15 lessons from a 5-year-old entrepreneur

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A tribute to Bruce Winston 15 lessons from a 5-year-old entrepreneur

Posted: June 14, 2013

He’s a big guy, his resume is impressive, and the list of scholarly publications is long. But none of the official documents list “entrepreneur at age five” as one of his major accomplishments. And, yet, that was perhaps the most life shaping event for Bruce Winston, professor in the Regent University School of Business & Leadership.

For Dr. Winston – Bruce to those who work with him – age 5 was when his entrepreneurial career got started. That’s when he started working the streets of Fairbanks, Alaska, selling newspapers. As an adult, he eventually came to realize that everything he knew about entrepreneurship was actually learned from his childhood newspaper experience.

Most of those entrepreneurial lessons were learned during his first summer after kindergarten. His mother worked as the secretary to the publisher of the Fairbanks, Alaska, Daily News Miner. It was the town’s only newspaper, published back in the day when papers were sold on the streets – as depicted in the 1992 movie “Newsies” – or delivered to neighborhoods.

“I was selling local newspapers and you had to be 8 years old to do that, but I was big for my age, so I looked a lot older,” explained Winston. “My mother worked for the newspaper and had a few connections there, so I had inside information and a strategic advantage. That was Lesson #1 – it’s more about who you know (networking) and how you appear (packaging) than what you are capable of doing. It helps if you have a network of connections – my mother was the connection in this case.”

“Lesson #2 was that you need to have starting capital. My mother gave me $1.05 to buy my first 10 papers with the strong admonition to sell them all so that I had money to buy 10 more the next day. That led to Lesson #3 – Cash flow is more important than profit in the beginning for the entrepreneur.”

With money in hand, Bruce purchased his 10 newspapers. He paid 10-1/2 cents per paper and sold them for 15 cents per paper, thus making a profit of 4.5 cents.

“This was Lesson #4 – make sure you know what kind of gross margin you’re going to get because all of your administrative activities and costs (overhead) are based on that,” Winston said.

Since he was a young kid and not in school in the afternoons, he could get to the back door of the newspaper plant and buy his papers when they first opened up at 2 p.m. before any of the other kids.

That led to Lesson #5 – being the first to market makes a big difference.

Bruce would buy his 10 newspapers and start wandering the streets of downtown Fairbanks hawking newspapers by yelling out the headlines, imitating the other boys selling papers who were yelling out the headlines. He found that advertising worked because people were more willing to buy a paper when you gave them some insight as to what was in the news. The key was to get people excited enough about the headlines that they would buy a paper.

“This is where I learned how you market, how you explain product information, how you get people excited about what you have,” Winston said. “A newspaper is nothing more than cheap paper with some cheap ink on it. The key is not the fact you are selling a newspaper, it’s that you’re selling some timely and relevant information. It’s what’s inside you’re selling. I quickly learned that I could state the headline, but leave out some information that would make the customer want to buy the paper.”

Things went well for the next few days and then Bruce learned powerful Lesson #6 – Location, location, location.

He found that the best place to sell papers was on the corner of the federal post office and court building. A lot of people walked past that location throughout the day.

During the second day at the corner, three older boys told him to get off the street corner because it was theirs.

“I refused and got beat up for my refusal,” Bruce said. “Fortunately, I left with my papers and sales money intact. I limped off and sold my papers on the lesser traveled streets and went home.

“I decided that I would sell at the post office the next day because it wasn’t right for them to keep me from doing so. The next day I was selling at the post office and the three boys returned. I got beat up again and limped off. I learned Lesson #7 – One should not try to take on the bigger and more numerous competitors head-on.

On the third day, Bruce was first in line to get his 10 papers and then ran to the post office corner and started selling again. Only this time, he was watching down the street from the direction the older boys would be coming. As soon as he saw them, he took off running the other direction.

He sold the rest of his papers on the less crowded streets and went home. He had learned Lesson #8 – The value of being first to market and to use the competitors’ weaknesses. The bigger boys could not get to the newspaper building as early as Bruce could, so that gave him the early market advantage.

One late afternoon around 5 p.m., Bruce had three papers left and was about to give up and go home. He sauntered down a side street that took him past an open door into a bar. Hearing a lot of people inside the bar, he walked in and started asking people at the tables if they wanted to buy a paper. At one table a rather jovial man said that he wanted a paper and gave Bruce a silver dollar.

“He told me to keep the change,” Bruce said. “I was thrilled with that amount. Then he yelled to his friend, ‘Joe, this kid’s selling papers and he only has two left. I just bought one and gave him a dollar – you gotta do the same.’ Joe yelled back ‘Sure! Hey, kid, come here.’ Joe bought a paper and gave me a dollar, and his friend at the table bought the last paper and gave me a quarter – another nice tip over the 15 cents the paper was supposed to sell for.”

Lesson #9 – Customer segmentation. The customers in the bar were different than customers on the street. They didn’t care so much about the news as much as they liked the idea of helping out a little kid. Additionally, Bruce learned the power of a customer that speaks well about your business to his friends. Positive word-of-mouth advertising goes a long, long way.

Over the following weeks, Bruce stopped by the bar when he only had a few remaining unsold papers. Experience taught him that when he had three papers left, the bar patrons bought them and gave him more than the papers’ advertised cost. If, however, he had five or more papers, no one wanted to buy them. He started leaving any extra papers over three outside in a small space between the bar building and the building next door.

After selling his three papers, he would retrieve his remaining papers from between the buildings and then work to sell the last of them on his way home. Lesson #10 taught him that the perception of the buyer is always important in making the final buying decision. But in this case, it never felt quite right.

Lesson #11 – It’s important to honestly represent yourself and your product. Those ethical pangs of remorse still haunt him to this day, yet the experience contributed to the development of his moral compass.

The process of change forever nips at the heels of the entrepreneur. Bruce sold papers throughout that winter, but lost his competitive advantage of getting to the newspaper building first since he had to attend grade school all day.

Selling papers when the temperature is below zero is not an easy thing to do since fewer potential customers are outside on the streets. Consequently, he ended up selling papers only when it was above zero degrees and only a couple of days a week.

The next summer brought a new entrepreneurial lesson. A local radio disc jockey worked an afternoon show from a storefront right around the corner from where Bruce lived. He had a large speaker outside on the sidewalk and any passers-by could stop and listen for a couple of minutes to his show.

Bruce stopped by the storefront one day while selling papers and listened for a few minutes.

“I was surprised to hear the disc jockey announce that there was this little kid outside his storefront studio selling papers,” Bruce said. “He encouraged his listeners to come buy a paper. I was sold out in 20 minutes. In Lesson #12, I learned the power of mass-media advertising.”

He stopped by this storefront every day, but quickly saw sales drop off after the second day. He tried staying away for a couple of days and on the day he returned, he again sold out in 20 minutes. Lesson #13 taught him about being careful to not tire the audience with your message.

“I was learning how to shoot a bow and arrow that summer, and the sporting goods store near the downtown apartment where we lived sold crooked [cheap] arrows for 40 cents each. Thus, I could from time to time spend my daily profits [revenue minus the cost of goods sold] to buy a cheap arrow. Lesson #14 helped me to understand the power of personal incentives.

“Lesson 15 was mandated by my mother, who told me I had to save some of the net profits each day for a time when I couldn’t work,” Winston said.

“It took me years to realize the value of what I had learned as a kid during the time I spent selling newspapers in Alaska. Entrepreneurial success is heightened when the entrepreneur loves learning and business. There needs to be joy and excitement in both the positives and negatives, the successes and failures, and there must be a constant passion for learning and trying new things.”

Today’s entrepreneurs have to love the customers, the sticky paperwork, the suppliers, the regulators and even those who occasionally beat them up.

While we may no longer see kids selling newspapers on street corners, the next time you see one delivering a morning paper in your neighborhood, realize you may be catching a glimpse of a next-generation entrepreneur.

A. Gregory Stone, Ph.D., is professor of marketing with the School of Business & Leadership at Regent University. He can be reached by emailing gregsto.

Greg Stone

Greg Stone

Marius Oosthuizen Strategic Foresight Professional
CUSP Consulting

Cell: 084 670 1723
Email: marius
Web: www.thecusp.co.za
Twitter: @CUSPconsulting
Skype: marius_oosthuizen

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