Why ‘Shark Tank’s’ Daymond John Once Fired Someone On The Spot
Daymond John of ABC’s Shark Tank hit it big when he created his million-dollar clothing line FUBU in 1992. The road to success with his hip-hop brand has been a rocky one at times, but the fashion mogul has learned the ins and outs of the industry along the way.
The Shark Tank star is known for having a big heart. Yet when it comes to running an enterprise, he has sometimes had to draw firm boundaries with employees.
Building a brand
John revealed that early in building his empire, he didn’t know how to properly handle the bottom line of the business. “Early on, I thought that money could solve everything. I thought that access to capital was no problem,” he admitted to Inc. “The fear wasn’t there, because I was too dumb to understand. I didn’t have the financial knowledge that I needed.”
Thanks to his mother Margot and her belief in his dream and talent, John was able to learn from his mistakes and keep the business going. “Once I depleted everything, it was a very scary time. But my mother saw the work I was putting in,” he shared. “I started the business in 1989, and we mortgaged the house in 1995. She saw that I wouldn’t give up.”
According to Inc., FUBU was bringing in $150 million in men’s apparel in the late 1990s. When some companies came calling with licensing deals, John turned them down. “Some companies were promising $20 million and $30 million in annual sales, giving us 10 percent, to license our brand,” he explained. “But they could have made anything they wanted to, sold anything they wanted to. They could have burned the brand.”
A boss with boundaries
With running a global brand, John has had to manage a considerably large staff with varying personalities over the years. He shared one story to illustrate certain attitudes he will not tolerate.
“Once I hired a guy, and I remember him saying to Leslie Short, who was then my head of PR, that he would never answer to a woman,” John said. “I fired him immediately.”
The millionaire investor explained the challenges of choosing the best and brightest potential employees from just reading their credentials. “It can be hard to hire the right people. Nobody comes to you with a résumé that says, ‘Hi. I’m a pig,'” John told Inc. “Entrepreneurs have to be shrinks. You’re forced into it. Some companies are growing so fast that they’re hiring maybe 70 new people a day. How much vetting can you do then?”
Picking the right partners
With a plethora of money-making deals in his Shark Tank portfolio, John has his own list of what he looks for when investing in an entrepreneur. “It always comes down to the entrepreneur’s character,” he said. “It always goes back to whether you like the person. The due diligence starts the minute I have contact with you, whether it’s online, social media, or shaking your hand. Your showing up late, showing up early, saying a couple of things.”
John revealed that through the process of getting to know the entrepreneur, he is able to formulate the most beneficial deal. “The due diligence process starts: ‘Do I like this person?’ If I don’t, that doesn’t mean you’re not going to get the deal,” the Shark Tank star said. “It may mean the deal becomes something else, like ‘I have to secure myself, so let me make it just a loan or a convertible note, or whatever, because I don’t know what this person’s going to do.’ Or it’s ‘I want to do more with this person, because I believe in this person’s purpose.'”
As one of the original sharks on the show since its launch in 2009, John has established his own way of making a deal. “On Shark Tank, I have this everyday man’s approach. I’ve never understood the concept of grow, grow, grow without turning a profit,” he said. “My co-Shark Mark Cuban is different. He probably makes more than all the Sharks combined, and people like him need to spend. But I haven’t gotten used to hearing ‘Eh, it’s just a few million…’ I’m a welfare case, compared with some of the other Sharks. I know that my co-stars Barbara [Corcoran] and Lori [Greiner] feel the same as I do.”
Watch ABC’s Shark Tank on Sunday nights!