Taking a cue from the emerging hip-hop culture in the early 1990’s, founder, president and CEO of FUBU, Daymond John revolutionized the sportswear industry. John's entrepreneurial dream didn't come easy; he sold tie-top hats on the streets of Queens—mortgaging his home for start-up capital in 1992. By 1998, he had become an incredibly successful businessman and is now a sought after branding expert.
Today, as a judge on ABC’s Shark Tank, John evaluates entrepreneurial proposals, deciding which are suitable for investment. With the show’s third season underway, John spoke with Inc.com reporter Abigail Tracy about the keys to garnering investors and becoming a successful entrepreneur.
What trait served you best in making FUBU a success?
I was very decisive—I had a very concentrated segment of a market I wanted to target. I attached myself to the emerging hip-hop culture and there was never a day that I wouldn’t work because I was doing something I loved. I knew what I knew, and I knew what I didn’t know. I always tried to align myself with strategic partners, friends and information to help me with the things that I did not know and ultimately I made it.
How did your experience with FUBU land you as a judge on Shark Tank?
Well, I have failed so many times over the last 25 years with FUBU and have faced every struggle that every entrepreneur does. I probably wouldn’t have made it past casting of Shark Tank in the beginning; I was so green when I started. But now I can see the many paths that an entrepreneur may be heading down that I know to avoid and can pick out the entrepreneur that is just like me—resilient, driven and won’t take no for an answer.
What else do you look for before making an investment in a company?
I always look for the person first—before the idea. I need to know that they are going to get the right information, and not go off and make mistakes without at least trying to educate themselves. I value an entrepreneur I can get behind and trust, because I know they are attempting to move forward in life.
How important do you think the relationship between an entrepreneur and investor is?
It's extremely important.
So then what do entrepreneurs need to look for in an investor?
An entrepreneur needs to know what they need, period. Then they need to find an investor who can build off whatever their weaknesses are—whether that’s through money, strategic partnerships or knowledge. It’s all about the vision that the entrepreneur has and the reward the investor wants.
Are there certain characteristics of entrepreneurs that make you hesitant or unwilling to invest in them?
Absolutely. A big warning sign is when an entrepreneur isn’t ready to listen. Sometimes the correct answer is admitting that you don’t have the answer.
What steps must an entrepreneur take before they can successfully find funding?
They have to know everything about their business and be educated in their space. I would like to know that they don’t just have an idea and they didn’t just come up with the idea yesterday. So they need to have gotten the bugs out—tested and vetted it in the market, and had some kind of sales. Sales are how I found strategic partners.
So initial sales really got FUBU off the ground?
Yes. If you go out there and start making noise and making sales—people will find you. Sales cure all. You can talk about how great your business plan is and how well you are going to do. You can make up your own opinions, but you cannot make up your own facts. Sales cure all.
Want to learn more from Daymond John? Hear his and other entrepreneurial success stories March 5-7, 2012 in New York City for our GROWCO conference. Visit http://growco.inc.com/ for more details.