From busboy to billionaire

Daymond John founded the FUBU hip hop clothing empire with ridiculous drive and savvy street smarts.

When Daymond John heard that major fashion designers were reluctant to associate themselves with hip hop and inner city youth he shrugged his shoulders.

Okay, I’ll just start my own brand he thought. He did – FUBU (For Us By Us).

To date the label has sold over $6 billion worth of goods and John has gone on to become a host on investment TV show Shark Tank, a highly sought-after public speaker and author.

How do you like them apples, snobby ill-informed designers of the early 90s?

John grew up with his mother in Queens, New York. His parents divorced when he was 10, which triggered an early entrepreneurial spirit as money was hard to come by.

Daymond turned to whatever financial endeavors he could. Shoveling snow, selling pens, handing out flyers – whatever it took.

His dyslexia made school tough and he opted to work instead of going to college after graduation. He was working as a waiter at Red Lobster when he started to think about going into business for himself.

John became a keen reader of his restaurant’s profit and losses reports in what was probably a world first for hospitality staff. When asked how many waiters would bother or care to read their company’s P&T reports he simply responds, “I don’t know – that’s not my problem. I was reading them.”

He was reading Napoleon Hill, listening to Anthony Robbins and thinking about what to do with his life.

John’s neighbourhood of Hollis was a tough one but it had produced its fair share of success stories.

Many of them were directly linked to hip hop and its culture. These included producer Russel Simmons and the mighty Run DMC and LL Cool J. The latter was to have a particularly huge effect on John’s business but more of that later.

Run DMC (left) and LL Cool J were two of Hollis’s biggest exports. Daymond John was about to join them.

John saw the success of his fellow Hollis dwellers as vindication that he too could make something of himself and he started considering the most viable business plans.

Hip hop exploded in the late 80s and John was determined to be a part of it. He knew performing wasn’t likely but when he got wind that some major fashion labels were opposed to the hip hop image he was pissed off. And fired up.

One particular brand claimed they didn’t “sell clothes to drug dealers”.

How rude.

John was also miffed that this apparel was outrageously priced, perhaps intentionally so.

He noticed some hip hop artists were wearing knit-type hats, not unlike ski hats with a string on the top.

They were cool and hard to find – if you did manage to spot one chances were they’d cost an arm and a leg. He bought one himself for $30, came home and his mum shook her head.

She said, “You know, you can’t afford to be buying these when you can make them yourself for $3”, he remembers.

That was his light bulb moment.

John’s mother had taught him how to make these so he got to work. He bought some cheap fabric and started to whip together the hats – they didn’t take long to make and he figured on selling them at $20 a pop.

“I sold them at a mall entrance for 20 bucks,” says John. “If you didn’t have 20 it would be 17, if you didn’t have 17 if would be 15…” he chuckles.

John sold all of his hats on the first day for a lazy $800.

Here we go – and…no.

Before Daymond could go home and shower his mum with dollars he crashed into another car.

Oops, no insurance.

Luckily the other driver offered to take whatever cash John had and that’d be the end of it.

Hello and goodbye $800. Enough to make you sink to your knees and curse the world.

However John was thrilled by the feeling of being able to create something that people were willing to pay for.

He wanted more of this action and went about creating his brand. He decided on Fubu, meaning “For Us By Us”. He liked the power of four letter brands such as Coke and Nike and Fubu stood for something.

Hats were fine but John wanted to expand his range. He ordered plain sweatshirts and t-shirts from manufacturers and sewed his Fubu logo onto them.

Daymond John (2nd from right) and pals, head to foot in Fubu.

The he hit the road literally. He took his apparel throughout the city to any shops he thought would stock them for him. Some did, some didn’t, but his clothes were becoming popular and he started taking orders.

He took his clothes to screen printers and then to embroidery companies.

“I wanted to keep improving the product, improving the quality.” He tested the prices to see what customers were willing to pay, he tested the colors and sizes.

All the time he was still working at Red Lobster, using every other hour to either produce the gear or drive around selling it. What spare money he had would go into magazine ads.

The expense of this forced him to close the business several times in the early 90s.

Fubu needed major exposure to take it to the next level. John himself was unsure about how to go about his business.

Then came a stroke of genius.

John realized that in his neighbourhood there were some hefty fellows who could only get clothes at unflatteringly named “Extra Large” or “For The Big Boy” type stores.

Many of them worked as bouncers at uptown nightclubs and others were bodyguards.

High visibility jobs.

As John puts it, they were potential “walking billboards”. He handed out 20 shirts to the guys working at the highest profile venues. The big boys were thrilled and wore their shirt several times a week.

The artists and singers who were surrounded by the bodyguards demanded some and John obliged.

His next break was when a hip hop TV host noticed his bodyguards’ Fubu Shirts, was impressed and invited John onto his show.

“Fubu will be the next big thing!” the host announced.

He recruited some buddies to help make the clothes and they decided to approach LL Cool J who was huge at the time.

LL Cool J blowing away Mariah Carey with his Fubu cap.

LL agreed and started wearing the Fubu brand. John was thrilled when Cool J snuck a Fubu cap into a photo for a GAP ad. The ad was printed with Cool J’s GAP shirt and Fubu cap. Heads probably rolled at GAP but the exposure was done.

Then came the pivotal moment. John and his buddies headed to Las Vegas for the MAGIC trade show, for men’s apparel. It was where all the nation’s major retailers met up with the major labels and decided what they’d stock for the upcoming year.

John saw no reason why Fubu shouldn’t be part of this so off he went with his pals. The only catch being – they didn’t have a booth for the trade show.

“We didn’t even have a pass” he chuckles. “So we laid out all of our gear in our hotel room then snuck into the trade show.”

John then went around and approached buyers who he thought would be interested in his brand. Many had indeed heard of Fubu and were keen to see John’s booth.

He explained his booth was actually a hotel room not far from the trade show and invited them to check it out.

As ridiculous as it seems, this paid off. Big time.

“It worked out” he said. “We wrote $300,000 in orders and that’s when I realized how much capital I needed.”

He needed to finance the orders but was lacking financial know how. “I didn’t know what I didn’t know.”

27 banks turned him down. He was 27, living with his mum and no track record of running a large scale business.

“Even loan sharks were turning me down!” he remembers.

He had to fulfill the orders. Enter mother dearest. His mum took out equity on their house, securing $100,000.

Next step was converting the house into a factory sewing cutting room. 6 friends moved in and he hired seamstresses.

They were able to fulfill $75,000 of the $300,000 orders but other stores threatened to cancel due to delay. He had to pay the salaries of the seamstresses plus the materials and was close to bankrupt.

Dark times.

His mother told him he needed a strategic partner and asked him for $2000. He didn’t have it so he went back to Red Lobster, waiting tables.

John went back to his mother with the $2000 and reasonably asked what it was for. She told him she was going to take out a NY Times ad.

He said at the time “That must be the dumbest thing I’ve ever heard of”. They took out the ad anyway. It simply read “$1 million in orders needs financing”.

They waited. 33 calls came, most of them cranks. 1 of them wasn’t. Samsung. The head of the textiles division saw the ad and invited him in.

Samsung agreed to finance him provided he could sell $5 million of orders within 3 years.

“We did $30 million of sales within 3 months” he said. After 2 years it was $350 million.

Today John is still very much the CEO of Fubu and an investor/host on the entrepreneurial TV show Shark Tank. He’s written 4 books and has established numerous foundations to support up and coming entrepreneurs.

The buses across town, the frantic sewing in his house, the trade show gamble and the indefatigable self-belief have all paid off.

When the Shark Tank host offers advice, you’d do well to listen. He might know a thing or two.

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