An entrepreneur in every sense of the word, Daymond John has come a long way from taking out a $100,000 mortgage on his mother’s house and moving his operation into the basement. John is CEO and Founder of FUBU, a much-celebrated global lifestyle brand, and a pioneer in the fashion industry with over $6 billion in product sales.
He is an award-winning entrepreneur, and he has received more than 35 awards, including Brandweek’s Marketer of the Year, Advertising Age Marketing 1000 Award for Outstanding Ad Campaign, Ernst & Young’s New York Entrepreneur of the Year Award. Plus, he ranked #4 on LinkedIn’s Top 20 Voices, a list of the top influencers in the U.S. worth following to get inspired and stay informed.
His marketing strategies and ability to build successful brands have made him a highly influential consultant and motivational speaker today. His marketing firm The Shark Group offers advice on how to effectively communicate to consumers through innovative means. And it connects brands with the world’s top celebrities for everything from endorsements to product extensions. John is also an author of four bestselling books, including his New York Times bestselling The Power of Broke (2016) and Rise and Grind (2018).
Finally, he’s celebrating his 11th season on ABC’s hit business show Shark Tank by acclaimed producer Mark Burnett. It has now gone on to win four Emmys, and millions of weekly viewers tune into the show as John demonstrates his marketing prowess and entrepreneurial insights.
Daymond John’s Journey to Becoming an Entrepreneur
John grew up in Queens with his single mother after his father left. He was dyslexic, held back in school, and didn’t have much money. But he always wanted to work, and he started working at age 10 to help his mother. Simple things like shoveling snow in the winter and raking leaves in the fall helped him earn money to feel less like a burden and more like an asset to his family.
He rarely saw successful entrepreneurs in his neighborhood who could serve as role models because they were so busy and away from home. On Good Friday in 1989, he managed to sell $800 worth of hats that had only cost him $40 to make. That’s when he felt inspired to become an entrepreneur by offering value to customers.
While holding down a day job, he also worked to get a startup called FUBU off the ground for nearly a decade. That way, even if he fell short in the business, he could keep the lights on. In 1997, the brand really took off and he’s been massively successful ever since.
The Origin of Shark Tank
He started writing books to help people understand the ups and downs of entrepreneurship. And he appeared on several networks to talk about his story and products. That’s when opportunity knocked.
One day, he got a call from a producer with an offer to appear on a TV show called Shark Tank because of his expertise on manufacturing, angel investing, and other business acumen. He turned it down at first because he didn’t want to be tied down to a single show. But circumstances led him to change his mind and give it a shot, and now the ABC show is in its 13th season!
The Best Ecommerce Company He’s Invested in
Bombas Socks isn’t just the best ecommerce company he ever invested in on Shark Tank, it’s the best company he’s invested in, period. The owners of that company taught him a thing or two about selling clothing, which has been his specialty for decades! So that was a big surprise. They had a way to use retailers and sell directly to customers online.
The value they offer isn’t just to the customer, but also to someone else in need. That’s because every time they sell a pair of socks, they donate a pair to the homeless. Even though their brand isn’t obviously advertised on people’s shirts or hats, it still became well known thanks to making people feel good about every purchase.
Authenticity as a Competitive Advantage
There’s nothing new in the world, just better ways to do the same old things. To stand out, you need to be authentic and know what you stand for. Can you define yourself in 2-5 words? If you can’t, others will. And it usually will be to your detriment.
You can’t hide who you are because people will discover your true character one day through social media or other means. So you need to be authentic and honest with them. Give them something to believe in and be inspired by. Look at what your competitors are doing and see if that might be a good strategy for your own company. Things that you think are out of your league are often possible and beneficial, just difficult to achieve.
Trying New Things While Staying True to Your Business Model
It’s easy to get lost trying to follow others’ success instead of staying true to your own business model. Take inventory of what you have before you follow a shiny new object. This inventory includes your:
- Time
- Resources
- People
- Customers
When you have an ecommerce business, you have a goldmine of data telling you what your customers want. Start small and do the biggest things your customers are asking you for.
At its inception, FUBU focused on men aged 18-35 until women began to show interest, too. Then FUBU shifted to start offering a greater product line that included women and children. The same thing applied to other countries. Different countries have different spending habits and fashions, so the clothing seller couldn’t just apply the same strategies everywhere.
Take your time and make sure you talk to your employees and customers before making momentous changes to your business model.
The Importance of Customer Feedback
More than 90 percent of the most popular products on the market came as a direct result of customer complaints. If a customer sees you respond to their complaint, they become much more loyal to your brand. Negative feedback is just as useful as positive feedback because it helps you do better.
Read your reviews instead of trying to push negative ones down or instantly refute them.
Data Always Wins
Data includes margins, units, customers, returns, etc. There are only two ways to do business:
- Increase sales
- Reduce costs
And there are three ways to deal with a customer:
- Acquire a new one
- Upsell a current one
- Get a current one to buy more frequently
It takes 25 times more effort to acquire a new customer than to upsell or sell more to a current one. It’s much faster and cheaper to receive a referral than to do a cold sale.
There are only four reasons why someone will buy something:
- Education
- Entertainment
- To live
- Pay someone to do something they’re too lazy to do themselves
Data helps you ascertain if you’re addressing any or all of those things. How can we use our internal resources to accomplish these goals before going out and buying new things?
Deeper data includes:
- Average purchase amount
- Length of time a person stays on
- Type of content customers are seeking from you
- Type of online community
Daymond John’s Inventory Management Success and Pitfalls
The biggest lesson he’s learned over the years is: don’t project that you will do more in sales than you will because you want to save the amount of turnaround time to add more sales and order more inventory. Inventory is the #1 killer of businesses if you get too much of it.
For example, you don’t want to hire too many employees or stock up on too many items blindly thinking they will solve a problem. Buying too much inventory reduces your margins, increases carrying costs, and has a cumulative effect of making your brand look cheap by forcing you to heavily discount slow-selling products.
Ecommerce allows John to accept preorders, receive feedback on why customers are returning items, use subscription models, and offer flash sales, among other things. He’d rather do $60 million of sales and leave people wanting more than do $90 million and have a lot of unsold inventory left over.
Scarcity, even when it’s just perceived and not real, is a powerful motivator to purchase an item.
The Best Business Model for ROI?
Actually, there is no best business model to generate an ROI. It all depends on what works for your customers. Bombas Socks doesn’t have a subscription model, but they’re still wildly successful. Five Four Jeans does use a subscription model to great effect.
Women have a higher rate of return than men when it comes to clothing purchases. Businesses should take that into account when deciding which business model will work best for them. When you make returns easy, it can eat into profits at first. But it increases the confidence of your customers, knowing they can get exactly what they want and return products that aren’t a perfect fit. That actually increases sales.
Popup stores, affiliates, and co-advertising are also viable models. The ideal one just depends on your industry and other key factors. If you make things as easy and time-saving possible, you are more likely to win a customer for life.
The Value of Hard Work
John learned the value of hard work from his parents and other mentors. It’s incredibly challenging to instill that lesson in children and employees. COVID-19 has made it difficult to hire workers because they often make more money staying at home. But those who understand the virtue and value of hard work will continue to be successful in a world of convenience where everyone is encouraged to be as lazy as possible.
He encourages his employees to do three things:
- Do their job well
- Help coworkers who may be struggling
- Share an idea, implement it, and become a partner in a department
People who succeed are ones who ask you how you’re doing, if there’s anything you need, and how they can be of service. Think of everyone around you as your customer you want to please. Proactivity produces positive results.
Be willing to admit when you don’t know something and then go out and learn it. That way, you and your customers/teams grow together.
Using Technology to Simplify the Future
Before implementing new technology, it’s important to address two factors:
- Friction – How difficult it is to implement
- Efficiency – How much time it saves
How many problems does it solve, and can it be built upon like LEGO blocks to create even more efficiency? And is it user friendly, providing resources to answer questions as they arise?
Mentors Come in Many Forms
Life is a series of mentors you can learn from. Mentors can even be younger than you. Your own children can be mentors. They are anyone who teaches you something new and beneficial. A board should be seen as a group of mentors who are available to help a business grow and thrive.
It’s okay to show vulnerability and admit weaknesses. When you do that with a group of trusted mentors, you’ll often find they’re willing to help you. People love to help you when you demonstrate that you see value in them. Mentors can be books or people you know in real life, but they can help you if you’re willing to be vulnerable and ask questions.
Be humble. That’s an essential quality to being a successful entrepreneur.
How to Overcome Hardship
Keep your primary focus in mind to make it through hard times. Your main goal should be to help the customer, not make money. John has benefited numerous people through his show Shark Tank and through his business ventures. He also loves sharing his story to inspire others to follow in his footsteps.
He’s leaving a legacy, not just an inheritance, to his daughters. Thanks to early detection, he managed to beat cancer. If we don’t have our health, there’s nothing else to gain. His goal is to bring heaven closer to Earth each day he’s blessed to live on it.
When you know why you’re here, you’ll have a good idea of what you need to do to accomplish it.
Parting Words of Wisdom
- Know your “why” and know your customers.
- Be vulnerable and educate yourself constantly.
- Use your resources and accept collaboration opportunities that arise.
- Be passionate about what you’re doing. Everything flows from that.
- Innovation will win in the end.