Ben Franklin’s way of business
By Jonathan Guthrie

The US is a mother lode of entrepreneurial role models: from steel baron Andrew Carnegie in the 19th century, to hamburger magnate Ray Kroc in the 20th and webmasters Larry Page and Sergey Brin in the 21st. But you might not immediately think of Benjamin Franklin, the tercentenary of whose birth was on Tuesday.

Americans have Franklin’s significance as a revolutionary forefather drummed into them at school. Britons have a smattering of this knowledge. But it is overshadowed by images of an amiable old buffer in a frock coat flying a kite in a thunderstorm. Did not Franklin invent electricity? Or kites? Or frock coats?

My own ignorance was similarly extensive until The Benjamin Franklin Tercentenary (“a non-profit consortium of five Philadelphia cultural institutions”) began a picaresque public relations campaign for me to promote Franklin as an entrepreneur worth imitating. Maybe, being in Philadelphia, they were unaware of the delight I generally take in writing the opposite of what PR campaigns suggest. Intrigued, I read Franklin’s Autobiography. Unwillingly, I was convinced.

Franklin’s threadbare beginnings make him a perfect subject for one of those Secrets of My Success self-help books sold at airports. The tenth son of poor parents he turned up in Philadelphia in 1723 aged 17 with the proverbial single dollar in his pocket. He then set about making his fortune – through low cunning as well as high principles.

Franklin followed the prudent path of learning about his chosen business at someone else’s risk, as an employee rather than an owner. A printer called Keimer provided this cuckoo with a nest. Franklin was soon plotting to set up in competition.

The way he achieved this would today still increase the flexibility of a fledgling business, and its chances of survival. Franklin started up in partnership with a friend, Hugh Meredith, instead of as a one-man band. They used capital borrowed from family – Meredith’s father – rather than a commercial lender. Franklin was not only hard working, but realised this had a PR value if flaunted. He pushed paper stocks through the streets in a wheelbarrow “to show that I was not above my business” and “took care not only to be in reality industrious… but to avoid all appearances to the contrary”.

He was also a demon networker, a characteristic that served him well in his later political career, which included such coups as persuading the French to bankroll the American Revolution.

Franklin made shrewd use of the mass media, in the form of his printing press. There was a shortage of coinage in Philadelphia, with money flowing back to England to pay for imports. High local interest rates encouraged the wealthy to lend money rather than to invest it in developing land for agriculture. Franklin wrote an anonymous pamphlet that spurred the adoption of paper currency. Enough influential people knew the author’s identity for Franklin – whose face now adorns $100 bills – to win the print contract. It was, he wrote, “very profitable”.

Many Americans see the sociable, pleasure-loving Franklin as a Santa figure, according to Rosalind Remer, executive director of The Benjamin Franklin Trust. He had strong humane principles, always striving to balance past misdeeds with present generosity. But he also had a merciless streak. His success drove Keimer to the wall. Franklin observed with relish that his erstwhile employer “was forced to sell his printing house to satisfy his creditors. He went to Barbados, and there lived… in very poor circumstances.”

Indeed, Franklin, having bought out Meredith, ended up with a near monopoly on printing in Philadelphia, which he extended vertically into newspaper publishing. It probably helped that he diverted his brightest employees from competition by pioneering a form of franchising. He set them up with print shops in growing colonies, such as Carolina, sharing their income until he had recouped his outlay.

Franklin did not expect royalties on his many inventions, being as Ms Remer puts it,“an early open-source kind of guy”. He turned down a patent on a fuel-efficient stove, saying: “As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours.”

The pamphlet Franklin wrote to promote the stove shows that he could have taught modern direct marketeers about hype, if not brevity. It was called: An account of the new-invented Pennsylvania fireplaces; wherein their construction and manner of operation is particularly explained; their advantages above every other method of warming rooms demonstrated; and all objections that have been raised against the use of them answered and obviated.

Franklin retired from business at 42, having achieved wealth he referred to as a “competence”. He had not accumulated the huge assets of such English friends as the industrialists Matthew Boulton and Josiah Wedgwood. But he had enough to live on comfortably.