like you should have just gotten the air i'm on the m1 air it's freaking fantastic and then just sell it and get the dude you just get an error right if i'm willing to get it i sell it for you there's like 10 bucks on it these things keep their value so much like you're right but we're so close now all right if they don't announce this damn thing i thought it was like three months away forever right right i think if this is not out by december i'm i'm literally gonna buy you an errand i'm to send it to you and then i'm going to charge it to a choir fair count me in i've said it on air you have my verbal signature the air is really good i bet okay i i have a second one though uh we at pslventures just invested in a great company called starfish space alongside our friends at nfx and mac venture capital this company is so freaking cool this is my first space investment from from psl oh you've been wanting to do

this forever totally and this company is so cool it's it's a effectively an outer space tugboat it's a tiny little satellite that you launch and it attaches to other satellites and can tweak them a little bit it can just move them back into orbit gently can do things like extend the life of satellites by like five years it can uh you know decommission satellites that are in a dangerous place i think we've all seen gravity you don't want that to happen you know satellites should be where you want them to be and it's it uses like it's autonomous it uses electric propulsion it uses this really cool novel technique to dock to other satellites to um that's a super versatile way to do it and the founders are just top-notch so i just wanted to like talk about them for anyone that's also a space nerd um obviously they're hiring but i think like just be go to starfishspace.com check out what this

company's doing i just love the like incredible innovation unlocked by this birth of the um the private space tech ecosystem these days so cool thank you spacex elon yep man we gotta we got listeners keep telling us not to do this because we get people's hopes up but uh i'll do it anyway we gotta do some more elon stuff we gotta do like a tesla part two elon if you're listening we officially agree yeah we'll have you for sure on the show we'll accept your invitation to come on the show and if you're listening and you've emailed with elon like in the last couple weeks like reply to that email with him and be like by the way i think you should do this yeah the next podcast you do it's got to be it's criminal that you haven't done it with us yet terrible no but literally i'm not even like being facetious here like nobody's going to tell the story better than us i truly genuinely believe that so

what are we waiting for rosenthal sales pitch uh okay my uh my car this is a funny one it's like sort of embarrassing but i'm not embarrassed anymore um so for a long time i saw all of my friends dropping like flies on this not just with having babies that we're now doing to the last of the party uh i'm not talking about that uh but i resisted for years and i was like you did this ben and i was like no way that is just too on the nose millennial i am not gonna do this it was my best pandemic purchase totally uh and sometimes the wisdom of the crowds is right for a reason i finally uh became a card-carrying millennial i broke down i bought a peloton uh and uh it's great it's it's really great like do you need one no actually i used it for a couple months i used just the app and a cheap spin bike from amazon it was fantastic but i found i was using it so much which like just shocked me i didn't expect that like

it's so it's so efficient you're looking in really good shape thank you thank you well and i've thinking you know i got the baby coming like things are going to get wild you know i'm not going to have time to just like go for long leisurely runs anymore i want to be efficient uh or i'm going to turn into i'm gonna start looking like my baby all you know flabby uh and uh so yeah then i broke down and i i i used ben's referral code thank you uh got a peloton uh pro tip so i think this is different for everybody initially i was like all right if i'm gonna do it i'm gonna go all in let me get the bike plus um so i got the bike plus initially and it's like really nice for sure but it just wasn't i had used a regular peloton before and i was like this is not especially with the price trap on the regular peloton this is not a thousand dollars more nice i can't believe it's a thousand dollar difference

it's absurd like they need to there's so many things wrong with peloton's pricing strategy but um like literally you know i don't mean this to her i'm actually helping peloton now john foley if you're listening to this come on the show we'll talk about the pricing strategy yes i actually mean it we should do a peloton episode if you know john if you're friends with him tell him he should come join us i love it this is great we're just episode planning uh anyway yeah it's great it's great don't get the bike plus at least right now it's stupid to spend a thousand dollars more but the main bike like it's really freaking great and now i get like amazing workouts in 20 to 40 minutes uh and i'm just so glad to now have this heading into crazy parent life welcome to the party pal uh we'll have to check in uh we'll do you know we'll have to do some um some like acquired group rides or something oh that'd be fun it would be

super fun if you want to do that post in meetups in the acquired slack great all right that's my car valve all right speaking of that there's an acquired slack it's uh got a great url acquired.fm slack nice and memorable we uh are launching a thing i think maybe depending on the order of these episodes as they come out we will have told you about this on a previous episode but if not then we are announcing today for the first time or the second time the existence of the acquired job board so so many of you have been posting in the jobs channel for years now in the slack you have hired each other you have gotten new jobs through the acquired community and it like warms our heart to see it because it's really cool to watch so many of you get to go work with each other levels solana labs vouch a bunch of different places that are sort of our friends and um you know close to the show have uh have had folks

join them uh but now if you go to acquire.fm slash jobs that is in a nice organized format where you can browse and there's even a little one-liner next to each job of it's kind of making their their rosenthal sales pitch of why uh this is a cool job and you should come work here we curate them so there's no one that's allowed to post there that we don't look at and approve and sort of decide um personally that we think there are interesting opportunities so uh yeah go check them out acquired.fm jobs most of you know about the lp program but i do want to highlight a recent episode that was friggin awesome we haven't shipped it yet as of recording this but i bet it'll be out by the time we drop it uh it is with roneill rumberg the founder and ceo of audios so fun i don't think i've had a better web3 conversation on or off the show than with ronille i thought it was so cool about it was like

we ranged from talking about like super technical like deep stuff like ronnie was a computer science like major at stanford like we were actually there at the same time i was a tsp he was an undergrad so then we were talking about fun like just like tech history stuff from that era and then like towards the end we're like oh yeah by the way you're in the music industry so tell us a little bit about like you know that and he's like oh yeah um a little like hanging out with dead mouse and yeah yeah he's really cool he's a cool dude like like what yeah for people who don't know audience is crazy it has six million users and it's a crypto application like it's i think that brave and meta mask are probably like the three largest um like applications by user count in all of crypto right now web3 yeah yeah he was like oh yeah like blowout did a mouse yeah but like you're really fun to hang out with

and we got into like the stuff that i was really curious about which is like how do how does a decentralized application work also with like a standard web stack like a web 2 stack where you definitely need web servers and you definitely need to serve an application to people using regular browsers so um really fun i'm actually going to go listen to it because i feel like i've forgotten some of the conversation and want to want to re-listen but check that out acquire.fm lp thanks so much to our friends at pilot pitchbook and nordvpn if you want to share this with a friend you totally totally should one-on-ones are our favorite we like to grow with high affinity rather than when a broadcast method so um pick a person that uh you think would really enjoy this and please send it to them and with at listeners we will see you next time we'll see you next time and next time well next time you're going to hear from

me because we we did build up a little bit of a backlog we'll actually be in the past but then the next time i talk to you my life will have changed so yeah it'll be wild totally wild all right listeners later we'll see you then who got the truth is it you is it you is it you who got the truth now huh

you