Leadership Lessons: Radical Ownership

Entrepreneurship is not a linear path and it’s hardly ever smooth.  

As the founder of AG1, I’m often asked for advice about building a business. I want to start sharing some of the lessons I’ve learned through 20 years of highs and lows, and I hope to learn from others here too.

The first lesson is about radical ownership, a concept that’s core to our mission and values at AG1.

Ownership is a foundational concept to me because it is the only way to truly learn from our mistakes and move forward on a better path. 

I’ve talked a lot about the failures and struggles early in my career, but it wasn’t always easy to own the mistakes behind them. Sometimes it was embarrassing or uncomfortable, or I didn’t want to admit what I didn’t know. 

For example, it took me years to radically own the failure of my early New Zealand real estate business. In short, I ran a “rent-to-buy” property program, but the financial terms were murky and confusing for some customers. 

The program allowed many people to get homes, but unfortunately some customers lost money or got evicted. The business model was later found in violation of a NZ law related to advertising, as a result I was fined for breaches of the NZ Fair Trading Act. I was terribly naive, and I should have done better on many fronts – more on that below. 

Radical ownership means accepting the hard truth of my mistakes, taking responsibility for the outcome, and changing my actions to align with my values. 

Through that experience, I also learned the importance of passion and patience, finding the best partners and team, and holding the highest standard of quality and integrity in anything I do. It shaped how I built AG1, which has benefited millions of people over time.

I learned to always focus on making the right long-term decisions and never to take shortcuts, even in hard times, because building a beautiful business that creates a positive impact for customers takes time. 

In the spirit of radical ownership, here’s what happened with my Auckland business, culminating in fines from the New Zealand Commerce Commission: 

• In 2003, I set up a small real estate venture in New Zealand, where I grew up. I was in my early twenties. My first foray into entrepreneurship - a nutrition business, my personal passion - had failed a few years earlier, and I was still trying to find my feet as an entrepreneur.  

• I tried a lot of things. I started buying houses and improving them and selling them. I built a financing and property management business on a U.S. model of a wrap-around mortgage, and then a “rent-to-buy” program. A property was sold to a buyer on an installment contract. The buyer had the equity in the property and all equity upside, but not legal title to the property until they had enough equity to refinance with a regular bank, they sold it, or they completed the term of the contract. 

• This model was not common in New Zealand at the time, and foolishly I did not understand the nuances fully myself. So I copied everything from the U.S. model – the finance structure, the contracts, all of it. I even copied an advertising slogan: “Why rent when you can own?” 

• From 2003 to 2005 I both did this myself, and I did this with investors where we managed the process for them.  

• This stopped being a focus and this real estate business wound down to maintenance mode only by late 2005 - which meant management of the rapidly shrinking number of existing properties in the program. 

• Thanks to a property boom in NZ, most customers refinanced or cashed out with significant capital gain. We had close to 150 customers come through the program over those few years.

• Real estate was not my passion. So, in May 2006, I stopped being active in the business and I left New Zealand to explore the world. I played rugby in Argentina while trying to learn Spanish, then went backpacking through Europe. 

• In November 2006, the New Zealand Commerce Commission inquired about the business model so we showed them everything we had been doing. The Commerce Commission went quiet and we had no comments from them. 

• In April 2008, 15 customers and former customers filed complaints with the Commerce Commission. The Commission alleged that we had breached the Fair Trading Act by using the words “Why rent when you can own.”

• After the Commission investigated the complaints, in 2010 they decided that I had breached the Fair Trading Act and the matter went to a court case; I was fined in March 2011. I did not have a lawyer because I couldn’t afford to keep paying one, and I didn’t travel to New Zealand for the case. At this point in time I was millions in debt from another failed business and about to be bankrupt, living on a friend’s sofa in New York City, and trying to get AG1 off the ground.

• The Fair Trading Act is legislation that deals with regulatory offenses resulting exclusively in monetary fines.

• By September 2014, I paid the fines and reparations under my name in full. All investors in this business also had all original capital back. 

Because of these mistakes, I became a different kind of entrepreneur. 

I realized that I had to establish a sense of ownership over everything -- resolving the legal issues, paying back my investors, succeeding in my new company, and finding happiness in my life.

This is one of the reasons I believe AG1 has grown the way it has. 

Taking ownership drove me to make an amazing product, build for the long term, assemble a great team, and raise the standard for myself and the industry so that all of us at AG1 are always learning, growing, and living this value of radical ownership and helping others do the same. 

I’ll share more reflections and lessons over the coming weeks, but I hope this inspires you to embrace radical ownership to move through your own struggles.

This post was updated for clarity and accuracy on July 2, 2024