Wednesday, March 16, 2011

PT Barnum and Joice Heth

You cannot spend much time in business, in business school or doing anything involving money without someone invoking PT Barnum's quote: "There's a sucker born every minute." This is a universal axiom if there ever was one.

One of the earliest of Barnum's schemes was a show he had in New York City where he presented Joice Heth, an 80 year old blind ex-slave who was almost completely paralyzed. He claimed that she was over 160 years old and was George Washington's nanny. She'd tell stories about Washington's youth and went into details about his childhood including the fabled story about the cherry tree. This was the year 1835 so a lot of Americans were very curious about our first president and would pay a lot of money for just a brief connection with him. Barnum was providing a service to meet their need ... right?

What is amazing about this story is that he even figured a way to make money off of this scheme once rumors become popular that the story was a fraud. He started to augment the rumor himself claiming that she was an actual machine, an android in modern terms. This made the crowds and profits even larger.

After she died a year later, he charged an admission fee to her public autopsy at a saloon with over 1500 spectators watching. When the surgeon revealed that she was probably only 80 years old or so, Barnum just acted incredulous claiming the body wasn't her. Business people haven't changed much. A modern equivalent of this scheme would be like a banker convincing a bunch of people without jobs or verifiable incomes to take out loans and then packaging those loans into an "investment" and then selling those loans for a profit. It is amazing what a good showman can do.

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