John Paul DeJoria: Business Lessons That Turned a $700 Startup Into Billion-Dollar Brands | Entrepreneurship | E407

21:53I mean, after three and a half days, nobody just closed the door on you. But they said something to me, and I believed them. So I lasted like, you know, my God, three and a half years. I did very well with them. They said, some of you are going to make it. A lot of you won't. Those that make it will be just as enthusiastic on door number 51. If the first 50 doors were closed on you, whether it's politely or not so politely, you got to be just enthusiastic. I believed them. It wasn't door number 51 for me. It was door 100 and something before I even got to go through. But it was true. The big difference is successful people do all the things unsuccessful people don't want to do.

22:32especially on door number 100 be just as enthusiastic as you were on the first door but these things do work and there are a lot of things that contributed to what i was doing another thing was that if it's eight o 'clock at night and you haven't made a sale yet there's still a light on by gosh at least knock on a few more doors say it happened to be here the light was on i'm doing a market research on education could i ask you a few questions because when the going's tough the tough get going that's another thing i learned there it's amazing how you pick these little tidbits along the way. Best education in the world in selling.

23:04Another thing, if you don't mind, I'd like to share with all of your people, and I learned this over time too, starting with encyclopedia sales, okay? Don't, don't go in the selling business. Go in the reorder business. I thought that, for example, it's a one-time sale with Collier's Encyclopedia, but it was so good, I never had an encyclopedia, that if I had one of those at home, I'd actually probably do all my homework, right? That I believed everybody needed one. And I thought Collier's was a great one. It was written on a high school level, high school language. I thought everybody really needed one.

23:37It was the best program in the world. If you got it, you would remember for years to come that you bought it, that it would be long-term. You're in the reorder business. Or when I started Paul Mitchell, if I had the best shampoo they've ever used, the best conditioner, they'll want to reorder. And people put a product together many times. They'll do it to sell. Do it so it's so darn good or your service is so darn good that they'll tell other people about it or they'll appreciate it.

24:03Hala Taha:Reorder business is so important. And a lot of people really focus on marketing. Influencer marketing is so popular now. Paid ads are so popular. What is the danger behind a product where you've got to put so much marketing dollars behind it in order to get sales? Well, there is danger because many times, I could give you an example, somebody entered the professional beauty industry and spent, oh, this is my God, 25, 30 years ago and spent immediately three or$4 million on ads and hardly had the distribution at all. Within six months, they went out of business. So it's not just the ads and marketing.

24:40It's a lot has to go behind it. But today you have things I don't have. Like for me, when I started Paul Mitchell and our money never came through. So we started with$700. And it's in the book that I wrote, Success Unshared as failure. But we had no money, but how in the world do you get a product out? Well, we had to go door to door like a sold encyclopedias to try and get salons to get the product from us, door to door to door to door. We picked salons because I was in the industry previously, and I had been fired from three different companies, but I learned something different from each company that allowed me to go forward.

25:18And I did good with every company, but unusual reasons why. One was, hey, you're complaining about us testing on animals, and that's what the corporation's doing. But even though it doesn't make sense, it makes us look good with a scientific approach. But you're telling other executive managers like you, JP, you've got to stop doing that. I said, but I can't because what you're doing is wrong. Well, they fired me, and my divisions were up. Second company, I increased their sales by 50%. Firmidale had bought, I mean, Syntex had bought a company called Firmidale, and I was hired to train their sales force and their educational force, which I did.

25:53And 50 % the first year they went up in sales, they fired me because I wasn't one of them, the inner click with them, whatever. I got fired. And then with the Institute of Trichology, I tripled their sales, but I was mainly on a commission basis, made more than the owner of the company. They said, ah, this will never stop. We'll get somebody else to your job for one third the amount of money. If it wasn't for all three of those companies and the experience I had, I could have never started John Paul Mitchell Systems with$10 million, let alone$700.

26:23Hala Taha:Yeah, the experience was so important. Oh, yeah. So we're learning. Whenever something happens that isn't good, maybe it's destiny or the planet saying, you don't belong here. You're going to get fired because your destiny, your purpose in life is yet to come. You're not leaving. We're making you move. Because I did good with every company, but I wasn't right for that company. It wasn't right for me. I moved on. And John Paul Mitchell Systems was a great start. And today, obviously, it's the world's largest privately owned salon hair care company that puts everything back into the salon and makes sure they always benefit no matter how you distribute.

26:59Hala Taha:So I recently was having a conversation with Naveen Jain, and he was actually talking about how it's such an advantage to be an outsider of an industry before you join it. But you had the advantage of being an insider of an industry. Exactly. What was it that you wanted to change when you started Paul Mitchell? Well, I wanted the products to be so incredible that people, when they use it, want to reuse it. Again, right? Not that there's not other products like that. There are. But I wanted to make sure the hairdresser knew what we had was so good. And if they used it, we know they would recommend it.

27:32But we also thought that what is missing? I know what's missing. The salons aren't really in the take-home business, in the retail business. And I said, well, wait a minute. If I could show them how this shampoo you only use one time, this conditioner you leave in your hair, this sculpting lotion adds all this body, and teach the hairdresser how to explain it to their customer while they're using it. Like, I'm using this much conditioner. I'm putting it in your hair. I'm going to leave it in your hair because it'll eliminate a lot of the damage the blow dryer is doing, okay? Or I just neutralized the chemicals in my hands when I did that.

28:04And it's a leave-in conditioner. It's like a pomade. You can use it, too. Or, you know, all the reasons why they're, like, show it to the customer while you're doing it. And when they go home, you can say, here's the same products I used on you. They are available, by the way, at the front desk. But I would recommend out of these five, for sure you should get these two. Okay, because you're going to need these particular two. But if you get all five, get all five or come back at the risk. We started salon retailing. And all of a sudden, it helped salons take off and became more successful.

28:32Hala Taha:Well, that's so smart because your hairdresser actually became your salesperson. So you were selling to the hairdresser and then the hairdresser was selling to their customers. And that was before we could ever afford ads. We had no ads. All we had was the product's quality that they would like it so much they'd want to reorder.

28:51Hala Taha:Yeah, fam, seven days. That's all it took me to go from idea to a$500 million storefront. No tech team, no coding, just my LinkedIn knowledge, a business idea, and Shopify. Here's what most people don't realize about starting a business. The idea is never the hard part. The setup is where people stall and procrastinate. They overthink the design, the checkout flow, and then months pass along with nothing to show for it, but you're a good idea. Shopify removes all that friction. Their templates and AI tools get you a beautiful, functional site set up fast. And when someone's ready to buy, Shopify checkout is so smooth that more customers actually follow through.

29:30Hala Taha:Returning buyers can check out in a single click with ShopPay, for example. And if you hit a wall at any point with your build, they've got a built-in AI assistant sidekick that's there to help. Not an FAQ page, an actual assistant that helps you build, troubleshoot, and keep going. And the proof is right there, Yap Fam. On the How We Profit series, the founders I've been talking to who are doing millions of dollars in their e-commerce business, they sell on Shopify. So if a business idea has been sitting in the back of your head collecting desk, stop waiting. Take action. Just do it. All you need is the idea because Shopify handles the rest.

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30:19Hala Taha:Yeah, fam, as my business keeps growing, I feel like I'm always hiring. I recently added two new video editors and a producer to my team. And I can tell you from experience, the right hire can give you leverage. The wrong hire gives you a second job, and that's the last thing you need. So when I need the right person, I go to Indeed Sponsored Jobs. Indeed Sponsored Jobs boost your job posts and search results so you can reach candidates who meet your specific criteria, like skills, certifications, location, and more. Because the goal is not more resumes. The goal is better matches. Spend less time searching and more time actually interviewing candidates who check all of your boxes.

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31:31Hala Taha:Smart move. Another smart move? Getting help from one of State Farm's 19 ,000 local agents when you choose to bundle home and auto. Bundling. Just another way to save with the personal price plan. Prices are based on rating plans that vary by state. Coverage options are selected by the customer. Availability, amount of discounts and savings, and eligibility vary by state. Let's talk about the origin story of Paul Mitchell. You team up with like a very, he was, was he already famous, like a famous hairstylist? Yeah, my partner, Paul, was a famous, Paul wasn't his name, by the way, it was Cyril T.

32:04Mitchell. But for a hairdressing name, he called himself Paul Mitchell. To the day he died, his passport was Cyril Thomas Mitchell, a hairdresser, right? And we would switch off, you're chairman of the board one day, I'm president. You know, next day, I'm president or chairman of the board. We just had a blast because we had no employees. Yeah. So Paul was very, very well known as about 5 % of the hairdressers in Neom as being very, very avant-garde. But because we had a product line and we went around doing a lot of shows, quite a few more were. He was just one of the greatest guys. But we had a great relationship.

32:36We were pals for nine years before we started. I didn't do hair. He didn't do business. We never argued about anything. It was just a wonderful thing. And we wanted to have the very, very best. And it turned out that way. Today, we are 46 years old. In this industry, you change your products about every three years, right? My first original four products are still good sellers. That's the quality of the products that Paul Mitchell made. And that's the quality of the products that hairdressers use and recommended to their customers. And they wanted to reuse again because of the quality of the product.

33:11It worked and it worked well.

33:13Hala Taha:So when you guys started, you originally had an investor. And I think he was supposed to give you like$500 ,000. but he pulled out last minute and you guys were left with$700. So my question to you is, why did you decide, all right, well, we only have$700, but we're just going to move forward? Great question. Okay. He didn't give it to us, by the way. The way it worked out was the money was coming in down the hill, okay, and my relationship was going good, so I was out of my relationship. I took the used car, the more used car down the hill, left the better one with my wife and daughter, left them all the money, went down the hill there.

33:47The money never came in. I mean, that's what the story is. And an interesting story, it never came in. So when I finally found out about it, I found out why it didn't come in. That night, someone got a hold of me. They found me and said, JP, we know where to find you, okay? It wasn't in my house. And they said, JP, Dick Holthouse from Citicorp is trying to get a hold of you. Please call him. Collect, okay? For him, it'll be the middle of the morning. He's going to pick up. And he said, JP, the guy changed his mind the last minute. And it was$500 ,000. He changed his mind at the last minute. He says, the reason he changed his mind, this is 1980.

34:19In 1980 and 81, inflation in the United States was 12.5%. Bad time to start a business. In unemployment in the United States was 10.5%. You had to wait in line for gasoline. And if you wanted a loan, if you could get one, we never could. Interest rates, prime rate, was 17 % interest. Worst time for us to start any kind of... So he pulled out. I found this out. And I said, and Paul had flown over. He was in Hawaii at the time. And I said, well, Paul, listen, I've already got the product set up. We've already made the products. I have everybody set up, right? Paul, how much money do you have that you can spare?

35:01He says, JP, I'm on my last dollars. I can spare maybe$350. That's it. I said, I have a couple hundred bucks, but I'm going to go borrow that$350 from my mom. And with the$700, we are going to start a company and it's going to happen. He said, God, JP, I hope so. Now, my mom, once again, I was too proud to tell her, Mom, for the second time, I'm down and out. I don't even have a place to live. I can't have my room back. I was too proud to tell her that. So I didn't. So I lived in my car once again. Okay, for a few weeks. Anyways, and we started the company. So now how in the world do you start a company like that?

35:35It's in the book also. How do you start a company like that with no money and get money? And I'll gladly share that with you. Number one is from the time I said go, we were ordering initially 100 ,000 bottles. And they knew who I was from my experience with all these other companies. Had a great experience in the industry. So I said, guys, we're going to do it. I set up 30-day billing. Well, when the money didn't come through, I had to be creative. So I called up the bottle man and said, look, can I get a sample order of only 100, only 10 ,000 bottles, not 100 ,000? 3 ,000 shampoo one, 3 ,000 shampoo two, and 4 ,000 the conditioner.

36:13He goes, of course. I was wondering why you never got a sample order before. I said, great. I said, ship it as quick as you can, the empty bottles to the silk screener. I called the silk screener up. Hey, we're having a run of only 10 ,000 bottles. Can you do this, right? All we needed now was the artwork. And I did the same thing with the filler who filled our products for us. We had everything ready to go. Only 10 ,000, right? So I had 30-day credit with each one that was arranged. If they knew what we were at at that time, we would have had any credit, right? So I called the silk screener and I called the filler.

36:47He sent it over immediately from the time it went from the bottle company, which was Sedco, to the silk screener to the actual filler along the way, right? That was two weeks. I had two weeks to pay the first bill. Now, let me back up. What did I do with the$700, right? And how did I start a darn company with that? We went to the person that did the artwork. You cannot get a silk screen unless you have the artwork, right? It was$1 ,000. We didn't have it. So I borrowed from my mother a few dollars, obviously, to get the$700. I have a few dollars in my pocket, a few hundred bucks left in my pocket, which I came down the hill with.

37:24That was it. So I told the guy the truth. He goes, well, if you only have$700, I'll never get my other$300. You want the artwork? It's$700. He took it all. What little money I had left, I got as an address, a P.O. box in Universal City,$16 for a little P.O. Box. A little teeny one, because this is 1980, right? So I had an address. And then in those days, we didn't have computers. We didn't have cell phones. We had tap setters. So I went to a printing store and had them type up for me for I think it was about$5. John Paul Mitchell says, since P.O. Box 105.97, whatever, Universal City, California.

38:03He set the type for me and made me one copy of a photocopy. Then I drew lines on it, like for an invoice, and I had to make me for four cents a copy, Xerox copies of it. That was my invoice, stationary. And at the top of those pieces of paper, we had our John Paul Mitchell Systems Universal box. At a friend's house, I used their telephone with a$49 answering machine on it. And the girl that answered the machine was a friend of mine. And my friend of mine, Kathleen, was a lady that was from England and very strong English accent, right?

38:38Hala Taha:Does that sound very luxurious? Yeah, when you call, they would say, Oh, hello, John Paul Mitchell Systems. This is Caroline. Caroline was her name. Oh, how can we help you? I'm out right now. We're all out and we're having such an exciting time. I'll call you back later. In fact, I'll try and get John Paul the person to call you back. Hey, have a nice day. We are so happy. And that was it. Well, she did it one time as a favor. I would be always the one that called back. But what happened? We had an office. We had stationery. We had a way to build them. And we had an answering machine. That's how we started.

39:08And there's other things we did for no money. to create a business. Once you create and you have no money, how do you get your money immediately? The professional beauty industry and their distributors and their warehouses paid their bills in 45 days. I needed the money immediately. So I came up with a way with the orders, the few orders that I'd gotten to get the money from him immediately. And he gave it to us. And that's how we started. And that's how we started a trend of within 10 days, getting your money from distributors used to paying for 45 days. And not to take up all of your time here, it's in the book how we did it.

39:45So in other words, you become resourceful and you find ways to do things. Even when, and we kept our promise, we'll stay in the beauty industry. So let's say distribution changed, and it did during COVID especially, right? Everyone said, oh, you can't get outside. And a lot of people closed their shops and everything, right? They were out of business for months at a time. They had nothing left, nothing left. A lot of them couldn't go back to business again. If they did, they had no products. So what happened was at the end of COVID, towards the end when salons opened up, we took several million dollars of our own money from Paul Mitchell and bought all these products.

40:18And those salons are really into Paul Mitchell. We gave it to them to start their business again. Free, no charge. Talk to our distributors and giving them some timing for reorders and things of that nature. So if you use what you have to help your customers out, it helps you even grow. And after that, we just continue to grow and grow and grow.

40:35Hala Taha:I have so many questions on this. I think the first question I have to ask is about the salons and the hairdressers and your loyalty to them. Because you never went commercial. You always stayed in the salons and you didn't want your product to be sold elsewhere. Why was it so important for you to be loyal to the salons? Right. And then let me tell you what we did, especially during COVID, okay? When we started, we told the salons, no matter what happens in distribution, if it changes, we will always be in the professional salon business. and includes you. So COVID comes along, right? Salons are closed.

41:10What are you going to do? So we worked with Amazon to go on Amazon with our products. One, to get rid of all the black market products that were on Amazon. There were a lot of ones on there, a lot of them counterfeit, right? And they did remove them. But also, we knew what our sales were in different parts of the country because you're on Amazon, they tell you. We took a percentage of our money that we got back from this and gave it right back to salons. Salons that were using Paul Mitchell, we gave it right back to them. Many of them were in what you would call credit slips, where, hey, you could buy all these products at wholesale right from Paul Mitchell, and maybe you could use your whole back bar just off of what we are sending you from what we're getting from Amazon, your portion, no matter what happens.

41:52Another one was a big store throughout the United States that was black marketing Paul Mitchell. A lot of people black marketed in old products. Salons would buy extra, sell it to them under the table. Yeah. And they had a lot of it. So we said, look, how about this? How about we cut a deal with you, okay? That we will help provide you, not with all of our products, but just some that support take-home use at home for your products, right? Period. But you will put a big sign up in your stores that says that, you know, these are for take-home to assist, but to go see your professional beauty salon to see how do you use them.

42:23And they're the ones that will do the professional products for you. They have to promote with a big sign that. So what happened? We took it out of the black market, so they didn't have to be black market anymore. They could have the real stuff, but there was a big sign in there. And we gave part of all those profits back to the salons again. So we kept our promise. Why do we do this? Because when you had companies like Vidal Sassoon, Jeremac, and I could go on and on, okay? They said, oh, we'll always stay in the beauty industry. We'll include you. They got big enough. They went full-blown retail and kind of forgot about the signs a little bit, okay?

42:54And forgot what we said. And then they sold their company to someone else and made a lot of money. But we said we had no money when we started. Nothing. You believed we would do something and somehow get money back to you forever. And that's what we're going to do. And I'm not going to get away from that.

43:11Hala Taha:Was your objective with Paul Mitchell to make the most money possible? Or did you have another goal? Our goal with Paul Mitchell originally was if we could only do$5 million a year in business, Paul, you can make$250 ,000. I can make$250 ,000. that we'd be set for life and give hairdressers the best products ever. We had no idea we'd get as big as we are and go into$100 million,$200 million. We had no idea that we could be able to achieve this unbelievable sales. But learned as we went along how we did it. And we just learned as we went along. I had no idea. But the initial motivation was to give them the best products ever so we could be proud.

43:50We used to make a quarter of a million dollars. You know, that was our potential. I had no idea of all the rest.

43:55Hala Taha:I guess I want to dig deeper on like why you decided to stay loyal to the salons where your business could have made more money. Oh, exactly. It's very easy to tell you. We were also offered more money for Paul Mitchell than any company has ever been offered or received in the professional beauty industry. It's all no, no, no, no. Why is this? Why did we turn down our word for money? Because we had absolutely nothing. And because we had absolutely nothing and they believed us, we got a whole bunch of something. We owe you. Yeah. And my feeling is be respectful. You owe them. We owe you. And I told them no matter how distribution changes, I will always keep it in the professional beauty industry with money somehow.

44:37And that's what we did through these other examples I gave you. Because in our heart, success unshared is failure. Part of it is your word. If you tell somebody you're going to do something and you became really famous or really, really good, right, and it's going great, and then all of a sudden you jump to get greedy and more money. Well, wait a minute. I had nothing. They helped me get some money because I didn't have any money. I owe them. And I think ethics in business is extremely important.

45:03Hala Taha:Yeah. And we just gave that up for money. We had enough. We were growing. And, you know, obviously when I finally started Patron nine years later, the money was really flowing in. But it was mainly because of our word. And I think a lot of hairdressers used our product before, during, and even these days because they see we kept our word. And you even put it in a trust for like 360 years. That's right. It's in a trust that no one can change it because many times someone will die and say, okay, well, that was what he said. We want the money. Less cash. No. I put it into a trust where nobody runs it other than my children and their grandchildren can observe it and help direct it as an executive in it.

45:42But all the money goes into one pile. No one controls it. And it goes out to all my siblings and all my children and great, great, great, great grandchildren. So let's see in the 100 or 200 years from now, they'll always get something. There'll always be something left there. And my kids cannot, no one can rate it. And they must keep it somehow in the professional beauty industry, where even if distribution changes like it does today, some money goes back to those hairdressers.

46:07Hala Taha:I love that. Let's talk about Paul Mitchell product and marketing. So one of your constraints actually turned out to be something that was really great for the company, which was you could only afford black and white. He has black and white art. He has to know the story. That is, it was two cents. Two cents, take a white bottle and put black writing on it. We didn't know we would have created unisex packaging. It appealed to both. We didn't know that. Today, we add some color to them. In those days, the difference was seven cents for color, two cents. Way to go for two cents. And it was so iconic, it stood out.

46:40Hala Taha:Like to this day, I remember a Paul Mitchell packaging because it stands out because it's black and white. That's right. And the letters went sideways at that time. Reordering, I think, is one of the best principles of your book. As an entrepreneur, there are so many entrepreneurs tuning in, and we really want to be in the reorder business. We don't want to be in the selling business. That is correct. And part of that is having a product so good that doesn't require marketing or as much marketing. Exactly, yeah. But you want to have some marketing, but if you could get a requirement. Let me give you an example of that.

47:11In fact, this is good for your audience to know. There is a site you go to, okay, called Global, like G-O-B-A-L, S like in Sam, K like in Kentucky, you like universe. GlobalSKU.com. Now, why is this great? We didn't have that in my day. I wish we did. I'll give you an example how this works. You could take your camera, take a picture, let's say, of an old T-shirt in your closet, half a bicycle in your garage, whatever. And then you take it with your camera. In a matter of seconds. It's like AI, right? Matter of seconds. The picture comes up of what you had and what it looked like, you know, new.

47:51And underneath it, what it sold for used last. Okay, all pops up like that, right? In seconds. Then you could push the button. Do I want it on, you know, on this place to be sold? Do I want it over here to be sold? For example, if you wanted to go online and sell something, in your mind, what's the first place you would go to sell it if you were going to go online?

48:12Hala Taha:eBay or... Okay, okay, okay. So what happens is now you have this all in seconds. Now you have a choice. You push a button. Do you want that to be sold? Because now you know what the price was. What price do you want? Or do you want it auctioned off, okay? Do you want to go on eBay? Or do you want to go on three or four of these other sources you could go on or on both of them to sell what you have all instantly? What does something like this cost? $15 a month up to, I think, a maximum of$400 a month. I believe for$15, you get about 20, 25 sales. Now, I wanted to see this work. So they sent two guys into a thrift store to buy T-shirts.

48:51One had Illinois, I believe, across it, but all embossed. So it must have been a special T-shirt for$2. The other one, some artwork on it for$2. They paid it. By the time they left the store, the guy that got the one with the Illinois state on it sold it for almost$100. There was something special about that T-shirt. somebody realized because it went out to millions of people, right? The other guy took them several months, he sold this also for 20 some odd dollars. I thought, whoa, that is really cool.

49:18Hala Taha:Yeah. So it gives somebody a way to sell something now without having a bunch of money to be able to get all these distributors. Now you have millions of people or multi. Why is this so powerful? It goes to all these different sites or you want to go just to one eBay, you just push eBay, it's on, you want these other sites, you push it, you're on. Change is just, and no money. You can from your home, have a business. Now you have distribution and cost you anything. It's easier than ever to be an entrepreneur. You used to have to go door to door to the distributors and we get to use sites like GlobalSkew and even our social media sites are free marketing distribution.

49:55Hala Taha:And so we've got a lot of distribution online that you didn't have when you were starting your company. Let's talk about Patron and how you ended up, you know, going into the beverage industry. So give us the origin story of Patron. How did you come up with the idea? And tell us the importance of storytelling when it came to the marketing of Patron. Storytelling is so good because then you can tell somebody what your feature is and how it benefits you. So Patron, we're in business now at Paul Mitchell, and this is 1988 going to 1989. And I'm building a house on the West Coast for my whole family, like a vacation house.

50:34And we're getting stones and a lot of our stone work and pavers from Mexico. And a friend of mine introduced me to this fellow named Martin who just went bankrupt in the hospitality business. He says, JP, give him a helping hand if you could. I said, okay. So I was the bank. He would go to Mexico, buy pavers, furniture, come back and sell it to architects from model homes or restaurants. Buy it in Mexico, really cheap back in the United States era. And one time he was going down there while I'm building this place to get me some stone. And I said, Martin, we were drinking tequila. It was the type, though, where you would lick the salt, shoot the tequila, and squeeze the lime and so you don't get that burning taste in your throat or make it into margarita.

51:14So I said, Martin, when you go down there to buy this stuff, why don't you find out what the aristocrats drink and bring a bottler back so we can drink something good? We do nothing about the business. He came back with these two long bottles, like just normal bottles of tequila. But it was really smooth. He says, but JP, I met a guy named Francisco Alcares who knows how to get this stuff made in this plant and, more important, can make it even smoother. I said, really? I said, Martin, go back down. Here's the money. Get a ticket right. Bring back a few bottles of the new stuff. And he did. He made the new stuff for us, brought it back.

51:51We found these incredible recycled bottles to put it in. I said, okay, we're going to the business. I'll order 1 ,000 cases, which is 12 ,000 bottles, 12 to a case. Let's see what we could do with it. My mind was working. Well, let's see. I know it's expensive. We'd have to sell it for$37.95 when the average tequila was$5 a bottle in those days, okay? I knew that. And if nobody bought it, I was doing good with Paul Mitchell. For 10 years, every holiday you had, you had a new baby, here's a bottle of Patron. You got married. It'll be gifts, Christmas time, anything. It'd be gifts to everybody, okay?

52:25That'd be the worst scenario because it was so good. I'd be so proud. So we came back. we wanted distribution, right? Nobody would take us. Nobody. They said, it's great. I've never tasted tequila like this, but it's too expensive. Now, just to get into bars, Martin and I would go around and we'd go, and you could do this in 1989. It was in LA where we started it. We would go in there and say to the bartender, I'd like to buy you a shot of tequila. Here's$3. That's what it was. Oh, thank you. He takes a shot. And then we'd pull out of our briefcase, the Patron. Can I have an empty glass? Say, would you taste that?

53:03Whoa, that is smooth. What is it? That's the new world of tequila. It's called Patron, and it is the smoothest tequila.

53:11Hala Taha:It's the hairdresser model, but for bars. Exactly, exactly. And then we went door to door. I knew someone at Spago's. I knew Wolfgang Puck. He took it. Martin did also, but we went door to door with that little taster to do it to get it going. No one would take us. We finally convinced a wine company that only sold wine to be our distributor. If we get them Spago's and Bala Cantina, we knew we would. So he said, yes. After one year, they were only selling about a thousand cases. That was it. So we dropped them and took on a big company, Jim Beam. That's a big one. We had it one more layer in. We had to give them money.

53:47And of course they would make money. Then their distributors are all the big distributors. They would make money. Then it goes to the wholesalers and the retailers. There's too many cuts. We'd make less money, but at least they would take it on. After about a year and a half approximately, they called us on in and we sat down with them. We said, we were really thinking that by now we do 20 ,000, 30 ,000 cases. And one day we can do 50 ,000 cases. They were so nice to us. They said, guys, you have the best tequila in the world, but it's too expensive. You know, you're competing at somebody at seven, eight times the cost of their tequila.

54:21Well,$37.95, guys, the most you'll ever do. You'll do good because it is the best. There's nothing like it. But you'll never do more than 20 ,000 cases a year. And they were nice about it. We dropped them. We won Seagram's. They took it up to about 50, okay? We dropped them and took it on ourselves and changed everything. We changed the market and we changed instead of having beautiful girls promoting stuff, we'd have the bottle eventually as the star of the ad. Did everything. I'm going to make a real long story short, okay? We continued what I learned selling encyclopedias, bar to bar, door to door, liquor store to liquor store, until we got the salesman to do the same.

54:59All right. So that's what we did. It was exactly the same thing over and over and over and over again. So from all these past experiences, we learned. But what was the end result? I sold Patron about eight years ago. when I sold Patron, maybe nine years ago, when I sold Patron, we were doing about 3 ,500 ,000 cases a year. We sold the company for more than 200 % more than any company in the liquor industry has ever sold for. Now, another thing that for your people to really know, if somebody that's the smartest people in the world tell you only do so good, but you know you could do better, Don't believe them.

55:40Don't let somebody that's an expert say, you'll only do 20 when we thought we could do more. You'll only do 50. Now we got you to 50 with another company. We knew we could do better. We believed it. So when we sold it, three and a half million cases, okay, because we believed it, that we could do better. And that's something people have to realize. We believe we could do it.

56:01Hala Taha:Well, I want to unpack also the branding and storytelling around Patron because it was really marketed as this premium, luxurious product from the price point to like the way that it was crafted and the storytelling that you told around that. It was really like the Chanel of tequila, right? You want to know the magic? I'll tell you the magic. Very easy. Okay. So we get this thing rolling. And what was the magic behind it, especially for a high price? The magic was when we start promoting it, not just as the best tequila ever here, you taste it. and we told bars to promote it the same way. And it would be this.

56:40How would you like to treat yourself today? Someone goes to a restaurant, for example. Can I have a margarita? Yeah, sure, we make a good margarita. But how would you like to treat yourself today? For$2 more, you could have the finest tequila in the world, Patron, for only$2 more to treat yourself. Oh, everyone wants to treat themselves. Those are the words we use, okay? We would tell people in liquor stores, Tell them if they come up with something, hey, you want to treat yourself? We have that new Patron tequila in here. That's the best ever made. You could treat yourself. We have it here. We started converting it to it's simply perfect and treat yourself, treat yourself, treat yourself.

57:17Now, when we started Patron, we knew nothing about the alcohol business. So I tell people, if you start a business you're going into, you know nothing about it. Learn the vocabulary first. Now, I use the same techniques I did to Paul Mitchell, the same things I did selling encyclopedias to get it out there and new marketing ideas, new everything ideas, right? And it worked really, really well. But I used what I learned along the way to be able to do it and new vocabulary using their vocabulary in the industry and what it meant. And that's how you learn industry really quick.

57:49Hala Taha:Yeah, that's really interesting. And then where did you come up with the name Patron? By accident, Martin and I were sitting around saying, what are we going to name this new tequila, the best, right? Or super cool, super mellow, whatever. And we said, yeah, you know, and we'll be just really good Patrons. Patrons. Patron means like the good boss, right? Yeah. Can we get that name, Martin? I don't know. So Martin went after it, right? Nobody ever applied for it. We applied for Patron and we got it. We were almost in shock. And then when we started making a little bit of money off Patron, we found some other company in Mexico called Reserva Del LL Patron.

58:26We bought that name from them immediately. So it can never come up in the future.

58:31Hala Taha:And I know Patron like really took off in the hip hop world, right? That was by accident. Yeah. I got a call one day that said, JP, you know, this is while we're in business for a while and hip hop started at Rep. There's some guy named 50 cents. Yeah, 50 cents. Yeah. It's 50 cents, but it's like 50 cents, right? He's walking around with a bottle of Patron, an empty bottle with diamonds all over it. I said, God, that's nice. I said, send him a case of it and tell him thank you, my God. All of a sudden, organically, it took off. Over 200 songs were written with Patron in it. I think there were three or maybe four country and Western songs.

59:10One of them was the biggest song of the time. It was called something about tequila makes my wife's pants fall down or something like that, right? But it was all about Patron. I gave her Patron, right? So all of a sudden, and that cost us nothing. People just loved it and wanted to show off that, hey, Patron is cool. We drink it. It's kind of like many years ago. Well, we drink Covassier, okay, as a cognac, right? We drink Patron. That was it. That was the amount because they loved it and they could afford to give themselves the best. And it just took off like the world never knew.

59:41Hala Taha:Did you end up leaning into that demographic and marketing to that demographic or you just let it take off organically? It took off organically. And that area also in all areas just took off organically. And in the hip-hop area, it just took off organically. It just exploded because they wanted to treat themselves, and they did. Even before we told them to treat themselves, they realized they were treating themselves. Go deeper on how you made Patron a luxury brand. Certainly. First thing is you have to—let's take a tequila. It's got to be different than other tequilas. Ours was the mellowest gourmet, and we did not have that in the United States at all.

1:00:19So that was number one. Second thing was when they tasted it, they saw the difference. Or when they put your shirt on, they saw the quality of whatever you had. It was different. So one, it's got to be different and better where it supports treat yourself. That's number one. And then number two is you've got to teach that to the salesmen that sell it. So we would go in the field with the salesmen, hold sales meetings for them, and keep on reminding them so they could use that same thing when they called on an on-premise or off-premise, which means in a bar or restaurant or in a liquor store. Same philosophy, but you have it all the way down.

1:00:55So they knew something to say that was simple. Had to be one or two simple things they could say. One or two simple things, right? Or they're not going to remember it.

1:01:03Hala Taha:You went on to sell Patron for how many billions of dollars? Five billion dollars? Well, since I normally don't talk about it, it was public information, made the Wall Street Journal, everything. I didn't want to sell it. And that was in their role. I did not want to sell it. So they came to me and said, JP, we want to be your partner. We want to buy the whole company. Well, how much do you want for it? I said, I don't want to sell it. And I said, well, but just give me your... I said, nope, I don't want to sell it. I'm having a blast, but then we're making lots of money. So they asked me the question, very good question they asked.

1:01:30They said, JP, if you did sell it, only if, how much would you want for it? Now, I had no idea what these things sold for. So I thought, I'll just throw a crazy figure out. And I did. I said, it'd have to be more than$5 billion. They left us at JP. The biggest brand in the industry sold for$2.2 billion. That was Grey Goose. You want more than twice that? Never going to happen. I said, I don't want to sell it. You're like, that's why. You asked me, I don't want to sell it. That's it. Anyways, time went by, okay. This approach, I'm not interested. Then they came back to me, Bacardi, and said, would you take$5 ,100 ,000 ,000 as a valuation?

1:02:07And I said, yes, immediately. Yes, yes, I'll do it. I'll do it immediately. I would never do that with Paul Mitchell with Patron. Yes, I did it immediately. And I had the majority, obviously, of the company and got the majority of all the money there. And I also shared it with my staff. I made people that worked with me, helped me get their millionaires and a few of them multimillionaires. So everybody walked away really happy.

1:02:30Hala Taha:That's incredible. And that is why your book is titled Success Unshared is Failure. It's on Amazon now, by the way. They start delivering this next week. They've been taking pre-orders on it. Hundreds of people have been pre-ordering it. So I would suggest guys get it as quick as you can because the first edition is what they're selling. And they think they're going to sell out of it within the first month. Get it while you can. I can just guarantee you that if you read it, it's not only an autobiography, but it's how to do all these things, how we did it, how we got money earlier. how America still works and other things you could do, other things you could do in your life that you'll find in that book that I'm allowed to talk about now.

1:03:09And I'll give you one quick example, okay? I am not and never have been an agent of the CIA. I am not and never have been an agent of the FBI, but I trained and have trained more than once both of them. I trained them how to be a more loving, caring manager because they have turned over like everybody else. In fact, it made the front page of the Wall Street Journal. Have a good hair day at the CIA, okay? Go teach them about how to be more of a loving manager. But anyways, that's the pre-set up for this. And I was in the book, I'm the guy who in 2000, 2001, I'm the guy that went into Libya and convinced Colonel Gaddafi to relist the two suspected terrorists to pan in flight 103, released him to go on trial in the Hague.

1:03:56I'm the one that helped do that. I'm the guy that went in and out. It was able to talk. He wanted to kill me. Okay, after I started talking, I thought the guy that was with me was, I mean, I would think peeing in his pants. He said he spilled tea on his pants. The whole story's in there. But with him almost wanting to kill me, I had him within two minutes laughing with me. And that's when I said I took my$8 throwaway camera. That's when he had 35 pictures. You took it down, they developed it. To his chief of staff, Omar Montazor, I said, could you take a picture with us? He said, sure. So I ran over, I hug Gaddafi, he smiled and I smiled and we got the picture.

1:04:28It's in the book of Gaddafi and I like that. So in other words, once you're into it and you have confidence within yourself, you know, you can do amazing things. And I have a saying that's this, being nice even works and being real even works on jerks. Being good to everybody works. It really works even on jerks.

1:04:47Hala Taha:Yeah. Even on jerks. So I was nice to Gaddafi and I made him laugh, even though he was ready to kill me for something I'd said just menace me for. Yeah. So these are some lessons we learn along the way and we apply them to people. We apply them. I read the book twice now, and there's so many incredible war stories. There's so much inspiration in it. There's especially for young entrepreneurs who are bootstrapping their companies and having to be scrappy and resourceful. So I absolutely loved it. I highly recommend that people go. So JP, I want to play a game called Would You Rather? I'm going to ask you a question.

1:05:21Hala Taha:Tell me which one you'd rather do and why. Okay, number one, would you rather have a great product with no marketing or great marketing with an average product? I would rather have the best product there is with little marketing because I normally get reorders. If I have a so-so product, I can spend all the money doing it, but I'll get a one-time sale. I want to be in the reorder business. Would you rather start a new business with$700 and full control or start a business with$7 million from investors but lose control? I would rather have$700 than have full control if I could build a business and have it myself and control it the way I'd like to do it, the way I envisioned it, if that's possible.

1:06:01Hala Taha:Would you rather be first to market or be the first to truly get the product right? I would like to be the first to get the product really, really right and the very, very best. Then once again, you're in the reorder business. Would you rather have 1 ,000 loyal customers or 1 million followers on social media? I'd rather have 1 ,000 loyal customers than 1 million on social media because they're loyal customers and they'll help me get the other customers. They're not listening to it. They are actually using the product and they're loyal and they can talk about its use, not just advertising that's thrown out at somebody.

1:06:35Hala Taha:Would you rather build another Paul Mitchell where customers reorder for decades or another Patron where you create a premium category and cultural status? Both. Now pick one. Both. Oh, no. Holy cow. Boy, that's a tough one because you're trying to buy two unbelievably successful products that are really, really good. If you had to just choose one that would have been your legacy, which one would it be? God, that's... Boy, well, I would say Paul Mitchell because it was the first. Yeah. You couldn't have done Patron without Paul Mitchell. No, that's correct. Would you rather grow up rich or grow up poor?

1:07:16In my case, and knowing what I know, I'd rather grow up poor than rich. Now, why would I do this? They say, are you out of your mind? You're putting us on. Nobody wants to do that. If I grew up rich with all the money in the world, I would have never learned the lessons I have learned in this life, in this body, this time around. I would have never learned them. And also the humility on what people go through in life and how to give them a helping hand to raise them up, which makes me even happier.

1:07:42Hala Taha:To close out this interview, I want to talk about the main motto of your book, Success Unshared is Failure. True. Why do you take it so far? Why is it not just like incomplete or bad? Why is it failure to not share your success? In the 1950s, J. Paul Getty Jr. was the richest man in the world. He was a multibillionaire. He was an oil man from Oklahoma that ended up starting Aramco, the big oil company in Saudi Arabia. He's one of the guys that held it going. And he lived in a huge, huge place in London, England. And he noticed once, this back in the 50s, we had what's called toll calls. We had them in the United States.

1:08:20If you call across town, it's an extra two cents a minute. You call across states, maybe it's an extra nickel a minute, whatever. Anyways, he looked at his bill in London, and it was like 250 pounds, which was equivalent of about 500 US dollars in the 1950s. And he said, my God, they're taking advantage of me. My guest, this is the richest man in the world. They're taking advantage of me. So he put a pay phone in his house. If somebody wanted to make a telephone call, they make it off a pay phone. I mean, that guy was really cheap. Anyways, but here's the lesson to learn and to answer the question really, really well from the richest man in the world.

1:09:00In one of the very few interviews he ever did, the lady interviewing said, J. Paul Getty, you are the richest man in the world. Is there anything in your life that you would do differently? And he looked at her and said, ma 'am, in one of these rare interviews that he had, you're wrong. Are you only half right? I'm not only the richest man in the world, I'm the most powerful man in the world. I could change governments. I could change governments with my money and my wealth that I have, by the way. He said, but would I change something? Yes, I would. He says, I would change the majority of my wealth and my power to have been happy in life.

1:09:38I've been married seven times, didn't love any of them. One of my grandkids cut off his ear and sent it in for ransom. I have not been happy in my whole life. I've just been unhappy, but wealthy and strong and powerful. And a lot of people didn't like me. So she said to him, well, why don't you start doing it now, J. Paul Gennady Jr.? And his answer was, can't. It's too late for me. I've only got a couple of years late. It's just too late for me. I wish I would have learned that lesson early. And if I could go back and change, and now I would. It's too late for me. So what is really, what is happiness?

1:10:09If you have all the money in the world, you're not happy. Is that worth it? Would you rather have a hell of a lot less or just get and buy, but you're happy in life?

1:10:15Hala Taha:Yeah. Big lesson to learn. I know that you want to be remembered not for your companies, but for your kindness. And you've got so many examples. I think even with Paul Mitchell, like your first$2 ,000 of profit that you ever made, you like bought out the restaurant and like paid for everyone's dinner. They helped a bunch of kids who are inner city children that can order a whole lot. That's so sweet. Talk to us about the way that you've shared your wealth over the years and how you're like willing to be hands-on and why even being hands-on is important for you. Of course. Well, let's go to the sharing the wealth part here.

1:10:50The first part of your question is this. If you're like J. Paul Getty Jr., you became the richest of all rich and you haven't shared it any at all and you're unhappy, well, that's not very good. But if you're blessed enough and God gave you the ability in these bodies and helped you out a little bit, okay, getting what you have, well, isn't it only proper to share it? I know in the past there was one fellow named Huey Long in New Orleans back in the 1930s that was running, and he was really a weird guy, right? He wasn't the most honest guy, but was running for, I think it was Senator of the Great State of Louisiana and said something one time that made all the sense in the world, even though he did not practice it.

1:11:30And what he said then was this on the radio. He said, Mr. and Mrs. Rockefeller up there in New York City, okay, that have all the money. I want you to have a big banquet and have so much food that your kids, your grandkids, your great grandkids have all they could possibly eat and leave some for them, okay? But there's gonna be a lot left on the table. Would you send those extra down to the poor people in Louisiana so they could eat too? In other words, when you have something and you don't give, you're not happy.

1:11:57Hala Taha:Yeah. In life, when you give something to somebody else, and you ask nothing in return, you are high as a kite. I mean, there's no weed you're going to smoke that's going to get you that high. You are so high and your feelings are so great. It changes your life. Are you a true success? Have you made millions or billions? No. If you made millions or billions and did something to help change the world with some of it or your time or energy, now you're sharing. I was asked many times, JP, what would you have on your epitaph? Let's say you were buried and not cremated. Let's say you were buried. or just you had a stone that was your epithet.

1:12:30What would you have on there? And I said, oh, this is so easy. He came to this world with absolutely nothing, John Paul DeGioria, but made a change to make millions of lives better because he was here, period. That's it.

1:12:43Hala Taha:I love it. That says it all. And it makes you feel better. That's why you should share your failure if you don't. And I know quite a few people that are extremely wealthy, but they don't share. They don't share, which is wrong. It's got to make you unhappy inside. Do you feel like because you share your wealth, the universe continues to reward you? Definitely. When you're good and you share, you are rewarded. Whether it's immediately or whether it's 10 years later, or it could be your next life around, somehow it's going to come back to you. It does. That's why success and share is failure. Because if you don't share, you're rewarded.

1:13:16Something not so good is going to happen to you eventually, because that's what you told the world you want to do. I want to have money, money, money, money. I don't want to share. I don't want to share. Okay, fine. You'll have this money you're not going to share, but at the same time, you're not getting the benefits of sharing. What's one of the benefits? You're happy. You did something for somebody else, didn't want anything. That makes you happy. Success unshared is failure. And if you don't have any money, you don't have to have money to be successful and share. Share of your time. Very valuable.

1:13:45Volunteer to do something. Give somebody a helping hand. Smile at people every morning. If you get on an elevator, get on an elevator and say, good morning, everybody. Just little things like that is sharing goodness with the world.

1:13:56Hala Taha:And you've got so many stories in the book of how you've like supported different communities and really went and helped. And you have not only your money, but your status, your connections to help people. That is correct. And it works and it makes me very, very happy. I'm a happy man. So I'm very wealthy. I'm happy. I'm very, very wealthy. I'm happy. Yeah. So I end my show with two questions I ask all of my guests. Okay. The first one is, what is one actionable thing our young and profiters can do today to become more profitable? tomorrow. Okay. Part of what you earn is yours to keep. And I read this in a book when I was selling encyclopedias.

1:14:34I think it was called The Richest Man in Babylon, where he was a poor guy, but he would get a little rug, enough to buy a rug. He was selling rugs for somebody else and sell it. But he says, I got to keep some of this for me. So people get a check, especially if you're starting to have very little money. Immediately with every dollar you see, start out taking 5 % If you found$10 on the street, take 50 cents of it, okay? Put it in the bank. Take something. Because whenever we get checks or money, first thing we do is pay all our bills. Whatever's left is discretionary. Do the reverse. Eventually take 10%, but take 5 % of whatever you earn or whatever you find and put it in a savings account, even though you make nothing off a bank in a savings account, right?

1:15:18But you're not going to touch as a savings account. You'll be blown away how that attracts other money. Pretty soon you'll be making enough for 10 % you'll put in there. It's starting building your wealth when you have none by getting to that little habit. The next thing is believe in yourself more than anybody else and learn the lesson. It's some of these lessons in the book, but the big lesson is knock on door number 51 or door number 101, as enthusiastic as you will be. Then you're not going to be in business for three days. you're going to be in business hopefully for the rest of your life or in a good business or you switch businesses.

1:15:53Those are the biggest things. And the two things I will say always remember is number one, don't go into the selling business, go into the reorder business we talked about. And the second thing is that you're going to get rejections in life. As long as you know you're going to get rejections, don't let it affect you. Like the 50 doors, whether they're closed professionally, nicely, or rudely, number door 51, number 110, whatever, be just as enthusiastic and happy, you're finally going to break through because you'll learn in all the other ones how to do a little bit better.

1:16:24Hala Taha:Yeah, you got fired from three jobs and then started Paul Mitchell. Exactly. Yeah, so your experiences are really what leads you to be able to create something amazing later on. And what would you say your secret to profiting in life is? Is being a happy person. Because that's going to be one of your biggest profits in life is being a happy person in life and not cheating anybody. You know, give them something, a dollar's value, and don't cheat them along the way. And you're a very, very happy person in business. And where can everybody go to learn more about you and your new book? Well, they would go on Amazon.

1:16:57That's one example. Amazon, you can buy it right now. They ship it out next week. But I would say this to all your listening audience. If you're an adult, when you read the book, read it with your children or let your children read it next. And if you have grandchildren, let them read it also. It shows America works and how you can start in a variety of businesses with no money become successful with the same exact principles and many things we haven't talked about now.

1:17:23Hala Taha:I love it. JP, thank you so much for your wisdom today. You're a superstar getting these good messages out. Thank you very much. Thank you. Well, Yap Gang, I hope you enjoyed this as much as I did. What an extraordinary conversation with John Paul DeGioria. From being homeless and living out of his car to building Paul Mitchell and Patron to billion-dollar businesses, his story is proof that resilience, integrity, and generosity are not just soft values. They are competitive advantages as an entrepreneur. JP made one thing clear. Rejection is not a stop sign. It's training. He got turned down over and over again, and instead of shrinking, he sharpened his pitch and kept on knocking.

1:18:00Hala Taha:He didn't obsess over closing one big deal. He focused on building a product so good that customers reordered. That's the shift. Stop chasing one-time wins. Build something that people come back for, and you'll build a legacy. Second, he bootstrapped with creativity, not capital. When suppliers said the minimum order was too high, he negotiated smaller runs with the same terms. He offered incentives for early payment to manage cash flow. He proved demand before scaling. That's scrappy entrepreneurship. shrink the risk, secure the terms, deliver excellence, and then expand. And finally, his philosophy says it all.

1:18:38Hala Taha:Success unshared is failure. He stood by his partners. He guaranteed quality. He built community around his brands. For JP, wealth without contribution is empty. Real success multiplies when it improves other people's lives. So take this with you, Yap fam. Outlast rejection, engineer reorders, negotiate boldly, protect your reputation like it's your greatest asset. And when you win, share it. Thanks for listening to this episode of Young and Profiting Podcast. If you listened, learned, and profited from this conversation with the incredible John Paul DeGioria, share this episode with a friend or fellow entrepreneur.

1:19:12Hala Taha:Even better, write us a few words about what hit home for you. I genuinely read every single review and they remind me why I record these podcasts each and every week. Yeah, fam, I love reading your reviews. So take a couple minutes right now and write us a five-star review on Apple, Spotify, or wherever you listen to your podcasts. You can also watch the full conversation of me and JP on video on YouTube and Spotify video. You can find me on Instagram at Yap with Hala or connect with me on LinkedIn. Just search for my name, it's Hala Taha. I love hearing from you guys, so don't be shy and shoot me a DM.

1:19:47Hala Taha:And finally, the biggest shout out to my amazing guest outreach and production team. Shout out to Farkhan, Joshua, Hisham, Jareen, Nina, Michael, Godundra, Caleb, Paul, Maxie. There's so many people on the team that work on this show. I couldn't do it without you guys. Thank you guys so much for all your hard work. And of course, the social team. I appreciate you guys as well. This is your host, Halataha, aka the Podcast Princess, signing off. The right window treatments change everything. Your sleep, your privacy, the way every room looks and feels. At Blinds.com, we've spent 30 years making it surprisingly simple to get exactly what your home needs.

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