.....Best Buys would quickly sprout up across the country.
Our expansion plans were aggressive which afforded me the opportunity join an elite store opening team that traveled from market to market opening Best Buys. nsio, new opportunities emerged around scaling efficienciesexpenses. just 10 years, we ranked as the 2nd largest corporate in-house operation in the nation behind Wal-Mart.
As Best Buy stores became saturated across the nation, the company’s priorities shifted to international expansion, acquisitions and new concept startups. Needing to scratch my itch again for building, I joined core teams that led various acquisitions and startups. Developing new skills in brand marketing to new segments, and in merging operational systems and cultures.
It was a wild and prosperous ride, as two decades flew by. As with most global enterprises, the entrepreneurial spirit was extinguished from the culture. Share holder value was the motto. My passion was lost, so it was time to leave the corporate world, and start a family business.
My passions at the time were still in technology. My wife Tracy had retired as a very successful cosmetologist, which inspired me to explore that industry for unique innovations. I didn’t have a passion for the beauty industry but I was great at leading teams and could leverage that passion in the family business. Our daughter Christine was just finishing college at Gustavus. She worked at a large salon and spa while attending college, so the timing was perfect for her to join our new family startup.
Judgement
"We are free to choose our paths, but we can't choose the consequences that come with them." — Sean Covey
The measure of a great idea or innovation is the degree to which the idea is both novel and useful. A "family business" is neither. With my judgement totally clouded on this idea, I pressed forward with the creation of phresh spa salon, our family-owned and operated luxury salon and spa.
The industry was predominantly commission pay or "booth rental", so we operated phresh as a unique team-based model. Our guests loved the model and the experience, and so did our employees. We soon doubled down on a second location and quickly established ourselves as the best salon and spa in both of our communities.
Meanwhile, my son Derick was attending college at Saint Thomas majoring in Business Entrepreneurship. While studying, Derick began researching crypto and dabbling with investments. Crypto quickly became his obsession, so he chose to go all in, investing in early stage “alt” projects with great success. Derick rapidly emerged as the crypto advisor within his personal network, building a reputation as “crypto feebs”. This led to the formation of a hedge fund to actively trade under. I soon got the call to join him, and together we launched Arturo Capital (Spanish for Arthur), both our middle names.
My career and experiences didn’t really include any notable setbacks or challenges to date. That was about to change. Shortly after launching our fund, the crypto market crashed in epic fashion. This crash was known as “crypto winter” and would last over 3 years.
Meanwhile, another perfect storm was brewing over our salon and spa business. Our newest phresh location was in a sudden tailspin.
Failure
“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life and that is why I succeed.” – Michael Jordan
We opened the location in a new luxury mall located west of Minneapolis that was still under development. The high profile tenants with Letters Of Intent never came. The Occupancy rate stalled at 50% for years to come. Business was growing for us, but not keeping pace with the high rent rate.
At the same time, the beauty industry was rapidly shifting to an independent contractor workforce. Luxury suite rentals were flooding the market, eliminating all the remaining barriers of working independently. Our staff loved our culture and model, but the excitement and appeal to work independently was a disruptive force that we couldn’t stop. As a result, we began experiencing a high rate of turnover. Consequently, we were forced to close our newest location, defaulting on our lease.
Then came COVID… the knockout punch. We were forced to shut down our remaining location for 3 months. Upon reopening, capacity restrictions remained in place for the next 9 months. We still needed to find ways to pay our staff during the capacity restrictions or we would risk losing them. With sustained revenue losses of 75%, we couldn't survive.
The costly lesson I learned as an entrepreneur was this. Failure often occurs, not from a bad idea, solution or innovation, but from an unanticipated consequence of your actions or inactions. Most often hidden from our view.
Inspiration
“Aspiring entrepreneurs have to actually do something that they feel strongly passionate about, and in most cases they should seek inspiration from their own experience. … If you had a terrible experience, you should despise the experience to the extent that you are continuously seeking a solution for it.” - Best Ayiorwoth, founder of Girls Power
Our fund has a heavy position in a project called Züs Cloud Network. Züs is a decentralized cloud storage network that has the potential to disrupt the entire data storage industry. Derick and I began working with the Founder to help build Züs on a solid foundation. Here I gained an added perspective being at the bleeding edge of technology and innovation in the "Web3" space. Leveraging AI and machine learning tools and studying the new web3 entrepreneurial ecosystem. In my spare time, I studied innovation and design strategies at Harvard Business Online.
What remains clear, is that businesses operating in any industry from manufacturing to technology, all need to build and grow from a solid foundation.
Introducing Fixx!
“The people who are crazy enough to think they can change the world are the ones who do.” - Steve Jobs