In 1811, when Cornelius Vanderbilt was 17, he borrowed $100 from his mom to buy a small sailboat. He figured he could make some money by ferrying goods and people around New York Harbor. He was right.
When the War of 1812 broke out, Vanderbilt’s competition nearly vanished (presumably, few American transporters were keen on operating in British-infested waters). The demand for effective transport, though—particularly military transport—increased dramatically. Vanderbilt, who quickly acquired the nickname “Commodore” for his prowess on the water, was all too happy to service the need and profit handsomely therefrom.
Vanderbilt, of course, was the sort of guy who thought seriously about the future, and the future, he thought, was steam power. So in 1818 he sold his fleet, leased a steamship called Bellona from a guy named Thomas Gibbons, and began to operate his ferry business 2.0.
But there was trouble on the water. The New York legislature had seen fit to grant a monopoly on steamboat service to a couple of guys named Fulton and Livingston. Some operators, like Gibbons, respected the edict and stayed out of the water. Others, like Aaron Ogden, cowed and paid the Fulton-Livingston partnership for an operating license. But Vanderbilt was made of different stuff. He just wanted to build a great business. What good are rules when they stand in the way of building great businesses?
Unsurprisingly, suits were filed. (Ogden was the plaintiff in the one you’ve probably heard of.) Interestingly, though, this didn’t seem to matter very much. Initially, Vanderbilt paid the litigation no mind; he continued to provide excellent service and ruthlessly undercut his competition on price. Equal parts sword and shield—he employed a “crew of shoulder-hitters, ready for battle” to ensure orderly moorings at competitor’s docks,1 while also deflecting criticism and developing a Robin Hood-ish mythology—Vanderbilt insisted on forging his own future. You might be aware that Jay-Z just executive produced Baz Luhrmann’s Gatsby; so long as we’re anachronistically weaving Hova lyrics into montages of the long-dead nouveau riche, take a moment to imagine Vanderbilt, as his marine hoplites take control of a pier, blasting:
And government, fuck government, niggas politic themselves.2
The end of the legal battle came in 1824, when the Supreme Court heard the case and ruled for Vanderbilt’s side. (Vanderbilt, as merciless in court as he was in business, had helped his cause by hiring Daniel Webster—think Ted Olson and David Boies rolled into one—to represent Gibbons.) Doctrinally, the case was quite important, but that is the stuff of AP US History and 1L year of law school. What matters here is that Vanderbilt was venerated:
“We owe to him,” said a prominent citizen, “the freedom of the seas as applied to us locally.”3
I think this story is pretty cool in its own right. It’s even cooler, though, to the extent it can help us understand the present. Does the Vanderbilt steamship ordeal remind you of anything more… familiar? Say, much of Silicon Valley right now? I’ll let someone else write the manifesto about how technology is and will likely continue to outpace physical-world regulators and solve problems the government can’t. But cf. Uber/Airbnb/Taskrabbit/Exec/Crowdflower/Turk/3D Printing. It’s hard not to notice that CS can be a powerful mechanism to route around inefficiency and unlock a lot of value.
Of course, disruption is risky. People don’t like to be disrupted. Aaron Ogden certainly didn’t. Neither, apparently, do the bureaucrats in DC who are coming after Defense Distributed, ostensibly because they feel weak and techno-libertarianism scored too many points over the weekend, or something. The best path is usually one that avoids head-on confrontation. But still—very often, it’s messy and complicated where the rubber hits the road. So what should we do then this happens? Play by all the rules? Ask for permission? Or just build something great? To ask the question, hopefully, is to answer it. WWVanderbiltD?
Over the last year or so, I’ve had the pleasure of watching my good friends Kyle and Dan build Leap, which, as they bill it, is “a better bus service for San Francisco.” The idea is simple: the city’s MUNI bus system ($2/ride) is slow, overcrowded, and leaves much to be desired.4 But biking (free) isn’t for everyone, and cabs ($20) are expensive. What if we could relieve the MUNI’s load by bringing the private shuttle service that Google and Twitter employees enjoy to… everyone? What if anyone with a smartphone could instantly buy a pass and streamline their commute on a bus with wi-fi, air conditioning, and a comfortable seat? Well, please meet Leap ($6), which launched this week with a line from the Marina to Downtown SF.
It’s always fun to watch your friends start new ventures. It’s also fun to see really good products get built. Throw in the delightful parallels to the Bellona line and it’s not hard to imagine Kyle and Dan and company as a couple of proto-Vanderbilts, just trying to get people from point A to point B in a better way.
May the streets of San Francisco be their New York Harbor.
Stewart H. Holbrook, The Age of the Moguls, 13 (1953). ↩
Jay-Z, Decoded, 214 (2011). Note the esoteric use of “politic,” glossed in p. 215 n20: “I wrote this at a time when I felt the government was irrelevant to the ways we organized, resolved conflict, and took care of ourselves. “Politic” is slang for the kind of talk that works things out.” ↩
Holbrook, supra, at 13. ↩