PALM DESERT, Calif.–In a full-circle moment, Daymond John, the founder and CEO of FUBU who is well-known as an original member of TV’s Shark Tank, shared with credit unions here how he wouldn’t be speaking to them were it not for—a credit union.
Speaking to Origence’s Lending Tech Live meeting, John shared five ‘S.H.A.R.K. Points’ with credit unions here. The S.H.A.R.K Points are a foundational acronym he said is designed to guide entrepreneurs through the mindset and principles required for business and personal success. He teaches that every time he succeeded, all five were present, and every time he failed, at least one was missing
Today, John oversees an estimated $6-billion empire that includes the global brand FUBU as well as his venture capital portfolio.
But before there was any of that, he was the poor son of a poor, single mother living in working class Brooklyn and Queens who was struggling to get a clothing line business started. After selling $800 worth of homemade hats outside a mall, John shared his story of taking an enormous risk in traveling to a trade show in Las Vegas with suitcases full of clothing he and his mother had manufactured. John’s market was the emerging hip hop community, and he managed to convince enough buyers to come to his hotel room (he couldn’t afford a trade show booth) that he ended up going home with $50,000 in orders.
The problem: He had no additional capital to pay for equipment to manufacture the clothing needed to fill the orders.
A Credit Union to the Res-CU
His mother agreed to get a second mortgage on her home to get the capital, but 27 banks turned him down. But his mother belonged to American Airlines FCU, and the credit union agreed to a $100,000 home equity line (on a $70,000 home, John said). With the equipotent was purchased John, his mother and others worked around the clock to create the clothing inventory needed to fill the orders.
John asked his audience how many of them have given “a Daymond John their opportunity? Probably every single one of you.”
Have Orders, Need Financing
But then he ran into another challenge familiar to any small business, especially start-ups: Cash flow. He was making purchases in real time, while buyers weren’t paying for up to 90 days. His mother asked him for $2,000, and he said he worked a month straight at a Red Lobster to get the cash. When he asked her what it was for, she said it was to buy a newspaper ad. That ad appeared in the Daily News and read, “Receive $1 Million in Orders. Need Financing.” It listed a phone number.
Eventually, Samsung Textiles agreed to provide John with the funding, with the caveat the new company do $5 million in orders in three years. It did $30 million in three months.
John said it was a lesson in “OPM: Other people’s money. Other people’s mindpower. Manufacturing. Money.”
The company’s explosive growth would continue.
The Five S.H.A.R.K. Points
John’s five S.H.A.R.K. Points are:
- S (Set a goal): Figure out exactly what you want to achieve, focus on it daily, and take actionable steps to make it a reality. “If you don’t set a goal, you can’t hit a target you can’t see,” he said.
- H (Homework): Research, prepare, and take honest inventory of your strengths, weaknesses, and the daily tasks you must perform to reach your goals.
- A (Amore): Love what you do and treat the people around you with care and respect. He advised, “One thing I realized is the hardest thing to do and the best thing to do are usually the same thing.
- R (Remember you are the brand): Understand that you represent your business at all times. You must control how people perceive you in and out of the boardroom. “Can you put yourself in two to five words? If you can’t, when you walk into a room you leave it up to others to define it. Can your staff do it?” He pointed to Origence’s slogan—“Origence, the Future of Lending Together,” as a good example.
“It’s all about mastering the pitch. I don’t understand how people continue to screw up the pitch. Not just on Shark Tank, but in life and business,” he said.
K (Keep swimming): Never give up. Push through obstacles and continue to hustle, even when times get tough.
