4 Business Lessons You Can Learn From Andrew Carnegie
If John D. Rockefeller was the richest man in America in the Gilded Age, Andrew Carnegie was the second richest. The two men are identified closely with the Gilded Age and the entrepreneurial chutzpah associated with late-19th century and early 20th century America. Like Rockefeller, and others like JP Morgan, Henry Ford and Cornelius Vanderbilt, Carnegie will forever be remembered as one of the men who built America and made America great.
Andrew Carnegie was, of course, the founder of the legendary Carnegie Steel Company, who made a vast fortune only to give it all away, becoming the first great entrepreneur turned philanthropist in history, a tradition that was followed by his contemporary, John D. Rockefeller and much later by Bill Gates and Warren Buffett.
Even today, institutions built with Carnegie’s money such as the Carnegie Endowment for International Peace, Carnegie Corporation of New York, Carnegie Institution of Washington, Carnegie Mellon University, and the Carnegie Museums of Pittsburgh are still very prominent. Let’s discuss a bit more about this great man and what business lessons you can learn from his life.
Lesson #1. Never Be Conservative With What You Can Achieve With Your Business
Carnegie always believed in running his business top capacity and not bothering about the margin. He was always clear to his managers that he wanted his steel factories to operate at full steam, regardless of highs and lows of the economy or other factors. His goal was to be the biggest and the most dominant steel producer in the country, regardless of any external challenges.
What can you learn from this? Greatness can never be achieved if you are too moderate with your ambitions or too conservative. To achieve greatness, you must stretch you capacity to the maximum. Don’t worry about temporary pitfalls; always focus on a larger goal.
Lesson #2. Never Reveal Your Business Secrets
Carnegie was very particular about holding on to his business secrets. He held 50% stake in his company and never revealed to anyone anything about its profitability. Carnegie Steel Company was the most profitable company on the planet at that point of time, but Carnegie wouldn’t let anyone know about that, as he didn’t want people to get curious about his business and try to do the same thing that he did.
That is why, even in your business, if you’re doing something right and making great profit, be sure to keep your business secrets to yourself. Yes, you won’t get the fame and the publicity you would get otherwise, but your business will stay profitable and free from competition for a lot longer.
Lesson #3. Technology Is Your Biggest Friend
Even though Carnegie wasn’t himself an expert on technology, he believed in the power of technology and hired the best engineers and scientists in America for his company. He invested more on the latest technologies in steel more than any other industrialist, which is why it didn’t surprise anyone that his company was also the most profitable one.
Always invest in technology; technology can only help you stay ahead of the competition, even though the initial investment is likely to be high.
Lesson #4. It’s All About Cash flow!
Very early on in his life, Carnegie had great trouble with cash – he never had enough. This prepared him for his role as a businessman, as he always ensured that his businesses maintained a positive cash flow from day one of their operation.
Yes, in your business, there will be a temptation to grow faster by taking on more debt even at the expense of profitability. Remember, nothing kills a startup faster than a negative cash flow. It makes your business unsustainable and is also the reason why 80% of all new startups shutdown within 5 years of starting their business. Never overextend yourself financially.
This blog post is a part of our series on Learning Business Lessons from the Greatest Businessmen in history. The business lessons you learn here will certainly help you stay ahead of the curve, establish a profitable business and achieve lasting success in both life and career. It’s equally important to find company partner who shares your vision. We encourage you to stick around here on this website, have a look at some of our blog posts, perhaps you’ll find some of the golden nuggets of information that interest you and arouse your curiosity. Ciao!
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