ORLANDO—Daymond John, star of ABC’s Shark Tank and founder of the FUBU clothing line, said credit unions are the “For Us/By Us” of banking during remarks in which he offered five “Shark Points” that have helped to make him successful.
John's story is a true American rags-to-riches story. Now a multi-millionaire, his journey is one of humble beginnings, a keen insight, a mother’s love (and business savvy), a few lucky breaks, and years of hard work.
But before sharing his story, John told the NACUSO annual meeting that “I want to thank credit unions. You are the For Us/By Us (FUBU) of banking. My mother was a member of American Airlines Credit Union and she valued the credit union that helped her.”
John grew up in Queens, N.Y. His father was an immigrant from Trinidad who slept in the streets until his 20s, helping to bring his six siblings to the U.S. His mother was a former Miss New York. His parents divorced when Johns was 10, and he said he has not seen nor spoken with his father again. That led to his mother working three jobs, while John got a job at 10 handing out fliers for the soon-to-open Coliseum Mall for $2.25 an hour.
Growing up John said the only people in Hollis, Queens who were making money and showed signs of success were “pimps and drug dealers,” while the real “heroes” quietly went to work early in the morning and came home late at night and did it over and over again.
Daymond Johns speaks to NACUSO meeting.
The first person who was not a pimp or drug dealer who John said he ever saw driving a “big old fancy car” was music producer Russell Simmons, who was responsible for big 1980s acts such as LL Cool J, Beastie Boys and Run DMC. At the same time hip hop was beginning to explode, John got a job working at that same Coliseum Mall, where he learned that “small business owners were actually decent people, and not nasty like Mark Cuban.”
“In 1980, at a hip hop tour I saw 30,000 people, and I noticed they all had on the uniform of hip hop,” said John. “There was as shift happening and nobody was noticing. Prior to that I didn’t know what I wanted to be.”
That led to John introducing the first of his Shark Points.
Shark Point #1. Set Goals.
John's goal was to “live, die or prosper in the world of hip hop, and I couldn’t sing, dance or produce. But I knew that if I wasn’t setting my goal, someone would set it for me.”
In the early 1980s John was working a job at Red Lobster when Timberland, the boot manufacturer that had become a status symbol in the hip hop universe, made a comment that “we don’t sell our boots to drug dealers.”
“We all know the 80/20 rule in business,” said John. “If you make technically the best boot in the world, how often do lumberjacks and construction workers need new boots? Every two years. But when it’s a fashion statement, I was buying two Timberlands per month. I work hard and you just called me a drug dealer. Now you’ve ticked me off.”
That led Johns to create the For Us/By Us brand (after initially naming it BUFU before discovering it had connotations he had not anticipated). “I started to notice this disruption in technology was occurring, and it was called a video. And they were communicating through the video way more.”
On Good Friday, 1989, after sewing hats with the help of his mother, John sold $800 worth of those hats outside the Coliseum Mall.
“Now my goals started to unfold in front of me,” said John. “I took 10 shirts and went to as many video shoots as I could for two years, put the shirts on rappers, and then took them back. We became known as some huge clothing company, and all I had was nine or 10 stinky t-shirts in my basement while I was working at Red Lobster.”
John finally got a break when LL Cool J agreed to wear his FUBU wear, telling him that “I wouldn’t be here if someone hadn’t helped me, so I’m going to help you.”
Shark Point #2. Homework.
“You call this analytics,” said John. “I always tell entrepreneurs on Shark Tank, ‘Do your homework, because you will never create anything new in this world again.’”
With LL Cool J onboard, John shot a photo of him wearing FUBU and sent it out with a press release announcing the company had just signed him to a million-dollar deal, and sent the release to every clothing store he could. With almost no money, John and five friends used his mother’s American Airlines’ connection to go to Las Vegas for the biggest clothing store trade show, the Magic Show.
Sneaking into the trade show, John directed people to the hotel room that was doubling as its showroom. The result? Three-hundred-thousand-dollars in orders for FUBU wear that John had no means of producing.
Back in New York John looked to 27 banks and credit unions for financing and got 27 denials.
“My mother took a second equity mortgage on her house for $125,000,” said John. “We moved 12 industrial sewing machines into the house, and we slept into that ‘factory’ in Hollis, Queens. We had material and clothes stacked to the ceiling. We became the #1 brand in the Coliseum Mall. Then noticed the $125,000 was down to $500. I was being choked by the float. I was about to lose everything. My mother said you need a strategic partner. I gave my mother $2,000; she said, you need OPM: Other People’s Money.”
Over John's protests, his mother placed an ad in The New York Times that said “$1 million in orders needs financing.” Thirty-three people responded, one of which was
Samsung’s Textile Division. Their offer: you need to sign $5 million worth of orders for clothes in three years to keep a distribution deal with us, “even though we knew we wouldn’t do it.” FUBU didn’t do it: instead, it did $30-million in sales in three months.
“Now I was officially rich and I could afford all the fake friends I wanted,” said John, only half joking.
Shark Point 3. Adore.
What did all that wealth lead to? A divorce and the loss of contact with his two daughters, said John. “You’ve got to find that balance. My ex-wife is the most amazing woman. She was the one who told me I was the one who was being disrupted now. She reminded me that my family needed to be the number-one strategic partner. So I started to give back and try to pay it forward.”
Johns rose to national prominence after being spotted by TV producer Mark Burnett while he was doing a local TV show; Burnett was already producing “the Lion’s Den” in other countries, a TV show he was bringing into the U.S. as Shark Tank.
“The contract said ‘you are going to spend about $2 million of your own money every season.’ I said ‘I am out,” said John. “Then I realized I needed to diversify my portfolio and I signed the contract.
Shark Point 4. Remember.
“Remember that you are the brand,” said John. “I think this is probably the most important point. We don’t invest in companies, we invest in people. If you don’t know what your personal brand stands for, others define it for you. You have to put your personal brand into two to five words. What is the art of the pitch? It’s very simple and I don’t know how people mess this up. People are always pitching. What’s in it for the people being pitched to?”
Shark Point 5. Keep Swimming
John said his own story makes clear the importance of consistently working to reach goals, noting that if a shark doesn’t keep swimming, it dies.