Back in 1987, Chip Conley was a 26-year-old idealist with a strong vision. A Long Beach, California native and Stanford MBA grad, he was working in San Francisco for a commercial business developer when he inquired about creating a hotel division of the company. His boss quickly answered in the negative.
Conley wasn’t discouraged; he had a backup plan.
“I told him I was going to start a hotel company of my own—and to that, he looked at me and laughed,” remembers Conley.
Pretty soon, Conley was the one laughing. In just four months, he fundraised $1 million (mostly from family, friends and former college associates), launched Joie de Vivre Hotels (‘joy of life’ in French), found a property to remodel in the heart of San Francisco’s seedy Tenderloin District, and got to work.
His was clear in his mission: to create a hotel with an intimate feel geared toward a niche market. The establishment would have a small number of rooms, focus heavily on quality of service and look unlike any other property on the market. In other words—he was creating aboutique hotel, something largely unseen at the time in the U.S. hospitality market.
He used Rolling Stone magazine as inspiration for his first property. “Like the publication, we wanted it to be cool, young at heart, funky, irreverent and adventurous—that is the kind of customer we wanted to attract; we were going to market based on psychographics,” Conley says.
The plan worked. After a careful building transformation, he opened The Phoenix Hotel with 44 rooms, hip décor, an outdoor pool and an awe-inspiring lounge. Celebrities flocked—from David Bowie and Faye Dunaway to Linda Ronstadt and Keanu Reeves.
Joie de Vivre Hotels flourished from there. Today, the company has the largest boutique hotel collection in California with more than 30 properties and many more in the pipeline. Most impressive is that the hotel industry has followed suit, creating boutique hotel properties as a late. Just look at the success of Kimpton boutique properties, and most of all, the transformation many heavy hitters are going through (i.e. Marriott and Hilton—once templated designs are now focusing on unique, boutiquey feel aesthetics).
I sat down with Conley to learn about his challenges, successes and advice for entrepreneurs.
Q: What were some of your biggest challenges starting out?
A: People didn’t take me seriously as a 26-year-old CEO that had no hotel experience. Also, it was difficult for people to be open to visiting a hotel in the Tenderloin District. They thought the premise was bizarre.
Things got better when The Phoenix became a big success against all odds. It was then that people started seeing that something was working and wanted to check it out.
Q: What have been some of your biggest successes?
A: I’m really proud that each of our properties feels like an original and they are accessible to a wide range of people across all price points.
I am also happy that big chains in the world are emulating us and trying to create their own boutique lifestyle companies.
Another big success was when we created the Hotel Heros Awards in San Francisco about seven or eight years ago. The economy was in shambles and we came up with the idea of creating an Academy Awards for service for line level employees for all hotels in the city, not just our company. The idea caught on and now it is a big citywide event.
Q: Who is your business mentor?
A: My father. He has really helped me throughout the years.
Also, Herb Kelleher (co-founder of Southwest Airlines). I really admire how his company does business. In the beginning, I would often ask myself, ‘What would Herb do under this circumstance?’
Q: What lessons have you learned over the years?
A: I’ve learned that the faster you grow as a company, the more likely you will outgrow the skill set of some of your most cherished managers, so it is really important to invest in those managers.
I’ve also learned that it is incredibly important whom you go into business with as partners. I [recently] sold a majority interest in this company, and we are like a family. I’ve learned that it is important to make sure you see eye to eye with them.
Q: Joie de Vivre is known as one of the best places to work in the Bay Area. How do you create an attractive company culture?
A: Culture is viral and there isn’t just one culture that works for all companies. I think it is important to be conscious and invest in the culture in your company. Make sure you have clarity in what is important, culture-wise.
As we grew, we created positions called ‘cultural ambassadors.’ We have one in each of our hotels, and they help to build and maintain the culture of the hotel.
Also, small business owners shouldn’t underestimate the power of employee recognition. Employees need a sense of meaning. Help them to see the impact and purpose of what they are doing. We regularly do work climate surveys where we ask employees how they feel about their jobs, work, where the company is going, etc.
I discuss these topics in my book Peak: How Great Companies Get their Mojo from Maslow.
Q: What advice can you give to budding entrepreneurs?
A: First, look at how other companies have operated and establish role models.
Second, before going into business, talk to people in your industry. Since I didn’t have hotel experience when I started, I had many conversations with people in that field. I took their words and came to the industry with fresh eyes. I think that is key: take information on how things have been done and do them in a fresh way.
Third, you have to have passion. Think of yourself as a customer of your company. Would your business/product/service delight you as a consumer?
Image credit: Lisa Keating