Milton S. Hersheys Extraordinary Life of Wealth, Empire, and Utopian Dreams

Summary Notes


Milton Hershey's legacy as an industrialist, philanthropist, and social engineer is rooted in his personal history and commitment to progress. Hershey, who came from a fractured family and faced neglect and poverty as a child, channeled his difficult upbringing into creating a chocolate empire and a utopian town, Hershey, Pennsylvania. His most profound impact, however, was the establishment of the Milton Hershey School for disadvantaged children, funded by a trust owning a controlling interest in the Hershey Company. Hershey's innovative approach to mass-producing affordable milk chocolate revolutionized the industry, paralleling the mass production achievements of figures like Henry Ford. Despite experiencing multiple business failures, Hershey's perseverance and dedication to quality and fair pricing led to his success. His life's work culminated in the creation of the school and the town, reflecting his idealistic views on commerce, education, and community, and leaving a lasting philanthropic legacy.

Summary Notes

Milton Hershey's Belief in Progress

  • Milton Hershey was an advocate for progress, which reflected in the advancements of his company.
  • He was an industrialist, philanthropist, and social engineer, continuously striving for improvement.
  • Hershey's personal experiences of neglect, poverty, and educational challenges as a child informed his philanthropic focus on helping disadvantaged children.
  • He created a utopian town and invested his fortune in a school for orphans, symbolizing a rescue of his younger self.

"Perhaps the only thing about Milton Hershey that is absolutely certain is that he believed in progress. As an industrialist, a philanthropist, and a social engineer, he was always moving forward."

This quote emphasizes Milton Hershey's commitment to progress in all aspects of his life, from business to social endeavors.

Milton Hershey's Childhood and Motivation for Philanthropy

  • Hershey's difficult childhood involved a negligent father and a struggling mother.
  • His empathy for children facing similar hardships led to his philanthropic efforts.
  • Hershey sought to fulfill his father's unrealized dreams of success and heed his mother's advice to serve a higher purpose beyond wealth.
  • He aimed to rescue disadvantaged children through his legacy, reflecting his own experiences.

"In his rare moments of open reflection, Milton Hershey showed his greatest affection for the little fellows whom he hoped to save."

This quote highlights Hershey's deep emotional connection to the children he aimed to help through his philanthropic work, driven by his own childhood experiences.

Founding of the Milton Hershey School and Trust

  • Milton Hershey established the Milton Hershey School for orphans to provide for the most disadvantaged in his community.
  • He set up the Milton Hershey School Trust, which owns a controlling interest in the Hershey Company, to fund the school.
  • At the time of the recording, the trust had accumulated approximately $12 billion in assets, making it one of the wealthiest schools globally.

"Milton Hershey had one of the most unique ideas that I've ever come across in all the books that I've read for this podcast."

This quote draws attention to the innovative nature of Hershey's philanthropic approach, intertwining his business success with his charitable goals.

Hershey's Utopian Vision and Social Engineering

  • Milton Hershey didn't just build a business; he created a self-sustaining community that reflected his idealistic values.
  • Hershey, Pennsylvania, exemplified his vision of a closed economy that supported commerce, education, and architecture.

"Ms. Hershey inspired the kind of reverence because he had created not just a great business and an enormous charity, but a complete, prosperous and self-sustaining community..."

This quote illustrates the breadth of Hershey's impact, which extended beyond his company to the creation of an entire community.

Milton Hershey's Early Life and Family Influence

  • Hershey's father, Henry Hershey, was a man of unrealized ambition, which Milton feared.
  • Henry Hershey's lack of perseverance and failure in various ventures contrasted with John D. Rockefeller's focused success.
  • Milton's mother, Fanny, played a significant role in guiding him towards a stable and industrious life, steering him away from his father's shortcomings.
  • Milton Hershey learned valuable business skills during his apprenticeship with Joseph Royer.

"One of my greatest fears in life, I would say, would be unrealized ambition."

This quote captures the fear of failing to achieve one's goals, a fear that Milton Hershey worked diligently to overcome, unlike his father.

Milton Hershey's Apprenticeship and Path to Success

  • Hershey's apprenticeship at Royer's ice cream parlor and garden was crucial in shaping his career in confectionery.
  • His mother's insight into the potential of candy led to Hershey focusing on confections, which would later become the foundation of his success.
  • At 18, Hershey moved to Philadelphia to establish his own confectionery business, supported by his mother and aunt.

"He needed to learn all he could about the confections that would yield the greatest profit."

This quote reflects the strategic focus on the confectionery trade, which would eventually lead to Milton Hershey's success in the chocolate industry.

Perseverance and the Rise and Fall of Milton Hershey's First Candy Business

  • Milton Hershey's first candy business coincided with the centennial exposition in Philadelphia, drawing a large crowd and potential customer base.
  • His initial success continued even after the centennial event, leading to expansion with a wholesale shop and a move to a larger retail space.
  • Hershey's business eventually struggled due to intense competition and the realization that they offered a "me too" product.
  • Despite having industry knowledge and experience, Milton Hershey's lack of innovation at this stage led to the downfall of his first business.

"I just mentioned that the main takeaway from this book is the value of perseverance. This is the rise and fall of his first candy business."

The quote emphasizes the central theme of perseverance in the face of the rise and fall of Milton Hershey's first candy business, setting the stage for his later successes.

Innovation as the Key to Success

  • Milton Hershey's eventual success was due to his innovation in the mass production of affordable milk chocolate.
  • Hershey's innovation made what was once a luxury good accessible to the average person, mirroring the democratization of products by other mass market pioneers.
  • The innovation occurred 15 years after his initial failures in the candy industry.

"The reason that Hershey chocolate was so successful is because Milton Hershey actually innovated."

This quote highlights the pivotal role of innovation in Milton Hershey's success, distinguishing his approach from his earlier failed attempts in the candy industry.

Financial Struggles and Lessons Learned

  • Hershey faced financial difficulties due to competition, slow payments from wholesale customers, and tight credit terms from suppliers.
  • The financial strain led to family tensions as relatives lent money to the struggling business.
  • Milton Hershey's illness during this time compounded the stress of the failing business.
  • Hershey later realized the importance of controlling key ingredients, leading him to establish his own sugar plantations.

"Money seems to disappear like magic with us."

This quote reflects the financial hardships faced by Milton Hershey's business, highlighting the struggle to maintain financial stability amidst competition and operational challenges.

Early Business Failures and Impact on Hershey's Life

  • Hershey's early business endeavors, including a failed caramel business, taught him valuable lessons.
  • After his initial business failure, Hershey traveled the country, looking for work and learning from other candy businesses.
  • Hershey narrowly escaped a dangerous situation where he could have been sold into slave labor.
  • His experiences during this period, including working in a Colorado candy shop, contributed to his later success.

"At 24, Milton Hershey had invested the first six years of his adult life in a business that failed."

The quote conveys the extent of Hershey's commitment to his early business ventures and the impact of his failures on his personal and professional life.

Learning from Others and the Path to a Successful Caramel Business

  • Hershey learned a valuable caramel recipe in Denver, which was not patented, providing him an advantage in starting a new business.
  • He decided not to return to Philadelphia but instead to start his caramel business in New York, where he saw more opportunity.
  • Hershey's intention was to start small, focusing on quality and matching the scale of his operations to the market demand.

"The Denver recipe for caramel, which yielded a vastly superior candy, was not under any copyright or patent."

This quote explains the strategic advantage Hershey gained from his time in Colorado, which he leveraged to establish a successful caramel business that would later fund the Hershey Company.

The Influence of Urban Poverty on Hershey's Philanthropy

  • Hershey's experiences in New York exposed him to urban poverty and the plight of destitute children, shaping his future philanthropic efforts.
  • He developed a critique of urban life and a vision for social reform, including the idea of helping poor orphans and redesigning cities.
  • These experiences influenced his decision to found one of the nation's great charities.

"The experience would affect him for the rest of his life and contribute to his eventual decision to found one of the nation's great charities."

This quote signifies how Hershey's firsthand encounters with poverty in New York City profoundly impacted him, ultimately leading to his philanthropic initiatives and the establishment of the Hershey Industrial School.

Setbacks and Learning from Competitors

  • Hershey's business in New York was derailed by his father's influence, leading to a failed venture in mass-producing cough drops.
  • He learned from the mass production methods of his competitors, the Smith brothers, which would inform his future chocolate production strategies.
  • Despite the failure of his cough drop business, Hershey continued to study and learn from successful entrepreneurs, preparing for his future endeavors.

"The eccentric bearded brothers, who used their profile portraits as a trademark, developed an early method for mass production."

The quote describes the innovative approach of the Smith brothers, which served as a learning point for Hershey in developing his mass production techniques for chocolate.

Resilience and the Importance of Bouncing Back

  • Milton Hershey's resilience in the face of defeat was crucial to his growth and eventual success.
  • His failures provided him with the opportunity to reflect, learn, and ultimately innovate in the candy industry.
  • Hershey's experiences underscore the importance of perseverance and the ability to recover from setbacks.

"Bouncing back from defeat is essential for growth in any endeavor."

This quote encapsulates the theme of resilience and its necessity for growth, reflecting Milton Hershey's journey from failure to success.

Perseverance as a Defining Trait of Milton Hershey

  • Milton Hershey experienced significant financial struggles and failures before his success.
  • Despite setbacks, Hershey continued to pursue his confectionery business with resilience.
  • Hershey's perseverance was influenced by his mother's high expectations and his father's ambitious dreams.
  • He was willing to take risks and ask for financial help despite previous failures.

"He's been working in this industry for 14 years. He now has two gigantic failures." "He intended to make candy no one else produced in the east Denver style caramel."

These quotes highlight Hershey's dedication to the confectionery industry and his innovative approach to creating a unique product despite past failures.

Innovation and Market Differentiation

  • Hershey sought to create a unique product to stand out in a competitive market.
  • He decided to produce Denver style caramels, which were not available in his region.
  • Hershey's approach to innovation was driven by the need to reduce competition and increase profitability.

"I have a better idea. I'm going to make something that you can only get from me."

The quote emphasizes Hershey's strategic thinking in developing a product that would give him a competitive edge in the market.

Family Support and Independence

  • Hershey initially relied on family support to fund his business ventures.
  • His family eventually refused to provide further financial assistance, viewing him as too risky.
  • The rejection by his family led Hershey to work independently, which he later viewed as a pivotal moment in his career.

"For the first time in his life, Milton Hershey was without the support of his family."

This quote underscores the turning point where Hershey had to rely on his own resources, marking the beginning of his independence in business.

Critical Financial Support and Risk-Taking

  • Hershey faced a critical moment when he needed funds to buy equipment for his new venture.
  • He received a loan from Lancaster County National Bank, which was a significant risk for both the bank and Hershey.
  • Hershey's honesty and transparency with the bank officer, Frank Brennaman, played a crucial role in securing the loan.

"I decided I would lend him the money."

This quote reflects the trust the bank officer placed in Hershey's character and business plan, which was instrumental in Hershey's subsequent success.

Leveraging Opportunities and Scaling Up

  • Hershey capitalized on a chance opportunity with a candy retailer, which led to a significant order from London.
  • This opportunity allowed Hershey to expand his business and eventually employ over 700 workers.
  • Hershey focused on quality and fair pricing to secure repeat business and grow his brand.

"After so much struggle. It was strange that one big break, an order from an importer who happened to pass through town, would make Milton Hershey a success."

The quote captures the serendipitous nature of Hershey's major business breakthrough, which was a turning point in his career.

Continuous Improvement and Branding

  • Hershey believed in the power of small, continuous improvements over time.
  • He used branding strategies to protect his market position and ensure steady growth.
  • Hershey named his firm the Lancaster Caramel Company and focused on maintaining high-quality standards.

"Small, continuous improvements over many years produces miracles."

The quote highlights Hershey's philosophy of gradual improvement and its long-term impact on business success.

Learning from Others and International Influence

  • Hershey was inspired by the Cadbury family's success in the chocolate industry.
  • He traveled to learn from international chocolate companies and applied their strategies to his own business.
  • Hershey invested in advanced technology to improve efficiency and compete in the chocolate market.

"He learned that George and Richard Cadbury, sons of the founder, had moved their factory out of the city to a rural site where they'd put up a new chocolate works and were considering building a company town to go with it."

This quote illustrates Hershey's willingness to learn from successful entrepreneurs and adapt their ideas to his context.

Investment in Knowledge and Expertise

  • Hershey recognized his need for expertise in chocolate-making and sought knowledge through hands-on learning.
  • He hired experienced workers from established chocolate firms to fill gaps in his own knowledge.
  • Hershey sold his caramel company to focus exclusively on chocolate, anticipating the market's potential.

"He bought workers from a milk chocolate factory in Switzerland. He recruited a chocolate maker from a small firm in Chicago."

The quote indicates Hershey's strategic approach to acquiring the necessary skills and knowledge for his chocolate venture.

Experimentation and Innovation in Milk Chocolate Production

  • Hershey faced challenges in creating a consistent and high-quality milk chocolate product.
  • He conducted extensive experimentation to perfect his milk chocolate recipe.
  • Hershey created a dedicated space for innovation, where he controlled all variables in the chocolate-making process.

"With no background in chemistry or engineering, Hershey would need years of experimentation, much of it in an attempt to copy the european outright, to arrive at his own method for making milk chocolate."

This quote highlights the challenges Hershey faced and his commitment to mastering the art of chocolate-making through trial and error.

Principle of Design and Experimentation

  • The principle of design and experimentation is essential for developing unique insights.
  • It involves a long and laborious process, as exemplified by James Dyson's work on vacuum cleaners.
  • Not many are willing to put in the necessary work to succeed.

"nian principle of design that's talked about in founders number three on Thomas Edison, that James Dyson uses in his experimentation on founders number 25, doing the vacuum cleaner."

This quote highlights the importance of a rigorous design and experimentation process in innovation, referencing the work of both Thomas Edison and James Dyson.

Milton Hershey's Bold Moves

  • Hershey demonstrated boldness by setting up a town and factory without fully knowing how to mass-produce milk chocolate.
  • He built extensive infrastructure based on his belief that he would solve the production problem.

"Milton Hershey did not know how to mass produce milk chocolate. [...] He believes he's going to discover to actually work his way through and solve the problem."

The quote emphasizes Hershey's determination and risk-taking attitude, as he invested in a large-scale operation despite not having all the answers upfront.

Mass Production Insights

  • Milton Hershey's approach to mass production mirrored that of Henry Ford with automobiles and the McDonald's brothers with fast food.
  • The use of simple routines, new machinery, and efficient building design enabled high-quality chocolate production at low costs.

"With workers performing simple but carefully choreographed routines and using new machinery [...] Hershey was able to make high quality chocolate at very low costs."

This quote summarizes Hershey's strategy for mass production, which was based on efficiency and technology, leading to a competitive advantage in the market.

Simplification and Business Strategy

  • Hershey focused on producing large quantities of a few chocolate varieties at low prices.
  • This strategy led to the enormous success of Hershey kisses and almond bars.

"Instead of making hundreds of items at varying prices, Milton would produce huge quantities of a few varieties and price none higher than a nickel."

The quote describes Hershey's business strategy of simplification, which allowed for scalability and affordability in the chocolate market.

Philanthropy and Community Building

  • Hershey's philanthropy was sincere, and he believed it was sinful for a man to die rich.
  • He turned over his assets to a trust for the Hershey orphanage and school, reflecting his commitment to community welfare.

"He says the charity in Milton Hershey's heart was sincere. [...] He turns over all of his assets to the trust."

This quote demonstrates Hershey's philanthropic philosophy and his actions to ensure his wealth was used for the good of the community.

The Hershey Idea

  • Hershey's philosophy combined populism and capitalism, known as the Hershey idea.
  • He aimed to share his philosophy through a magazine and followed the example of George Cadbury, who promoted social reform through a newspaper.

"He planned to publish a magazine that would bring his philosophy, the Hershey idea, to a national audience."

The quote reveals Hershey's intention to spread his unique blend of social and business principles to a wider audience, drawing inspiration from George Cadbury.

Milton Hershey's Legacy

  • Hershey's image was built through publicity, his accomplishments, and his complex leadership style.
  • He was both frugal and generous, rewarding employees with bonuses and prioritizing labor alongside capital.

"A great many factors had helped to build the image of Milton Hershey."

This quote encapsulates the multifaceted nature of Hershey's reputation and the various factors that contributed to his legacy.

Hershey's Trust and Economic Impact

  • The trust established by Hershey made the industrial school majority owners of the Hershey Company.
  • The arrangement ensured financial security for the children and the school's growth.

"This act would create something unique in both philanthropy and capitalism."

The quote highlights the innovative and impactful nature of Hershey's trust, which combined philanthropic goals with capitalist enterprise.

Reflection on Mortality and Legacy

  • Reading biographies serves as a reminder of our limited time and the importance of living life to the fullest.
  • Milton Hershey's death was significant, with his contributions to industry and philanthropy being his most celebrated achievements.

"We have limited time here. Let's not waste it."

This quote reflects on the universal truth of mortality and the motivation it provides to make meaningful use of our time.

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