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The Tight Spot
Several years ago, I was running a company I thought would soon have thousands of employees. Things were going exceptionally well and I was enjoying myself and my job in all respects. Anticipating continued expansion, I started purchasing all sorts of commercial real estate. My belief was that I would soon have thousands of employees — and having the commercial real estate would save me a great deal of money in the long term. One building I purchased I’m confident could have held at least 1,000 people.
But then the real estate market changed in a big way. Nowadays, one of the buildings I own in Pasadena costs me about $70,000 a month to keep open. Currently only three small tenants occupy it and collectively generate just a few thousand dollars per month in income for me.
Things are not going all that well.
Before that, my largest ground-floor tenant in this commercial building left with zero notice. They tore up the floors, ripped out the lighting, and even helped themselves to several toilets and sinks. They hadn’t paid rent in months. I’m really not sure what was wrong with these people.
Prior to leaving, the tenants got an attorney, a young graduate from Pepperdine University, who sent me threatening letters — the air conditioning hadn’t been on one weekend so the tenants lost business, and this constituted a good reason for them to walk away from a cumulative rent obligation of $750,000.
The market the building is located in continues to decline. In some sort of real estate Armageddon, businesses are going under on both sides of the street. So here I am with a $70,000-a-month nut, a gutted space, and a seriously deteriorating situation.
These days I work on the other side of town, in an office building in Malibu. As an antidote to the anxiety about my real estate issues, I’ve been going to yoga during my lunch hour for the past several weeks. Stretching for an hour seems a far more productive enterprise than eating sandwiches, and I’ve come to truly enjoy it. I’m much more effective after lunch with so much of the stress melted away. Exercise and stretching. It’s a very good thing.
After yoga, a truck outside my office sells fresh juices made with a hydraulic press so strong that the juice is extracted to the maximum possible extent. It’s the latest trend here at the Malibu Country Mart. So I grab a juice and drink it. The juices cost about $6.50 but they’re very good, very fresh, with lots of nutrients and ingredients like kale, lemon, and various greens.
“How many of these juices do you sell in an average day?” I asked the juice guy in his truck one day.
“At least a hundred, and more on the weekends,” he said. “We’re getting ready to open a few new locations.”
And so. As I pondered my financial predicament I started wondering … What if I opened a yoga studio that also sold fresh juices?
The Aha Moment
I made some quick calculations:
This comes out to about $2,100 profit per day and $62,000 profit per month. That’s roughly $740,000 a year.
Would it work?
I had no idea.
But I’ve got to make it work.
The studio is going to be called Yoga Blue.
“Blue is fresh, clean and happy,” one of my new instructors told me. “It’s simple; I like it.”
It’s going to be where the old furniture store was.
Here’s a picture of the website I’m working on:
Here’s a picture of the building it will be in:
Here’s a picture of the space it will be in:
“You’re out of your mind,” my wife told me. “This is not what you do for a living. You’re in the career business and know nothing about yoga.”
She may be right.
But that won’t necessarily stop me.
A few days after my aha moment, I had lunch at an outdoor café in Pasadena with one of my yoga instructors and her roommate, who was also interested in joining this endeavor, along with my longtime assistant. My assistant, who’s known me for seven years, has worked with me in businesses as diverse as printing, student loans, job sites, recruiting firms, publishing companies, real estate companies, and resume companies. These businesses have operated all over the world. She no longer asks questions and has come to embrace whatever insanity I bring her way.
So there we were that hot day with two yoga teachers in Pasadena, contemplating a juice bar/yoga studio. One of the girls wore rings with exotic stones in different shades of green. They both had experience in dance and Eastern disciplines and had spent time in India learning about Eastern medicine.
“So, it’s like this …” my assistant told the girls as the sun reflected off the lenses of their sunglasses. “We will have scented towels in lavender and lemon. We will rent regular towels for $1.00 to the yoga people and then rent the scented ones for $2.00. We can also have dance classes and maybe even do some jazz yoga. We can serve little snacks … you know, the sort that have fillings and are tiny pastries. We can offer all the juices, and people will be happy. Maybe we can even serve cappuccino.”
“That’s brilliant!” I exclaimed.
I was tired that day. I’d been taking classes at UCLA Business School as part of an entrepreneurs program that demanded 20 hours a week in study. Then there was my daily 90 minutes of yoga, plus my family and several companies. Oh, and the three hours each week I put in at a counseling group for the unemployed (more on that later). And now I needed to open a yoga studio. Yes, my wife was probably right. I was out of my mind.
“What kind of yoga are you interested in,” one of the girls asked me. “What’s your vision?”
“Why don’t you plan out the sequences and what you think the yoga should be like,” I told them. “Whatever you think is best.”
The girls were surprised. Here was a new yoga studio being created with no vision whatsoever.
“It’s yoga for everyone!” I said.
In my decade-plus in Pasadena, I’d never seen a yoga studio go out of business. I was determined that Yoga Blue would be the largest one there yet.
Yesterday a few contractors came to the space to review the situation. It was not pretty. The tenants had ripped out not only the bathrooms but also the floor and, for some strange reason, the wiring in the walls as well. In addition to fixing all of that, we’d need to put in triple sinks to make the juice. Like I said, it wasn’t pretty. But we were making a start.
The Support Group
I’ve mentioned that I’ve been going to a support group for unemployed people. Every Tuesday afternoon, about 30 miles from my house. I’m the only person who does not talk there. And even though I’m employed and should technically not be there, I go anyway, to listen. I want to find out how people think about their careers; I want to learn about the struggles they’re going through.
One of the men in the group has been in and out of jail for petty offenses. Another woman is addicted to Oxycontin. Everyone is unemployed. A few were let go from grocery stores. The meetings are led by a very nice older woman with multiple studs along her ears. She goes around the room and asks people what they’re doing to find a job.
In the five or six weeks I’ve been attending these meetings, no one has found a job yet. I keep quiet for the most part. When the woman asks me how I’m doing I tell her I’m hanging in there.
“They’re going to start selling pumpkins at the pumpkin patch for Thanksgiving soon,” the leader tells one man this week. “Then the same people will be selling Christmas trees.”
The discussions about finding jobs are stunningly one-dimensional. They all come down to whom you may know who can help you. Most of the people sit there week after week without any purpose or direction, not knowing what to do. Part of me looks forward to these meetings, because I’m learning so much about how people think about looking for a job.
Most of the meetings focus on how to get insurance and unemployment benefits and how to appear at various unemployment rulings. There is a deep mistrust of employers. People are largely concerned about how to get benefits from the government. One woman in the group is a paralegal. She is asked by one person or other at every meeting whether or not they can sue their former employer, the government, or someone else. Everyone wants to sue someone.
Most feel that the best way to get a job is through other people. They’re looking to network at these meetings. They discuss working conditions at various grocery stores. Working in the produce department is one of the preferred jobs. The produce department has a lot of activity and you get to say hello to customers while working.
There are lots of jobs out there working the night shifts in grocery stores. Apparently the only people who can master these sorts of jobs do a lot of speed. No one wants to work a night shift in a grocery store. The jobs also sound somewhat dangerous. Fights between people working the night shift are not uncommon.
My wife drops me off at these meetings, which are held in a community center on a hill. She goes to a local gym while I sit in a dark room on foldout chairs with a bunch of strangers discussing job search.
“You’re out of your mind,” my wife tells me after picking me up from the class one day. “Those people coming out of the meeting look like zombies.”
“Not true,” I tell her. “One of them has an interview at the pumpkin patch, right over there. They’re just frustrated by the market.”
When I go to these meetings I’m in the presence of massive failure. I try to understand failure from as many levels as I can. How can you help people succeed if you’ve not seen failure first hand? How can you understand failure if you don’t sit with them and listen?
And then I realize something that shakes me up more than a little. I’ve been coming here as an outsider to observe failure in other poor souls, but the truth is, I am one of them. I may be employed, but I too stare squarely at failure every day. I am like them in more ways than I wish. But one thing’s for certain: I deal with failure and the prospect of it very, very differently. And that’s the game changer.
Many people in these meetings seem to be angry with others for what’s happened in their careers and lives. Mothers and fathers get discussed a lot. Bosses are blamed.
I’m still not done figuring out the people in the unemployment counseling meetings, but I believe that failure has to do with three things: (1) allowing oneself to be defeated, (2) being blind to opportunity, and (3) tending to blame others when we fail.
Defeat Is Not an Option
You absolutely cannot allow yourself to be defeated. The tenant who ripped out all the fixtures in my building was defeated. That furniture store was unable to make money, and instead of reinvigorating the business or trying something new, they allowed themselves to be defeated. Then, like so many others, they tried to blame others—they blamed me for one weekend of broken air conditioning and tied this into the failure of their entire store.
When people fail and when businesses fail, they often look for someone to blame. They blame their landlord. They blame the economy. They blame their parents. Then these same people stay angry and simmer in this anger.
You don’t have time to stew and be angry. The furniture store’s manager called us after they’d finished gutting the place to come pick up the keys. That same evening, I was in that space working on the yoga studio.
When you fail, you need to rise from the ashes and address your failure – you need to find a way to succeed. You cannot blame others; you must go forward, put your big-boy pants on, and succeed.
If I want to apply for a mortgage and tell the bank I’m losing $70,000 a month because my biggest tenant left my building, do you think they’ll care? No. They will have zero interest in why the tenant left and how unjust it was. They’ll simply not give me the mortgage. Nothing personal – it’s all finance to them. And it’s just the same with your life. If you fail at something, the world doesn’t care why — you’ve just failed.
So you can blame others—or you can take responsibility for where you are and make the most of it.
Will Yoga Blue make it?
Probably. Every yoga studio in that area has survived for the past decade.
Will the juice portion of Blue Yoga do OK?
Probably. Fresh-pressed green juice seems to be very much in demand.
Is it insane for me to open a yoga studio? It depends on how you think about it. On the one hand, I know little about yoga or operating a retail business. I’m completely out of my element.
But I also have to survive …
Up and down the street the studio is on, all sorts of businesses display For Rent signs. There are scads of vacancies out there. Most landlords are taking the economy lying down and losing tons of money each month—their response to the market is to put a For Lease sign up. Businesses are closing and not changing their way of doing business to accommodate new trends and the economic needs of their communities.
I look at Yoga Blue as a reflection of my career. I will not give up and will continue trying new things and reinventing myself. Instead of worrying about suing the furniture store, I’m going to spend the next several weeks trying to reinvent myself. I’m going to fight to make this work because I have to. Yes, it’s something new—but I don’t care. It’s a choice between losing $70,000 a month and doing something to staunch the outward flow. Which would you choose?
Foreclosures, unemployment benefits, career counseling — to some extent this all results when people allow themselves to be defeated and fail to see the opportunity around them.
Your #1 priority is to survive and make the most of the circumstances life has handed you. In order to do this, you need to look for clues in your environment about what works for others and what can work for you. You’re much better off seeing opportunity and not blaming others than accepting defeat – no matter how crazy your response may seem in the circumstances you face.