John R. Paul

Transcription

[MUSIC] [BLANK_AUDIO] I wanna tell you how America still works and, maybe give you some tips. I had to start a variety businesses with little or no money. But she had touched upon one thing in high school. I was in a high school class with my friend Michelle Gillian, and I sat in front of Michelle. And we were at 11th grade, we would pass notes back and forth, so we were really clever. She sat behind me so, I would like, write a little note. Put it in like, like that, you know, lean back, and she grabbed it. Well one day mister Wax, intercepted our note, and read it to the whole class. Oh, this Johnny guy and this Michelle, I'm gonna read the note. Some stupid like see you at [UNKNOWN] you know, after school you know Darlene [UNKNOWN] and Ron were gonna be there. Something really, really silly, you know, we're just buddies. It said, they will never amount to anything. Well, Michelle Gillian two days later, I should say two years later, became Michelle Phillips of the Mamas and Papas, whose an actress, was the superstar, and so forth, so, on my 50th birthday, Michelle and I have always remained friends. She went and found Mister Wax, and brought him to a place to called El Cholo, in L.A., a place we go to for dinner after, in high school. Brought him there, and we reminded him of the situation. [LAUGH] And well, I don't know. [LAUGH] I wanna tell you that, America works, America works really, really well. And the rest of the world is following, regardless of the publicity, that some people put out. Yeah, there are some things wrong with our country. But boy, we're straightening them out really quick. We the people, are taking over. In life, you're gonna see things, that you think are real, or read things that you think are real. Sometimes they are, and sometimes they're not. What is very real is that, the economy you're in today, is not what the press makes it out to be. I'll give you an example. In 1980, when I started John Paul Mitchell Systems with my partner, inflation was 12.5%. What is it now, 1%? Interest rates were 18%. What's it now, four, five, six, 7%? Unemployment was 10.5%, and you had to wait in line, for sometimes blocks at a time, to get gasoline. You know, actually, most of you weren't even born then, but that's how it was, it really, really was. It was a lot worse than this today, but yet people say look how bad the economy is. Maybe not the best time to start a business. In 1980, we started John Paul Mitchell Systems with $700. That's it, no loans. Today it is probably the largest independently owned hair care professional company in America. And growing, we're in 87 countries throughout the world, and growing quite rapidly. But America does work, and our way of doing things works. No matter whether you agree with the politicians, you don't agree with the politicians, look around the world a little bit. Why the uprising in Tunisia? Why do you have uprises in Egypt, where they didn't before? And all of sudden, in Iran they're saying, wait a minute, you know, we threw the shah out. Mullahs, you're not doing any better. You know, we want you. Why is this going on? Well obviously, as most of you know, we're the technological age, where they have email, they have twitter, they have everything you could ever imagine, so they know what's going on in the world. More people in the world, want deservingly, a better chance, a better opportunity, to at least have the opportunity for a better life, and they're watching it now, what's going on throughout the world and saying well, that's not so bad. Maybe these bad guys aren't really that bad. Maybe what's going on in America. Where, we the people. Hey, Obama came in. Man that guy gave great speeches. I thought wow, I don't believe this guy. He's gonna knock out immediately pork barrow spending. It's gonna be gone. He said he would in the election. Let's go for this guy. Yey, finally someone's gonna do something! All of a sudden, every bill that went through, had pork barrel spending. So what did we the people do? We didnt' wait four years. Two years later, we started kicking out democrats and putting in more republicans or, independents. Because, we the people are speaking up. We the people don't want anymore. All of a sudden, republican party jumps in and says, op, were gonna stop pork barrel spending, even though it's been going on for years. We didn't do it during our administration, but were gonna do it now, because Obama said he would and didn't. It's politics. But the end result of politics is, things are changed. They are getting better. I wanna share with you, how to start a business, with little to no money, using Paul Mitchell as a great example of this. And then also go into a few of the other things we do, and maybe some real secrets to success. Wanna start with two things. It's the most asked questions of me. John Paul. What is the main, main thing we should know, to be successful in anything we do? And is there a second one? And I'll tell you those right off the that. The first one is this, and I'll explain it. Be prepared for rejection. Be prepared for a lot of rejection. I don't care how good your idea is, no matter how unique it is. You're gonna be knocking on doors, or talking to people, to sell your services, or sell your product. And you're gonna get a lot of rejection. You, if you're aware of it in advance, it won't be like, wow, this is not a good idea, 20 people said no. You have to be able to knock on door number 100, and be just as enthusiastic on that door, as you were on the first 100 doors that were slammed in your face. Be prepared in advance for rejection. I sold encyclopedias door to door, when I was 19, 20, 21, and 22 years old, for Collier's Encyclopedia. I believed, everyone needed a Collier's Encyclopedia. A high school student could understand it. A college student could tolerate it okay. May not be Britannica, but was, everyone needed one. So I sold them door to door. No appointments, just went out there knocking on doors. And all of a sudden, if they let me in, all these bindings red and blue would come out. But I believe what I did was right. I had a lot of rejection. Doors slammed in my face, all the time. And people, they weren't very courteous. But then again, I was calling on their homes, in the late afternoon, throughout the evening, I wasn't expected there anyways. The average encyclopedia salesman in those days, lasted three days. I lasted four years, and then I got out. Commission only. But, one of the things I learned was, belief, if you believe what you're doing is right, don't give up. The successful people, do all the things the unsuccessful people don't want to do. That's number two. Successful people do all the things unsuccessful people don't want to do. Like a door number 101 smiling. And being enthusiastic. Not giving up on what you're doing, and being really into it. I wanna give you, that's phase one. Part one and part two. The other secret to success, its own category, is whatever service, whatever product you are selling. Make sure, it's of the highest quality, in its category, you could possibly have. You do not want to, and I would underline do not, you do not want to be in the selling business, as most everybody does, I wanna sell my service, I wanna sell my product, you don't want that. The big secret is, you wanna set up your business, so you're in the reorder business. Your service or your product is so darn good, that people are gonna want it again, or tell other people, you gotta get this, it's that cool. That's how you build a business. You start in the beginning saying, it's gonna be so good, that I'm gonna be in the reorder business. People are gonna wanna talk about me. People are gonna wanna say, this is great. How do you start a major cosmetic company, 30 years ago, during the worst economy of the United States, and it's the great depression, the real worst economy since the great depression, with $700? Well, we thought it was impossible. I had my partner who was a hairdresser. His name was Cyril Thomas Mitchell. He used the name Paul Mitchell, as his hairdressing name. And Jean Paul DeJoria, John Paul Mitchell Systems. That's where we got that name together. And I was from the business end, the marketing end. And a little, I knew a little bit about product formulation. And my partner was a great hairdresser. Like one of the most avant garde ones you can imagine. He knew products. He could us them. So I said, Paul, I've been in the industry myself, as an executive. And I said, why don't you and I start a company together? I'll raise the $500,000 we need, and you'll own 30%, I'll own 30%, and the money will own 40%. We had an investor. From the tax free haven of Jersey, between England and France. And Dick Holpauch with City Corps, set it up for me, he was a friend of mine. And then it was all set to go. And that day, I wasn't getting along with my wife, wanted to get out of there anyways. I left her whatever money I have, left her the house, a nice car with my daughter, plenty of money for a few months, you know, and, put a few 100 bucks in my pocket, jumped in my car. And went down to the bank. My partner Paul came over. He was out of money too. So he came on over, so we'll get our $500,000 then Paul, here's a few thousand for you, I'm gonna rent an efficiency hotel or apartment for a week or two, month, til I see where I want to situate myself, and we're in business. The money never came in. That night the money still never came in. What are we gonna do? Dick [UNKNOWN] got a hold of me, through a friend of mine. And so [INAUDIBLE] to JP, it's three in the morning in England, when HE finally get a hold of me, and it's the evening, the banks are closed. So I don't know how to tell you this JP, but I just have to. The backer pulled out. He says inflation is such and such in the United States, 12.5% interest rates are sev, 18%. Unemployment is 10.5%. There's a, fuel shortage going on. And your hostages, there's over four of them still in Iran that they're holding. They're not released yet. I can't invest in the United States where there. Oh my God, no money, great idea. I already set up the bottle man. I set up the silk screener. I set up everything to just pull the trigger and go. We didn't have any money. How do you start a business with zero money? So I'm gonna give you everything we did. We didn't have an office. But, I had a friend with a telephone. My office, was an answering machine that you could buy today for $29.95. I got a friend of mine who had an English accent. And she said, hello, John Paul Mitchell Systems. Aah! We're so busy, but leave a message, we'll get with you. It looked like we were bigger, there was just Paul and I. That was our office, we needed a location, I went to Universal City, California, to the little post office there, for $15, I got a P.O. Box. John Paul Mitchell Systems, P.O. Box 10597, Universal City, California. We had a phone. We had a secretary, didn't exis, there was someone answering the phone. That was it. For stationary, I would go to a print shop. For $3, they would typeset, and make me one copy. That was my stationary. I would go to a photocopy place for four cents a copy, and make many copies, and now I had stationary, and I had letterhead. And I could draw on there, an invoice, I could invoice people. Okay, fine. You have a make believe office set up, but how about the products? Well, everyone was set up to do a 100,000 of each bottle. And you know, they were excited, they were enthusiastic, we were enthusiastic, I was excited and enthusiastic. But nobody knew we didn't have any money. We didn't wanna lie, but we didn't wanna quite tell them everything. So I called up the silk screen, the bottle man, gotta start with the bottle guy and said. Instead of ordering 100,000, bottles I'd like to have a sample run of 10,000. Oh, of course, we understand, no problem, we'll give it to you at the same price. Called the silk screener, 10,000 are coming over. And, it's a sample run, I want 300 shampoo one, 300 shampoo two, and I mean 3000, and then I want the other 4000, the conditioner. No problem. And by the way, don't put the color on, because color was seven cents a pass, black and white was two cents. So our bottles came out black and white. It turned out, it was great, unisex, we didn't know that. We just knew it was a lot less to silk screen them. Called the filler up. You get all the supplies, we just need 10,000 filled. 3,000 of this, 3,000 of that. Okay, and all a sudden, bingo. The clock started ticking. From the time the silk screener, got it, I mean the bottle guy got it to the silk screener, got it to the filling house, we had them full, was two weeks. It was two weeks longer. Cuz I'd set up credit with everybody, prior to this time, 30 day credit. Two weeks from now, that first bill is due. I hit the streets, knocking door to door, like I was selling encyclopedias, but I would go from beauty salon, to beauty salon, to beauty salon. We had a shampoo, that instead of using two shampoos. More product, rinsing it down the sink, you know, it goes away. You only need one shampoo. Saves you time and money. Our conditioner, you didn't put it in the hair, in the salon, leave it for ten minutes, rinse it off. You take the customer to the station, you sit them down. You put the conditioner in your hands, you show them. You run it through their hair, and leave it. And, you tell your customer, this is a moisture treatment, this is a protein treatment. It's gonna let me cut your hair easier. And, when I blow dry it, it's gonna cause less damage to your hair. Cuz, it's a protector. So, we knew that. And, by the way, hairdresser, when you put it in your hand, and you do this, every time. It neutralizes all the chemicals in your hand. So, I would go in and give a presentation, here's my project. Most people would say, well, why do I need your product? You know, I've got Zotos, I've got L'oreal, I've got Redken, they go down all the, you know, regular companies lines. I don't need your product, you're unknown. I say, well, here's what I'll do. If you will agree, to take one dozen each of what I have, and use my shampoo and conditioner at every station you have, I'll make this agreement with you, and display it, by the way, to eye level. Black and white looks so good at eye level. If you will do that, and you are not satisfied, that's one of the hottest products you've ever used. And recommend to your customers to take home. I will come back, take every bottle off the shelf, you have not used or sold out the door. Still a good bottle, we haven't used or sold yet. I will give your money back, on all of it. Now, is that fair enough? The answer was usually, no we don't need your product, okay. [LAUGH] We've all this other products here right. [LAUGH] Finally I'd say okay, I can understand your scepticism, but if it works the way it says it does, and your customers love it and you love it, you're gonna wanna recommend it. I'll tell you what I'll do. If you will agree, tab it at eye-level on a nice little display, let me come in and hold the look class for your stylist and how to use it. I will place only six bottles, on the shampoo six bottles of the conditioner you know of everything in your salon and I'll also give you this within one month 30 days. If you're not totally happy anything you haven't used or sold out the door I'll give you your money back is that fair enough? And the same with your customers. And, someone say yes and some would say no, and I would say, okay I can understand. If I only gave you two bottles, [LAUGH] and it's amazing how you can only fit two bottles or six bottles. I went around and I got 12 people to buy it. Hide it in my trunk so I took it out, here's your order. Can I have the check? [LAUGH] They gave me the check. I went down to Paris [UNKNOWN] Beauty Supply in downtown LA, who was calling on salons. And I said, would you like to be the distributor for this new hot-line. We call it Paul Mitchell because my partner is a hair dresser, I'm not. It will only be in the hair dressing industry forever. It's not going to be like Nexus or Jerramac or all those other companies that sell you out. They let the hair dressers build them up and then they go retail with there lines, It will always stay in salons. so, that's why you should buy our product here's how unique it is. He said, we don't need to buy your product, we have Elaine Curtis, he just went on and on. I said, but I'll tell you what. If you knew customers were gonna buy this, would you take it on? Yeah, but who knows that? You don't know for sure. I whipped out twelve orders, put twelve checks right in front of them and said that's your first 12 orders and there's the checks for them. I haven't cashed them yet. For $2,000 [LAUGH] in product, you could be my LA distributer exclusively for all of LA County and I'll come in here and help you sell it. He looked at it, laughed his head off, it was Jim Henriette, laughed and said, okay, I said, but just one more thing, when I deliver the $2,000, I'm a new coming. I really need a check. He laughed and said hey, we pay our bills in 45 days, well knowing that in advance, I priced my products at 5% over what I really wanted. I said I'll tell you what, I'll give you a 5% discount. Give me a check on the spot, I need the money. I already had this in my mind, how do you get money right away? Well whatever your price of your product is up it 5%. And then give it right back to them for paying you right away. To this date, Paul Mitchell gets paid COD or within ten days. And we still have the 5% in there, no one ever doesn't take it. Hiding in the door she said, okay, and I drove around back to the warehouse [LAUGH] Ware house man, this stuff is for you can I have a check? He calls Jim Henrietta, we had Jim Henrietta about ten years ago at one of our meetings to tell everyone the story. This is the same office the phone rings and my warehouse manager, and he says your not gonna believe this some guy loaded products back here, he wants a check. He says whats he look like? It was John Paul, he was just in my office five minutes ago. [LAUGH]. Laugh, gave us a check and that's kinda of how we took off with grass roots. If we wanted to cross the nation in those days you could fly for $99, the midnight special, from Los Angeles to New York. Hardly anyone's on that plane. You pick up the little dividers. You sleep on it. And the bathroom is your shower. So you learn as you go along various ways to, shall we say save money and to, along the way, build the business. Now I wanna talk to you a little bit about also, as you build a business, how to manage it where you don't lose people. In 31 years, John Paul Mitchell Systems, in 87 countries throughout the world, has had a turnover of less than 30 people, that's unheard of. People say, how do I get a job at Paul Mitchell? There are no positions, because nobody wants to leave. We'll occasionally have a new one with expansion, but we treat people the way we want people to treat us. So I'd like to take a moment, cuz there's just so much to cover in such a short period of time. I wanna take just a moment with you to give you some very important management techniques, that will last you for the rest of your life and maybe some personal techniques on getting along with people. I wanna cover with you right now, how to reprimand somebody if you're a manager or an owner of a business whenever you reprimand somebody. If I went up to this lovely lady here and told her what she did wrong. She would feel really bad when we left each other. She wouldn't feel good at all. There's a way to reprimand somebody, where they feel really good when they leave. Before you do, you need three things, you wanna write down on a piece of paper what is that they did wrong. Second of all, you wanna write down so you know it, how to do it right. You would be amazed at how many people get scolded for something, they didn't know how to do it right, but they won't admit it how to do it right. And the third thing is, the last thing the most important, what do they normally do really, really good? What do they normally do really, really good? That you could tell them so they feel like their really wanted, and they are someone that you appreciate and respect. And when they walk out, their happy being reprimanded. You know these things, when they call him and and they come on in. You always reprimand privately behind closed doors. Never reprimand anybody in front of anybody else. You do, and that's called for hostility, they'll stab you in the back whenever they can. Only reprimand people behind closed doors and in private. First thing you do is you tell them what it is they did wrong. The second thing, how to do it right. I'll give an example, okay? You come in, every day, on time. And you're great, people love you. But when you answer the phone, you're not smiling. It's like, hello, can I help you, Stanford University, or John Paul Mitchell Systems. If you smile, like we suggested before, your brightness, your beauty comes across. And the person on the other end of the phone knows it's a happy company. Hi, John Paul Mitchell's System Stanford, how can I help you? Big difference, you are incredible, you come in all the time, people love you. You bend over backwards to help people out, because you're that cool and you do everything that wonderful, one would expect you to do this thing also because you're that, you're that great at what you do. She walks out feeling good. It's the opposite, its the total opposite for who, a praising somebody. Whenever somebody did something good, praise them loudly and in front of as many people as you can. Like if there were people walking around that worked with you, oh my god you're unbelievable. You smile you make people happy on the other end of the phone guyz, she is too cool. And there was, tell them what they did right in front of a lot of people or make sure there's someone around so she knows that someone else heard what she did right or he did right. Very important business the old school was, I want you to do this, why? Because I said so. That is not management. The worst book ever written in the world, and it was a best seller 40 years ago. It was called Management Through Intimidation, terrible, terrible [LAUGH] It was a book. It was a big sell, how could anybody possibly wanna do that? And the other thing gets into treating people how you'd wanna be treated and not lying about what you're gonna do. We're the only major company left in the professional beauty industry. I could be two, three times my size, if I opened up the Paul Mitchell line to drug stores, supermarkets, everybody, but I don't. I go on TV and say, if you ever see Paul Mitchell in any drug store or supermarket. It's counterfeit, or it's from the Black Rate Market. We don't put it there, don't buy it, even the counterfeit bottles say, guaranteed only when sold in a professional salon. They really get don't buy it, because we only sell our product in salons. That's all black market, grey market or counterfeit don't buy it, because we're only in the beauty industry. We told hair stylists if we make it, we're gonna be in the professional beauty industry forever. We're never gonna cut you out of the picture. We'll never desert you when you build this, and they did. So ethics is another good thing, if you say you're gonna do something, by gosh, you wanna do it. You wanna do it right away. Another area I wanna to touch on with you here cuz it's very helpful, and I know when I was at various government agencies I would do some lecturing for some of our agencies CIA, FBI and I do a little lecture here and there for the secret service and other groups. So, what I lecture on is management motivation business and just a lifestyle of being happy so everyone just feels good. And I feel that if you're a citizen of any country and you wanna change it, by gosh get in there and motivate people! If I don't like the way someone is doing something, why don't I get in there and talk to their agents or talk to their people about another belief, a new way to do things be a more loving and kinda manager. Where people wanna do more for you, on a regular basis, and don't want to leave. There have been times where I've been at John Paul Mitchell Systems corporate headquarters, at five in the afternoon, 5:30 and half the office's full, I said get out of here go home what are you doing? Get out of here no, no, we wanna finish this. Get out of here no, no JP, it's okay we wanna finish this because they feel they are part of it. And we treat people as they should be treated. And there is free lunch by the way, John Paul Mitchell Systems, everyone gets free lunch. We have utensils, so you don't have, so they're recyclable. We bring food in big, different restaurants, in large quantities recyclable. If you carpool, we pay for your gas we do unto others, as we have others do unto us. And I'm not gonna get religious on you because I'm not qualified, but my feeling is, that if God wanted you to do something, and if your atheist, let's say nature, okay? So I won't get realistic nature, the universe, let's just say God for just a good name to use. What God wants for people is to be happy and love one another and treat one another the way you want to be treated. Not bashing people, squashing them down, or killing them in the name of God he doesn't want that. He wants all people to be happy and respect one another not step on anybody. We have 110 Paul Mitchell schools through out the United States, or 15,000 students in them. And there's something we have that's different than any other school It's called a culture. You have to learn the culture while you're there. Yes, you will learn [COUGH] if you go to a Paul Mitchell school. How to be a great hair stylist. How to be a great hair cutter. A great hair colorist. You will learn all this. How to merchandise, market, display. But you'll learn a culture that I think every university, every high school, just every school should teach and they don't. And the culture is how you love yourself, people around you. How to communicate with people you haven't communicated with in years. How to break that bound and how to take care of your own community, your own state, your own country, and the whole world. Everyone that goes to our school participates for a couple of months into a fund raising program. And if you do really, really well 2,500 of you get all expenses paid to Las Vegas for a special training program and a concert and just a best time in the world. But when you raise the money, all the charities we pay for. Not one dime of the money they raised goes to anything but the actual charity itself. Everything from Alzheimer's disease to helping people Children's Miracle network, to feeding orphans in Africa, where their parents have died of AIDS. A roundabout thing, well, these students, and by the way, last year they raised $1.2 million these are students, okay? Will they ever meet the orphans, in Africa? No. Will they ever meet the people who have Alzheimer's Disease where you're teaching their family, or the organization is teaching them how to deal with people that are losing their memory? No, probably never will. Will they meet some of these kids that we help out where they are not turned down from, for any medical reason at a hospital, no probably never will. But why do they do it? Because they know, while they are alive and a student, and in their life, they can give back and change their country and the world for a better place to live, because they are here, somehow participating. >> [COUGH] Well, and the participation, it starts with you. We talked to people about how to love yourself. You may come in one day, everything went wrong, you're really bummed out. Which happens to everybody we're humans. Well, here's an affirmation you could read, or here's how to talk to another student or one of the instructors about it or here's how to do it with yourself. The biggest one is this and you don't have to raise your hands because what I'm gonna tell you is gonna affect more than 50% of the people in this room. But I'll tell you about it, I'll tell you how to over come it and go forth and be happy. Many times in life, from your younger days, your school days, maybe right now. There may have been someone in your life. >> [COUGH] >> It could be your mother, brother, father, relative, dear friend, significant other, husband, wife, something in your life. There was a communication break. Some of your life was pretty, pretty close to her, you wanted to be closer to them. Something happened, all of a sudden you're not close to one another anymore, something happened. Example is you know, divorces, when you first met your husband, your wife, your significant other, whatever, when you first met somebody in your life, boyfriends, girlfriends, they were the most important person oh, you couldn't separate us. But so many months or years later, they were not liking each other. Sometimes its in school, sometimes its his relatives, it just happens in life because we're humans. Now if I were not Kate and [UNKNOWN] closest [LAUGH] advocate is you here. If you confront the person, then youre gonna be human. Boy you know, you were really wrong in high school, you passed all those terrible rumors about me, and that, you never apologized, you were wrong. First thing she's gonna do is say absolutely not, that's not how it went, look what you did. People are normally defensive the first thing that happens, you're gonna defend your position. Its normal, its human, but, were at it again, how do I break that bond with my mom, my dad, brother, sister, uncle, with anybody, [COUGH] I allow her, to be free enough to tell me anything she wants. And the way I do it is this. We were the best friends, call them on the phone, or see them face to face either way. Hi, we were, I have to talk to you, this has been on my mind so long. We were the best of friends, we grew up together, grammar school, junior high, high school and all of a sudden something happened, whatever I did, whatever I said or did to offend you, please forgive me that's not me. I'm a different person, that's not me. Will you please forgive me for whatever I may have said or done that offended you, please that's not me. Well-. In half the cases, the other person says oh my God I'm so glad you called me, oh my God I've been wanna call you for years. It wasn't you, it was me. Let's talk, and you cry, you're happy, you have coffee or tea or shot a patron together or something, [LAUGH] or shampoo your hair with vomit. In other words, something, almost on, you allowed the bond to be broken. If you do this with people, 90% of all people are gonna respond and say, oh my gosh, I'm so glad she called me, yeah, this went wrong, let's talk about it, what happened? And, in many cases it was, somebody said something to you about someone else, that wasn't true. There was this great book written called The Four Agreements. Four ways to live your life, and I believe it was the second agreement and the author Don Miguel Ruiz, R-U-I-Z, the second agreement was never gossip or listen to gossip. Because if you listen to gossip and tell somebody else, all of a sudden they'll tell somebody else, it spreads. Now you find out, what you were told was not true. Now do you go back to everyone said, no, that, that wasn't true. Tell everybody you told that was a lie. Somebody told me a rumor. You can't. It's out of control. Don't pass gossip or ever listen to gossip. It may not be true. And you're not gonna live a happy life if you do that. And you know people in your lives that, you know, just wanna tell you all the scoop, all the bad stuff that's going on. Well that's your choice. You can hang out with people that want to yell the bad stuff, or hang out with people who want tell the good stuff on how to make things better in life as opposed to all that's going on wrong. So, look at how cool our lives are, look at all that's going on wrong there. Also what does giving, give you? If you give to somebody, they never says thank you, never knows you did it, what is your reward for it? I'd like to give you a little example of philanthropy. When I was six years old, I grew up my mother, my brother and I. We group at Echo Park, LA. Downtown, LA. We had very, very little. We had food on the table, two changes of clothes. Extra t-shirt, pair of shoes every week. Same pair though. [LAUGH] Until they had holes in 'em. We never had a lot, but we never knew it. When I was six years old my mom took my brother and I to downtown Los Angeles. They had trolley cars in those days, five cents. This is early 1950s. Trade the trolley car for a nickel and then. At Christmas time there'd be all these fine department stores Bullocks, Macy's, these beautiful department stores and these giant windows they'll have all these cool Christmas decorations, puppets that move, trains going around. And my mom one day, took ten cents and gave it to my brother and I, and said boys, each one of you hold this and together walk up with this dime and put in the bucket of that guy ringing the bell. We did. Went back and said, mom, why did we give that guy? Ringing down the bucket, ten cents, that's three candy bars, two coca-colas, remember this is the early 50s. Okay? That was a lot of money. Right? And my mom said to us, boys it's to let you know something in life. No matter how bad off you think you are. There's always someone worse off than you. That's the Salvation Army. And those people really hurt. Most don't have places to live, and people have to feed them. So it's a good thing son. So that kind of stuck in the mind. But I'll give you the example of the most ultimate high. Now, I'm older than you guys. Most of you are probably born in the 60s and 70s. Well, I was there in the 60s. [LAUGH] A little different environment. I'm gonna give an example of the ultimate high. [LAUGH] Paul Mitchel. [LAUGH] >> I didn't say any, I'm just gonna give you an example of the ultimate high. Okay? That's all. Didn't say I did anything. [LAUGH] Okay. I didn't say I didn't, I didn't say anything okay. But the ultimate high, it took, and a lot of people ask this too. When did you know Paul Mitchel hair care products, John Paul Mitchel systems was gonna be successful. Two years after I started the company, because two years after I started was the first time, we could pay our bills on time. Didn't pay them off, but paid them on time, it took that long. Every week was please the check's in the mail don't cut me off, I"ll hand deliver it the day after tomorrow. Oh no I sent it to the wrong address. In other words, it was miserable. I could remember not sleeping at night cuz I couldn't pay my bills. Did it help? No, but I didn't sleep anyways. It was just oh god. So it was a big deal. Every week for almost two years, we should of gone out of business. If you fill, follow a textbook how to do things. You would say, guys, go bankrupt, go bankrupt, go bankrupt. You just, there's no hope for you. You can't even pay your bills. And the black and white, of course, was two cents, opposed to the seven cents for the color. When we hired our first person, one person a year and a half later. That's when we had our first employee in the field. Had to do ten jobs. So we built a company with fewer moving parts. So, two years later, our bills are finally paid on time. We have $2,000 in the bank each. We immediately took a dividend and felt on top of the world. Oh my God, it's 1982 now, our bills are paid on time, we have $2,000 each. So I'm gonna do something I've never done in my life when I went to a restaurant. I went to El Torito Marina del Rey. It's a chain of restaurants all over the place, and I went down there and if you look at a menu, well, here, when you open a menu up. Right? Okay, here it shows you what you get and over here on the right side, is the price. Well if I ever went to a restaurant, I would go to the price first, see what you got, came over here and see what you get for it. Worth how much, is it 395 okay. So this time, okay, I'm going to El Torito. I'm, and I took a friend with me, and I'm gonna order anything I want, of the left side of the menu. Carne de asada, you know, big margarita, didn't have Patron yet, but was okay. [LAUGH] >> Big margarita, big order of guacamole, you know. Woo, cool. So I'm with my friend there, corner of the room there, top of the world. In front of me, is a table of 12 children, one Hispanic lady at one end, one Afro American lady at the other end, with her back to me, and all these children, Caucasian, Asian, black, white, everything, every color, there was like a rainbow sitting there, and they were from the inner city. I knew, cuz I'm from the inner city, I knew how they dressed you know, I you could just tell. Well, the mom held it up like the said menu and did what I was doing before. 395, what do you get? It was obvious that they had a very limited budget, she was holding vulnerable children there, and it was someone's special day. I don't know what made me do this. It just did. I got up, I walked into the kitchen, efforted calculations, okay 12, 13, 14 they pick out what's the most it's gonna cost them. I came to 200 somewhat dollars okay. Now then I got 2000 in the bank, a credit card, I walked into the kitchen after the waiter, and I said those kids sitting in front of me, those two moms, tell them to order anything they want. Tell them the bill is gonna be picked up and the tip's gonna be picked up. Anything they want, but don't tell them who's doing it. Now, I don't why I said that. I don't know why I followed indication. It was just the thing to do. Sometimes in life, the thing to do comes at you. If it does, do it, just do it. Don't question, just do it. As long as it doesn't hurt anybody, came up. I went and sat down. And, he told the lady. And, this lady must have been an evangelist, big woman with an angelic voice. She stood up, she was about that far from me, stood up, turned around, looked at me. Can't be this guy. Slowly looked around, slowly looked around the entire restaurant. Maybe it took her half a minute. It was that slow. And that's a long time to look around a restaurant. And ended up with me, not this guy obviously. And I was, you know, not even looking at her. Anyway, she stands up with her back to me maybe two feet from me. Her arms raised in the most angelic voice. She must have led a choir or something. And she said, loudly in this restaurant, whoever you are. God bless you, you have no idea what doing for me and these children! The place went silent looked at her, God thank you and sat down. As she did that, goose bumps ran up, in fact when ever I tell the story there's still goose bumps, they run up and down my arms, these ran over my body, I was high as a kite oh, my God did I feel like I was. Wow, this must be what heaven is like. I did something for somebody else, never asked anything in return, she still did never knew. When I walked out, I felt so unbelievable that day and the next day. And what made me feel good was, I did what humans should do, something for somebody else asking nothing in return. Your, your reward far exceeds any thank you. You know you did it, you know you wanted nothing in return, but doing something while you're on the planet earth, to make it a better place to live, because you are here. Now, I know we're limited for time, and I wanna have sometime for questions here. So, let me open this up now, and as you know, I'm in a variety of businesses. But from, we did start, by the way, 21 years ago. We started Patron, I'll tell you that just real fast. We wanted to give the world the finest mellowest tequila on the planet. So my partner Mr.Crowly and I, put this together, went down there and Patron is made out of the finest highlander blue agave that ever existed. When we started the company, it was so expensive to make it, we knew America wanted to treat itself, with something that was good and mellow. Not holding your breath when you drink tequila. We wanted something that was higher end, that once you drank it, you'd wanna reorder it. Big problem. The most expensive tequila's then were 5, 6, 7, $10, maybe $14 a bottle. It was so expensive to make patron, we had to sell it for 35 to 37.95 a bottle in 1998. Who's gonna pay that? It was the best. People started drinking and, wow, I don't have to hold my breath anymore. I can drink this straight. Wow. I'm not hung over the next day. If you drink the whole bottle, you're gonna get hung over, but, regardless. It's not the same as regular tequila. I wanna treat myself. And it slowly grew. We were the first to introduce what you call a high end ultra premium tequila ever throughout the United States of America. Today Patron is the number one ultra premium tequila in the world. We're in 120 countries. 109 rap songs and hip-hop songs have been written about Patron. Three country western songs and two pop songs, okay. We don't pay for any of this, it's in lots of movies. But people appreciate it. One, it was the best quality, it was the finest, and still is today. It is the finest tequila you could ever buy today, and the best, we think for your body, and we even use our distillage and make it into fertilizer, instead of polluting the land. That's how we feel about it. And of course it's also the second largest selling tequila in the world even know it's the highest-end ultra premium. If you take all the inexpensive ones, combine them all together, we're number two in the world by bottle. Number one by far is, the top ultra premium. Highest quality there was, finest packaging, but more important, we also give back. Not only do we make Patron, in the old fashioned way, in little stills. But, we have an orphanage down there, I have an old folks home down there, we're rebuilding houses for the St. Bernard Project in Louisiana. Our staff goes down there to help rebuild houses. We believe in giving back and giving a lot of love. Do you have any questions or comments, because I could be here for hours with you going through all the companies, what we did, how we started it. But, let's take a few minutes with you, any comments, criticisms, any questions you have on anything I might be able to answer for you? Anybody? Hands? There you go. There's, start with you, sir. >> Everybody just wait for a mic. >> You even have a mic. >> Mic comes down to them for the recording. >> So I hear a lot of people that have your entrepreneur's story, where they sold encyclopedias, or they, I mean, what do we do today that's the equivalent of selling encyclopedias door-to-door. What's something street-smart that we can all do? Anything you want to sell, any idea, any product, whatever it is, just go out and do it. That's the equivalent of selling something new door-to-door. [LAUGH] l did encyclopedia. You know? And they don't have door-to-door sales of encyclopedia's anymore. If they did, every one of my kids would be forced to do that for at least six months, no matter how they did. If I have to subsidize them just for the experience, I would say it's, it's anything, anything. If you want the experience of going door-to-door, why don't you go and make up a little booklet or make up an information packet on what you're starting right now. Take two or three or four pages, do a whole report on what you're doing, and go door-to-door and say, hi I'm a student you know, here at Stanford University this is five pages. I want people to know about the subject, it's only one dollar you know, here's what it is the dollar goes to me it helps with the education. I think it's interesting and here's why. That's one example. Selling yourself and your idea. Just one example. You wanna just test it out. But I think, if you say you're a student from Stanford, they'll probably be a little more accommodating. You know, opposed to, hey, I have this bushel of potatoes. And I bought it for $5, but I'm gonna let you have it for four. It's the best potato in the world, you know? In other words, your own idea, your own thoughts, is a great way to get started on anything. Or grab some charity, any charity that you firmly believe in, and just go knocking on doors. Hi I wanna tell you a little bit about Food for Africa, I wanna tell you a little bit about Kids Play New Park here in Palo Alto, anything. Just need experience. Yes sir? >> Thanks for talking to us today when you were losing money in your first business, what I guess. What was the threshold at which you said, after this point I am going to declare bankruptcy when everyone said you should be declaring bankruptcy right away and what kep you going? >> Okay, we started losing money from day one. But, I knew, that if I could tell enough hair dressers about this product and get them to use it. It was better than anything they'd ever used in their life, and they'd wanna continue to use it. It was just how many people could I talk to? And keep on chasing the bill collector, you know, and at the same time, you know, get the job done. I believed enough in it. Four months later, we invented something called Skullfine lotion. And it became a trend two years later. So you put this lotion on, it didn't flake. You had the wet look, or you brushed it out and you had the dry, fluffy look. Or, if you had straight hair, you'd put it on, put waves in your hair, let it dry, they would stay there. Brush your hair, the waves are still there. Rinse it out, they'd disappear instantly, no build up. But, nobody knew it, it was all word of mouth, word of mouth. So, we knew, that we wanted to be in the, reorder business. So I knew, I would tell enough people. We'd be able to keep up with our supply, goes we had no money. Every dime we had that came in, was inventoried. And since we had no inventory, it was hand to mouth, hand to mouth, hand to mouth. But we believe what we were in and we knew it. Cuz the first few people re-order. We just didn't have a lot of customers, we had to get out there and do it. Hope that answers your question okay for you. Questions? Comments? Criticisms? Yes sir? >> So [INAUDIBLE] [INAUDIBLE]. >> Yes. >> And you didn't, you don't remember [COUGH] that experience, so why did he take chances on you? >> Well, I was in the beauty industry working for major companies for nine years, and I started out as a sales person with one company and became their national manager in a year and a half. So, then I got into marketing, so it was obvious in sales and marketing in the professional beauty industry I knew exactly what I was doing. There was no doubt in his mind. >> So [INAUDIBLE] >> Very good. How to size up your partner, very important. Whether it's your family, your friends, or somebody you never met the first thing is feel the energy. How many people year round you just feel uncomfortable around them? You get somebody like that, that's not your partner. Yeah, when you feel that, the, the universe, the, the the frequency of this planet is rising right now and more and more people can feel other people out a lot quicker than ever before. First thing is, if you feel odd around somebody, that's not your partner. Next thing is, write down a piece of paper. Here's what you bring to the partnership. What can the other person bring to the partnership, other than just money, if it is money. And where's what influence what can they do to help build your business and, how are they planning to do it. Interview them, like you interview them for a position, a partner. What can you bring to it and why do you like this? Why do you think we're gonna make it together? What are you willing to do? And do we like each other? Also, go to breakfast or lunch with them. Go to breakfast or lunch with, hang out a little bit. Just don't rely on interviews. Sometimes you have breakfast and you've lunch or dinner. You get to know the person. You get to see them in a social environment, not just your business environment. So get to know them first and get that feeling for that person, what they gonna bringing to the table. Is it synergistic? Synergism meaning one plus one doesn't equal two. It equals three, four, five, or 20. Is that gonna happen? When the two of you together is gonna be a synergistic thing where you each bring something to one another. And you know you like each other. If you don't like each other, that's not your partner. If they're a mean person, that's not your partner. If when you're talking to them, they criticize other people, that's not your partner. They don't believe in a nice positive way of life, that's not your partner. If they're not honest, that's not your partner. They don't wanna make the world a better place to live, that's not your partner. [COUGH] If they're not exciting, that's not your partner. And you don't have to be an extrovert to be excited, you just have to believe what you're doing is really cool and you have like a quiet excitement. [LAUGH] [INAUDIBLE] excited. Any other questions? Yes. >> [INAUDIBLE]. >> What's your name? >> How many entrepreneurial success that were preceded by emotional and financial hardship. >> Yes. >> I'm assuming that you've had several others that have proved unsuccessful and I'd like to know what your internal dialogue was like throughout those, you know ventures. And what you told yourself to kind of keep going. >> Okay, well in using that, let me give you a better example to answer your question of things that weren't successful. I was in my car, there was no money. And what little money we had, $700, between Paul and I that paid for the silkscreener, period. I had no money. I went to my mom, did not tell her how things were, except I was doing well. I had a nice house on Mulholland Drive. I said Mom, could I borrow a few 100 bucks right now, I'm just short with cash. Oh sure son, everything okay. Yeah, it's fine. And the big failure was how am I gonna eat and sleep for the next couple of weeks while I'm selling this and the stuffs coming into sell. How am I gonna exist? That was the biggest challenge of them all and, I knew no matter what I'll some how figure a way to get by this one no matter what. I slept in my car for two weeks. I showered at Griffith Park, they had public showers down there, for 99 cents, I went to the Freeway Cafe, you find these things out when you're really hurting, you know, how do you overcome this problem. Went to the Freeway Cafe for 99 cents, after 9 o'clock they wanted people to come by, truckers. So, they give you egg egg, one piece of toast or sausage or bacon, and one glass of juice or coffee and you will tell so, I had one egg, sausage was a bigger one. One sausage, one piece of toast, one orange juice that was my breakfast. When you come the afternoon, you will get hungry. Well, at a lot of these big places, these big chains, to get people come in there and order at 4:30 to 6 o'clock they've heavy hour. 99 cents, any well drink you want. So I'd go in there for 99 cent margarita and they also had food to keep you there. And I'll tell you what about 20 chicken wings later and whole bunch of salsa you had your vegetables your full meal and you're feeling good. [LAUGH] And then, so that's how I survived and put some gas in the car and got this business going until the first sale was able to be made. Along the way other little businesses that I started one was a consulting business a year before I started John Paul Mitchell Systems. I was a consultant I knew the beauty industry inside and out if I went to you and you could pay me I told you everything you had to know in three months then you didn't need me anymore. I was out of a job. If you really needed me badly, I was running your company for you and it was two to three weeks behind trying to pay me. That was going nowhere, so I moved onto something else. Also, since Paul Mitchell and of course Patron Tequila, John Paul Pin, other ventures, I've started other little things that didn't quite work as well. But, I did have Paul Mitchell there you know, as my back [UNKNOWN] so wasn't really a thing that was overly challenging. The biggest one was Paul Mitchell and eating and finding a place to sleep, which was my car in existing for a couple of weeks and still put your jacket on and your stuff in the car to deliver where nobody knows you're really down and out. That was really the tough one. But I believe what we did was right. There was a young lady here first then we'll get you sir. >> [INAUDIBLE]. >> Yes, ma'am. >> [INAUDIBLE]. >> Yes. >> [INAUDIBLE]. >> Correct. >> [INAUDIBLE] rinse the-. >> The conditioner in your hair is a leave in conditioner. Yes. >> Can you tell us a little bit about how that played in to the timing of that, and the innovation of these firms and. >> Absolutely, that's a great question. >> All part of a movement- >> You got it. Yeah. >> Basically, and you were in the timing. >> The timing was incredible, because here you had people, and salons that had a, perms were a deal in those days. Had to perm people's hair for example. And yet people backed up. So we looked at, what does salon need? Well maybe we'll cut some time there. One shampoo instead of too. And you pick up another ten minutes if you're not rinsing and putting the conditioner on the back basin. So that's time and money. That's unique. Also as you said about perms during the time, and blow drying. People were perming and blow drying, perming and blow drying and just ruining their hair. And when they had perms, this leave in conditioner, you could leave in your hair as a perm, when it dried instead of freaking out of you, it was under controlling all the curls in. So the timing had a lot to do with it too it was a good time. It was a good time to come in. We saw the need in the marketplace. Find the need in the marketplace that someone else didn't find and push that. Or find the need in the marketplace that no one else is promoting and promote it. Yes, sir, you've got a question over here. >> This will be the final one. >> Okay. >> I wanted to, I wanted to commend your, your attrition rate with your employees, but can you speak a little bit about employee selection? >> Sure. First thing I do when we interview people and up until a year ago I interviewed everybody, but now we're getting pretty big in a few countries so I have to rely on my president to do some interviewing with me. But it's just what I told this other young man about finding a partner. If I'm interviewing you, the first thing I'm gonna do is, I'll have your resume in front of me but I'm not going for your resume, I'm going for how I feel about your and the energy that's coming from you to me. I'm going for the soul. Not for this thing the soul's occupying and not the resume you filled out. I'll look at the resume and refer to various things on the resume. I go straight towards the person. One girl, for example, that heads up part of my research and my trademarking department, I went to the promona mall and she was there at Christmas time for charity trying to raise money. She was the happiest, most incredible lady I, young lady. 20 years old I'd ever met. Oh, how ya doing? Oh, we have this charity here. And you don't have to give us a lot of money. But on your way out if you wanna give us a quarter or anything. It helps the kids. I could not belive this personality. As I left I said, if your ever interested, boy do I have a job for you at John Paul Mitchel Systems. Yeah, I don't have a job right now, other than helping charities. She was my receptionist. Her personality was so overwhelming. That year, we gave everybody bonuses in the year. That year, she got one of the biggest bonuses in the company. And she was a receptionist because of what she is. I go for the person. I go right for the person, the soul. How do I feel about that person? Then I go into some of the necessities that we might need for the job. You know, some of the things that, that, you know, can you use a computer? You know, can you talk on the phone? You know what I mean? Can you write? [LAUGH] You know what I mean? We go towards, you know, the things with the technical things for the first thing is, I go for that soul, I go for the entity. Again the frequency of the planet is raising. People are becoming more aware and you say, well how can you prove this? I will prove it to you in one statement. Per capital, cuz lot more people on this planet never was before, per capital there are more individuals and groups into philanthropic endeavors. Or what can I do to help the planet and others out more than ever in the history of this planet, per capital, not just because of a large population. Frequency has something to do with it. Think of you when you watch TV or listening to the news, or you read things and books years ago, they have changed, it aren't so true. I you, wait a minute, that's not right, I'm gonna challenge this, why is this the way it is? I don't think that's right. Maybe, you know, we even believe in the [UNKNOWN], maybe there's something else that could be true, like the world is flat. No, I think it's round. I'm gonna sail around it. The frequency is rising and more and more people are going for it. They say 2012 and I'll finish in five, ten seconds. 2012 Mayan calendar said worlds gonna collapse. Look whats going on in the middle east. Explosions. Armageddon, bla, bla, bla. I think whats going to happen in 2012 is the frequency is rising and people are becoming so aware that all peoples are saying this is wrong. This is right. We want more of what's right. And we don't mind helping one another out. One of the biggest things that ever happened on television a week and a half ago, was in Egypt, after they took over their own government, there was a day. I've never seen anything like this. No one could ever imagine it. There was a day there where Christians and Muslims were together. They made a flag of the Christian cross and the Muslim symbol and they said we're reuniting together as Christians and Muslims, we both want our freedom and we're going forth together as one. Whatever you believe in you believe in. My way may be different from yours but we're to gonna kill you or we're not gonna degrade you because of it, and it was all over the streets all over the news. And I thought wow they should have ran that for many may days not just one day. The frequency of our planet is changing. It's going in a great direction so you have some good things [SOUND] to look forward to. Thank you for taking your time to be here with me and give me a chance to chat with you. [SOUND]