Happy Accident Creates "Super" Wealth

Hello! This is Deep Pockets #11.

Inventing something is a great way to earn a huge fortune. And as old saying goes: “Necessity is the mother of invention.”

The subject of today’s Deep Pockets Deep Dive is a scientist who holds multiple degrees including a master’s in nuclear engineering. He spent a decade working for both NASA and the Air Force on some of the United States’ most top secret space and military projects. He was an inventor in his free time. With that background, you might assume the invention that ultimately earned him a fortune was based on a very serious “necessity.” For example, an advancement related to military strength, space exploration or nuclear technology.

As it turned out, the “necessity” that gave birth to his fortune was the complete opposite of serious.

DEEP DIVE: From NASA Scientist To Toy Tycoon

Lonnie Johnson was born in Mobile, Alabama, in 1949. He was the third of six children born to two black parents of very modest means.

Even though they were both very gifted, college was never a remote consideration for his parents. His mother, who did graduate high school, held down two jobs. She worked at a laundromat and as a nurse’s assistant. His father, who didn’t finish high school, served in World War II and then worked as a driver at an Air Force Base. During the summers, both parents returned to Lonnie’s grandfather’s farm to help pick cotton.

Partly for fun and partly out of financial necessity, Lonnie’s father taught his children how to make their own toys using scraps from a local landfill.

Lonnie, who could not sit still, absolutely thrived off these lessons. A hallmark of many future inventors, Lonnie couldn’t resist tinkering with everything he could get his hands on. Even if that meant destroying his sister’s favorite dolly just so he could learn how the eyelids worked.

And while most of the neighborhood kids spent their free time playing sports, Lonnie headed to the junkyard after school to dig up scraps that could be turned into toys.

On several occasions, Lonnie’s intellectual curiosities resulted in some interesting snafus.

When he was 13, Lonnie built a go-kart from junkyard scraps. Nothing particularly unusual about that… but Lonnie was unhappy that he would only be propelled when pushed or when going downhill. So, he went back to the junkyard and found a broken lawnmower. After fixing whatever was wrong, he removed the engine and attached it to the go-kart, making it fully motorized. A few hours later, Lonnie was pulled over by the police after he was caught racing the go-kart down a highway.

On another occasion, he came close to burning down the house while attempting to make rocket fuel in a saucepan on the kitchen stove.

You can understand why neighborhood kids called Lonnie “the professor,” a nickname that stuck through high school.

This was still the time of legal segregation, so Lonnie attended the all-black Williamson High School in Mobile. Early on, even with his obvious growing brilliance, a teacher told him he should not aim too high. Maybe he could be a basic industrial technician someday, but he shouldn’t aspire for much more than that.

Another teacher disagreed. This other teacher encouraged Ronnie to dream big and pursue his passions.

In his senior year, Lonnie represented Williamson High at a state science fair. The fair was held in the auditorium of the University of Alabama at Tuscaloosa. Just five years earlier, Alabama Governor George Wallace stood in a doorway of that very same auditorium in an attempt to block two black students from enrolling. Here’s a photo of Wallace (center left wearing on a suit) on that fateful day just a few years before Lonnie walked in for the science fair:

Lonnie was the only black student at the competition. Needless to say, the university officials and the other fair attendees were not exactly welcoming. As Lonnie would recall years later, the only words anyone from the university said to him during the multi-day competition were “goodbye” and “y’all drive safe, now.”

For his exhibit, Lonnie spent a year building a 3.5 foot tall robot he named “Linex.” Linex was not just a stationary robot. Using a remote control built from his sister’s walkie-talkie, when Lonnie pressed a button Linex could rotate its shoulders through compressed air to raise its arms and wave.

Much to the frustration of many of the attendees and university officials, Lonnie won first prize.

Lonnie idolized George Washington Carver (1864-1943), the famous black agricultural scientist/inventor. In 1941, Time Magazine dubbed Carver "the black Leonardo.” Carver developed many of his world-famous patents and farming techniques while working as a professor at Tuskegee Institute (today’s Tuskegee University). So, when it was time to attend college, there was only one choice for Lonnie. He received a full scholarship through the Air Force.

In 1973, Lonnie Johnson graduated from Tuskegee with a B.S. in mechanical engineering. In 1975, he earned a master’s degree in nuclear engineering.

After receiving his degrees, Lonnie’s scholarship terms sent him straight to the Air Force. He was assigned to work at Strategic Air Command, where he developed technology that would go into the Stealth Bomber.

In 1979, he jumped over to NASA. He was a crucial member of the engineering team behind the Galileo mission to Jupiter, the Cassini mission to Saturn, and the Mars Observer. He returned to the Air Force in 1982.

A Happy Accident

Lonnie never gave up his dream of becoming an inventor. When he wasn’t developing stealth technology or landing space missions at his day job, he was tinkering with dozens of pet projects. One of those pet projects was an environmentally friendly heat pump that used pressurized water as a coolant instead of ozone-killing chlorofluorocarbons like Freon.

One night in 1982, he had what many inventors would call “a happy accident.”

That night, he attached a high-pressure nozzle to the bathroom sink. When he turned the water on, a powerful stream of water shot across the room. As he would later recall:

"I turned around, and I was shooting this thing across the bathroom into the tub, and the stream of water was so powerful that the curtains were swirling in the breeze it sent out. I thought…

'This would make a great water gun.'“

Over the next few months, he continued tinkering. He eventually perfected a prototype using PVC pipe, Plexiglas, and O-ring seals. For the water reservoir, he used a two-liter soda bottle. He called his invention the “Power Drencher.” Success didn’t happen overnight. In fact, he had to endure nearly a decade of frustrations and false starts.

Lonnie initially wanted to manufacture the gun himself, but a factory quoted him $200,000 to make 1,000 units. He did not have anywhere close to $200,000. In the early 1980s, someone of Lonnie’s rank and tenure likely made around $10,000 PER YEAR.

Lonnie knew he needed to form a strategic partnership with an established toy company. In the meantime, he continued his day job at the Air Force and spent all of his free time pitching toy companies and attending toy conferences. At a toy fair in 1989, he finally caught the attention of the Vice President of a company called Larami. A partnership was formed, and later that year, Lonnie left the Air Force to become a full-time water gun entrepreneur.

Larami suggested some tweaks to make the gun more friendly to mass production. In 1990, the Power Drencher first appeared in stores. It was not a big hit at first.

The summer of 1991 was different. That summer, Lonnie’s water gun sold 20 MILLION units, generating $200 million in revenue. Sales were propelled by a series of national ads promoting the toy by its new name…

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The Super Soaker

A Super Soaker Fortune

Over the next ten years, Larami sold 200 million Super Soakers and generated over $1 billion in revenue. It was the most successful toy of the 1990s. Thanks largely to the success of the Super Soaker, Larami was acquired by toy giant Hasbro in 2001.

To date, Super Soakers have generated over $2 billion in sales. And with every sale, Lonnie earns a royalty.

We actually have a bit of insight into the size of Lonnie’s royalties thanks to a 2013 lawsuit he filed against Hasbro.

In the lawsuit, Lonnie alleged that Hasbro failed to pay him any royalties in the five-year period between 2007 and 2012. A judge eventually agreed and ordered Hasbro to pay him every penny he demanded. The lump sum, which covered just five years' worth of missed royalties, came to $72.9 million.

On an average annual basis, that implies Lonnie was still making around $14 million per year off his invention 40 years after that happy accident in the bathroom. Over the decades, Lonnie has earned hundreds of millions of dollars in royalties off sales of the Super Soaker. Today Lonnie Johnson’s net worth is $200 million. Not bad for a former nuclear scientist!

Other Projects and Companies

Newly flush with millions of dollars in royalty money, in 1992, Lonnie founded his own company, Johnson Research & Development. To this day, Johnson R&D employs over 30 engineers and has acquired hundreds of patents.

Unable to stop tinkering, Lonnie founded two additional companies:

• 1) Johnson Thermoelectric Energy Converter (JTEC) focuses on building advanced heat engines that someday he hopes will convert solar energy into electricity at twice the efficiency of today’s standards.

• 2) Johnson Battery Technologies aims to invent a new generation of rechargeable batteries.

Lonnie Johnson personally holds 200 patents. He is the recipient of the Air Force Achievement Medal and the Air Force Commendation Medal. In 2011, he was inducted into the State of Alabama Engineering Hall of Fame. In 2015, the Super Soaker was inducted into the National Toy Hall of Fame. In 2020, he was inducted into the Alabama Business Hall of Fame. In 2022, Lonnie was inducted into the National Inventors Hall of Fame.

In 2019, the now-desegregated Williamson High School in Mobile broke ground on a $4 million, 12,000-square-foot learning center. The learning center was named, “The Lonnie G. Johnson Educational Complex.”

FINAL WORD

On the next edition of “Deep Pockets,” we’ll tell the story of a guy who became one of the richest people on the planet thanks to his nickname “Mr. 5%.” What did that nickname mean and why did it make him an extraordinarily large fortune? Find out next week!

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