ExclusiveHow a Single Mother Built a $50 Million Company and Taught Her Kids the Value of Giving Back | Melinda Masson

It was a turning point in my life. I'm going to go back to California, and I'm going to start my own company. I'm not going to compete. I'm just going to change the game. I started with one contract, no investment money, and grew it to over $50 million gross value, probably close to 300 communities across California, some in Nevada and Arizona, with part-time and full-time over 500 employees. It was important to be a changemaker, that to understand where we are going versus where we're at is almost more important. Melinda, it's great to have you. Welcome. Thank you. I'm looking forward to this. We want to talk to you about your background in philanthropy. You're very committed to philanthropy, but then you started a very successful business, which was somewhat unusual. Can you tell us about how you started? I think the starting of the business and my passion for philanthropy are one and the same. I grew up in the Midwest. My parents were very, very involved in giving back. An interesting antidote from Mason City, Iowa, actually. My father was a Democrat. My mother was a Republican, so we didn't talk politics in the household at all. But yet, they were very giving to the community, predominantly through their church, as well as I was the middle of five children. So they were constantly being parents. But yet, at the same time, there was that strength of being independent, because it was expected when we were 18, we moved out and we lived our own lives. So I think having that value system growing up helped prepare me for the changes that I ultimately would have in my own life. And I think the main thing that I took away from the value system of my parents was that it was important to be a changemaker. That to understand where we're going versus where we're at is almost more important. And watching my children play in sports, they would always tell me, especially as they played water polo, it's where the ball is going. It's not where it's at that makes you the winner. So I think I took that as I started out in determining what my career path would be. Can you tell us how you started? Initially, I graduated from the University of Minnesota, and I wanted to be a teacher. I love business. I love learning, and I wanted to give back. And at that time, based on my age, women were given three opportunities. You could be a teacher, a nurse, or a secretary if you were going to or had to work outside the home. Otherwise, you were a homemaker. I was too fascinated by the outside world to be content with that. So initially, I said, I'll be a teacher. And I started out in education and married, and my husband at that time wanted to be a professional athlete. So he moved around a lot, and so it was hard to keep my credential active in the state that we were living. So when we ended up in California, I was waiting for my teaching credential to come through. So I just took a job in a property management company. And it's interesting, when you take a job to be like a placeholder until you get back on track with what you want, you don't realize, or I didn't realize at the time, the opportunity that really was there. So it wasn't until trying to save my marriage, got pregnant, was in the hospital, Friday the 13th, going to deliver, get a phone call from the two owners of the company, and they decided to split the company. And because they said they both wanted me, I was fired. So that was my big wake-up call. So they both wanted you, and then... Well, so they said. I always told them, I don't really care what title you put on my business card. Just let me do the things that I think need to be done, subject to their approval, of course. So at that time, technically I guess I was their vice president, kind of holding their operations together. And they let me go. So how did you recover from that? Because you're in hospital, you lost your job. Well, friends got me home, and then I did what we all do in the Midwest. We go home to mom and dad. And so I went home to mom and dad and said, Okay, here I am, a single mom. We're living beyond our means, so financially I know I have to get work. And there's no training manual that came with this child. And I was in my early 20s. Now what do I do? And I remember sitting on the back porch with my dad, as we would do and watch the corn grow, as that was, I guess, the term that we would use when you're thinking heavily, like, what's next in your life? And my parents, all of us kids were gone. To take their daughter back with a newborn was not necessarily something they probably wanted to do, but they offered. So I could come back to Iowa, regain my teaching position, and they would help me raise my son. And then I thought, no, it was a turning point in my life. I'm going to go back to California, and I'm going to start my own company. And I'm not going to compete. I'm just going to change the game. Because I really felt that sitting at the table with some of the smartest and best real estate developers in the country, I was learning so much. And what I was predominantly learning is that the term property management didn't apply anymore. I mean, initially, I was involved in managing homeowners associations. When was that? That was in the 90s? In the late 70s, early 80s. And so developers found that they could build more homes, make more money when they combined the amenities, like the tennis courts, the swimming pools, landscape, fields, et cetera. And then management would come in and maintain the properties. But what was missing was the social fabric, meaning that you didn't know who your neighbor was going to be. You didn't know their nationality. You didn't know where they came from. You didn't know anything about them. And yet all these people were rushing into buying in these great communities, but then they didn't know anyone. So they would call the property manager if the neighbor's dogs were barking during the day. Or if they didn't like the fact that, I think the classic was they left their trash can out too long. And it was command and control. You put your trash cans out on Wednesday and you have them back in your garage on Thursday morning. As a manager, relationships and people are everything to me. And I guess I would use a term, being a servant leader was much more important than ensuring that the controls of the CC&Rs were met verbatim. And so as a result of it, I guess I would say that I was probably the change maker for the industry moving from property management to community management. At least that's what many of the developers say when I talk to them is in terms of, what was it that you thought that I did that was so different than anyone else? And they would always say, you were a change maker. You didn't necessarily need to go by the rules and regulations that had been set up before you. You're willing to take that risk, be a pioneer, and determined to make change. But you did it with ethics and with, I like to use the words, grace and dignity. And that then tied into my philanthropy work. That I realized I was learning a lot from working with some of the best developers in the country. But I also wanted to really understand what the needs of the people really are. And that's what philanthropy taught me. That there's a whole gamut of need. That many times living in the most beautiful state in the country, in the world probably, it gets buried. And we don't realize how many people really need help. So I started working with the Orange County United Way. Still am very involved with them. In fact, they awarded me their legacy award this past year. For the years of service in terms of being a founder of the Women's Philanthropy Fund. Wanting to really understand specifically the needs of women and children in this county. And as a result, working very closely with many of those programs with great success. But it's still just a ripple in the ocean when you look at all the needs that we really have. In this beautiful state and in this county. Tell us about what does change making with grace and dignity mean? To me it meant that it was okay to be a pioneer. That it was more important to serve. That a leader didn't need followers. A leader needs to just develop other leaders. And as a result, the way in which you mentor, encourage and cause change is so much more effective. When you have people that understand what serving and what a servant leader really is all about. And it was like a saying that actually I would follow John Wooden who is the infamous basketball coach. And he would say that the most important thing is to always be learning. And he would have this phrase or a story that he would say, come to the edge. And you'd say, no, I can't, I'm afraid. No, trust me, come to the edge. And you would resist, but then continue teaching and coaching. You came to the edge, he pushed and you flew. And that metaphor has always stayed with me. Because it just means that you push, but you're pushing because you know you're going to reach greater heights. And that's the dignity that you have is by pushing. It's not for ego, it's not for fame, it's not for fortune. It's for just serving others so that they as well can feel comfortable in whatever place they're at in their life, if that makes sense. So essentially, you were innovating your space, right? And it was probably difficult to do that kind of innovation with your team, right? And you had to motivate the team to go to the next level, right? That would be the good 50%. The other 50% is being a female. I was usually one of maybe two sitting at the table with these developers that were strategizing how to develop their next community. Some of the largest and greatest communities I worked on were with the Rancho Santa Margarita, which Tony Moiseau's group put together. We spent years planning that. And the Irvine Company, the Newport Coast community and how that came together. I was fortunate to sit at the table and listen. And it's what my father would always say, God gave you two ears and one mouth, so listen twice as much as you speak. And as a result of the act of listening, I just learned. And what I learned from the client, I was then able to understand their vision of what they wanted that community they were developing to represent. And as a result of it then, I was usually awarded the management contract because I had sat at the table listening, understanding, and then helped them with the governance model, the financial model, and then most importantly, the social model. What would that community look like? Did you want events? Did you want programs? Did you want just passive use of a community? All kinds of decisions had to be made. Did you want to put in a swimming pool? If so, how active did you want it? Did you want children's programs? Did you want this to lean more towards an adult-only community? On and on. So I guess that was 50% working with my team and 50% working with my clients. But then on both sides, I was in a new game. There weren't that many women that were doing what I was doing. And there were not that many women that were running their own business either. So it was a different time. Was that in the 90s? It was in the 80s and early 90s, and pretty much all the way through the 90s. My kids laugh because I tell them when I started my company, I had a telephone and a fax machine. There were no computers. There was no Internet. There was no text messaging, and all the technology and social media that they've grown up with all came into our lives, if you remember Y2K. We were all terrified that the world would fall apart because technology was going to take over. And then our worlds changed. We had to learn. And learning as an adult is hard. Really hard. How big did the business get eventually? And you sold it, right? I did sell it. I started with one contract, no investment money, and grew it to over $50 million in gross value. Probably close to 300 communities across California, some in Nevada and Arizona. And with part-time and full-time, over 500 employees, I decided to sell. And I learned to do it the right way, again, by just using a lot of the relationship building I had over the years. Find a good business broker, because a lot of people will just ask into a small community, and there were two or three large management companies buying companies at that time. But my broker went out, and I had 25 offers in the first month. Wow. And so that was an experience of, how do you go through that? He would grill me before every single interview, at least an hour to three hours of what to say, what not to say. My posture, it was just its own learning experience. And as a result of that, I was then brought into several colleges to talk about buying and selling your company and what were some of the stories that I could share with them. Can you tell us about some of the lessons you learned along the way? Oh, there are so many. The first being in my 20s and female and starting the company in a male-dominated industry, there was a lot of negativity that, who was I? Did I know what I was doing? Was I capable? Was I competent? And my father gave me one of the best. He said, you know, people who throw dirt just lose ground. Move on. Stay focused. The other is when I went through the first breakup of a marriage. I grew up in the Midwest, and you marry for life. And when it didn't work out that way, I phrased it like tragedies of the heart can create great opportunities, but you have to be willing to really seek out the opportunity. And I think it was because of that major change in my life, I had already planned out I was going to be a teacher, we were going to have the three kids and live happily ever after, when it all just stopped suddenly. I had to live differently. I had to look for a different opportunity. I had a son to take care of. I had financial obligations, and I needed to work. And the best thing about that period of time, I would also say, is that the women who worked in the building industry were my greatest fans and supporters. They threw business at me right and left. They were just the best, and they still are. And that's a great legacy to have come from. I go back to John Wooden, who had another great saying. It's what you learn after you know it all that counts. And it took me a while to really understand what he was saying with that, but I took it in multiple ways. The first was ethics. Ethics is something that you try to teach in school or by behavior, but it's very slippery. And so what I took it to be is ethics is so important that you have to lead by example, and you have to build an ethical house where you have the courage for truth and honesty, even when sometimes the truth hurts, versus building that house of cards where everything will fall down because you're living a facade. And what I took from that is in my homeowners associations, I had some of the most prestigious business people, society people, Orange County movers and shakers that were running these associations, but they didn't know how. It's interesting. You think that, oh, anybody can run a meeting. Well, anyone can run a meeting until you have 50 people storm through the door saying, hey, that tree is blocking my view. I want it cut now. Or that you don't like the parking situation or that the tennis courts are now being turned into pickleball, and pickleball is too noisy and they've got to stop at 9 o'clock. So you have all these problems all the time, and you're having to teach then people that are used to being in powerful positions how to serve and how to listen and then how to problem solve. And I learned as much from them as hopefully they did from me, but most of the time we had to instigate their strategic planning process. We had to help them set their goals, and then we had to help them monitor their meetings. And I would say as much as I've tried to retire over the years, I still have communities call me and say, can you come back in and give us a recap because we're not getting along as a board or we're making decisions that we shouldn't be making and our board is going to be sued if they don't really get their act together. Try to stay away from that, but still give them those great, great materials out through the California Association of Community Managers. It's a trade association I'm very proud of, probably because I was one of the founders, but as a result it was a way to educate people coming into positions on these community associations. They now have millions of dollars under management, and so making good decisions is important. Can you tell us what's the difference between a community that has a sense of community and a normal HOA? Is there a difference? There is a difference. I would always say to the homeowners at their annual meeting, it's important to know who your neighbor is, to at least know their faces. You don't have to be new best friends. You don't have to have each other over for wine or cocktails or breakfast or brunch or necessarily even like each other, but you need to know each other, and that's first of all for safety. Then from that, they start creating their own bonds, and if you think about moving into a community that now has, let's just say, 500 homes and you don't know anyone, you feel really lost and insecure, and an HOA that does not encourage their members to know one another, they end up having a lot more negativity taking place in terms of distrust, challenging the board, the decision-making. Every time that the assessment had to go up, it would be World War III. Why is this going up? What are you doing for me? I don't see anything going on here that's benefiting me. A lot of challenges, whereas those communities where people know each other, they're willing to serve on a committee to really replicate a place that they want to live in, and then you feel it. You can go into a community, and let's say you're looking at buying a home, and you go and see the amenities, and you see people talking with one another. You see people hanging out by the poolside. It's different, and the resale value is really greater when there's that sense of community than when there's that separation or almost hostility. How did you come up with that? If you can tell us the story, if there's a story around that. Did you see something? Did you notice differences? I would go back to an individual that those who have been in the real estate industry for a long time, and especially Orange County, would know her. Her name was Mae Russell, and she worked for the Irvine Company. She was responsible for setting up the communities. Which Irvine Company is one of the largest real estate. In Orange County, they're the number one, but around the globe, probably one of the largest ones. They're very respected for their very business savvy. What she said to me is she said, you know, people don't expect change from you because they're still not quite sure what to make of you. So be that pioneer, be that change maker, and bring into our communities what you value most. And I said what I value most is my upbringing in Iowa, meaning you can take me out of Iowa, but you can't take Iowa out of me. And so it's family, it's friends, it's community, as I defined it. Mason City was the home of a very well-known musician, and he wrote the play The Music Man. And from that was how they created community through music, which is what our city had done. So it didn't really matter the programs, but it was just the willingness to try it. So we would do movies in the park. We had all this landscape area. Why not put up a big screen and show Gone with the Wind or The Three Stooges or naming old black and whites that were fun and that families would come and gather and parents would remember when and the kids would say, wow, this is really cool. So we did a lot of things like that, which is different. And as a result, the developers were intrigued by it. So I was always asked to come and sit at the table as they were planning these new communities. And as a result of listening and learning their vision and then giving them, here's what I think is what you want this community to represent, I ended up with a management contract. So people kept saying, how come you're getting all this business all the time? And I grew the company by listening and by wanting to take the vision. I was determined to make their vision a reality and have that reality being a very positive reputation for that developer as they went on to build the next community. You managed to bring Iowa to Orange County, essentially. In my mind, yes. And how did it work? Were people receptive to it? Initially, there was difficulties in accepting it because it was funding. How do you pay for these events to be put on? Because the owners have to pay for it. Right. So then it was a matter of being very creative, finding means where we would have strategic partners with the businesses in the area that they would come in and maybe donate the food or the movie night brought to you by ABC, that type of thing. That's how we started it. But then as the homeowners attended, they loved it and wanted to keep it. So then they would form their own committees and they would use their imagination and make it happen. And that's what created community. It's the homeowners themselves took ownership of it and said, oh, we'd like to have a county fair or we'd like to do swim lessons or we'd like to do water aerobics or whatever it was. Then they started the committees and then they made it happen. And so a lot of our large communities ended up with event planners as real positions that stayed to just listen to the homeowners and then plan their events and their community outings. Now, Melinda, you started a foundation early on. I did. What size were you at that time and why did you do it? How big was your business? The business was growing. It was in the late 1990s. I wanted to create a value system that would be a legacy for my children, that they would understand what the needs are of our people. We would do things as a family. Instead of giving a lot of holiday gifts to one another, we would pool the money that we would have spent or I would have spent or their father would have spent, and we'd adopt at least one, usually three families for the holidays. Then we all went out and we shopped. Usually it was the day after Christmas. We had the families and we had the children's names and then only their first names. So we would say, okay, Bobby wants this, Susan wants that, and then we would shop and then we would gift wrap it and then I would deliver it to the agency. Usually it was Human Options was one we did a lot with, Laura's House, a lot of the women's shelters that we did. My children really looked forward to that. I said, well, I think in starting our own foundation, it's going to let them see not only giving back, but then what does it take to run a business, which is what a foundation is. Teaching them, my daughter was probably eight. I think my middle son, 12, my older one, was in his late teens when I started it. One of the first meetings I had my bank at that time, and still is, Northern Trust Bank, because they do a great job with families and foundations came in and did a financial review initially. I remember my son, middle son, in his chair spinning the whole time like, okay, do I have to know this? We laugh about it now because he's a treasurer and he does a great job. But it taught them how to run a meeting. How old was he? He was 12. But it taught them how to run a meeting and it was safe because it was family. But then also we went through, I rented a hotel room at a local Laguna Beach hotel, and we did our first strategic planning. I said strategic planning is how do we choose who to help when there's so many organizations that need help. So we talked about what was really important and it ended up predominantly being women, children, and the environment. And then we went on and added obviously education and medical. And then from that I had the list of all the philanthropies in Orange County that we could find. The Orange County Business Journal does an excellent job listing them out. And then we studied them. And then they each chose one and then said, okay, whatever one you choose, you also have to be involved with. And so how does an 8-year-old get involved with something that deals with the ocean, which was her passion? Well, she cleaned up beaches. So when you spend the funding, when you give the funding, you have to? You have to participate. And now it's with great pride that Pierre, who's in his mid-30s, is one of the youngest to be asked to serve on the board for the Bowers Museum in Orange County. He's passionate about the arts and history and put himself out there, put his resume out there, and he was selected by the board. So he's on his way. So you've managed a lot of these HOAs and they must be very complex because there's always these HOA fights. Do you remember one that stands out to you? I do. It was early on. It was South County. In Orange County. Very large, very expensive. An L.A. builder. And the homeowners would, at least the first year or two, always use their personal issues of their home as a reason to come to the association meeting and complain and try to get, let's say their fireplace wasn't working or the kitchen cabinets weren't hung correctly or there were doors that weren't closing in the house. And in this one night, I was fairly new, and the developer sent his representative, who was an ex-Marine, 230-pound solid muscle, as his rep because he said, it's going to be a tough meeting. And I'm new to this industry, meaning that I'd gone to a lot of association meetings, but never to a meeting where there were 200 people that were just fit. And you were representing the developer? I was representing the association, but the developer had all the positions on the board of directors still because we hadn't had our first election of homeowners to serve on the board of directors. So how association is set up is the developer controls everything initially, and then they have their first election, and then they decide how many seats they want to turn over. Well, this developer had all five seats, but he sends his one representative, and I remember he was just being bombarded, and it was a nasty, ugly screaming. I just thought, we're not going to get out of here alive. And he stands up and he said, Mrs. Rose, how much did you pay for your house? Well, what do you mean? How much did you pay for your home? About $530,000, which is a lot of money at that time. He goes, okay, pulls out a checkbook, I'm buying it back. How much did you pay? And he asked every single one initially, how much did they pay? And he had a checkbook, and he started writing, I'm buying your house back. I don't want people living in my home that are so unhappy, and I can't meet all your needs the way that you want them met, so let me buy your house back. It was dumbfounding, and it just quieted the room. And then he said, the next thing is you are respectful to this young lady here. She's going to begin meeting with all of you, taking down a list of your concerns, and if they are concerns that don't really deal with the building or the house itself, but really with your personal needs, she's going to help me separate the two out, and you're going to have to accept that, or I'm buying your house. I've never had an experience like that. You mentioned one of the things you got really good at is managing meetings. For our audience members, for our viewers, can you tell us how you manage a meeting? Some tips on how to manage meetings. The first is prepare, prepare, prepare, because elephants don't bite. It's the mosquitoes that are going to get you, which means that you just don't know what's going to come at you. So you prepare. You always have an agenda. You make sure if you have any guests or guest speakers, you rehearse with them so that they're comfortable with what's expected of them, what role are they to play, what is the outcome or the goal of the meeting, that you're trying, is it just information, is it just giving them an update, is it deciding on a major renovation, is it the budget, which is always a heated discussion. You have to prepare. I think I also learned a lot from serving on boards myself. I'm still on the Chapman University Board of Trustees and watching how that trustee board meeting is ran. I am the chair of the Student Life Committee, and I never know what these students, I call them my students, are going to bring to the meeting, because the focus is you have our ear. What's concerning you? And it can run the gamut of didn't like the cafeteria food, don't like the parking, don't like the dorm hours. It can be all kinds of things. But prepare as much as you can. That would be number one. And then number two is obviously have your agenda. Number three is you rehearse with your people. And number four, always do a meeting summary. When they say there's minutes, but sometimes the minutes of meetings are so sparse that they really don't catch the flavor. So make sure I verbally summarize after every meeting, because that's what I've learned. Then people retain it, and then you follow it up in writing. You started your business when you were in a pretty tough position, right? Right. Do you have any advice for people that might be in that position and they're thinking about doing something with their career? The most important thing for me was to have a vision and know that the vision will always be changing only if I seek it out, meaning that another saying of my father's was, there are no failures in life, only detours, and some have greater learning curves than others. And as I grew my company and my career and would hit some really rough spots, the second great advice would be to pause. And I would literally take a work box and ask permission from the family, I need a pause weekend. And I would go to the mountains or go to the desert or go someplace and just think. But I'd have my work box if I needed it to put me back on track. And I think, especially in today's world, we move so fast, and technology and social media drives. I used to have a saying on my desk, whatever happened to the check is in the mail? Meaning that the check is in the mail gave you at least three days to solve the problem. Now, with instant emails and everything you want to do. Say the check is in the mail. Right, give me time to think. You can't think, they want instant gratification, they want instant response. So that's hard, that's a different trend that I'm glad to be out of, because I think critical thinking is so important that we don't think enough. The other aspect that I would say in starting the company would be just to serve. It's okay to say you made a mistake. It's okay to say that you're sorry. You don't have to be right all the time. And if you use your two ears and listen more than you speak, most of the time people who have a problem or a complaint will tell you what they want. They'll allude to how you could fix it for them. If you listen to them, they'll tell you the answer. So that was a big aha moment in growing my career. But I do want to speak a little bit about philanthropy, because I'm worried. Philanthropies raise money pretty much all the same way. They have a pay for breakfast, lunch, or dinner, a pay for gala, or pay for golf tournament. What happened with the pandemic is that the work environment changed, and a lot of the businesses who supported philanthropies are now not supporting them because their workers are not coming back. And so during their, like United Way, we had our workplace campaign where all the employees could participate, and we had a week of really supporting and getting to know United Way, and then they could do a payroll deduction if their heart was there. That's not happening as much as it used to be anymore, because the workers aren't at the office. And with the philanthropies, what I realized is I was involved in a startup company that had developed an app that would allow for their everyday shopping to give back a percentage to the organization. So it was just one more click in your shopping ability. But that the labor pool within the philanthropy world was not comfortable with technology, that they were so used to doing what they've always done, and they were just waiting it out. Well, they've waited it out, but now sitting on the few philanthropy boards that I do, the revenue's not coming back, because the way that they had secured the revenue has changed. So I'm on one board. It's a Laguna Beach Playhouse, and we used to always have the big gala-gala, depends on how you say it, and we realized that people didn't want to do that. So instead, as of last year, they changed, and they're doing a big production. They brought in Jersey Boys, and so people would pay to come see Jersey Boys, and then they had somebody underwrite that, so all the money of all the tickets went into their fundraising. And then they could do a razor paddle and some of the other activities there. So it's changing. Melinda Messon, California philanthropist and entrepreneur. It was great to have you on California Eastside. Thank you. I've enjoyed this.