Jean Paul Getty was the industrialist who in the 1950s became the richest man in the world. The book was published in 1961 and is a biography and a “how to” guide for aspiring industrialists. Although Getty came from a well-to-do family, he was largely self-made.
OIL IN THE FAMILY. Getty was born in 1892 in Minnesota. At the age of ten, the family moved to Oklahoma, where the father entered the oil industry – an industry that would later dominate Getty’s life. During his studies at Oxford, Getty was called “Dictionary Getty” because he read so much. He spoke fluent French, German and Italian and later in life also learned Spanish, Greek, Arabic and Russian. During his life, Getty had five wives and a lawsuit about an illegitimate child. His promiscuous living led to a weak relationship with his Christian father who strongly disliked the promiscuous life.
THE 1910s: OIL BOOM & PENSION. When Getty returned to the United States from Oxford in 1914, as a 22-year-old, he received $10,000 from his father to expand the family’s oil interests in Oklahoma. The first investment was a hit and after only one year in business he could call himself a millionaire. He was then 23 years old and decided to retire. His father explained that Getty, with his capital, had a responsibility to develop the business that created jobs and better lives for the employees. After two years of vacation living, Getty got tired of the easy life and returned to work.
THE 1920-30s: DIVORCES & ACQUISITIONS. In the 1920s, Getty followed the oil rush to Los Angeles, increasing his net worth to $3m and churned through three marriages. The crisis of the 1930s hit Getty hard. However, he saw the possibilities in the crisis and had excess capital to make opportunistic investments. He took a large position in Pacific Western Oil and Mission, which consisted of Tidewater Oil and Skelly Oil. At the time of investment, Pacific Western’s share price was down 99% since the boom times of the late 1920s. He also bought The Pierre Hotel in Manhattan for $2.4m, a quarter of the construction cost 8 years earlier.
THE 1940s: A HOMERUN IN THE MIDDLE EAST. In 1949, Getty paid $9.5m for a 60-year concession in an area near the Saudi-Kuwait border. No oil had ever been discovered there. It took four years of work and $30m in investments to find oil. But as of 1953, the investment produced 16 million barrels of oil per year, which greatly contributed to making Getty one of the richest in the world. During this time he learned Arabic which enabled further expansion in the Middle East.
MANOR LIFE & GETTY OIL. In the 1950s, Getty moved to England and became a strong admirer of the country, its people and its culture. He bought the 72-room mansion Sutton Place, located 50 kilometers southwest of London. From there he ruled his empire, often working 16 hours a day. He also wrote several books and aggressively bought art that would eventually be displayed in the giant J. Paul Getty Museum in Los Angeles. In 1967, Pacific Western Oil and Mission Corp merged to form Getty Oil.
A STINGY MAN. In 1973, Getty’s grandson John Paul Getty III was kidnapped by the Ndrangheta mafia who wanted $17m in ransom. Getty negotiated with the kidnappers and eventually paid $2.9m – as much as was tax deductible. Another example of stinginess is that he installed a coin-operated telephone in Sutton Place. Guests had previously used the manor’s telephones for international calls which irritated Getty immensely. He said that almost all companies had redundant costs that could be relatively easily cut off – something he also did successfully in the businesses he took over.
THE GETTY NAME LIVES ON. Getty died in 1976 at the age of 84. He was then worth six billion dollars, equivalent to about $26 billion in today’s money value . After his death the shares in Getty Oil were distributed within the family. Over the years, assets have been sold off and today only the naming rights to the company remains, controlled by an Austrian company. However, the name Getty lives on in Getty Images, which was founded by his grandson Mark Getty. The company owns one of the world’s largest image banks and is again controlled, after a few tours on the stock exchange and at PE companies, by the Getty family.
PRODUCTIVITY & KNOWLEDGE. According to Getty, a company’s central goal is to constantly strive to produce more and better products, to more customers, and at a lower cost. What the Getty companies had in common was that they were constantly striving for expansion. It was also of great importance that his employed managers were experts in their industries and had a clear picture of all players’ positions, strengths and weaknesses.
MEET ADVERSITY WITH JOY. In his youth, Getty met an industrialist whose company had major problems – yet he seemed to be in very good spirits. The industrialist said that he was not the least bit worried about the situation and that in the name of honesty he needed this. Things had long been too comfortable – this got him on his toes again. Getty embraced this and felt that a businessman is in need of solving big problems from time to time. It is a good test that you go through stronger.