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When wide-eyed business owners walk down the corridor of the hit TV show Shark Tank, there is only one investor they will stand before who created a $6 billion enterprise that gave birth to a new wave of black entrepreneurs: Daymond John.
Russell Simmons has said that if there were no FUBU, there’d be no Phat Farm—and, while he’s at it, no Rocawear, Sean John or any other clothing line that the superstars of hip-hop’s golden era peddled as an extension of their music brands. John began selling his FUBU T-shirts to his rapper friends in the 1990s while he was waiting tables at Red Lobster. He leveraged that into a multibillion-dollar franchising opportunity that allowed him and his business partners to slap their logo on other entities, like women’s clothing, a suits collection, eyewear, perfumes, hats and shoes.
When LL Cool J appeared in that iconic Gap commercial in 1997 donning a FUBU hat and explicitly rapping the words “For Us by Us” (spelling out the company’s acronym), it became clear that John’s FUBU brand had infiltrated mainstream corporate America in an innocuously stealth—yet brilliantly strategic—way. As music executive Steve Stoute describes in his book, The Tanning of America: How Hip-Hop Created a Culture That Rewrote the Rules of the New Economy, urban commerce was moving at a pace faster than white America could grasp or even understand.
Since then, John has gone on to accrue a successful portfolio of investments that has cemented his role as a keen businessman and entrepreneur. After several appearances on business talk shows, John got the call from ABC and became the first and only African-American investor on Shark Tank. The popular show features early-stage business owners and hopeful entrepreneurs pitching their ideas to five “sharks” (investors) in order to get money to grow or start their businesses.
John spoke to The Root about his experiences and dished out a few key pieces of advice about what it takes to succeed as an entrepreneur.
Don’t Buy Into the Hype
John expressed a gnawing frustration about a common mistake made by well-intentioned people with great ideas for a business. They buy into the hype—literally.
John describes how early-stage entrepreneurs often create the environment they think they should have in order to succeed. They get a loan or take out an exorbitant amount of money from their 401(k) plan or savings account to rent office space, hire a secretary and pay a lawyer to process patent applications. They’ll even spend money for fancy and expensive packaging for the product. And yet they haven’t sold a single thing.
“Go out and start selling the product,” John stressed. He explained how only customers can give business owners the feedback they need to focus on the most important aspect of the entire operation: sales.
The Power of Black
John wants black Americans to feel empowered about the market share they hold in marketing and social media. According to Pew Research, 40 percent of black Americans ages 18-29 who use the Internet use Twitter. John calls this a “strong focus group” that black entrepreneurs can leverage for promotion and to see how customers might react to their product.
And while it may be difficult to hear—and some black people may cringe at this advice, especially coming from rich black folks—John cautions against black entrepreneurs walking into pitch meetings with the “I’m an African American” chip on their shoulder, thinking that race somehow puts them at a disadvantage.
“You’re a person first,” he said. He describes how every single person has his or her own issue, so it’s best to think of yourself as a great person first, with a magnificently profitable idea, who happens to be a person of color.
Take Affordable Next Steps
There always comes a time when an entrepreneur must decide whether to stay at a 9-to-5 job or devote him- or herself 100 percent to the business. John describes how the best entrepreneurs, at every level of the game, take “affordable next steps.”
“Take Facebook, for example,” John explained. Mark Zuckerberg created the social media network for his friends and peers at Harvard. Then he extended the site to other Ivy League schools, then to more colleges, and so on and so forth—and, finally, the world.
“Don’t just drop everything,” John advised. “The great entrepreneurs sell a couple of cupcakes or a couple of hats and then keep it moving.” Learning about the business while operating at a smaller scale and having revenue come in from a secondary source is optimal because the stakes are low and the entrepreneur’s learning potential is high.
Diana Ozemebhoya Eromosele is a staff writer at The Root and the founder and executive producer of Lectures to Beats, a Web series that parses those compelling topics in your favorite TV shows, songs and movies. Follow her on Twitter.