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  • Writer's pictureMichael Gallant

What Big Tech Can Learn From Standard Oil

Updated: Mar 15, 2021

Last week I put out a survey asking my audience (you) what should my newsletter be about. Many of you were kind enough to respond at length and provided super useful insights into what interests you, what you'd love to read about, what would bore you.

Business, People, Education is the first attempt at making something worth reading. The company in question is the Standard Oil Company; the person is John D. Rockefeller Sr.; the lessons - you'll need to read for yourself. If you want to read further, I put links throughout the piece and gathered lots of information at the end of it. You are also welcome to join my subreddit r/historyofbusiness.

So, without further ado...


The Standard Oil Company was founded in 1870 and operated until 1911 when it was eventually dissolved by the US Supreme Court. During this period, it was an absolute oil powerhouse/monopoly, controlling at its peak close to 90% of oil refinement and sales in the United States. Standard Oil did so by acquiring, outselling, and generally forcing its competitors out of business.

One interesting business practice Standard Oil used to achieve such nation-wide control was using its strong financial standing to sell its products at a loss and drive other, less substantiated, producers out of business (this is known as predatory pricing). Another was to make state legislators, governors, and public officials (hidden) partners in different entities in Standard Oil's corporate structure.

Before the turn of the 19th century, Standard Oil expanded to international markets, and its famous Blue Barrels dominated numerous markets such as Europe, China, and even Russia (can you imagine a US company being the dominant player in the Russian oil market?).

If the US market was completely dominated by Standard Oil, outside the US it had more competition. In Baku, Azerbaijan, oil was discovered at about the same time as in the US. Soon, “mom and pop” oil wells began appearing on the coastline of the Caspian Sea like mushrooms after the rain.

It didn’t take long before a pair of savvy Swedish entrepreneurs consolidated the Azeri oil production. Their name, which you might recognize from a certain prestigious prize, was the Nobel brothers. They were financed by another somewhat famous European group, the Rothschilds. The three players - Nobel, Rothschild, Standard Oil - competed across Europe and Asia on oil production, refining, distribution, and sales.

For decades, Standard Oil tried to buy the Nobel's Branobel, but to no avail. It wasn’t until after the October Revolution that the Nobels, who were concerned about the change of power from the Czar to the Socialists, agreed. The Nobels did a massive “exit” - and certainly sold at the right time, as a few years later the Socialists nationalized oil production and refining in Baku, deeming Branobel's assets practically worthless - and turned to other business and philanthropy ventures.

Back in the US, Standard Oil's control over the market became so dominant questions started to arise and the matter could no longer be ignored by the Government. The 1890 Sherman Antitrust Act, which was primarily aimed towards and against Standard Oil, has put the company's back against the wall. It wasn't until 21 years later that the company was taken apart. Although it hired the best lawyers to fight prosecution in different courts across the nation, it eventually found itself dissolved in 1911 by a Supreme Court order, in what would become a historic precedent in antitrust rulings.

Standard Oil of New Jersey was broken down into 34 different companies, but not to fear! The company was so dominant that even to this day, a number of its fledglings are amongst the largest companies in the world in terms of revenue (see ExxonMobil and Chevron, among others). Indeed, if Standard Oil existed today, its worth would be well over $1 trillion.


John D. Rockefeller Sr. was born in Richford, NY in 1839. His father was, put bluntly, a traveling snake-oil salesman, who mixed potions and sold them to unsuspecting clients across the Northeast.

John D. Rockefeller Sr.

John D. was fascinated with finances and organization from early on, first at age 14 when supervising the construction of the family home (while his absentee father was with his second, secret family), and later as a young bookkeeper with a dry goods trader. He went on to start his first business partnership at the age of 20. A few years later, that partnership would invest in buying a share at an oil refinery, in a move that would eventually create the Standard Oil Company, and change the world’s financial history.

Interestingly enough, the methodology John D. invented to control the growing Standard Oil beast and its numerous branches of companies (and avoid trials and prison), would later become the building block of the modern corporate structure. Not only that but in his need to finance all the acquisitions and operations of these companies, he practically sparked an entire branch of finance, known today as investment banking. He was also among the first, if not the first, to come up with the idea of a “family office” - today a widespread concept - in which a dedicated team manages the business and philanthropical interests of wealthy families.

Maybe less known is the fact that John D., through donations of his different philanthropies, almost single-handedly eradicated the hookworm, a stomach parasite that thrives on bad sanitation and was very common (some say up to 40% of the population) in Southern US in the early 1900s. Unfortunately, many decades after it allegedly disappeared, the hookworm made a strong reappearance in the US, and even more unfortunately in poverty-stricken communities.

Moreover, John D. was one of the individuals who most contributed to the rise of research-based modern medicine and the strong decline of homeopathy. Until the early 1900s, homeopathy was the dominant form of medicine in the continental US. Through financing only data-backed / factual medicine, together with fighting homeopathy with the same aggressive practices he fought his Standard Oil competitors, Rockefeller made “orthodox” medicine the prominent, and to a large extent almost the only, medicine practiced today in the US.

In his later years, after becoming unwell (and entirely bald in his 50s), John D. became obsessed with health, nutrition, and exercise, almost 100 years before it became cool. In an era where the average life expectancy for men was ~58, his goal was to live until the age of 100. He died two months before his 98 birthday.


  1. Next time someone offers to buy your business, think of the Nobel brothers, and how they found the best timing to sell. Perhaps your money, like theirs, can make a massive impact on the world.

  2. A quote John D used, that I found enlightening and useful: “a friendship founded on business is a good deal better than a business founded on friendship”. Take it or leave it - up to you.

  3. Last but not least: At its time, Standard Oil was an absolute monopoly, with a death grip on the American energy market. It was, before the term was invented, too big to fail. In the many legal hearings the company officials attended, they made the government and its representatives look like complete idiots. However, at the end of the day, those representatives (from all three branches) joined hands in taking down and eventually dissolving, Standard Oil. If the comparison to big-tech companies springs to your mind - you are not alone. Can modern-day “too big to fail” giants meet a similar faith?


As I was writing this article, the WSJ released this article about Facebook, titled "Facebook Seeks to Dismiss Antitrust Suits, Saying It Hasn’t Harmed Consumers".

Many of my friends argue that congress is "too stupid to understand what tech giants are doing", or that government doesn't have the funding to keep track and regulate what tech is doing. While some of that may be true, remember that government can do things that no company or individual can: it can dismantle a company (as the above example with Standard Oil); it can ban certain companies from doing business; and if it comes to it, it can arrest individuals.

If you need an example of how to put a gigantic company to a halt at the brink of an eye, look no further than this NPR article, titled "Regulators Squash Giant Ant Group IPO". True - the US government isn't the Chinese government - but it can nevertheless resort to drastic measures if it feels that it is being threatened.

One Last Thing:

I’m experimenting with these types of blog entries/articles. If you found this article interesting, boring, wonderful, terrible, or something else, please let me know by commenting below or using this link. You are also very welcome to recommend business concepts/ventures/ideas/companies that you found interesting and you think I should write about.

If you REALLY liked it, I would be grateful if you could share it with your friends/community, so I can get even more feedback and improve faster.

Be good!



In each newsletter, I tell a story. This story is about a business venture, trend, or concept; the person (alive or dead) behind it; and my key lesson(s) from studying those two. Now and then I might throw in a “bonus” like a product, a book, or a course that relates to the story or the takeaways.

If any of this reads to you as remotely interesting, I cordially invite you to subscribe to my newsletter.

[UPDATE]: After 522 upvotes and 74 comments in 15 hours, the moderator at r/business blocked me. I guess that's a part of the risk when you're a tenant and not the landlord. With that in mind, you are welcome to join the Subreddit I built, History of Business.


If you want to read further, here are some links:

Titan: The Life of John D. Rockefeller, Sr. - incredible, though somewhat lengthy, a book about the life of JDRs.

The Wikipedia page about Ida Tarbell - the female journalist most recognized with taking down Standard Oil (after the company drove her father out of business).

The origin story of the Nobel brothers.

The history of Chicago U, which JDRs founded.

History Channel’s documentary about the Robbing Barrons, The Men Who Built America.

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