Standard Oil Part 1

1. BGBen Gilbert0:01

   So history and facts going up through-

2. DRDavid Rosenthal0:05

   1890. [laughing]

3. SPSpeaker0:08

   Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

4. BGBen Gilbert0:25

   Welcome to season nine, episode four of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

5. DRDavid Rosenthal0:40

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

6. BGBen Gilbert0:46

   And we are your hosts. Today's episode is 150 years in the making. David, somehow we missed this IPO-

7. DRDavid Rosenthal0:54

   [laughing]

8. BGBen Gilbert0:54

   ... if or when it happened. [chuckles]

9. DRDavid Rosenthal0:56

   Can we get, uh, can we, can we still get, uh, get secondary shares?

10. BGBen Gilbert1:00

    We'll see.

11. DRDavid Rosenthal1:00

    Put together a little SPV, do, uh-

12. BGBen Gilbert1:02

    I think it might be of a spin-off or something like that-

13. DRDavid Rosenthal1:04

    Oh, okay. Okay

14. BGBen Gilbert1:04

    ... at, at, at this point. Uh, at least the Standard Oil that we will cover today never IPO'd. It was privately held the whole time. Its financials were kept very secret. That, that must be why we, we have missed it until now, David. Sure.

15. DRDavid Rosenthal1:20

    Oh, yeah, must be. Must be.

16. BGBen Gilbert1:22

    Well, this episode on Standard Oil is, of course, the oil monopoly founded in the 1870s by John D. Rockefeller, the wealthiest person in modern human history. Embarrassingly, until I had started to do the research, I didn't realize the oil in Standard Oil did not refer to gasoline, at least until much, much later in the life of the company. Standard Oil actually-

17. DRDavid Rosenthal1:43

    Auto mobiles, uh, the Model T was, like, 1910 or so, like-

18. BGBen Gilbert1:48

    Totally. Standard Oil predates the Ford Model T by, like, 40 years.

19. DRDavid Rosenthal1:52

    Yeah. So wild. So yeah, John D. becomes the wealthiest person in, like, you know, modern human history before gasoline. [chuckles]

20. BGBen Gilbert2:02

    Yeah.

21. DRDavid Rosenthal2:02

    This is a different kind of oil.

22. BGBen Gilbert2:02

    Gasoline helped later. Turns out compounding, uh, compounding can kind of show up, especially when the second business line gets layered on top, but we will get into it. Listeners, the other thing that is crazy that I want to point out, I didn't realize how much Standard Oil is very much with us today. Despite being famously broken up, the parts went on to become both Exxon and Mobil, Marathon, Amoco, which of course is now a part of BP, Chevron, and several other companies. When you look at a gas station, you are probably looking at some remnant of, uh, of Standard Oil.

23. DRDavid Rosenthal2:36

    Just wild. Just wild. We will get much more into that next time.

24. BGBen Gilbert2:41

    Yep. So this one will be at least a two-parter. It turns out the company responsible for creating the entire modern energy industry has a lot of wild stories. So, uh, we, uh, we will, uh, in part one here, just go through probably the Sherman Antitrust Act, but we'll see how far we get.

25. DRDavid Rosenthal2:57

    Yeah, we're gonna talk about Standard Oil today, and then next time will be legacy. All right, before we dive in, I would like to welcome our presenting sponsor for all of season nine, pilot.com. Pilot is the backbone of the modern financial stack for startups and is backed themselves by all-star investors like Sequoia, Index, Bezos Expeditions, and Stripe. They are truly the gold standard for startup bookkeeping. They are truly the gold standard for startup bookkeeping. Ben, do you know who else started their career as a bookkeeper?

26. BGBen Gilbert3:32

    John D.

27. DRDavid Rosenthal3:33

    John D. Rockefeller! That's right.

28. BGBen Gilbert3:36

    [laughing]

29. DRDavid Rosenthal3:36

    Today, he would have started his career working for Pilot. [laughing] Uh, so great. Now, over to our conversation with Pilot co-founders, Waseem Daher and Jessica McKellar. So for nearly every technology startup, finance and accounting is not one of the things that matter and that you should do in-house. So this is not a new idea. Startups have been outsourcing their finance and accounting for decades. What changed that enabled you to actually build Pilot as a technology company around this?

30. SPSpeaker4:09

    So I think there are really two trends that enable Pilot to exist now, sort of at this unique moment in time. The first is really the rise of fintech, the rise of SaaS, the rise of the cloud, and this back office stuff, meaning even 10 years ago, if you looked at the landscape, Stripe didn't really exist, Expensify didn't really exist, Gusto didn't exist. Your bank statement was literally a thing that arrived in an envelope at your home or your office. So the fact there are these best-of-breed electronic systems that you can use to help you run your back office, and that they all have APIs, is what enables a key portion of what we do, which is the ability to programmatically ingest and transform data from a variety of data sources. The second thing, though, I think, is really a shift in the consumer's behavior, which is that, again, you know, even 10 years ago, probably what the business owner wanted to do was to go downtown with a shoebox of receipts to visit their accountant in person and, you know, talk to them in a office with a lot of mahogany or whatever. And actually, what the business owner wants now is the convenience of it being done electronically, of being done well, of being able to take care of this stuff, you know, at Saturday at 11:00 PM in their pajamas.

Episode duration: 2:36:40