Daymond John, FUBU CEO & Shark Tank Investor talks Beauty & Business with Michael Halmon, AACS Chair & President of American Institute of Beauty
Daymond John discusses starting a business with today’s technology, goal setting, tips on shifting the perception of careers in the beauty industry and speaks on keeping your business afloat during COVID-19.
Daymond John’s success has inspired us all throughout the years as he turned $40 into a $6 billion fashion dynasty. His humble beginnings started on the streets of New York City with Keith Perrin, J. Alexander Martin and Carl Brown.
Together, in 1992, they created the FUBU brand (For us, by us) selling shirts and hats with the FUBU logo. Over the coming years, the brand became wildly popular and included casual wear, sportswear, a suit collection, eyewear, belts, and shoes.
Not only is Daymond John a pioneer in the fashion industry, he is “The People’s Shark” on the 4-time Emmy Award winning television show Shark Tank, a New York Times best-selling author, motivational speaker, and continues his work as a successful entrepreneur.
In this interview, Daymond John discusses starting a business in today’s technological world, goal setting, tips to shift the perspective on careers in the beauty industry, and tips on keeping your business afloat during COVID-19 with President of Tampa Bay beauty school, American Institute of Beauty, and AACS (American Association of Cosmetology Schools) Chair Michael Halmon.
FUBU and Technology
Michael: Daymond, you started FUBU before the wide-spread use of the internet. If you were starting your business today, what would you have done differently?
Daymond: It would only be a different form of delivery. FUBU would be Nike if I started out today. When I sold somebody a shirt years ago I would have to go and find them, literally, to sell them another shirt.
When I had to get customer feedback or analytics, do you know how I did that? I stood out on the corner in Harlem on 125th Street at midnight when the Apollo Theater let out. The good thing about that is those drunk people would tell you everything they thought about FUBU and your mother. So, that’s how I got my customer feedback and my data.
Today with the ability to hit the entire world with the palm of your hand. To be able to put in hashtags and find out what people are saying who don’t like you, you can realize where you are falling short. You have the ability to have a direct line to customers.
There are only three ways to increase your customer business:
- Acquire a new one
- Upsell a current one
- Make one buy more frequently
That’s it. That’s the only way. Acquiring a new one is 25 times harder than upselling a current one or making one buy more frequently. We are seeing today how COVID has highlighted the weaknesses or strengths of many people.
Many people have shops right now and their customer is right down the block, but they have no idea how to get their customers because they have no data on their customers. Other people, their customers are all around the world and they are servicing them with ease and growing.
So, that is exactly what I would have done. I would have built a community the same exact way as I did on the streets of New York, and then I would have over-delivered and over-serviced that community, but I would have been doing it now using all of the tools of technology.
Goal Setting for Entrepreneurs
Michael: Do you believe in goal setting and is it important to you? What tips can you share with entrepreneurs? What should goal setting look like?
Daymond: There are three reasons why people are successful in life:
- They are the only ones with the operational manual to themselves and they really know their “why”
- Goal setting
- Mentorship, some form of education or mentors
Goal setting is why I’m here. I read the book Think and Grow Rich by Napoleon Hill when I was 16 years old, and the man that I envisioned I would be by goal setting I became at 30, but it became very dark from 16-30. But just like a plane that is on automatic pilot from New York to Los Angeles, it’s off the course 97% of the time, it’s the automatic pilot that just keeps bringing it back. It’s a very specific technique in goal setting.
I have 10 goals that I read every night before I go to bed and every morning when I wake up. Six of them expire in 6 months and the other 4 expire in 2 years, 5 years, 10 years, and 20 years. The ones that I read at night, the reason I read them is because science has said that over 70% of the things that you dream about are either what you fear is going to happen to you or what you hope is going to happen to you. The reason I read them when I wake up in the morning, I want it to be one of the first actions I take.
They [goals] range from business to spirituality to health to time with my family. I never hit my 6-month goals ever because I set them so big. So, when I get to them, I just reset them. Or I scratch them off the list and I say you know what? I have been doing this for 6 months and I’m not into it. They [goals] have a “why” in there.
I’ll give you an example of a goal that I never hit, especially now during COVID. I am going to lose 20 pounds in 6 months. I am going to do that by substituting one meal with a green drink, drink my full day of water, cut out fried foods and meats, no eating after 6 PM, walk 10,000 steps a day, and one hours’ worth of weight training at night. I am going to lose one pound per week! If I do that, I will be down to my fighting weight of 175 but here is the important part: if I do that, I will be healthier and I will be around to walk my 3 little girls down the aisle.
That is the purpose of the goal. If I don’t have that purpose of the goal, then what am I doing? Goal setting is extremely important.
Careers in the Beauty Industry
Michael: It is estimated that the beauty industry garners $60 billion dollars in revenue, yet many people look down on careers in beauty. In your opinion, how can we better change the perspective of these individuals and get them to understand how lucrative a career in beauty can be?
Daymond: First of all, how are you positioning it? Are you positioning it as you are somebody who is going to be in charge of your own destiny? Are you positioning it as the joy you are going to get out of transforming somebody’s life various times a day? It becomes how are you positioning it to then be able to reflect that and share with the end consumer.
I do have a question for you though. Do you in your schools teach them [students] technology and how to get themselves out there? Are those things that you teach them at the same time for Instagram, videos, things of that nature?
Michael: Oh, absolutely. I think that is an absolutely important part of the curriculum that we provide. Business entrepreneurship, technology, there’s certain partners that specialize in some of those areas, that we as school owners bring in. But it is 100% essentially part of the delivery of the education that we give them.
Daymond: How are you getting customer feedback from people who went to school? How do you show the leaders in the industry who those teachers or those leaders are and how do you make a sizzle reel of that? I look at the industry and obviously I am being made up often and I am seeing some, who as you said earlier, are just over broke. But I am also seeing a lot who are doing amazing.
I mean they are on YouTube and they are making millions and millions of dollars on product lines. I need to see more of those and how is the world not seeing more of those? It was only when Karl Kani came out that inspired a little young guy named Daymond John and then a Jay-Z and then a Puffy and then a Russell Simmons to all start wanting to be in this world, right? Because we saw an example of it.
Your examples are thousands, millions of people are your examples. How are you taking that and catapulting it out to the world?
Michael: I think that what would be really an accomplishment is if we can get acknowledgment from individuals that utilize our graduates in those areas all the time. Let’s face it. For every time we see a television production there’s probably a hair stylist, makeup artist, possibly a barber in the back preparing them to go on stage. Maybe we can convince some of them to bring them out and introduce them to their audiences. But it certainly has been a challenge for us, and we will continue to try to find a way to get that message out.
Daymond: You have to get your customers to talk about you. I’ll give you an example. Bombas Socks comes onto Shark Tank, it’s the #1 product in Shark Tank history that has been invested in, so please remember that any time you see any of those other underachievers that we call my fellow sharks. Remind them that I invested in Bombas Socks! Buy Bombas Socks. Why? Because I had 10 clothing brands and 8 of them were dead. The last thing I need is another pair of socks.
If I invest in this company, you can’t even tell that you’re wearing them because you can’t see the logo! Everybody right now could be wearing them, and I couldn’t tell.
No way in the world am I buying them. But you know what I realized? Every time that they sell a pair of socks, they give a pair away to the homeless. I realized that unlike when I grew up in business, and I would give at the end of the year. Or maybe even if I gave to people who had hardship, I never advertised or marketed it because why would I want to do that and make a profit of the hardship of others? I realized that today’s consumer says “no, no, no”.
When I am at dinner, and you say you gave money at the end of the year, I want to say that I gave 100 times. How did I give 100 times this year?
Well, every time I bought this, I helped clean up the ocean, every time I bought this, I helped stop human trafficking. Every time I bought this; they gave a pair of socks away to the homeless. And you know what? That is where your biggest ambassadors are.
How are you going to get the end users, or your students, to want to scream at the top of their lungs about what you’re doing? Think about it, if they could do that with socks, imagine what you can do with people who are transformed into being very comfortable or proud of how they look, just because of a skill set that you have given to others.
Power of Broke & Maintaining Business During COVID
Michael: In your New York Times best-selling book The Power of Broke, you talked about how a tight budget can be your greatest competitive advantage. How can our AACS members exercise The Power of Broke to stay afloat when money is needed for operations, advertising, and marketing?
Daymond: The Power of Broke is really for those starting out. Those operating businesses have to take a different look at their inventory. The highlight of Power of Broke is if you don’t have it, you have to find your resources, your OPM (operating profit margin). Your OPM should not be other people’s money.
Your OPM should be other people’s manufacturing, marketing, mindset, and various other things. Money generally highlights your weaknesses. The only time you need money when growing a company is when you cannot keep up with orders or you need more machinery. If you need more money right now because you need to do more advertising well, if your advertising is not great, you’re just spending more money on bad advertising that is not converting.
It all depends on what you need. Right now, what am I finding that all entrepreneurs are doing who are successful? They’re looking at their inventory. What is their inventory? Is it that they have this many emails, this amount of time, this amount of space? Is it who is in their rolodex right now? Rolodex of people you used to work with, people that you never could work with because you geographically were saying that they needed to be in New York, and now your talent pool has opened up around the world. Is it people that you wanted to collaborate with and if you called them 8 months ago their company wasn’t going in this direction, but now you know exactly where they are, right? They’re on the couch fighting over the remote control with their significant other eating a bunch of Cheetos and drinking Titos, wondering how they are going to get out of this situation.
So, when I say the Power of Broke you have to use the resources that are at hand. I see a lot of people that say “I need more inventory” well, you didn’t sell the inventory you have. Have you ever seen on Shark Tank: how much inventory do you have? Five hundred thousand dollars’ worth. Woah! “But if I only had your money, I can improve it”. Well, no, then you’re going to have a million dollars’ worth of inventory in your garage. The Power of Broke, you have to find ways to adjust what you’re doing and use what you have.
Remember there are only two ways to operate a business:
- Increase sales
- Reduce costs
Those are the only two ways and right now honestly, I am not going to sugar-coat it, you have to make a lot of hard decisions.
Michael: That’s wonderful, Daymond. I thank you on behalf of the board for spending this time with us, we certainly appreciate it.