Ash Jurberg

5 Business Lessons Entrepreneurs Can Steal From The Greatest Showman | by Ash Jurberg | Dec, 2020

Don’t let P.T Barnum’s act fool you — he was also a helluva entrepreneur.

Source: WikiCommons

Ladies and Gentleman, it’s the moment you’ve been waiting for!

With those words, accompanied by clapping and stomping feet, the Greatest Showman appeared on our screens three years ago. The movie loosely based on P.T Barnum.

Why, you may ask, am I writing about a movie that is three years old? Well, I am actually going further back than that. 150 years further back to be precise. For while PT Barnum was the Greatest Showman; he may have claims to also being the Greatest Entrepreneur. A big call but one that can be substantiated. Before Gates. Before Jobs, Musk and Bezos, there was Phineas Taylor Barnum.

Data from the Bureau of Labor Statistics show that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Barnum’s businesses — the three-ring Ringling Bros. and Barnum & Bailey Circus, founded in 1871, only folded in 2017. Now, that’s longevity.

His book, The Art of Getting Money was released in 1880, and his advice and lessons are still applicable now. Even the title draws you in. Subtly it may imply that within is how to make money quick and easy, but the content actually delivers. He provides a set of rules that individuals can follow to be successful in their business and financial endeavours.

Entrepreneur, salesman, innovator, showman. America’s second-ever millionaire. One that many modern entrepreneurs follow. And a man so famous that a letter sent from New Zealand simply addressed to Mr Barnum, America was delivered to him.

It’s the moment you’ve been waiting for.

“He who is without a newspaper is cut off from his species.”

Let’s start with the easiest bit of advice; after all, you are already following it. Barnum was a big advocate for reading. Admittedly, the options were far less back in his time, before the internet. But it is through words that we gain knowledge. Obviously, reading keeps you up to date with the latest information but also helps cultivate the mindset needed to lead people and build a business.

In his book Barnum uses the example of a hostess buying candles to illustrate opportunity cost. The hostess needed the candles so she could read at night but said they were too expensive. Barnum mentions the knowledge she would gain from reading far outweighed the expense of the candles. By not spending her money on candles, rather than saving money, she would actually be poorer.

Not only did Barnum, believe in reading he loved to write, working on his autobiography right until his death. And ensuring his wife wrote about his funeral as the final chapter.

The entrepreneurs who follow this

Most CEOs read four to five books a month. The average person reads only two to three books a year.

Bill Gates reads a book a week, Warren Buffet spends 80% of his day reading, and Mark Cuban spends three hours a day reading.

“Politeness and civility are the best capital ever invested in business. Large stores, gilt signs, flaming advertisements, will all prove unavailing if you or your employees treat your patrons abruptly. The truth is, the more kind and liberal a man is, the more generous will be the patronage bestowed upon him.”

Barnum definitely attracted his share of controversy and criticism, but one thing he was known for was treating his customers well. As he says in his book, those “who drive sharp bargains with their customers, acting as if they never expected to see them again, will not be mistaken. They will never see them again as customers.”

He was fair in his pricing, ensuring that everyone could afford to attend his shows, especially as the entertainment sector had traditionally ignored them. “The noble art is that of making others happy.”

The entrepreneurs who follow this

When you hear the word customer, there is one entrepreneur that springs to mind — Jeff Bezos. Bezos is famed for his obsession with customers and says that Amazon’s secret sauce is ‘obsessive-compulsive focus’ on customer over competitor. Bezos’ business idol Sam Walton, founder of Walmart, was also customer-focused saying, “there is only one boss. The customer.”

Brian Chesky, co-founder of Airbnb, is another strong customer advocate saying, “if you want to create a great product, just focus on one person. Make that person have the most amazing experience ever.”

“Engage in one kind of business only, and stick to it faithfully until you succeed, or until your experience shows that you should abandon it. A constant hammering on one nail will generally drive it home at last, so that it can be clinched.”

Startups need to dream big but focus small to succeed. Barnum was famously against going into debt, preferring to focus on generating profits before borrowing.

As Barnum says, “when a man’s undivided attention is centered on one object, his mind will constantly be suggesting improvements of value, which would escape him if his brain was occupied by a dozen different subjects at once.”

Once he did succeed in a venture, he quickly expanded onto other pursuits. He invented the beauty contest, opened the first aquarium in the US and introduced fine arts by bringing the Swedish opera star, Jenny Lind to the US on tour. The tour took in the modern equivalent of $21 million over a nine-month engagement as well as a range of merchandise from books to opera glasses to chewing tobacco. Barnum certainly wasn’t against expansion, just at a managed pace.

Research from California State University shows that companies that had fast revenue growth performed worse, long-term, than their slow-growing counterparts. 66% of the fastest-growing companies fail. Too many startups seem preoccupied with rapid expansion to the detriment of slow, steady and sustainable growth.

The entrepreneurs who follow this

Tim Cook, CEO of Apple, says what he admired most about Apple founder Steve Jobs was his focus. “He had a focus that was unlike any other.” When Jobs famously returned to Apple in 1996, he dramatically reduced down Apple’s product line from a huge range, to just four different computers.

This allowed Apple to focus on creating four excellent products while by eliminating unprofitable projects. This new focus led to Apple creating the game-changing iMac.

Go on in confidence, study the rules, and above all things, study human nature.

Barnum employed consumer psychology long before there were customer surveys, market research and consumer insights. He didn’t have Google analytics to pore over, but he wanted to understand what people did things and why they did it. He then created services and products based on this and what was missing in the market.

At the time, live entertainment was a luxury that only the wealthy could afford. This meant that the large majority of the population were ignored as theatre and drama productions only targeted the rich. Barnum saw a huge gap in the market and created a product for them — family entertainment for the masses.

He wanted to provide value, so kept prices low while delivering a great product. He took the local circus and freak show and turned them into high-quality entertainment that people felt good attending.

There may be some debate as to the ethics of his ‘freakshow’ business, but he understood human psychology. He sold people the promise of amazement, and he delivered it. People are attracted to the unusual and Barnum used this to create a highly successful business.

Barnum also knew the power of word of mouth. If people were entertained, they would tell others. It is perhaps the biggest rule of marketing — turn your customers into your marketers. Delight them and turn them into advocates.

The entrepreneurs who follow this

Daniel Ek, founder of Spotify, says, “put your consumers in focus, and listen to what they’re actually saying, not what they tell you.”

When Michael Dubin started Dollar Shave Club, he instilled the philosophy of member engagement with the motto of ‘we don’t respond to situations; we respond to people.’

At Netflix, Reed Hastings wants his legacy to be ‘consumer science.’ He said, “Leaders like Steve Jobs have a sense of style and what customers seek, but I don’t. We need consumer science to get there.” Netflix uses a scientific process to understand and delight customers to create personalized experiences and recommendations.

“I am indebted to the press of the United States for almost every dollar which I possess.”

While he was no doubt a great entrepreneur, Barnum’s main claim to fame is as a Showman. And as far as marketing, sales and public relations go, it is hard to top him. He was always aiming to capture people’s attention.

Barnum had a property in Connecticut next to the railroad tracks that took passengers into New York City. Most people would dismiss the location as noisy and of no benefit to a business. Barnum saw it as a marketing opportunity.

He brought in an elephant to plow the fields on his property. This grabbed the attention of all train passengers heading into the bustling NYC metropolis. The publicity stunt worked as he received nationwide press. In fact, it was so successful that agricultural societies wrote to him for advice on how to get elephants to do farming.

“Newspaper reporters came from far and near and wrote glowing accounts of the elephantine performances. The six acres were plowed over at least sixty times before I thought the advertisement sufficiently circulated.”

When his show included a ‘161-year-old woman’, Barnum himself wrote a scathing, anonymous letter to the editor of the newspaper questioning her authenticity. Of course this led to controversy and ultimately ticket sales.

He also spent a lot on paid advertising, never leaving the success of his events up to chance. He took out ads in newspapers, rented billboard space, distributed pamphlets, and arranged press coverage. Barnum spent a lot of time working with local news reporters to gain publicity, employing a team of agents to schmooze them.

There was a reason he was called the ‘Shakespeare of Advertising.’

The entrepreneurs who follow this

There is no such thing as bad publicity is a quote attributed to Barnum, and one entrepreneur that has really taken this to heart is the founder of all things Virgin, Richard Branson.

From trying to fly around the world in a hot air balloon to dressing up as a bride/competitors airline attendant/Zulu warrior, Branson has done his best to drum up media interest and free publicity for his brand.

If Barnum was the Shakespeare of Advertising, then Branson is perhaps more the Dan Brown.

I am not a well-known entrepreneur, but I tried Barnum’s suggestion when I started my first business when I was just twenty-one years old and ending up getting free coverage in the biggest newspaper in my country as well as TV. Unlike Barnum, however, my business didn’t last 150 years.

Whether inadvertently or by design, you can see some of these Barnum’s advice has been adopted by the best entrepreneurs of the modern world. Barnum wrote an Entrepreneurs Handbook many years ago, and it has been followed by many since then.

Greatest Showman? Definitely. Greatest Entrepreneur? I think so.

“Writing lives forever, while you may not.”

His writing has lived forever, and you can view a free copy of his book here.

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