What does it take to be successful in business?
Winston Churchill said, “Success is not final, failure is not fatal — it is the courage to continue that counts.” And Theodore Roosevelt said, “It is hard to fail, but it is worse never to have tried to succeed.”
My guest today is serial entrepreneur, billionaire, and philanthropist John DeJoria, who is best known as a co-founder of the Paul Mitchell line of hair products and The Patrón Spirits Company. Today, he’s one of the most successful entrepreneurs in the world with billions in profits. But he wasn’t always a fabulously wealthy businessman. Once upon a time, he was literally sleeping in his car and selling shampoo bottles door-to-door.
John knows what it takes to build a successful business from the ground-up. He knows what it means to have a billionaire mindset, overcome the fear of rejection, and make wise investments that will allow you to grow the kind of business you’ve only dreamed of.
In 2011, John signed the “Giving Pledge” created by Bill and Melinda Gates and Warren Buffet. Today, the commitment includes more than 200 of the world’s wealthiest individuals who will “give the majority of their wealth to address some of society’s most pressing problems.” John’s using the wealth that he’s earned to give back in a big way.
We had an incredible conversation about how John came from nothing and how he was able to create multiple globally successful businesses by facing rejection head-on. This conversation was so inspiring to me, and I think it will inspire you too. Let’s get started!
Who Is John Paul DeJoria?
Born and raised in Los Angeles, California, and residing in Austin, Texas, John DeJoria is best known for co-founding two iconic global multi-billion-dollar-valued brands: Paul Mitchell and Patrón.
In 1980, John connected with hairstylist Paul Mitchell, and together they used a partially borrowed $700 to co-found their California- based company, John Mitchell Systems (JPMS). That black and white bottle they’re so famous for today? They invented it because they didn’t have enough money for printing. Today, JPMS has approximately 325 full-time employees and a global network of hundreds of educators to teach advanced artistic and technical training classes, and John remains as chairman of the company.
Kline & Company ranks JPMS first in Care & Style sales in the United States, and Euromonitor International, the leading independent provider of market research, ranks JPMS second in global sales of professional beauty products. JPMS professional and salon sales-at-retail are approximately $2.7 billion.
In 1989, John invested $400,000 to co-found (and eventually have a 70% shareholding of) Patrón Spirits International. In 2018, Bermuda-based Bacardi Limited purchased the company for $5.1 billion. The return on investment (ROI) was 1,275,000%. John is chairman emeritus of the company.
Established in 2011 and with assets exceeding $55 million, John’s Peace, Love & Happiness Foundation channels the DeJoria family’s commitment to contributing to a sustainable planet through investing in people, protecting animals, and conserving the environment. I truly respect John’s commitment to giving back. His foundation is making incredible investments in the future of our planet and species, and that’s in addition to the wonderful work he’s doing with Mrs. and Mrs. Gates and Warren Buffet.
It’s hard to deny that John DeJoria is one of the most successful people out there. But through it all, he’s remained wise, grounded, and committed to using his profits to help others. This interview was insightful and informative, and I know you’re going to get a lot of value out of it. Let’s dive in!
Starting a Business in the Midst of Adversity
This year has been a challenge for many of us. Many people have lost their jobs as a result of the COVID-19 pandemic, and while there is hope for a vaccine on the horizon, we’re not out of the woods yet. Many of us are still experiencing extreme challenges — if that’s you, I want to offer you some encouragement: It will get better!
In fact, you have the power to make it better. If you’ve lost your job — or even if you haven’t — have you considered using this time as an opportunity to make a pivot in your career? Maybe you have a side hustle you’ve been working on, or maybe you’ve been dreaming of starting your own business for a while now. This could be the time to get that started! If you — like so many of us — are finding yourself with a lot more free time during this time, you might have a really beautiful opportunity to start creating the business of your dreams.
John didn’t launch John Paul Mitchell Systems in the midst of a pandemic, but he definitely experienced a fair amount of adversity when he was getting started:
“Money never came in, and I left all the money [I had] with [my ex-wife] to take care of … my daughter for many, many months [with] a few hundred bucks in my pocket. It’s a true story. … I lived in my car. … Inflation was 12.5% in the United States, [and] unemployment was 10.5%. … If you wanted a loan, … prime rate was 17%, [and] most loans were 25% or 30% if you [could] qualify for it. … Our whole office was an answering machine because that’s all we [could] afford … So today, yeah, it’d be a lot easier.” – John Paul DeJoria
John was up against a lot of obstacles when we set out to start his company — both personally and economically. At that time in the United States, it was incredibly difficult for someone like him to get a business loan. On top of that, John wasn’t in a position to invest a lot of money in his company. He was literally living in an old Rolls Royce that often broke down.
But did John let that stop him? Nope! He stepped out and confidently put his time and energy into building a business and making it successful, and you can do the same! Don’t be afraid of using this time as an opportunity to start something new — this could be the moment when you start building the life of your dreams.
Business Advice from a Billionaire
For those of you looking to launch a new business — John Paul DeJoria has plenty of wise advice! Here’s the absolute number one thing he tells new entrepreneurs:
“Whether you have a service or whether you have a physical product, don’t go into [the] selling business. … You’re selling … the existing service, however, that is a one-time sale. If, in your mind, it is, ‘I’m not going into the selling business; I’m going into the reorder business,’ … it’s, ‘here’s how it’s going to affect me and you,’ but long-term. So all the products were developed to be so good and so easy to use that people want to reorder them. … Sell the reorder, not just the order.” – John Paul DeJoria
If you have a product or service you want to sell, you have to think one step ahead. Don’t just plan to have people purchase your product or service once — sell them on the reorder. Provide so much value that your clients will want to come back for more.
That’s John’s most important business tip, but he had plenty more to share! Here are the top three pieces of advice he had for any business owner:
#1: Pay Off Your House
“The first thing I want to do, and I would suggest to everybody [is] … pay off your house … because if everything goes wrong, you have a place to live.” – John Paul DeJoria
John knows what it’s like to live in his car, and he doesn’t recommend it. If you’re a business owner and you’re starting to turn bigger profits and make some real money, John recommends using that money to pay off your house before you make any other investments. That way, no matter what, you’ll have a roof over your head.
#2: Put Money Aside
“Now your next thing to do is to put enough money aside. Don’t raise your standard of living much at all, raise it very little, okay? … [If you have] extra money — invest it somehow where if everything went wrong, you have that six months now for the rest of your life.” – John Paul DeJoria
Once you’ve paid off your house and you have a secure place to live, you might find yourself with extra money. You may be tempted to spend it all on fun things, but John recommends saving at least enough money to cover your expenses for six months. It doesn’t take too much money to do it, but if anything goes wrong, you’ll be glad you had enough money in savings to cover you.
#3: Invest in Your Own Business First
“Invest in your business before you invest in anyone else’s business … because you have control of it and you know what comes out of it.” – John Paul DeJoria
When it comes to investing, invest in yourself first. If you’ve paid off your house and set aside six months of living expenses, start putting money back into your business! Keep building and investing in yourself. If you get to a point where you still have extra money, you can invest in someone else’s business, but don’t bank on receiving a return on those investments. Place your money where you can control where it goes, and continue to make your business bigger and better!
