Warren Buffet and pinball machines are not often used in the same sentence. Did you know, however, that Buffet used to be in the pinball business? In fact, he describes that business as the best he has ever had.
Buffet was involved with pinball machines back in the forties when he was a teenager.
The Teenage Businessman
Buffet has been involved in business deals and schemes since he was a teenager. In fact, in today's money, he earned around $53k while a teenager.
Pinball was only one of his teenage businesses, but it was the one that delivered the biggest return on investment. Buffet told his pinball story to Microsoft founder and friend Bill Gates. The chat took place at the shareholder meeting of Buffet's investment company Berkshire Hathaway.
Buffet started his pinball business in 1946 when he was 17. It started with him purchasing a machine for $25. Buffet brought his friend into the business to get the pinball machine working while he negotiated a deal with a local barber, Frank Erico.
Buffet told the barber he worked for a Mr. Wilson who ran Wilson's Coin-Operated Machine Company. Both Mr. Wilson and the Wilson's Coin-Operated Machine Company were fictitious but that didn't matter as the barber liked the pitch Buffet offered.
That pitch involved no risk to the barber. All he had to do was make space at the back of the shop, so customers could play pinball while they waited to get their hair cut. Buffet would then split the money with him.
Profitable from Day One
The pinball machine in Frank Erico's barbershop earned enough in just one week to cover the cost of Buffet's initial purchase. He used that money to buy another machine, continuing to repeat the process until Buffet's pinball machines were in multiple barber shops across Washington, D.C. Buffet then sold the business a year after starting it.
Reminiscing to Gates, Buffet described his pinball business as the best he was ever in. Of course, that is not surprising. After all, he started the business for $25, ran it for just one year, then sold it for $1,000. That is an impressive return on investment whoever you are.
Watch more of Buffet’s conversation with Gates here:
The days of installing pinball machines in barber shops as a business venture are probably over, but pinball is enjoying something of a renaissance at the moment. You can own your own pinball machine, too. Check out range today.