In 1980, a homeless salesman put his final $700 into shampoo he sold door to door; his company later reached $900 million in annual sales

In 1980, John Paul DeJoria was living in an old Rolls-Royce and trying to make a living selling hair-care products. He had already worked a string of jobs, including selling encyclopaedias door to door, and had become accustomed to hearing no. His next gamble was different. Together with hairstylist Paul Mitchell, he put just $700 into a new professional hair-care business. The products were carried from salon to salon in the trunk of DeJoria’s car, with the founders relying on personal sales rather than a large advertising budget.According to Paul Mitchell’s official history, the idea was straightforward: create professional-quality hair products that hairdressers could use in their salons and recommend to their customers. The first range consisted of three products: Shampoo One, Shampoo Two and The Conditioner. The company began with $700 and those three products in 1980. The brand eventually grew into a global hair-care business with more than 100 products sold in more than 80 countries.The business grew through rejectionDeJoria's earlier experience selling encyclopaedias door to door proved useful when he started the hair-care business. The job had taught him how to approach strangers, handle rejection and keep going when a sale did not come easily. Those skills became important when he began introducing the new products to salon owners, many of whom had no reason to take a chance on an unfamiliar brand.The early months were far from glamorous. Stanford Graduate School of Business reported that DeJoria sold the products from the boot of his car and used his sales experience to approach salons directly. The company lost money during its first two years, and DeJoria recalled a period when he struggled to pay the bills. By 1982, however, the business had reached the point where it could pay what it owed on time.Instead of immediately trying to sell their products in supermarkets, they decided to target professional salons. The owners started networking with hairdressers who would promote and advise customers to buy them. According to the history of the company recorded by the US Tax Court, the first batch of the products was sold during a beauty show in 1980 for $10,000, and then the company started to distribute its product through professional channels. This helped the company establish its distinct identity. Paul Mitchell was marketed as a product developed for hairdressers, not just another shampoo competing for shelf space in stores.From $700 to a global brandResearch published in Global Business and Organisational Excellence examined necessity entrepreneurship and found that unemployment, financial pressure and limited economic opportunities can encourage people to start their own businesses. Having a reason to start is only the beginning. Whether such a business survives depends on how effectively the founders find customers, use limited resources and respond to challenges. For DeJoria and Mitchell, the business gradually gained momentum as salons began reordering their products. The range expanded, distribution widened, and the company continued to build its identity around professional hairdressers. When Paul Mitchell died of cancer in 1989, DeJoria carried on with the business and later expanded into other ventures, including Patrón tequila.The company's later scale was hard to imagine from those early days. Stanford Graduate School of Business reported that John Paul Mitchell Systems reached $900 million in sales in 2010, while Forbes later reported annual sales of around $900 million in 2019. The figures show how far the company had travelled from the $700 that DeJoria and Mitchell had pooled at the beginning.The company's simple approach helped it stand out in the market. DeJoria lacked the means of engaging in a large-scale advertising campaign and therefore went straight to the salons to persuade the hairdressers to use their products. In these initial conversations, the young company was able to secure its first customers and build a professional network through which it would grow its brand. A few bottles placed in the trunk of a car would later become an international hair-care business worth hundreds of millions of dollars annually.Catch the latest World News and Live updates. Download the TOI app.