Summer Reading: Whalers

I am gleefully devouring Nathaniel Philbrick’s “In the Heart of the Sea” and recommend it to anyone involved in private equity.

The book provides a non-fiction account of the voyage of the whaler Essex, which as any English major can tell you, was the inspiration for Moby Dick.

The economic situation of 1819 is not that different from that of today. The mainland economy was struggling. newspapers were reporting “dishonored credits, deserted dwellings…and declining commerce.” But the energy industry was doing quite well and whaling–essentially the depletion of a natural resource to provide energy–was a mainstay of the northeastern economy.

The business process is very similar as well. Ship owners would provide capital to entrepreneurial captains and provision their ships with as little food for a voyage as possible in the name of efficiency (sound familiar?). Captains would issue options to their crew on the eventual profits that would be reaped from the sale of whale oil some two or three years later.
I’m just a third into the tale, and the boat has just left the Galapagos and has yet to be rammed by a giant sperm whale.

My enjoyment of the story comes from an appreciation of the management problems that Captain George Pollard, 26, seems to be having a tough time managing.

Pollard, a first-time captain, can’t seem to get anything right:

  • Three days into the voyage, Pollard doesn’t take down enough sail and the boat is completely knocked over by a gale. Pollard’s underlings advise that returning to port for repairs and additional whaling skiffs would be a bad idea and Pollard capitulates against his better judgment.
  • Pollard’s first mate, Owen Chase, was a little too ambitious. He drives the crew hard and challenges the authority of the captain.
  • To make up time, Pollard adds sail to a dangerous extent.
  • Pollard buys a ramshackle whale skiff at an inflated price from an island provisioning station, only to have it destroyed by a whale shortly afterward.
  • Pollard buys food from another island along the way, but the 30 skinny pigs he gets barely keep the crew fed. They complain to the captain but are told to sit down and shut up.
  • The crew spends a month trying to round Cape Horn, fighting off typhoons, freezing temperatures and crew ennui. Perhaps nothing Pollard could have done here other than to tough it out.
  • The Essex springs a leak before heading deep into the Pacific and Pollard stops to fix it. But the crew does only as good a job as it can and the leak persists.
  • One of the crew abandons his post in favor of a tropical island. Rather than re-staff, Pollard plans to go it alone. It’s a poor choice, especially since he will need that man to pilot the Essex while the whale skiffs are hunting.
  • One of the more spirited mates plays a practical joke on his comrades who are off hunting on Charles Island in the Galapagos by setting a brush fire which they must run through. The entire island goes up in flames and thousands of creatures are killed. Pollard swears to punish whoever set the fire, but is unable to bring the trickster to justice.

It sounds like a few startups I’ve covered. Mind you, this is all before the boat meets a giant sperm whale intent on destroying the boat and the crew is forced to eat each other to stay alive.

Is there a PE/VC angle to your summer reading? Please share your suggestions. I wouldn’t be reading this book had it not been recommended by Buyouts Events Editor Mark Cecil.