Watch IZEA CEO Ted Murphy’s interview with The People’s Shark Daymond John
IZEAFest was certainly one for the record books! After two days jam-packed with 35 industry-leading speakers presenting heapings of highly actionable tips and tricks, best practices, and personal anecdotes, plus unforgettable parties and networking opportunities, it’s easy to feel a little wiped out.
Luckily, we recorded it all for your viewing pleasure. For those who missed this once-in-a-lifetime opportunity to experience the wisdom of New York Times Bestselling author, CEO and founder of an international iconic lifestyle brand FUBU, and original cast member/investor of ABC’s hit series Shark Tank, Daymond John, here’s your opportunity to hear it all from the Shark’s mouth. For those who were there, get ready to relive this amazing presentation.
The “People’s Shark” chewed on the following topics:
- If he were placed in the Shark Tank one year into FUBU, who would he be going after to get a deal and what would be the pitch?
- The struggles he encountered along his entrepreneurial journey including how he ran out of capital three separate times
- How he got the name, “The People’s Shark” (hint: it came from social media)
- The importance of brands educating their audience about their products
- How focus groups are now a thing of the past
- How to understand the consumer
- His criteria for green-lighting a deal
- How he advises brands and product-integration like he did for the Kardashians
- How the definition of entrepreneurship has changed for him
- The importance of “busting your ass”
- What drives him and how he picks himself up after hitting a low point
- How being rich isn’t the same as being successful
- What he would say to his 21-year-old self
The complete transcript is provided below for those who are at work and can’t watch with the sound on.
Ted Murphy: Thank you. All right, anybody here love Shark Tank?
Daymond John: Thank you.
Ted Murphy: All right, so we are so honored to have you here. I’m personally such a huge fan of the show. I watch it all the time, it’s one of the few things that I actually tune in to.
Daymond John: Thank you.
Ted Murphy: I want to start by actually rewinding a little bit.
Daymond John: Sure.
Ted Murphy: Thinking back to your early days at FUBU and understanding what it was like to be an entrepreneur and I want to know if you were placed in the Shark Tank one year into FUBU, who would you be going after to get a deal, aside from yourself, and what would be the pitch?
Daymond John: Whoa, tough. Well first of all, one year after starting FUBU I closed it three times after that because I ran out of money, so I would say the appropriate time for me to walk into the tank would have been right around my sixth year in FUBU. I was still working at Red Lobster but I had already known that the company was starting to get traction. I think knowing the sharks now personally, the one I would have went for believe it or not would have been Barbara. I think that Barbara has a fascinating way of cutting through the truth and still, as we just saw, I think Peter talk about is customer service and understanding what people really want, what motivates them. Mr. Wonderful wouldn’t have been great, I don’t want no royalty crap from him, you know? Robert’s too pretty. Cuban would have been cool, but he’s a know it all.
Ted Murphy: I’m happy to see that the banter that happens on the show, actually-
Daymond John: Oh no, it’s real.
Ted Murphy: Transcend the show.
Daymond John: Those guys are idiots. Now, Barbara would probably have been it, but I don’t know if FUBU would have been the cool, hip brand with old, crusty Barbara on the, I mean whatever, it doesn’t matter.
Ted Murphy: You ran out of money three times?
Daymond John: Yeah.
Ted Murphy: In the first six years.
Daymond John: Three times from ’89 to ’92 I ran out of capital, but the important thing about, for the people in this room to understand, is I ran out of capital but I only ran out of $1,000 and $5,000. I didn’t take out the $100,000 loan until I actually had $300,000 in orders. People think they need to do that, but the number one reason why small businesses fail is they actually fail because of over funding. They take out too much too soon.
Ted Murphy: Mm-hmm (affirmative), so what did you do in between then, you basically went back to work at Red Lobster to get more money?
Daymond John: Yeah, and today you know, I want to talk, because it’s hard, there’s a room here of brands and then there’s, or big companies and then individuals, and I want to really talk to the brands itself because if I can talk to them then it can power, they can understand more about the individual influences in the room. I think what drove me is the fact of all these influences. I was doing something that I really was passionate about and when I stopped, people would come back to me and say “I bought a shirt from you last year. What’s up? When you gonna do this again?” The business called me back, unlike when I was trying to do things for money and I never made money. It called me back the same way somebody can just start doing a beat box at home and all of a sudden, McDonald’s is going to them, and it’s just really authenticity. That’s what drove me back to the business.
Ted Murphy: When we talk about brands and building a brand, you’ve been dubbed the People Shark. Where did that come from and how does that drive you as you look at your role at Shark Tank?
Daymond John: Well because you know we’re at the day and age of the consumer is no longer what have you done for me lately? It’s what have you done for anybody lately, when they talk to a brand. These millennials, as are any consumer, they don’t need to buy anything. You’re never going to create anything new in this world again, it’s only going to be a new form of delivery, a new audience that you hit. If you’re a brand, these kids and adults are looking through you going, what have you done for anybody lately or are you just doing this for money? As I got onto the show, I realized only five years ago, everything I’ve done in my life, even though I wanted to make money, has always been what I felt for other people. For Us By Us was created for a community, not a color, but it was a community that was being ignored by brands, right?
My first book Display of Power was the power that you have inside of you, and now I’m on Shark Tank it’s about empowering people. People started calling me the People Shark because the only time I ever get irritated on the show is when somebody’s up there, they’re trying to raise a million dollars, they’ve already raised 10 million dollars, they’re trying to exploit the platform and they’re just trying to show off. Meanwhile, they took that opportunity from a hard working mother or dad who leveraged everything, they’ve done everything they could with $50,000 and all they need is an opportunity. I get mad at the people who try to exploit the platform, and then people started calling me the People Shark because I really wanted to help pull other people up the ladder.
Ted Murphy: Did that name come from social media then? People watching the show?
Daymond John: It did come from social media, you’re right, it did come from social media because we are the first show to start doing live tweeting. Mark Cuban had realized that the show was the top show watched kids from 5 to 15 years old, and parents of kids together. We started doing live tweeting and we started to understand how this second screen started to light up, as we call it, during commercials. It became the first screen, and we started to then push our information out through there, what you weren’t seeing on the Tank and then my dialogue, I guess you know people starting saying “Oh man, you’re like the People Shark” and I think that’s how we started to look at it and push the name out and embrace it.
Ted Murphy: Were you a big social media user prior to the Shark Tank or did that really kind of make you realize the amount of power that that platform has?
Daymond John: I think I was growing every single day, but I was using it first because I have a lot of young people at my office who are telling me the advantages of it. I was going through it at first when I was consulting, let’s say, I was consulting for a big chicken company and they wanted to catch up to their new competition. I said to them, what kind of campaign you want to run? They wanted to run all these other campaigns, but I said the problem with your brand is everyone thinks your chicken has steroids in it. Before you try to sell anything new to them, you have to take this stink off of your brand. I started to do it as well with FUBU. We started to hashtag FUBU and instead of the people who like FUBU, we wanted to hear what people were saying who didn’t like FUBU. We started to realize that people were talking about FUBU going either we sold the company, only made baggy jeans or the product we had out was crap.
We had to educate them that we didn’t sell the company. We were making form fitting, tight clothes in Europe from day one, it was the American hip hop kids that only wanted the baggy jeans and we didn’t put anything in the market for the last 10 years, so anything you’re seeing right now is 10 years old. If you look at Louis Vuitton 10 years ago, it still looks dated. We had to change that mind set. I was looking through social media and we were active with it, so we can understand what to do with our brand, personally and for the brands that I was working with.
Ted Murphy: Does that now become an active part, from the show’s perspective, are you guys now looking at social media as a platform that’s really integrated with each show? Like you have an idea before a show airs what you’re going to be talking about and how you’re going to be trying to engage audience to get more discussion around the platform?
Daymond John: We do a little bit of that, but we more look at the data afterwards and see how we can improve the next form of communication we put out there, and then we do it for all the brands we work with, you know, such as obviously with you. You don’t hear about focus groups anymore.
Ted Murphy: You don’t need them.
Daymond John: You don’t need them, right?
Ted Murphy: They’re happening all around us.
Daymond John: It’s all there, so we do it in all aspects of what we do at Shark Tank and personal brands. My team does it with myself as well. You know, you look at somebody like, I was having a discussion with somebody about a recent commercial Usher did about two years ago, three years ago, and he did it in the BMW and looking all cool, right? As an artist or an influencer, who is your real brand, right? There’s a couple of Ushers, there’s Usher the singer, Usher the sex symbol, Usher the rich guy, Usher the dad. If you’re doing a commercial as Usher and you’re talking about this sexy woman you like, and you’re in a BMW, those people aren’t buying your stuff. If you looked at a woman and she was walking out with two kids and you were talking to a guy about how beautiful and sexy this woman is, the 35 year old woman was the one who fell in love at 20 years old to Usher’s music. She’s going to be the one that’s going to buy your product, so you need to go about the automobile that is appropriate for her because she’s sharing your content and loves you 10 times more than the guy who cares if you’re sexy or has jewelry, right?
You have to really analyze who your real customer is, and I know that believe it or not, people think oh I’m the FUBU guy, this and that. I been on ABC for eight years, my core customer is a 60 year old middle American white woman. That’s my customer. Shout out to white women, that’s my customer.
Ted Murphy: All the white women in the audience, yeah!
Daymond John: You got to understand who your customer is.
Ted Murphy: That’s fantastic. Dove tailing that into the deals that you look at, whether it’s through the Shark Tank platform or I know that you do just a lot of mentoring in general, how important is a social media presence and their active monitoring of what their customer’s saying as you look at a deal? I actually hear that come up in the show where people will be like, we’ve got a million followers on YouTube. Does that matter? Is that a proof point one way or the other?
Daymond John: We know that quality is more than quantity, it’s extremely important that we know that our new investments have some level of technology and on social media conversion because right now with retail closing every single day, you can’t depend on that. Right now with the fact of membership programs and things of that nature, and you get full margin selling directly to your customer and you get full feedback, it’s extremely important. If I wasn’t on Shark Tank, I’d probably learn the most in anybody else. As much as I joke about the sharks, I learn from them, but I learn from these new kids coming up doing business a whole nother way. If I wasn’t on Shark Tank, I would have been still doing the same thing. Designing a shirt, maybe Macy’s buys it, maybe the kid who’s on Instagram all day at Macy’s with pimples on his face looking for a girlfriend, maybe he’ll take it out of the back room and put it on a rack, and the woman who buys it or the man or son who bought it. Who bought it? Why didn’t they buy it? Did they like it? Did they not like it? They bought it for themselves?
I would have no knowledge of this. Now, you know exactly who bought the product, you know that it’s a guy in Detroit, 30 years old, loves dogs, red cars, has chronic halitosis and dandruff, you know that that person bought it. Now I got to sell him something to wash your hair with too, right? That is the most important part. You have to have social media ability and I learned a lot from say, Brian at the Honest Company. Honest Company’s doing amazing with Brian and Jessica Alba and Rich, and they’re doing amazing jobs online, but they’ll look and they’ll realize that something is selling more than Orlando than some place else, they’ll call their stores and they’ll replace the goods with what is selling better in that territory, so they’ll also support retail from that side but it all starts with the fact of social media conversion.
Ted Murphy: You’re in a unique situation in that you’re working with companies, they have their own brands and you, yourself, are a major brand, right?
Daymond John: Yeah.
Ted Murphy: We’ve worked together on programs with technology companies in particular who are really interested in tapping into the entrepreneurs who are really inspired by you, and we’ve had the pleasure of doing a couple of deals together, but you’ve always passed on way more deals than the deals that we’ve done.
Daymond John: Right.
Ted Murphy: I know that you’re very discerning when it comes to green lighting something versus saying not a good fit. How do you make that call because the brands that do want to work with you are willing to pay you substantial sums of money, and you’re willing to say I’ll take a pass.
Daymond John: Well I think first of all as we’ve gotten to know each other, you present to me even though you know that I may not want to do it, because you say to the brands, I know you’ve said it to them plenty of times “Hey, he’s probably not interested but I’ll put it on his desk.” Don’t get me wrong, it’s not because financially I’m secure and things of that nature. The sharks in us, we all have a passion. Anything we do, we over do. You look at Mark Cuban, he’s in Sketcher commercials, whatever resonates with him, right? I want brands that will empower the people we’re talking to and it makes sense, and they’re giving value to them. A lot of times with the brands, the challenge they have is they say “Hey, Ted I really like Daymond John and here is the messaging” and we go, but you like him for the message that he puts out. Why are you trying to alter this message?
Ted Murphy: Yup.
Daymond John: Let’s approve the message that he’s going to put out to make sure it doesn’t hurt your brand, but you want this authentic voice. You want to keep it real, argument’s sake. That’s the biggest thing. How do we keep it real? I find that half the brands get it, and half go not with us, we’re just trying to spend our money, we need to get this off our books and here is the communication, and it just doesn’t work with me. I don’t want them to feel like we don’t want to work with people. We love working with brands, it’s just that it has to be authentic.
Ted Murphy: Yeah, and because of your profile, you’re in very high demand right, and so you got to balance, what do I take?
Daymond John: You do, you don’t want your followers to have sales fatigue. You don’t want to be pitching something every two minutes to them. After that, they’re going to say what are you doing this for? We look for brands that really work, and honestly, few brands get it. I’ll give you an example. We’re on ABC, we’re on Shark Tank, everybody no matter what has to address financial literacy and the ability to grow their business. You think an H&R Block calls me or you think anybody with financial instruments call me? They don’t call. They usually use stupid ass celebrities that nobody understands. No disrespect, and some of these celebrities are my friends and I’m not mad at them for getting a cheque. Insurance companies always use actors, why wouldn’t they use people who understand the value of insurance to protecting your assets? Why wouldn’t H&R Block or whoever these people are use people who told you the value of taxes before you end up in jail? You understand what I’m saying?
A lot of brands they just don’t get it, and I stopped advising brands for years. I was managing the product integration of the Kardashians for their first four years. I walked all three girls around to all my friends in the fashion district, some of them were creating brands. I promised them the girls would wear all their clothes, all three of the girls for $75,000 the first year. Some of my friends just called me two years ago and said “Hey, I got $75,000 for the girls.” Hey you stupid, they won’t even pick up the phone for $75,000 now. Brands are so late, all the time.
Ted Murphy: Yeah, I remember we did our first tweet with Kim Kardashian in 2009 and it was $10,000 and people were like $10,000?
Daymond John: Are you crazy?
Ted Murphy: For a tweet? That would be unheard of today.
Daymond John: That’s why in the first three years, they’re all wearing my brand KUJI because I was like, screw you, you ain’t gonna pay them then I’ll pay them. Here you go.
Ted Murphy: You spend a lot of time with entrepreneurs and obviously that’s what you live and breathe. How do you think the definition of what an entrepreneur is has changed over the years?
Daymond John: That’s a good question, I don’t think I’ve been asked that before. Entrepreneurship is not new, we’ve been bartering and trading since the beginning of time. This country was created off of it. Everybody used to think, maybe 10 years ago, that entrepreneurship is I want to build a billion dollar brand. It’s not that any longer, it’s I want to build a great podcast and all that, just educate people and empower myself. The brands are being splintered now. You know, when I grew up there were three stations ABC, CBS and NBC. Now there’s 300 stations and it’s the same exact thing happening with brands and entrepreneurs. Entrepreneurs are each individual now who can have a business doing as little as, it’s not little, but $100,000 and you’re putting $70,000 in your pocket. It’s just being very splintered and each independent person is becoming a brand and an entrepreneur, and they’re realizing that now.
Ted Murphy: How do you compete with all that fragmentation? I guess that’s the question, how do you stand out as an entrepreneur as somebody who might be a creator who’s doing their own little podcast or they’re making honey, right. How do I actually even get to that $100,000 level?
Daymond John: Yeah, so, it’s a secret honestly that almost every successful person knows and we’ve been holding it back from the entire world, on how to become successful. We have been. Most of us been doing that. You got to bust your ass, that’s it. You got to wake up before everybody, go to sleep after everybody, keep it real 100%, never quit and bust your ass. That’s it. You have to bust your ass, that’s it. There’s no secret. Everybody thinks there’s a secret. You have to bust your ass and you have to fail and fail and fail and fail and keep busting your ass.
Ted Murphy: I love that. Have you ever read the book The Secret?
Daymond John: I have.
Ted Murphy: You have, and if you keep thinking about the bicycle you’ll get the bicycle.
Daymond John: There’s no difference, Think and Grow Rich is about desire and drive, The Secret is about meditating, everything else. Mark Cuban’s book Will to Win, mine The Power of Broke, Go Bust Your Ass, Robert Herjavec Driven. We keep saying the same shit to everybody and they keep on coming to me going “Yeah, why don’t you tell me how to be rich, man?” I don’t get it.
Ted Murphy: In your book The Power of Broke, you talk about the fact that throwing money at a problem is not going to fix it.
Daymond John: Correct.
Ted Murphy: What typically does fix the problems that entrepreneurs come up with?
Daymond John: It’s very hard to say a nice, fluffy answer but it is rolling up your sleeves and getting into the business, and I’ll explain the Power of Broke. I learned the value of the Power of Broke more when I had money, when I acquired a company called Heatherette. I put $6 million into advertising, marketing, these great fashion shows and $6 million later I lost the money, I’ll tell you why. Heatherette is a brand that was ran by two really amazing designers named Richy Rich and Travor Rain. They had all these great fashion shows, everybody would go on the show like Naomi Campbell would walk for free. Kimora Lee Simmons would walk the show for free, and these women charge $150,000-$200,000. When they finally got backed by me of course, people wanted to get paid.
Now, you and I, every man in the world, there’s two sizes to a 32, 34, 36. There’s 32 regular, 32 long. A woman’s body, there’s 17 sizes or 18 sizes to every one size. If a woman wears a six, there’s a six with the butt gaps, the thighs too big, the thighs too small, whatever the case is, so there’s about 17 sizes to a size six and a woman will not buy a pair of jeans unless it makes her hiney look fantastic, all right. Now, what we found out is these guys they were great costume designers and they weren’t great ready to wear people, so they’ll take Naomi Campbell, put an ace bandage on her all the way down to her ankles, spray paint her put a garbage can on her head and push her out on the runway. She’ll look great, but they couldn’t make everyday clothes fitted like that. I didn’t learn that lesson until $6 million late because I didn’t put my ass at the sewing machines with them and realize what was going on, so I lost that money.
Also, when FUBU started to decline, I would keep spending money and buying more ads, but I was buying into the curve instead of going back out there and seeing what was happening. I learned that no matter how big you are as a brand or how small you are, you have to go in there and roll up your sleeves everyday and be there.
Ted Murphy: You got to try on those women’s jeans.
Daymond John: Well you have to have your wife do it, my wife never tried them on at the time. She said to me “Why didn’t you ask me?” I didn’t think about it.
Ted Murphy: You talk about busting your ass, talked about the fact you’ve gone broke multiple times, you’ve run out of money. What drives you? What gives you this hunger for success? Why can’t you just sit back?
Daymond John: I can, but you know I’ve learned that we’re at an amazing time in our lives and things are changing drastically with technology and I realized that over the last five years or even the next five years, I need to know the fundamentals of what’s going on so I can apply it to my life. At the end of the day, I’m 47 years old and I don’t know how to do anything else. I love business. I’m going to probably do this until I’m 70, 80, 90 in some form or another. Even if I retire and everything I’m going to do is a non profit to stop human trafficking or something in that nature, I still need to know all of this stuff that’s going on. If I don’t know these fundamentals of this crucial time that things are changing, then I’m going to be so left behind 10 years from now and 20 years from now, and I see it with my colleagues in the industry every single day. I do see different colleagues out there who are practicing innovation, bringing millennials into their company and realizing their mentors don’t need to be old or sometimes it’s reverse mentorship.
They need to be younger. The ones that change are just like me, they always are learning. You never stop learning. There’s no level of success that’s a name, a price the size of a house or an education. You never stop learning and that’s why I do it. I love what I do.
Ted Murphy: At what point do you know that you’ve had some level of success, right?
Daymond John: Yup.
Ted Murphy: From what I hear from entrepreneurs a lot of times is, when did you know that you hit it? I’m like, I’m not successful yet, there’s people that I look up to, that I say oh man, that guy’s successful or that woman is successful.
Daymond John: Yeah.
Ted Murphy: Where do you feel you are in that curve?
Daymond John: I agree, I feel that I’m successful but it’s not because of money, it’s because I went through this curve. I was successful, my businesses went down, I then came back and did them again and kept going. I feel that hopefully I’m successful because I’ve tried, because I’ve been blessed I’ve been trying to educate people and hopefully I’ve changed one or two or three people’s lives, and I can consider myself successful there. I’m not up at night wondering how much more money I can make. Trust me, I’ve got a decent amount of money but I always say, if Mark Cuban woke up with my money he would blow his brains out. You know what I mean? There’s no number, and I always say if Bill Gates woke up with Mark Cuban’s money, he would blow his brains out. Success is not about money. I’ve been fortunate enough to have my health and I have three daughters, and stuff like that, so I’m sorry. I am successful but to answer one part of your question, on my rise I probably have only felt successful in the last four or five years, but on my rise I’ve always had this healthy paranoia that I’m going to lose it all. I’m going to lose it all. It’s a healthy paranoia that people should have. Don’t get too comfortable.
Ted Murphy: When you were at your lowest of lows, how did you pick yourself up?
Daymond John: At my lowest of lows was when I lost my, I got divorced, and I lost my family at that point and I realized that I was hanging out partying too much, things of that nature. I picked myself back up by realizing that what I was doing was trying to live up to what I thought success meant, it meant a bunch of cars, hanging out with all my celebrity friends. When I turned around and realized that going back to authenticity, that I wanted to go and start educating people, I never wanted to be a TV star, whatever you want to call it. I wanted to be like a newscaster. I wanted to share information. I went and I started going to Donny [inaudible 00:25:22] at NBC, and here’s the reason why. I grew up with a lot of celebrities. I grew up in Hollis, Queens. LL Cool J, Salt n Pepa, Run DMC, all these people. I used to see them being harassed, so I said to myself if I’m going to be a newscaster, nobody harasses a newscaster. Nobody says “Walter Cronkite, look at these.” Nobody does that, right? So I said I want to be a newscaster.
I started going to Donny’s [inaudible 00:25:43] CNBC, and then all of a sudden because I wanted to educate people, all of a sudden what happens? Mark Burnett calls and he goes I have this show with five business people, and I go, nobody wants to see five business people talk crap and all that stuff, and I said I’ll do the stupid show called Shark Tank, whatever it is. Now all of a sudden look where I’m at, right? What happened was I lost everything and I said to myself, I’m not happy. I have all the money in the world, I have celebrity friends, I’m partying. What am I going to do that makes me happy and was somewhat trying to empower people and give back, and what happened when I started doing that? Nobody can foresee the fact for Shark Tank being what it is, boom, my career started again. It happened exactly when I started FUBU. I wasn’t happy trying to do things for money, I just wanted to make these T-shirts, and I just kept at it and then all of a sudden, boom. It always happened when I just did exactly what I was super passionate about.
Ted Murphy: If we could rewind back, say 21 year old Daymond, sitting on the couch here, what would you tell him?
Daymond John: I would say Daymond, you have to first of all have financial intelligence, because no matter what, I don’t care if you’re just balancing a checkbook at home or you have a massive company, you need to know how numbers work, number one. Number two, you have to surround yourself with amazing individuals that have the same goals in mind, and every single one of them need to know where there position are in the company. Number three, please take affordable steps on anything you’re doing. Just try a little bit, try a little bit, learn and then repeat it, and then when you’ve mastered what you think it is, then you can bring in investments or bring in other people or expand it, because you’ve ensured the way it’s going to scale. Do your homework, he said it earlier today, the guy talking about, what was it, oh shoot.
Ted Murphy: Peter?
Daymond John: The guy right after the air guitar guy.
Ted Murphy: Peter.
Daymond John: Peter, yes, Peter. You have to do your homework. Google is your friend. You will never create anything new in this world again. Listen, Uber is still a limousine service. Air BNB is still time share, and if you think that the Snuggie is not a blanket with holes in it, you crazy. There’s nothing new. What is new? There is nothing new. Facebook is a nasty chain letter, it is.
Ted Murphy: We are out of time. Daymond John, thank you so much.
Daymond John: Thank you.
Ted Murphy: The People Shark, that was amazing.
Daymond John: Thank you, thank you, thank you everybody.
Ted Murphy: This guy right here.