Q&A: What’s an Example of a Successful Entrepreneur Who Was a First-Time Failure?
Everyone has a favorite Hershey’s candy. From Reese’s Cups to Twizzlers, Hershey’s is one of the biggest names in candy. Heck, there’s even a Hershey Theme Park where tourists pose for photos with candy mascots and can ride through an exhibit entirely dedicated to the process of making chocolate for the candy brand.
However, in 1883, Hershey’s founder, Milton Hershey, was homeless and bankrupt, having been disowned by his family after 3 failed business ventures.
The Many Failures of Milton Hershey
Milton Hershey was a born entrepreneur. He dropped out of school in 1871 at the age of 14 to take apprenticeships—first at a print shop then at a candy factory in Lancaster PA—and just 5 years later, he opened his first candy store in Philadelphia, PA.
Here, he worked 15 to 16 hours per day, 6 days a week. He would make candy by night and sell his goods from a pushcart near The Great Centennial Exposition during the day. It was clear that Hershey had the drive to succeed, but luck was not on his side.
After a harsh winter of illness and mounting debt, Hershey sold his first business.
He then spent some time briefly working for other candy makers in Denver and New Orleans. His work in Denver provided a valuable education. In fact, it was here that he learned how to make caramel from fresh cow’s milk, knowledge that would bring him great success later on. However, he clearly yearned to own his own business.
Failure followed Hershey through his next 2 attempts at opening candy shops in Chicago and New York. Finally, he hit a new low when his delivery truck was robbed in New York, and he went bankrupt.
Abandoning New York, Hershey returned to his home in Lancaster, PA to find little support from his family. After so many failed business ventures, his relatives, understandably, refused to offer him assistance to start yet another business.
After this low point in Milton Hershey’s career is when he started to turn it all around.
Hershey teamed up with an old friend, Henry Lebkicher, from his first candy-making apprenticeship. Lebkicher offered Hershey a place to stay and lent him the money he needed to retrieve his equipment from New York.
Together, they started the Lancaster Candy Co. It was here that Hershey applied the skills he learned in Denver. Incorporating milk into the caramel made his products chewy, delicious, and stable for transport. Hershey received a $250,000 loan after securing a deal with an English supplier, and expanded his business.
Even with these successes, Hershey was yet to discover the full potential of his entrepreneurial skills.
An Eye for Opportunity
In 1893, Hershey attended the World’s Columbian Exposition where he watched a demonstration of German chocolate-making. Immediately after the demo, Hershey turned to a friend and said, “Caramels are a fad, but chocolate is permanent. I’m going to make chocolate.”
Just like that, Hershey switched gears and started to experiment with what would later become the world-famous classic Hershey bar. Unlike caramel, milk chocolate was new to the U.S., and Hershey’s product became an instant sensation. The Hershey Chocolate Company was born.
Hershey sold Lancaster Candy Co. for $1 million and began work on a utopian “city of the future” where his factory workers could not only make chocolate, but also find housing, send their children to school, and shop.
The town, renamed Hershey, PA, featured modern amenities, a zoo, a hospital, and, of course, an amusement park.
The company flourished, even during the Great Depression, during which time Hershey kept his workers employed through ambitious projects designed to provide work for those who would otherwise be at risk for losing their jobs.
Entrepreneurial Lessons from Milton Hershey
Today, Hershey is a household name and his namesake company sells over $7.5 billion worth of chocolate worldwide—not too bad for a 3-time business failure. If I had to take some lessons in entrepreneurship from Milton Hershey’s story it would be these:
- Cultivate business connections. Hershey didn’t turn it around by himself. His friend from his apprenticeship in Lancaster ultimately provided the catalyst he needed to start a successful company.
- Learn from your experiences in the workforce. Although he was a great entrepreneur, Hershey’s experiences working for other candy-makers ultimately fueled his later success. He took advantage of the opportunities he was given and used that as the groundwork for his own business.
- Keep up with industry trends. Hershey attended industry events and exhibitions. He knew that chocolate was the future of candy-making, and he had the good sense to jump on it at just the right time.
- Engage with ethical business practices. Hershey is known today not only as a great entrepreneur, but also as a great philanthropist. He worked to keep his employees happy and well taken care of. This empathy led to the creation of the town of Hershey, PA and has contributed to the legacy and reputation of the Hershey brand.