Daymond John: Swimming With a Shark (Q&A)

Daymond John is an unlikely tenant for the 66th floor of the Empire State Building. In 1992, as a teenager in Hollis, Queens, John sold home-sewn, tie-top hats and dreamed of starting an apparel brand. So he drew up a logo, expanded into T-shirts and called his brand Fubu (“For Us, By Us”)—his response to what he saw as outsider corporations selling clothes to black kids they otherwise wanted nothing to do with. When 27 banks turned him down for financing, John and his mother mortgaged their house for $100,000 in startup capital. And though he did not possess a marketing degree, John made a shrewd and fateful move: He gave some Fubu gear to rapper LL Cool J (who’d grown up in Hollis, too) and asked him to wear it. L did—in concert, no less. Practically overnight, Fubu was the word on the street. After Samsung stepped forward as an investor in 1995, Fubu went global. To date, the brand has done $6 billion in sales.The Fubu brand has receded a bit from the spotlight in recent years, but John, 42, is back out in front. Now an investor and consultant, John is a venture capital “shark” on the ABC reality show Shark Tank, which began its second season on March 25. The show represents a turning of the tables for John, who’s now in the position to offer startup entrepreneurs the kind of financing that the banks refused to give him 20 years ago.Adweek staff writer Robert Klara took the ear-popping elevator ride to John’s office to talk about the clothing business, building brands and how marketing has changed since the early ’90s.Adweek: Fubu really took off around 1994. That was 17 years ago. For a brand creator starting out today, is life easier or harder than it was for you?Daymond John: That’s the first time I’ve been asked that question. In my area of expertise, if it was just clothing, it would be much harder.Why?Well, when Fubu came around, it had a new angle. It was a new age—like a black renaissance in our time. Now, it’s been done already. TV back then had six or seven channels. Now there are 500. Marketing is so segmented [today] that it’s hard to make a broad stroke.These days, you consult to brands, and you put a high premium on a brand getting a celebrity endorser. Why’s that such a big thing for you?I’m a firm believer in utilizing celebrities because they tap into people on an emotional basis. One of the artists I work with is Pitbull [rapper Armando Christian Pérez]. Now, someone might listen to a Pitbull song 50 times a day, and you’re talking about millions of people doing that. That’s way more effective than spending $1 million on a banner someplace.Some brands might think twice before hitching their wagon to a hip-hop artist.The biggest fear brands have is: “Is this artist going to go shoot somebody? What happens to my brand then?” But we live in a real world, and with social media, you can’t hide things anymore. You just have to deal with that, and there are good ways to deal with it, too. Because if you really look at it, consumers resonate more when people have real issues in their lives—à la Charlie Sheen. So the best thing in the world is for a star to have some kind of reality check.It’s interesting that you say that. Most brands run screaming from a celebrity when the celebrity self-destructs—and plenty of them have.I don’t see it like that. You know why? I’m sitting in this room because a person like LL Cool J wore my product. When you get behind a celebrity, he’ll get behind you. And he did the biggest advertising coup in history when he put Fubu in Gap commercials.You’re talking about the infamous 1997 Gap ad in which LL Cool J insisted on wearing a Fubu baseball cap?He insisted on the hat, and then he said, “For us, by us, on the low.”When he slipped that in, did the Gap people know what it meant?The Gap didn’t know what happened—and they aired the commercial.I want to shift gears to Shark Tank. The show is probably the first time that Americans really get to see the hard realities of what it’s like for a brand to get a venture partner.[Laughs] Yeah.Now, you were fortunate to get one at the right time yourself—Samsung, right?Yes.Is it even possible to build a successful brand without someone else’s financial help?I’ve seen it done, but it’s very challenging. And it’s not necessarily the financial help; it’s the strategic help.So about this show—you’re really using your own money and investing in these brands?Absolutely.Can you give me an example of a brand you’ve invested in and that’s doing well?OK, so, Treasure Chest Pets [personal organizers concealed inside a stuffed animal] is one that I did last year. Are they doing well? Not necessarily. But it takes about three years to really get it going.If Shark Tank had existed back in 1992, and you showed up with some Fubu hats and T-shirts, how would you have done as a contestant?Well, put it like this. I got turned down by 27 banks—and bankers are nice compared to the sharks. So I would have failed horribly. I probably wouldn’t have made it past the casting agency.You did a promotional interview for ABC in which you said that the show was “a great way to find out why a business actually fails.” Is there an overriding reason why startup brands fail?Not enough education—about financials, about the business, about the product, about the numbers. If you don’t educate yourself, you’ll never get out of the starting block because you’ll spend all your money making foolish decisions.Do people look at Fubu and think that because you did it, putting out an apparel brand is an easy thing to do?I get those e-mails about 10 or 20 times a week.What do they want?They think they have a brand and they say to me, I’m into it 10 to 20 thousand dollars, and Grandma wears the shirts all the time, and this is the next billion-dollar brand.Any chance any of them are right?One of them may be right.How do you evaluate that? Can you?Twenty years into the game, I haven’t seen that person ever come back and say, “I made it.” Or I never see those brands they’ve mentioned ever again.In your book, The Brand Within, you chart the successful course of several brands that are now household names. Is there one thing they all have in common?Most brands started from a strong base and kept a strong belief. Somebody asked me the other day about Mark Zuckerberg. They said, you know, he’s a jerk and he’s this and that. But Facebook may not be where it’s at if he didn’t stand his ground and say to half the people, “Screw you.”I presume you don’t miss being a kid on a corner selling hats. But do you ever wish you were the startup guy with the next big idea?I do, when you see the twinkle in that person’s eye like you used to have. Sometimes, I say to myself: “Wow, I’m an idiot. All these people with these great inventions, and I’m making shirts.”

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Daymond John: Swimming With a Shark (Q&A)

Robert Klara

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Robert Klara