I told him about my story with Joie de Vivre, the boutique hotel company that I started at 26 and sold just before my 50th birthday. I started it for lifestyle reasons – I was looking for a career vehicle that allowed me to be my own boss while allowing me to be a creative entrepreneur. I also loved the idea of being in the hospitality industry because it allowed me to travel the world.
As it grew into the second largest boutique hotel company in the U.S., I used it as a leadership laboratory and wrote books about my evolving experience as the CEO. The business had turned into a proud legacy for me. But, I also started to feel a loss of creativity and freedom as my job was to feed this beast with 3,500 employees.
And, then, at the bottom of the Great Recession as my debt and stress were growing, I felt the extreme need to escape this Frankenstein I’d created. I dreamt of cancer and car crashes and, through divine intervention, went flatline (Near Death Experience) on stage after giving a speech about my legacy business. That made me realize that I desperately needed a liquidity event, but I’d never set Joie de Vivre up to be sold. I imagined running the business at age 80.
I wish someone had asked me in my mid-20s, which of these three kinds of businesses I was creating:
- A Lifestyle business that’s relatively low-profile giving me the freedom to curate my life,
- A Legacy business that I want to be a role model and live on far into the future, OR
- A Liquidity event business that is being built to sell for a handsome profit.
To be honest, I created a Lifestyle business that grew into Legacy that was wholly unprepared for a Liquidity event when I felt the urgency to get out. How was it unprepared? My ego was too attached to running the business and I hadn’t created a succession plan for myself. The capital structure was convoluted. And, I hadn’t developed a track record of healthy profits (I was always investing in the long-term, legacy of the business) to attract motivated investors during a challenging economic time.
Instead, I needed to sell the business to vultures who were circling and had the deeper capital pockets to sustain the business during the prolonged Great Recession. But, along the way, they screwed up the legacy of what we created while saving the business. Today, my company (which is owned by Hyatt) has lost most of the corporate culture and unique brand reputation it used to have. But, I will say I’m incredibly thankful that JdV still exists and Hyatt is stewarding the company into the future. Yet, I learned my lessons the hard way.
In sum, I’ve built some wisdom on this question over the course of nearly 40 years as an entrepreneur. I just wish someone had asked me this question about what kind of business this is, at least once a year, because you run a Lifestyle business one way, a Legacy business a different way and a Liquidity business a third way.
That’s part of the reason I’m excited to be co-leading (with well-known executive coach Edward Sullivan) a Baja workshop this winter called “What Now? Finding Passion and Purpose After a Big Success” which will explore both whether and how to sell a business, what to do next, and how to think of your next act including if you want to become an entrepreneur again. This workshop is also well-suited for other successful non-entrepreneurs whose identity has possibly been too closely attached to their business card, whether that’s being a pro athlete, a well-known artist or actor, a local hero, and/or someone who has a tinge of workaholism built into them.
Hope you’ll join us March 9-14. Sign up now as this workshop will fill up.
-Chip