The Making of FUBU — An Interview with Daymond John 114 Comments
The following is an interview with Daymond John, CEO of the clothing brand FUBU, whom I’ve come to know and respect. If there were one mantra I’d associate with him, it’s “where there’s a will, there’s a way.”
Can’t afford billboards? No problem — just pay retail store owners in key areas to let you spraypaint “FUBU” on their overnight roll-down security walls. His drive and improvisation has led him from sewing cloth in his kitchen to #15 on Details magazine’s list of “50 Most Influential Men.”
It would seem he’s just getting started, but I’ll let him tell the story…
TIM: Many entrepreneurs launch their companies in addition to working a full-time job. How did you manage your time when launching FUBU to get the company going? When did you decide to quit the day job and make this a full-time operation?
DAYMOND: It was incredibly tough, but the passion for the project pushed me through. If your project doesn’t do that for you, well, maybe you need to sit down and revaluate. Even though I had placed our product in the hottest music videos out there, I was still working full-time at Red Lobster. To the public, FUBU was a huge company. Little did they know that I was still serving them shrimp and biscuits!
After a couple years of seeing FUBU as a hobby, I decided to get serious and stick to a standard daily schedule. I would wake up at about 7 or 8 in the morning, and I would sew the hats by myself, tag them, answer a couple of orders that came in overnight. Then I’d take the hats, package them, and begin to ship them out. I took care of all of that until about Noon or 1 PM. Then I’d hit up Red Lobster around 4, work there until midnight, come back home, make more hats, and tally up any orders until about 1 or 2 in the morning. I’d start the routine all over again the next day. I did this for about two years straight.
After my three friends joined the company, the business really started to take shape. With the extra hands, I was able to focus on growing the business at a much faster rate. At the point where I had enough money to quit (I didn’t really have enough to quit the job, because I had taken out this $100,000 loan), I decided that I had to give the business all of my attention and effort. So I quit Red Lobster around ’95-’96, and went completely full-time with FUBU.
In entrepreneurship, you decide to give up your day job at the point where either (A) the hobby/new business is at least making some form of ends meet, or (B) you feel that you need to dedicate yourself for a certain amount of time to it and give yourself the last hoorah.
What were your initial struggles with launching FUBU and how did you overcome them?
Like most entrepreneurs, the initial struggle was to go past the point of imagination and make it a point of conception, where I was actually putting together a product and producing it. Everyone has an idea, but it’s taking those first steps toward turning that idea into a reality that are always the toughest.
However, once you take those first steps you will be confronted with another obstacle, and I don’t think there’s just one tipping point for a company, but a string of them. For example, once I decided to put my idea on paper, I had to find a local screen printer. Then, I faced the challenge of increasing sales. Since I knew the stores wouldn’t buy it, I put my product in them on consignment. After I got to the level of making more goods on a consistent basis, I had to figure out how to create a sustainable structure for manufacturing the product, so I mortgaged my house, moved sewing machines into my home, and hired seamstresses.
It’s this string of obstacles that separate the people that truly want their company to succeed from everyone else, because so many questions hit you so fast. It’s just a matter of not letting these challenges keep you down and finding solutions no matter what. It can be overwhelming at times but just be prepared for it. The more forward-thinking you are and the better plan of attack you have to grow the company, the easier these questions will be to answer.
What were some of your first big marketing wins to promote FUBU?
The first big break was when we went down to Virginia and met up with Ralph McDaniels, who had a video show like MTV and VH1, and he fell in love with our product. At the time, Ralph was throwing a big weekend event for Teddy Riley, a producer and musician that really shaped Hip-Hop and R&B. He came back to New York and decided to put us on a local video channel for an interview about FUBU. We all knew the FUBU brand was closely associated with music, but this hit created some immediate buzz and showed us the way to market our product unlike any fashion company out there yet.
We then concentrated in getting our product into music videos. We would sit on video sets all day trying to get the artists to wear it. First it started with Brand Nubian in one of their videos, then Ol’ Dirty Bastard wore it in a Mariah Carey video, then Busta Rhymes wore it on one of his videos, and LL Cool J decided to wear FUBU on the “Hey Lover” video with Boyz II Men. Our product was front and center on the biggest and most influential personalities for our core consumers.
One of the most well-known hits we had with LL was during a Gap commercial. He was wearing a pair of Gap jeans and a Gap shirt, but he was somehow able to sport one of our hats during the commercial. Then during his thirty-second freestyle rap, he looks directly into the camera and says, “For Us, By Us, on the low.” No one at Gap nor any of their ad execs thought anything of it. It wasn’t until a month later that someone at the Gap found out, pulled the commercial, and fired a whole bunch of people after they had spent about $30 million running this campaign.
Historically, the Gap commercial is one of the biggest coups known to date in the advertising world. But in Gap’s defense, they were smart enough to realize a year later that, because FUBU had limited distribution, African-Americans, Latinos, and the hip kids of all colors thought that FUBU was actually available at the Gap. So they saw their numbers spike during the LL Cool J campaign. Gap repackaged the same commercial and committed two times the amount of money in advertising that commercial in the following year. If you look back at Gap’s numbers, that was around the time where they had some of their highest returns.
How did you take FUBU from a t-shirt and jeans company to a global brand?
This wasn’t easy, and the best way to say this is that I ended up finding a great strategic partner in Samsung America, who understood global distribution. It’s the basic lesson of starting a company: If you don’t know how to do something, find someone who does. I could not have done this alone, whether it was by having the knowledge or financing it myself. Samsung directed me, guided me, and assisted me in my global expansion. Also, with a huge international company like Samsung on our side, we instantly had an incredible amount of clout with all the retailers.
How important is social media for your various fashion brands? How do you best utilize it?
Extremely important. Even if you aren’t putting out a message, the first thing that you can do with social media is find out and understand why people like or dislike your brand. This is like having a focus group—a focus group that’s not sitting in your office, getting paid by you while you’re looking in their face for them to give you an answer. You actually get to see the reality of what people think about you. And at that point, you have enough knowledge to make the proper adjustments. It’s very hard to cure something if you don’t know the ailment. Social media is a great acid test.
When I first started my brand before all this technology was available, it was just putting it out in people’s faces and talking to them. But the good thing is, before you go and mortgage a house like I did, or sell the farm, you can push your brand out in the market and see how many orders you get on your website, how many people follow you on Twitter or friend you on Facebook, and request your product. This info will let you know if you have a winner or if you should go back to the drawing board and reconsider.
How have the fashion and soft goods business worlds changed since you started FUBU?
When I started FUBU, practically no one was directly addressing the young hip music/African-American, Latino market. Now there are many people addressing them. It’s similar to how TV, at first, only had a couple of channels. Now there’s a station for every topic, catering to every niche.
The fashion world has changed in that there’s nothing new to target for a certain segment. Or at least, there isn’t one on my radar. Maybe just how people didn’t see FUBU’s segment as an opportunity, it just isn’t as apparent right now.
The most recent challenge is the increased price of cotton, which has dramatically increased the price to make goods. So you’re going to start seeing one of two things. You’re either going to see very clean, inexpensive goods where the products are basically white t-shirts, jeans, or things along those lines. Or you’ll see it go in the complete opposite direction, where the luxury brands go overboard and bring in bigger numbers because they have the free retail stores. When you have retail stores, you can set up the goods the way you’d like them to be seen. The benefit of having a retail store is that there’s no competition with other brands to slash prices, and you become ‘one of very few,’ instead of getting lost in the mix of other clothing lines that compete for space in the Macy’s, the Burlington’s, and all other department stores. So, it’s a very challenging time for clothing companies right now.
Did you know much about manufacturing when launching FUBU? If not, how did you learn about it so quickly and effectively?
I did not know much about manufacturing—I did know how to sew, but that’s different than manufacturing. Sewing is an ability; manufacturing is a knowledge. Manufacturing is about how much per square yard you are using and how to do technical packages. For example, you need the knowledge of how to interpret your designs for overseas, how to be cost effective, how much embroidery machines may cost per hour to run, how much it costs to ship the product back to the States, etc.
Luckily, one of my partners went to FIT [Fashion Institute of Technology] and he knew that side of the business. Also, working with Samsung, they were able to pass on that knowledge to me. It worked out well having that part of the company focus on that aspect, because it allowed me to focus on our marketing initiatives and how to keep the brand fresh.
If you don’t have the partnerships available or you can’t find a team member with that knowledge, try to intern or shadow for someone who does. It gives you a lot of hands-on experience and it’s less expensive than paying for that education. Although you don’t get compensated for it, at least you don’t have to pay for it. If I had that internship experience before starting FUBU, it would have accelerated even quicker than it did. It probably would have cut the time I spent learning it on the fly in half. Education and knowledge is key. And I always say, the only thing more expensive than education is ignorance.
On your show Shark Tank, you must look at hundreds of companies. What’s the first thing you look for when deciding whether or not to invest in a company? Do the other Sharks and investors you work with share the same approach?
After the first season, I realized that the first thing all investors look at is the person. When we’re being pitched live, we always look at the person who is pitching and cast our judgment based on whether or not we would want to do business with them. After that, our ears are tuned to the things that will confirm whether our assessment is accurate—that they are a good or a bad person to be in business with.
This actually inspired me to write my book The Brand Within where I mention how we build upon our brand from the moment we were born; we also, inevitably, tend to make immediate judgment about others. And it’s because of this, that we should always be conscious of our self-image, our brand, in order to maintain a desired reputation. It’s something most entrepreneurs seem to forget when pitching me.
After measuring the person, you have to look at it from a totally business standpoint. I look at the product and ask a couple questions to myself. I focus on:
- What void in the marketplace does this product fill?
- Who are the core consumers? Has this company correctly marketed to them?
- What are the sales?
- What are the distribution channels?
- How much does this entrepreneur know about his own industry? (Note: HUGE pet peeve if he doesn’t)
- Is the business on an upswing? Or has it peaked?
- Is there room for profit and growth?
- What is that plan for growth? Is it laid out or simply another idea in the entrepreneur’s head?
- Is the evaluation of the company fair?
- How can I best help this company?
The answers to these questions are key and the entrepreneur should always be ready for these. If you don’t have rapid-fire answers to these questions, there’s a problem.
My favorite thing to look for is whether or not the product is proprietary or patented, and whether he/she can prove it. Not only do you have a documented competitive advantage, but it also means that in the event he or she is a bad business partner, you can potentially buy him or her out totally. However, at this point in the game, the evaluation of the company could be a little obstructed because of the potential inherited value that the patent holds.
Do you think Shark Tank can educate entrepreneurs looking to take his or her company to the next stage of personal or financial growth?
I believe the educational aspect of the show is one of the best things for all entrepreneurs. I know undergraduate and MBA professors use the show as a tutorial for their entrepreneurship classes. It gives them something beyond text to show their students.
Members of the VC community love the show because it gives entrepreneurs a checklist of things they need to have in order to be taken seriously, such as sales numbers, how many stores they’re currently in, patent info, can they pitch the product efficiently, etc.
When I started my business, I had no understanding of what investors were looking for and why they would want it. A lot of entrepreneurs just do not understand how to evaluate their product and make it attractive for others.
If people study the pitches to see what caught our attention and what completely lost us, you’ll definitely be a lot more prepared. On my own site, I’m going to do commentaries with top professors, marketing strategists, and business executives to show viewers the real business lessons you can easily learn from the show.
In your opinion, should the entrepreneur focus primarily on promoting his company or promoting himself or herself?
Generally, I’d say that every penny and ounce of hardwork should be focused on the latter. I believe that in any business (or in anything in life), if you do not have a strong foundation, the rest will crumble. If you aren’t 100% completely focused on your company, you can easily lose motivation or focus.
With all that said, I recognized when launching FUBU that “For us, by us” was such a powerful statement, and I knew that the world needed to see we actually meant it. That’s why my three business partners and I were at the front of a lot of our advertising and media. It communicated to our community that we were authentic and so was our brand. You always need to keep in mind that people are constantly looking at you and your legitimacy to see if the company itself is legitimate.
What books, people, or media inspire your inner entrepreneur or teach you new lessons about business?
I love Think and Grow Rich. I think that it inspired more people because of its methods for setting goals to become a person of wealth. I also love Robert Kiyosaki’s Rich Dad, Poor Dad because of its focus on financial intelligence.
Those who inspire me are the people all around me. I’m inspired by the people on Shark Tank—not just by my fellow sharks, but the people that pitch on the show, too. When I see the challenges they’ve had to overcome in life, and the crazy and ingenious things that they’ve developed, I’m humbled and amazed.
On the flip side, people who have failed and people who are currently failing also inspire me. I will always understand that I, too, could be one of those people if I don’t take heat and learn lessons everyday.
What’s next for you?
There’s a lot coming up that I’m extremely excited about. Obviously, I’m still very involved in the fashion world. I’m working on some Shark Tank products that I’ve acquired during this new season. There are two companies in particular that I think are going to be huge. And I mean HUGE, so you’ll have to check out the show this season to see what I’m talking about.
I’ve been doing a lot of keynote speaking at conferences, schools, and company functions. I used to do it sporadically, but now it’s a major focus of mine. Whether I’m speaking about motivation, entrepreneurship, business negotiations, or marketing, it’s extremely rewarding to speak to thousands of people at a time and share simple lessons I’ve learned that will make their own careers a bit easier or help them see life in a different way.
Another big project is a company I’m starting that shows a new marketing approach for what I see as the new age of media.
I believe there is a shift happening as to who actually controls the media (and will continue to hold it) that is very different from what everyone else is saying. I see the top-level celebrities out there as the new media vehicle. Consumers watch their every move in reality shows, social media, music videos, magazines, etc. They’re the masters of both old and new media, and if brands want to stick out from their competitors, they need to align themselves with these celebrities. So I’m acting as a facilitator between brands and celebrities, and showing companies how their brand cannot only just be part of pop culture, but rather engrained throughout pop culture. The way I did that with FUBU was not just a random occurrence, and I know how to emulate that for any type of company.
For this project, I’m in the process of teaming up with the best possible strategic partners. As I said before, this is always key. On the celebrity side, I can’t say exactly who I’m working with yet, but they’re all A-list, household names. They’re all looking forward to working with brands in ways that celebrities haven’t been utilized before. One person I can say is on our roster is the music superstar Pitbull. Not only is he a huge international star, but the guy is incredibly sharp and savvy. He crosses so many genres and resonates with so many people, it’s amazing.
On the business side, I’m already working with Jeff Hayzlett on a project for the Miss Universe Organization, which is very exciting because of the brand’s huge global presence and I love working with incredibly intelligent people like Jeff. I’d love to team up with an advertising agency to give them access to our celebrity roster and our marketing insights.
I just need to find the right one that sees the true value in this direction.
To download a free e-book copy of Daymond’s book, Display of Power, follow the directions below:
1. Click this link: http://bit.ly/avAW4B
2. Fill out your name then use the following info to download:
- Referrer: Daymond John
- Password: theshark
Posted on April 7th, 2011