Building up and giving back: The story of John Paul DeJoria

Every fledgling entrepreneur who worries about surviving in today's tough marketplace should have the chance to speak with John Paul DeJoria. Now on Forbes' list of multi-billionaires, he began his career selling door-to-door.

“I started with $700 in 1980. Inflation was 12.5%. Interest rates were 18-20%. Unemployment was 10.5%, and you had to stand in line around the block to get gasoline for your car,” said DeJoria, a serial entrepreneur who is chairman and chief executive officer of John Paul Mitchell Systems, Inc., the enormously successful beauty products company and famous hair care system.

“It was worse than it has been for the last 3 years,” DeJoria said. “Much worse.”

DeJoria, who has lectured on management at Yale, Stanford, UCLA and the FBI, has a list of tips for small business startups that begins with quality. And ends with the Golden Rule.

Tip #1: “Whatever service you provide or whatever product you want to sell, you must make sure it's of the finest quality, because you don't want to be in the order business,” DeJoria said. “You want to be in the reorder business.”

He adds, “We believed in what we did, we believed that if we told enough people about it, we would eventually succeed.”

DeJoria and his partner, the late stylist Paul Mitchell, founded the Beverly Hills, CA based firm to create products exclusively for hairstylists. DeJoria later developed the smash hit that has elevated tequila to the ultra-premium ranks of liquor. Along the way, he has embraced causes of public concern worldwide, from nutrition in Appalachia, to child victims of AIDS in Africa, to economic sustainability and a line of products based on natural ingredients, to removing land mines.

Forbes puts DeJoria's wealth at $4.2 billion. But in the beginning, he slept in his car.

“There is no right economy to start a business. It's anytime,” DeJoria said. “John Paul Mitchell Systems started in the worst economy since the great Depression. It was a struggle, but we believed what we had was the very best.”

The partners had no money, and therefore no advertising budget—just a conviction that their products were great. By persuading hairdressers to try them out, DeJoria was convinced they would, in turn, recommend them to customers. So the plan was one by which “the quality of the product stood for itself. They were unique products.”

In the beginning, that belief was put to the test, DeJoria recalled. In the early years, the shadow of failure never fell far away.

“It took us two years to be able to pay our bills on time. Not pay them off, but pay on time,” DeJoria said. “It was very difficult. By all normal business standards, we should have declared bankruptcy every week. But we didn't, we hung in there.”

Tip #2: “Be prepared for rejection.”

“If you knock on one hundred doors, and show your product to one hundred people and they all say ‘no,' or won't even talk to you, you have to be just as enthusiastic at door 101 as you were at the first,” DeJoria said, citing a marketing history that goes back to age nine. “If you're prepared in advance, it makes it a heck of a lot easier. Be prepared for a lot of rejections.”

He grew up in Los Angeles, the son of immigrants. At 9, he sold Christmas cards. By 11 he had graduated to peddling and delivering a daily newspaper—with a $1 bonus for each new customer he signed up. “It was a big help talking to people, calling on people. That was priceless. We had a little presentation we put together to tell people why they should buy.”

Tip #3: Work hard. Your presentation gets better and better as time goes on.

“Successful people do the things that unsuccessful people don't want to do,” DeJoria said. “By working a little bit later, and working a little more on the weekends and at night.”

Keeping one's nose to the grindstone also means staying open to new possibilities—such as Patrón.

“In 1989, I was just hanging out with a friend. We were talking about liquor, and the big complaint about Tequila was that when you drink it, you get sick and have a headache,” DeJoria said. “We thought we could produce something that people could drink and wouldn't have to hold their breath. We decided to try to produce one that's so mellow, you want to drink it straight, chilled, as opposed to mixing it.”

Their creation, Patrón, is now the second-largest-selling tequila in the world by volume and number one globally in the ultra-premium class.

That sort of success provided DeJoria with food for thought—and another tip from the entrepreneur.

Tip #4: “Success unshared is failure,” DeJoria said.

“To make a long story short, that's how I look at it. We do very well, so if we've been blessed, then I think it's everyone's obligation to pass some of it on. Once you have enough food for you and your family and your grandchildren, and a little barbecue for your great-grandchildren left over, then let's give some other people a helping hand.”

He spends time lecturing at M.B.A. classes at some of America's premier academic institutions on management motivation. And then, several times a year, he heads down to Los Angeles' skid row to talk to groups of homeless people.

DeJoria speaks of working with Nelson Mandela and others to help remove land mines from former war zones. His special passion, judging from his obvious enthusiasm in discussing it, is helping care for AIDS orphans in northeastern South African.

“Every day I feed 8,000 children. All of them, their parents died of AIDS. All over the country we have homes for children who are left to die. Someone brought them to us. We give them a vitamin-infused meal, a shelter, volunteers to watch over them, and a little bit of an education,” said DeJoria.

His most recent project is Grow Appalachia. The program, barely two years old, provides resources and training designed to encourage residents of the poverty-stricken area to grow their own healthy food.

“I provide the money for the equipment for farming or gardening, the seeds and fertilizer. We go into the mountains where people are unemployed and having a very difficult time, and we teach communities and individuals in the middle of nowhere how to raise their own vegetables,” DeJoria said. In the first year, 100 gardens were planted and the harvest fed 2,700 people.

“When people eat fresh vegetables, that means immediately their weight starts going down because they're not filling themselves full of junk food and white flours. At the same time, they take pride in their gardens and live much healthier lives.”

With passionate intensity, DeJoria describes the program to help Americans in need.

“This is smack in the middle of the United States. It's our own people that deserve a helping hand to eat right,” he said, happily espousing the Golden Rule—do unto others as you would have them do unto you. “We help the world, why not help our own people?”

DeJoria exudes energy. There is just one negative on in his list of tips for entrepreneurs.

Tip #5: “Avoid people who don't make you happy. Leave no room for negative people or negative influence in your life. That's true for personal life, and also for business,” said DeJoria.

“If you start a business and have negative people around you, they are going to tell you what you cannot do, and what you did wrong. You don't need that when you start a business,” he said. “Stay around people who are a positive influence and have good energy.”