Gottlieb Daimler (1834-1900) was a pioneering German engineer, industrial designer, and visionary entrepreneur who is celebrated as one of the fathers of the automobile. While not a stock market guru, his story is a masterclass in building a business with an enduring competitive advantage, making it essential reading for any value investor. Daimler, along with his lifelong business partner Wilhelm Maybach, developed the first practical, high-speed internal combustion engine. This wasn't just an invention; it was the seed of an industrial revolution. He then applied this engine to create some of the first-ever motorcycles and four-wheeled automobiles. His entrepreneurial drive led him to found the Daimler-Motoren-Gesellschaft (DMG), the company that would eventually merge to become Daimler-Benz AG, the manufacturer of Mercedes-Benz vehicles. For investors, Daimler’s legacy is not just the car itself, but the creation of a global brand built on innovation, quality, and a deep economic moat.
Born in Schorndorf, Germany, Gottlieb Daimler was an obsessive engineer with a relentless drive to create a small, powerful engine that could be used to power a vehicle of any kind. After years of working in various engineering firms, he teamed up with the brilliant designer Wilhelm Maybach. Together, they were the “dream team” of early automotive engineering. Their breakthrough came in 1885 with the “Grandfather Clock Engine,” so named for its upright shape. It was a game-changer: light, powerful, and it ran on gasoline. This invention was the key that unlocked personal mobility. They quickly put it to use in:
Daimler’s vision was clear: to put an engine on everything that moved, whether on land, water, or in the air. This focus on practical application is what separated him from being a mere tinkerer and made him a true industrialist.
Having perfected the engine, Daimler founded Daimler-Motoren-Gesellschaft (DMG) in 1890 to commercialize his inventions. The early years were rocky, but the company’s products soon gained a reputation for excellence. A pivotal moment came through an entrepreneur named Emil Jellinek. He began successfully racing DMG cars and selling them to high-society customers. To make the cars more appealing, he suggested they be named after his daughter, Mercédès. The name stuck, and in 1901, the Daimler-Mercedes was born. This marked the birth of one of the world's most powerful luxury brands. After World War I, the German economy was in shambles. In a brilliant strategic move to ensure survival and market dominance, DMG merged with its chief rival, Benz & Cie., founded by Karl Benz. In 1926, Daimler-Benz AG was formed, uniting the two founding fathers of the automobile under one three-pointed star.
Studying the life of an industrial pioneer like Gottlieb Daimler provides timeless lessons for investors looking to identify great, long-lasting businesses.
Daimler didn't just build a car; he built a fortress around his business. This economic moat had two key components:
For investors, a business with a deep moat like Daimler’s is the holy grail. It can protect profits and market share from competitors for decades.
Daimler was a visionary who saw the future of the “horseless carriage” when the public was still skeptical. He invested heavily in research and development, focusing on long-term goals rather than short-term profits. This is a crucial trait to look for in the management of any company you invest in. Great leaders build enterprises that last for generations, not just for the next quarter.
Daimler’s personal motto was reputedly “Das Beste oder nichts” (“The best or nothing”). This philosophy was baked into the company's DNA and is still central to the Mercedes-Benz brand today. A relentless focus on quality creates an asset that doesn't appear on the balance sheet: a reputation. This reputation translates directly into pricing power and resilience during economic downturns, qualities that every value investor should cherish.