Aster And Factor Mobility

John Jacob Aster's business career was impressive for any number of reasons, but it is most interesting when viewed through the lens of factor mobility. At the time of his death in 1848, John Jacob Aster had risen from a small time piano salesman to become the wealthiest man in America. He did not, however, become the wealthiest man in America by selling pianos. John Jacob Aster owned a variety of business over the course of his career.

Factor mobility is the ability to reallocate resources from one industry to another, as the market demands. John Jacob Aster was very adept at this. He immigrated to America with relatively little wealth, although he did bring with him some musical instruments which his brother had made which he hoped to make a living by selling. Even before the ship he arrived on had landed, Aster began scouting new markets by questioning his fellow passengers. As soon as he discovered that the fur trade was booming, he quickly changed business. He converted the resources he had, pianos, into funds with which he could enter the fur trade and make his name.

Aster eventually became very wealthy through the fur trade, but that didn't stop him from abandoning the business in its entirety when he saw better opportunities elsewhere. When his fur empire was threatened by over trapping, changes in demand, and the turmoil of the War of 1812, Aster sold everything related to his existing fur business. With this money, Aster was able to enter into a business that was not endangered: real estate. Careful investing and foresight on his part made his real estate business stunningly successful.

John Jacob Aster was successful not only because of his ability to manage a business he owned well, but also because he was well aware of when to change businesses altogether. Factor mobility allowed him to successfully weather the fall of several markets he was involved in.