by Ryan Blair
I’ll never forget walking into Blyth HQ. I remember walking past a collage of framed stock certificates on the wall, which for some reason I was drawn to. As I walked over to it, I was greeted by Bob Goergen himself. I was so nervous. This was one of the Forbes 400 richest Americans, a real icon, and he was walking right toward me wearing his Armani suit and impeccable shoes. I immediately noticed his gold Rolex. He said to me, “You know what that is, right?”
“No sir,” I replied.
“Those are failed investments. Guys like you, whom we bought into but failed to perform.”
I reexamined the stocks and the letters hanging on the wall. Letters from CEOs saying things like, “Dear Mr. Goergen, the following 100 shares should be worth tens of millions!”
I remember thinking, There is no way—I won’t be immortalized on that wall! I had no idea that the very stock I would sell him that day eventually would become about as worthless as wallpaper.
The meeting started and I gave my presentation at the end. Bob Goergen asked me, “How much money do you need, Ryan?” I said, “I need a minimum of $1.5 million.”
He shrugged off the number and said, “We’re in, under these conditions: get through due diligence, hire a solid finance guy, and our name can’t be involved at this stage.” I would later learn that those conditions would require another four months of twenty-four-hour days, but for a shot at greatness, it would all be worth it. And as the song “Lose Yourself” by Eminem goes, “If you had one shot. . . .”
After the meeting I got into the town car they’d arranged for me and we drove through Greenwich, Connecticut. Apart from what I’d read about Greenwich, I’d never been to a place like that. Here I was driving past one billionaire’s home after the next, after having met with one of the most influential men in the world. I was in the midst of daydreaming when I got that same rush I had gotten when I knew I’d sell SkyPipeline. This time I knew that one day Bob Goergen was going to buy ViSalus. In that car ride I visualized it, and I knew that I was on the path to my destiny.
That following Monday I began to work on the conditions they had imposed. That Saturday I sent Nick and Blake the following e-mail:From: Ryan J. Blair
Sent: Saturday, September 24, 2005 7:40 AM
To: nsarnicola; ‘Blake Mallen’
Subject: Massive attack
Guys, let’s kill this shit . . . We need the money in the bank! We’re at 91K! Let’s hit all of our goals and impress the Goergens and make them want to do a deal so bad that we sell less of the company for more money.
If we beat our numbers . . . I might be able to make part of the deal that we each get to take 100K off the table from the transaction. The more money we make this month the more room I have to work with.
Let’s create a cause this weekend and get our team so behind it . . . that they hit their numbers or die trying!
Kill !!
Kill !!!
Kill em all!
CHEERS.
Ryan J. Blair
Nobody believes you when you speak into the future. Very few people are able to see a clear path like that and follow it. I used to tell Nick and Blake all the time that one day Blyth would buy ViSalus. I saw that straight shot and I took it. I seized the day and they did their part to make sure that day would come.
Since the Goergens had invested in us, Blyth had found a way to eavesdrop on ViSalus. They’d send someone to drop in at a board meeting, audit our events, review our financials, and make sure they tracked us.
One day I straight out asked Todd, “What are the chances that Blyth will buy us?”
Todd said, “Little.”
I didn’t buy the odds. My vision was clear.
In February 2008, Blyth sent one of their executives to audit a ViSalus conference. I sat down with him when it was over and I told him that I had other buyers at the table. In fact, I was in negotiations with several funds that wanted a piece of our deal. I had term sheets in hand, and I said that if Blyth wanted the opportunity to buy us, they should jump on it now. He went back and told the Goergens that the little company they’d invested in had grown up.
On April 17, 2008, I was summoned for another presentation to Bob Goergen and the Blyth team. I started the meeting with this opening remark: “Three years ago to the day I came here to ask you for millions of dollars to help build ViSalus into the company it was capable of being. Nothing has changed except the number of zeros I’m looking for.”
Bob Goergen literally laughed out loud. And his ensemble of suits followed suit.
I knew they would buy it, but I had no idea about the kind of test I would go through to close the deal. They put me through the craziest due diligence, through hell and back, and then when I thought I couldn’t take any more, they required that I divest PathConnect, which involved letting go of twenty employees and possibly burning the $2.5 million several investors and I had put into the company along the way. They also required that I test and retest and relabel and remanufacture every product we made. I had to hire tax advisers, corporate attorneys, personal attorneys, FDA attorneys, and FTC attorneys; and all those attorneys had to deal with their counterparts on the other side of the deal. We spent more than a million on attorneys and fees. (See chapter 18 under “Lawyer Up.”)
At one point, every step I made was through fear, because I knew if they pulled the plug on the acquisition, I wouldn’t have enough money to stay in business. I was doing the deal because I needed working capital in the first place and now this deal was not only costing us more than $1 million in fees, it was also costing our management’s focus on building the business, in a time when the economy was changing rapidly. Remember, this was just days before the 2008 recession. This is when having a nothing-to-lose mind-set comes into play. I just focused and kept charging ahead, and played my highest-stakes game of poker to date. I went all in.
Term after term, we negotiated. One time we were discussing the revision of the contract and I noticed some of the same terms that had been the result of that zero calculation from the sale of SkyPipeline. It took me back to the anger I’d felt in that boardroom with those investors, and I leaned on that feeling. We called the Blyth negotiators and said, “The terms are unacceptable. Either accept our terms and send back the documents or the whole deal is off.”
A rather loud bluff, but the only move we could make in this situation. I wasn’t going to swallow the same poison pill that had nearly killed me in my last deal. After all, I wasn’t building my résumé here, I was building my life’s mission.
We told their attorneys, “Go back and tell your boss that this whole thing fell apart because you guys are being greedy.” I remember that I was so adamant, one of the Blyth attorneys said on the phone, “Calm down! Nobody is trying to insult you.”
They suggested a day to review the matter, then they came back and accepted our terms. And the rest was history. The premonition I had had that day in the town car while leaving Blyth’s HQ was now a reality.
I’m sharing these stories with you not to impress you but to show you that life is a summary of actions taken. If I could have enough faith to believe in my goals and become the person I once dreamed of being, and build a company that someone would one day buy for millions of dollars, so can you.
But first you have to learn how to honor your deals.
6
HONOR YOUR DEALS
One time I made the mistake of living beyond my means. I was driving a hundred-thousand-dollar sports car and living in a beach home overlooking the ocean, but I had a negative bank balance and my credit cards were completely maxed out. I remember thinking that I couldn’t even take a girl out on a date and fill up my gas tank. I’d completely squandered my money on a failed investment (which I’ll talk about later in chapter 12, “Million-Dollar Mistakes”). I had bet all my liquid cash on that venture, and then, tail between my legs, I had to ask my stepfather for a loan.
This was against Bob’s principles. If you knew Bob, you knew that
he always wanted the best price on everything. He said I’d been living irrationally.
After having learned how the business world was structured, I couldn’t fathom working for a manager who worked for another entrepreneur. Besides, I had no career training, no college degree. Regardless, I told Bob that if he wouldn’t lend me the money, I would have to shutter my entrepreneurial dreams and get an actual job.
Reluctantly, almost angrily, he grabbed his checkbook and said, “Ryan, you’re unemployable. Trust me. You used to work for me.”
He was frustrated that he’d broken his own personal rule and lent money to a family member. He knew what it must have taken out of me to ask for help, and maybe I’d learn the lesson.
Bob lent me $20,000, and his terms were very gracious: 8 percent interest. I had to take on a 1099 for the loan amount, and I would receive a daily call as a reminder that I was late. When I finally paid him back (with principal and interest), it was a proud moment because never again would I have shame on my face at a family gathering, or have to worry that the next incoming call was from my bill collector stepfather, Bob.
To Bob, a deal was a deal, and he taught me to honor my deals. True to his word, a month after I’d paid him back he called to tell me I’d miscalculated the interest. I owed him $67. He was a true businessman and a man of his word, and I will miss him very much.
We recently lost Bob to lung cancer. At the long bedside vigils while Bob was dying, I got my last chance to make a deal with my stepfather.
He’d been checked into the hospital with pneumonia on a weekend. Two days later he was diagnosed with lung cancer that had metastasized to his brain, and he would die within that week. After days of watching my stepfather’s numerous friends make emotional visits to his hospital room, and watching the unstoppable decay of his mental acuity, the family made a decision. I pulled every string to get the right equipment and the staff, and we took him home to die. There in his own home I sat with him, hand in hand, for ten- and twelve-hour stretches. I had dropped everything to spend every last minute with the man who had rescued my mother and given me all I had.
Late into the night, knowing that a person’s hearing was the last of the senses to go, I leaned in and whispered into my stepfather’s ear. I told him, “I always sought your approval. Everything I ever did was to impress you.” I said, “You were my true father. I’m going to make you proud and take care of my mother when you’re gone. I will honor my commitments.”
He grabbed my arm tight, pulled me close, and said, “I’m proud of you.”
It hit me that I would never try to impress this man again. What all sons dream of doing is making their dads proud. I’d gotten final praise from a man who had never congratulated me for my achievements, only for my potential. And it wasn’t because of my art collection, or my cars, or my millions, or all the other things I’d bragged about to him over the years. It was because I’d just stepped up for my family. He’d taken care of my mom so that I could concentrate on becoming the man I am today, and now he could pass in peace, knowing that I would take responsibility for her.
And she will be cared for, because I’ve learned how to honor my deals. Often, the hard way.
Having been raised spiritually, I was always taught to pray and hope for the best; that when you are down on your luck, get down on your knees and pray. As a kid I often prayed for my mom and dad to sober up. I’d pray that we wouldn’t lose our house. I’d pray for my father’s rage to stop. My prayers were never answered in the way I wanted, but still I held on to the belief that the only person you can turn to when you’re down is God.
By the time I was seventeen I’d been arrested nearly ten times; I’d been asked to shoot a man to prove myself to the gang I was accepted in; I’d broken into and robbed every business within a mile radius from my house; I’d been dragged home in the middle of the night by police officers; I’d sold firearms with disastrous results; I’d gotten convicted for strong-arm robbery. Finally, after many of these episodes, I found myself sitting in a jail cell in Juvenile Hall, faced with four years. Every day I watched people leave the jail and wished I were among them. I got more and more depressed. I made use of my time by writing in my journal and writing letters to my family, and true to my upbringing, I started making deals. First I made deals with God, then I made deals with myself, and finally I started making deals with my mother and everybody else.
Shortly after I appeared in court that August 1993, I wrote a letter thanking my mother for being there for me. It said, “Mom . . . I am making an oath that I will do better. I am going to go to school, get a job and make you proud. I am sorry for what I did, I truly am.”
My mother wrote me back, saying, “Dear Ryan, just a note. It was good to be with you on Wednesday. I love you and care about you very much. I miss the Ryan that was good and caring and kind to people. I hope you have learned a lesson. That you realize that you were wrong in what you were doing and did. We’ll see you soon on Sunday, Grandma is coming with me. Take care of yourself and do the right thing. Love, Mom.”
When you’re facing four years, surrounded by people who have nothing to lose because they’re going to prison for the rest of their lives—some of them for taking lives—there is nothing left to do but make deals. Eventually one of those deals paid off.
I had the idea to write a letter to Judge Perrin, the head of juvenile justice, in an effort to convince him of my change of heart. Judge Perrin had a reputation for taking no prisoners (or taking prisoners, as it were), but it was worth a try because I had nothing to lose. My penmanship was so bad back then because of my learning disabilities and the healthy dose of Prozac the juvenile hall counselors put me on, I had to recruit one of my cellmates to write it for me. In perfect old English cursive the letter read: “Dear Honorable Judge Perrin, I’m writing you this letter because I want you to know that I am truly sorry for what I have done. It was wrong and I admit it. I’m aware of the consequences I must face. Not only did I hurt Mr. Andrews, but for that matter, I’ve hurt my family, too.
“I’ve been in here twenty-six days. I want you to know I learned a lesson when I first came in front of the court on July 30th. The D.D.A. Karen Block referred to me as a burden to society. I want you to know I’m no longer a burden, but an asset to society. I plan to continue my education, start family counseling and become a responsible law-abiding citizen. I realize I have to control my anger or else I’ll be unsuccessful in life.
“Your Honor, I’m asking you for a chance. I give you my word I’ll never see you under these circumstances again. Thank you for giving me the opportunity to show my true feelings. I’m deeply sorry for what I’ve done. Thank you for your time. Sincerely, Ryan Jerry Blair.”
Judge Perrin did take the time to read my letter and gave me leniency. I got the chance to honor the deal I’d made. But this isn’t a fairy tale where an angel came down and handed me a pot of gold. I got out of jail and, of course, immediately called my homeys. But this time, at least, I knew I was dishonoring the deals I’d made. I knew I wasn’t doing the right thing.
As we grow and develop into the citizens we desire to be, we don’t always honor every deal we make right away. We don’t have control over all the circumstances. We don’t have control over the expectations other people have. Someone will always feel you did him wrong. But you do your best to honor your deals, regardless.
Circumstances change. For example, people will be relying on you for employment and maybe suddenly your new board of directors doesn’t give a shit about the deal you made. Or maybe the market changes. Maybe you took out a loan, but your company wasn’t in a position to pay it back in the time you thought it could. Maybe you just failed to perform. That happens. We all have the capacity to take on something, thinking it’s going to end up a certain way, and then it doesn’t. Next thing you know, you haven’t honored a deal. The most important thing is to ask yourself how to make it right, then how to make sure you don’t do it again.
You
have to bank the lesson and figure out how to restructure the situation so it never recurs. For instance, I told one of the first employees I hired at SkyPipeline that “if all goes well, you’ll be rich from the equity you own in the company.”
What he heard was “Ryan said I’m going to be rich no matter what.”
It was a pretty broad statement, and an overly optimistic one. The problem is that as you start to add more and more individuals to the equation, everyone has to perform equally to get their equal, or more than equal, share. Suddenly this employee’s performance didn’t warrant additional equity incentives because there were others who were contributing more to the team.
The lesson here was not to create false expectations or make vague promises with regard to cash, salary, or equity. Of course this is really hard to do when you want everyone, including yourself, to believe that you’re all going to be millionaires.
Or maybe you’ve got a multimillion-dollar idea, but you didn’t structure it correctly, as I’ve mentioned, and you have to break a deal.
One time a businessman approached me for some advice. This guy had a great idea based solely on his ability to life coach tens of thousands of people. He’d raised all kinds of money, and lots of people had invested in his grand vision. He’d raised upward of $600,000.
He raised it all on a grandiose, overly optimistic business plan that didn’t mature, and now he had hundreds of people who hated him. Some of whom had given him their life savings. He wasn’t a scam artist; he just didn’t know what he was doing. This was a case of pure negligence.
Unfortunately, I didn’t have a great solution for him, other than to say business is business, and that’s why there’s bankruptcy law. I felt bad, though. I told him to write a letter to each of his investors, explaining to them what had happened, that the business hadn’t matured or materialized in the way he had thought it would, and that he was going to take responsibility by carrying their investment with interest into his next venture. He’d have to figure out a way, no matter what, to make it right.
