When television producer Mark Burnett called Daymond John in 2008 to ask if he’d like to be on the upcoming series “Shark Tank,” it was the perfect time in John’s career for something new.
His clothing company FUBU was bringing in $US300 million in revenue at its peak, but its popularity waned in the early 2000s. John had investments in about 10 different fashion companies, and all but two or three were severely hurt by the recession.
When Burnett called, John was already considering branching out into different industries. He took the job and the show debuted the next year.
Eight years later, John manages more than 60 “Shark Tank” companies through his company The Shark Group, and recently started a new co-working space company, Blueprint + co, partially as a way to build relationships with more seasoned entrepreneurs.
Business Insider recently met John at the New York high-rise that houses both The Shark Group and Blueprint + co, to discuss what he’s learned in the past eight years as a Shark. We’ve also added a couple more insights from his 2016 book “The Power of Broke.”
There’s a lot to learn from young entrepreneurs.
John and the other Sharks are typically more hands-on than most investors, and look to partner with entrepreneurs they can mentor. But John also found that he’s learning as much from his best entrepreneurs as they are from him, especially young ones — like Scholly founder Christopher Grey, who’s in his early 20s.
“There are kids who are 18 years old who are communicating in a whole different way and you need to understand what’s going on in their minds,” John said. “How are they communicating and sharing these messages, and how can you convert that to sales?”
Companies benefit from social causes.
“Nowadays you shouldn’t have a company that is not contributing in some fashion or form or sense to a cause, because the people today who buy a product, they want to know what have you done for somebody else lately,” John said.
Analytics can cut costs.
John works with his “Shark Tank” startups to run as efficiently as possible, and he’s realised that “granular” online analytics can be used to keep a company focused on its target customers, and produce what they are buying, rather than producing a money-wasting stock of unsold products.
A reliable team is essential.
There’s no way John could keep a close eye on each of his “Shark Tank” investments, and it’s why he hires about two new Shark Group employees each season.
When John first joined the show, he was losing money on consultants and temporary employees, before he realised a close-knit, permanent team of specialists not only benefited him, but gave his entrepreneurs better guidance.
Emotions are dangerous when making deals.
In his book “The Power of Broke,” John explained that when he joined “Shark Tank,” he found himself getting caught up in the excitement of a bidding war with his fellow investors, even if he was seeing something he normally wouldn’t want to invest in. He realised he needed to keep a steady head when considering a deal, and not let a competitive spirit or an impulse override logic.
Throwing money at a problem doesn’t solve it.
In “The Power of Broke,” he wrote that he lost $US750,000 the first season of “Shark Tank” because he would make impulsive investments and then think he could turn around a poor company by continually injecting it with capital. He was doing the same with his own business, as well.
“I lost a bunch of money because I found myself making decisions in ways I’d never made them before,” he wrote. “I was spread thin, with all these new demands on my time, so a lot of times I would just throw money at a problem and hope that would take care of it. But of course, that’s not how it works, right?”
NOW WATCH: ‘Shark Tank’ star Daymond John: Making products in the US could cost consumers 25-30% more
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