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WHAT WEALTH MEANS TO ME John Spence Karma Group

People & Companies / Profiles

United Kingdom

Jun 11 2019

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John Spence, CEO of Karama group can best be described as a maverick. With more than two dozen of hotels dotted around the globe, Karma Group is a membership-based holiday and experiential club that gives its various levels of members the benefit of access to beautiful destinations around the globe. Having won the prestigious Ernst and Young Entrepreneur of the year award in 2011 in Australia, and also the American based Philanthropist of the year award, one of the unique aspects that John Spence has mastered with success via his Karama Group is the blending of philanthropy and commercial aspects of business.

Born next to Gatwick airport to the sounds of planes landing on the runway, his teenage years saw him working as a janitor at the airport and he developed a love of planes, flying and travel early on. At university his passion for music and entrepreneurial drive landed him in the position of manager to labels such as the Eurythmics, Culture Club and Bananarama.

Seeking a break from the frenetic music scene, at 24-years old he went to Tenerife and sold holiday accommodation property for Global Group. “I discovered I was very good at it, and what started as a holiday job really was the start of the rest of my life,” he says.

MP Report speaks with John Spence about what wealth means to John Spence.

MP: What does Wealth mean to you?

JS:Security. To provide for my family & freedom; the ability to do what I want; liberation. I have a small plane but that’s because I grew up next to - and call it my formative years - working at the airport, with the smell of jet fuel in my nostrils and so I developed a passion and love for planes. Wealth to me doesn’t mean ostentation.

Any man says that wealth doesn’t matter is a liar because wealth is about what you do with your life experience. 

MP: Does Wealth mean money?

JS:Not always, wealth means what you do with your time. Because I am in the fortunate position where I have financial means, I am able to dictate my time which to me is what wealth is about.

Despite perhaps more historical stereo types, wealth rarely means you play golf and do nothing, it absolutely means health and doing what you can to enhance health for a high quality of life and effectiveness.  

Old stereo types perhaps conjure up images of wealth portrayed as overweight and overindulged and cigar- smokers in pinstriped suits at an old fashioned lounge, but now days that paradigm has shifted to mean having a focus on health and being health conscious, I am a marathon runner and do that as a way of staying healthy. Wealth is the ability to enjoy yourself.  

What does success mean to you?
JS:Success is independence, its about being able to do what I always wanted to do. I’m saving golf and gardening until I’m 80. I am blessed in life in that what I do is really my hobby, my business is like a job-sport – it’s a business, but it’s also a sport for me.

MP: Would you ever talk about your net worth?

JS:Its more than some people think and less than other people think, I think it’s a vulgar topic.

MP: What would you say are your key motivations?

JS:I’m motivated by doing the best that I can, I am never satisfied and always need to do more. I always need to beat my personal best if running a marathon and in business I am motivated by succeeding, achieving & falling asleep knowing I have done something special. I am motivated by giving back and motivated by what I can give to my family. Despite my love for travel, its a brutal lifestyle on the road all the time as my role demands, so the motivation and the personal satisfaction need to be bigger than the day to day intensity.  

I was born next to the airport and grew up staying in hotels. I get nervous chills in the dark of a night, I don’t like the dark and so for me, staying in a hotel with a telephone next to me and someone to answer it 24/7 is a comfort. As a kid I was a stamp collector, I have evolved from collecting stamps to hotels and my business is an extension of my personality and DNA.

I am away from my family a lot which I find very difficult, one trip my daughter came along with me and we had scheduled a lot of philanthropic activity. At the end of the trip, she turned to me and said, “Now I understand what you are doing when you are away, you are helping people”.  The personal satisfaction that came from her acknowledgment was incredible.

MP: Can you talk about your childhood, growing up and key experiences, influences and role models? 

JS:I grew up next to Gatwick Airport, my dad was in the aviation industry, my uncle was a spitfire ace. As a result, I developed a love for planes early and I love plane travel, I delight in a 13 hour flight.

I have never done really had a real job, I have drifted from entertainment to hotels and travel. I am fortunate to have been given a Yale fellowship, the same that was given to Steve Jobs. In the acceptance speech I had to give an open address for over 3000 students and I thanked the dean because it was the second time in my work life where I had been provided with an employment  contract and a salary, the first and only other time I had been employed had been when I was 18 years old cleaning toilets at Gatwick airport, which was a laugh and I enjoyed it at the time. 

MP: In an interview with the financial times, you recently said: “My maxim is that it’s more fun to be a pirate than to be in the navy. It’s not enough to simply build astounding resorts. At Karma, we create extraordinary experiences that our guests will remember for a lifetime. Can you elaborate on this?

JS: Although we are in hotels we are really in entertainment. We are actors on a stage the universe we create is  our brand and this brand is about is about the overall experience. As soon as a guest arrives, they walk into our ‘world’. We may not have the comfiest bed but its about the overall experience and entertainment. Our aim is to transport our guests to that time when life was easier, they didn’t have a mortgage or the pressures of daily life, but they may have just finished school or university and would lay in a hammock, care-free under the starry night sky listening to a great DJ, full of anticipation for life, enjoying the moment, the experience and the visceral-ness of life. We have 4000 staff and when someone walks into our universe our job is to provide this experience for our guests. 

When I talk about being a pirate, I mean we are anti-corporate, it’s something we pride ourselves on, to me it also means comradery we all work as a team, we are mavericks and have an amazing culture. Most of us are unemployable until recently I always used to have long hair - the last of the long-haired pirates! We are counter intuitive, counter corporate and embrace a fun environment.

MP: What is the relationship between philanthropy and successful commercial business in your view?

JS: Far too little, I am passionate about philanthropy. I enjoy success and the trappings that come with it, money, a beautiful family, private plane, quality of life, choice and opportunity, but it’s only a twist of fate or roll of the dice that I am on the street 

I believe we have a moral and ethical obligation to give back. Without being shame faced or Machiavellian many people support us and trade w us because we are so heavily vested in giving back to the local communities. 

Our acute focus in giving back to the local communities we are active in globally and this makes me feel good. Also, my staff love it, it really is amazing how doing good connects the human spirit and I believe it saves me a fortune in HR because our philanthropic activities unite all of the staff the organisation to a greater good, which elevates the dynamic and culture of what we do.  I am incredibly proud of what we do, I have called my company ‘Karma’ because I believe in the idiom; ‘do good and good comes back to you’. I am not religious, but I do believe there is a gravity or law of a universal power greater than all of us and this is the law that governs life and connects us all. 

MP: Who would you say molded you the most? Why? 

JS: I’m not sure, to be honest, maybe Richard Branson, he really understood way ahead of his time the power of PR to expedite the growth of a brand.

MP: When it comes to entrepreneurship what is more important to you, the creative process or the financial outcome? 

JS: Without a shadow of a doubt, the creative process is the most important, the financial comes as a result of the creativity. Finding new resorts and putting them together, building them and seeing them come to life, this creative process is what excites me and fuels me. Cash flows are necessary but creative power is more exciting. Creativity is the core of what entrepreneurship is about, the logical route is for everyone to work for exciting companies because its safer from a financial perspective. Being an entrepreneur is being a trail blazer and it’s the risky way to make money with new ideas the fire that fuels the inspiration. Every big company started off as an idea with a passionate entrepreneur driving the force to manifest it. To the winner goes the riches, I am unashamedly capitalist, but I do it because I love the creative process and that is what drives and fuels me.

MP: Investment vs making the money, what’s the difference to you?

JS: I am very conservative when it comes to investing, the first principle is to keep it safe and as long as it grows above inflation, I am happy. My business is more of a creative process and its more of an active process, investing to me is more passive and conservative.

MP: What has enabled you to have such a successful global footprint in such a short period?

JS: Having a sense of humor and no debt. I have always operated very counter-intuitively, and this is what I teach at Yale Business School.  I have never borrowed a penny, some would call me “Syd the Sloth” off the kid's movie “Ice Age” because taking this route means slower and more organic growth but I am comfortable with this approach, its served me well over the years. As warren buffet says; “When the tide goes out, you can see who has been swimming naked”. Our approach to debt and growth has been deliberate and it has served us well in harder economic times.

MP: For ownership in resorts like Karama Kendra in Bali where its difficult to get finance do purchasers usually buy with cash? 

JS: Yes, most are cash buyers who are buying a lifestyle, we suggest an annual investment income of circa 4% plus any capital growth. The primary driver, however, is that owners are able to stay in the villas around 45 days a year, which tends to be the main reason they want to buy, for lifestyle.  

MP: What is the difference between Karma and Royal?

JS: While we had the engine room underneath of fractional ownership with Royal, Karma has given us a public face. While Karma represents only 10 per cent of our business, it’s what most people see. It’s where the celebrities stay, where the pop stars go, sometimes with $5,000-a-night villas. It gets us into the media and gives us fantastic credibility for all our Royal resort owners.”

MP Is there anyone that you have ever wanted to meet and not yet had the opportunity to meet, Who and why? 

JS: Madonna 20 years ago because I think she is fabulous and Bill Clinton I think he would have been a character I am fascinated by his political views, and he seems like a lad, he would have been fun. 

 

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