A Secretary Strikes Liquid Gold

Hello! Welcome to the sixth edition of Deep Pockets! Thank you for being here!

The most important step in the process of earning a huge fortune is the very first step. Anyone can dream up an idea that they think will be worth a fortune, but only people who have the guts to take that first plunge into entrepreneurship will ever turn their dreams into millions. Or billions.

In fairness, it’s not just “guts.” The basic ability to take the first step greatly depends on your life circumstances.

Why are most entrepreneurs young men? Because young men have absolutely ZERO risk of failure. They have no obligations. No wives. No kids. No pressure to get a wife or have a kid. No mortgage. Rent is probably split between two other 20-somethings and then also supplemented by parents. They’re probably still on family health and phone plans.

Taking the first step could not have been more of a challenge back in 1954 for a Dallas secretary named Bette. She had an idea for a product she knew would be successful. Actually, she had more than an idea. She already had a working prototype that people loved. But she wasn’t a 20-something young man in San Francisco. She was a 30-year-old, recently divorced, single mom living paycheck-to-paycheck as a secretary. In Texas in 1954!

DEEP DIVE: You can’t erase this liquid fortune

Bette Clair McMurray was born in Dallas on March 23, 1924. Her mother was an artist who ran a knitting store and loved oil painting. Her father worked at an auto parts store. Money was tight growing up, and college was never even a remote consideration. When she was 17, Bette dropped out of school and married her high school sweetheart, Warren Nesmith.

A year later, Bette was pregnant AND Warren was heading off to fight in World War II. Their son was born in 1942 while Warren was overseas.

Warren wouldn’t come back for several years, and when he did, the marriage was very rocky. They divorced in 1946, less than a year after his return..

The newly divorced single mom put herself through secretarial school and landed got a job at a bank. Despite never being a particularly good typist, by 1951, she managed to work her way up to the position of executive secretary for the bank’s Chairman of the Board. Her salary was $75 a week.

She lived paycheck to paycheck, supporting a teenage boy, but generally, life was comfortable.

A speed bump happened at work in 1954 when the bank upgraded its typewriters. The new IBM electric typewriters had much more sensitive key triggers that suddenly caused Bette, already a struggling typist, to make typo after typo.

At the time, there was no easy way to fix a typo from a typewriter. One little bitty typo would force Bette to start the page all over again from scratch.

Instead of getting frustrated, Bette got creative.

The daughter of an artist who loved painting herself, one day, an idea popped into Bette’s head:

When an artist makes a mistake, they just paint over it. Why couldn’t the same be true for a typist?

Bette began sneaking little bottles of fast-drying white tempera paint into work. When she made a typo, she would simply paint over it. Her boss barely noticed, and soon, the other secretaries wanted bottles of their own.

At this moment, Bette had an idea for a business. And incredibly, this single mom in Dallas in 1954, with the entire deck stacked against her, had virtually no hesitation about taking the entrepreneurial plunge.

She formed a company called the Mistake Out Company. She devoured books at the public library to learn about paint formulas. She reached out to a chemistry teacher friend to get advice on how to improve the product’s consistency. When she was finally satisfied, she went to apply for a patent… but could not afford the $400 fee. That was over a month’s salary for Bette. The modern equivalent of around $4,700. That kind of cash wasn’t just sitting around.

And yet, she persisted.

She kept her day job at the bank. She hired her teenage son and his friends to fill bottles. At night, when she got home from the bank, Bette sent samples to potential buyers and wholesalers.

This is how it went for the next FOUR YEARS.

Fate took the next step for Bette in 1958. One day she accidentally signed a bank letter as being from “The Mistake Out Company.” When her boss saw the mistake, there was no erasing it. Bette was fired on the spot. She had no other choice but to plunge into entrepreneurship full-time.

That same year she finally had saved up enough money to apply for a patent and trademark, both of which were granted. She also changed her product name from “Mistake Out” to “Liquid Paper.” The company name was also changed to “The Liquid Paper Company.”

Word of Bette’s product started to spread. She was profiled in an office supply magazine and received several large orders from companies like IBM and General Electric.

The business moved from her kitchen to a building in downtown Dallas. By 1964, the company was selling 260,000 bottles per year.

In 1968, a decade after she was fired from the bank, the Liquid Paper Company sold 1 million bottles.

By the mid-1970s, the Liquid Paper Company was selling 25 million bottles a year.

A Liquid Fortune

In 1979, Bette sold the Liquid Paper Company to Gillette for…

$47.5 million

That’s the same as $205 million in today’s dollars.

Tragically, Bette died less than a year after the sale from a stroke at the age of 56. She was worth $50 million at the time of her death. That’s the same as around $200 million today.

Before dying, Bette had already created two charitable foundations. The Gihon Foundation supported women in the arts. The Bette Clair McMurray Foundation supported female entrepreneurs.

Bette left half her fortune to her two charities. She left the other $25 million to her only child, her son, who was born in 1942 while Warren Nesmith was fighting WW2.

That son, Michael Nesmith, was 38 when he inherited his mother’s estate. He took over his mother’s foundations and continued giving millions of dollars to deserving women.

If his name sounds familiar, it’s because about 15 years earlier, Michael became world-famous as a member of the comedic musical/acting group The Monkees. In addition to starring in two seasons of a TV, show, The Monkees sold 75 million albums worldwide during their career. In 1967, they sold more records than the Beatles and the Rolling Stones COMBINED.

Bette even made a cameo on an episode of “The Monkees.”

In season 1, episode 14, titled “Dance, Monkee, Dance,” (1966) Bette appears as one of Michael’s dance partners:

A high school dropout. Divorced single mother. Bank secretary living paycheck to paycheck. And yet, somehow, against all odds, Bette Clair McMurray found the guts to take that crucial first entrepreneurial step. And in the process, earned a fortune, changed many lives, and left behind a legacy that can not be erased.

Go Deeper: Like Mother, Like Son

Being in The Monkees wasn’t Michael Nesmith’s only claim to fame. Even after earning his own small fortune, Michael pursued several entrepreneurial ventures.

In 1974, he founded a production company called The Pacific Arts Corporation, which would eventually go on to produce, acquire and distribute a massive library of original and licensed content. In the 1980s, Pacific Arts had the largest catalog of non-theatrical video titles in the world (music videos, documentaries, etc).

And that’s not all.

His time as a member of The Monkees and as the founder of Pacific Arts gave Michael a unique insight into the importance of combining music and video. Tasking advantage of his insight, in 1979, he founded a company called PopClips for a newly-launched children’s cable network Nickelodeon.

PopClips produced music videos for Warner Music Group artists. Warner Music’s parent company owned Nickelodeon. In weekly episodes, a “VJ” (instead of “DJ”) would introduce the music videos.

In 1980, "PopClips" was acquired outright by the Warner parent company. It was then developed into a network of its own. A network that would show music videos 24 hours a day. That network was launched at midnight on August 1, 1981. The name of the network was changed from PopClips to…

MTV.

FINAL WORD

On the next edition of “Deep Pockets,” we tell the story of a tycoon who faced a very unusual dilemma: He made one of the largest fortunes in America 100 years ago. Enough to make all of his children and grandchildren extremely rich. Unfortunately, he hated his family.

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