“This is the story of a remarkable man, a family dynasty, and a company. Ruben Rausing did something that should have been impossible: starting and maintaining control over a company that became a world leader in its industry without any initial capital. And not only that: in the end, the Rausing family held one of the world’s largest private fortunes. Thus, this book is also about money, power, and influence. It can also be seen as an almost 90-year-long innovation process that continues today.”
“The book is an attempt to describe as accurately as possible how an idea is born, developed, realized, and brought to market, while a completely new company emerges.”
“But it is also an attempt to describe how one acquires, uses, and retains power.”
“In Ruben Rausing’s case, it was about ensuring that his own family retained control at all times. In some cases, he failed, but in the long term, he succeeded. His strategy was to turn the family into an industrial dynasty while being obsessed with solving problems or improving old solutions. But his overriding concern was his dynastic ambitions.”
“In countries like Great Britain, the USA, and Germany, milk was already being sold in paper packages. But common to all was that they were too expensive because they required a lot of material and costly manufacturing processes. Since they also had to be filled one by one, the filling process itself was also costly. Thus, Åkerlund & Rausing had to either find a cheaper material or another way to manufacture and fill the cartons.”
“He liked to work at night, and it was also now that he reasoned step by step towards a possible solution. Using pure logic, he pondered possible shapes that minimized material usage. In his mind, he envisioned a tube made of paper.
“If one folds it at one end and then folds in the opposite direction at the other end, a small pyramid of paper is formed. It can thus be folded from a single piece of paper and only needs gluing at two seams. Thus, there is no material waste whatsoever,” he thought in the darkness of a February night.
Although Wallenberg realized that he had found the optimal shape, he was not yet completely sure if he had really solved the problem. During the night, he had actually come up with two more possible solutions that he also wanted to try. Moreover, he had not yet actually folded any tetrahedron in reality.”
“People often find it difficult to accept new inventions, simply because human capacity to think in new ways is limited. Therefore, Wallenberg also encountered skepticism when he showed what he had come up with. Even Ruben Rausing, who had “think differently” as one of his mottos, had a hard time embracing the little ingenious invention. A few days later, when he asked Erik Wallenberg to come up and show how things were going with the milk packages, Wallenberg placed a number of tetrahedrons on a tray and went up.”
“Ruben Rausing was far from alone in his skepticism. Erik Torudd saw the tetrahedron for the first time a few days later. He became thoughtful. He has described the event as “a shock.” The package looked like nothing else – not round and not square. And how would one be able to fill it? It was made in one piece. Erik Wallenberg was alone in understanding during the first week that he had really constructed a package that would work. That the little quirky package would lay the foundation for the Rausing family’s entry into the very exclusive circle of billionaires, no one realized. Not even the inventor himself, Erik Wallenberg.”
“Wallenberg then continued to try to solve the problem of how the package should be filled. The work was entirely focused on the tetrahedron being folded from a single sheet of paper. Then an opening would be left in one of the seams. In the opening, the milk would be filled. And finally, the package would be sealed. It was, in other words, a traditional – and expensive – solution to the problem.”
“Most people have at some point experienced suddenly just seeing the solution to a problem in front of them, without really being able to explain why or how they came to the answer. Such a moment occurred that day when Erik Torudd came down to the laboratory and saw how Wallenberg and his assistants took a long paper tube and folded tetrahedrons in a long chain before they split them apart.”
“Suddenly, he saw in front of him how the package that had seemed impossible could be used after all. He understood how they would be filled: by first filling the tube with milk, then forming the tetrahedrons, and finally cutting them off individually, one would get a long line of filled tetrahedrons. Perhaps the package would be worth a try after all. The idea of continuous filling had been born. And it had only been a week or so since Erik Wallenberg first showed his tetrahedrons.”
“The continuous filling was one of the factors that would give the tetrahedron an advantage over competitors’ packages. The competing packages were filled only after the folding was complete, before they were finally sealed. Such a process was anything but cheap. But the continuous filling, on the other hand, meant that many costly steps could be avoided.”
“Although Ruben Rausing liked it when employees dared to think in new ways, he did not always accept their ideas. It often took time before he could approve them. But once he had finished pondering and embraced the ideas, he often presented them as his own or as his family’s. The same happened with the tetrahedron: after Torudd had told him about how the filling problem could be solved, it took a few weeks before Rausing had finished thinking and definitively realized that the tetrahedron was worth a try.”
“He realized that nothing could be considered impossible until one had tried. These words would gradually become central in his life. As soon as someone was skeptical about different proposals, he asked “have you tried?””
“When he invited his Deputy CEO, Holger Crafoord, to lunch at the house on Tomegapsgatan, he still was not convinced. Now he wanted to hear what he thought about the tetrahedron’s possibilities. But at the lunch, it was instead Ruben Rausing’s wife, Lisa, who said the liberating words. She suggested exactly the same thing as Erik Torudd had done. But her husband still resisted. “It’s not possible. You cannot seal the packages straight through the milk without it taking on taste,” he objected.
“Have you tried?” asked Lisa Rausing.”
“At this stage, when his wife had said the decisive words, Ruben Rausing decided to bet everything on the development of the tetrahedron. Suddenly he was almost manically charmed by the idea. It is no exaggeration to say that he nearly became obsessed with the idea of the tetrahedron.”
“He tasked Torudd to immediately apply for a patent for Wallenberg’s tetrahedron. And the drawings of the tetrahedron were handed over to the patent firm AW Andersson in Malmö, so they could write the patent application. Erik Torudd had a hard time getting the agency’s representatives to understand that the tetrahedron really was an invention and that it truly could be used as packaging. Eventually, Rausing became irritated and instructed Torudd to call a meeting with the patent firm.”
“Now, there was both a concrete packaging and an idea of how it could be filled. Rausing was convinced that they had found a superior solution for how milk should be packaged. He realized that the packaging could become a mass product that could be manufactured in gigantic quantities. If he just played his cards right, the royalty income from the production would be enormous. Ruben Rausing had sometimes played with the idea of making the family into an industrial dynasty of the same kind as the Wallenbergs. But so far, realism had held back his dreams. The milk packaging, on the other hand, made his imagination take off again. But for the dream to come true, all patents had to be written to him. Therefore, Erik Wallenberg transferred the ownership of the tetrahedron patent to Ruben Rausing in December that year.”
“When laboratory experiments showed that it was possible to seal the paper with heat without affecting the taste of milk, Rausing wanted Erik Torudd’s continuous filling to be patented immediately. However, he bypassed Erik Torudd, who was the inventor. Instead, he contacted Tage Nilsson at AW Andersson. Since he was completely non-technical, it was Nilsson who had to make the drawings for the patent application that was filed in August. Ruben Rausing himself was listed as the inventor.”
“As the tetrahedron later succeeded globally, various myths about its origin developed: one of them is that it was merely by chance that Wallenberg came up with the solution, since he was actually just playing with some paper while he was home in a feverish delirium. Rausing himself told this story in various contexts.
Another version of the story is that Ruben Rausing himself came up with the tetrahedron when he saw his wife stuffing sausages. He also started referring to the tetrahedron as “his patent,” which was correct but gave a misleading impression that he had invented it himself. And Torudd’s idea of continuous filling, he attributed to his wife.”
“It was not until 1991 that Erik Wallenberg was publicly recognized when he was awarded the Royal Swedish Academy of Engineering Sciences’ grand gold medal. But perhaps the finest, albeit informal, praise he received was already in the mid-fifties from the Danish Nobel laureate in physics, Professor Niels Bohr.
“I have never seen such a distinguished practical application of a mathematical idea,” Bohr said in his quiet, almost shy manner when he visited the factory.”
““Time and again, one returns to the same question: Who is really the inventor, the person who orders a solution to a problem or the one who comes up with the solution?” he would later say during a dispute over a patent, where he had falsely claimed himself as the inventor.”
“The industrialization and urbanization of Sweden had made it suddenly possible to rise in society even if one did not belong to a rich or noble family. But despite this, August and Mathilda were still surprised by the commitment and joy of discovery that their son showed.”
“The economy for the approximately 1,200 people who lived in Råå was still in a fairly rudimentary stage and was largely locally based. Much of the trade still took place through barter transactions between fishermen and farmers. One group had what the other eagerly desired. Fishermen needed meat, milk, flour, and other items, while the farmers needed fish. Above all, the farmers wanted the coveted herring. In the autumns when the people in Råå and its surrounding area could see the herring fleet return after its long time at sea, the harbor square quickly filled with people. And when the herring was landed, the barter began. The farmers got their herring and the fishermen received meat, which they smoked and salted for their winter needs.”
“Which was exactly what he was. He had never been in such an environment before and had never associated with people who had fine names like Gyllenstierna, de Fine Licht and Oxehufvud, as some of his schoolmates were called. They were children of the upper class in Helsingborg. Unlike the parents of the artisan and farmer children from the villages around the city, their fathers worked as shipowners, officers, lawyers, and doctors. Ruben’s social ascent had – probably without him really understanding the extent of it at the time – begun.”
“At the secondary school, whose time-typical grand Swedish motto was “Knowledge and manly virtue, loyalty to the homeland”, he received, in his own words, “professorial teaching from the beginning”, thanks to the highly qualified teachers who were recruited from the University of Lund. All lecturers except one had doctorates.”
“When all the examinations were done, it was clear: all the students had passed despite the challenging knowledge tests they had undergone. Class R IV came running out to the tunes of Prince Gustaf’s graduation song, singing and putting on their white caps. The town’s citizenry could breathe a sigh of relief: they would avoid the disgrace.”
“August and Mathilda Andersson were proud of their talented son; now the first in the family had graduated from high school – a key to success. Moreover, young Ruben had received distinguished grades, well above average. They were satisfied and could hardly have wished for more. But young Ruben had completely different and bigger plans. During his time at the grammar school, his self-confidence had grown. The grades were too good to just be wasted on employment somewhere, he thought. He had decided on pursuing higher education.”
“The answer to Ruben’s troubles was Aunt Johanna. This enterprising woman had managed to earn some money by selling fish in the inland markets. On days when the fish didn’t sell, she exchanged the leftovers for farmers’ eggs, meat, and butter. When she returned to Råå, she sold the bartered goods to the fishing population. In this way, she could charge higher prices for the fish, and among the fishermen, she could sell the agricultural products at a higher price than would have been possible inland. Aunt Johanna had, in other words, on her own and without any formal economic training, discovered the law of supply and demand. Her business acumen had over the years resulted in a larger saved amount of money.”
“When Ruben and his mother asked her for help, she immediately agreed. She had no children of her own and felt she might as well help her nieces and nephews. It was a fortunate day for Ruben. Aunt Johanna’s loan of five hundred kronor ensured his studies at the School of Business, Economics and Law were secured. He resigned from Sydsvenska Kreditaktiebolaget. It was a big step for a young man who had also only recently started his job.”
“In hindsight, Ruben has occasionally claimed that he had decided in secondary school that he would become a wealthy man and that he was already clear about attending the School of Business, Economics and Law. In response to a teacher’s question about his future, he is said to have answered, “I’m going to be rich. I’m going to be a banker.” Unfortunately, these claims do not deserve much credibility, but are instead to be regarded as tales. Ruben liked to paint a picture of himself as a man who has always followed a straight path – a man who has marked out a path and then consistently followed it.”
“What really interested the young student was industrial organization and economics. He was impressed by Eli Heckscher, who was known for being a very skilled theorist but also a distinguished pedagogue. It is not very surprising that these subjects attracted Ruben. From an early age, he was a person who, with unshakable self-confidence, preferred to devote himself to visions and to drawing the big lines instead of dealing with the everyday – and both economics, which at this time was largely reasoning and reflective, and the theory of organization were subjects that left a lot of room for this. On the other hand, pure business economics left no room at all for extensive speculation during Ruben’s time.”
“The burning interest in economics would pay off. Of all the students that Eli Heckscher examined during his professorial years, only five received the highest grades in economics. Ruben was one of them. The others were Jacob Wallenberg (1912), Bertil Ohlin (1919), Alf Johansson (1922), and Göte Engfors (1924).”
“When one of his closest associates protested against the historical narrative on one occasion, Ruben simply replied with “You don’t know what you’re talking about” – a comment that became increasingly common over the years. The very strong self-esteem that Ruben had in his youth increasingly turned into overestimation.”
“However, it wasn’t long before he began to question his work assignments. He was definitely meant for bigger tasks, he believed, and should not waste his time on such things that other, more unimaginative people could do. Ruben Andersson had high expectations for life and he was in a hurry.”
“Arfwedson was very upset. During the conversation with him, Ruben was informed that firstly, one did not simply leave Enskilda Banken, as it was a privilege to start there. Secondly, it was not in the bank’s interest for young men “who mostly just got in the way” to leave before they had contributed anything useful.
“I understand all that, but I was actually not thinking primarily of the bank’s interests but of my own,” Ruben confidently replied and resigned with immediate effect.”
“During the directors’ customary afternoon tea in the chairman’s room, many voices were heard expressing outrage at the audacity that Ruben had demonstrated.”
“Once the courses began, both Swedish guest students were surprised to note that the interaction between students and teachers was much less formal than in Sweden, where teaching was characterized by German academic tradition. An example was that students were allowed to interrupt the lecturers with questions without hesitation. Törnqvist and Ruben found the system very positive, provided that the questions presented were intelligent and of general interest.”
“One company that made a significant impression on them during the trip was the Winchester Arms Factory, which was busy converting production from wartime activity to normal peace levels when they arrived. When World War I broke out in 1914, the factory had 8,000 employees, four years later they were 25,000. It goes without saying that if it was difficult to convert to wartime production, it is infinitely more difficult to convert to peace conditions, Ruben soberly noted. But thanks to the management applying Scientific Management, everything was conducted rationally and methodically, he believed.”
