The Beginnings
But behind the exterior of wealth and luxury lies reasonably humble beginnings. Inspired by Frances Minaker’s One Thousand Ways to Make $1000, he and a friend set out to start their budding entrepreneurial beginnings by acquiring a $25 pinball machine, which they placed in the local barbershop. He told longtime friend Bill Gates during a visit to a candy store in Omaha during a Berkshire Hathaway shareholder meeting: “I bought a machine for $25 in 1946.”Buffett told his biographer that his pitch to the local barber involved faking a business coined “Wilson’s Coin-Operated Machine Company,” explaining that it was no risk and the money would be split. He loved the idea. The young entrepreneurs installed their first machine in the barbershop, which was a hit. On the first night, they collected four dollars. After one week, they had $25, enough to buy another pinball machine and expand.
Naturally, his drive and desire to succeed saw them install several machines in three different barber shops across Omaha within just months of starting. His friend’s side of the deal was to fix up the old pinball machine while Buffett handled negotiations with the barber, Frank Erico. They later sold the company to a war veteran for a tidy sum of $1200 (equivalent in purchasing power to about $20,056.00 in today’s money), which, even to this day, Buffet describes as having “built a small empire out of it.” Not bad for a business set up by a couple of teenagers.
Nostalgically, he described it to Gates as the “best business I was ever in. I peaked very early in my business career.” I imagine the lessons he learned in those early days of hustling helped to lay the foundations for the behemoth of a career he went on to achieve.
