These High School Dropouts Crushed It With Some Simple Growth Hacks

A version of this article previously appeared in Forbes.

Novelist and High School Dropout Louis L’Amour knew the importance of seemingly unimportant people (AP Photo)

“Growth hacking” is one of today’s most overused terms, yet despite its trendiness, it predates the Internet by centuries. Entrepreneurs have been seeking clever shortcuts to spur their growth and circumvent their competitors since the dawn of commerce.

By looking backward, modern entrepreneurs can co-opt the hacks from a pre-digital age that remain relevant today. These clever ideas often come from unusual sources, including an uneducated carnival operator, an author who dropped out of High School at 15, the owner of a laundry company who ran away from home as a teenager and a restaurateur who left school at the age of 13. That’s right, all of the growth hacks described below were created by High School (and Junior High) dropouts.

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Target The Untargeted, Offer Value And Ignore Conventional Wisdom

You probably haven’t heard of Raymond “Pappy” Smith, but he parlayed his Junior High education into an entertainment empire that changed the way Americans viewed gambling.

His success was based on delivering substantial value to an overlooked market, spurred along with some common sense growth hacks.

Pappy left home at 14 and spent the next two decades working midway games in traveling carnivals. These games, which included throwing dulled darts to pop balloons, knocking over lead-filled milk cans with a mushy, cork-filled softball and roulette wheels manipulated by the operator to land on certain numbers, were notoriously rigged and nearly impossible to win.

Late in his carny career, Pappy began to operate his roulette wheel without cheating. Business boomed. He expanded this experiment to other games and realized the obvious – people will play more often if they believe they have a fair chance of winning.

Pappy later said, “I wanted them to win” – he understood the quid pro quo that illicit gaming operators had missed. People will forfeit their money for the entertainment value of gambling, but only if they feel might win. Raymond’s innovations led to the creation of modern-day Vegas, in which the house earns a fair return, with payouts averaging 97%.

Some of Pappy’s commonsense growth hacks included:

  • Target – Pappy served an overlooked market: women. His casinos where well lit, clean, utilized female dealers and offered child care services
  • Education – When he opened his first casino, gambling was not mainstream. Thus, he had to educate his gamblers. To this end, dealers were encouraged to advise against bad bets and to explain the games to novice players
  • Money Back Guarantee – If you lost at Pappy’s casino, he would reimburse your travel expenses (this was a one-time offer)
  • Entertainment – He pioneered the integration of shows, fireworks, etc. into the gambling experience
  • Marketing – In the age of the automobile, Pappy blanketed billboards within a 500-mile radius of his casino with clever messages, all of which concluded with the tag line “Harolds Club or Bust” Note the typo in his casino’s name, a legacy of his lack of formal education which he refused to change, even after he was apprised of the mistake.

Lessons: (i) Over deliver value to your users. No matter what you sell, if you deliver fair value and provide a more expansive value proposition than your competitors, you will win. (ii) Be a contrarian, when everyone is zigging, zag. Question conventional wisdom. (iii) Seek out an unserved market and tailor your offering to accommodate target users’ needs.

There Are No Unimportant People

American Western writer Louis L’Amour left home during tenth grade and worked a variety of itinerant jobs for over a decade before beginning his writing career. During his vagabond days, Louis learned a very important lesson, “There is no such thing as an unimportant person.”

Mr. L’Amour eventually outsold nearly all of his contemporaries, become the 20th biggest selling author OF ALL TIME, just behind Stephen King, with sales in excess of 330 million books.

Once he became an established author and began traveling to promote his books, Louis always sought out the local rack jobbers – the people who placed paperback books in the stands by supermarket and drug store checkout lines. He would hang out with these modest folks, often taking them to dinner and getting to know them over a few drinks.

Louis knew that jobbers traditionally received little to no recognition from authors, yet the manner in which they did (or did not) display an author’s books could significantly influence its sales.

The impact of meeting a celebrity author who was genuinely interested in them ensured that in the pre-Amazon era, Louis’ paperbacks were always front and center of the book buying public.

Lesson: Who are the rack jobbers in your industry? Understand that there is no such thing as “unimportant people” and show respect and give recognition to everyone in a position to help your venture.

You can follow John on Twitter: @johngreathouse.

Image credit: AP Photo

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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