PEAK, 2nd Edition

Chapter TwoKarmic Capitalism

Behind every managerial decision or action are assumptions about human nature and human behavior.

Douglas McGregor, The Human Side of Enterprise¹

Against all odds, my first hotel became a smash hit. In 1987, at the ripe old age of 26, I bought a virtually out-of-business no-tell motel in San Francisco's gritty Tenderloin district. My slightly delusional business plan was to turn The Phoenix into San Francisco's official rock ‘n'roll hotel so that I could rub elbows with famous musicians, build a business that would enable me to utilize my creativity, and design a workplace where I could live the joy of life every day.

Cheap Trick? Bad Company? While those were some of my favorite bands during my younger years, they also described the clientele I inherited. The hotel's biggest corporate account was Vinny (and his girls)—at least until we renovated the place and terminated the pay-by-the-hour option, which constituted most of the hotel's business. Based on a classic niche marketing plan, a lot of chutzpah in our sales efforts, and a bit of luck, this 44-room motel soon became an internationally acclaimed crossroads for the creative.

I have innumerable stories I could tell about my experience running The Phoenix: babysitting Sinead O'Connor's new child, serving Linda Ronstadt breakfast in bed, loaning cuff links to JFK Jr., and asking Courtney Love to wear a bathing suit when she used the pool are just a few—but they're perhaps more appropriate for ...