I finished reading about William Richard “Billy” Wilkerson’s journey. The biography details Billy’s life through 1947, when he was about 57. Billy passed away in 1972 at age 71.

How Did Billy’s Early Years Affect His Trajectory?

Billy’s family was financially unstable because of his father’s gambling trade. Then his father’s unexpected death thrust Billy and his mother into poverty. Fear of poverty would drive Billy’s work ethic for the rest of his life. He vowed that neither he nor his mother would ever experience that again.

Billy may have inherited a compulsive personality or developed one by watching his father. Billy began gambling as a young man, and it became a full-blown addiction by the 1940s. Trying to satisfy his need to gamble, along with his fear of poverty, is what drove him to build the Flamingo Hotel. And Billy was compulsive in other areas as well. He was known to drink an average of twenty Cokes and smoke three packs of cigarettes a day while working at his desk.

How Did Billy Become So Successful?

Billy didn’t have a safety net and feared failure, so he was extremely detailed in his planning and execution. This attention to detail served him well and led to The Hollywood Reporter and his various restaurants and nightclubs being known for quality and attention to detail. This was perfect for attracting the elite patrons Billy targeted who happily paid premium prices.

The businesses Billy launched attracted elites from various networks. People wanted favorable write-ups in The Hollywood Reporter or reservations at his popular restaurants and night spots. As a result, Billy was able to build a Rolodex of influential people who sometimes owed him favors. This put him amid the flow of information, so prime opportunities came his way. It also put him in position to open doors and get things done that might seem impossible. Billy’s businesses reduced his network distance and allowed him to create relationships with the right people, which benefited him tremendously. The more elite people who knew him, the more elite people there were who wanted to know him.

Billy got into a growing market early and rode the wave of growth. He fell into the film business in the 1910s but soon realized its potential. As it grew and advanced to motion pictures, he moved to the epicenter of this rapidly growing industry: Hollywood. He then positioned himself as the source of news about the industry. As the movie industry's popularity among the masses grew, The Hollywood Reporter’s popularity rose too. Even the President of the United States was an avid reader. Billy’s magazine was the conduit through which everyone learned about the fascinating, new, and rapidly growing industry. This gave him tremendous power and led to big profits.

Billy also combined being a visionary with an ability to think through the necessary plans and closely manage their execution. His ability to think at a high level and get into the execution weeds contributed to his success.

What Kind of Entrepreneur Was Billy?

Billy was a founder. He didn’t focus exclusively on one business, but he built his businesses from the ground up. He never bought anything. He started with a vision for each and worked to turn that vision into reality. He went from an idea to a thriving, operating business repeatedly and managed several successful companies simultaneously.

Billy wasn’t the greatest capital allocator, though. He was known to lease his restaurant locations instead of buying them and rarely reinvested profits to grow his businesses. This was likely because his gambling addiction consumed so much cash.

Billy was never content and got bored easily. This likely contributed to his bizarre pattern of selling some of his businesses on a whim when they were doing well. This never made sense to those around him, but Billy was sometimes restless and enjoyed the thrill of pursuing new endeavors.

What Did I Learn from Billy’s Journey?

My biggest takeaway from this biography is that there’s no such thing as a good partnership if your partner is a bad person. Even if that person brings tremendous complementary skills or vital resources to the table, it’s not worth it. Bad people often look out only for their own interests and don’t honor their commitments. Great paperwork can’t protect you from a bad partner, so avoid bad partners at all costs. Do your research before you go into business with anyone.

Control is why many entrepreneurs start companies. When they lose control, they become miserable.

Some businesses have properties that allow them to manufacture magnetic luck, which is the hardest type of luck to have. If a business has these properties, the returns can far exceed the financial returns.

Building businesses that generate cash flows consistently and avoiding debt is the way to control your destiny. Even if you have a gambling problem, those businesses will replenish the cash you gambled away. Limiting debt allows you to weather any rough periods and maintain ownership of your cash-generating businesses.

Billy was a colorful entrepreneur whose life was full of excitement. His vision reshaped Las Vegas from a desert town to an entertainment metropolis. Ninety-three years after Billy printed his first issue, The Hollywood Reporter is still going strong. I’m glad I stumbled upon Billy, and I plan to look for more books about his journey.

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In December 1946, William Richard “Billy” Wilkerson received a call from J. Edgar Hoover, the director of the FBI. According to the biography of his life, the two were cordial friends who enjoyed betting on horse races and opposed communism. Hoover warned Billy that Benjamin “Bugsy” Siegel was dangerous and that the investor group might try to take control of his project, the Flamingo Hotel—and that Billy’s life might be in danger. The warning came too late; Billy was in too deep.

Two weeks before the Flamingo Hotel’s rushed opening, Bugsy called a meeting of shareholders in Las Vegas and announced there that he’d sold 150% of the project to investors. All shareholders would need to take a haircut to resolve the situation. Bugsy told Billy that he’d have to give up his 48% ownership stake and wouldn’t be paid for it—and if he didn’t, he (Bugsy) would be killed, and further, that if he were going to die, he wouldn’t go alone; he’d kill Billy first. Billy then realized that Bugsy had no intention of honoring his legal commitments.

His life in danger, Billy rushed back to Hollywood that same night. His lawyer threatened Bugsy and filed affidavits about the meeting with the district attorneys in Las Vegas and Los Angeles, the FBI, and the attorney general.

Billy went to Paris to hide. He still believed the investor group would fire Bugsy once they found out what Bugsy was doing. Billy decided to make sure the investors knew how bad things were. He used The Hollywood Reporter to publicize the project’s cost at the time: over $5 million, five times Billy’s original budget. The investor group now knew what had been hidden from them. This was a dangerous move by Billy.

Bugsy moved forward with the opening on December 26, 1946, and it was an epic failure. As Billy had predicted, with no hotel rooms available to gamblers, they took their winnings elsewhere. Within two weeks the casino had lost $275,000. Bugsy couldn’t understand what was happening and shut down the entire operation in late January. He had spent an additional $750,000 on operating and building costs. By April 1947, the total project cost was over $6 million.

Billy’s lawyer urged him to sell, but he refused. He believed his 48% ownership in the $6 million investment would do well once Bugsy was replaced. But hiding in isolation in Paris wore Billy down, and he instructed his lawyer to sell for $2 million. Bugsy’s lawyers countered at $300,000, and Billy came back at $1 million. The final offer from Bugsy was $600,000. Billy didn’t want to accept, but he didn’t want to die either, so he accepted the deal. On March 19, 1947, Billy signed the deal for a $300,000 initial payment with the remainder to be paid in August.

With the deal done, Billy returned to Hollywood in March. Within days, he got a call saying there was a contract to kill him. Within 48 hours, Billy was back in Paris.

The Flamingo reopened in March 1947, the same month Billy had planned for initially. Bugsy asked his investors for more time, and the property even generated a surprise profit in May. But it was too late. Bugsy’s credibility with the investor group was damaged beyond repair. In late May 1947, Billy was about to return to Hollywood when his office got an anonymous call warning him to stay in Paris until everything was over. On June 21, 1947, Billy opened the newspaper to learn that Bugsy had been murdered. He returned to Hollywood on June 23, 1947. His partnership with Bugsy was over.

Minutes after the shooting that killed Bugsy, Gus Greenbaum and Moe Sedway took control of the Flamingo. They changed some things to make it appeal to more people—not just to people with huge budgets. In the first year of their management, the Flamingo turned a $4 million profit.

Billy’s vision for Las Vegas was surpassed, to his astonishment. Developers took Billy’s vision to new heights and transformed the sleepy desert city into a luxury gambling mecca. The stretch of land outside of town where Billy started became the famous Las Vegas strip. Even though his vision for the Flamingo and Las Vegas became reality, Billy never spent a night in the Flamingo. In fact, he gave up gambling cold turkey when his son was born in October 1951. After six decades, becoming a family man gave Billy the strength and purpose to kick his gambling addiction.

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William Richard “Billy” Wilkerson had a policy of working with the best people. According to the biography of his life, sometimes that meant working with gangsters. During Prohibition in the 1920s, Billy ran several speakeasies for New York City Mayor James “Jimmy” Walker and later owned several himself in the city. Billy relied on gangsters to supply his liquor because they were the best.

In 1942, Ben “Bugsy” Siegel had murder charges against him dismissed after witnesses died during his trial. Bugsy was from New York City and well respected in organized crime circles, but he was known for being short-tempered. He moved to Hollywood to go legitimate and become a movie star, but his ego got in the way. Instead, he became a playboy and made money in familiar illegal ways.

Myer Lansky and Bugsy were close, and Lansky ordered Bugsy to explore expanding organized crime gambling activities in Nevada. Bugsy hated the desert and the extreme heat and stayed in Beverly Hills. He turned his responsibilities over to Moe Sedway. But when Lansky pressured Bugsy to oversee the investment group’s Flamingo Hotel investment and Billy Wilkerson, Bugsy reluctantly agreed.

Billy was shocked that Bugsy was his partner, but he made the best of it and mentored Bugsy. He even had his service providers sit with Bugsy to fill his knowledge gaps regarding all aspects of the project. Bugsy was glad to learn and worked to win Billy over. He was in awe of Billy’s visionary and business skills and tried to emulate him.

It wasn’t long before Bugsy became jealous of Billy’s talents. He contradicted Billy’s decisions behind his back and told people the Flamingo idea was his, not Billy’s. He demanded more of a hands-on role. Billy didn’t want that, but he gave in to keep the project moving. Bugsy would manage the hotel portion; Billy would manage everything else.

Bugsy went crazy spending and, within one month, spent the entire budget for the hotel and demanded more money. Billy was alarmed and realized that Bugsy could be stopped only by the investor group, but they refused to rein him in.

Bugsy demanded control of the entire project and talked the investor group into this, but he promised that Billy would have creative control and manage the operation when it opened. In reality, Bugsy wanted to destroy Billy, and Billy started to realize this as he witnessed Bugsy’s irrational behavior and outbursts. To get complete control, Bugsy bought creative participation from Billy by giving him an extra 5% ownership stake in the project. In June 1946, Bugsy formed the Nevada Project Corporation of California and named himself president and the largest principal owner. Everyone else—including Billy—was listed as merely a shareholder.

With Billy entirely out of the picture, Bugsy went on a spending spree. It was clear to everyone except Bugsy that he didn’t know what he was doing. His changes added to the project costs and forced him to raise more money from investors.

Bugsy still wasn’t happy because Billy owned 100% of the land. He offered to buy the land, and they struck two deals in 1946 that resulted in Billy getting an extra 10% ownership in the project in exchange for the land. Billy owned 48% of the project.

Costs kept increasing, and by October 1946, the project cost was over $4 million—four times the original budget. Investors were upset and asked for a full accounting of the project—and said that if they didn’t get it, there would be no future funding. Bugsy got a loan for $600,000 from Valley National Bank in Phoenix and started raising cash by selling nonexistent stock in the project. With pressure mounting, Bugsy planned to open the hotel early during Christmas 1946, even though the hotel rooms wouldn’t be ready. He was hoping gambling profits would help him pay back investors and buy him more time. Billy knew that Hollywood’s elite didn’t travel during the Christmas holidays and that opening without hotel rooms was a death wish.

When Billy shared his views, Bugsy didn’t listen; in fact, he exploded. That would come back to haunt him.

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By the end of 1944, William Richard “Billy” Wilkerson sought ways to gamble legally without incurring personal losses. According to the biography of his life, he looked hard at Las Vegas because Nevada was the only state with legal gambling at the time. The extreme desert heat and seclusion initially turned him off, but he realized the location was perfect for limiting distractions to gamblers. In December 1944, he leased the El Rancho Vegas for six months for $50,000, but he had bigger plans. He wanted gambling to be an elegant experience as it was in Europe, not a rustic experience as it was in the few casinos in Las Vegas at that time.

In January 1945, Billy purchased thirty-three acres several miles outside the city for $84,000. People thought he’d made a mistake, but Billy knew he couldn’t get that much land in the town and wanted to avoid competing with existing casinos.

In February, Billy started putting his vision on paper and hired architects. He wanted to build an oasis that would be heaven for gamblers and a relaxing spot for non-gamblers. He envisioned it as a luxurious vacation destination with a casino, showroom, nightclub, hotel, restaurants, health club, and more. He wanted his project to resemble European luxury and rival a Monte Carlo casino, with black-tie evening attire. Billy leaned on his gambling addiction to create the perfect gambling environment—including no windows so gamblers wouldn’t be distracted by sunlight. Most importantly, his project would be the first hotel in the United States to offer air conditioning, making the desert comfortable for the rich and famous patrons he wanted to target. Billy loved birds, so he named his project the Flamingo Hotel after the beautiful pink birds he’d seen on a trip to Florida.

Billy didn’t know how to run a gambling operation, so he hired Gus Greenbaum and Moe Sedway, who were overseeing lucrative gaming operations at the El Cortez Hotel. Both got good at running gambling operations by doing it illegally as bookmakers. They became silent partners and assumed responsibility for gaming, including staffing and permits.

With plans complete, the project was budgeted at $1.2 million, money Billy didn’t have. Bank of America reluctantly agreed to finance $600,000, and Howard Hughes loaned Billy $200,000. Billy decided to gamble with $200,000 to get the rest but lost it all. Frustrated by this and his continuing gambling losses of up to $10,000 a day, Billy erratically bowed out of the project and signed the land deed over to Sedway in September 1945 to settle a debt.

After seeing what Billy had done with Arrowhead Springs, Joseph Schenck believed in his vision for The Flamingo and convinced Billy to keep pursuing the project. Billy listened and bought the land back from Sedway. In November 1945, construction started, but post-war, materials were scarce and expensive, so the inflated costs exceeded Billy’s budget. The project was 33% complete and Billy had $300,000 invested and not enough to finish. He bet $150,000 of his last $200,000 to make quick money to keep the project going. He lost it all. In January 1946, construction was halted.

In February, a well-dressed businessman from the East Coast named G. Harry Rothberg offered Billy a $1 million investment for a 66% stake in his project. Billy would remain the operator and manager, and Rothberg’s investment group would be silent partners. Billy wouldn’t have to put any more of his own money into the project. Billy was intrigued. He didn’t like having partners, but investors who stayed out of the way he could live with. He negotiated to retain 100% ownership of the land and closed the deal.

After Billy received the funds, Sedway and Greenbaum introduced Billy to his new partner, Ben Siegel, better known as Bugsy Siegel. Billy didn’t know it then, but things would never be the same.

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William Richard "Billy" Wilkerson founded The Hollywood Reporter and the Flamingo Hotel in Las Vegas. I learned about Billy when I read the biography of Kirk Kerkorian. Though I hadn’t heard of Billy, I had heard of The Hollywood Reporter. I did some quick research aiming to find out more about his publishing career and learned that he was a serial entrepreneur who also started several upscale restaurants and nightclubs. I was intrigued, so I bought a biography of him, The Man Who Invented Las Vegas, by his son, W.R. Wilkerson III.

Billy was born in 1890 in Tennessee. His father, William “Big Dick” Wilkerson, was an alcoholic and “obsessive” gambler by trade. He bet heavily and won and lost big. His mother was overbearing, which, combined with his father’s gambling, led to an unstable and unhappy childhood.

In 1916, Billy was in medical school when his father unexpectedly died. Billy was forced to find a job to support himself and his mother. A friend from medical school won a nickelodeon, and Billy agreed to manage it for a share of the profits. This was Billy’s gateway into the theatre business, and between 1918 and 1929 he had various jobs in the industry, including selling films to theatres. In 1929, when he was 39, he acquired a partnership in a trade paper focused on the film industry—but promptly lost control of the paper in a lousy bet.

Billy wanted to start the first trade publication for the motion picture business, so he moved to Hollywood in 1930. He started Wilkerson Daily Corporation, and the first Hollywood Reporter issue was issued that year. Billy was outspoken in his publication—simultaneously a champion and critic of the industry and its players. Studio bosses had all the power, and they didn’t appreciate his tone. For six years, Billy struggled and battled the studio heads. He got loans from friends, including Howard Hughes and Joseph Schenck, to stay afloat. By 1936, his publication was a hit. Everyone read it daily, including President Roosevelt, who had it airmailed to him. Billy’s large audience gave him as much power as the studio bosses who hated him had, if not more.

Around this time, Billy opened several cafes, nightclubs, and restaurants. The depression was underway, but Hollywood had plenty of cash, and Billy’s establishments were wildly successful. As Billy became more successful, he leaned more into gambling and began structuring his days so he could work and gamble—and he began using business funds to gamble, risking funds dedicated to payroll.

By the late 1930s, California outlawed gambling, and Billy had to figure out another way to gamble. Schenck asked him to manage a failing investment, the Arrowhead Springs Hotel in the mountains three hours outside Hollywood. In 1940, Billy agreed. He quickly turned the money-losing hotel into a profitable hot spot for Hollywood celebrities. Eventually, he started running backroom card games. This escalated to full-blown gambling, and the US Marshals raided the hotel and shut it down.

Four years later, Billy was having an awful year. By the end of 1944, he’d gambled away over $1 million. He realized he had an out-of-control problem and sought help, but none existed then.

As he thought about how to address his problem, an idea from Schenck, also a prolific gambler, stuck with Billy: “Be on the other side of the table if you are going to suffer those kinds of losses. . . . Build a casino. Own the house.” Billy reflected on the Arrowhead Springs experience and wondered: what if he could create a legal place to gamble and not owe other people money? This idea would be the catalyst that changed Billy’s life.

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I finished reading about John H. Johnson’s journey. John’s autobiography details his life through 1988 or so. When John published this book in 1989, he was 71. He passed away in 2005 at age 87.

How Did John’s Early Years Impact His Trajectory?

John’s family didn’t have money. The two years they were on welfare in Chicago was a low point in John’s life. It put a fear in John that drove him for the rest of his life. He was constantly worried about having to go back on welfare. John decided that wasn’t an option. He was going to make it or die trying.

Chicago also put John in an environment where he was in proximity to success. He could see people he could relate to who’d become successful. Talking with and learning from them helped John realize that he too could become successful. And he noticed that these successful people had more control over their destiny than most, which was something he sought.

John’s mother, Gertrude, set a good example. She was an action-oriented person who refused to accept the status quo in Arkansas City: she believed that she and her family deserved better. Her work ethic and willingness to take risks inspired John. She was also a supportive mother who thought her son could do anything.

John’s experience of being teased in high school put a chip on his shoulder. He found that he could read and learn his way out of any problem.

How Did John Become So Successful?

John’s marriage to Eunice was pivotal. She helped him launch Johnson Publishing Company and helped him think through big company decisions. She also turned Ebony Fashion Fair into a huge success. Eunice was John’s life and business partner. Her support allowed John to thrive.

John was comfortable experimenting. He experimented until his understanding improved. This approach led to JET and Ebony Fashion Fair.

Because John bootstrapped his company, he became a master at resource allocation. He learned to get the most out of the resources he had. And his capital allocation skills allowed him to maintain 100% ownership of his company.

John was a masterful salesman. He studied people and figured out how to tug on his targets’ emotions. He persistently pursued some people for years until he won their business.

Johnson Publishing, the conduit between white America and Black America, elevated his status in both networks. He gained access to elite business and political circles, which opened doors for his company.

John was a risk taker. He embraced being uncomfortable and living life on the edge.

What Kind of Entrepreneur Was John?

John was a founder. He spent his career providing publications to Black Americans. As his resources grew, he diversified and became proficient at investing and deal making.

As a bootstrapped founder, John was operationally oriented. With little room for error, he was adamant that everyone, including himself, double-check their work, and he checked on his direct reports’ progress daily.

What Did I Learn from John’s Journey?

John’s strategy to launch by having customers prepay for his magazine was genius. He avoided any need for the approval of investors or banks, getting it directly from customers instead. He gauged how much authentic demand there was before launching. John realized that customer revenue was the cheapest and best form of growth capital.

John built an audience with magazines. He then built businesses that sold products his audience wanted. His companies advertised in his magazines, which directed his audience to purchase his products. Most companies build and then find customers by marketing to them. John did the opposite and had low to no marketing costs for his product businesses.

Content companies can scale quickly because their cost to reproduce and distribute content can be significantly lower than the cost of reproducing and distributing physical products.

John’s strategy of openly confessing his ignorance to entice people to share everything they knew was a smart way to fill his industry knowledge gaps and build relationships.

John was an amazing entrepreneur. His autobiography details his business journey, involvement in the civil rights movement, service as a director on the boards of numerous large corporations, and candid thoughts about the four US presidents he was close with. Anyone interested in bootstrapping, media or publishing, or American history may benefit from reading this book.

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In 1949, John H. Johnson was doing well. He was a millionaire at 31, and his magazines, Ebony and Negro Digest, were thriving. That wasn’t good enough for John; he feared losing it all. He launched two magazines in 1950 and two in 1951, including JET. JET was a breakout success, selling out its first issue and reaching 300,000 weekly circulation in six months.

According to his autobiography, JET’s and Ebony’s success reduced the circulation of Negro Digest, and John discontinued it in 1951 so he could focus on strengthening his company’s foundation. Cash flow issues, dealing with recessions, expanding the advertising team, and building a solid accounting and finance team all had to be done simultaneously. John recruited talented workers who lacked growth opportunities at large publishing houses. And he set up a system where everyone continuously grew by mastering several skills. Specialists weren’t allowed.

In the 1950s, John created a four-point plan to make Ebony and the Black consumer market integral parts of corporate America’s marketing and advertising plans. He wrote articles in trade publications and provided data to ad agencies and corporations to confirm the spending power of the Black consumer. His strategy worked: advertising dollars increased. However, these new believers, needing staff who understood Black consumers, poached John’s team members.

In 1954, John faced twin headwinds: a series of recessions and a shift away from newsstand sales for magazines. In one month, Ebony’s circulation dropped by 100,000. If Ebony failed, his company would collapse. John shifted the revenue mix to half subscriptions, half newsstand sales and changed the content to reflect the seriousness of what his readers were facing.

After thirteen years of fighting to survive and ten years of publishing Ebony, things finally stabilized. John’s first thirteen years had been hell, but he’d made it. He had 145 employees and a monthly circulation of 2.6 million copies across four magazines. Johnson Publishing was healthy and on solid footing.

With his company running smoothly, John lifted his head and focused outside Johnson Publishing. John and Eunice were ready to start a family but encountered infertility issues. They were rich and successful but couldn’t obtain what they both craved: children and a family. They endured embarrassing and painful exams at the Mayo Clinic, only to learn they both had healthy reproductive systems. Not being able to have children can be a blow to a man’s ego, but John and Eunice investigated adoption for a year and decided it was the best option for them. In June 1965, they adopted a two-week-old son and named him John Harold Johnson Jr. Two years later they adopted a two-week-old girl and named her Linda Eunice Johnson.

The family’s happy times didn’t last. John Jr. began having long bouts of sickness. John and Eunice learned that their son had sickle-cell anemia. They discovered that there was no cure and John Jr. would endure pain and likely die early from the disease. To make matters worse, the adoption agency had forgotten to test John Jr. when he was a baby. The situation changed John. Knowing he had limited time, he traveled less and made being home daily for dinner a priority. He dedicated Sundays to doing fun things with his family. John Jr. lived life to the fullest and was fearless. Sadly, he died in 1981 at 25. John and Eunice were devastated. John kept his son’s office at Johnson Publishing, setting it aside in his memory. And he and Eunice left John Jr.’s bedroom as it was the day he died.

John went on to do many more amazing things. He created Ebony Fashion Fair, which became the largest traveling fashion show in the world. He launched a best-selling cosmetics company and entered the cable, radio, and TV production business. He dabbled in commercial real estate and acquired Supreme Life Insurance Company. And he accomplished all these things in business while serving on numerous corporate boards and having direct relationships with and working with four US presidents.

John’s journey was incredible, and he was a remarkable entrepreneur. His companies had an enormous impact on Black Americans and changed how Blacks and the rest of the United States viewed Black America. That he bootstrapped Johnson Publishing to almost $200 million in annual revenue in the 1980s while owning 100% of the company shows how special the poor boy from Arkansas City was.

I couldn’t cover everything in John’s autobiography. I picked the things that interested me most, but it contains other great stories and details about his life and journey. It’s worth reading. He shares valuable wisdom he learned along the way.

In my next post, I’ll share my takeaways and insights from his journey and what specific traits made him so successful.

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When John H. Johnson published Negro Digest on November 1, 1942, his printer realized it wasn’t for John’s employer, Supreme Life Insurance, and that it had unknowingly subsidized the magazine. To pay the printer, John had to sell the remaining 2,000 copies quickly.

According to his autobiography, John called the biggest magazine distributor in Chicago and was told that “colored books don’t sell.” John sent thirty Supreme coworkers to buy his magazine at the distributor’s newsstands using money he gave them. This prompted the distributor to buy John’s remaining inventory and then some. The distributor started pushing the magazine aggressively and introduced John to other distributors in major cities. Within eight months, he was selling 50,000 copies a month. In July 1943, he took a leave of absence from Supreme and hired a secretary.

John couldn’t crack 50,000 in circulation, so he wrote First Lady Eleanor Roosevelt a letter asking her to write an article in his “If I Was a Negro” column. John was persistent, and she agreed. National media picked up the article, and circulation soared to 100,000 copies. John bought a building for $4,000 and hired a permanent staff in 1944.

John realized he had knowledge gaps in the publishing business, so he cold-called top executives at prominent magazines. He quickly learned that people will tell you everything they know when you confess your ignorance. Gaining wisdom from credible insiders provided John with the blueprints for what he wanted to build and how to build it.

John didn’t have loans or investors, so he faced cash flow issues that forced him to learn cash flow management and to do some questionable things with checks and bank accounts.

In 1945, World War II was raging, and wartime rationing meant that John’s fast-growing company was using more paper than the law allowed. The U.S. government issued him a violation. He had to reduce the number of copies he printed and send the company into bankruptcy or keep printing and go to jail. John claimed ignorance of the law and passionately appealed to the War Production Board. Twenty-four other people, with their lawyers, also appeared before the board that day. John, who by design didn’t have a lawyer, was the only one who got a hardship exemption.

John refocused on the business, and two of his freelancers approached him with an idea for a new photograph-based magazine named Jive. John didn’t like the idea, but he respected their contributions to his magazine and agreed to partner with them three ways on the idea. Each would put up $1,000. After working on the concept, the freelancers didn’t put up their share of the money, so John funded the entire project and took ownership. This ended up being the turning point in his life.

Even though he was skeptical, he kept working on the idea. He eventually realized that America was shifting from reading and wanted to see themselves and the people they admired in pictures. John slowly saw that the shift to photographs could be a way to emphasize the positive aspects of Black life, highlight the significant achievements of Blacks, make Blacks proud of themselves, and recharge Black people using positivity. This became his philosophy for the new concept. John hated the name Jive, and when Eunice suggested Ebony, John ran with it.

The first issue was published November 1, 1945, by John, then 27, and a team of two other people. John initially ran Ebony with no ads to ensure that it was high quality. Ebony was a breakout success and instantly surpassed Negro Digest as the top Black publication. However, as more copies were sold, John lost more money. People praised him in public, but John hid from creditors. The high-quality magazine was expensive to produce compared to Negro Digest, which was backed by ad revenue. By the end of 1946, John was in a tough spot. He couldn’t cut Ebony’s circulation because that would reduce potential future ad revenue. But he was losing a fortune every month.

John devised a twofold strategy. He launched five mail-order businesses that he could advertise in his magazines. The revenue from product sales from the mail-order companies would offset the cash burn from Ebony. He then started personally selling ads to executives of ad agencies and then large companies. He was relentless. He called one CEO 400 times and stalked another on a train weekly for three weeks.

After two years on the verge of collapse, Ebony turned around when the ad dollars started flowing regularly. John hired the best ad person he could find and built a team of ad salespeople. He’d run the gauntlet. Seven years after launching Negro Digest, John was 31 and a millionaire. But he was still insecure and scared of failure. His fears would be a key factor driving John’s next bold bet.

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According to his autobiography, after graduating high school in 1936, John H. Johnson attended an Urban League luncheon where Harry H. Pace spoke. Pace was the CEO of Supreme Liberty Life Insurance, which provided insurance to the Black community. John rushed Pace after his speech. Pace had heard about John’s commencement speech and asked about his plans. John shared that he couldn’t afford college, and Pace offered him a part-time job at Supreme.

In September 1936, John started working part-time for $25 per month and eventually quit school to work at Supreme full-time. Supreme was the perfect environment for John and became the university where he would learn all things business over five years. Watching and learning as Pace navigated a million-dollar business gave John a thrill.

Journalism was John’s passion, and Pace assigned John to work on Supreme’s monthly newsletter. Pace was the editor, so John worked closely with him. In 1939, John was named editor. John learned as much as he could from Pace about business, life, success, and Black America as he chauffeured him to the bank every day. Lessons about focus, computerizing your mind, business being an art, and others stuck with John; he used them throughout his career.  

John eventually moved to selling insurance in the field and even supported Supreme’s general counsel running for local office. By then, Supreme wasn’t just a job for John; it was the place where he was learning how to navigate life and achieve his goals.

In 1940, John met Eunice Walker, who came from a prominent southern family. Eunice’s friends told her John’s background wasn’t encouraging and he wasn’t one of the Black professionals who were likely to succeed. Eunice saw something else in John, and John relished how she listened to his dreams and made him feel that he could be somebody one day. They married in June 1942.

Pace didn’t want to take Black newspapers home. He asked John to read magazines and newspapers and prepare digests of what was happening in the Black world, which John did on Mondays. Pace used them to stay abreast of race relations and guide his conversations. John became one of the most knowledgeable people in Black Chicago. At social gatherings, he became the center of attention when he began sharing what he’d learned. People kept asking, “Where can I find that article?” and offered to pay him to find specific articles.

After several weeks, John realized he was “looking at a black gold mine.” Readers Digest and Time were popular, but there wasn’t a successful, Black, commercial magazine. But after two months of going from office to office in Black Chicago, John realized that nobody wanted to give a twenty-four-year-old insurance worker a cent toward this idea.

John was running the machine that mailed invoices to 20,000 Supreme customers. He looked around and asked himself what he could do by himself with what he had to get what he wanted. Then it hit him: he could send a letter to each of Supreme’s customers asking if they wanted to prepay for a $2 subscription to a new, Black magazine. Pace blessed the idea. John just needed one last thing: $500 to buy stamps. Desperate, he tried to get a bank loan but was turned down. Eventually, he found a bank that loaned to Blacks, but he needed collateral. He didn’t know what that meant, and he didn’t have it anyway.

After much prayer and pestering by John, his mother put up her furniture as collateral. John wrote his letter, pitching his magazine as something that appealed to what Black customers craved at the time: respect and recognition. He mailed it and crossed his fingers. It worked. Three thousand people sent John $6,000. Negro Digest Publishing was born in June 1942.

John worked by day at Supreme and by night on the magazine. Eunice helped him at night too. By October he was ready to print but needed a printer who would extend credit. John ran the duplicating machine at Supreme and managed Supreme’s relationship with Progress Printing Company. When John said to the printer, “We are publishing a magazine,” the printer assumed the magazine was for or backed by Supreme and started working without worrying about being paid.

On Sunday, November 1, 1942, Negro Digest was officially published. John realized the true potential of what he’d created when he held the first magazine.

John had successfully launched Negro Publishing, but it was a one-man company, and he wasn’t out of the woods yet. He printed 5,000 magazines and sent 3,000 to prepaid subscribers. Now, he needed to find a way to pay for the remaining 2,000 copies and cover the mailing costs for the 3,000 copies already sent to subscribers. If he didn’t figure it out fast, he’d be in jail. This led to what he would do next.

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John H. Johnson founded Johnson Publishing Company, which published JET and Ebony magazines for decades. I learned about John when I read the biography of Robert “Bob” Johnson (no relation to John). Doing some research, I discovered that John started his company with $500 and grew it to over $174 million in annual revenue by 1987—almost $481 million in 2024 dollars. He grew without bank loans or investors (i.e., customer revenue only) for over a decade. This blew my mind, so I bought John’s autobiography, Succeeding Against the Odds: The Autobiography of a Great American Businessman, initially published in 1989.

Life started out rough for John. He grew up dirt poor in segregated Arkansas City, Arkansas. When he was eight years old, his father was killed in a sawmill accident. When he was nine, the Great Mississippi Flood of 1927 ravaged his city, and his family became homeless. As a child, John was forced to work to help his family make ends meet. He grew up feeling that his family wasn’t in control of their destiny. “[A} word or frown from a White person could change our plans and our lives,” he wrote. This feeling unnerved him.

There was no radio then, so information didn’t flow freely. What people believed was possible was based on what they saw. John’s mother, Gertrude Johnson Williams, who remarried, was a “dominant force” in the family and didn’t subscribe to this way of thinking. She believed that just because she hadn’t seen something, that didn’t mean it wasn’t possible, and that John could be more than what they saw in Arkansas City. Education was the key, but Arkansas City didn’t have a high school for Black students. She devised a plan to move to Chicago for more economic opportunities and better educational opportunities for John. The plan was to leave in the summer of 1932 when John finished eighth grade, but she didn’t have enough money. By the summer of 1933, she’d saved enough money to leave. John was 15 years old.

When they arrived, they found Chicago to be a “Black metropolis.” Seeing Black entrepreneurs, politicians, doctors, and lawyers made a lasting impression on young John. And his high school had more students than the entire population of Arkansas City. The primarily Black educators and administrators were a daily reminder of what was possible.

John’s classmates were poor, but John was a level below them. He had to wear clothes his mother made for him. During the Great Depression, his mother and stepfather lost their jobs, and the family went on welfare for two years. The shame of this experience left a lasting impression on John. Poverty and his deep southern accent made John the target of ridicule.

Determined to get even with classmates, he threw himself into excelling at his schoolwork. He became a voracious reader of self-help books, Black literature, and Black history. John spent significant time in the public library reading books about Blacks who had succeeded against the odds, which energized him. He also became an avid reader of Dale Carnegie’s books, especially How to Win Friends and Influence People. John took Carnegie’s principles to heart. He practiced in the mirror for hours daily and forced himself to speak up in class. The hard work paid off. His classmates didn’t just stop teasing him; they elected John class president in his junior and senior years. And John was invited to give a commencement speech at his high school graduation, which was highlighted in local newspapers.

John was a good student and received a partial scholarship to the University of Chicago, but it wasn’t enough, and his family couldn’t help. It was the depths of the Great Depression, and John was desperate to find a way to pay for college; this, plus the confidence he’d gained from practicing Carnegie’s methods, would lead to what John would do next.  

Prefer listening? Catch audio versions of these blog posts, with more context added, on Apple Podcasts here or Spotify here!