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Entrepreneurial genius consists of a knack for acing your competitors out of key markets through innovative means.

John D. Rockefeller did this by taking a nascent and highly localized oil industry (originally only in Pennsylvania and then Ohio) dominated by wildcatters and other independents and transforming it into a highly integrated and even ruthless competitive machine by which he could always beat his competitors on price while serving major emerging new markets. This was not based on any genius he had about the oil products themselves. He was not technically trained concerning such products. What he understood was business and innovation in emerging markets for these products. Hire the best talent. Gain control of the railroads that were vital to ship the products cheaply and efficiently, first by pressuring them through building a system of pipelines that threatened to undercut their business and then by entering into deals with them involving secret rebates so as to incentive them to deal with Rockefeller either alone or on highly preferential terms. Use legal innovations to set up trusts and partnerships that allowed a series of corporations, one in each state, to function as an integrated whole at a time when it was (people forget this) illegal for a corporation to do business across state lines, thereby gaining hegemony in the U.S. oil market that no other competitor could come even close to matching and eventually using this as a springboard for international dominance as well. The result (setting aside the illegalities involved): the building of an empire that grew exponentially in relation to anything else around it owing to its ability to offer quality and cheap pricing to consumers.

It is not too far-fetched, I think, to say that Steve Jobs is doing something similar in taking on the wildcatters of today in a quest to win the major markets of the information age. He has so managed to unite amazing product development with tightly integrated and company-dominated distribution channels with ground-breaking arrangements with the telcos (who are the vital connecting links, or "railroads," of our day) as to build a formidable empire that threatens to crush any direct competitors in its field. The genius is undeniable, even down to having set up retail outlets of a type that everyone would have laughed at just 20 years ago.

Who can tell where this quest for hegemony in today's open-systems world will go but the implications are both intriguing and frightening at the same time.




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