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

John Paul DeJoria is proof that entrepreneurs can build extraordinary businesses without extraordinary resources. After experiencing poverty, homelessness, rejection, and the collapse of the funding he needed to launch John Paul Mitchell Systems, he kept going with just $700, selling door to door and creating products so good people wanted to reorder them. Those hard-earned lessons helped him build two billion-dollar brands and inspired his new book, Success Unshared Is Failure. In this episode, John Paul shares how entrepreneurs can turn limited resources, rejection, and early setbacks into companies built on exceptional products, customer loyalty, and lasting success. In this episode, Hala and John Paul will discuss: (00:00) Introduction (00:00) John Paul’s Rags-to-Riches Story (04:17) Homelessness and the Power of Words (13:02) Business Lessons From Door-to-Door Sales (20:57) Starting Paul Mitchell With $700 (29:45) Why Loyalty Beats Bigger Profits (35:26) Paul Mitchell’s Product Marketing Secret (39:22) The Origin Story of Patrón Tequila (45:24) Positioning Patrón as a Luxury Brand (54:58) Business Decisions John Paul Wouldn’t Make (58:07) The Power of Sharing Your Success John Paul DeJoria is an entrepreneur, philanthropist, and co-founder and chairman of John Paul Mitchell Systems, one of the world’s largest privately held professional haircare companies. He later co-founded Patrón Spirits Company, which Bacardi acquired in a deal valuing Patrón at $5.1 billion in 2018. As the author of Success Unshared Is Failure, John Paul explores his life, business philosophy, philanthropy, and the belief that true success means helping others rise too. Sponsored By: Indeed - Get a $75 sponsored job credit to boost your job's visibility at Indeed.com/profiting Shopify - Start your $1/month trial at Shopify.com/profiting. Northwest Registered Agent - Get a complete business identity with Northwest. Visit northwestregisteredagent.com/YAPFree and start using free resources to build something amazing. Mindstone - Master practical AI skills without the complexity with Mindstone’s AI Competency Programme. Head to experience.mindstone.com/yap and get 10% off. AT&T - Stay connected with reliable, secure internet built for entrepreneurs. Switch to AT&T Business at business.att.com. Quince - Make your summer wardrobe feel easier. Go to Quince.com/profiting for free shipping on your order and 365-day returns. Now available in Canada, too. Resources Mentioned: John Paul’s Book, Success Unshared Is Failure: bit.ly/JP-SuccessUnshared The Richest Man in Babylon by George S. Clason: bit.ly/GSC-RichestMan Active Deals - youngandprofiting.com/deals Key YAP Links Reviews - ratethispodcast.com/yap YouTube - youtube.com/c/YoungandProfiting Newsletter - youngandprofiting.co/newsletter LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new Entrepreneurship, Entrepreneurship Podcast, Business, Business Podcast, Self Improvement, Self-Improvement, Personal Development, Starting a Business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side Hustle, Startup, Mental Health, Career, Leadership, Mindset, Health, Growth Mindset, Passive Income, Online Business, Solopreneur, Networking

• 0:00Speaker 00

  Today's episode is sponsored in part by Northwest Registered Agent, Whatnot, Mod, and AG1. Northwest Registered Agent gives you the tools and guidance to build a complete business identity. Start using free resources at northwestregisteredagent.com/ yapfree. Whatnot helps sellers grow through live shopping, community, and real-time connections with buyers. Search Whatnot, W-H-A-T-N-O-T, in the App Store, download, and you can start selling right away. Mod connects qualifying patients with licensed medical providers for modafinil to support sustained energy, focus, and alertness throughout the day. Visit mod.com for a free consultation and get 10% off your first order plus free shipping with promo code PROFITING.

• 0:45Speaker 00

  See their website for important safety information. AG1 Next Gen supports your nutritional foundation with vitamins, minerals, pre- and probiotics, and superfoods. Go to drinkag1.com/profitting and get a free immune support bundle with your first subscription order. As always, you can find all of our incredible deals in the show notes or at youngandprofiting.com/deals.

• 1:08Speaker 01

  Don't go into the selling business, go into the reordering business. When 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.

• 1:22Speaker 00

  I'm sitting down in person with billionaire entrepreneur and philanthropist, John Paul GiGiore. You might know him as co-founder of Paul Mitchell Haircare Products and Patron Tequila. But what you may not know is that JP was homeless and living out of his car before building not one, but two billion-dollar brands.

• 1:39Speaker 01

  When I started Paul Mitchell, we started with $700. 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-

• 1:49Speaker 00

  You had lots of sales jobs before you actually started your own company. Talk to us about what you learned with door-to-door sales.

• 1:57Speaker 01

  You're gonna get rejections in life. As long as you know you can get rejections, don't let it affect you. Like, if the first 50 doors were closed on you, whether it's politely or not so politely, you gotta be just enthusiastic. The big difference is, successful people do all the things unsuccessful people don't want to do.

• 2:15Speaker 00

  Influencer marketing is so popular now. What is the danger behind a product where you've gotta put so much marketing dollars behind it in order to get sales?

• 2:24Speaker 01

  Well, there is danger because-

• 2:27Speaker 00

  JP, welcome to Young and Profiting Podcast.

• 2:30Speaker 01

  Well, Hala, thank you. It's a pleasure being with you. I've heard a lot about you and how you help people out in such a great way and disseminate just great positive words and make the planet a better place to live. Good for you. I'm happy to be here with you.

• 2:41Speaker 00

  You're so sweet. You're known to be such a kind, generous man. But something that people may not know is that you actually grew up very poor.

• 2:51Speaker 01

  That's correct.

• 2:51Speaker 00

  And you've got this incredible rags-to-riches story. Now you're a billionaire. You've sold two billion-dollar companies. But you actually grew up really poor in Echo Park. And your mother taught you a lot about money and what it really means to be wealthy.

• 3:06Speaker 01

  And I wouldn't say we grew up poor, because we had so many riches from my mother. And we didn't know, we didn't have- I would say we grew up without any money.

• 3:15Speaker 01

  In a very poor part of town there. But no, you are right. My mother was wonderful. We had a deadbeat dad, so at two years old, he kind of left the family, you know, and no money, no nothing. And my mom had it really, really difficult. In fact, even for about four years, with some medical problems, my brother and I were in foster care. But we were the lucky kids, because every weekend or every other weekend, we'd be able to come home with mom. And a lot of the kids we were with, no one ever visited them, you know, other than maybe at Christmas time. So, we grew up with riches, so my mom was really a kind person. We never, she never told us that, you know, we were doing without. And we didn't have a TV, so we didn't know. But remember, this is the 40s and early 50s, so-

• 3:55Speaker 00

  You didn't know what you were missing.

• 3:55Speaker 01

  Exactly. We know what we were missing, exactly. So, we didn't know. So, it was okay.

• 3:59Speaker 00

  Yeah, and you've got this great story about 27 cents and how your mom really taught you about abundance.

• 4:06Speaker 01

  Yeah, it was amazing. At that time, I was nine and a half, 10 years old, actually. And we were finally home together with my mom, my brother and I. Little area called Atwater in Los Angeles. We lived in a little dinky house there. But one day, my mom said, "Okay, boys, come here. Let's see how much money we have." So, we went into everything we had, piggy banks, whatever. Anyways, we ended up with 27 cents, period. We had a little garden around back. And my mom said, "You know, kids, we have 27 cents, but we have food in the refrigerator. Our bills are paid on time. We have a little garden around back, and we have love with one another. We're rich. Isn't this wonderful?" And that's where I learned the meaning of rich. Are you happy? Are you healthy? You're definitely rich.

• 4:46Speaker 00

  And you also learned a lot about generosity from your mother.

• 4:49Speaker 01

  Sure did. Yeah, there was a time, in fact, I was six years old. This would be 1950, that year, 4950. And she took my brother and I to downtown LA at Christmas time. We had trolley cars at that time. They took them away, I think, you know, in the late 50s, whatever. They took them all away, but they were there. So, we would take it downtown LA, and all these big, beautiful department stores, the Boogus, the Bullocks, May Company, just, just sex with the happy, big stores were down there. And they'd have all kinds of entertainment in the big windows. Puppet shows for Christmas, outside, maybe a little train going around to take kids on those little toy trains. And we thought we were the luckiest kids in the world. And then my mom gave my brother and I a dime and said, "Boys, hold half of it each.

• 5:32Speaker 01

  Walk over and put in that red bucket with the man ringing the bell." And we did. Then we went back and said to mom, you know, it's one of my favorite stories. "Mom, why do we give a dime?" Because in those days, that's two big soda pops or three big candy bars. She said, "Boys, that's the salvation army. There are people that have no food and no place to live. They help them out." And that's, we could donate something. We could only donate because we only have it, an extra dime, that's it. But we're donating something. And always remember, boys, that as long as you live, there's always somebody that needs it more than you do, no matter where you're at. And try to lend a helping hand. If we didn't have a dime, we would also be contributing our help to them.

• 6:13Speaker 00

  How do you think that gave you more power later on as an entrepreneur?

• 6:16Speaker 01

  Oh, never forgot it. Never forgot. In fact, even during the days when I had no money to contribute financially to some really good causes out there, I would volunteer. Like, in my late teens, early 20s, after I got out of the Navy in my 20s, I would go at Thanksgiving and Christmas time and help serve food in Griffith Park for homeless people. It'd be the one to have a free meal. They were, they were there. And I was a server there. That's, that's how I could contribute. It was a big deal.

• 6:42Speaker 00

  In your early 20s, you had another really big hardship. Your first wife left you with a two-and-a-half-year-old.

• 6:49Speaker 01

  Yep.

• 6:49Speaker 00

  And you were evicted from your house, you're broke, I think, living in your car.

• 6:54Speaker 01

  Yeah.

• 6:55Speaker 00

  Talk to us about what you learned about community and resourcefulness at this time.

• 7:01Speaker 01

  It is amazing that when you have experiences, and we're all here on this planet Earth for experiences, we enter this body, we learn. We either learn and hold the bad things with us by remembering them all, or learn and make sure it doesn't happen again, but learn a lesson so we don't carry it with us anymore. And that's very, very important for someone to do. So, here we were, the money was supposed to come through, for example, in one company. In the other case, whatever little money we had, for example, the first time I was homeless, was, we had a little bit of money in the bank, not a lot. I was, at that time, 22, 23 years old. At that time, I was two and a half years old. And we had a little, little money in the bank. We had a nice little apartment we lived in at the time with my wife and, but a little one.

• 7:45Speaker 01

  So, I came home, and I drove up in the car. And she came down the steps and said, "Oh, I've gotta run to the store." Okay, so she took the one car we had to the store. When I got upstairs, there's my little two-and-a-half-year-old kid sitting in the middle of the living room on a pile of clothes with a note. And it says, "I cannot handle being a mom anymore. It's gonna be better off with you. I wish you good luck, and I know you're not in the best standings." That's when I found out the next day, because she never told me. She did not pay the rent for three months. She kept all the money. The little money we had in the bank, it was just a couple hundred bucks. She took that. And the utilities were being shut off the next day. She just kept it going and going and going until she could do no further, and then split.

• 8:29Speaker 01

  So, there we were, and it was the time, when you're down and out, and people say, "Well, when you're down and out, what happens?" Well, when you're down and out, you think about, at least most people do, "Oh, my God, it's terrible. So-and-so's fault." I mean, all this other stuff on your shoulders.

• 8:43Speaker 00

  Yeah.

• 8:44Speaker 01

  My only thought, it was a good lesson to learn, but it was the only thought I had was, "Uh-oh, I gotta get a hold of a car. I've gotta eat. I have nothing. And I'm too proud to tell my mother, who live in the same town, 'Mom, I'm down and out. Look what happened.' I didn't want her to know." So, I became resourceful. One, I found someone that was a wonderful lady that had a car with a busted water pump. You had to put water in the car every four hours, but it was a car. It ran, okay? And then we wanted money. And again, I was too proud to even tell my mom about it. So, in those days, if you had a soda pop bottle, little one, the normal-sized one, it's two cents you would get. A big one, five cents, okay? But every grocery store and every liquor store in the 1950s and going into the 1960s

• 9:30Speaker 01

  had to give you the money for those. So, we would go around to vacant lots, my little boy and I, and collect them all. Or at night, go to gas stations when they close and just take them right off the coke machine, cash them in, and that's how we kind of survived. So, a good lesson was that when you are down and out, your next thought should be, "Okay, I'm down here. I'm not going any further down." I mean, you can't get any further down than that, right? "Okay, what do I have to do to get to the next step?" That should be your only thought, because you cannot change yesterday's newspapers. And Hala, how often do people go through life thinking about, "Only if I did that differently."

• 10:03Speaker 00

  Yeah, they're always like looking at the past.

• 10:04Speaker 01

  "It wouldn't be the same way. Okay, I wish I would've done that differently, or look how mean somebody was to me." You know, all this "what if." They care on their shoulders. They think about it. "I still hate Mary because she broke up with me. I don't like Phil because he punched me in the tummy in junior high school." You can't change yesterday's newspapers. You get it off your shoulders. What you must look at is the future. Now, you're a whole changed human being, because now you're looking at where I'm at now and where I get to go. Just too many people, too many people, Hala, don't realize the power of words and the power of thought. May I give you an example of that?

• 10:39Speaker 00

  Yeah, of course, of course.

• 10:40Speaker 01

  Too often in life, and we hear this all the time. Let's say a lady or a gentleman says in December, "My New Year's resolution is gonna be, I'm gonna try and lose 10 pounds, okay?"

• 10:51Speaker 00

  So many people, yeah.

• 10:52Speaker 01

  And they never do. Okay, okay. Or, "My new resolution's gonna be, I'm gonna try and learn a language, okay?" And it just never happens, okay? Well, why does that happen? We are in a universe where the universe listens to you and wants to please you. But the universe is in black and white, not without any emotion. So if people are saying, I want to try and lose 10 pounds this next year. The universe is basically saying to them, fine, that's what you wish. You will try and you'll keep on trying and trying and trying. Okay. Big difference until you unless you were to say, I am going to lose 10 pounds this next year. And I could visually see one year from now, the scales with me stepping on them. And I'm 10 pounds less than I weigh right now.

• 11:37Speaker 01

  Now that's conviction. Now your mind is set that way. That's all you're to think about. And that's all you're going to do. So if you think about it and you see the end result. It's amazing how this will happen. I'm going to give you an example of powerful this is.

• 11:50Speaker 00

  Sure.

• 11:50Speaker 01

  I told a friend of mine last November, which is a little over six months ago. Last November that, hey, you have a lot of bad luck because you've been telling me for three years. You have the worst luck. He goes, yep, JP and I do. I think about all the time. How could this happen to me? And I tell you, I have the worst luck. We're doing good. We do a hell of a lot better, right? I just had bad luck. It just happens to me in life. And I said, I found out why you have all the bad luck. He says, really? I said, I know who's responsible. JP, who? I said, you, because you're putting out to the universe, to me and to yourself. You think about, I just have the best, worst luck. The universe is giving you that. You caused it.

• 12:32Speaker 00

  Yeah.

• 12:33Speaker 01

  He says, really? I said, yes, I want you to try something. Just try this for a month. Whenever that even comes into your mind, just say, I'm having the best luck now. Now I'm having the best luck. Don't you dare say you've had bad luck. Okay. I'm now having the best, best luck there is. I am going to have one of the luckiest years ever. That's all I want you to say. This is no kidding. Okay. So that's November, December, January, February, March, April, May, right? Joining to June, whatever. Anyways, everything changed. Three of the main product lines that he worked on, all of a sudden, on one of them, you can't even fill the orders. That's how many orders are coming in. The other two are doing great now. All because of his change of attitude. He's got JP, that works. I said, it sure does.

• 13:15Speaker 01

  Those that think that, oh my God, I'm too short, too fat, too ugly. I don't have any money. I don't have an education. Oh my God, Jack broke up with me or Mary broke up with me or, you know, I sprained my ankle or I have half of a foot, whatever. Every reason in the world other than, no, I am going to do it. And here's how I'm going to do it. And I could see myself at the end of this, having it done. Huge change in life. If people change this, we could change the whole world. The power of words.

• 13:44Speaker 00

  Power of words and your thought is so important. I'm a believer of this. And I always try to stop myself if I'm ever having any sort of negative thinking. I love to think positively. And a really great example that I have in my own life of how your words can like just come into existence.

• 13:59Speaker 01

  Sure.

• 13:59Speaker 00

  When I started my podcast eight years ago and all my friends kind of were like against or like just thought it was weird that I was starting a podcast. And they'd always be like, well, what do you want in five years? Like, what do you expect to happen in five years? And I was like, I want to have the biggest podcast network in the world. And I had no idea what that meant. I, I didn't know the mechanics behind it. And I remember five years later, I literally had a top self-improvement network. We're now like number 17 in the world of podcasters.

• 14:30Speaker 01

  Wow, congratulations.

• 14:31Speaker 00

  Shows that I grow and monetize. And it all happened so organically where it was just like one step after the other. And before I knew it, I was knew how to do a network under like, you know, was able to just have it happen. And it happened so like seamlessly. And I really think it's because I want, I believed it. I said it. I'd always say it. And one day it just came true.

• 14:53Speaker 01

  Very. So you know, you see it working.

• 14:56Speaker 00

  Yeah.

• 14:56Speaker 01

  It's like if one got up every morning said, I add the words I am are very powerful. I am healthy.

• 15:02Speaker 00

  Yeah.

• 15:02Speaker 01

  You are going to be healthier. I am healthy. Today, my day's going to be happy. Today I'm going to start being the observer without judgment.

• 15:10Speaker 00

  But you still got to work hard.

• 15:12Speaker 01

  Oh, you have to work.

• 15:12Speaker 00

  You gotta work hard.

• 15:13Speaker 01

  Oh, I catch myself. I'll still doing that, but then I'll catch myself and stop immediately and go back to, you know, making it a normal thing not to do that.

• 15:24Speaker 00

  Yap, fam. You know, October hits different. The season shifts and suddenly when your alarm goes off in the morning, your body's like, absolutely not. But when you have the business and a million decisions waiting for you, you cannot start the day already feeling behind. And that's why AG1 has earned a real spot in my morning routine. AG1 Next Gen is a daily foundational nutrition drink with 75 plus ingredients, including vitamins, minerals, prebiotics, probiotics, and superfoods. AG1 Next Gen is backed by four separate gold standard clinical trials and key nutrient levels improved within three months of consistent use. Plus it's formulated to support immune defense, which is really important this time of year.

• 16:05Speaker 00

  Yap, fam. If you want to start your mornings off right, go to drinkag1.com/profitting. And for a limited time, get a free immune support bundle, including a bottle of omega three fish oil and a bottle of vitamin D3 K2 with your first subscription order of AG1 Next Gen or AG1 Pro. That's drinkag1.com/profitting. Drinkag1.com/profitting.

• 16:33Speaker 00

  What's up Yap gang? I recently had Gary Vee on the podcast and he told me something that really stuck with me. If you've got sales DNA, you've got to be paying attention to live selling because it's one of the biggest opportunities right now online. And that really got me curious. So I checked out an app that he told me about called Whatnot. I jumped into a live show and I instantly got it. The seller was showing products in real time, answering questions in the chat, and building a real relationship with the buyers. It didn't feel like boring shopping. It felt like a community. Whatnot is the largest live shopping marketplace in the country. And for entrepreneurs, the results are really hard to ignore. Sellers on Whatnot can sell up to 10 times more than traditional marketplaces. And the number of sellers making over a million dollars a year on the platform has doubled.

• 17:17Speaker 00

  So if you've got products to sell and you're looking for a new way to reach customers, search Whatnot, W H A T N O T in the app store. Download it and you can start selling right away. That's Whatnot in the app store.

• 17:32Speaker 00

  Hello, young and profiteers. If you're running a business, getting website traffic is only half the battle. The real key to profiting is turning those visitors into paying customers. And I know checkout friction can quietly kill your sales. That's why I always say, serious entrepreneurs build on Shopify. Shopify is a commerce platform that helps you launch and run an online store without needing to be super technical. You can build your storefront, manage your business, and make it easy for people to buy. And here's the major advantage. Shopify checkout with Shop Pay converts up to 36% higher than the competition. With Black Friday coming up, now's the time to get your store ready and simplify your checkout experience. If you're ready to launch your business before Black Friday,

• 18:16Speaker 00

  go to Shopify.com/profitting to start your free trial. That's Shopify.com/profitting. Go to Shopify.com/profitting today to hear your first.

• 18:28Speaker 01

  True, but it was true. The big difference is successful people do all the things unsuccessful people don't want to do. Especially 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 little thing I learned there. It's amazing how you pick these little tidbits along the way. Best education in the world in selling. Another thing, if you don't mind, I'd like to share with all of your people.

• 19:10Speaker 01

  And I learned this over time too, starting with encyclopedia sales. Okay. Don't, don't go into selling business. Go in the reorder business. I thought that, for example, it's a one-time sale with Colliers 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 on my homework, right? That I believed everybody needed one. And I thought Colliers was a great one. It was written on a high school level, high school language. I thought everybody really needed one. It 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,

• 19:53Speaker 01

  they'll want to reorder. That's so when 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.

• 20:06Speaker 00

  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?

• 20:23Speaker 01

  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 four million dollars 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. It'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 and Shared is 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 encyclopedia's,

• 21:06Speaker 01

  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. And 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 with a scientific approach. But you're telling other executive managers like you, JP, you gotta 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%.

• 21:49Speaker 01

  Fermadell, I had bought, I mean, SynTech had bought a company called Fermadell. And I was hired to train their sales force and their educational force, which I did. And 50% the first year they went up in sales. They fired me because I wasn't one of them, the inner clique 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.

• 22:27Speaker 00

  Yeah, the experience was so important.

• 22:29Speaker 01

  Oh, yeah. So we're learning. Whenever something happens that isn't good, maybe it's destiny or the planet's 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. 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.

• 23:02Speaker 00

  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. So what was it that you wanted to change when you started Paul Mitchell?

• 23:20Speaker 01

  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 want to make sure the hairdresser knew what we had was so good. And if they used it, we know they would recommend it. But 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 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?

• 24:04Speaker 01

  Or I just neutralized the chemicals in my hands when I did that. It's a leave in conditioner. It's like a pomade. You can use it too. Or, you know, I mean, 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, you know, at their 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, get the rest. We started salon retailing. And all of a sudden, it helped salons take off and became more successful.

• 24:35Speaker 00

  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.

• 24:44Speaker 01

  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.

• 24:51Speaker 00

  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?

• 24:59Speaker 01

  Yeah, my partner, Paul, was a famous, Paul wasn't his name, by the way. It was Cyril T. Mitchell. But for a hairdressing name, he called himself Paul Mitchell. To the day he died, his passport was Cyril Thomas Mitchell, 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, chairman of the board. We just had a blast because we had no employees. So we wanted to, so Paul was very, very well known as a, about 5% of the hairdresser's realm is 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. We were pals for nine years before we started. I didn't do hair. He didn't do business. We never argued about anything.

• 25:43Speaker 01

  It was just so wonderful. 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 recommend to their customers. And they wanted to reuse again because of the quality of the product. It worked and it worked well.

• 26:13Speaker 00

  So when you guys started, you originally had an investor. And I think he was supposed to give you like $500,000, but.

• 26:23Speaker 00

  What's up, Yap gang? I recently had Gary Vee on the podcast and he told me something that really stuck with me. If you've got sales DNA, you've got to be paying attention to live selling because it's one of the biggest opportunities right now online. And that really got me curious. So I checked out an app that he told me about called Whatnot. I jumped into a live show and I instantly got it. The seller was showing products in real time, answering questions in the chat, and building a real relationship with the buyers. It didn't feel like boring shopping. It felt like a community. Whatnot is the largest live shopping marketplace in the country. And for entrepreneurs, the results are really hard to ignore. Sellers on Whatnot can sell up to 10 times more than traditional marketplaces. And the number of sellers making over a million dollars a year on the platform has doubled.

• 27:08Speaker 00

  So if you've got products to sell and you're looking for a new way to reach customers, search Whatnot, W H A T N O T, in the App Store. Download it and you can start selling right away. That's Whatnot in the App Store.

• 27:22Speaker 00

  Hello, young and profiteers. If you're running a business, getting website traffic is only half the battle. The real key to profiting is turning those visitors into paying customers. And I know checkout friction can quietly kill your sales. That's why I always say, serious entrepreneurs build on Shopify. Shopify is a commerce platform that helps you launch and run an online store without needing to be super technical. You can build your storefront, manage your business, and make it easy for people to buy. And here's the major advantage. Shopify checkout with Shop Pay converts up to 36% higher than the competition. With Black Friday coming up, now's the time to get your store ready and simplify your checkout experience. If you're ready to launch your business before Black Friday,

• 28:07Speaker 00

  go to Shopify.com/profitting to start your free trial. That's Shopify.com/profitting. Go to Shopify.com/profitting today to hear your first.

• 28:21Speaker 00

  What's up, Yap fam? You guys know we love reading on this show. So I'm always excited when I find a book I genuinely think is worth sharing. Life at the Speed of Play: Launch Products People Love by Mark Pincus is one of those books. Mark is a legendary Silicon Valley entrepreneur and investor. And this fast-paced 170-page book is his playbook for testing ideas quickly, navigating uncertainty, and figuring out what's actually worth pursuing. One of my favorite concepts is what he calls the abyss. Those moments when you feel stuck or unsure of what's next. Instead of fearing uncertainty, he shows you how to use it as a tool for discovery. Right now, Mark is doing a buy one, get one offer for Yap listeners.

• 29:06Speaker 00

  Go to GetMark'sBook.com/Yap, buy one copy for $32 and get a second copy free. So you can keep one for yourself and give the second to a friend, future co-founder, or someone who needs a little push.

• 29:19Speaker 01

  And I said, well, Paul, listen, I've already got the product set up. We've already made the products. I have the silk, I have everybody set up, right? Paul, how much money do you have that you could spare? He says, JP, I'm on my last dollars. I could spare maybe $350. That's it. I said, I have a couple hundred bucks, but I'm going to go borrow that 350 bucks from my mom. And with the $700, we are going to start a company and it's going to happen. He's, 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. Can I 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?

• 30:03Speaker 01

  It's in the book also. How do you start a company like that? 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 a hundred thousand bottles. And they knew who I was from my, uh, my experience with all these other companies had a great experience in the industry.

• 30:21Speaker 00

  Yeah.

• 30:21Speaker 01

  So I said, guys, we're gonna do it. I set up thirty day billing. Well, when the money different 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 a hundred, um, only ten thousand bottles, not a hundred thousand? Three thousand shampoo, one, three thousand shampoo, two, and four thousand, the conditioner. He goes, of course, I'm, 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, a, a run of only ten thousand 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 ten thousand, right?

• 31:04Speaker 01

  So I had thirty day credit with each one that was arranged. If they knew what we were at at that time, we would have any credit, right? So I called the silk screener and I called the, the filler. He sent it over immediately from the time it went from the bottled company, which was Sebco 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 seven hundred dollars, 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 a thousand dollars. We didn't have it.

• 31:43Speaker 01

  So I borrowed from my mother a few dollars, obviously to get it to seven hundred, have a few dollars in my pocket, a few hundred bucks left in my pocket, which I came down the hill with. That was it. So I, I told the guy the truth. He goes, well, if you only have seven hundred bucks, I'll never get my other three hundred. You want the artwork? It's seven hundred dollars. He took it all. What little money I had left, I got is an address, a P O box in Universal City. Sixteen dollars for a little P O box, a little teeny one, because this is nineteen eighty, 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 five dollars.

• 32:26Speaker 01

  John Paul Mitchell Systems, P O Box one oh five nine seven, whatever, Universal City, California. He 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 forty nine dollar answering machine on it. And the girl that answered the machine was a friend of mine and Kathleen, my friend of mine Kathleen, was a lady that was from England and very strong English accent, right?

• 33:05Speaker 00

  Does sound very luxurious.

• 33:07Speaker 01

  When you called, they would say, oh, hello, John Paul Mitchell Systems. This is Caroline. It was 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, 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, what happened? We had an office, we had stationary, we had a way to build them and we had an answering machine. That's how we started and 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?

• 33:44Speaker 00

  Yeah.

• 33:44Speaker 01

  The professional beauty industry and their distributors and their warehouses paid their bills in forty five 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 ten days, getting your money from distributors who used to pay for forty five days. And not to take up all of your time here. It's in the book how we did it. So 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 close their shops and everything, right?

• 34:28Speaker 01

  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 and those salons are really into Paul Mitchell. We gave it to them to start their business again, free, no charge.

• 34:51Speaker 00

  So nice.

• 34:51Speaker 01

  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.

• 35:02Speaker 00

  I have so many questions on this. I think the first question I have to ask is about these 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 salon?

• 35:22Speaker 01

  Right. And, 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 include you. So COVID comes along, right? Salons are closed. What are you gonna 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,

• 36:07Speaker 01

  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. So another 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 will buy extra sell it to them under the table.

• 36:29Speaker 00

  Yeah.

• 36:30Speaker 01

  So we, 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? And they're the ones that'll do the professional products for you. Or they had 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 marketing anymore. They can 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. Well, why did we do this? Because when you had companies like Vidal Sassoon, Jermac, and I could go on and on, okay?

• 37:14Speaker 01

  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? And, uh, forgot what we said and no, uh, yeah. 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 gonna do and I'm not gonna get away from that.

• 37:38Speaker 00

  Was your objective with Paul Mitchell to make the most money possible? Or did you have another goal?

• 37:45Speaker 01

  Our goal with Paul Mitchell originally was if we could only do five million dollars a year in business, Paul, you can make two hundred fifty thousand, I can make two hundred fifty thousand. 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 a hundred million, two hundred, three. We had no idea that we could be, be able to achieve this unbelievable sales, but learned as we went along how, how we did it and we just learned as we went along, had no idea. But the initial motivation was to give them the best products ever. So we could be proud. We each make a quarter of a million dollars. You know, that was our potential. I had no idea of all the rest.

• 38:23Speaker 00

  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.

• 38:30Speaker 01

  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.

• 38:53Speaker 00

  Yeah.

• 38:54Speaker 01

  And my feeling is be respectful. You owe them. We owe you no matter. And I told them, no matter how distribution changes, I will always keep it in the professional beauty industry with money somehow. And 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 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 moment, 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.

• 39:30Speaker 00

  Yeah.

• 39:31Speaker 01

  And we just gave them for money. We had enough. We were growing and you know, obviously when I finally started Patrol nine years later, the money was really flowing in, but it was mainly because of our word. And I think a lot of hairdressers use our product before, during, and even these days, because they see we kept our word.

• 39:48Speaker 00

  And you even put it in, in a trust for like three hundred and sixty years.

• 39:51Speaker 01

  That's right. It's in a trust and no one can change it because many times someone will die and say, okay, well, that was what he said. We want the money. Let's cash it. 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. But all the money goes into one pile. No one controls it. And that goes out to all my siblings and all my children and great, great, great, great grandchildren. So let's see in the one or two hundred years from now, they'll always get something. There'll always be something left there. And my kids cannot, no one could raid 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.

• 40:34Speaker 00

  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.

• 40:46Speaker 01

  Yes, you know, that story. That is, we gave us two cents. Two cents, take a white bottle and put black writing on it. We didn't know we would have created unisex packaging and 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.

• 41:06Speaker 00

  And it was so iconic. It stood out. Like to this day, I remember a Paul Mitchell packaging because it stands out because it's black and white.

• 41:13Speaker 01

  And the letters went sideways at that time.

• 41:16Speaker 00

  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.

• 41:27Speaker 01

  That is correct.

• 41:27Speaker 00

  And part of that is having a product so good that doesn't require marketing or as much marketing.

• 41:34Speaker 01

  Exactly, yeah, but you want to have some marketing, but if you could get it requires it, let me give you an example of that. In fact, this is good for your, your audience to know. There is a, a site you go to, okay, called Global, like G O B A L S like in Sam, K like in Kentucky, like universe, global S K U dot com. Now, why is this great? We didn't have that in my day. I wish we did. I'll give you an example of 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

• 42:17Speaker 01

  know, new and 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 a, you know, on, 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 to sell it if you were going to go online?

• 42:40Speaker 00

  eBay or?

• 42:41Speaker 01

  Okay, eBay, 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? Cause 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. One had Illinois, I believe, across it, but all embossed, so it must've been a special T-shirt for $2.

• 43:24Speaker 01

  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 of the 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 him several months, he sold his also for 20 some odd dollars. That, wow, that is really cool.

• 43:45Speaker 00

  Yeah.

• 43:46Speaker 01

  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. Changes district and no money. You could from your home, have a business. Now you have distribution and it costs you anything.

• 44:09Speaker 00

  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 Global SKU and even our social media sites are free marketing distribution. 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.

• 44:45Speaker 01

  Storytelling is so good because then you can tell somebody what your feature is and how it benefits you. So Patron, uh, we're in business now at Paul Mitchell and this is in 1988 going into 1989. And I'm, I'm building a house on the West Coast for my whole family, like a vacation house. And 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 for model homes or restaurants. Bought in Mexico, really cheap back in the United States there.

• 45:28Speaker 01

  And one time he was going down there on building this place to get me some stone. I said, Martin, and we were drinking tequila. But it was the type though where you, 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. So I said, Martin, when you go down there to buy this stuff, what do you find out what the aristocrats drank? And bring a bottler back so we can drink something good. We knew 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 Alcaraz, 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 it taken right.

• 46:13Speaker 01

  Bring back a few bottles of the new stuff. And he did, that he made the new stuff for us, brought it back. We found these incredible recycled bottles to put it in. I said, okay, we're going into 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 that. My mind was working well. Let's say, 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, but 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'd be gifts, Christmas time, anything, it'd be gifts to everybody. Okay. That'd be the worst scenario because it was so good, I'd be so proud.

• 46:56Speaker 01

  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.

• 47:07Speaker 00

  Yeah.

• 47:08Speaker 01

  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. So they, oh, thank you. He takes a shot and then we'd pull out of our briefcase of Patron. Can I have an empty glass? Say, would you taste that? Whoa, that is smooth. What is it? That's the new world of tequila. It's called Patron and it's, it is the smoothest tequila.

• 47:38Speaker 00

  It's a hairdresser model, but for bars.

• 47:40Speaker 01

  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 Spago's and Bar Cantina, we knew we would. So we 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 to one more layer in. We had to give them money and of course they would make money. Then their distributors or all the big distributors, they would make money. Then it goes to the wholesalers and the retailers. There's too many cuts.

• 48:24Speaker 01

  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 and, and we sat down with them. We said, we were really thinking that by now we do 20, 30,000 cases and one day we could 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. $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 were seeing rooms. They took it up to about 50, okay? We dropped them and took it on ourselves and changed everything. We changed the marketing.

• 49:09Speaker 01

  We changed instead of having beautiful girls promoting stuff, right? 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 in Sacropita's bar to bar, door to door, liquor store to liquor store, until we got the salesmen to do the same. All 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 million 500,000 cases a year.

• 49:51Speaker 01

  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, uh, 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. Don't let somebody that's an expert saying 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.

• 50:29Speaker 00

  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, the Chanel of tequila, right?

• 50:50Speaker 01

  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 started 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. How 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, they come up with something. Hey, you want to treat yourself? We have that new Patron tequila in here.

• 51:36Speaker 01

  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. Now, 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 used 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.

• 52:16Speaker 00

  Yeah, that's really interesting. And then where did you come up with the name Patron?

• 52:20Speaker 01

  By accident. Martin and I were sitting around saying, what are we gonna 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 Patron's. Patron's. 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 Al Patron. We bought that name from them immediately. So it can never come up in the future.

• 52:59Speaker 00

  And I know Patron like really took off in the hip hop world, right?

• 53:02Speaker 01

  That was by accident.

• 53:04Speaker 00

  Yeah.

• 53:04Speaker 01

  Like, I got a call one day that said, JP, you know, this is why we're in business for a while and hip hop started, right? There's some guy named Fifty, Fifty Cents.

• 53:12Speaker 00

  Yeah, Fifty Cent, yeah.

• 53:14Speaker 01

  Fifty Cents, but it's like Fifty 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. One 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.

• 53:54Speaker 01

  It's kind of like many years ago, well, we drink Cognac, okay, as a cognac, right? They'll industry, we drink Patron. That was it. That was the mountain, because they loved it and they could afford to give themselves the best. And it just took off like the world ever knew.

• 54:08Speaker 00

  Did you end up leaning into that demographic and marketing to that demographic? Or you just let it take off organically?

• 54:15Speaker 01

  It took off organically. And that area also, and all areas just took over 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.

• 54:30Speaker 00

  Go deeper on how you made Patron a luxury brand.

• 54:35Speaker 01

  Certainly. First thing is, you have to, let's take a tequila. It's gotta be different than other tequilas. Ours was the mellowest gourmet and we did not have that in the United States at all. So 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, whatever you had, it was different. So one, it's gotta 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 salesman that sell it. So we would go in the field with the salesman, hold sales meetings for them and keep on reminding them, they could use that same thing when they called on in on premise or off premise, which means in a bar or restaurant or in a liquor store.

• 55:20Speaker 01

  Same philosophy, but you have it all the way down. So 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 gonna remember it.

• 55:30Speaker 00

  You went on to sell Patron for how many billions of dollars? Five billion dollars?

• 55:34Speaker 01

  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 there all, 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 little 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, I said, nope, I don't want to sell it. I'm having a blast with it, we're making lots of money. So they asked me the question, very good question they asked. They 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 laughed, I said, JP, the biggest brand in the industry sold for 2.2 billion. That was Grey Goose.

• 56:18Speaker 01

  You want more than twice that, never gonna happen. I said, I don't want to sell it.

• 56:22Speaker 00

  You're like, duh, that's why.

• 56:24Speaker 01

  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 billion, 100 million as the valuation? And 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 help me get there, millionaires and a few of them multimillionaires. So everybody walked away really happy.

• 56:58Speaker 00

  That's incredible. And that is why your book is titled Success Unshared is Failure.

• 57:03Speaker 01

  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. And 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 gonna 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. And 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.

• 57:46Speaker 01

  But I trained and have trained more than once, both of them. I trained them how to be a more loving, caring manager. Cause they have turned over like everybody else. You're like, if that had made the front page of the Wall Street Journal, have a good hair day at the CIA, okay? JP, here, care about, go teach them about how to be more of a loving manager. But anyways, but that's the preset up for this. And Al is 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 of Pan and Flight 103, release them to go on trial in The Hague. I'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?

• 58:28Speaker 01

  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 where you had 35 pictures, you took it down, they developed it, to his chief of staff, Omar Montas, where I said, could you take a picture with us? He said, sure. So I ran over, I hugged Gaddafi, he smiled and I smiled and we got the picture. It's in the book of Gaddafi and I like that.

• 58:57Speaker 00

  Oh, my gosh.

• 58:57Speaker 01

  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.

• 59:15Speaker 00

  Yeah.

• 59:15Speaker 01

  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 minutes before.

• 59:23Speaker 00

  Yeah.

• 59:23Speaker 01

  So these are some lessons we learn along the way and we apply them to people, we apply them.

• 59:28Speaker 00

  I've 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, 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 gonna ask you a question. 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?

• 59:59Speaker 01

  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.

• 1:00:10Speaker 00

  Would you rather start a new business with $700 and full control or start a business with $7 million from investors but lose control?

• 1:00:20Speaker 01

  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.

• 1:00:28Speaker 00

  Would you rather be first to market or be the first to truly get the product right?

• 1:00:33Speaker 01

  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.

• 1:00:41Speaker 00

  Would you rather have 1,000 loyal customers or 1 million followers on social media?

• 1:00:46Speaker 01

  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 their product and they're loyal and they could talk about its use, not just advertising that's thrown out at somebody.

• 1:01:03Speaker 00

  Would you rather build another Paul Mitchell where customers reorder for decades or another Patron where you create a premium category and cultural status?

• 1:01:13Speaker 01

  Both.

• 1:01:15Speaker 00

  Now pick one.

• 1:01:16Speaker 01

  Both, oh no. Holy cow. Boy, that's a tough one. Cause you're talking about two unbelievably successful products that are really, really good.

• 1:01:26Speaker 00

  If you had to just choose one that would have been your legacy, which one would it be?

• 1:01:30Speaker 01

  God, that's, that's.

• 1:01:33Speaker 01

  Boy, well, I would say Paul Mitchell because it was the first.

• 1:01:36Speaker 00

  Yeah, you couldn't have done Patron without Paul Mitchell.

• 1:01:39Speaker 01

  That's correct.

• 1:01:40Speaker 00

  Would you rather grow up rich or grow up poor?

• 1:01:43Speaker 01

  In my case, and knowing what I know, I'd rather grow up poor than rich. Now, why would I do this? 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.

• 1:02:10Speaker 00

  To close out this interview, I want to talk about the main motto of your book, "Success unshared is failure."

• 1:02:16Speaker 01

  True.

• 1:02:17Speaker 00

  Why do you take it so far? Why is it not just incomplete or bad? Why is it failure to not share your success?

• 1:02:24Speaker 01

  In the 1950s, J. Paul Getty Jr. was the richest man in the world. He was a multi-billionaire. He was an oil man from Oklahoma that ended up starting Aramco, the big oil company in Saudi Arabia, is one of the guys that helped 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 in the United States, if 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.

• 1:03:07Speaker 01

  My guests, this is the richest man in the world. They're taking advantage of me." So he put a payphone in his house. If somebody wanted to make a telephone call, they make it off a payphone. 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, in one of the very few interviews he ever did, the lady interviewer 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. Or you're only half right. I'm not only the richest man in the world, I'm the most powerful man in the world.

• 1:03:51Speaker 01

  I could change governments. I could change governments with my money and my wealth, and 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. I'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 Getty 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 train, go back and change, and now I would. It's too late for me." So what is really, what is happiness?

• 1:04:37Speaker 01

  If 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 by, but you're happy in life?

• 1:04:43Speaker 00

  Yeah.

• 1:04:44Speaker 01

  Big lesson to learn.

• 1:04:45Speaker 00

  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.

• 1:05:01Speaker 01

  Let's say helped a bunch of kids who were intercity children that can order a whole lot.

• 1:05:05Speaker 00

  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.

• 1:05:15Speaker 01

  Of course. Well, let's go to the sharing the wealth part here. The 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 Louisiana, and said something one time that made all the sense in the world, even though he did not practice it.

• 1:05:57Speaker 01

  And 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 going to be a lot left on the table. Would you send those extras 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.

• 1:06:24Speaker 00

  Yeah.

• 1:06:25Speaker 01

  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, but let's say you were buried, or just you had a stone that was your epitaph. What would you have on there? And I said, "Oh, this is so easy." He came to this world with absolutely nothing, John Paul DeJoria,

• 1:07:06Speaker 01

  but made a change to make millions of lives better because he was here, period. That's it.

• 1:07:11Speaker 00

  I love it.

• 1:07:11Speaker 01

  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.

• 1:07:25Speaker 00

  Do you feel like because you share your wealth, the universe continues to reward you?

• 1:07:30Speaker 01

  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 unshared is failure. Because if you don't share, you're rewarded. Something 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.

• 1:08:00Speaker 00

  Yeah.

• 1:08:01Speaker 01

  You did something for somebody else that 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. Volunteer 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.

• 1:08:23Speaker 00

  And you've got so many stories in the book of how you've like supported different communities and really went and helped and used not only your money, but your status, your connections to help people.

• 1:08:36Speaker 01

  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.

• 1:08:44Speaker 00

  Yeah. So I end my show with two questions I ask all of my guests.

• 1:08:47Speaker 01

  Okay.

• 1:08:48Speaker 00

  The first one is, "What is one actionable thing our young improfitters can do today to become more profitable tomorrow?"

• 1:08:55Speaker 01

  Okay. Part of what you earn is yours to keep. And I read this in a book when I was selling encyclopedias. I 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, because 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% of, 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. Take five, eventually take 10%,

• 1:09:37Speaker 01

  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? But you're not going to touch it's a savings account. You'll be blown away how that attracts other money. Pretty soon, you'll be making enough, or 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, and 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. Those are the biggest things.

• 1:10:22Speaker 01

  The two things I will say, always remember, is number one, don't go into the selling business, go into the reordering 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 as 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.

• 1:10:52Speaker 00

  Yeah, you got fired from three jobs and then started Paul Mitchell.

• 1:10:55Speaker 01

  Exactly.

• 1:10:56Speaker 00

  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?

• 1:11:06Speaker 01

  Is being a happy person.

• 1:11:09Speaker 01

  Because that's going to be when 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.

• 1:11:20Speaker 00

  And where can everybody go to learn more about you and your new book?

• 1:11:24Speaker 01

  Well, they would go on Amazon. That's one example. Amazon, you can buy it right now. They ship it out next week. And 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 could 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.

• 1:11:51Speaker 00

  I love it. JP, thank you so much for your wisdom today.

• 1:11:54Speaker 01

  You're a superstar at getting these good messages out. Thank you very much.

• 1:11:57Speaker 00

  Thank you. Well, Yap Gang, I hope you enjoyed this as much as I did. What an extraordinary conversation with John Paul DeJoria. 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. 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.

• 1:12:42Speaker 00

  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. 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.

• 1:13:28Speaker 00

  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 DeJoria, share this episode with a friend or fellow entrepreneur. 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. Yap fam, I love reading your reviews. So take a couple of 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 @yapwithhala or connect with me on LinkedIn. Just search for my name. It's Hala Taha.

• 1:14:11Speaker 00

  I love hearing from you guys, so don't be shy and shoot me a DM. And finally, the biggest shout out to my amazing guest outreach and production team. Shout out to Farqan, Joshua, Hasham, Jayreen, Nina, Michael, Gedundra, Caleb, Paul, Maxi. 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, Hala Taha, AKA The Podcast Princess, signing off.