Q&A with 'Shark Tank' Judge Daymond John (part 4 of 5)
Opinions expressed by Entrepreneur contributors are their own."Shark Tank," ABC's reality TV show featuring capital-hungry entrepreneurs and five investors holding the pursestrings, is well underway as we near the end of the judges' line-up. The spotlight today is on Daymond John, founder of FUBU The Collection, a multimillion-dollar fashion empire that sprang from fairly humble origins.
In 1992, after some success selling hand-sewn, tie-top hats at concerts and festivals, John recruited some friends, took out a $100,000 mortgage on his mother's house, and launched a branding campaign for an urban clothing line that, roughly five years on, reached a staggering $350 million in revenue.
He's no doubt increasing his net worth with some of the deals he's making on the show, which he's been hyping on Twitter @TheSharkDaymond. If you're not a follower, you'd best get on it: John's been offering free phone consultations to people who can re-tweet and answer his questions the fastest.
What's going through your mind as you listen to people lay their business dreams on the line?
Because it is my own money, I go through various different emotions. I go through the emotion of, "I've been there," where I feel the need to be gentle and soft or very understanding. I also think, "Wow, I would have asked for the same amount of money and asked for the same stupid things at that point in time. Did I sound that stupid at the time, too?"
Other times, I wonder if people are trying to insult me and ask for this amount of money and tell me these things that I absolutely know through experience aren't true. And the greatest emotion is when I feel someone is a star and the world just doesn't know it yet, and I ask myself how I can help propel that person to that status, make a profit, become a partner and just have a great time.
That's a lot to consider all at once.
Right. It's all being shot at you within 10 minutes of talking to people and four other sharks yelling at them.
True. You sharks don't actually seem that "gentle" or "soft."
[Laughs] No, it depends on what emotion we're going through.
If the positions were reversed, what would your chances have been?
I would have gotten shot down. When I was at that point, what I had done in my space had never been done before, so it was hard because there wasn't a blueprint. I wouldn't have asked them for the appropriate amount of money, and to tell them at that point, "Hey, Busta Rhymes wears my stuff, LL Cool J wears my stuff," they would have said, "Who?" So I would have been shot down immediately.
So contestants who don't get deals shouldn't give up, is that right?
Oh, absolutely. This show is a huge, huge step for them, but it's not the end all be all. You can't buy this kind of exposure, and when the five of us from all walks of life critique them, it's a learning experience. So no matter what, there will be a lot of stars who will come from the show, and a lot of stars who will come from the follow-up and the lessons they learned.
What's different about "Shark Tank" compared to other elevator pitch shows?
The aspect of it being our money is a really big issue. I hold back when I see someone dreaming because when my money is at risk, and my children's futures, I throw real questions and real scenarios out there, and it's like night [versus] day.
Well, it certainly makes for good TV.
It makes for good TV because you see negotiations go down within five minutes. You have to understand, some of the negotiations go on for half an hour, and you have a camera on each person. That means there's six cameras running for half an hour--imagine all the material they have to cut down.
So how do you tell if someone's going to be a good investment?
First of all, I think the person is the brand, so I'm buying into the person, and there are a few things I find attractive. Do they have something that is proprietary--a patent, a great idea, a certain formula that nobody has that I can maximize off of?
Second of all, do they have sales? Have they run it through the truth-telling machine where somebody that's not in their family spends hard-earned money on it? And between that is whether they are able to manufacture this idea and ship it to people.
That's what really matters, and then for me to engage in the deal itself, they have to give me a number I can understand. If they're asking $2 million for a company they've only made $100,000 off of, I can't even talk to them at that point.
And what's the best business decision you've ever made?
I believe the best business decision I ever made was to learn to brand my product, because I was just another one of the millions of items out there. So I think learning branding, understanding how to create a brand, was and is still currently my best decision.
What about your worst?
You know, not to be the guy who's happy about everything, but every single decision I've made and all the failures I've [experienced] have only taught me how to build a better mousetrap. You can say failures were because of inappropriate timing, and I ended up benefiting off of it anyway because I learned from it.
I really don't live my life around bad decisions and regret.