I did my first two start-ups when I was 7 and 8. One was an economic failure. The second was an ethical failure.
When I was seven, I launched a lemonade stand. Auren’s Lemonade was a big hit with the neighbors. I set up the stand in the corner of the street and it sold like hot-cakes. I was rich. At least I felt rich. I probably only made a few dollars after a long day, but I felt really wealthy.
The next week, it was really hot out … so I decided to do lemonade sequel. But this time my dad charged my for the lemonade can (the Tropicana frozen kind), the plastic cups, the ice, the poster-board for the sign, and made me rent the table and chair for the stand. Luckily he did not ask me to pay parent taxes.
Needless to say, I lost a lot of money that day and Auren’s Lemonade officially filed for bankruptcy. But it was problem the best lesson I ever learned.
The next year, my friend Blaine and I decided that we were going to become multimillionaires selling cigarettes to kids. This was the unethical business. We figured that neighborhood kids would gladly pay $0.25 for a cigarette so we only had to sell 4,000,000 of them to become the first kid business tycoons. We had already decided what car we would buy our parents. We were eight years old going on Rikers Island.
Beside for the problem of selling toxins to other kids (for some reason, this did not bother us at all), there was the big issue that we did not have access to cigarettes. And even if we could buy them, they were expensive and would really cut into our margins.
So Blaine has the brilliant idea of collecting cigarette butts on the ground (there were thousands of them in the park) and then manufacturing new cigarettes. We gathered our product, created an assembly line of white paper, scissors, shredded dried leaves, and scotch tape. Soon we had a few hundred cigarettes and were hawking our wares to all the other kids. And for the first time in my life, I was really popular. No wonder people become drug dealers.
All was peachy until one of our customer’s parents called up Blaine’s dad. We were in big trouble. We were forced to destroy our entire supply, and write apology notes and reimburse all the kids. And I think I was grounded for nine months.
I learned my lesson.
Glad it happened to me when I was eight … otherwise I might have grown up to be Andy Fastow.
great story! point proven once again: entrepreneurs aren’t born overnight
Auren, this post made me laugh so hard I almost fell down. Well done. I love the picture of you and Blaine making cigarettes.
Of course, who am I to talk. I completely forgot that one of my longstanding quests as a child was to find a way to construct slugs that would fool arcade machines so I could sell them to other kids. Another word for it is counterfeiting!
Why is Andy Fastow the bad guy for everything. People find one person to blame for everything that is wrong with an era. Like my finance professor used to say about Enron, In good times, it’s called financial engineering, in bad times its called fraud.
Selling cigarettes to minors is illegal, special purpose entities, while shady manipulations of GAAP accounting were disclosed in financial statements and were LEGAL. Further, profiteering by making yourself the beneficiary of these special purpose entities is clearly a conflict of interest and a breach of fiduciary duty, but Fastow is not a drug dealer, he was using clever accounting to feed cash into a business that wasn’t producing any. Poor business sense and a downward spiral? Yes. Dealing drugs to kids? No.
Let’s please stop comparing these people to drug dealers and murderers.