While playing sports such as Tennis, often our opponent plays an unthinkable shot. But, the moment your opponent plays that shot, the trajectory of the ball gets etched in your mind, and you began to wonder that–leave aside playing a shot like that–why you had not been able to even imagine the possibility of such a unique shot!
In business too, there are a few players who play the business game in such a original manner.
But, the originality of their choices is not visible to most of us (since, unlike in sports, we are not directly competing with them). Most us remain in awe of their results, but we seldom pay enough attention to the independence of their mind.
Rockefeller is a case in point.
In early 1860s in Pennsylvania, when the oil business was booming, most of the players were making similar set of choices:
- Most players were wasteful. They spilled crude oil through out the city
- They extracted only kerosene from crude oil, and dumped gasoline into the river
- They also threw out other by-products
- Their costs were very high, and their refineries were ill built
- They often bought insurance cover for their ill-built oil refineries, further increasing their costs
But, Rockefeller used his independent mind that led to some original choices:
- He worked on extracting more kerosene per barrel of crude
- He searched for uses for the by-products: gasoline for fuel, tars for paving, naphtha for gas plants. He also sold lubricating oil, vaseline, and paraffin for making candles
- He built his refineries robustly, and bought no insurance
- He also employed his own plumber and almost halved the cost on labor, pipes, and materials
- He bought his own tracts of timber, his own kilns to dry the wood, and his own transportation. He made the oil barrels himself and transported them himself.
As a result, while other players charged $2.50 per barrel; Rockefeller was able to charge $.96!
Soon, he became the wealthiest man in America of his time!
The above example has been borrowed from this book.
Now, let me ask you a question:
Is such kind of independent thinking that Rockefeller displayed, visible in cab aggregation start-ups (such as Uber and Ola)?
Think, and answer the poll below.