Koch started with oil-related capabilities. They acquired a paper company (short jump from oil due to existing chemical processing capabilities) to build consumer marketing & branding capabilities. After which they could start acquiring consumer-oriented businesses.
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Other examples: INVISTA (nylon and advanced materials) → oil pipeline technologies.
Consumer marketing and branding capability → Molex (electronic connectors+sensors) → oil pipeline monitoring
Oil futures trading → built trading capability → enabled bets on oil wells.
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Why is this interesting?
Take Warren Buffett as an example. Buffett's MO (grossly simplified) is to buy companies with high free cash flow, collect those earnings, and then use it to buy yet another company with high FCF. Rinse and repeat.
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But Buffett is all capital allocation, no operations. Koch is what you get when you combine some capital allocation ability with a crazy amount of operational excellence. Nearly all of Koch's subsidiaries contribute to each other in some way or form.
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The difficulty here is to develop knowledge capture and knowledge sharing capabilities within the conglomerate. This is why I find Koch so interesting. I'm not sure if there are other conglomerates who have so successfully managed to do this, and away from the public markets.
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(And, yes, this is also somewhat relevant to my thing about career moats. commoncog.com/blog/career-mo Capability building, where each additional capability strengthens existing capabilities, is very much applicable to the individual career.)
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I'm about 60% through with Koch's Good Profits book. He seems incredibly reasonable and very humble (because of course he will; it's his book!) To balance this out, I'm reading Dark Money, which portrays him as an ideologue.
The truth is probably somewhere in the middle.
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I should also add, there's amazon.com/Kochland-Histo, which was published just a few days ago. I've added that to my toread as well.
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Perhaps the science of success is ... inheriting a lot of money? This is obviously reductive, but I’m already seeing the benefits of reading Mayer’s book in parallel with Koch’s.
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Perhaps but then how would that explain for eg the vanderbilts?
forbes.com/sites/natalier
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Yeah I don’t want to discount what they’ve done with the fortune since. But this was an important thing that Charles Koch conveniently left out of all his books.