Great cars, lousy karma

My biggest mistake; BJ Cunningham of `Death' cigarettes

"So if you are interested in this clearance stock call The Karma Connection and ask for the man in the steaming bath with the razor blade screaming for his mother... So ended the last press release I sent out, as my first entrepreneurial venture, with pedal to the metal, headed for oblivion.

The Karma Connection was my first foray into business, fresh out of a post-graduate degree in three-dimensional design (pottery class). It was a relatively simple business, trading the price and quality differentials between the UK and California in classic sports cars and Harley Davidson motorcycles - both great passions of mine.

The idea was to connect UK customers with the rust-free car of their dreams, at the right price. In short, to inject positive karma into the classic car trade.

At the time in the Eighties, classic cars were booming, the sterling/dollar exchange rate was favourable and you simply couldn't go wrong. I spent half the year in California and the desert belt, purchasing bikes and cars, riding them across the two-lane blacktops of America en route to the coast and the container ports. The other half of the year was spent selling them in the UK.

In most cases the cars were sold before they were even seen in the UK and almost without exception, for a two-year period, I doubled my money on every vehicle. Luxury.

I was young and I believed in it. This was the very late Eighties and all was still fantastically well. My initial investment in one Karman Ghia eventually translated into a fleet of exotic cars and beautiful bikes.

The idea of consolidating profits or `risk management' seemed ridiculous. This was a gravy train and I thought I could lick the bowl. I was oblivious to any macro-economic factors, every little deal I turned seemed absolutely separate from the wider economic cycle. As far as I was concerned this could never end.

What I absolutely and resolutely failed to understand was that the whole market for my vehicles was a `bubble'. My customers were buying not for their personal use but to sell on at a greater profit.

Karma, indeed. I was a tiny link in a huge chain but couldn't see past my own steering wheel. The bank loved me, my girlfriend loved me, the world was my lobster.

When it went wrong it went horribly wrong. I had pounds 750,000 worth of cars and bikes in containers coming down the Panama Canal and life was a breeze. Then a Ferrari failed to reach its reserve at auction in London. This (in my world) tiny hiccup catastrophically changed my life.

The bubble had burst. The whole market went into a nose-dive and I was quite literally up a creek without a paddle. I watched helplessly as the market collapsed, taking me with it.

My stock, my beautiful stock, was falling out of bed at a rate of tens of thousands of pounds per week and I took it all extremely personally. I believed someone, everyone, was out to stuff me. My old pals at the bank seemed to turn in an instant into demons. My relationship with my girlfriend went down the toilet, as did the previously simple and straightforward relationship with my business partner. Everything turned into a nightmare, bad karma.

My mistake was the old `eggs in one basket' classic, coupled with tunnel vision and zero true market perspective. My eggs cooked up into one nasty omelette and I had to eat it. In the end I managed to offload my stock to a Japanese guy whom I chanced upon. He saved me thousands but I hated him for it. I was left for dead, another festering road kill of the Eighties.

Drowning my sorrows in LA led to Death cigarettes. What goes around comes around, Death seemed like the right move. It took me four years to climb out of the debt with my bank, who were in some respects incredibly forgiving with such a messy and naive young pup.

I learnt that while you must believe the unbelievable to make the impossible possible, you must also remove the rose-tinted glasses and never believe your own hype. Too bad you're gonna die."

BJ Cunningham is chairman and founder of the Enlightened Tobacco Company (ETC) , which makes Death cigarettes. He was talking to Paul Slade.