Wednesday, February 1, 2017

Ep. 210: Daymond John – 5 New Lesson I Learned From Daymond John

He is exactly one year younger than me, almost to the day. So we could’ve even grown up together. We had similar interests in music. He could’ve taught me sewing. I could’ve taught him how to play chess.
But, to be honest, he worked harder than me. He stood on a corner and sold hats. Then he sold t-shirts. Then he would go work at Red Lobster all night. Then back to school the next day.
I was lazy as a kid.
I couldn’t work so hard. Six billion dollars later, Daymond John sits atop the FUBU fashion empire and I think to myself, “He’s one year younger than me.”
Do you ever feel that: jealousy?
Or if not jealousy, then maybe regret? Like there’s so many things you could’ve done…if only…
The good news is, “if only” has two answers: “You didn’t do it then.” And…”Start today.”
There’s never any rush. If today is the day you can start enjoying something, start making money from it, start combining all of your interests into a career that lasts one, five, ten years….then today is the day you should do it.
I’ve interviewed Daymond before. We covered a lot of his background and how he started when I interviewed him about his book, “The Power of Broke.“
But on this interview I learned some new things.
1) DON’T QUIT YOUR DAY JOB. 
 Many people are unhappy in their jobs. I hear it every day from people. I get emails every day about it.
But you can’t start a business in a second, or a month, or even a year.
Daymond worked at Red Lobster for SIX YEARS while he was getting FUBU off the ground. He didn’t want to take a chance.
Why not? One might ask.
It’s scary. If you leave a job for a new business and it doesn’t work out, how will you pay your bills? I stayed at my job at HBO for 18 months after I started my first business before I would make the leap. I was really scared.
You don’t leap until you can take away as many of the risks as possible.
2) DON’T DO THE COOL THING
 While Daymond was working at Red Lobster and selling hats on the street, his friends were losing their lives selling drugs.
I was reading recently about Charlie Munger, Buffett’s #2 man at Berkshire Hathaway and one of the richest men in the world.
He started a hedge fund in 1973. The worst time ever to start a fund. And, if I remember correctly (I refuse to Google), he was down 20-30% the first year. And then 20-30% the second year. And then he fought back and ended up making money for his investors.
Another man, probably in a very similar situation, was Bernie Madoff. We don’t know exactly what happened but the theory is that when he was down he was too ashamed to tell anyone and turned it into a massive fraud.
Character is destiny. The choices you make today are your biography tomorrow.
Daymond refused to let the opinions of others veer him off his path. He worked hard, stuck to his uncool job while he pursued his passion. And made it work.
3) COMMUNITY
 Critical to Daymond’s success. Make the company more than just about you. Make it about the community. Then it has a life larger than “Daymond John.” You create something people are willing to share.
How did he do this?
  • Name – “FUBU” means “for u, by us”. BAM!
  • Friends – Daymond got his friends to wear it. Then their friends wanted to wear it. And so on. That’s real marketing. Don’t even think of advertising your product unless PEOPLE ARE FIRST DYING TO SHARE IT.
  • Authority – LL Cool J grew up down the street from Daymond. Daymond didn’t know him but he started pursuing him, asking him to wear a FUBU product in one of his videos. LL probably didn’t even know who this kid was. But then he saw other kids wearing the clothes. And he responded to the name. So he started wearing FUBU in his videos. BAM!
  • Shows – Daymond started going to all the hip-hop fashion conventions. The Magic convention in Las Vegas. He met his peers in the clothing business. They didn’t know him as a kid from Queens. They just knew his products. They knew that LL Cool J was wearing them. He built his network with his peers.

Note that in all of the above he didn’t spend ONE DIME on ads but he had millions of dollars worth of free advertising.

This doesn’t come out of luck. That comes from every day…

4) DOING WHAT YOU LOVE

People mess this part up a lot. There’s not one “destiny” that we are meant to figure out and do.

Maybe Daymond John loved hip-hop music but wasn’t a good musician. Maybe he loved clothes. Maybe he loved selling. Maybe he loved seeing LL Cool J wear a hat he made.

We don’t really know. There are too many factors. We do know, though, that once he got through the hard parts of the business and it was really starting to roll, that, as Warren Buffett would say, he “skipped to work every morning”.

5) READY. FIRE. AIM.

This is the most important factor. I’ve interviewed 200 successful people so far for my podcast, give or take, and this is the one factor they all have in common.

Daymond got ready (he made the clothes, he saved money, he didn’t quit his job, he built community).

And then something happened that was game-changing. If you stick to something long enough and it’s growing and you feel that people are loving what you do, then something game-changing will happen.

Macy’s placed a $400,000 order (at the MAGIC fashion show).

Daymond didn’t have the money.

Now was the moment when you can take risk. He and his mom mortgaged his mom’s house for $100,000. He had to make 15,000 items. He got the fabrics. He filled up his house with seamstresses, and he fulfilled the $400,000 order.

Then he returned the $100,000 out of the profits.

He quit his job at Red Lobster. He was in business now. He was in business for life.

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