The below excerpt was provided by RJ Lumba, Managing Partner of GrowthCap and host of the Growth Investor podcast. He interviewed Jim Donnelly, Co-founder of Restore Hyper Wellness, a leading national health and wellness franchisor. The company is backed by General Atlantic.
Jim: Most people tend to build on an expertise and just add layer upon layer on the same expertise. That was not my path. I like to take a base level of competency and apply it to the things that mean something to me. And they can be very different categories. They can be very different things. But the same sort of philosophy, the same approach works. And so I’ve taken that path.
So I like to say I’m not great at anything, but I’m good at a lot of things. I think I’m really good at building a culture. I think I’m really good at creating a consumer proposition that’s appealing. I think I’m pretty good at attracting talent and, you know, putting the pieces together. And I think for a startup entrepreneur, those are the things that certainly follow you from business to business, no matter what the category is.
And I like to say restore is what people know me for most now because it’s the latest. But IgoUgo at the time was very disruptive to the healthcare space. And so the next business I do will also be equally disruptive and something new.
RJ: That’s interesting. So you’re already thinking ahead, you think there’s still room for other ideas for you to pursue?
Jim: Absolutely. Like I joke with my wife, I’ve probably got three more five year cycles in me. And people ask me all the time, why would you do that? You’ve been successful, you’ve made a lot of money, you have a great life. And I simply say, you get to choose what you do in life, and you get to choose what the definition of work is.
I’ve never had a company that I’ve started to run, that wasn’t a joy to go to every day, that wasn’t full of really wonderful people that I cared about, people that I wanted to share my time with. And they all had a mission, they all had a mission that was important to me personally, but also good for the world around me. And I think if you have those ingredients, it doesn’t feel so much like work, it feels more like doing the thing you were meant to do or want to do every day.
And so this five year thing, I do think if you look at your life, five years is kind of how the ebb and flow of life happens. You know, college is four to five years, you sort of have four to five years of single life, then you get married, and four to five years later, you have a kid, and they’re little kids, then they’re teenagers, you know, I could go on and on. And so this five year dynamic, I think, is really tied to the way life works. You know, for restore, I was 46 at the time I started that.
So if you think about why would I get into proactive health and wellness? Well, because you’re starting to hurt, you’re starting to not be able to do the same level of high intensity sports that you used to do. You’re seeing your parents get sick, you’re seeing your grandparents die. And so that all kind of hit me at once and made restore an obvious thing to do.
RJ: And when you think about that five year cycle, do you think about fully exiting or retaining ownership and building a holdco, you know, like a kind of portfolio of companies that you continue to own?
Jim: I could probably be more sophisticated about that notion of a hold co and portfolio. Part of the problem of jumping from category to category is the portfolio approach doesn’t work quite as well. But I’ve definitely held on to some. I still own the Charlotte Athletic Club after 14 years, I own it with other people, they operate it day to day. But that’s an example of something I’ve had for a lot longer than I normally hold on to things.
So the idea isn’t necessarily that I have to exit every five years. The idea is that I’m not going to be the day to day operator after five years. This sort of the day-to-day activity becomes different. It’s much more process oriented. There’s less original creation. So you know, some people are better at that than me. And I always say my superpower is self-awareness. And so I know what I’m good at. And, you know, after five years, there are people that like that daily grind a lot more than I do, for instance.
RJ: And do you have a core team that goes with you from one idea to the next?
Jim: I always say if you want to check the quality of an entrepreneur in terms of loyalty and people skills, just look at how many people follow them from business to business. And every business that I’ve ever done, I’ve had a significant number of folks follow me. And that’s why it gets easier and easier.
People think, God, starting a new business every five years, that must be hard. Well, it’s not hard when you do have key people that will follow you. It’s not hard when you have investors that will follow you that will like literally they’ll invest in a business I do now based on an idea on a napkin.
And it’s because there’s been a track record of success. I’ve always worked hard. I’ve always done the right things. They see the record of success, no matter what category we’re in. And so it actually does get exponentially easier to be an entrepreneur if you have a track record of success.
RJ: Now you have in your investor base, I think they’re the key investor – General Atlantic. Had they been with you or been part of your businesses in the past? And tell us a little bit about that partnership and what they bring to the table.
Jim: General Atlantic is the first actually institutional private equity money at that scale; it is the first time I’ve done that. It’s tended to be angel investors or lower level institutional investors in my previous companies. But Restore is such a big opportunity. Clearly, it’s the way the world is moving and the top growth equity funds like General Atlantic clearly want to be in that space.
And so we had an option of virtually every quality consumer growth equity fund out there, whether it was TPG, General Atlantic, I could name others, we did have our pick of the litter. And I think it’s because once again, the space we’re in is a huge opportunity. We had a very attractive business. I don’t think you can find too many other companies in the medical space that have been able to scale like we have. It’s very hard to scale a medical business at the retail level in the states because every state is like its own country with its own set of regulations.
So I think what we did was very unique. And I think the private equity dynamic is obviously the cream of the crop. They’re in a tier that is rarefied air with a few other top names. And so if you’re trying to help change society, make society healthier, at some point, you do have to bring on a partner that has number one, the sort of intellectual skills, the financial capacity to sort of be in it with you through several stages.
The private equity dynamic is… it depends on the day you ask me. I think that there have been some very positive things. I’ve learned a lot. There have also been some other things, like careful what you ask for. If you get $140 million from somebody, don’t ever think that it doesn’t come with certain strings and other things. And so I’ve learned that for better or worse.
And I tell people all the time when they ask me, should I go down the private equity route? I said, it just depends. It depends on what you’re trying to accomplish. It depends on what you’re comfortable with. If you have the characteristics of personality A, do it. If you have the characteristics of personality B, don’t do it. You’ll be miserable. And so it really just depends.
RJ: You know, I’ve watched an interview with you and you talked about impact, and this was in relation to what you’re doing at Restore. But then I kind of hear it again with how you approach your day to day and just enjoying the time you have with your team. Can you tell us a little bit more about your overall business philosophy and how you operate on a day to day basis?
Jim: Sure, I mean I always have certain principles that I think apply to every new business and every culture that you create. Number one, enthusiasm matters. I tend to operate from a place of positivity. I think talent matters. And so I do think we do a good job of attracting really talented people who, by the way, care very deeply about the mission of the company. And so if you have a great mission, if you have talented people that are enthusiastic, that really do want to make a difference, it’s a hell of a lot easier to create a great culture and to create societal impact.
I do not think I would be able to start a random retail concept that wasn’t doing good for society. I’m not sure that I’d attract the right kind of people. I’m not sure I would be able to intellectually engage on that day to day without getting bored. But we do things like we have a Monday morning standup with the entire company and we update everybody through the leadership team and through anyone on the team that has something that needs to be shared across the company. And we end it with things like, tell me something good.
And so you get a little bit of what’s happening in the company. Everybody hears it. Everybody can participate. And we do highlight the good things that are happening. And that tells me something good tends to be about their life, not their work. And so what I always impress upon people, get your priorities straight, your family, your faith, and then work. And I don’t care what your faith is. It doesn’t matter to me. But whatever your construct is, that and your family should be more important than work.
And if you put those kind of people together, once again, they tend to be more passionate. They tend to be more committed to the mission. They tend to have a greater loyalty, a moral compass that just creates good activity day to day. And that’s the kind of place that I want to work at.