- “Shark Tank” investor Daymond John got his start when he founded clothing brand FUBU in Queens, New York in 1989.
- By 1996, he had $US1 million in total sales, but was still running the company out of his house, which he had essentially converted into a factory.
- That year, he placed a straightforward ad in the New York Times asking for funding. It led to an international distribution deal with Samsung that brought in $US30 million in sales in three months.
As a teenager, Daymond John visualized himself as a high-powered executive. He didn’t really know what he wanted to do, or where, but he had a strong ambition. By his early 20s, though, he had a series of jobs that included selling car parts and working at Red Lobster. His dreams felt far away.
Then, in 1989, he decided that he would break into New York City’s growing hip hop scene with clothes that both rappers and fans like himself would enjoy. He began sewing his logos for his brand, FUBU, onto hats and shirts. After a few years, he took it from a hobby to a full-time endeavour.
When things were getting tough, he put an ad in the paper for funding, and Samsung’s textile division answered. Two years later, FUBU had gone from a project run out of a house to an international brand with $US350 million in revenue.
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After getting Queens rappers like LL Cool J to lend credibility to the brand in its early years, John had enough momentum to land $US300,000 of orders at the MAGIC retail convention in Las Vegas in 1995. He returned to New York and turned the house his mum left him after she moved to Manhattan into a makeshift factory.
“That almost went bust,” he told Business Insider in a recent episode of our podcast “Success! How I Did It.” He had $US1 million in total sales, but it was getting difficult to maintain. He took a second mortgage out on the house so that he’d have $US100,000 to help fuel his business. “I have no idea how we got that mortgage because my house is worth $US75,000.”
“It was a crazy time,” he said. “We were manufacturing about a year and a half. We were burning polo fleece in the backyard – the excess polo fleece – so the whole neighbourhood was purple. The fire department would come and kick down the door.”
It was fun, but it wasn’t exactly sustainable. He decided to place an ad in the New York Times. “This was our version of Kickstarter. It said, ‘$US1 million in sales. Need financing.'”
John got some calls. Most were from scammers or sharks, but one was from Norman Weisfeld, president of Samsung’s textile division.
The proposal was simple: They could provide large-scale distribution to retailers if FUBU could sell $US5 million of clothes over three years. With the help of rappers wearing FUBU in media and video appearances, FUBU ended up selling $US30 million – in just three months. In 1998, it brought in over $US350 million in revenue.
John’s career would go through ups and downs after that, but one thing that didn’t change was that his successes and failures were always at a high level. He had managed to achieve the goal he set as a teenager, and so it was time for a new one.