The Railroad War and Modern Competition
Lessons in Strategy and Rivalry from the 19th Century Rails
Competition has been on my mind a lot lately. At B:Side, we find ourselves navigating an increasingly competitive environment, and our industry isn’t exactly built for that. There’s a noticeable friction between how groups want to present themselves and their underlying need to compete. The result? Awkward, clunky behavior where companies say one thing but act another way. It’s a breeding ground for confusion, and that duplicity makes genuine progress tough to achieve.
When faced with a challenge as complex as this, I prefer to look to history. The past often holds powerful lessons, especially when it comes to strategy. One example that stands out is the fierce rivalry between 19th-century railroad tycoons William Jackson Palmer and William Barstow Strong. Their battle to dominate the development of railroads in the American West offers valuable insights into how leaders can navigate aggressive competition while keeping a long-term vision intact.
The Contest Begins: Palmer vs. Strong
William Jackson Palmer, a Civil War hero, founded the Denver & Rio Grande Railway (D&RG) in 1871 with a vision to connect Colorado to the Pacific Ocean. His competitor, William Barstow Strong, led the Atchison, Topeka, and Santa Fe Railway (AT&SF), which sought to dominate the same territory. These two men couldn’t have been more different. Palmer was known for his refined demeanor, military discipline, and lofty aspirations, while Strong was a pragmatic businessman, known for his ruthless determination and sharp business acumen.
The rivalry between Palmer and Strong wasn’t just about building railroads; it was about shaping the future of the American West. Both men saw the same opportunity—the lucrative routes into Colorado’s booming mining towns—but had different approaches to getting there. Palmer envisioned a narrow-gauge railroad that could traverse the rugged terrain of the Rockies, while Strong focused on standard-gauge lines that could carry more freight. The clash between these two visions quickly escalated into a full-blown war.
Aggressive Competition: The Royal Gorge War
One of the fiercest battles in this war occurred over the Royal Gorge, a narrow canyon along the Arkansas River, where only one railroad could lay track. This fight was a literal and legal battle, known as the Royal Gorge War. Both companies dispatched armed men to secure the right to build in the gorge, with each side claiming priority. At times, the conflict threatened to break out into open violence. Ultimately, it was a battle of endurance and resources, with each company using legal challenges, bribes, and outright intimidation to outmaneuver the other.
In modern business terms, this is a lesson in the importance of securing key strategic assets. Just as Palmer and Strong fought for control of the Royal Gorge, companies today vie for market dominance in critical areas. Whether it’s technology, patents, or exclusive partnerships, leaders must be willing to fight for the resources that will ensure their long-term success.
Strategic Vision vs. Short-Term Gains
One of the key differences between Palmer and Strong was their approach to strategy. Palmer had a long-term vision for his railroad—he wanted to connect Colorado to the Pacific and build a transportation empire that would support the region’s development. He invested heavily in infrastructure and pursued routes that would eventually lead to California, even if it meant losing money in the short term.
In contrast, Strong was more focused on immediate gains. He aggressively expanded the Santa Fe Railroad, laying track as quickly as possible and securing key routes before Palmer could act. This allowed him to outflank Palmer in key areas like the Raton Pass, a critical gateway through the Rockies. Strong’s emphasis on rapid expansion allowed the Santa Fe to dominate the market in the short term, but it came at a cost. The Santa Fe eventually overextended itself, facing financial difficulties and internal strife.
This contrast between Palmer and Strong highlights an essential lesson for modern business leaders: balancing short-term victories with long-term vision. While it can be tempting to focus on quick wins, sustainable success requires a strategic approach that considers the future as much as the present. Companies that invest in long-term infrastructure, innovation, and customer relationships are better positioned to weather competitive storms than those that prioritize immediate gains at the expense of future growth.
Resilience in the Face of Setbacks
Both Palmer and Strong faced significant setbacks during their railroad war. Palmer, despite his best efforts, was often outmaneuvered by Strong. He lost control of key routes and was forced to lease his railroad to Strong at one point. However, Palmer didn’t give up. He regrouped, reorganized his company, and continued to push for his vision of a transcontinental railroad. His persistence eventually paid off, as he was able to regain control of his railroad and expand his network.
Strong, on the other hand, faced a different kind of setback. His aggressive expansion strategy eventually caught up with him, as the Santa Fe became overleveraged and struggled to meet its financial obligations. Despite his initial success, Strong’s company faced bankruptcy, and he was forced to step down.
For modern leaders, these stories are a reminder that resilience is a critical component of success. Setbacks are inevitable in any competitive environment, but those who can adapt, recover, and stay focused on their long-term goals will ultimately emerge stronger. Business competition is a marathon, not a sprint, and resilience is what allows companies to survive the inevitable ups and downs.
Lessons for Today’s Leaders
The railroad war between Palmer and Strong offers timeless lessons for modern business leaders:
1. Secure Key Assets Early: Just as Palmer and Strong fought for control of the Royal Gorge, today’s leaders must recognize the importance of securing strategic assets, whether they are technological innovations, market share, or key partnerships.
2. Balance Short-Term Gains with Long-Term Vision: Strong’s aggressive expansion gave him short-term dominance but ultimately led to financial overextension. Palmer’s long-term focus, on the other hand, allowed him to build a more sustainable business. Leaders must strike a balance between immediate wins and future success.
3. Be Resilient in the Face of Setbacks: Both Palmer and Strong faced significant challenges during their rivalry, but their resilience allowed them to continue fighting for their vision. In business, setbacks are inevitable, but those who persevere will ultimately succeed.
4. Adapt to Changing Circumstances: The railroad industry in the 19th century was in constant flux, and both Palmer and Strong had to adapt to new challenges, whether it was shifting market conditions, technological advancements, or legal battles. Today’s leaders must be equally adaptable in a rapidly changing business environment.
Forging a Path Forward
The rivalry between William Jackson Palmer and William Barstow Strong is more than just a historical anecdote—it’s a blueprint for navigating intense competition in any industry. Their battle for control of the railroads in the West teaches us that securing key assets, balancing short-term gains with long-term vision, and staying resilient in the face of setbacks are all critical to success. At B:Side, we’ve found ourselves in a similarly competitive environment, and while our industry might be uncomfortable with competition, I believe that’s exactly why we need to embrace it.
Rather than shy away, we have to lean into the friction, using it as fuel to drive innovation and growth. Palmer’s resilience and strategic patience are key takeaways for us as we aim to build something sustainable, not just for the next quarter, but for the long haul. Strong may have won a few battles, but Palmer’s long-term vision outlasted his competitor’s short-term victories. The same applies to us—our focus on the future, even when it means enduring short-term discomfort, is what will set us apart. History may be in the past, but its lessons are still our best tools for navigating the challenges ahead.