How to Be a Billionaire, Learn From One
Jess Jackson--patriarch of Kendall-Jackson Wine Estates and 14th-generation American whose family tree includes the swashbuckling pioneer Daniel Boone--tends to leave a pretty big footprint, no matter what frontier.
He was a successful San Francisco lawyer and rural grape grower who got into the wine business by accident and ended up creating one of the largest family-owned wine empires in the country. He began dabbling in horses and ended up owning two of the most acclaimed thoroughbreds in a generation. Now he's a guy trying to get the U.S. government to rename a mountain after one of his wineries.
Jackson's successes are immense, but his fortune is rooted in a single entrepreneurial moment: when a grape glut hit in the early 1980s and he turned his unsold grapes into a small bottling of Chardonnay. The wine was sweeter than what other winemakers were producing, and consumers went crazy for it. Now 2 million cases of Kendall-Jackson Vintner's Reserve Chardonnay are sold each year, and it is one of the most popular wines in restaurants across the country. Jackson has an estimated net worth of $1.85 billion and is ranked among the 400 richest Americans by Forbes magazine.
He is the owner of two private planes and a helicopter. But his rough-hewn hands reflect a lifetime communion with the soil, and his world-view is shaped by his growing up during the Great Depression.
With the help of his business partner and wife of 25 years, Barbara Banke, he runs Jackson Family Wines, a collection of 35 wineries at the center of an expanding global empire that includes thoroughbred farms in Kentucky and Florida. Banke is a former land-use and constitutional law specialist whom Jackson met when their firms were involved in the same case. Their first date ended after the San Francisco Fire Department was summoned to extinguish a fire caused by her attempt to cook them dinner.
He travels widely, but home base is still Sonoma County, where he maintains two offices--one in a Santa Rosa office park, where his administrative staff works; the other in a converted house behind his home near Healdsburg. Which is not far from Black Mountain--or, if he has his way, we'll soon be calling it Alexander Mountain.
Both offices are spartan, with few accoutrements that suggest "Rich Guy Works Here." He met Entrepreneur at the staff headquarters, dressed in his typical outfit of blue blazer, white polo shirt and rumpled blue jeans. His corner office overlooks a small vineyard next to Route 101. And aside from a few family pictures, the wall is adorned with a row of 28 bottles of Kendall-Jackson Vintner's Reserve Chardonnay, one for each vintage since 1982.
What was it like growing up during the Depression?
There were times I ate rice three times a day, sometimes I went to bed hungry. My dad, who was a teacher, was out of work three times. My mother had to work. It was a hard time for working families, particularly our family. We had formerly wealthy relatives, but they all lost their fortunes. At one time or another, all of them lost their jobs and hit the wall. I lived with cousins and aunts from time to time when the husband was off looking for work.
What did you think life held for you?
I always knew I had to work. Even before I was a lawyer, I had jobs as a lumberjack, teamster, longshoreman, lifeguard, candy maker, sales clerk, a temp at the post office, I pumped gas, I bagged groceries, and I was a policeman. I bet I had 50 jobs before I became a lawyer.
Who inspired you?
The inspiration for me came from my grandfather John Alexander Jackson, who was a teacher. He saved his money, retired from teaching and bought an apple orchard in Delta, Colo. He couldn't sell the apples. So he bought some sows and pigs to sell and fed them the apples. When he couldn't sell the sows and pigs, he turned the outhouse into a smokehouse and turned the pigs into ham, bacon and chops. He bartered them for things he needed to live. It was a lesson in survival.
And your first entrepreneurial endeavor?
As a kid in San Francisco, I sold eggs and chickens. I had a corner near where the trolley car turned around, at Ninth and Judah, the best location in the Inner Sunset, until a bully beat me up and I had to move.
How did those first jobs help you later on?
The work ethic comes from having to do something and repeat it until you do it well. That becomes ingrained in you, and the reward is the contributions you make to your family. Everybody, in any profession, if they do something well, it comes from repeating it. That's the experience of learning. But the work ethic also taught me that all those different jobs were jobs I didn't want to do even if they paid well.
Part of my nature is that I'm easily bored. Mundane repetition doesn't work well for me. I'm not a guy who goes home, drinks a beer and watches TV. I've left many professions that were economically rewarding to take on a new challenge that I knew wasn't economically rewarding.
So what's the lesson in that?
My best advice is to do different things. Find what really satisfies you. Do what you like; the monetary reward follows.
Is that why you left your law career?
I had achieved a pinnacle of success, and it was economically rewarding. But my real interest was returning to farming, to get away from the law. I had an urge to return to the earth.
Why did it take 20 years to abandon your practice?
I was just evolving. I enjoyed the intellectual and cultural side of law, but I didn't enjoy the long hours, which was the only way to increase compensation.
And your interest in winemaking?
In 1974, we bought an 80-acre farm in Lakeport, just north of Napa County. We had no phone and no TV, although I do remember we had a radio. The farm had peaches, walnuts, apples, corn, geese, chickens and turkeys. We converted it all to a vineyard. We started by selling grapes to local wineries like Fetzer and Mondavi until they stopped buying them in the early 80s. Then, with our own cuttings, we began making our own wine in 1982.
What was your best business decision?
Financially, founding Kendall-Jackson. For soul satisfaction, going back to farming. To me, nothing's better than working dawn to dusk on the farm, getting your hands dirty, hearing the rustle of the wind. It restores your moral center and your soul to the relative insignificance of life in the universe.
What was your worst business decision?
I've made many. They're part of life. My biggest mistake as an individual is being too transparent and accepting of people. I'll trust them, and they take advantage of it with unethical conduct.
Care to name a few?
(He laughs) No, that wouldn't be a good idea.
Are there similarities between making wine and racing thoroughbreds?
In each case, you want to win. Both are luxury products. Both bring a lot of satisfaction by their achievements. In horse racing, Rachel Alexandra and Curlin are great examples. We're very proud of the results of our racing career and extremely proud of the prominence of our wine business. In each case, we have exceptional products. And success enables you to give back in a charitable sense.
How does the Great Depression compare to now, the Great Recession?
I hate to be pessimistic, but both parties have abandoned the concept of individual responsibility for risk and reward. The free enterprise system, ownership of property and creation of wealth from the application of resources is the essence of liberty in the free market system. The lesson I learned in the Great Depression is what I'm seeing now. President Roosevelt tried to spend us out of the Depression. Mr. Obama is doing that now, following in what Mr. Bush did. In a pure democracy, with the economy the way it is, you can't have a large percentage not working or retired.
So you're not in favor of government handouts.
No. Since my childhood, I've learned that you do what you can to find work. Work is therapeutic. It's healthy. It gives people self-respect. You learn. It makes you part of society. Happiest man I ever met was a guy sweeping leaves in Paris as I was jogging near the Champs-Elysees. He was singing opera.
But everybody wants to work, right?
Everybody want to be rich, healthy and on top without working to get there. Young people have high expectations and feel they're entitled without working for it. There are no entitlements in life. In reality, it's self-determination and self-reliance as the fundamental truths at the base of individual achievement.
How is Kendall-Jackson responding to the recession?
Consumers have tightened their belts, so we are introducing new high-quality, value-priced wines that are more affordable in an economic downturn. And we've cut expenses, including personnel, which is below normal. You're always looking in the mirror; a downturn always makes you more introspective. This just forces you to make an evaluation. It's healthy for the business, anyway.
What is the biggest mistake business people are making right now?
They are not willing to take risks. You have to take risks in order to be an entrepreneur, to be successful.