How Did A Secretary’s Invention Of Liquid Paper Get Her Fired And Then Made Her A $25 Million Executive?
Bette Nesmith Graham worked as a secretary like many other women did in the 1950s. But she needed to keep her job because she couldn’t type very well, her boss was mean, and she had to take care of herself and her young son Michael. So, she came up with Liquid Paper correction fluid, which she turned into a business that made her millions, as the New York Times wrote in a recent “Overlooked” obituary.
Graham was a single mother when she was in her early 20s. She was divorced and did art and modeling on the side. In his 2017 autobiography “Infinite Tuesday: An Autobiographical Riff,” her son wrote about how money often made her cry out of fear.
Graham had a steady job at Texas Bank & Trust and made $300 a month by the time she was 30. But she got mad when her typewriter made mistakes she couldn’t fix. Graham used her background in art to come up with her own solution: she covered up the mistakes with white tempera paint that dried quickly and a watercolor brush.
Even though she couldn’t pay the $400 fee to copyright the name “Mistake Out,” she kept working on perfecting the recipe. Graham told Texas Woman magazine in 1979, “During that time, I often felt down.” “Before I sent out the product, I wanted it to be perfect, and it seemed to take so long for that to happen.”
Graham had to keep her “Mistake Out” side business a secret from her boss, unlike Twitter co-founder Jack Dorsey and Salesforce founder and CEO Marc Beinoff, who both got permission from their bosses to quit their jobs and start their dream businesses. She sold the correction fluid to other secretaries and, later, to wholesalers without them knowing.
As her business grew and her son got older, Graham paid Michael and his teenage friends $1 an hour to work in her garage filling nail polish bottles with liquid and putting labels on them by hand.
Four years after making Mistake Out, Graham signed a bank letter with the name of her private company instead of her own. This got her fired. This made it possible for Graham to work on her business full-time. She finally came up with the name “Liquid Paper” and put in for a patent.
She got big clients like General Electric and IBM, and her business grew steadily from there. Within 10 years, she opened an automated plant, and by 1975, 25 million bottles of Liquid Paper were being made every year.
Graham was taking one of the riskiest, but potentially most profitable, ways to get rich: she was putting her time and money at risk to build the business of her dreams. Tom Corley, a financial planner, says, “When you make a business dream come true, the financial rewards are often big compared to the investment. And the results often change lives.”
As her business did well, Graham was finally able to buy nice things like fancy jewelry and a Rolls Royce. She set up two nonprofits that helped women in business and the arts by giving them money and grants. But Graham’s second husband, Robert Graham, who had become very involved in the business, tried to take control away from her. In 1975, she asked for a divorce, and in 1979, she sold the company to Gillette for $47.5 million. Six months after that, she had a stroke that took her life.
Graham’s son Michael became a member of the popular rock band The Monkees in the 1960s and got $25 million from his mother when she died. He took over her nonprofit and kept telling people about his mother.
In an interview with David Letterman in 1983, he said, “She had a vision, she had a lot of help, she married again, and she had some help from some capable execs, but she built it into a big multimillion-dollar international corporation and saved the lives of a lot of secretaries.”