Oil Creek Valley and the Early Oil Industry
Dan Yergin of CERA on entrepreneurs in the early oil industry, and how it is arguably the original Silicon Valley. Interesting reading.
First there was the need. In mid-19th century, the best source of illumination (electricity had not yet been harnessed) was from burning whale oil. But whale oil was in increasingly short supply and the price was going through the roof (as high as $2.50 a gallon!) So-called "coal oil" was not as good.
…And the success of this 19th century venture capital deal did what venture capital tries to do today, 150 years later--it "disintermediated" the incumbent industry. That is a fancy way of saying that Oil Creek Valley put the whale oil industry out of business. Oil Creek Valley did something else too. It also disintermediated the capital city and very heart of the whale oil industry--the island of Nantucket, off the coast of Massachusetts, which thereupon went into a long decline until, eventually, it found a wholly new vocation as a haven for summer vacations.
More here.