Why Money, Profit And Success Don't Mean You Should Sell Out

by Ryan Blair

I’m a sell out. I admit it. I like money, fast cars, classic cars, luxury cars, watches, pools, beaches, homes with views (and homes without views, too), fine art and fine food.

To me, spending money is almost as fun as making it. I know I’m not the economic majority in this country and my relationship with wealth and work is unique, but before you judge me, hear me out.

The first time I sold out, I was 24. I started my first company, SkyPipeline, when I was 21 years old, ramped up my entrepreneurial chops, sold the company three years later in a $25 million deal, subsequently making my first million.

Then, I blew all my money on the things listed above (are you surprised?). Three years later, in 2005, I started my next venture, ViSalus, with my co-founders, Nick and Blake. We enjoyed fast success and a company we could all be proud of. Then, guess what we did just before the 2008 recession? We sold out.

This time, the sale was complicated; it was based on a five-year earn out (8X EBITDA) that was backend loaded in the final year. In other words, the company that bought us, Blyth (NYSE:BTH), had a big bill to pay in 2012.

The final shares were bought at a price of $792.4M, and after the deal closed, my co-founders and I signed on to multi-year employment contracts. I became a VP at Blyth and was named executive officer. We had plenty of interest in and passion for the business, and still worked hard.

But, of course, things changed. We went from being an innovative industry disruptor and a company with a reputation for irreverence to a “by-the-book,” SEC-regulated division of a public company with no relevance. We essentially went from having nothing to lose to having everything to lose.

I wrote the book on having a nothing to lose mindset in business. Literally. I came from nothing, maybe even less than nothing and I was most comfortable operating from a survivalist, risk-taking stance. What I wasn’t familiar with, however, was suddenly having everything to lose.

When you’ve got money and the media’s attention, you have to ask yourself different questions and make different decisions. You censor what you say, to whom you say it and are more cautious with every interaction. The people around you have more incentive to short you than support you.

We had to switch from a lean and mean business mentality, which was all about the offensive strategy, to a defensive squad. Flash forward a few years and we’ve created a fortress of defense.

I’ve hired attorneys, who hired more attorneys, who hired more accountants, who hired even more accountants, who probably also hired attorneys. Pretty soon, I found myself spending millions per year on defense, and rather than a competitive marketplace defense, it was Wall Street defense.

My competitors saw an opening. They took the hard work of the bloggers in bathrobes (shorts) and turned it into an offensive playbook. Then, I was attacked on two fronts from multiple entities, with the majority of my energy spent playing the “everything to lose" defense.

That’s a terrible strategy, especially in the hyper-competitive direct sales industry. We’d lost our focus and we were losing the game. As Sun Tzu said, “An army everywhere is an army nowhere.”

I am sharing this now because I’ve spent the past two years in hell and I hope you’ll learn something from my experiences. Two months ago, the hell finally ended. My co-founders and I bought our company back and took it private.

Why did I lead the $143M dollar buyback of ViSalus when for the last two years, all I wanted to do was get on my private jet and go retire on an island far, far away?

Making a ton of money may sound like a victory, but it isn’t if you’ve sold out. Selling your company may be the right thing to do for you and your shareholders, but it is often the wrong thing for your other stakeholders.

And, if you’re so damn good at what you do, then why would you want to sell it? If you’re the best, nobody else will do it better.

The help you think you need won't come from some outside company meddling in your business and won't come from the good opinion of people who have never started or ran a successful business. It will come from hiring the right people, creating the right culture and making the right decisions.

In my company's case, we knew the only way to turn our situation around was to go back to the way things were before we were successful. We had to return to how things were when we had nothing to lose and a disdain for the industry.

It’s too early to declare victory, but I will tell you our entrepreneurial gusto has returned and we are making bold moves we couldn't have before. And, our freedom feels priceless. Yes, our backs are against the wall, but this time, it’s not Wall Street we are fighting.