As far as rags-to-riches startup tales go, Fubu founder and Shark Tank star Daymond John has one of the best around. Here's how it goes, in brief: He grew up in Queens, in New York City, raised by a single mother who worked three jobs to care for him. "The only entrepreneurs we would see were the pimps and drug dealers at 3 p.m.," he told the audience at Inc.'s GrowCo conference in Nashville Wednesday. But once he discovered hip-hop culture--and more important, the business opportunities it offered--his world suddenly turned "technicolor." Starting with a mere 10 shirts, and with a few stints slinging biscuits and shrimp at Red Lobster, he eventually created a fashion empire.
Along the way, John sharpened his entrepreneurial instincts, becoming "the smartest shark" in the Tank, he jokes. Here's how he has literally turned the cliché of "never stop swimming" into a way of life.
Act bigger than you are.
John realized early on that although he knew he wanted to be a part of hip-hop culture, he couldn't sing, dance, or produce music. But he loved fashion. Dominating the hip-hop clothing business became his one and only focus. "I couldn't hit a target I couldn't see," he recalls. The only problem was that he had no money and no knowledge about how to start a fashion company. So he did what many enterprising entrepreneurs have done before him: He faked it until he made it. The first step was getting the right people to stand behind the brand.
John made 10 Fubu shirts and, using his connections, showed up wherever influential rappers would be--often at music video studios, or as was the case with LL Cool J, his house. He charmed them into trying on the shirts, snapped their photos, and then took back the shirts. Fubu still wasn't a real company with real merchandise, but after two years the brand looked huge, John says--or at least, it looked like all of the cool hip-hop kids wore it.
Win on scrappiness and savvy.
John eventually learned that anyone who is anyone in the fashion business needs to show up at the annual Magic Show in Las Vegas, a trade show for clothing manufacturers. He couldn't afford a booth or even a ticket. So he and a few friends turned a room at the Mirage hotel into a makeshift showroom. John sneaked into the convention and persuaded buyers to make a trip over to the room. By the end of the show, he had closed $300,000 in orders. Fubu later went on to sell, with the help of a distribution deal with Samsung's textile division, $30 million of clothing in three months.
Or there was the time that LL Cool J was slated to appear in and write the lyrics for a Gap ad. John persuaded him to show up for the shoot wearing a Fubu hat and rap about the brand. (If you listen to the lyrics closely, he mentions For Us By Us, the tag line behind Fubu.) The way John tells it, Gap had wanted the rapper to help the clothing line break into the hip-hop market. But after the ad aired and then re-aired, Fubu was the real winner behind the deal--revenue climbed to $400 million. Not a coincidence, the entrepreneur says.
Remember: You are the brand.
If you're an aspiring Shark Tank contestant, this tip is for you. John says one of the most important things you can do to set yourself up for success when you pitch your company is to come up with two to five words that define you as an entrepreneur. "If you don't know what you stand for, you leave it up to us," he says, referring to the other sharks on the show.
And speaking of those sharks: Whatever you do, learn what each shark is looking for. "After six years of the show, I have no idea how people go on Shark Tank and they don't understand what the sharks want," he says.
Here's John's cheat sheet:
- Robert Herjavec: He just wants to know if "he is going to look cool" by investing in you.
- Barbara Corcoran: "If you're a woman, and you're struggling but putting everything you have into it, she'll walk over hot coals for you."
- Lori Greiner: Got something that's perfect for QVC? She's your shark.
- Kevin O'Leary: "He wants to know one thing only: Are you truly evil?" John says of the shark who's embraced the role of villain on the show.
- Mark Cuban: Resources are not a problem for this shark--he has enough to "buy all the sharks, six times over. But what he wants is time. If you ask Mark for a million, he'll give you two--just don't call him every day."