What Is a Tycoon?
A tycoon is a prominent figure in a particular industry who has amassed substantial wealth and power while building a business empire. Tycoons are often identified in industries that have economic prominence.
Tycoons have traditionally been associated with steel production, railroads, oil, and mining, but more modern tycoons have been closely associated with technology and Internet companies. The word tycoon is based on taikun, a Japanese term used to describe shoguns.
- Tycoon was first used to describe wealthy industrialists who dominated their industries in the 19th and 20th centuries.
- The word tycoon comes from the Japanese taikun, originally used to describe military leaders.
- The term tycoon is less negative than the term robber baron, which was applied to many tycoons because of abusive business tactics.
- Traditionally tycoons were in industrial sectors like oil, steel, and rail. Now many modern tycoons own businesses in technology and entertainment.
- Wealthy investors with large holdings are not generally considered tycoons, as they are investing with entrepreneurs rather than operating a business themselves.
Referring to owners of large businesses as tycoons became popular during the Industrial Revolution when small-scale manufacturing gave way to mechanized manufacturing on an industrial scale. Tycoons were both popularized and demonized during the Gilded Age, a term coined by Mark Twain to describe the period after the Civil War that saw the rise of the robber barons and America's first large multi-national companies.
While robber baron was a clearly negative label for these industrialists, tycoon could be used to imply vast holdings more than anti-competitive and corrupt business practices. However, public opinion on the business practices of some tycoons eventually led to more stringent regulation around critical issues of child labor and monopolies.
The Industrial Tycoons
During the Gilded Age, a number of entrepreneurs amassed unparalleled amounts of wealth through aggressive business deals that created massive companies. These companies when on to dominate the American economy in a way that was historically unprecedented. John D. Rockefeller was the world's first billionaire thanks to the fledgling oil industry of the 1860s and shrewd acquisitions.
Rockefeller diversified his oil holdings by refining one product into several, including kerosene for lamps, paraffin for candles, and petroleum jelly, to medical supply companies. He also made acquisitions up and down the energy value chain, making it very difficult for his competitors to operate without also padding his bottom line.
Andrew Carnegie similarly built his empire as a steel magnate through a series of good investments. When Carnegie needed a way to transport iron ore from mines, he purchased a railroad company. When he saw the steel business outpacing iron on shipping volumes, Carnegie pivoted and began buying up steel mills and vertically integrating so that he held more of the supply chain.
Carnegie's steel was sold to companies that manufactured railroads, train cars, ships, and automobiles, almost all of which exploded in production over his lifetime. In 1901, Carnegie sold U.S. Steel to banking tycoon J.P. Morgan for $480 million.
While Rockefeller and Carnegie were the wealthiest tycoons of their age, there were many others. These include industrial tycoons whose businesses peaked later, like Henry Ford, as well as some of the earlier tycoons like rail magnate Cornelius Vanderbilt and the proto-tech entrepreneur Thomas Edison.
One of the first industrial tycoons was John D. Rockefeller, an oil magnate considered to be the richest American of all time.
Plenty of men and women have risen to tycoon status in more recent memory. Bill Gates founded Microsoft in the 1970s, and his technology company took off in the 1990s as personal computers became more affordable. Gates's personal wealth was pegged at around $129 billion in 2022. This is more than social media tycoon Mark Zuckerberg's $63 billion fortune but less than Amazon's Jeff Bezos' $135 billion.
Not every tycoon is purely in technology now, however. Oprah Winfrey has amassed her fortune through her popular television talk show that inspired millions of people thanks to her daily conversations on topics such as spirituality, literature, and health. She had earned more than $900 million by the start of the 21st century and is now worth $2.5 billion as of 2022. This is largely due to her taking an ownership role in the content she has produced and oversaw as her career has continued to grow.
Are Wealthy Investors Tycoons?
Warren Buffett, nicknamed the Oracle of Omaha, frequently ranks as one of the world's wealthiest people, as do some of his investing peers, like George Soros. While there are many investors who have built fortunes making the right call time after time, they are generally not considered tycoons—nor are they considered entrepreneurs for that matter. Investing is less about building an empire than it is about spotting the next empire being built and the company best positioned to do it.
How to Become a Successful Entrepreneur
Successful entrepreneurs tend to have a strong sense of vision and the ability to delay gratification. Starting a business often means long, thankless hours for little pay and no guarantee of success, so the ability to make sacrifices and hard decisions is absolutely essential in the early stages of a startup. These qualities do not guarantee success, but success is much harder to reach without them.
Otherwise, organizational and leadership skills are also essential for business success. Running a successful company means coordinating the resources of many different people with different skills, and it is important to avoid interpersonal conflict.
What Is the Difference Between a Tycoon and a Billionaire?
A tycoon is generally considered to be someone with a dominant or even monopolistic power within their industry. A billionaire is simply someone whose net worth is over one billion dollars, regardless of how they attained their wealth. There are many billionaires who are retired or do not dominate one industry in the same way that a tycoon does. Bill Gates, for example, is currently a billionaire, but no longer a software tycoon.
What Is the Difference Between a Mogul and a Tycoon?
Like a tycoon, a mogul is someone with a great deal of power or influence in a certain area of business. Neither mogul nor tycoon has any formal definition, and the terms are sometimes used interchangeably to describe powerful business people or CEOs.
How Do I Become a Tycoon?
Business tycoons tend to have strong organizational and leadership skills, as well as the ability to make hard decisions and sacrifices. Business leaders who want to reach tycoon status will need to put in lots of late nights and weekends to build their business, with no certainty of success.
Who Is a Modern-Day Tycoon?
Today, tycoons are typically associated with the technology industry, such as Facebook or Amazon. These companies have great power within their industries and are sometimes accused of monopolistic practices. Mark Zuckerberg, Elon Musk, and Jeff Bezos are sometimes considered tycoons.