By Nancy Dahlberg, firstname.lastname@example.org
Shark Tank star Daymond John parlayed his passion for hip-hop and entrepreneurship to go from waiting tables to founding and growing FUBU, a $4 billion urban fashion empire.
But as John told nearly 400 entrepreneurs in a Fontainebleau ballroom Wednesday night, there is no such thing as an overnight success. His phenomenal entrepreneurial journey took more than a decade and included plenty of roadblocks and detours. Speaking for more than an hour, the entrepreneur who also stars in the popular ABC business reality show kicked off Entrepreneurs’ Organization’s global four-day conference called University, which continues through Saturday in Miami Beach.
“For two years we had 10 T-shirts, and for two years we would go out and put a T-shirt on a rapper [doing a video] and then he would give it back,’’ John said of FUBU’s early days. “We got on a lot of videos. We were perceived as a big company and I was still working at Red Lobster.”
Russell Simmons, LL Cool J and John’s mom figured prominently in his story, along with a Las Vegas trade show. Lacking the money to exhibit or even get into the show, John and his friends set up their products in their hotel room five miles away, then snuck into the show and convinced some fairgoers to check them out.
“Out of that little hotel room we wrote $300,000 in orders. ... Then it hit me, I have to make $300,000 worth of clothes and I don’t have any money,” he said. Twenty-seven bank loan rejections later, his mother took out a $120,000 second mortgage on her house. He moved in 10 industrial sewing machines.
“As entrepreneurs, we don’t do our homework. I didn’t have financial intelligence; I was blinded by the potential. ... The factory was cranking but what started killing me was the float. I thought I was about to go bankrupt.”
The turning point: Through a “need financing” ad placed by his mom, Samsung Textile Division provided financing as long as he would sell $5 million in three years. He ended up selling $30 million in three months. When LL Cool J appeared in a Gap commercial wearing a FUBU cap, sales shot to $350 million.
“We were on our way, there was no stopping us,” said John, who has owned property in Miami Beach and visits often.
Shark Tank, the show in which the “sharks” evaluate entrepreneurs’ pitches and sometimes invest their own funds into the ventures, is now in its 4th season. What you see on TV is just a sliver of the grilling the entrepreneurs get on Shark Tank, John told the audience. That was confirmed by Yuan Yung, an Entrepreneurs’ Organization member from Texas who appeared on Shark Tank a month ago to pitch his custom sushi shop How Do You Roll? — and received a deal from Shark Kevin O’Leary.
“As entrepreneurs, we are pitching all the time,” said John, who has written books on branding. “The only way we are successful at pitching is to pitch what’s in it for the person we are pitching to. ... If you watch the show, you know what the sharks want.”
The Entrepreneurs’ Organization conference — which also included other speakers and workshops, including an event at the Miami Freedom Tower Thursday night — continues Friday with a speech by Manny Medina, founder of Terremark.
EO is a global organization with 8,000-members from more than 40 countries. All members must own businesses that bring in at least $1 million in revenue. The local EO chapter, EO South Florida, partners with universities and community organizations on entrepreneurship-related projects, hosts an accelerator program for promising small businesses under $1 million in revenue and holds an entrepreneurship contest for college students, said Dr. Mark Sanna, CEO of Breakthrough Coaching and president of EO South Florida.
The 150-member EO South Florida, the global group’s fourth-largest chapter, has been planning the annual conference for more than two years, said Aaron Lee, president of Illuminati Studios and an EO South Florida board member. Entrepreneurs from 27 countries — including Saudi Arabia, Japan, Malaysia and Australia — are attending this week.
Earlier in the day Wednesday, EO co-sponsored a BritWeek Visits Miami event with UK Trade & Investment about tech entrepreneurship, in which a panel of local and British experts discussed successes in London’s “Tech City” and explored ways to continue building a tech hub here. “It’s an exciting time to showcase entrepreneurship in Miami,” said Lee, who organized the lunchtime event for EO South Florida. (More about this event tomorrow in Starting Gate)