John Paul Mitchell Systems is a new-wave profit machine with few moving parts and a direct connection to Paradise
John Paul Mitchell Systems is a new-wave profit machine with few moving parts and a direct connection to Paradise
ON NOVEMBER 1, SOME TWO DOZEN teams will send cars off the blocks in the first Pentax World Solar Challenge: a grueling 1,980-mile trans-Australian road race through the belly of the Red Centre Desert, from Darwin to Adelaide. Open exclusively to solar-powered vehicles, the race will be the severest -- and most public -- test yet for an embryonic technology that has long interested everyone from hobbyists to major automobile makers.
Many of the contestants will fly the familiar flags of car companies. Japan's Nippon Motors is fielding an entry, for instance, as are General Motors and Ford Motor Company of Australia. The car with the most intriguing logo, however -- and, some say, the best chance to win -- could well be one belonging to a small Beverly Hills, Calif., shampoo company.
Christened the Mana La ("power of the sun" in Hawaiian), the $250,000 car -- built at one-tenth the cost of some of its rivals -- utilizes a patented vertical-wing design that makes maximum use of wind power as well as solar power. Composed of urethane foam, carbon fiber, and high-temperature vinyl ester resin, the entire vehicle weighs only 500 pounds, sports an on-board computer and a six-and-a-half-foot-high solar canopy, carries NASA-grade storage batteries, and is, in the opinion of one consulting aerospace engineer, "aerodynamically ahead of any [model] I'm familiar with." The Mana La will also be featured in a National Geographic Society film about the race, thus providing its creators with a worldwide audience for their exploits.
What's more, this car will actually be driven by a shampoo company -- and in more ways than one. Two of its pilots are Paul Mitchell, founder and president of John Paul Mitchell Systems Inc. (#71 on the 1986 INC. 500), and his cofounder and chief executive officer, John Paul Jones De Joria. Their commitment to funding the Mana La with company capital got the project rolling in the first place, and soon it will test their driving skills as well. A third pilot, Jonathan Tennyson, the car's overall architect, is partner with De Joria and Mitchell in a separate but related enterprise: a self-sufficient, solar-powered fruit plantation on the "big island" of Hawaii.
It is on this plantation, high above the cane fields in the tiny village of Paauilo, that both the car and the corporate vision have taken form. Mitchell, De Joria, and Tennyson bought the 30-acre site in 1980 as a personal investment, not a corporate one, intending to make real their dream of establishing a working experiment in tropical agriculture and energy independence.
Seven years later, that dream has been realized in spectacular fashion. A kind of Polynesian version of a hippie Disneyland, the farm not only provides workers and family members with their own food, water, power stations, and living quarters, but it also supplies the company with a key ingredient for one of its most popular products: awapuhi, a wild Hawaiian ginger plant used in Awapuhi Shampoo. As both company and farm continue to develop, moreover, the Paauilo operation is expected to grow and process other native emollients unique to the company's product line.
It is here, too, on a recent summer weekend, that Mitchell and De Joria have come to inspect Tennyson's prototype and to explain, in this improbably utopian setting, the leap from selling hair-care products through salons to driving twentieth-century vehicles that run on sunshine.
"I believe you have to visualize your dreams before they can happen," says Mitchell, 51, lounging on the deck of his gardenia-scented guest hut. "And one of my dreams has always been finding a better way to live on this planet. When I moved to Hawaii from New York City 12 years ago, I was one of the most recognized hair artists in the world -- and totally burned out on the whole success trip. For nearly a year I lived in a one-room beach shack, doing nothing but yoga, meditation, and vegetarianism. Hawaii healed me. Now that I'm successful all over again, I have the opportunity to show the world that there is a better way to live. The car and this farm are parts of that vision."
De Joria, 43, a 15-year veteran of the industry's sales and marketing sides, adds that while he and Mitchell always believed they could make a lot of money -- and have a lot of fun -- launching their own line of hair-care products, "We're just beginning to understand the real possibilities here. What comes off [the farm] could be the wave of the future for businesses as well as for people -- proof that you can operate at lower cost, greater efficiency, and design practical products in the process. Instead of a system in which huge offices and factories are required to create one little idea, why not put the human brain -- the greatest computer of all -- to work on ideas that could revolutionize they way we live? That's the alternative we're exploring.
"When we opened up China last fall," he continues, referring to the latest market for the company's hair-care products, "members of the China Trade Co. expressed serious interest in our ideas about alternative energy and transportation. We're already talking about a co-venture with them, mass-producing solar-car kits. If that works out, we could instantly become a multibillion-dollar company. And that's pretty mind-blowing."
It is Tennyson, however, a onetime Miami marketing executive, who most succinctly expresses the philosophy governing these myriad enterprises: shampoo company, solar-car company, self-sufficient farm, way of life. "The whole idea," he avers, "is to design your way out of overhead. Design your way out of a water bill. Design your way out of an electricity bill. Out of a car payment, a gasoline bill, all those things you think you need, but it turns out you really don't. And the best way to do that is to minimize the number of moving parts."
This union of philosophy and practice -- of lifestyle and workstyle, if you will -- has been as much a cornerstone of John Paul Mitchell Systems as it has the Mona La or its lush Hawaiian habitat. Like the lagoons and papaya groves that now dot the Paauilo hillside, it did not spring up overnight. Products of the 1960s all, Mitchell, De Joria, and Tennyson first connected during a decade when conventional wisdom was mostly good for turning on its head and "alternative energy" referred to solar, water, and wind power, not cocaine or venture capital.
"A lot of us were dreamers then," remembers Tennyson, 42, who in the mid-'70s abandoned the business world and went off to live in a homemade pyramid on the banks of the Suwannee River. "We'd all sit around fantasizing about what we'd do if a) we had the money and b) we could master the appropriate technology. My own particular interest turned out to be ancient Egyptian culture, which pointed me in the direction of exploring solar energy and, ultimately, solar-powered vehicles. But there were many different dreams back then. Unfortunately, most of them got derailed along the way."
Others never left the track. Paul Mitchell had grown up in England during the war years (his father was chief engineer at Buckingham Palace), later becoming, under mentor Vidal Sassoon, one of Swinging London's hottest hair stylists during the early '60s. He had the marquee name, and the reputation among his peers, thanks to the dozens of traveling clinics he conducted each year (some of which Tennyson's company helped design and mount), for being an indefatigable showman. He also cultivated an appetite for Eastern mysticism -- and an aversion to working for somebody else.
"All the times I had partners before," he says with a sigh, "their idea of making money was me earning it and them counting it. John Paul is totally different. He approaches work with the same energy and enthusiasm I do. And he's easily the best salesman I've ever seen."
John Paul Jones De Joria has indeed been that. A Los Angeles native, he got out of the navy in 1964 (Vietnam, the worst fantasy of all, was right on the verge of exploding), thinking he'd enroll in dental school. Unable to find the tuition money, he started selling encyclopedias, then copying machines, insurance, you name it. He tried publishing, and by 26 was a sales manager for Time Inc. De Joria then slid over into beauty products; after just 18 months with Redken Laboratories Inc., he was appointed national manager of Redken's schools and chain salons. Life in the beauty-industry fast lane was proving to be a far cry from pulling teeth. While many of his service buddies were becoming war statistics, De Joria was tasting the American dream, a fruity concoction filled with hot cars, pretty women, and rock 'n' roll.
"It's a show-business industry," De Joria allows, "and Paul and I crossed paths often. Still, it wasn't until he dropped out and moved to Hawaii that we talked about starting a business together. Paul had a small salon in Honolulu then and was tinkering with his own product line. Most hair artists aren't businesspeople, though. He had no clue how to market his product. So it became clear from the outset what our roles in such a company would be: I wouldn't tell Paul how to cut hair, and he wouldn't tell me how to sell shampoo."
A couple of other things were clear from the beginning. One was that normal channels of capital weren't going to be available to them (too flaky for the marketplace, the bankers said, too "free-spirited," too avant-garde). And the other was that, as Tennyson posits, if you want to run lean and natural, design a way out of the overhead and minimize the moving parts.
Applying that blueprint to the environment they knew best, Mitchell and De Joria came up with an ingenious scheme. Instead of underwriting the cost of a production facility, they approached Star Laboratories Inc., a small Los Angeles-based hair- and skin-care products maker, and worked out a deal to subcontract all their manufacturing. Mitchell, inventor of the technique known as hair-sculpting, collaborated with Star Laboratories president William Boyd on developing a line of setting sprays and lotions that would unleash the creativity of his fellow hairdressers -- and be easy for their clients to use at home. Once dismissed as a passing fad, hair sculpting is now the industry's hottest trend. Star Laboratories, meanwhile, has grown into an $18-million-a-year, 200-employee operation, a large chunk of whose business remains John Paul Mitchell Systems.
Mitchell and De Joria had also been told that, to market and distribute their product nationally, they'd need a huge sales staff and a host of divisional managers. Not so, they reasoned. Relying upon industry contacts instead, they set about building a network of regional distributors and salon-owner associates. Mitchell, Mr. Inside, went on the road to do training seminars and demonstration shows. De Jora, Mr. Outside, concentrated on keeping the distributors happy by visiting them regularly, rewarding their efforts lavishly (the first to reach $1 million in sales got a Rolls-Royce as a symbol of gratitude; the first to hit $3 million, a new Ferrari), and supporting the product with heavy advertising money. Overhead was obviously overrated. Today, the company has 34 distributors in the United States, 7 international distributors, and 350 John Paul Mitchell Systems associates -- none of whom are on the full-time corporate payroll.
Seven years later, in fact, the company that was too weird to bankroll and too lightweight for its drivetrain boasts more than $5 million in monthly sales, a staff of just 27 employees, zero debt, and a profile even higher than its 40%-plus pretax profit margin. Whole divisions are in the hands of 25-year-old ex-hairdressers. Employee compensation is twice the industry norm, and several recent buyout offers in the $125-million range have been politely declined. Furthermore, although no formal mission statement has circulated internally, a succinct one might be this: if you're not having a really, really good time working for John Paul Mitchell Systems, you're probably just not trying hard enough.
"John Paul sets the tone around here," says Dawn Warmuth, 24, vice-president of international affairs, "and John Paul's pretty loose. There isn't any plan -- or problem -- you can't take into his office. He definitely works hard, but he plays hard, too. The rest of us take our cue from him."
As if contravening every known law in the managerial universe, moreover, the faster this vehicle goes, the more easily it seems to operate on autopilot. Mitchell, who used to do upward of 100 road shows a year, has settled into semiretirement on Oahu and conducts most of his business from the porch above his hot tub. "I don't really take the company very personally," he confesses. "I mean, my name is on it, but it's not me. Having that kind of attitude -- which John Paul shares -- not only leaves me a bit more ego free, but it also allows me to be more objective about what's good for John Paul Mitchell Systems. And most days, all that requires from me is a few productive minutes on the telephone."
De Joria, who bears the heavier managerial burden of the two, is hardly chained to a desk, either. Figuring he once spent 90% of his time working and the rest on more sybaritic pursuits, he has now brought the ratio down to roughly 50-50 -- even as sales continue to double with each fiscal year. The key to management by remote control is "having bright, motivated people; setting up simplified [accounting] systems that can be evaluated easily; staying close to the distributors; and not being afraid to let others make their own decisions."
"I used to think I could run [the company] only up to $15 million," De Joria says. "When we got there, I realized the design was such that may taking John Paul Mitchell Systems to $50 million has been no problem. Now that we're approaching $100 million, I see us adding maybe five or six more people, mainly in the warehouse. The bigger we get, the more I delegate. The more I delegate, the less office bound I have to be. And the more fun I can have."
So . . . are we having fun yet?
"We are having so much fun," De Joria smiles, "that it's practically an indictable offense."
Indeed, compared with his somewhat reclusive partner, De Joria flies right up there in the jet stream. He owns a posh house in Beverly Hills, a penthouse in Manhattan, and would probably commute between them in his Porsche if they stopped setting speed traps in Kansas. When the snow's right, he likes to be in the Rockies or the Alps. When the surf's right, he takes off for one island or another. Los Angeles's better restaurants know him by sight, and if there's music in town, chances are he'll be dancing. A flag-waving patriot, De Joria also gives generously -- and quietly -- to such local charities as the Vietnam Veterans Food Drive.
His own traveling days mostly behind him now, Mitchell is finally getting around to building the house of his fantasies: a $2.9-million estate on the beach. When completed next year, the complex will include a main house, guest house, boat house, office/apartment annex, Japanese bath, solar-electric system, fruit and vegetable gardens, and a view of the Pacific that doesn't quit. Locally, he supports the antinuclear-power movement and the effort to stop Hawaiian food processors from irradiating native produce for export.
However great the personal wealth they ultimately accumulate, and whatever their company's influence on the hairdressing industry, it is their vision that separates Mitchell and De Joria from most get-rich-quick entrepreneurs. Forget, for a moment, the beach houses and sports cars. Come back instead to Paaulio, where Paradise is assuming unusual shapes.
More than 2,000 fruit-bearing trees adorn the farm -- most of them planted during Tennyson's first year of residency, when he and his family camped out in tents, the better to study local weather patterns and growing cycles. All are mulched in a sterilized growing medium and planted in circular beds, to reduce maintenance. Another recent addition is a 500-square-foot garden, which, after the Australian race, will be enclosed in a 70-foot domed green-house complete with fish ponds, an expanded kitchen area, and a company laboratory.
On one knoll sits John Paul's house, a glass-and-koa-wood hexagonal hut looking down on a private lake and papaya grove. Clustered around the main building are a pair of solar panels, an open-air kitchen, a "deluxe natural toilet," and a water-distillation tank. Parked out front: a souped-up, candy-apple-red, 48-volt solar-powered golf cart ("fastest damn golf cart in the world," says De Joria, who tends to pay attention to these things).
Mitchell's complex lies down slope. Like the other residences, it is faithful to an ancient Hawaiian principle of grouping discrete, open-air buildings designed for individual functions. It has its own separate kitchen, shower, and toilet facility. Across the path: a bright-yellow '69 Datsun pickup truck, its gasoline engine removed and discarded, power cords plugged into a solar-charging station.
"I call this one the Organic Zucchini," says Tennyson, of his all-electric, Suzukichassis, you've-never-seen-anything-like-it solar machine. "Nice, huh? The motor cost $300. The controller, $500. Batteries? Maybe $800. Maintenance runs probably 5% of a comparable gas-powered vehicle, and this one is pollution free. Only one moving part in the motor, too."
Responding to a visitor's curiosity, Tennyson climbs down and starts lecturing on economics. The average small farm, he explains, has dozens of machines -- trucks, tractors, Rototillers, lawn mowers, several water pumps, chain saws -- with thousands of moving parts. The more moving parts, the more complicated the habitat. Parts wear out and have to be fixed or replaced. The machines run on oil-based fuels, which pollute the environment. He has taken the same habitat, he says, and designed it "so you can count the number of moving parts on the fingers of two hands.
"And do the same amount of work," he continues. "With totally silent operation, low maintenance, and free fuel. When you start looking at the numbers, they become very attractive. People will tell you there's no hope left for the small farmer. Nonsense. If you design a farm so that it doesn't have to make money -- if you make self-sufficiency the primary goal, and let cash crops be a plus on top of that -- then you're pretty much home free."
The farm -- now operating on a breakeven basis, thanks to minimal fixed costs and a brisk trade in awapuhi -- has already inspired its partners to buy up two other parcels. If Tennyson's car succeeds in capturing the World Solar Challenge, however, the kind of numbers he's playing with could get a whole lot of scrutiny. And Mitchell, for one, believes it's a lock. "I can absolutely see that car crossing the finish line first," he insists. "There's no doubt in my mind we're going to win this race."
Don't dismiss that vision too quickly. A decade ago, when he first moved to Hawaii, one of Mitchell's few acquaintances was Swami Muktananda, an Eastern mystic. Because Mitchell was adept at doing hair, and because the swami was nobody's fool, the two struck up a relationship that was part personal, part professional. On odd mornings (and at the odder hour of 4:30), Mitchell would be summoned to trim Muktananda's locks. The swami repaid the favor by discoursing on metaphysics. Each knew his specialty well, and in time their understanding deepened.
One morning, as Mitchell tells it, they finished their session and went for a walk on the beach. Suddenly, Muktananda stopped and demanded all Mitchell's money. Producing a handful of bills from his pocket, he watched the old man wad them up and throw them into the Pacific.
"Money means nothing," said the swami enigmatically. "The sea will bring back all you need. Live in peace, my son. What's yours shall come to you."
This year, the sea brought Paul Mitchell and his partner about $12 million apiece -- and some sweet miles in the sunshine. Maybe what Muktananda meant was simply the wave of the future.