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A Few Principles of Entrepreneurship from a Billionaire Farmer

By Rigfennidh | The Hideout | 13 Nov 2020


When I was in high school, I had the opportunity to listen to the wisdom of one of Idaho's greatest entrepreneurs. His name was Jack Simplot. Simplot's claim to fame comes from the perfected crispy french fry that everyone enjoys with their hamburger today.  The McDonald's french fry was the brainchild of JR "Jack" Simplot.

Simplot's story began in southern Idaho not far from where I grew up. He showed great entrepreneurial skills early in life. As a teenager he worked on a local farm learning the essential skills in agriculture. In his off time, he continued to work at improving his situation.

Teachers in early rural Idaho towns were often paid in script instead of cash. This script was a type of local currency that served as credit at the local businesses. He would trade the script at a discount for cash. He would turn around and trade it with other people for cash and goods that he could resell. He would take the cash he earned and save it for what he called "seed money". He used this "seed money" to buy hogs. He then raised and sold the livestock for profit until he had enough capital to buy his own farm.

Using this process of saving and investing capital he created the Simplot Corporation. When he died in 2008 he was the oldest billionaire on the Forbes 400 fortune list. His empire was estimated at 3.6 Billion dollars.

In 1987 Simplot spoke to a group of high school students about entrepreneurship. I was in that audience.I was awestruck by this man and his straight forward and very blunt personality.

He began his speech by saying "If you want to make money, you have to learn the business first." There was no way around it. If you didn't know what you were doing, you couldn't do it better than anyone else. I am amazed at the number of stories I have heard about people who jumped into a new business unprepared. It is foolish to think you are going to make a ton of money by wasting money on something you know very little about.

He also emphasized businesses fail because their owners fail to mitigate risks. Your job as an entrepreneur is constantly look at your business and identify obstacles to your profitability and either eliminate them or mitigate them as much as possible. The odds are already against your business succeeding so you must do everything you can to reduce those things that can be reduced and work hard to overcome the odds that remain.

It was clear that Simplot cared little for consultants. My favorite quote of all time was uttered by him in that speech long ago.

He said:

"Consultants are guys who know 40 ways to kiss a girl, but do not know any girls."

His logic had reason. If you are telling someone how to make money and you aren't making the money the same way, your advice may not be sound. This rings true for me today as I learn the world of bitcoin, there seem to be a lot of people who claim to be millionaires wanting me to give my hard earned money to them so they can teach me how to be a millionaire.  The money must still matter to them.

Simplot also told us that capital was never spent on anything that did not have a return on investment. "Capital is always invested in increasing assets." This thinking is also demonstrated in The Richest Man in Babylon by George S. Clason. Clason's story about wealth creation should be required reading in high school.

Hard work, creative thinking and a drive to succeed where also critical. He emphasized solving problems rather than creating fads. Simplot did this by finding a way to flash freeze french fries so they would be available year round to vendors. Before that, potatoes were shipped fresh and spoiled rapidly, making french fries a seasonal treat.

I don’t remember a lot about that Business week back in 1987 but I do remember Jack Simplot’s speech. It has left an indelible mark on me and my approach to business. The principles of utilizing capital, identifying and avoiding risks taking expert advice with a grain of salt has worked for me.

I have not been as successful as Jack Simplot, but I have experienced numerous successes in life and business by listening to his words of wisdom. Hopefully my little trip down memory lane will help some of you as well.

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Rigfennidh
Rigfennidh

Just your average 50 something introverted Entrepreneur. I’ve owned several businesses and served in positions of community trust both elected and appointed. Now I trade crypto and run a successful apiary business.


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