#359 The Russian Rockefellers: The Nobel Family Dynasty

**David Senra** (0:00)
You and I always talk about this phenomenon that reoccurs throughout the history of entrepreneurship, that you can always understand the son by the story of his father. The story of the father is embedded in the son. The story you're about to hear is one of the most remarkable industrial odysseys ever told. And at the center is this relationship between a father and his two sons. The founder of this family dynasty was a great inventor, but he wasn't a great entrepreneur. He knew how to build great products, but he didn't pay enough attention to the financial side of his business. And as a result, he goes bankrupt. That is a mistake that his two sons actually learned from and successfully avoided. His sons, Ludwig and Alfred, were both world-class entrepreneurs and some of the wealthiest people on earth when they were alive. They both built their businesses to last. They never went bankrupt like their father, and they were both obsessed with watching their costs. They both knew that it's not enough to build a great product. You have to build a great business. And people that built great businesses, businesses that last is who we study on this podcast. And every single one of them was obsessed with controlling their expenses, just like Ludwig and Alfred were. In fact, this book talks about the fact that Ludwig and Alfred were both born in the 1830s. And there's all these great founders are also born in that decade. And the book talks about what some of these great founders, all born in 1830s had in common. And one of the people that is mentioned in the book is Andrew Carnegie. And Carnegie would repeat this mantra time and time again. Profits and prices are cyclical, subject to any number of transient forces on the marketplace. Cost, however, could be strictly controlled. And in Carnegie's view, any savings achieved in the cost were permanent. This is something I was talking about with my friend Eric, who's the co-founder and CEO of Ramp. Ramp is now a partner of this podcast. I've gotten to know all the co-founders of Ramp and have spent a bunch of time with them over the last year or two. They all listen to the podcast and have picked up on the fact that the main theme from the podcast is the importance of watching your costs and controlling your spend and how doing so gives you a massive competitive advantage. That is the main theme for Ramp. The reason that Ramp exists is to give you everything that you need to control your spend. Ramp helps you watch your costs. If Ramp existed in the 1800s, the founder of this family dynasties last years of life would have been a lot more pleasant. And one thing is for sure, Alfred and Ludwig Nobel would have definitely used Ramp. They would have jumped all over a tool that gives you everything you need to control spend and optimize your financial operations all in a single platform. Ramp's landing page is incredible. Make history's greatest entrepreneurs proud by going to ramp.com to learn how they can help your business control costs. That is ramp.com.
The name of Nobel usually calls to mind Alfred Nobel, the inventor of dynamite and the Nobel prizes, which he endowed. But other members of the Nobel family were no less creative and innovative. In fact, the range of their achievements in building an industrial empire truly qualifies them to be known as the Russian Rockefellers. The founder of this Russian industrial dynasty was an immigrant from Sweden. Immanuel Nobel was an architect, a pioneer producer of steam engines and a weapons maker. Decades before his son Alfred's dynamite began to alter the character of modern warfare, Immanuel designed, invented and produced underwater mines. Immanuel's other sons included Robert, who directed the family's activities in the Caspian oil fields. As you and I will talk about, a spur of the moment decision by Robert actually changes the entire trajectory of the Nobel family from weapon makers into developing the entire Russian oil industry. Ludwig, who is going to be the majority of what I want to talk to you about today. This is my favorite Nobel. And Ludwig, an engineering genius and manufacturing magnet, whose boundless energy and fierce determination created the Russian petroleum industry. Ludwig's son, Immanuel, was not only one of the wealthiest men in Europe, but the peer and occasional adversary of some of the most powerful figures in international business circles. He shrewdly bargained with the Rothschilds for control of the Russian markets, and did not shrink from head-on competition with Standard Oil and Royal Dutch Shell for lucrative world markets. Immanuel not only helped modernize the Russian Navy, he also expanded the Russian oil industry, was a pioneer user of the diesel engine, official of the state bank, and a commander of a fleet of 300 ships. Perhaps no family in history has played so decisive a role in building an industrial empire in an undeveloped but resource-rich nation. Yet, the achievements of the Nobel family are almost entirely unknown. Why? The answer can be found in the official Soviet myth that when the Bolsheviks seized power in November 1917, they inherited an empty cupboard which they transformed into a cornucopia. The truth was the exact opposite. When the Bolsheviks came to power, Immanuel had to flee the country disguised as a peasant. A reminder of how fast things can change. He was one of the richest people in the country. He had to flee the country disguised as a peasant, and two of his brothers were thrown in jail. The family's holdings were confiscated. The Nobel Empire, which its 50,000 workers lay in ruins, its fleet of oil tankers were idled, the fires and its foundries were banked, the oil refineries ceased operations, their oil wells were flooded, and Russia's largest engine factory shut down. An empire which had taken the family 80 years to design and build was destroyed, bringing to a sudden and bitter end one of the most remarkable industrial odysseys in world history. That is an excerpt from the inside flap of this remarkable book that I'm going to talk to you about today. First published all the way back in 1976, it is called The Russian Rockefellers, The Saga of the Nobel Family and the Russian Oil Industry and is written by Robert Tolf. So I found this book through my friend Cameron Priest, who continues to be one of the most prolific readers of entrepreneur history that I've ever come across. He's recommended, I don't know, 40, 50, 60 of these books to me. And I spent the last few days rereading my highlights and going through all my notes in the book to try to figure out what I want to focus on. So I want to focus on Ludwig Nobel, but to tell the story of Ludwig Nobel, I have to tell you the story of his father, a few of his brothers, and then his son. And so I want to start in the introduction of the book to give you an overview of what has to be one of the most remarkable families in human history. So we start with Alfred Nobel, everybody knows him because he's the one, he dies and in his will he endows the Nobel Prize, and then other people knew him as the inventor of dynamite. So it says, Alfred Nobel was only one member of history's most inventive family, and the story has never been told of his father, Immanuel, and his brothers Ludwig and Robert, and his nephew, Immanuel, and their own individual, entrepreneurial, technological, and financial achievements in the weapons, petroleum, chemical, and transportation industry. So Ludwig Nobel, the reason the book is called The Russian Rockefellers is because Ludwig Nobel, Alfred's brother, literally created the Russian oil industry. This is nuts. So I've been going around talking about this book to all my friends and really anybody who will listen this week as I've been reading it, because at the time, to give you an overview, at the time that the book takes place, okay, Russia at this point in history is going to wind up producing over half of all the world's oil.