Besides being a showcase for the next generation of tech gadgets, the International Consumer Electronics Show in Las Vegas is, in its way, a mass celebration of entrepreneurship. And no one there this week represents that spirit as well--or as stylishly--as Daymond John. The Fubu founder and co-star of Shark Tank was on hand to promote the newest products from Moguls Mobile, his line of cell phone accessories.
If the throng surrounding booth 6306 is any indication, he's going to have little difficulty selling them.
In an exclusive interview with Inc. at CES, John--who also is working on a book called The Power of Broke (due out next year)--talked about his tips for finding a market for your product, his favorite Shark Tank pitches, and which of his fellow sharks is universally regarded as the craziest. (His answer will likely surprise you.) Here's what he had to say about practically every subject under the Nevada sun.
On establishing what your market is:
Sometimes you think you're going after one market and then another market is really following you and adopting you. If you're fortunate enough to have somebody who wants to dig into his pocket and pull out hard-earned money to invest in you, then you should embrace him as well.
When I started Fubu, the first areas that I sold well in were Seattle and Japan. People thought that Fubu was just for African-Americans, but it wasn't. The Japanese kids, just like they are now, were really into break-dancing and things of that nature. When I saw they loved the culture of it, I didn't shun them.
On the value of listening to all your employees:
In my company, we will listen to the kid in the mail room just as much as we'll listen to the vice president when it comes to opinion on fashion. I remember there was a kid who worked for my company as an intern when we were looking at all the products for the next year.
After three months he came to me and said, "A couple of your pieces from the showroom, the samples are no longer there." I said, "All right, why are you telling me this--to tattle on somebody?" He said, "No, but whatever's missing are the things you better make for the next season. 'Cause that's what people are stealing." And it worked like a charm from that point on.
On what makes a successful Shark Tank pitch:
Punch holes in everything you're saying. Stand in front of that mirror and really just dig deep and don't lie to yourself. Be able to really answer every single thing, and even if you don't have the answer, say, "And that's why I'm here, because I don't have the answer to that." We don't like to hear the perfect story. It's better to say, "I went through these hard times, but guess what, I learned from that. I have a proof of concept. Here are the people I sold to, and I learned from that, and now I'm here."
We all know business is never rosy all the time.
On the biggest mistake contestants make:
Never say something to the effect of "Well, the market is a $20 billion market." Every market is a $20 billion market. And they say, "If we got only 2 percent of the $20 billion market, [we'd be a huge success]." When you start fluffing things like that, we know that you don't have enough information.
And then I usually tell them how big the bankruptcy market is.
On his all-time favorite pitches on the show:
Scrub Daddy was one of the most amazing pitches I'd ever seen because he kind of did an infomercial right in front of us. It was amazing, and Lori [Greiner] ended up doing $30 million of business on that thing. Another was Al "Bubba" Baker with his boneless ribs. You knew that he was strong, you knew that he was determined. He had a daughter who really tested him. And then he had a rib that was delicious. There's a real future in that. When I sell you a shirt, you're going to keep wearing the shirt. When I sell you a rib, it's gone.
On how his investment philosophy differs from that of the other sharks:
Mark [Cuban] and Kevin [O'Leary] don't mind being in series B and series C and series D. They don't mind super high valuations, I guess because they're tech-based. That's not my philosophy. I want to make a decision with the owner and I don't want to hear about these 50 people on the board and that I'm going through this and that series. You raised $7 million? Well, then you didn't need to come onto the show, because you're OK. I don't like the politics.
I became an entrepreneur not to be in the corporate world. I became an entrepreneur to know that I will live and die by my decisions, and not because of a big board or committee.
On having Mark Cuban as an investor:
Mark has a lot of money. He could buy all the sharks probably a couple times over, so he's like, "You know what? I'll take a gamble." He has more to gamble and play with. And he's going to be very hands-on, but don't call him every single day. You need a million dollars? Mark could give you two--just don't call him until it's time for heavy lifting.
He's also the guy saying, "I don't want to hear about any other jobs, any other aspirations. You asked for one million, and I'll give you two, but I want you to work every single day just like I would, 24 hours a day."
On what most viewers don't realize about Shark Tank:
The pitches can last up to 2½ hours. I also think people would be very surprised to hear that we know nothing about the entrepreneurs [ahead of time]. Then, in the pitches, we dig deep into these people for 30 minutes and then we go back and we all do due diligence for months.
Don't be confused and think that you can pitch somebody in eight minutes and they're like, "Here's a million dollars." It's really not like that. And it's our own money. People think for some reason it's the show's money. If it were the show's money, I'd be giving everybody a million dollars.
On his fellow sharks:
Mark is as crazy as he looks. Kevin is crazy. But there's nobody crazier than Barbara Corcoran. We all agree. She's like a mad scientist--she's a genius, but she is right off her rocker.