NYU Stern Undergraduate College Baccalaureate 2015: Peter Morton

NYU Stern Undergraduate College Baccalaureate 2015: Peter Morton


Dean Menon: It is now my absolute pleasure to
introduce today’s distinguished speaker,
Peter Morton. As I mentioned before, like
many of you in the audience
Peter Morton is a proud parent of a
Stern student graduating here today. Mr.
Morton is also the co-founder of the
world-famous Hard Rock Cafe. He opened
the first Hard Rock Cafe in 1971 in
London when he was just 22 years old.
Class of 2015, that’s your age. The pressures on. Hard
Rock Cafe became global when Mr. Morton
opened the first Hard Rock in Los
Angeles in 1982. He later opened the
first 660 room Hard Rock Hotel and
Casino in Las Vegas in 1995 today there
are over a hundred and seventy Hard Rock
restaurants worldwide and twenty hard
rock hotels in addition to being a
successful businessman mr. Morton is
also a supporter of the environment
education and medical sciences he serves
on the board of trustees of the Natural
Resources Defense Council as well as the
board of the young Eisen scholars an
organization dedicated to leveling the
education playing field for promising
students in underserved communities he
is also on the UCLA Medical School
advisory board he has been a generous
supporter of NYU Stern and for that we
are grateful mr. Morton successful
career in many way reflects the
innovative and entrepreneurial mindset
that I see in many of you are talented
Stern students we are honored that he
could be here to speak with us today
with that please join me in giving him a
very warm NYU Stern welcome ladies and
gentlemen mr. Peter Morton
Peter Morton: Thank You Dean Menon for your kind words
graduates friends and family members
faculty it is an honor to be invited to
speak with you today when I was thinking
about what to say today I thought back
to when I was your age and speakers
would come to school and try to impart
wisdom I remember all I ever really
wanted to know was out of that guy pull
it off so I want to tell you a few
stories from my own journey and that
hopefully answer that question and might
even be helpful to all of you as you set
out on your own journey when I was
leaving college I had a plan I’m sure
many of you have plans that’s where we
all start we have plans my plan was to
go to Harvard Law School I would go
there get a degree join a respectable
firm make a respectable amount of money
and have a good life I had it all
figured out
unfortunately the Harvard admissions
board had other ideas
I got a rejection letter and there went
the plan that’s the problem
with plans life gets in the way I
scrambled and found a job working for a
new restaurant Division of the great
western United corporation based here in
New York the job did not make my heart
race I told them I’d start in September
I wanted to take the summer to travel in
North Africa and Europe until I
eventually ended in London on my way
back to go to work
London in 1970 was in full swing guys in
red velvet pants snakeskin boots girls
in miniskirts people driving on the
other side of the road it was
while I loved it but the plan was still
to join gray western United and then one
night I had a fateful dinner with a
friend after eating on the road and then
encountering the boring food in London I
was homesick for some food you know that
I really loved I craved a hamburger
french fries and milkshake I looked down
on my plate and I had an idea everywhere
you went there was this amazing cultural
disruption going on in London the music
the fashion the design everything was
blowing up and changing except for the
food the food was not keeping up with
the rest of the city it was all very
bland and boring what London needed was
a hamburger joint
I informed Great Western United that
there had been a change of plans
I stayed in London met up my future
partner we each put up scrounged up five
thousand dollars and we went begging for
a loan of a hundred and fifty thousand
dollars to every bank in London we
finally got the loan and we began
creating what would become the Hard Rock
Cafe many of you will also have great
ideas ideas that get you excited and
convinced that you can change the world
and that’s awesome but ideas are only
the beginning what’s going to turn that
great idea into reality is how much hard
work you’re willing to put behind it
success is the marriage of good ideas
with commitment attention to detail and
follow-through I knew the only way the
hard rock was going to work is if we
nailed every single detail from working
with the ice cream manufacturers to get
them to understand what American ice
cream was to teaching bakeries in
England what a real sessom
a seed bun was to redesigning our menu
over a hundred times and it was more
than just the food we had to get the
right music i sat on the floor of my
flat at night making cassette tapes if
anyone remembers what cassettes are so
he could just capture the right vibe in
the right order we snagged the Beatles
graphic designer and spent months with
him working on the hard rock logo
changing colors working with the design
until we got it right we work day and
night on every detail until we were
convinced we had a great product
eventually we were almost there the hard
rock was almost ready to open when I
stepped into this space and I looked
around the whole restaurant there was
something wrong the contractors had done
a great job too great a job this was
supposed to be an American roadside cafe
the whole place looked too new too
perfect to fix this My partner and I got
some chains and we can we began beating
everything the tables the chairs the
walls and I still remember our
contractor watching with absolute horror
as we swung the chains and put a patina
of age on his work as I said it’s the
details that make the difference then
about two weeks before we opened we ran
out of money our bank account was closed
down we had no way to pay our bills we
convinced all the various parties that
we owed money to to work with us and
give up give us some time to come up
with financing this became my first
experience in creative financing the
financial stress initially put me in a
state of shock
I remember my partner and I were up for
48 straight hours trying to figure out
what to do
the hard rock opened on June 14th 1971
with no bank account no checking account
and we did about three hundred pounds in
sales the first day so from the cash
register we paid the waitresses the next
day we did about three hundred and fifty
pounds so we paid the beer man the next
day we did about four hundred pounds
when we paid the ice-cream man and the
kitchen staff and it kept growing every
day to solve our money issues though we
knew we had to sell half the company in
order to raise the capital we needed but
we put in a clause in the agreement with
the people that were buying half the
company that if we hit certain sales
figures we could buy our shares back
they thought no chance these guys are
going to hit those sort of numbers every
day it got a lit little busier and then
suddenly one day there was a long line
to get in eventually the restaurant was
all ours again all of you will face
similar moments of opportunity and
challenge in bringing your own ideas to
fruition I don’t care if you’re opening
a restaurant or building a website or
closing an investment deal as an
investment banker it is your hard work
and attention to detail that will make
all the difference your customer
whatever shape they come in will be
cognizant of this and recognize this
commitment good ideas are just the
beginning anything can be a success
anything can be a failure the difference
between the two is up to you so the hard
rock legend was continuing to grow the
line of people waiting to get in was
getting longer we were the toast of the
town we were invited to the Stones
after-party at their home we were
in the best table at Annabelle’s
nightclub and because of all this we had
every invitation to self-destruct I knew
how easily we could have gone off the
road and I knew how hard it was to keep
our hands on the wheel deep down I knew
that we had to remain grounded in terms
of what our values would be in terms of
this process and with great work and
perseverance we did it and remain true
to ourselves life has taught me there’s
only one way to maintain success and
that’s through continued hard work in
taking care of the people that work for
you this sounds simple we all want to do
the right thing or at least most of us
do but it can be tricky success is a
weird thing it’s very easy to have it go
to your head and frankly make you act
like a fool
after a Hard Rock’s fame continued to
grow
we were living an extraordinary life I
was 23 years old I was making more money
than I ever thought was possible and
being young in an exciting city of
London and the focus of a lot of
attention was truly a lot of it was a
wild time
what I never lost sight of was what
allowed us to be having such a good time
one of the most important reasons the
hard rock was successful was due to the
people working there and I knew that if
we took care of them they would take
care of us that’s why from the beginning
I always tried to make it part of the
ethos of the Hard Rock that it was a
great place to work everyone
every single member of the staff was
treated generously fairly and with great
respect we would do anything for the
people that work there whether it was
giving them interest-free loans or
helping them with any family problem I
did this because I knew the employees
were my ambassador
of goodwill they were the point of
contact with the customers if they were
happy they worked hard they were
friendly and believed in good service
customers would pick up on that we took
the same respectful approach with our
customers we worked hard to deliver
great food with great value a satisfied
and happy customer creates good
word-of-mouth and the word of mouth was
spreading throughout England and Beyond
and soon to America there is such a
thing as Karma
trust me one of our mottos that became
part of the hardrock ethos was love all
serve all and it has become part of my
business philosophy ever since
in 1993 I saw a similar opportunity in
Las Vegas that I saw in London where a
certain market was not being met I was
in the process of creating a partnership
with Harrah’s to open the first Hard
Rock Hotel and Casino in Las Vegas
Harrah’s was and still is the largest
gaming company in the world we had we
shook hands on a deal that was 6040 I
would be the majority shareholder and at
the time we’re having a property
recession in America and the night
before the deal was going to close hair
has changed the terms they wanted 51%
they were betting with the property
recession then that I would not walk
away from a fully financed casino
especially considered it was my first
time out I felt this last-minute change
changed the spirit of the deal we shook
hands over and I walked away as hard as
it was it goes back to the same ethics I
had from when I first started the Hard
Rock I won’t go into business with
someone that is not honest even if that
means walking away from a lot of money
a week later I got a call from the
president of First Interstate Bank of
Nevada which was financing the deal with
Harris and they said we think we know a
great part
another great partner for you and there
was a group based in Lake Tahoe
California called Harvey’s Hotel Casino
flew up to Tahoe met with them and
walked away with a deal where I owned
60% of the project eventually I was able
to buy Harvey’s out their 40% the Hard
Rock Hotel and Casino turned out to be
one of the best deals I’ve ever done I’m
not telling you this to boast but
because it’s important to have a moral
code you live by and are willing to
stick to even though the easier decision
might be to break it all of you are
smart you’re talented I have no doubt
many of you will go on to great
successes in your chosen field
remember this you are only as good as
the people working for you or with you
choose them carefully treat them well do
right by everyone it’s not always the
easiest path to take but trust me it’s
the only road to true and lasting
success the last thing I want to leave
you with is a story about learning to
trust yourself let’s go back to the
1970s in London the first hard rock was
doing amazing the lion was there the
papers were writing about as rock stars
even wrote songs about the hard rock and
that’s when the offer started pouring in
many large restaurant companies wanted
to join venture franchise expand the
brand opened new ones all over the place
Europe and America the conventional
business wisdom would be to do just that
maximize your opportunity for growth
isn’t that what they teach you it’s
business school we believed otherwise we
thought keeping it as a singular
location
with one line would make the hard rock
special an iconic destination so we
politely listened to the offers and said
no to everyone we always had been
anti-establishment that was our inner
voice and we tried very hard to stay
true to it we did not want to be just
another faceless chain we did not want
to fall into the trap of just chasing
the almighty dollar we had a crazy idea
that we could grow the business by not
growing it we didn’t open another Hard
Rock for 10 years which allowed the
legend of the Hard Rock to continue to
grow as an intimate individual entity as
opposed to just another restaurant chain
keeping it at one location all those
years made it a cultural icon in the
long run it was the best business
decision we could have made we trusted
ourselves and our vision and that’s what
proved most valuable in the end so let’s
fast forward to 2006 the Hard Rock Hotel
& Casino is doing amazing and I acquired
26 acres next door to the 18 acres the
Hard Rock Hotel and Casino sat on the
condo marketplace in America was red-hot
the entire project was pre-sold we had
approximately two and a half thousand
reservations with deposits to buy our
1,200 units it was all systems go as
part of the project I got a loan for 1.2
billion dollars from credit Swiss when I
got that loan it always puzzled me how
easy it was to get a billion dollars I
remember how much harder it was to get
that hundred and fifty thousand dollar
loan in London that’s when the interval
my inner voice started whispering to me
it just didn’t feel right the condo
market was booming
projects were going up across the
country and huge numbers Miami New York
Los Angeles Las Vegas I had experienced
a real estate bubble firsthand in London
in the early 70s and had seen how
devastating the crash had been then I
was traveling to Miami picked up an
issue of Ocean Drive magazine it was
about an inch and a half thick and it
was only filled with condo ads and I
asked myself who was going to buy all
these and then that whisper inside me
got a whole lot louder my concern grew
and I finally reached a point where I
called my lawyer told them I decided
I’ve had a great ride I feel incredibly
fortunate but I wanted to sell
everything and I said I want to give all
the reservation holders give them their
deposits back with interest my lawyer
thought I was out of my mind I didn’t
care I trusted myself we put the Hard
Rock Hotel and Casino up for sale the
condo project up for sale and all the
land and in three weeks I had eight
parties bidding on it
I sold the entire Hard Rock Hotel and
Casino at the top of the market the
market crashed not soon thereafter in Oh
eight
Las Vegas has still not fully recovered
to this day and I’m still thanking my
lucky stars that I got out when I did
what’s the lesson here always remember
we live in a boom and bust cycle gravity
always takes hold and brings us back to
earth I tell that to my children all the
time whatever you do be prepared for
those leaner times the good times will
not always be here structure your
business and your life so that you can
withstand those inevitable
Changez secondly each of you will find
yourselves in similar situations to what
I faced with expanding the hardrock and
later the condos the crowd will tell you
one thing everyone will rush to the easy
money and push for you to join them
don’t fall prey to to the conventional
wisdom be true to who you are no one
knows what’s best for you better than
you listen to that inner voice trust
yourself now it’s easy for me to tell
you all these things the truth is each
of you will have to learn these things
on your own sometimes maybe even the
hard way sometimes plans you make will
be interrupted you will get slapped in
the face with rejection well-laid
business plans will fall apart
and while these inevitable hard times
may feel like the bitter end of
something it just may be the beginning
of an even better plan
I still think what would have happened
if my initial plan had worked and I had
gotten into Harvard I would have never
gotten to live the incredible life that
I’ve lived with hard rock as you leave
here today my hope is that you pack my
story away in the back year brain
somewhere and maybe it comes in handy as
you live your lives most importantly you
have to be open to an opportunity when
it comes your way because in life it may
not come the way you think it’s coming
and please remember when your respective
enterprise is a success don’t think that
it’s mission accomplished trust me
that’s when the real work begins
that is when you have to stay the most
grounded and remain true to your core
values and I’d like to thank everyone
for listening to me and I wish each and
every one of you
good luck as you set out to make your
own mark in the world

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