by Ryan Blair
Table of Contents
Title Page
Copyright Page
Dedication
Chapter 1 - WHERE I’M FROM
Chapter 2 - THE NOTHING-TO-LOSE MIND-SET
Chapter 3 - HUSTLERS, CHARLATANS, . . . AND TONY ROBBINS
Chapter 4 - PHILOSOPHIES FROM THE JAIL CELL TO THE BOARDROOM
Chapter 5 - SEIZE THE DAY
Chapter 6 - HONOR YOUR DEALS
Chapter 7 - SMARTEN UP
Chapter 8 - FIRST THINGS FIRST
Chapter 9 - WHAT’S DRIVING YOU?
Chapter 10 - TAP THOSE ASSETS
Chapter 11 - RISK AND SACRIFICE
Chapter 12 - MILLION-DOLLAR MISTAKES
Chapter 13 - I HATE BUSINESS PLANS
Chapter 14 - PROS AND CONS OF A HOME-BASED BUSINESS
Chapter 15 - LAUNCHING YOUR BUSINESS
Chapter 16 - RAISING MONEY
Chapter 17 - GROWING, HIRING, AND FIRING
Chapter 18 - CASHING OUT
EPILOGUE: ON TO THE NEXT ONE
SUPPORT THE BOOK!
Acknowledgements
SPECIAL ACKNOWLEDGMENTS
INDEX
PORTFOLIO / PENGUIN
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Copyright © Ryan Blair, 2010, 2011
All rights reserved
Previously published in different form by Nothing to Lose Publishing.
Library of Congress Cataloging-in-Publication Data
Blair, Ryan.
Nothing to lose, everything to gain : how I went from gang member to multimillionaire entrepreneur / Ryan Blair.
p. cm.
Includes index.
ISBN : 978-1-101-51705-5
1. New business enterprises. 2. Strategic planning. 3. Entrepreneurship. I. Title.
HD62.5.B553 2011
658.1’1—dc22
2011004053
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To my mother, Erla Hunt,
you gave me life, love,
and strength. I will always work hard to make you proud.
AUTHOR’S NOTE
These stories are based on events from the author’s experiences.
Some names have been changed for privacy.
Note to parents: vulgarity is used in the book. The intention isn’t to
endorse cussing, but to display my internal dialogue as a reflection of
the environment or circumstances I was in at the time.
I value your feedback, and I’m always looking
for good ideas. If you have any please
e-mail me at [email protected].
READ THIS FIRST
Los Angeles is a city that’s famous for a sign. The ultimate symbol of my neighborhood is the white lettering you can see nestled in the hills between the buildings as you drive through Hollywood. Like the city where I live, the defining symbol of my life is also made up of letters, the letters L and A overlapped like the Dodgers logo, but where the A crosses over the L there is an AK-47.
I live in a penthouse apartment in an exclusive building in Hollywood where each night when the local clubs let out, a steady flow of celebrities spills over into the complex for after-hours parties. Anyone from billionaire Paul Allen to Jessica Biel has stopped by my spot, and accordingly, my crib is decorated to reflect my lifestyle. I have a pool table instead of a couch. And I have a collection of rare art and literary works I’ve acquired over the years. One of the unique pieces is a painting with the LA/AK-47 design, which I commissioned fashion designer Bryden Lando to paint for me, based on one of his most popular T-shirts.
It symbolizes the violence I grew up with, and it reminds me of the times when I actually used to carry around an AK-47. It was my most valuable asset back when I was a troubled young gang member—it protected me in the LA riots and in gang shootings. Now the painting on my wall could buy a truckful of those guns.
Next to this painting is a locked glass bookcase full of books, first-edition books by Napoleon Hill, Dale Carnegie, and several others from friends such as Jerry Rice, Bode Miller, Coach Dale Brown, the late John Wooden, and one special title that was given to me by Bob Goergen, a world-renowned entrepreneur and investor, when he bought my company. Inside the cover of the book reads an inscription: “Welcome to the Blyth family. We look forward to a profitable future together, Bob Goergen 8/08.”
From the outside it looks as if I have this great, easy lifestyle. The truth is I’ve never made a million dollars easily, and I’ve made many millions of dollars.
It was August 2008, the same date as the inscription on the book, and I was on the ultimate high. I’d just sold ViSalus in a deal that, coupled with a multiyear earn out, was pegged at $120 million (or more if we performed greater than expectations) to a public company called Blyth, owned by the Goergen family. I celebrated my victory on the Donny Deutsch show, Fox News, MSNBC, and all over the wires. E-mails of congratulations from Wall Street to Main Street flooded my in-box. I had done something no one had ever done in my industry: we negotiated ten times our forward projected earnings in 2008 and eight times our earnings over the next three years. Never has a company as small as ours in the direct selling industry been bought for as large a valuation as we’d gotten. In essence, we’d received something better than what we’d have gotten if we’d taken the company public. As I was walking on set to my Donny Deutsch appearance, I received a text from my girlfriend at the time, who was also on set; she was a model on NBC’s Deal or No Deal. The text simply said, “You’re going to be a father.”
Almost immediately after I came to grips with the fact that I would be a father (fatherhood is a serious thing to me, given that my biological father was a deadbeat), the U.S. economy went into a death spiral. A few short months, by December 2008, the pr
esident’s economic adviser announced that the American economy had fallen into a “depression.” The announcement was paired with a report from the U.S. Department of Labor that more than 533,000 Americans had lost their jobs in November 2008, and 1.9 million Americans had become unemployed during that calendar year. And I had a first-born child on the way.
As a student of entrepreneurship I knew this was a rare moment in history. Having studied capitalism and the impact of the Great Depression I knew that sixteen of today’s Dow 30 companies were founded during a recession or depression. Corporate icons like General Electric, Johnson & Johnson, Procter & Gamble, and Disney were formed when times were tough. I started writing this book to rally the pioneering spirit in Americans and I called it Nothing to Lose after the mind-set I used to climb out of poverty and become a multimillionaire CEO.
Fast-forward to December 2009. At this point, ViSalus, the company I had just sold in a deal valued at $120 million, was worthless. Sales had dropped from $2.5 million a month to $600,000 over the year. That profitable future Bob Goergen had inscribed in my book was anything but. Blyth had lost faith in my business and written it off. The recession had exposed flaws in our business model—flaws that our overconsuming target customers didn’t pay much attention to when they’d had access to credit cards and home equity lines, the value of their homes was appreciating, and their incomes were on the rise.
In good times, weak businesses prosper. And it turned out that I had built a business based on good times. Blyth had paid me a premium for a company that was now worthless to them. All the executives who had fought to pay me the ten times valuation that I had so vehemently negotiated in 2008 had egg on their faces. The people who were against the deal were proved right. And I was the poster boy for the guy who took a public company for a lot of money.
That December I was summoned to Blyth headquarters for a special meeting in the same boardroom I’d sat in to negotiate the terms of the sale of ViSalus the year before. I was asked to come alone. But they did send out a suit from Greenwich, Connecticut, headquarters to Los Angeles (who claimed to know more about my business because of his MBA), to babysit me while I prepared a presentation they wanted me to give at the meeting, so it would be up to their corporate standards.
As it stood, I had put nearly a million dollars of my own money into the business to try to revive it. I’d voluntarily agreed to a $1 a year salary the minute the economy went south. I had a newborn son to think about, and it worried me that I might have just bet his future as well as my own on a business that was about to die. The company needed at least a million more to get through the next few months, but that probably wasn’t enough—and I knew it. I might need $2 million, maybe $3 million, and at this point we had put $26 million into it. What I needed more than money was a beacon of hope. I needed my investors to look at me and say, We know you’re going to make it, Ryan. We believe in you as an entrepreneur; we are on board with your vision.
It was a winter day in Greenwich. I put on my Sunday best and walked into that meeting. It was clear within seconds that nobody wanted to hear my presentation; they wanted to crucify me. They had investor’s remorse. One by one they tore into me, until one of the managers got so angry at me that he stood up—biting his tongue, red in the face—and walked out of the room.
I remember feeling like I was back in my gang days, when the older gang members would try to punk me because I was a kid. I said in my head, You better have respect. I’m not a kid.
They told me in no uncertain terms that they wouldn’t support ViSalus. They’d written it off. They wouldn’t participate in this round of funding. They hammered the last nail into the coffin as hard as they could and told me not to let the door hit me on the way out. And rightfully so. I deserved it.
I flew back to LA and was immediately infected with the swine flu, and spent the entire Christmas holiday in bed. I asked myself over and over whether I should quit and jump ship. I’d argue with my ego that it wasn’t worth my time, and my ego was doing a lot of talking. I’d wake up at all hours of the night, angry at myself. Why did I let that MBA suit influence my presentation? I was mad at myself for borrowing money for the business. Spending millions on fair-weather friends and fast times. I should have predicted what had happened to the economy. A CEO has nobody to blame but himself—and I knew it. It was my fault and I wasn’t going down like that.
I had nothing to lose, and I was going to show my investors, and the rest of the world for that matter, that I would fight my way out of the corner.
I spent Christmas Day alternately throwing up and making phone calls, rallying employees, friends, family, the two other founders, Todd Goergen, and some other investors—and most important, myself. In the end, we came up with the million dollars, but it was for a business that had deteriorated so much that not even I had hope for it. Todd sent me an e-mail saying he had faith in me, that this time next year we’d be giving each other high fives. I dismissed it. I’ve never had to have an investor motivate me.
And that’s when another blow came. I received a letter from my partner Nick Sarnicola and my vice president of sales, Mike Craig, that they were resigning. The letter was just like the manifesto from the movie Jerry Maguire. It listed all the things that we needed to change. I started reading their five-page rant and I couldn’t finish it. I actually received it ten minutes before I was to hear that the board was moving to replace me. I was livid.
I’ll never forget pacing around the hotel room where I received the news that I was losing two of the most talented people on my staff, and that I would be fired by my board of directors. (I knew this because friends in the industry had told me.)
After my anger subsided, I was overcome with exhaustion. I gave in and got on my knees to pray. I couldn’t take it anymore. I had to ask for guidance to get through the most difficult business situation I had ever been in.
Clear in my mind and in my heart, I went back to Nick’s letter, then called him up and said, “Let’s do all the things on your list.” We agreed to move him and Mike to entrepreneurial roles in the sales field and to put everything we had behind them to lead us out of the recession.
Once that strategy started to come together, I knew, even sitting in meeting after meeting, faced with the ultimate criticism, that I knew better than they did. I knew, whether they backed me or not, that I could turn the ship around. I thought to myself, I know our customers better than these guys do. I’m the entrepreneur here. During our October 2008 Vitality event in Las Vegas, the Goergens had stood up in front of a thousand or more of our distributors and boasted that one day ViSalus would be the strongest, most valuable company in their holding. And even though that statement seemed so far away in 2009, there was a bit of a masochistic streak in me that was still excited to try to prove them right. For some reason I felt alive knowing that I had no choice but to win.
So in the end I went with my gut instincts. We started redesigning our business around a new economy, a new consumer, and around the move of two of my most talented sales executives to the field. And it turned out that the plan I’d tried to outline in the presentation I gave that day in 2009 was the winning strategy.
Today, ViSalus is far more valuable than what Blyth paid for it. The company went from $600,000 a month in sales to $12,000,000 a month about fifteen months later. Based on our current growth, by the time you read this, that number will be far more. My meetings in that boardroom at Blyth headquarters are completely different now. So I got the vindication I wanted. And what did I really have to lose if I had been wrong? Actually, a lot: my business, millions of dollars, and my son’s future, not to mention the embarrassment of being a failure.
But the reason I have a company today that’s worth far more than it ever was is that, despite the circumstances, I played as if I had nothing to lose.
It reminds me of the speech Steve Jobs gave at Stanford in 2005. He said that “in the face of death, all fear of failure and embarrassment disappears.”
I’ve faced the reality of death; I’ve faced the flash of a muzzle, the loss of my father, gang murders, friends who committed suicide—a failed business is nothing compared to that. When you have that level of survival instinct in you, it is your greatest asset. Like that AK-47 used to be. And that’s why that painting hangs on my wall. So I’ll never forget where I come from and what it took to get here. It hasn’t been easy. There have been obstacles to overcome every step of the way, and a lot of looking in the mirror and fixing things that were broken. This book is not a self-help guide to a better life; this book is the road map I used to overcome adversity I’ve encountered. By sharing it, I hope you, too, can create your own road map to success in life and business.
1
WHERE I’M FROM
I didn’t start out at the bottom—but I reached it quickly.
Long before I became a millionaire entrepreneur, I was a kid with a criminal record, street gang experience, and a lot of emotional scarring from years of abuse from my father. My teenage years were hardly the typical starting point for a normal, productive life, let alone a successful business career. Turns out, that didn’t matter.
The first decade or so of my life was actually unremarkable in a pleasant, upper-middle-class kind of way. My family lived in a small, comfortable community in Southern California. No one was exceptionally wealthy where we lived; but just a town or two away were the billionaires’ hot spots, and a town or two in the other direction was the ghetto. We knew where we were situated on the ladder, and we were all pretty content there.
My family had a pool, lots of nice clothes, and at Christmas, a new bike or scooter if I wanted one—we were doing pretty well, by most people’s standards. And then, just as I was hitting my middle-school years, my dad got hooked on drugs.