The speaker, John Paul DeJoria, recounts the story of how he sold his tequila company, Patrón. He explains that when first asked for a price, he jokingly threw out an unheard-of number ($5 billion), was laughed at, and reiterated he didn't want to sell. He then reveals that the potential buyer, Bacardi, later returned with an even higher offer ($5.1 billion), which he immediately accepted.
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When they asked how much he'd sell for, he threw out a crazy number.
$5 billion.
They laughed. The biggest brand in the industry — Grey Goose — sold for $2.2 billion.
"You want more than twice that? Never gonna happen."
He shrugged. "I don't want to sell it anyway."
Others approached. He said no. Kept building.
Then Bacardi came back. $5.1 billion.
He said yes immediately.
Not because he was desperate. Because he knew his number. He knew his worth. And he waited until someone else saw it too.
Most people undersell because they're afraid to name a big number. They negotiate against themselves before the conversation even starts.
Know what you have. Name your price. Let them laugh.
Then let them come back.
What's something you've been undervaluing?
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Transcript
They said, JP, if you did sell it, only if, how much would you want for it? Now I had no idea what these things sold for, so I thought I'll just throw a crazy figure out, and I did. I said, it'd have to be more than $5,000,000,000. They laughed at JP. The biggest brand in the industry sold for 2,200,000,000. That was Grey Goose. You want more than twice that. Never gonna happen. I said, I don't wanna sell it. You're like, dusted. That's it. Anyways, time went by. Okay? This approach said, no interested. Then they came back to me, Bacardi, and said, would you take 5,100,000,000 as evaluation? And I said, yes. Immediately. Yes. Yes. I'll do it. I'll do it immediately. I would never do that with Paul Mitchell. With Petrone, yes. I did it immediately.
