There is a tough truth that any small business owner has to face. Even in the best of times, the vast majority of small businesses fail. In this article, we'll look at ten entrepreneurs who not only succeeded, but built vast business empires.
John D. Rockefeller
John D. Rockefeller was the richest man in history by most measures. He made his fortune by squeezing out efficiencies through horizontal and vertical integrations that made Standard Oil synonymous with monopoly - but also dropped the price of fuel drastically for the everyday consumer. The government broke up Standard Oil for good in 1911. Rockefeller's hand can still be seen in the companies like Exxon (NYSE:XOM) and Conoco that profited from the R&D and infrastructure they received as their piece of the breakup. Rockefeller retired at the turn of the century and devoted the rest of his life to philanthropy. (More than 70 years after his death, this man remains one of the great figures of Wall Street. Learn more, in J.D. Rockefeller: From Oil Baron To Billionaire.)
Andrew Carnegie loved efficiency. From his start in Steel, Carnegie's mills were always on the leading edge of technology. Carnegie combined his superior processes with an excellent sense of timing, snapping up steel assets in every market downturn. Like Rockefeller, Carnegie spent his golden years giving away the fortune he spent most of his life building. (Though not as well-remembered as some of his contemporaries, Andrew Carnegie's legacy is strong and moralistic, read The Giants Of Finance: Andrew Carnegie.)
There is no doubt that Edison was brilliant, but it's his business sense, not his talent as an inventor, that clearly shows his intelligence. Edison took innovation and made it the process now known as research and development. He sold his services to many other companies before striking out on his own to create most of the electrical power infrastructure of the United States. While Edison is a founder of General Electric (NYSE:GE), many companies today owe their existence to him – Edison Electric, Con Edison and so on. Although Edison had far more patents than he did corporate ties, it is the companies that will carry his legacy into the future.
Henry Ford did not invent the automobile. He was one of a group working on motorcars and, arguably, not even the best of them. However, these competitors were selling their cars for a price that made the car a luxury of the rich. Ford put America - not just the rich - on wheels, and unleashed the power of mass production in the bargain. His Ford Model T was the first car to cater to most Americans - as long as they liked black. Ford's progressive labor policies and his constant drive to make each car better, faster and cheaper made certain that his workers and everyday Americans would think Ford (NYSE:F) when they shopped for a car.
Charles E. Merrill brought high finance to the middle class. After the 1929 crash, the general public had sworn off stocks and anything more financial than a savings account. Merrill changed that by using a supermarket approach - he sacrificed the high commissions to serve more people, making up his money on the larger volume. Merrill worked hard to "bring Wall Street to Main Street," educating his clients through free classes, publishing rules of conduct for his firm and always looking out for the interests of his customers first. (We all know names like Rockefeller, but there are other influential pioneers of finance in America's history, see The Unsung Pioneers Of Finance.)
Sam Walton picked a market no one wanted and then instituted a distribution system no one had tried in retail. By building warehouses between several of his Wal-Mart (NYSE:WMT) stores, Walton was able to save on shipping and deliver goods to busy stores much faster. Add a state-of-the-art inventory control system, and Walton was lowering his cost margins well below his direct competitors. Rather than booking all of the savings as profits, Walton passed them on to the consumer. By offering consistently low prices, Walton attracted more and more business to where he chose to set up shop. Eventually, Walton took Wal-Mart to the big city to match margins with the big boys - and the beast of Bentonville has never looked back.
Charles Schwab, usually known as "Chuck," took Merrill's love of the little guy and belief in volume over price into the internet age. When May Day opened the doors for negotiated fees, Schwab was among the first to offer a discount brokerage for the individual investor. To do this, he trimmed the research staff, analysts and advisors, and excepted investors to empower themselves when making an order. From a bare-bones base, Schwab then added services that mattered to his customers, like 24-hour service and more branch locations. Merrill brought the individual investor back to the market, but Chuck Schwab made it cheap enough for him to stay. (Learn more in The CEO Dream Team - Walton, Schwab, Marcus And Blank.)
The 1920s found Walt Disney on the verge of creating a cultural juggernaut. A gifted animator for an advertising company, Disney began creating his own animated shorts in a studio garage. Disney created a character inspired by the mice that roamed his office, Mickey Mouse, and made him the hero of "Steamboat Willie" in 1928. The commercial success of Mickey Mouse allowed Disney to create a cartoon factory with teams of animators, musicians and artists. Disney turned that mouse into several amusement parks, feature-length animations and a merchandising bonanza. After his death, the growth has continued making Disney (NYSE:DIS), and his mouse, the founders of the largest media company on earth.
When people describe Bill Gates, the usually come up with "rich", "competitive" and "smart." Of the three traits, it's Gates' competitive nature that has carved out his fortune. Not only did he fight and win the OS and browser wars, but Gates stored up the profits that came with the victories – and Microsoft's dominance – to fund future fights and ventures. The Xbox is just one of the many sideline businesses that the massive war chest has funded. The fact is that Microsoft's cash and Gates' reluctance to pay it out is a big part of what saw the company through hard times and funded expansion in good times.
Unlike most of the others on this list, it's possible that Steve Jobs' greatest achievements are yet unwritten. Jobs co-founded Apple (NYSE:AAPL), one of the only tech companies to offer a significant challenge to Microsoft's dominance. In contrast to Gates' methodical expansion, Jobs' influence on Apple has been one of creative bursts. Apple was a computer company when Jobs returned to it. Now, the iPod, the iPhone and the iPad are the engines of growth that have pushed Apple past the once unassailable Microsoft. When Apple surpassed Microsoft's market cap in 2010, it became clear that investors that, with Jobs, the best is yet to come.
These 10 succeeded by giving the customer something better, faster and cheaper than their nearest competitors. No doubt, some like Rockefeller will always be on these lists, but there is plenty of room for the right person to find their place among the entrepreneur's pantheon. (Find out what this winning manager did to grow one of the biggest companies in the world, see Management Strategies From A Top CEO.)
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