The business from the bottom: how a homeless man could become the owner of the state $3 billion

John Paul Jones Of Dejoria

The nine years

John Paul Jones of Dejoria was born in the spring of 1944 in Los Angeles, his father was an immigrant from Italy, mother from Greece. From early childhood John learned what poverty and hard work. When he was two years old, his father left the family. The first years, the mother had managed alone, but when John was nine years old, he had to go to my first job. “I went home and sold Christmas cards,” recalled the billionaire in an interview with Enterpreneur. — When I was ten years old, we with my big brother carried the Newspapers. Get up at four in the morning, put the newspaper, spread, then get ready for school”.

Despite this, the mother was unable to financially support children, and was forced to put them in a foster home (in the US common system of foster care: the child that can’t contain parents, placed in foster care or paid family children’s home at public expense).

In the school of Dejoria was briefly in a gang. The decision to change his life urged him to take the math teacher who warned the teenager that the pace that “will never achieve anything in life.” After graduating from high school in 1962, Dejoria joined the Navy, where he served for two years on the aircraft carrier “hornet”. When Dejoria returned from service, he was 22 years old.

By the end of the service at Dejoria already had a son, but the financial situation of a young family was no better than his own childhood. When the child was two years, the future billionaire suddenly appeared with son on the street. “My wife decided that she no longer wants to be a mother. The money that we had, she divided and gave half to me with a child. The rent was overdue. A couple of weeks later I was rushing around looking for work, in the street picking up bottles of Cola, receiving two cents for the little and five cents for large, ” he told the Enterpreneur. But the money was not enough. We spent several days on the street. Then I was adopted by a friend of a biker”.

Dejoria barely make ends meet for more than ten years, until 1980, when he founded John Paul Mitchell Systems. During this time he tried many professions — from janitor to insurance salesman and of a salesman. “[I have sold] the encyclopedia. Hard work. Are you trying to interest them strangers. The door slammed shut in front of you 30, maybe 40 times, before the first buyer normally will talk to you and let me in, ” explained Dejoria. — The company told us: “When things are bad, be persistent and never give up. You need to call the twenty-fifth door, on the fiftieth, hundredth with the same enthusiasm that came through first, slammed in front of you. I always say to young and even Mature entrepreneur that they should be ready for many failures and should not lose enthusiasm. Ultimately this will lead to success.”

The future of Dejoria predetermined one of the many works that he has changed in that period — the manufacturer of products for hair care Redken Laboratories. As in many other places, Dejoria stayed there for long and was dismissed (edition of Famous Entrepreneurs, however, writes that the dismissal was due to the discontent of Dejoria strategy). But this work inspired him to create their own business: “I was fascinated by the industry professionals who want to make every person more beautiful”.

However, the first business of Dejoria was not associated with cosmetology. In 1978, when he was fired the third time, he founded a consulting company. “I did that for two years. It was difficult. But it was my own business. Still, I wanted to do business related to the production of something tangible,” he said to Business Insider.

As a result of Dejoria together with his old friend the hairdresser Paul Mitchell in 1980 founded the company, which the partners called John Paul Mitchell Systems, which is engaged in the production of hair. “I met Paul in 1972 the hotel Blue fountain in Florida in the Congress of the participants of the industry of beauty, recalled Dejoria. He’s never worked in business, I’ve never had hair, so we were perfect partners.” The starting capital amounted to only $700.

Now a personal fortune of Dejoria, according to the real-time counter Forbes, is $3.2 billion, according to Bloomberg, more than $4.5 billion.

Difficult start

The beginning of the work of John Paul Mitchell Systems was a difficult period in the life of Dejoria. He was again married, but family life went wrong, and he was gone, leaving ex-wife all the money. At the same time John Paul Mitchell Systems threw an investor who promised to invest in the company half a million dollars.

“I thought everything was under control. My partner had 350 bucks I borrowed from another 350 and we started, ” he told the Enterpreneur. The money went into the making of the first products [of the two kinds of shampoo and one conditioner]. It took two weeks, two weeks later the bills arrived. As with encyclopedias, I went from door to door, from salon to salon. We had an investor who agreed to invest in Paul Mitchell Systems. The money was supposed to come, but not received a penny.”

Following two weeks of Dejoria had to spend the night in your used rolls Royce. The money was not there. “I learned to live on a few dollars a day. At 9 am I went to cafe Boulevard — this time for 99 cents, you could buy one egg, one toast, one orange juice or coffee and one slice of bacon or sausage. Between 14:30 and 17:30 I’ve been going to Mexican cafe, where for 99 cents you could buy a Margarita and some food like tacos or chicken wings”, — he shared memories with Business Insider.

Two weeks later on the help of Dejoria came his friend, actress Joanna Pettet. “She heard rumors that I live in the car, and she couldn’t believe it. She gave me a room for a couple of months until I get back on my feet. It was a very kind gesture, ” continued the businessman.

The economic situation in the United States at the time was heavy: early in 1980, a year before the coming to power of Ronald Reagan, inflation was more than 13% and unemployment is 6%. In April, inflation peaked at 14.8%. “If you can survive in this economy, it will get easier,” — said Dejoria.

Money from Paul Mitchell Systems, the company could not afford the colorful packaging. Labels of shampoos and conditioners Paul Mitchell was made in black and white. To promote the brand, Dejoria and Mitchell resorted to a variety of techniques. They traveled around the country and arranged a free presentation to potential clients — salon owners. They guaranteed that the hair care Paul Mitchell will be a success with customers, otherwise unsold products can be returned in exchange for a full refund. To seem potential buyers more seriously, Dejoria asked to write a message on a telephone answering company familiar with a British accent.

After two years since the start of operation, the company was able to pay the bills. “We have the extra $4 thousand, my partner and I took for $2 million And we said, “Damn! We did it!” The first thing he spent the money, had dinner in the restaurant. “The first time I read the menu on the left side than the right where the prices are. It was very cool,” he recalled.

By 1993, the Paul Mitchell products are sold in 30 countries around the world. By 2016, the network has expanded to more than 80 countries, including Russia. John Paul Mitchell Systems operate only in the b2b segment: hairdressing and other beauty. “If you ever see Paul Mitchell products at a hardware store or supermarket — is a forgery or counterfeiting,” explained Dejoria Forbes in 2011.

John Paul Mitchell Systems is a private company and its financial performance has not been disclosed. Forbes estimates its revenue at approximately $1 billion annually. Bloomberg, citing data from Euromonitor, $725 million for 2015. Now 72-year-old Dejoria holds the post of Director of the company and does not intend to depart from the management of the business. As of 2001 [latest data cited by Bloomberg, he owned 50% shares of the company.

The first shots

Despite the success of John Paul Mitchell Systems, the main income of Dejoria brings the second he created the company — Patrón Spirits, maker of premium tequilas, Patrón.

The idea is to engage in the liquor business. there is Dejoria in 1989, when business John Paul Mitchell Systems has been booming. As told of Dejoria Enterpreteur, one of his friends, Martin Crowley often traveled to Mexico, where he purchased the stone slabs and accessories, which are sold to architects in the United States. Dejoria asked a friend to capture from Mexico and some good tequila. Crowley complied with the request.

Drink like Dejoria. “Tequila was softer than anything we have ever had,” said the businessman. He invited Crowley to organize a joint business to make tequila even softer with Mexican specialist and pour it into the bottle square shape with a beautiful label. Subsequently, square bottle will be the hallmark of Patrón. The recipe was developed by a veteran market tequila Francisco Alcaraz.

Business John Paul Dejoria in numbers

At $3.2 billion, estimates the state of Dejoria Forbes

$722 million was rescued by John Paul Mitchell Systems in 2015, according to Euromonitor

$1.1 billion — Patrón Spirits, according to research firm IWSR

$195 is a bottle of tequila “super ultra-premium Gran Patrón Platinum Tequila

$50 — the average cost of a bottle of Patrón

Dejoria explained that he and his partners set out to change the traditional concept of tequila, creating a fundamentally new product. “What is tequila in the United States in 1989? The cheap stuff that you drink in College to get drunk and the next morning you feel so bad that you promise ever to take this stuff into his mouth”, he said in an interview Simplewinenews. “We wanted to produce the soft tequila that people have ever tried, where the next day will be bad and you can savor,” said Dejoria about his vision of the work of the Forbes company.

Alcaraz used in the manufacture of tequila two techniques: modern, using roller mills, and the ancient technique of “tuhon” in which the fruits of the agave plant are ground first, and slowly ground with a two-ton mill of volcanic stone, and then the juice is fermented and subjected to distillation. Made in this way, the tequila has a different taste. Alcaraz used both techniques, and then mixing the resulting product.

The first batch made 12 thousand bottles. “We went from bar to bar and all were treated to a tequila — first best tequila bars, then our tequila. “Wow, that’s much better, what is it?” “This is the future of tequila. This Patrón”. Tequila ultra-premium to sell much easier and more enjoyable than the encyclopedia. No one slams the door,” said Dejoria Simplewinenews. Soon Patrón loved all of California Bohemia. Clint Eastwood took Patrón to your movie “In the line of fire.” Sales have gone up. By 2009, according to Forbes, sales of tequila Patrón in the US (one bottle of which costs an average of $50) has reached almost 2 million desyatiletnij boxes [U.S. unit sales of spirits] per year.

“[Film Director] Robert Rodriguez, a Mexican, also a fan of Patrón. In the two movies he put the bottle in the frame. We do never offer money, never did product placement,” — said Dejoria Simplewinenews. According to him, after Patrón in 2014 appeared at least 50 new brands of premium tequilas, Patrón but is growing faster.

In 2009, Dejoria owned 70% of the shares of the company [according to Bloomberg, he now owns the same package]. According to Forbes, in July of the same year, a small package bought international giant Bacardi [amount not disclosed]. In 2009, Dejoria first came to the Forbes list of billionaires with a fortune of $2.5 billion Since then he is among the permanent defendants. According to Bloomberg, the 2015 Patrón Spirits has gained $1.1 billion.

Movie, diamonds and charity

The number of companies in the establishment or management that took part of Dejoria a network of concert halls and restaurants the House of Blues in United States, jewelry company DeJoria Diamonds, engaged in the manufacture of jewelry with conflict-free diamonds [produced with respect for human rights and of environmental norms], manufacturer of mobile and web applications ROK Globals, a manufacturer of audio equipment for cars Diamond Audio and others.

Dejoria dabbled as an actor. In 2008 he played the role of his partner Paul Mitchell (who in 1989 died of cancer at the Comedy screenplay by Adam Sandler “don’t mess with the Zohan”, and a year later — the role of a fictional hair stylist John Paul Mitchell in the Comedy “the Big haircut”. He also appeared as himself in the second season of the Comedy series “the Dope” (Weeds).

Dejoria is an active philanthropist. It helps environmental organizations, organizations for the fight against cancer and HIV, to Fund Morris Animal Foundation, dedicated to research in the field of veterinary, educational institutions and foundations that help African children, Amnesty International and others.