When celebrities like Lindsay Lohan have drug and alcohol problems, they go to Cliffside Malibu. The treatment center, overlooking the Pacific Ocean, was originally the home that founder Richard Taite bought to retire in.
In a life on the edge, starting a business was just one more risk. For 20 years, Taite was a drug addict. He started smoking pot at 12, snorted cocaine at 16, and eventually started smoking crack every day. In Taite's telling, he had been an abused child, born in Lake Encino, California. His father left when he was 17. A Valley kid, he got to college, but graduating took seven years. He failed out of law school in 1991, but ended up a workers' compensation claims representative for a few different attorneys--getting fired from each job.
At his lowest point, he says, he was bunking up with hookers at crack motels and eventually was homeless. In 1999, a friend wrote him a cashier's check for $850 for a sober living facility. Until 2003, he struggled to stay sober while he made money buying up medical bill debt. He earned enough by age 37 to get a mortgage to buy the Malibu mansion, and he decided to turn it into a sober living and treatment facility.
This year, Cliffside Malibu is expected to earn more than $20 million in revenue. At $58,000 to $75,000 a month, Taite's facility is known as the one of the best rehabs in the world; its clients have a 70 percent chance of sobriety a year after treatment. With organic food and five-star-hotel-like amenities, it has become the premier rehab for the rich and famous. One difference between Cliffside and other facilities is that no one is compelled to stay. The doors aren't locked, and no guards will run after you with a hypodermic of Thorazine. People come here when they're ready to "remove the monkey," get clean, and commit to change.
Living a life full of risks, Taite bet his house on a business he had no idea how to run. In its early days, Cliffside made him a living, but nothing to brag about. After years of reinvesting in the business and never raising capital, he eventually started making millions. Today, Cliffside Malibu has a reputation for being the most successful rehab center in the nation, both financially and in getting people on the wagon. Below is an edited version of Inc.'s interview with Taite about getting sober and betting on himself.
Building Cliffside Malibu didn't seem like a risk at the time, and it still doesn't. When you have nothing, you're not risking anything. That I was homeless after college wasn't surprising. I didn't have the tools for living. My thing was crack and hookers. I'd go on six-month-long binges, staying up six days straight, eating a Big Mac once a week just to keep myself alive. At the lowest point, I was 148 pounds, at 5 foot 11--I was completely f---ed up.
I'm not talking about under-a-bridge homeless; I'm talking about staying at crack motels for $28 a night until I didn't have money for that anymore. Then I went to a marina, and hoping it was my friend's boat, hopped on and stayed for two days to get sober. Then I checked myself into a sober living facility, for $850 a month. From that point, in 1998, I was getting sober and struggling to stay sober until it clicked, on March 3, 2003. I finally got my head out of my a-- and understood myself. The beauty is that I just did my best one day and then did my best the next day, until I had all these days where I had my best day every single day. After a year, my life was completely different from what it used to be.
I originally bought the house in Malibu to retire in it, but I had always wanted to open a sober living facility to give back. I benefited from my experience at one, and it felt romantic to me.
It was never meant to be profitable; I just wanted to break even. I was newly sober, about 15 months, and I didn't think it through. I bought a dream house in Malibu with a huge mortgage. I decided to rent a one-bedroom apartment on the beach and lease the house to the sober living company I had just started and opened it on August 7, 2004.
It really started in an altruistic way. What I realized soon was that I was in the rehab capital of the world, and everyone was charging exorbitant amounts, but people weren't really getting help and there was no aftercare. People thought I was making tons of money--the buzz was that I was charging $20,000 a month, and I was always full. What they didn't know was that I couldn't say no to anyone. If a guy had only $2,500, I'd take him. If this guy had no money and I had the space, it was God's will, so come on in. I was actually losing $40,000 to $60,000 a month, but everyone thought I was killing it. My competition grew.
In response to all the competition, I decided to open up a treatment center, and on July 1, 2005, Cliffside Malibu was born. I didn't know much about the business of treating addicts when I first started, so I hired a friend I met in sober living, and my wife kept the books.
With only six beds, the margins were low, and the center never made any money until I bought the partners out after my divorce. On my birthday, in July 2007, I got them out, and it was solely my business.
This is what I would do: I'd go to AA meetings, find the newcomer and take him out to lunch, get him a haircut, buy him new clothes, and take him to my sober living facility, and I'd pay for it all. Until 2011, I made only a modest living. I was still running the business just to give back; I couldn't reconcile making money off getting people sober. I felt that I should do this for fun and for free.
In the beginning, I was only one step ahead of my clients; I was doing two hours of therapy a day myself. I just showed them how to dig themselves out of a hole and how to stay out of a hole. At that time, I wasn't a licensed treatment facility. I was strictly a sober living, no clinical treatment. I was giving my clients more than I promised: whatever they needed. If someone came in for drugs and alcohol but also had an eating disorder, I'd hire a specialist to shadow her and help her through meals, keep her from going to the bathroom to throw it all up. I became known as the place where you get whatever it is you need. Slowly, I started treating some of the biggest movie stars in the world and some of the richest people on the planet.
We don't have a lockdown facility. We give your phone back after 72 hours of detoxing. If you want to leave, you can leave. But we do it car salesman-style: If someone wants to leave, one therapist talks to the client, then another comes after the first leaves, and then a third, until it's been an hour and we convince you to stay. We've treated about 2,000 people so far. On average, a year after leaving Cliffside there is a 70 percent chance of being sober.
Back in 2008, I was seeing a swami. For two years, I'd cry to him about how I didn't feel clean trying to make money this way. He kept telling me: Wouldn't it be a better world if everybody made a living helping people? I didn't hear it the first year, but the second year it resonated with me.
In 2011, I received that concept, and everything started to change, but I still had this feeling of embarrassment over me. I owed the government money for back taxes. I had to sell a house I had just bought for my family, or else the IRS was going to pull all the money out of my business, and I wouldn't make payroll. Luckily, I sold the home in one day, and the government got its money.
My dad had declared bankruptcy when I was a kid, and we had to leave the house. I didn't understand that, so I stayed. I put my mattress in the living room and said I'm not leaving. The sheriffs came and kicked me out. As an adult, when I was forced to sell my own house and give the money to the government, it felt like that again. Change isn't a light switch; it's slow and gradual.
I went to meet a friend of mine, Ron Tutor. He runs a successful construction company. For half an hour, he tore me up: "You're a f---ing loser and here's why..." I got up, gave him a kiss, and walked out. From that minute, I worked around the clock. Between the swami and being shamed by a guy I respect, it all clicked, and I started working 12 to 16 hours a day. That year, we grossed $6 million. In 2012, we made $8 million. In 2013, we made $10 million. This year, we're on track to make more than $20 million, and by 2015 the business is expected to make up to $60 million.
I never took a loan for the business, except for mortgages for my homes. I don't like banks, I don't want partners, I don't believe in raising capital. I have been constantly reinvesting in my business. I have only one move: I go all in. Why play the stock market, why bring in partners? I trust myself and my own track record. I went from being homeless, to having the government forcing me to sell my house and give them the money, to where we are today. What's important to me is to constantly reinvest in myself and my business.
A few days ago, as she does every month, my comptroller sends me the numbers for our gross and net profit. We were a couple thousand dollars below a million-dollar profit for the month. She apologized to me that we didn't break $1 million.
I was driving at the time, so I pulled over on the shoulder of the Pacific Coast Highway and started crying. When you have a past like mine, you're constantly fighting "I am not worthy." But the past isn't who I am. Who you are is who you are now.
Getting better is about constantly making that repair. When you have a month like that, that's a milestone.
I won't keep that money; I'll reinvest it. We are in the process of buying the two sober living facilities I went to while I was getting clean, because I think it's romantic. It's what I always wanted to do, buy the two places that changed my life. It's full circle.
I am also opening up an affordable rehab center, where I can treat 100 people at a time at a low price point, a midrange level. For the first time, I am diversifying my businesses so we're not just high-end treatment. We get 100 calls a day, and we may get only two of the people to come in, so I wanted to monetize those calls and help those people.
The past 14 months have seen the most growth. We went from 18 beds to 56 beds. We'll have 108 beds by the end of this year, meaning in 16 months, we'll have grown 400 percent, not including the 30 beds at the two sober living facilities.
This part of my life is all about expansion. I was on a hamster wheel for so long. Now it's all about finding out who I am. That's a long road, man, to take from being homeless. At 48 years old, with a 19-month-old son and 3-year-old daughter, I almost missed it.