Daymond John Reveals What It's Like Being A 'Shark Tank' Investor
FUBU is no longer the powerhouse it was in the '90s, but John has been a sought-after branding and marketing expert since.
And today he is best known as a cut-throat investor on ABC's hit pitch show "Shark Tank," where he competes alongside the likes of Mark Cuban and Barbara Corcoran for the best deals.
His company Shark Branding manages the wide variety of investments he's made on the show.
We spoke with John about what motivates him as a businessman, what he looks for in an entrepreneur, and what it's like being a Shark.
The following interview has been edited for brevity and clarity.
Business Insider: Was there a moment when you knew you wanted to be an entrepreneur?
Daymond John: I never knew anything other than wanting to be an entrepreneur. I tried my first business when I was 6 years old, and I started another business when I was 8. I don't think I knew anything besides that.
BI: So it was always part of your identity?
DJ: Yeah. My parents always taught me that my day job would never make me rich; it'd be my homework.
BI: What drives you now?
DJ: Constantly learning. Making a change in people's lives; paying it forward. Being absolutely obsessed with loving what I do and loving the people I work with. Not doing anything necessarily for money. Doing it purely because it's exciting, and knowing that even though you're doing it because it's exciting, you're having something established and a way to make money from it, hopefully, but at least getting into the passion of the business first.
My new book coming out is called "The Power of Broke," and the philosophy of that is whatever I'm creating or doing makes use of my mental resources before I'm just throwing money at it. Money's not going to make it any better. It may make the opportunity come faster, but it also can hurt you if you think that money's going to solve it.
DJ: I barely finished high school. So it's purely trial-and-error, and it was proof of concept, meaning not only studying it, messing around a little bit, but also analyzing it. Because some people have bad ideas, or it's not the right time. So knowing when to stop your efforts because all the proof has given you that it won't work.
BI: What books have changed your life?
DJ: "Think and Grow Rich" was the number-one book in terms of being impactful. I read that at 16.
BI: Why was it so important to you?
DJ: The main takeaway from that was goal-setting. It was the fact that if you don't set a specific goal, then how can you expect to hit it? And if you don't set a specific goal, you could be setting negative goals without realizing it. So if you don't go, "I'm going to get a raise by the end of this year by putting in an extra two hours a day at work, which is going to compound into X amount of hours, which is going to make sure that my superiors see that I'm a team player," you may set a negative goal. "Eh, I don't feel like going to work. Eh, I don't feel like being a team player. No one in my job respects me." And you start setting a negative goal that will actually hurt you.
DJ: There are the normal ones that everybody loves. There would be "Rich Dad Poor Dad," "Who Moved My Cheese?;" I love all the Dale Carnegie books; "The One Minute Manager." I love newer ones like "Blue Ocean Strategy" and all the "Freaknomics" books.
BI: What's a favorite piece of advice from one of your mentors that you've never forgotten?
DJ: My mother said, "Money is a great slave but a horrible master." [It was her version of a French proverb.]
I think that in the earlier days, when I was a "wantrepreneur," I was really doing things because I thought what I wanted was to be rich. For the most part, those businesses failed, and then later when I started doing something casually because I loved it, that business burst.
So all those old sayings that your grandmother and grandfather used to tell you are actually somewhat real, you know? I learned that over the years. And then after becoming wealthy and having money, I failed at a lot of things, and that reinforced some of those theories that I was told at a young age.
BI: So now, as you've been working with entrepreneurs on "Shark Tank," what has your favorite investment been?
DJ: It hasn't aired yet, so I have to go with another one… It would be Al "Bubba" Baker's Boneless Ribs. Absolutely, yup.
BI: How involved are you with the entrepreneurs you make deals with?
DJ: Every one of them is different. Some it's purely cash. The others it's a little fusion of it. And then another would be I speak to them almost every day or we are running some of the business within my corporation.
I enjoy working with most of them no matter what. But some of them geographically aren't located in New York or there's nobody in New York. Also it may be an industry that I'm not well-versed in, so my role in there is not needed as much because the people who are in there are running the business really well and they just need me to do the heavy lifting once in awhile. It's like any relationship that anybody has, with a friend or a romantic relationship. Sometimes somebody puts a lot into a relationship, and sometimes somebody puts in very little. But it all depends.
DJ: It's all in the moment. And in the moment, it does get personal here and there. None of it is for the camera. Listen, I don't care if you're my brother - if we go play football I'm gonna try to crack your head open. It doesn't mean that I don't love you. It doesn't mean that I don't respect you. But I'm going to try to crack your head open! There is real stuff at stake. There's real money, and there are also real egos. And you have 10 million people watching you get smacked down on national television! It's real.
Ninety-five, ninety-seven percent of the time, as soon as that deal is over, we have totally forgotten. Have we carried a little animosity throughout that day of shooting over one deal that we really liked? Yes. But I think that's why we are at the level we are in life.
BI: What's an example?
DJ: Robert [Herjavec] beat me out of a deal this last season. It hasn't aired yet. The deal was apparel-based, it was fitness-based, and Robert beat me out. So I'm sitting there saying to myself, "Should I be mad at Robert or should I be mad at myself?" Because this a natural layup for me. The person knows my expertise. What didn't I communicate to that person that made me lose the deal, or what did I say to that person that may have pissed them off?
I can't be so mad at Robert. It's almost like going into sports. Two boxers go out there and somebody whoops your ass - you know you weren't on top of your game in that fight. I don't know if I'm mad at that person.
BI: How do you decide what's worth your money and how much?
DJ: That's the problem. We get caught up in so many things in the moment, and we always spend more than we want. [laughs] So we're like, "I've got 10 companies, 15 companies this year! Oh my God, what's wrong with me?" But that's the nature of the beast. We're opportunistic. We're sharks. We smell something, and we're like, "Man, this is a great opportunity for me to be part of a new industry or for me to do something that's amazing. I'll do the deal!" You can't help it, man.
BI: What's your all-time favorite and least favorite pitch?
I hated Scottevest - not even Scottevest, that Copa Da Vino pitch. I don't know about saying "the worst," but with some I didn't like the people. They were obnoxious or there for the wrong reasons.
BI: Does it come down to the person selling themselves more than their product? If you don't like a person, you're not going to want to work with them?
DJ: A hundred-and-twenty percent. We're not investing in companies. We're investing in people. There's nothing that we've seen, that you will ever see, that is brand new. It's always going to be a new form of delivery or a new angle on it. Instead of working in seven minutes it works in six. So it's not going to be what you like. You are going to have to potentially talk to the person on the other side of that pitch every day for the next 20 years. Can you deal with that person?
BI: What is your advice to an entrepreneur pitching you? How can someone appear more likeable?
DJ: You can't know what the other person is going to like about you. You may look like their husband's ex-girlfriend!
But for the most part, the best thing to do is be very smart with comments - but not too smart with the investors. The investors may feel like, "You know what, you're so smart, I need you, because this is something tech-based and I need you to figure it out." Or they may feel like, "You know what, you're so smart that I'm never going to see my money because you'll be stealing it every two minutes."
You have to be energetic - but you also don't want to be too energetic. Because if you're too energetic, the investors may be like, "This is a show. You're trying to sell me a bunch of smoke and mirrors." No matter what, the most important part is that you need to make the investors feel like you're going to wake up every day and bust your butt.
And show that you have determination and you have a level of honesty. Honesty means that you don't go up there and act like what you're doing is so great and that it's never had any problems. Tell me about the problems as much as you tell about the opportunities, and how you may have solved some of the problems.
BI: Do the Sharks get paid per episode? And is there an allotment for investing?
DJ: The Sharks get paid per episode, and there is no allotment. Producers and ABC do not tell us what we can and cannot spend, or expect to spend. They couldn't do that. We're like any host or talent or judge; we get paid per episode, but it's nowhere near the money we spent. [laughs].
There's no limit on what you get to spend. If someone comes in the door asking for $5 million and you feel you can make money off of them, or if someone comes in asking for $50,000 and you feel you can make money off of them [you go for it]. And the $50,000 might be better than the $5 million one. It's just the stage you want to spend it on. People always look at it as, "Oh, you spent so much." Well, you spend, and you also start to make cash off it as well. So it's money at work. That's basically all it is.
BI: How much time does being a Shark require?
DJ: It is a big job. Every one of us has hired probably 15 to 20 people to handle all these projects and companies. It is not like anything else where you finish shooting and you go home. We finish a show and then we go to work. It probably takes up a good six to eight months of our lives [each year].
BI: Can you tell me a little bit about what you're working on at the moment?
DJ: I'm working on this recent season as well as those from the past. What I'm excited about: There are a couple companies that have recently aired: Bombas socks, SunStaches, and Sleeping Baby. They've all been pretty strong performers. And I'm still working with Al "Bubba" on his boneless ribs, and he's amazing and the product has come along amazingly. And then I have this guy Nate from Mission Belt. Those are the "Shark Tank" investments that I'm doing really well with.
And personally, we just acquired a company Etonic, the old footwear company. And we just released our Akeem "The Dream" Olajuwon retro sneakers that were one of the first athletic sneakers of their kind. And we're really doing well with that. FUBU is having some level of retro comeback - not the way we used to be before, but for a younger generation. The hipsters are finding it.
You can follow Daymond John on Twitter.