Born and raised in Echo Park, John Paul DeJoria was famously living out of a car when he co-founded Beverly Hills hair care company John Paul Mitchell Systems in 1980. He reaped a huge fortune and moved to Texas 12 years ago, but still has a number of local connections. In addition to his company here, he keeps a Malibu home, has two daughters who live in the area and supports several charities. Today, DeJoria, who has since founded several other companies including tequila maker Patron Spirits, is worth $4 billion, according to Forbes Magazine. But in conversation you can still hear the easygoing cadence of a guy who went to love-ins at Griffith Park in the ’60s and the tireless enthusiasm of a salesman who sold encyclopedias door to door. Briefly in town to check in at the Paul Mitchell offices, the 68-year-old spoke to the Business Journal in a phone interview about entrepreneurship, his relationship to Los Angeles and why he still keeps his company here despite what he considers an unfriendly attitude toward business in the state.

Question: How much time do you spend in Los Angeles these days?

Answer: I’m probably here an average of two, maybe three days a month for John Paul Mitchell Systems. And, of course, during the summer it gets really hot in Texas, and we go back and forth between Malibu and Colorado. But I’d like to give a little story on why I have the company headquartered here and haven’t moved it someplace else.

Why’s that?

Texas, where I live, is the No. 1 best state to do business in on every chart. California is at the bottom, it’s one of the worst states in the nation to do business in because of taxes, red tape, regulations. I could easily move my business to Nevada or to Texas and have no taxes.

So why don’t you?

The majority of the people that work with me have families here in Southern California. They’re Hispanic, about half of them, and other people have big roots here. If I pick them up and move them, they’d either have to leave their job or leave their families, so I pay the extra money so they can be here in Los Angeles and can be by their families, because they’re part of my family.

So that’s really the reason?

That’s it. I could move these offices if I wanted to tomorrow and it would just be a Nevada corporation or a Texas corporation.

But you’re running a company. If that’s really the reason, some would say that doesn’t make business sense.

We’re privately held and I started this business with $700 32 years ago living in the back seat of my car. I made it and I made it in a very nice way. The people there with me deserve the same respect to be able to have good lives and be treated as if they were the owner of the company. Would I make more money? Yes. But why be greedy? Love is a little bit more powerful than money.

And you’d also be dealing with unhappy or new employees if you moved.

And I can’t have that. Or they wouldn’t work with me anymore. And we love to take care of our people. They’re just as important as our bottle of shampoo.

Does Los Angeles have anything to offer potential investors who don’t live here?

I would just say if there was a good opportunity for a business, regardless of the red tape or the taxation, that made good sense, then, hey, why not? But would it be one of the cities that a company would look to put their major headquarters? Probably not.

Can you expand on what you mean by taxation?

Nevada and Texas have no state income taxes. And we don’t have the same business taxes. By the way, I still pay a portion of my taxes to the state of California for whatever business we do in the state. Which I don’t mind doing at all. That’s my contribution I make to have my staff here.

Can you give me an example of what you mean by red tape?

I’ll give you an example of the movie industry. I was for a long time a spokesperson for Creative Coalition, and they’re all about keeping jobs in America. Several years ago, I did a little conference here in L.A. when we brought directors, producers, union people and city officials all together at the Petersen museum about why a lot of movie jobs are going to Canada or outside California.

And?

It has a little to do with the unions – they have to use all union workers here. And if you only needed 70 people for the movie, you had to use 100 of them. Another big reason was all the red tape it takes to make a movie in Los Angeles, there are so many filings and so many permits. If you go to a place like New Mexico or Texas, they eliminate half the red tape. We had them all in one room and they just wouldn’t agree (on how to solve the problem).

But there’s still opportunity here, no?

Gosh, yes, there’s opportunity here. Tremendous. My God, I started John Paul Mitchell Systems here.

Do you think somebody could do today what you did then in Los Angeles?

Definitely. In 1980, 1981, when we started, inflation was 12.5 percent, unemployment was 10.5 percent, interest rates were 18 percent and you had to wait in line to get gasoline. So you tell me if it’s better today than it was then.

What did you learn in your time here in Los Angeles?

I grew up in Los Angeles with absolutely nothing. I started my business in Los Angeles with $700. I learned that Southern California is a wonderful place to live; it’s a place you can start your business as an entrepreneur and be able to make it.

Is there something specific about Los Angeles that invites that entrepreneurial spirit?

I’d say the United States offers that, but in L.A. it’s more diverse. You have every business in the world represented here. So there’s a lot of different diverse businesses you could get into, and you’re also in the entertainment capital of the world.

You were homeless around the time you started John Paul Mitchell. I understand you now support homeless charities in the L.A. area, such as Chrysalis.

They always have a little group session where they bring in those looking for jobs, and I talk about how it was when I was there and what I went through and I know what it’s like and I feel for them. And I give motivation on how to not give up.

What do you talk about?

I show them how to even start a little business with little to no money. How I made it on $2.50 a day. How I never gave up when 50 doors were slammed in my face. Door No. 51 I was just as enthusiastic – this was when I was selling Collier’s Encyclopedias. When I was homeless, I figured, well, things are so bad they’re not getting worse, and they only got better. How to think positively.

What do you mean by that?

How to look at the little good things that are happening along the way that are really big things in your life: Well, hey now, I’m not on the street. I’ve got a place to stay. I’ve got food to eat. I’ve got some clothes on. Wow, I’m really going up the ladder now. You’re progressing, look at the progress and where you’re going as opposed to the tragedy of the past. Don’t live in the past.

What other L.A.-area charities are you involved in?

Another place in South Central L.A. I started 22 years ago with a guy named Bennie (Davenport). It’s called the Blazer House. We take kids in junior high, high school, we tutor them, we show them how to do things right, help them with their homework. Another thing here is the Boys and Girls Club of East L.A. There are 40 gangs within a couple miles of the Boys & Girls Club on Cincinnati Street. When I lived here in L.A., I was in a little street gang when I was 5 to 9-and-a-half years old called the Pink Rats. We never killed anybody. We just thought we were bad, but we weren’t. Anyway, I went down on the weekends and it saved me from getting into trouble so I helped them build a new facility here.

How did the Boys & Girls Club help you?

That was my first entrepreneur job. I was 7 years old. And at the Boys & Girls Club here in Los Angeles, for a quarter, which you could get on credit, they’d give you enough wood to build a nice big flower box, a big one to put in your window. So my brother and I got 25 cents on credit, built this thing in wood shop, went down the street and walked up and down Brooklyn Avenue and sold it for 50 cents. This is 1951, 1952. Then we went back, gave them a quarter credit back and we made a quarter. That was a lot of money in those days.

Did you work much as a kid?

When I was younger, like 11 years old, I had a paper route in Los Angeles for the Herald-Examiner. L.A. allowed me as a kid to have a job all the time. It was a great town and would always give someone an opportunity if you knock on enough doors.

Why don’t you live out here anymore?

Why did we move to Austin 12 years ago? My wife and I looked all over the nation for the best place to bring up our youngest son. At that time, he was 2 years old. My wife is from Texas. We looked around, we checked out the schools, the environment, everything, and Austin was our choice to raise him. Also, for me, because I travel so much, it’s in the middle of the United States. From Austin, I can get to any part within three hours.

Where else do you have homes?

We have a couple others, in Hawaii and Colorado. But I really try to stay away a little bit from the stuff I have and would rather talk about what I do or what’s cool about California.

What do you do when you’re not doing something related to John Paul Mitchell or charities out here?

There’s concerts to go to, there’s great beaches to go to. I would say the water life here is incredible and plus I have a lot of old friends here.

Any favorite places to go?

I could give you two of my favorite restaurants. One is called Coogie’s in Malibu and serves all organic juices – orange juice, apple, carrot, anything; it’s all squeezed on the spot for you. They have farm fresh eggs, unbelievably great. It’s what you would call a family restaurant but local people in Malibu go there all the time. Bui Sushi is one of the best sushi bars on the planet and it’s in the middle of Malibu.

What else do you like to do?

I also like very much to go down to Marina del Rey on my motorcycle. I keep one here in L.A. I like going from Malibu on the weekends when no one’s around and to take it back in the canyons down Mulholland Drive, go to the Rock Store. On Friday nights, you may find me at Bob’s Big Boy at Toluca Lake. They have a hot rod night, and my daughter Alexis is a race car driver. She drives some really cool hot rods and I’ll take one of her cars down there or one of my old cars.

Do you know a lot of other people who spend time here but aren’t living here full time?

I would say when you look at a lot of major people in business, a lot of them do have holiday homes here. But they’re not headquartered here. I think California is a fabulous place, but if they made it more regulation friendly, I think they’d get more businesses to come here.