START UP
THE LIFE AND LESSONS OF A SERIAL ENTREPRENEUR
by
David H. Gilmour
Smashwords Edition
*****
PUBLISHED BY
Wakaya Perfection LP at Smashwords
Start Up
The Life and Lessons of a Serial Entrepreneur
Copyright 2011 David H. Gilmour
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There are no born entrepreneurs. They are born of life’s experiences.—David H. Gilmour
Start Up is dedicated to the one who makes it all worthwhile, my wife, Jill.
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Preface
“The farther backward you can look, the farther forward you can see.”—Sir Winston Churchill
One of my most prized possessions is a portrait by Frank O. Salisbury. “Blood, Sweat, and Tears” hangs in a place of honour in my study. This is the second home this painting has had since it was commissioned by the Commonwealth Club in 1942 and completed by the artist the following year. Its first was Number 10 Downing Street.
For as long as I can remember, Winston Churchill has been a hero of mine. I grew up with the stories of my grandfather meeting him in Natal during the Boer War. I also have vivid memories of my father, sitting in the family home in Toronto, listening to the famous radio broadcasts during the Second World War. Later, as a businessman, I came to realize that Churchill embodied qualities in the political realm that I believe to be essential to entrepreneurial success. Politicians seldom provide useful models for anyone embarking on a business career—quite the opposite, usually—but Sir Winston is the exception. His innate ability to command attention, his talent for engaging people’s interest, his skill at convincing people that his cause was their cause, his capacity for clearly articulating his thoughts and objectives, his forward thinking, and his decisiveness are aspects of character that would have made him a formidable business leader—had he not been otherwise engaged.
He was courageous, and courage is something upon which, to varying degrees, all entrepreneurs need to draw at one time or another. Churchill’s stakes were a good deal higher than most of us are ever called upon to play. But there are times—in the darkest hour of a company as in a country—when conviction is all there is to go on. Whether he was in power or in the political wilderness, Churchill believed: in himself and in his cause. Conviction on its own is never enough, but the other elements that lead to success, in business as in politics, can never work without it.
I was fortunate enough to become a friend of Sir Winston’s grandson. The Winston I knew was a chip off the old block: a writer, an adventurer, a politician. Although I am now of an age at which such news cannot be a surprise, Winston’s death in 2010 was a blow.
The ancient Egyptian symbol of the ankh represents to me the inter-connectedness of things. I have always had the strong sense that even my earliest memories are linked directly to who I am now—that the story of my life cannot be separated from the story of my entrepreneurial ventures. “Will it be about business or will it be a memoir?”, friends have asked when I told them of my plans to write a book. “Both,” I reply. In my case, one can’t exist without the other.
Good or bad, dark or bright, my experiences have always felt to me as if they have been leading me somewhere. I haven’t always been sure where the path is going, but the lifelong habit of trying to learn from the past while trying to peer into the future has made me who I am.
When I was a young man, my father thought that I should take a job in an office—at a brokerage, or an investment firm, or a bank. I was deeply respectful of my father. Much of the advice Dad gave me has shaped my life. But in this instance, even though I couldn’t quite see the path I needed to take, I knew instinctively that it lay in another direction.
Similarly, the time I spent as a co-founder of Southern Pacific Hotel Corporation, of Barrick Gold Corporation (the most profitable gold-mining firm in the world), and of Horsham Corporation (which became TrizecHahn Corporation, one of the largest publicly traded REIT companies in North America) was challenging and rewarding. I was, I believe, a valuable partner. But the truth is I was never as consumed by acquisition and management as I am by helping to start things up.
What my experiences have added up to, and what they have helped me create, are the subjects of this book. And while it may be unusual to preface a book with disappointment, there is always some element of sadness that comes with looking back. I am sorry that my old friend, Winston, shall not be ringing me up to let me know what he thinks of what I have written—particularly since, as these pages reveal, his grandfather’s life has been such a touchstone for mine.
Were the achievements of Sir Winston Churchill’s life to be divided up among the biographies of three men, they would each still seem remarkable. His political life alone is a multi-volume saga. His writing would be prolific for anyone who thought of himself as a writer exclusively. But Sir Winston was not only a politician, and not only a writer. He was also a soldier, a journalist, a military tactician, a wartime leader, a painter, a bricklayer, an historian, and a husband.
All my life I have admired his keen observations. I have often jotted down his famous quotations—sometimes because they are so witty, sometimes because they are so wise, usually because they are both. I’m sure that many business people have encountered the kind of thinking that Churchill summed up so beautifully with his pointed comment: “However beautiful the strategy, you should occasionally look at the results.” What sales department would not do well to take as a motto, “Difficulties mastered are opportunities won”? I’m sure there are many entrepreneurs who have fought their way successfully through the battleground of starting up a business and who smile knowingly at one of his most celebrated epigrams: “There is nothing more exhilarating than to be shot at without result.”
Other than my own father, I can’t think of a man for whom I’ve had greater admiration. But were I forced to summarize Churchill’s life with a single triumph—one that has had direct impact on my life—I would say this: he helped to save freedom at a time when it was under the gravest of threats.
Creative capitalism is a potent force—arguably, the most powerful mankind has invented. But it requires a level playing field. It requires economic stability. It requires justice. More than anything, it requires freedom. I came of age in the post-war years and the world that Sir Winston Churchill saved is the one in which I have lived and worked. It is the world in which I have been fortunate enough to do business, and as I reflect now on my experiences as an entrepreneur, I find myself automatically reflecting on our debt to the subject of the portrait that hangs in a place of honour in my study. To paraphrase England’s greatest prime minister, never have so many owed so much to one man.
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Chapter One
Preamble at Dawn
“To improve is to change. To be perfect is to change often.”—Sir Winston Churchill
I always come back to Wakaya.
It’s not hard to fall in love with this island. Most visitors do. It’s a 2,200-acre jewel in the Fijian chain, in the Koro Sea, less than a hundred miles to the northeast of Fiji’s main airport at Nadi. I saw it for the first time in 1972, two centuries after its earliest European admirer landed—almost—on its shore.
Captain William Bligh spied its white beaches, soaring cliffs, and lush interior on May 8, 1789. After the famous Bounty mutiny, Bligh was set adrift in an open boat with the crewmen loyal to him. In his logbook he wrote, “As we approached Wakaya, two large sailing canoes approached. We, therefore, apprehensive that their intentions were to attack us, rowed with some anxiety, knowing that we were very weak.”
Bligh was a master of understatement: the situation was more dire than his sang-froid indicates. There were seven men at sea in a single longboat. They were “with no firearms,” and their supplies consisted of two coconuts. I suspect that there are entrepreneurs reading this—captains of capitalism who find themselves on the storm-tossed seas of venture and commerce— who can picture Bligh’s predicament all too accurately. Anyone in the business of starting up businesses knows something about apprehension and anxiety.
My introduction to Wakaya was a little less stressful than Captain Bligh’s, thankfully. Apprehension and anxiety are far removed from day-to-day life here, although I don’t want to give the impression that my mind shifts into neutral when I come to Fiji. The opposite is true, actually.
Focus is fundamental to success in business. During a start-up, I like to bear down obsessively on a particular challenge or marketing strategy. My single-mindedness can push all other concerns into the background. When, for example, we were trying to come up with the perfect bottle and label for FIJI Water, the bottled water company I founded in 1997 (and sold in 2004), we went through 32 versions before we hit on the right design. As soon as I saw it, I knew it was right. But until that moment, whether I was in Fiji or in the United States, the FIJI Water label and bottle were constantly on my mind.
But sometimes, here on Wakaya, I let myself be a little less focused. I think of this as my morning preamble—a chance to follow one subject to another, to see where my thoughts and my memories and my observations will take me, to circle back on things in a meditative loop of connections that, in my mind’s eye, is best represented by the ancient Egyptian symbol, the ankh.
Sega na Leqa is the name of our home on Wakaya. It is by the sea, only a short walk from our small, lovely resort, The Wakaya Club and Spa. And when I sit on the deck of Sega na Leqa, I often let my imagination roam as I watch the sky change at dawn.
When the sky changes, the sea changes. And when the sea has changed, and I pull my rapt attention back to the burnished light on the trees, I see that they have changed, too. And by then, of course, the sky has changed again. Here, every morning, I witness something everyone who is starting up a new business—or, for that matter, starting up a new chapter of their life—should accept as an absolute given: everything is connected to what has come before and what will come after. Change is the only constant.
Wakaya has always been a magical place for me. Even the way it came into my life resonates with two things that lie very close to the core of who I am: my friendships and my businesses. My first trip to Wakaya was as a businessman assessing its possibilities. I was a young businessman, I realize now—although I didn’t think so then. And my partner at the time was another young man named Peter Munk. We were close friends in those days. We still are.
The island was one of a number of properties acquired by Southern Pacific Hotels—a company I helped found in 1971 with Peter. After the roller-coaster ride of our first major business collaboration—Clairtone Sound Corporation—Southern Pacific was our next joint venture.
Curiously, the fates seemed to have already aligned my course with the distant islands of Fiji. In the early 1960s, Peter and I bought, sight unseen, a 12-acre piece of property in the South Pacific. To be clear: this was not Wakaya, nor even part of it, but our little acquisition proved to be our springboard to Southern Pacific Hotels and, for me, to the island that has become my spiritual home.
At the time, our real estate purchase in the South Pacific was very much on the periphery of our thinking. We were busy with Clairtone and it would be some years before I travelled to the South Pacific to begin putting together a plan that would become Southern Pacific Hotels.
We made that first purchase of land in the South Pacific a little cavalierly, with no grand scheme in mind. We were acting on the friendly advice of an acquaintance in Toronto who convinced us that the South Pacific had enormous potential and pointed out that the location he was suggesting had no property tax. What did we have to lose?
Not long after we acquired our first South Pacific property— and almost a decade before I made my first trip there—I found myself seated at a dinner party in Los Angeles beside the famous astrologer and psychic Jeane Dixon. Naturally, I asked her to make a prediction. We’d never met, and once she realized I wasn’t interested in the Hollywood gossip that was commanding the attention of the table, she considered me carefully. She said, “You’re going to play a strong role in the last pure place in the world.” She thought for a moment. “I think perhaps this last safe place is… Fiji. Have you ever heard of it?”
It speaks volumes about how very far away Fiji seemed from North America and Europe in those days that Jeane’s question was not had I ever been to Fiji, but rather, had I ever heard of it. Still, it was uncanny. I’m not sure who was more surprised—me, because of the specific nature of her question, or Jeane Dixon, when I said, “Actually, I have. In fact, my partner and I have just bought a small piece of land there.”
Wakaya never quite worked its way effectively into Southern Pacific’s portfolio, which was just as well. Soon enough, I bought the almost-completely undeveloped island from my Southern Pacific partners. Somehow, I’d come to realize that it was going to be an important place for me. Business and friendship led me to Wakaya. But it always felt as if the island found me, and not the other way around.
Both entrepreneurship and friendship have been strong currents throughout my professional life. They are themes that I often consider as I sit in the early morning here on the deck of Sega na Leqa. Things have a way of coming full circle, especially if you are observant of life’s cycles and patient enough to watch carefully as they turn.
Recently, the work that I have been doing with Russell Thornley, our manager of Agriculture, Horticulture, and Animal Husbandry, has made me even more aware of these cycles. Our objective is to make the Wakaya Club and Spa entirely self- sustaining while leaving as little of an environmental footprint as possible—and with Russell’s experience, practical skills, and devotion to the precepts of organic agriculture, we are close to reaching that goal. Wakaya’s virgin, volcanic soil is so rich in nutrients, our environment so pristine, and the climate so generous, that we have also begun to work toward raising and exporting our organic ginger (possibly the purest and most potent ginger in the world) and dilo oil. (Dilo oil is a natural skin care product made from the nut of the dilo tree, which has extraordinarily healthful and regenerative qualities.) “Wakaya Perfection” is the name we have given to our suite of products— a brand that we believe resonates with the quest of discerning consumers today for products of real, natural quality.
I sometimes wonder if my passion for our agricultural team’s projects has also to do with the kinship I see between the natural world and the equally rewarding, equally unforgiving laws of capitalism. My father straddled these two worlds. He was a prominent businessman in Toronto and, during my teenage years, our family also owned a working farm a short distance north of the city. As a result, my roots are deep in the soil of both commerce and agriculture. Possibly the cycles to which farmers pay such close attention and the ups and downs of supply and demand hold the same fascination for me. Both seem to be systems of great complexity that are based on a process that, in its purest form, is utterly simple: invest, nurture, raise, harvest.
Nineteenth- and twentieth-century capitalism had two areas of monumental triumph: industrial production and communications. I believe that the same potential for the creation of wealth today resides in the realm of sustainability, whether we are speaking of something as enormous and far-reaching as the digital publishing revolution or something as specific as deciding how long to leave our ginger paddocks fallow on Wakaya. Invest, nurture, raise, harvest—these remain the bedrock. But a new imperative has been added: we must be clever with our resources. The future is going to be about being smarter.
Whenever I am faced with a challenge or a problem, my instinct is always to get away from the hustle and bustle of life—to step for a moment to a view of the sky or verdant fields. This was true at Far Hills—our family farm north of Toronto. And it’s true here, when I look out to the ocean from our home on the island of Wakaya. I see in the natural world an elegant balance and an uncluttered purpose that, on an infinitely smaller scale, I try to emulate in my own ventures.
During my career, I have played a role in more than ten business start-ups—which is a long list of occupations for someone who, since 1968, has had neither a salary nor (the sine qua non of corporate achievement) a company car. My journey has had its share of successes. But there were also setbacks—and while the successes have been sweet, the setbacks have also proven to be a good thing. In their way.
Uncomfortable though they are, setbacks have a way of teaching business lessons with particular clarity, and I like to think that my experiences, positive and negative, might prove helpful to a sector of the economy for which I have unbounded respect. Entrepreneurs are, by definition, individualists. They find their own way and do their own thing, which is what creating and nurturing wealth is all about. But they are not such solo-flyers that they cannot learn from the lessons taught by the triumphs and disasters of others. I don’t think they need constantly to reinvent the wheel. Making mistakes that have already been made is as much of a waste of time as not paying attention to what has already succeeded. I have lessons to pass on from both sides of the ledger, which, I suppose, is the reason for this book.
Whether aspiring or battle-worn with experience, entrepreneurs are the advance-guard of free enterprise. They send out no newsletters and attend no professional conventions. Often they labour well outside the glare of the media’s fickle attentions. But those who use the tools of capitalism for purposes of creation—of ideas, of products, of companies, of wealth—are one of the most valuable of America’s human resources.
The approach of the entrepreneur is distinct from that of the opportunist. An opportunist is someone who, while often clever, sees an existing idea and takes advantage of it. There are many successful businesspeople who are opportunists, who see weaknesses in companies or false starts, and who, like sharks, smell blood in the water. They move in to take advantage of a good idea. They buy what is advantageously available, and the truth is that often they bring no added value to a project. This is a bit like graveyard dancing or ambulance chasing, but it can be a real talent, and it requires its own skills. However, as far as I am concerned, it lacks the great thrill of entrepreneurialism: the invention of something new, the creation of something that did not exist before. In this light, I often think of opportunists as being like critics. They are, as the Irish playwright Brendan Behan once said, “Like eunuchs in a harem; they know how it’s done, they’ve seen it done every day, but they’re unable to do it themselves.”
Americans have developed a sophisticated proficiency as managers, bankers, traders, and investors. The contributions of these sectors to our nation’s well-being (recent financial calamities and the policies of our current governments notwithstanding) should not be underestimated. But it is the creativity of the entrepreneur that is the heartbeat of our economy. It is the incentive to invent new products, establish new methods of production, and attend to new markets that is the true genius of capitalism.
I am a conservative, and chief among my reasons for disagreeing with many of the prevailing notions of the day is my conviction that over-regulation and over-taxation stand in the way of the entrepreneur. It is fashionable these days to speak of the decline of America, a conversational fad for which I have little patience. It is tempting, for example, to imagine that the decline of a great nation was evident in the tawdry spectacle of the 2011 Academy Awards, an event at which tasteless mediocrity was given tacky pride of place on the fabled red carpet. If I spend another evening watching inarticulate, unkempt, unshaven actors and uncouth actresses who look as if they have been poured into off-the-rack bridesmaid’s dresses, it will be too soon. Frankly, I can’t imagine worse role models for young people today.
Please don’t misunderstand me. I have only respect for great actors; I’ve known a few. Theirs is a remarkable talent. But America’s hyped-up, runaway cult of celebrity does not reflect well on the best of them, and the more I listened to the “stars” on Oscar night, the more I was reminded of what the very great actor Sir Ralph Richardson once said: “If you have half a mind to be an actor, you have more than enough.” Once elegant, once fun, the Academy Awards have become a dispiriting wallow in the shallows of celebrity.
But the decline of America? I think not, for the simple reason that behind the flashbulbs, the moronic interviews, the fawning publicists, and behind every egocentric “star,” there is an army of hard-working, innovative, and intensely creative people—cinematographers, editors, sound recordists, animators, directors, designers, writers, technicians, and computer wizards whose work is what makes American movies the most potent force of popular culture in the world.
Similarly, I don’t see much “decline” in the explosion of e-readers and electronic tablets that are revolutionizing the publishing industry.
I believe that the spirit of innovation, whether in moviemaking or in more conventional businesses, is America’s great strength. Start-ups are the bellwether of our economy, and we place obstruction and restriction in the way of the entrepreneur at our peril. Most politicians and bureaucrats see things differently, of course—a point of view that may have a great deal to do with the fact that they are more accustomed to cashing their pay cheques and filing for expense claims than paying salaries to employees. My experience is that the people most intent on the redistribution of wealth are the ones who, endlessly apologizing for the success of others, have never created it themselves.
In times of economic uncertainty, new business ventures are even more important than in periods of calm and stability. Now more than ever, we should be doing whatever we can to encourage the entrepreneurial spirit on which this nation is founded, and not stifling it by naïve policy, however well-intentioned. We may not yet be in danger of waking up and finding ourselves in a socialist state. But we are distracted by silliness. We are dazzled by the trite and inconsequential. We are suffering under the illusion that we can overcome fear with regulation and minimize risk with legislated obstruction. Worst of all, we sometimes lose sight of the power of creativity. We are coming closer and closer to extinguishing the spark of imagination that lights the fire of possibility.
When I was 20, it must have looked, from my father’s vantage point, that there was not much direction to my life. And lack of direction was extremely worrisome to his generation. The Depression was not a distant memory. He knew that it was possible, both for economies and for individuals, to go very wrong. Dad’s military and business background led him to believe that venturing from the straight and narrow would not be a wise course. He believed that I would find fulfillment as a broker or in an investment house—that, in other words, I should get a job.
I knew that wasn’t for me. I didn’t like to pursue a path that ran counter to Dad’s wishes. But I just couldn’t see myself in an office, and not because I felt above such things. I’ve always enjoyed the camaraderie of working with others. Today, I work with Doug Carlson, Richard Maggiotto, and with the Viv Magazine and Zinio team. I look forward to my time with them. I always leave inspired and excited by the company’s prospects and ambitions. The office environment my father had in mind—the kind of office environment that prevailed in Toronto in the 1950s—was not quite so exhilarating.
Even as a young man, I knew that office routine would stifle any strengths that I have. I knew I wouldn’t be happy following in my father’s footsteps, particularly in a city as relatively insular as Toronto. My father was a well-known figure on Bay Street (Canada’s version of Wall Street), and I knew that in certain Toronto circles I would always be Harrison Gilmour’s son. Perhaps striking out on my own was just a matter of pride.
Whatever the motivation, I embarked down a road that must have looked fraught with peril to my father. And I suppose it was.
One of the curiosities of my life is that even though Dad would probably have advised against my becoming an independent entrepreneur, and even though, sadly, he died before I realized my early success, it is his general wisdom that has been one of the guiding lights of my career.
Dad was often extremely canny in response to suggestions I presented to him when I was young—suggestions that, more obviously than I imagined, served some purpose of my own. Once, for example, when I was travelling alone in Europe for the first time, I was running out of money but by no means anxious to end my European adventure. I sent word, by what in those days was called the night mail, to my father. I told him that I had been travelling so much that the tires on my little Volkswagen were now bald, and I needed $300 for a new set. His reply was not exactly chatty, but his quiet sense of humor was apparent. He’d seen through my ruse, but he didn’t really blame me for trying. “Pull vehicle to side of road. Abandon. Your safety our paramount concern. Return home.”
As I get older my father only grows in my esteem. He handled himself with a calm sense of what was and what was not important, and the advice he gave had a way of turning into beliefs I hold to this day.
I remember that before my European travels, when I was home in Toronto on a mid-term break from the boarding school I was attending, Dad asked me to have a word with him in his study. I recall perching nervously on the left end of the large sofa in his study. He was sitting in his wingback chair. Our family was comfortably off, but Dad made it clear that no vast trust fund would be coming my way. Under discussion was whether I’d like him to put aside something for seed money for a future business, or whether I’d prefer to spend the same amount travelling.
This was by no means a lopsided question. Dad could see that there were good reasons to choose either option, so long as the choice was made thoughtfully and with conviction. He may have had doubts about an uncertain path, but he had none about what success requires. “You can do anything you set about to do,” he said, “ if you do it honestly, and if you work hard. Self-doubt undermines confidence, and without confidence, any project suffers, if not fails.” That advice is as useful to me today as it was 60 years ago.
I am not particularly well-known as a businessman. My relative anonymity runs contrary to contemporary society’s mania for celebrity and penchant for self-promotion. But that’s fine by me. “The spouting whale gets the harpoon” is an old saying of my father’s that I have taken very much to heart. I have never yearned very much for attention—not enough, certainly, to make it a goal. Even as a younger businessman, I was content to let my partner and friend, Peter Munk, take centre stage—because that was my nature and that was the nature of our partnership. Peter’s irrepressible enthusiasm made him very good at being in the spotlight.
To the extent that I have a public profile today it is probably as the founder of FIJI Water, although a much more recent venture (my involvement in the digital revolution with my longtime friend and collaborator, Doug Carlson) is beginning to make it difficult for me to stay entirely in the shadows. As has happened from time to time in my life, the press has been calling.
With Doug, the Managing Director of Zinio and the CEO of Viv, along with Zinio’s founding President and CEO, Rich Maggiotto, and Jeanniey Mullen, Global Executive Vice President, I have ended up at the centre of a revolution in human culture, the dimensions of which are staggering. Zinio, a thriving young company of which I am the owner and Executive Chairman, is the world’s largest global, digital news-stand, distributing over 3,000 magazine titles, tens of thousands of books, catalogues, and newsletters in digital form to over 190 countries. (Cuba and Venezuela are currently the exceptions, but I am confident that one day soon that too shall change.) Zinio is now one of the premier reading applications for the many e-readers and electronic tablets that are fueling a red-hot market. We are ubiquitous. Zinio delivers globally, operating in 19 currencies and 33 languages, and its custom publishing division is setting new industry standards. It is, in my view, at the very leading edge of the new reading revolution. By way of demonstrating how much the world has changed, I like to point out that, through Zinio, I get the new issue of The Economist on my island in Fiji the day before my friends, Lynn and Sir Evelyn Rothschild, who are major shareholders of The Economist, get theirs in London.
Viv is the world’s first interactive, all-digital magazine for women. Lively and informative in its own right, it has the additional role of being our test kitchen for what we believe is the future of magazine publishing. I own Viv as well, and the young innovators who are the driving force behind these ventures are at the crest of a wave that I believe will prove to be greater than the one unleashed by Johannes Gutenberg when he invented moving type in the 15th century.
Timing is everything, and throughout my career of start-ups I seem to have had a knack for it. But never more so than now. I have ventured into publishing at the very dawn of its new golden age.
FIJI Water sticks in peoples’ minds. It astonishes me that long after we sold the company that I started in 1996, a light-bulb often seems to go on when anyone is told that I’m “the guy who started FIJI Water.” It makes me think we got it right.
It is a source of great satisfaction to know that the marketing strategy that Doug Carlson, then the CEO of FIJI Water, and I created has proven to be so successful. Especially so because our tactics were born of necessity. Ingenuity was the only tool we had.
We knew we couldn’t come close to matching the advertising budgets of our biggest competitors, and so we were obliged to use our imaginations. We couldn’t afford to take the conventional path. So we found an unconventional one. We approached the marketing of FIJI Water with the same absence of orthodoxy that went into the product’s conception.
To this day, people are intrigued by the story. How, on a field with 620 direct competitors and dominated by the soft drink and bottled-water giants, we accomplished the difficult task of establishing a national brand within five years of product launch. Our plan followed a strategy that is my marketing mantra: visibility, trial, advocacy. We made the product visible and, by virtue of its visibility, people tried it, and then because the product either fulfilled or exceeded their expectations, they became advocates on its behalf. That simple paradigm continues to work its magic, and is almost always the template for any future marketing plans that I contemplate.
I am pleased to be introduced as “the guy who started FIJI Water.” Pleased because it is a superior product with many healthful benefits, and pleased because we figured out how to make our customers and potential customers understand that to be true. In the context of the industry into which Doug and I stepped, a campaign to build a national brand was almost certain to be a long, expensive, painstaking process. We had come from out of the blue, and yet, in marketing terms, FIJI Water became recognizable in the blink of an eye. FIJI Water seemed to be in the hands, always, of the most sought-after celebrities at the most fashionable parties and galas. Suddenly, and not by accident, it was in scenes in televisions shows and movies when the director wanted to signal to the viewer that “classiness” was on display. Store owners placed it prominently because it was one of those products that made a store look better for carrying it. Just a glance at the distinctive turquoise of the original design on our bottles (a design its new owners have changed) registered name recognition. To this day, there are restaurants that serve no bottled water other than FIJI Water. I’m proud of all that. But I’m also very proud of the fact that there are business schools that use the FIJI Water story as a case study in marketing. Visibility creates trial, which creates advocacy. A business rule to live by. I certainly have.
If anyone is familiar with my history beyond FIJI Water, they tend to link my name with that of my longtime friend and former partner Peter Munk, the Chairman of Barrick Gold. While Peter and I have been involved in four major start-ups together, my years as an entrepreneur didn’t begin with my association with him. But I wasn’t very far out of the starting gate when we met, and my career certainly picked-up speed after we joined forces.
Our first venture together was Clairtone Sound Corporation Limited—a Canadian hi-fi manufacturer that began brilliantly in the late 1950s and ended badly in the early 1970s. Remarkably enough, Peter and I survived with our partnership, and more remarkably still, our friendship intact. My affection and respect for Peter only grows as the years pass.
The demise of Clairtone was not a pretty picture—a lesson about the dangers of mixing up business ventures with governments that neither Peter nor I have ever forgotten. My concerns about government, labour unions, and over-regulation may not have had their origins in the Clairtone debacle, but they certainly came of age with it.
Clairtone was all about innovation. It was all about the latest components and startling, fresh design. It was all about being new, which, I think, is the very essence of entrepreneurship. But through a combination of ambition and naivety, Peter and I formed alliances with forces that proved to be entirely opposed to the entrepreneurial spirit. We were shocked by the experience of watching our dream trampled by the anticorporate agendas of unions and elected officials. This was an important lesson to learn, our PhD in the school of hard knocks. But fortunately, for us, it was something we experienced when we were young and resilient and able to bounce back. Not everyone is so lucky.
Almost immediately, we started wondering what to do next. Quickly enough we became engaged in one of the many long, on-going conversations that have animated both our partnerships and our friendship throughout our professional lives. Peter and I talked, and talked, and talked—and as we did, an idea began to take shape.
This, I believe, is a characteristic of the true entrepreneur: the ability to begin. And to begin again. And again. An absolute requirement of the job is the ability get up and start over with renewed vigor and increased wisdom after a setback. Because there will be setbacks. That I can guarantee. As is so often the case, Winston Churchill put it best: “Success consists of going from failure to failure without loss of enthusiasm.”
Peter and I often remark that had Clairtone continued from success to success, we might have ended up as comfortably well-off hi-fi manufacturers—which wouldn’t have been half as much fun or rewarding as the many adventures for both of us that followed Clairtone’s demise. I’m inclined to think that there are reasons for things unfolding as they do. As the saying goes, “It’s darkest before the dawn.” And nobody knows the meaning of that old chestnut better than an entrepreneur.
Peter and I got on with things as a result of a pretty straightforward inspiration: the practical matter of our survival. After Clairtone, neither of us could afford to take the time to do much wound-licking.
Neither of us had inherited wealth. As young men we were both restless and ambitious. So we did what we would do several times in our careers: we ignored most of the cautionary advice we were getting.
We turned our energies to the vast potential of resort and hotel real estate in the Pacific rim. And our thinking—as the best thinking often is—was simple. We had figured out that while a growing market was there, the big hotel chains of Europe and North America were not. We wouldn’t have to take on any sharks in what was then, commercially speaking, a small pond.
Southern Pacific acquired and developed many properties— hotels, resorts, a golf course. Wakaya was one of our assets, but the company never quite figured out what to do with the beautiful little island, which was a lucky break for me. I was beginning to have some ideas for it, myself.
I’ve travelled a good deal; I’ve had more addresses than I care to count. But I have never felt anything for a place like what I feel for Wakaya, our island paradise in Fiji. I had an immediate connection with the white beaches and soaring bluffs that Captain Bligh had so hopefully spotted on the horizon. As time has passed, my bond has only grown stronger. My daughter Erin—my only child—and I holidayed often on Wakaya.
I bought the island from my business partners a few years after my first visit there in 1972. I was acting on a hunch—a premonition, I suppose—that it would become an important place to me.
And so it has. The most important place I know, as a matter of fact. It’s home, and one of the reasons I have chosen it for that role is because I can do something to return what it has given me. I can preserve its beauty. There aren’t many places that grant us that possibility.
So many other places that have been dear to me— St. Tropez, Majorca, Marbella, Acapulco, Puerto Vallarta, and Hawaii, to name but a few—have, in my view, been ruined as compared with their original beauty. Mass tourism is to culture what an oil spill is to ecology. But Wakaya gave me a unique opportunity to find a home and, at the same time, protect it. The island had been virtually uninhabited since 1838, and therefore offered me a chance to create a new beginning for one of the most beautiful places I know.
Our home is part of a small resort that has been created by me and, more importantly, by my wife Jill. Our ambition at the Wakaya Club and Spa is the creation of something truly, lastingly beautiful—something that will have a truly impactful effect on visitors who come here to unwind, to refresh, or perhaps even to find themselves. The Wakaya Club and Spa is a retreat that is as close to perfection as we can get. But perfection isn’t perfection at all if its future is not secure. I’ve learned that lesson well enough in my life.
And so our home on Wakaya and the Wakaya Club and Spa is about the preservation of extraordinary beauty. Jill and I have established a rigorous conservation plan, one that will continue in perpetuity. This is fundamentally important, for the simple reason that Wakaya is so valued by us both. My former partners have sometimes kidded me about my purchase of the island. I paid for it with stock that quadrupled not long after I’d traded it to them for a property that they didn’t know what to do with, but I have never felt the slightest pang of regret.
The island of Wakaya is about 20 minutes by air from Fiji’s capital, Suva. As our (happily-arriving, sadly-departing) guests know, Wakaya is only about a 40 minute flight from the international airport at Nadi in the resort’s private Cessna Grand Caravan.
But Wakaya feels a long way away from everywhere, even other islands of Fiji. Even during an abrupt change of administration, Fijian politics are as distant to our guests as Suva’s traffic. Indeed, what is going on in the capital often has more resonance in much more distant points than on Wakaya, in large part because agencies such as the U.S. State Department and the international press can be counted on to make things sound considerably more alarming than they actually are.
Once, not so many years ago, the well-known actor Patrick Stewart and his fiancée were booked to come to the Wakaya Club and Spa for their honeymoon. As a result of the State Department’s knee-jerk reaction to a “coup” (one of the five virtually bloodless government take-overs that I have experienced during my years in Fiji), a travel warning was issued to American citizens shortly before the newlyweds’ departure from Los Angeles.
Stewart called Gavin de Becker, exactly the right person to consult. De Becker’s 250-member firm, Gavin de Becker & Associates, provides security for high-level government officials, business executives, and celebrities. An advisor to the Rand Corporation, de Becker also happens to own a beautiful piece of property in Fiji. Stewart had been a client. Few people know more about international security than de Becker, and almost nobody combines this knowledge with an intimate association with Fiji. Who better to turn to for advice?
De Becker listened patiently to Stewart’s concerns, and his reply rings in my mind to this day. It demonstrated eminent common sense—common sense that I wish the State Department could have in greater abundance. “Patrick,” de Becker said, “the dangerous part of your trip will be between your house in Los Angeles and the Los Angeles airport. Not in Fiji.” As a result of this advice, Stewart and his beautiful bride came to Wakaya. They had a happy, relaxed, untroubled stay.
During the 40 years that I have been coming to Fiji—a period that coincides almost precisely with Fiji’s independence after 96 years of British colonial rule—the nation’s growing pains have certainly been evident at times. But time and again, the leaders of Fiji have proven that plunder is not their motivation for power. For the most part, they have been intent on improving the conditions of life in their nation each in their own way.
In 2006, when Commodore Bainimarama took over the government of Laisenia Qarase, friends of ours from the United States and Europe e-mailed or phoned in great consternation. A coup! They wanted to know how we were doing: I think they pictured us huddled around a radio with artillery rumbling in the distance and supplies running low.
“Well,” I replied, “our guests are snorkeling, and going on picnics, and sitting on the chaises in front their bures reading, or sunning, or looking out to the magnificent view. The ones who are good tennis players are meeting their friends, the good golfers, on the level playing field of our professional croquet court. I can almost hear the quiet thunk of the mallets David Niven gave to Jill and me. I can see a school of dolphin passing from where I am standing. The weather is perfect. The lunch today was divine. I’m having a massage this afternoon. We are doing quite well, thank you. How are you doing?”
Dumb-founded silence was generally the response to my reporting from “the front.”
I don’t mean to be naïve about the roughshod ways of military dictatorships. Both my father and my grandfather fought for democracy, so its overthrow anywhere is not something I take lightly. But I have to say, the debates in America about healthcare, or in the U.K. about spending cutbacks, or in Canada about Quebec secession are generally more heated than any of the Fijian “coups” I have experienced. Modern, independent Fiji is a country that is less than 50 years old, and yet I have never seen anything in its internal politics that can compare with the divisiveness that is currently the hallmark of the U.S. Congress and Senate—institutions of a republic that has had almost two and a half centuries to get its legislative act together.
In my experience, Fijian “coups” have been more civilized than the hurled spittoons that characterized an average day in the House of Representatives for decades after American independence. And I’m convinced that the only reason spittoons are no longer used as missiles in Congress is because, with tobacco chewing out of fashion, they are no longer fixtures of the chambers. I see no decline in the partisan fury that so frequently sent them flying in the first place. Were duels still regarded as an acceptable way to settle political scores and avenge personal insult, I’m sure that pistols-at-dawn would be as common in Washington today as they were when Dolley Madison was First Lady and Abraham Lincoln was a toddler.
If America is more civilized in its political discourse than it used to be, the improvement cannot be said to be vast. Never, for instance, have I heard a Fijian leader refer to his opposition as “the enemy,” a term that the President of the United States recently used to describe Republicans opposed to his policies.
But one ignores politics at one’s peril. A quick glance at the history of the years before the Second World War makes that point with graphic clarity, and my father was someone who read the ominous signs clearly. Neither I, nor my Fijian friends would accommodate a rapacious dictator. I am not recommending heads in the sand. One cannot be an admirer of Winston Churchill and think that doing nothing in the face of a gathering storm is an acceptable course of action.
I am merely suggesting a reality check, not something the State Department seems to encourage when it comes to Fiji. I am merely recommending knowledge—again, not always the State Department’s strong suit. Its reading of the situation in Fiji has been almost as accurate as its reading of the situation in North Africa and the Middle East—and that was an explosion that State somehow didn’t see coming until it was on the television news.
As someone who is very active in Fiji’s economic life and who concerns himself with the general welfare of the Fijian people, I make it my business to keep my ear to the ground about goings-on in the nation’s capital. I make it my business to be informed. This has not always been Washington’s strategy. During the Clinton administration, when the wife of the American ambassador to Fiji decided that she missed her grandchildren and the couple returned to the U.S., their abandoned diplomatic post was left vacant for two years! Not much of an ear, and not anywhere close to the ground. I sometimes wonder whether we would be a little less quick with travel restrictions—and whether an ambassadorship would be left vacant for two years—if pools of oil and not aquifers of water were under Fijian soil.
I don’t become involved in factional politics, and so long as administrations are working toward improving the lot of Fijians, I see no reason for an outsider to interfere. My interests are in building new industries in Fiji, in creating exports, and by creating exports, helping to align the balance of payments. My chief priorities are Wakaya and the building of preschools throughout Fiji—schools that will teach children the all important lessons of how to learn in preparation for their entrance into elementary school. Every Fijian administration has been supportive of these goals.
I take a long-view—a position that, in the ebb and flow of politics, has proven to be wise. I’ve been doing business in Fiji for 40 years. I am whatever the opposite of a carpet-bagger is. I am friendly with Fijian accountants, Fijian lawyers, Fijian business people, and Fijian citizens from all walks of life. I take the time to ask them and to ask the Fijians in our employ what their views are. And if they are reasonably content with the efforts of an administration, I think it would be presumptuous of me to pretend I know better.
I confess to some impatience when my American, Australian, and New Zealand friends react with total alarm to Fiji’s internal struggles. What, after all, was America like a few decades after independence? Not exactly an oasis of political and social calm.
As it so happens, my own family history has a strong connection with exactly this tumult. Not very many generations back, we were, on my father’s side, members of that group of refugees from America known as United Empire Loyalists.
My family, having left first Scotland and then Northern Ireland in search of opportunity, was granted property in Vermont by the British Crown. During the time of the Revolutionary War, it was entirely plausible that, were the rebels successful, my family’s land would have been confiscated. Such uncertainty is almost impossible for us to imagine today. My ancestors were not rabid supporters of the British Crown. They were plain, god-fearing Protestants, anxious about their family and their property. As a result, they did what refugees in North Africa, in the Middle East, in Asia, do to this day: they headed for the borders. They left for British North America. They ended up in Canada. When I think about my family’s history and about Jeane Dixon’s prediction for me, I wonder if the ability to look forward and see trouble on the horizon and to then act accordingly might be an innate survival skill that some have and some, sadly, do not. There are always people who wait too long to act.
The kinds of growing pains that a young nation such as Fiji is going through are modest and orderly by comparison. How hypocritical of us, with our own histories of unrest, to punish the slightest departure from democratic procedure in others.
Wakaya is where I am sitting now, looking out over the curls of surf breaking on the distant coral reefs. The view from the deck of our house is of Homestead Bay, the safest and most beautiful anchorage in the South Pacific. It’s a vista that is a kind of meditation for me. I like to take it in. I like to be observant of its details.
The best commercial ideas of my career have come to me on Wakaya while daydreaming, reading, or exploring the vistas that unfold before my eyes every minute of every day. As hunches go, Wakaya was one of my better ones.
I live by hunches, but not by wild guesses. They are different beasts, and the distinction is an important one. Good hunches, in my experience, are never shots in the dark. They are actually predictions that are informed by watchfulness and by experience.
Throughout history, there have been events that have caused major changes in human behavior. We are going through such a period now, the transition from decades of fiscal profligacy and unnecessary waste to what The New York Times columnist Thomas Friedman predicts is the emergence of the “re-generation.” And I hope that Friedman is right. Certainly, the possibilities opened up by the revolution of computers and digital communication make that seem much more than wishful thinking. In my view, the recalibration is a necessity. We are at a point where we have to use the spark of change to kindle the flame of creative, sustainable capitalism.
The shifts and realignments of history can be grand historic revolutions and cataclysms, or they can be realignments of commerce and markets. Or, more commonly, they can be combinations of both.
Buying habits as well as design and style preferences are impacted by shifts large and small, and the successful entrepreneur is someone who can recognize these trends before others do. The ability to recognize a style, a desire, or a fashion before they exist in the popular imagination is not something for which anyone gets a degree. So we describe these prognostications with understatement of which even Captain Bligh would have approved. We call them hunches.
The present is difficult enough to see clearly, let alone the future. The trees have a habit of getting in the way of the forest. But with the benefit of hindsight (one of the few things that I have more of, the older I get) I can see that my career as an entrepreneur has been all about hunches. It’s been all about trying to see signs in the present that point to changes yet to come. Let me give you an example.
Immediately after the Second World War, the longing for brightness, for cleverness, for simplicity, for innovation, and for casual elegance was very strong—even if most of Europe was too devastated to acknowledge this. Fashion couldn’t be much more than a daydream for people who had to struggle to survive. I saw the aftermath of the war with my own eyes in 1948 when, as a young traveller, I stepped off trains and saw the flattened ruins of once-proud cities stretch before me. For many, the very basics of food, shelter, and safety were more of a priority than design. But humans are humans—drawn to beauty and appreciative of its luster—and a longing for brightness was a natural response to the sadness, the restrictions, and the prevailing gloom of the war years.
My early European travels also took me to Scandinavia. And there, in Finland, Denmark, Sweden, and Norway, I caught a glimpse of what, compared to the spectral ruins of Hamburg, Cologne, and Dresden, seemed a ray of sunshine. As a young man I wasn’t drawn to matters of domestic design or housewares. I knew a salad bowl from a soup tureen, but my knowledge didn’t extend much beyond. Still, it was in this unexpected realm that the contrast to the pervasive grey of the post-war years caught my eye. My trip to Scandinavia was to visit my sister, Shelagh. She had met a Norwegian flyer when he was training in Toronto during the Second World War. They married and, after the war, moved to Oslo. There, in shops, in restaurants, and in people’s homes, I got my first sight of what we now know as Scandinavian design. I felt instinctively that this was a key to the future.
My first real commercial ventures were companies called ScanTrade and Dansk Design—companies that were, essentially, predictions that the ray of sunshine that I had seen during my travels in Scandinavia would soon break out over Europe and North America. This is exactly what happened, and this successful prediction—this hunch—reinforced my belief in the art of paying attention.
My approach to business opportunity then, as is my approach today, isn’t so much thinking “outside the box.” It would be more accurately described as looking closely at what’s in the box for clues about what the future holds. All the major start-ups in which I have been involved—ScanTrade and Dansk Design, Clairtone, Southern Pacific, Barrick Gold, Thumper, Trizec-Hahn, The Wakaya Club and Spa, FIJI Water, VivMag.com, Zinio, and Wakaya Perfection—have drawn on this skill. You can call it tea-leaf reading if you want. I call it being observant.
It was my father—a decorated war hero, a well-known Toronto merchant banker, and a great sportsman—who taught me to keep my eyes open. When I was a teenager in the late 1940s, and I decided that I would accept his offer of money to travel, he gave me the minimum of necessary funds for $10-aday travel in Europe—but with one stipulation. He insisted that I travel alone.
This directive must seem strange to parents today. They often don’t allow their children to walk home from school, let alone advise them to go to Europe, on their own. But I grew up in a different, and I sometimes think saner era.