How I Did It: Sammy Hagar

http://www.inc.com/magazine/201311/liz-welch/sammy-hagar.html
How I Did It: Sammy Hagar
The former Van Halen frontman is actually quite the entrepreneur, with a business empire based on his passions: the beach, booze, and bikes.
Most people know Sammy Hagar as the former singer of Van Halen, a wild-man rocker who has trouble abiding by the speed limit. In fact, Hagar is a lifelong entrepreneur who has turned his passions–booze, music, and the beach–into a small empire. Cabo Wabo, his tequila brand, was acquired by Gruppo Campari in 2010 for $91 million. Cabo Wabo Cantina, the restaurant-music venue he founded in Cabo San Lucas, Mexico, in 1990, now has outposts throughout the U.S. There’s also a new spirits business, Sammy’s Beach Bar Rum; a chain of airport restaurants; and a fine-dining establishment. He may be 66, but apparently the Red Rocker still can’t drive 55.
I always wanted a backup in case my career flattened out. Truthfully, I never felt secure about my music. I always thought, Boy, as big as you are today, you may be history tomorrow. I’ve seen this happen time and time again. But if it wasn’t for music, I wouldn’t be able to do any of my businesses.
I grew up poor in Fontana, California, and my mom was my first business adviser. She convinced me, “If you’re going to be in the music business, then you have to save your money and invest it properly, because all those guys end up alcoholic, drug addicts, and broke.” I didn’t want to be poor again, so as soon as I made a bit of money with my first successful band, Montrose, I invested in a few apartment buildings with my brother-in-law. Then, when we started touring a bunch, I started my own travel agency so I did not have to pay someone else fees to book our travel.
By the early ’80s, I was selling out stadiums. In 1983, I made $3 million, a ton of money. Back then, I was seriously into bikes. My friend Bucky was working at a bike store in Corte Madera, California, and he said, “Man, these guys are building mountain bikes with big tires and gears.” I gave him an old junky bike and he built me this crazy-ass mountain bike. I was like, “This is awesome!” I can go off curbs, over rocks, up hills. So I bought the bike store and hired more mechanics to convert more bikes, and then opened a bigger store, Sausalito Cyclery, in 1987, which was doing $4 million in annual sales before I sold it.
I’ve never started a business thinking, Oh, I’m gonna make money off of this. All my ideas have come from sheer enthusiasm. I felt that way about Cabo San Lucas. I bought a condo down there in 1981. There were three hotels, and none of the restaurants had air conditioning, telephones, or TV. But I fell in love with the place. I wanted a place to hang out down there, so I said, “I’m going to build a tequila bar.” I had an instinct that people would come.
By then, I had joined Van Halen. So there I was, the lead singer of the biggest band in the world. I opened Cabo Wabo in 1990 and then invited the band members to become partners in the restaurant–it felt like the right thing to do. But then, in 1996, I got kicked out of Van Halen. They basically said, “You can do Cabo Wabo or be in this band.” I was like, “Why can’t I do both?” At that time, I was so brokenhearted about it, but it turned out to be the best thing I’ve ever done. I bought the band out, fired the team that had been managing the restaurant, and teamed up with Marco Monroy, who still runs Cabo Wabo today. It has been a freakin’ gold mine for 22 years.
After I left Van Halen, Shep Gordon, a music manager, came to visit me at Cabo Wabo. I was wearing shorts and flip-flops, and he said, “You need to roll your whole thing into your whole thing.” Around that time, I met Kari, my current wife, who said, “You remind me of Jimmy Buffett.” I thought she was nuts. But then she took me to see him and I’m going, “Holy shit. This is awesome.” Some fool with a parrot on his head would get his ass kicked at a Van Halen show. But a light went on. He created a lifestyle for his fans. I had already started Cabo Wabo. I said, “We beach all day, eat tacos for dinner, drink tequila. I get onstage and play. That’s it.” It’s not like I’m some genius.Hagar opened the first Cabo Wabo Cantina in Baja California, Mexico, in 1990. He still performs there 10 or so times a year.
That’s how the tequila company happened. People say, “Wow, how did you figure that out?” Well, I didn’t. I’m instinctual. During my rowdier rock-’n'-roll days, I used to like the whole salt, tequila shot, lime ritual followed by the big shiver. Point being, tequila is a fun drink. But then I was turned on to really fine handmade tequila in Mexico, which they didn’t have in America. I thought, This is the best tequila I’ve ever had! I want to make this for Cabo Wabo. And I did.
“I’ve never started a business thinking, Oh, I’m gonna make money off of this. All my ideas have come from sheer enthusiasm.”
Business is alive for me. It’s organic. I don’t like making money with money. I would rather take a shovel and dig a hole and put a post in it and say, “OK, give me my five bucks.” Just like when I go out and do a concert. I love making money with my restaurants. You serve people. You give them something, and they give you something in return. That’s good money.
I’m a walking billboard. I got my Cabo Wabo tattoo in 2004. The Van Halen guys hate me for this. We hadn’t spoken in 10 years, and suddenly they said, “Let’s get a reunion together.” We started getting into the details, and they were like, “You can’t do this. You can’t do that.” One of those things was, “No Cabo Wabo shirts.” So the day of the first show, I got a Cabo Wabo tattoo on my arm and wore short sleeves.
I didn’t really want to sell the tequila company. But Campari offered me so much money that I thought, If I don’t do this, I’m going to regret it. Even if I don’t need the money, I’d say, “Why the hell didn’t I do that?” But after I sold it, I felt like there was a hole in my life. We have a home in Maui, and we spend a lot of time there. I heard about this guy Mark Nigbur, who was making vodka out of pineapples. I went to meet him and said, “You’re in the middle of these sugarcane fields. Why aren’t you making rum?” A week later, he comes over with a little barrel. I tasted it and was like, “This is the best damn rum ever.”
The rum is made not far from our house, and when I’m there, I see Mark daily. He’s a real chemist. I might say, “Everybody likes a rum and coke–let’s make some cola-infused rum.” So he grinds up cola beans and puts them in a tea bag and soaks it in the mash. Then, we’ll do tastings and get all excited. Everything is sourced from the island. I wouldn’t put anything in there that you don’t smell in the air.
“Millions of people are exposed to Sammy Hagar in some way every day. It’s like having a huge hit–but I’m not selling records.”
My strategy for running companies successfully is to find the right guy. Steve Kauffman runs the rum company. He was at Seagram for years before he came to work with me on the tequila. These days, I spend most of my time on the phone with him. We’ll talk about someone new that I haven’t pulled a favor from yet–like a chef or a restaurant owner I want to send some rum to. Friendships are really important in any industry. So I’ll call up Mario Batali and say, “Mario, come on, now.” He’s not loading booze behind the bars, but he can give me the name of the guy who is.
I’m connecting the dots all the time. And though I don’t tour as much as I used to, I try to make sure every radio station gets a bottle of my rum. The DJ will say, “Hey, Sammy sent me this rum–this stuff’s great!” And I try to make sure the rum is in every venue I play. We figure the number of cases based on the number of people coming to the show–roughly one drink per person. But I never try to shove it down their throats. The main thing is that the people get to taste it.
Marco and Steve are the best partners on the planet. And I can’t get through the day without Renata Ravina. She is my business manager and has been with me for 26 years. She organizes my day and handles my calendar. We talk several times a day at least. Tom Consolo, my music manager, oversees that part of my world.
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Stan Novack oversees the Sammy’s Beach Bar & Grill restaurants. He used to work for HMSHost, which is how I met him. HMS wanted to put Cabo Wabo restaurants in airports, but I said no way. Cabo Wabo is a destination. My fans go there on vacation. They said, “Well, do you have any other ideas?” And I said, “Sure; how about a beachside palapa?” They liked the idea, so I came up with Sammy’s Beach Bar & Grill and wrote a menu. I give all the money from the airport restaurants to charity. We’re working with HMS on a new Cajun Taco concept with Emeril Lagasse, who is a good friend. I love to cook, and whenever I get together with Emeril, that’s what we do.
I care about good food; always have. El Paseo is my fine-dining restaurant in Mill Valley. Tyler Florence is the executive chef, and his team runs it. Fine dining is tough: five waiters per table, crystal, finest silverware and china. I opened it because it’s in my hometown, and the building was rundown and needed to be preserved. Then I met Tyler and said, “Where’s your favorite restaurant?” He said, “My house.” I went over and ate with him four or five times and said, “Let’s do a restaurant.”
I could not do any of this without the support of my wife, Kari. She’s solid as a rock. We have two daughters, ages 12 and 17. And then I have two sons from my first marriage–they’re now 29 and 43. We take the girls down to Cabo Wabo a dozen or more times a year. Kari actually gives me shit before I’m getting ready to go out onstage at the Cabo Wabo. Nobody knows I’m there. I’m up in my little dressing room, and I’m kinda antsy. And Kari is like, “Sure you aren’t taking this too seriously?” And I’m like, “Honey, you don’t understand. I want to be good!”
I don’t rest. I have so many ideas in my head. Everywhere I go, I hear, “Love your tequila,” “Love your rum,” or “Hey! I went to Cabo Wabo.” I’ve got a Sammy’s Beach Bar restaurant at the Las Vegas airport and a Cabo Wabo on the Strip.
Every year, about 40 million people walk that strip and pass by that restaurant, and half a million people eat there. Millions of people are exposed to Sammy Hagar in some way every day. It’s like having a huge hit–but I’m not selling records. It’s totally cool.