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Direct Response Marketing

Cover Story: Swimming With Sharks

1 Jul, 2012 By: Thomas Haire Response

The ‘Godfather of Urban Fashion’ and ‘Shark Tank’ TV star Daymond John takes Daymond Johna crack at the DRTV business.

Besides creating FUBU, my greatest professional accomplishment has to be making the initial transition from that success and creating more brands,” says Daymond John, New York-based founder of urban fashion brand FUBU, star of the ABC television series “Shark Tank” and owner of Daymond John’s Shark Branding. “I refused to be a one-hit wonder. I wanted to set a career and a lifestyle for myself, and continue to succeed.”

Succeed, he has. Aside from FUBU (which has amassed more than $6 billion in global sales)and Daymond John’s Shark Branding, he has a hand in the Coogi, Heatherette and DrunknMunky clothing brands, and is author of two books including 2007's, “Display of Power: How FUBU Changed a World of Fashion, Branding and Lifestyle.”

But it was his initial foray into business, creating the FUBU brand (FUBU stands for “For Us, By Us”), that entrepreneurs anywhere can relate with. The personal investment and hard work that helped create a brand that hit $350 million in annual revenue — and a willingness to share his experience and expertise — made him a popular contact for new businessmen even before ABC cast him as one of the “sharks” on the popular TV series.

“I jumped into consulting and public speaking because there’s always something in it for me. I truly want to give back,” John says. “I wrote two books, knowing that publishing is usually a money-losing proposition, to try to help people. I have the kind of personality where I always push the limits with what I do. With speaking, I am always trying to perfect the art of it, but at my best, I always feel I’m only 50 percent of the way there.”

It’s that personality that has led to John’s intrigue with the direct response market. On “Shark Tank,” John has invested in a number of products, including two that became DRTV products: Last Lid and Treasure Chest Pets. In fact, Treasure Chest Pets founder Lisa Lloyd continues to help out at Shark Branding on a handful of projects.

“I’ve been working with the Medico family (Mike Medico and Anthony Medico of E+M Advertising in New York) and we have a ‘first-look’ deal with them on any DRTV products,” John says. “But we’re now looking to expand our partnerships on products in this space.”

For Us, By Us

It’s been 20 years since John founded the FUBU brand. And while, during those two decades, he’s evolved from a successful fashion icon to one of the most sought after business and branding experts, he never forgets the initial motivation to create the brand.

“The concept of FUBU first came to me after I heard a rumor on the street that someone at Timberland made a comment that they didn’t sell their boots to drug dealers,” John recalls. “Back then, designers didn’t want to be seen as selling to the urban culture. But hearing this was my breaking point. I thought, ‘When is anyone going to be proud of who they sell their products to?’”

John says he was an avid buyer of Timberland boots, like many in his Hollis, Queens neighborhood. “They were breaking their own 80-20 rule by disavowing this group. I know that construction workers and mountain climbers love Timberlands, but they only bought a new pair every three years. The hip-hop kid in my neighborhood had five pairs, and any kind of scuff meant they were buying a new pair.”

So — at its very beginning — FUBU represented a lifestyle that was neglected, if not downright shunned, by other clothing companies. One could say that John created the urban apparel space, in fact, drawing the roadmap for many companies to follow.

John’s first step into the apparel space came when he wanted a tie-top hat he’d seen in a popular music video — but he couldn’t find one for a good price. With sewing skills he’d learned from his mother, he started making the hats for himself and friends. The hats’ popularity was such that he decided to make a sizeable order of them and sold them on the streets of Queens, making $800 in a single day. After that success, John recruitedFUBU's Throwback Look some of his friends to work for him, birthing what would become FUBU.

“FUBU was never about a color,” John says. “If it was, I’d be guilty of the same prejudice. It was always for those who understood the culture, the music. It was for those who loved the young champ Mike Tyson; those who loved the Beastie Boys; those who loved Michael Jordan or Spike Lee.”

Initially, FUBU was about the clothes and the logo, which the team began sewing on all kinds of apparel, including hockey jerseys, sweatshirts and T-shirts. But the brand’s tipping point came when John’s immense business talents came to the fore — the young entrepreneur convinced hip-hop superstar LL Cool J to wear FUBU for a promotional campaign.

“This was the catalyst behind the entire hip-hop community supporting the new brand and instantly giving it credibility,” John recalls.

In need of start-up capital to keep up with demand, John and his mother mortgaged the home they collectively owned for $100,000. Soon, it became a makeshift factory and office space. This personal investment drove John even more.

“I began to realize that the most important success a person can have is taking care of yourself, determining your own future — and that of your family,” he says. “It’s not purely about money. Financially, it’s always going to be up and down, and money will come and go. But it’s about being in charge of your own destiny.”

And John took charge of FUBU’s destiny right away. Early on, he traveled with his partners to the apparel industry’s biggest trade show, Magic, in Las Vegas. Despite not being able to afford a booth at the event, the FUBU team showed buyers the distinctively cut, vibrantly colored sportswear in their hotel room.

When John and team returned to New York, they had more than $300,000 worth of orders and soon had a contract with Macy’s. Shortly thereafter, FUBU began expanding its line to include jeans and outerwear.

A distribution deal with Korean electronics manufacturer Samsung allowed its designs to be manufactured and delivered on a massive scale. With the brand — and hip-hop culture — leaping into the mainstream, FUBU recorded annual sales of $350 million in 1998, placing it in the same stratosphere as designer sportswear labels such as Donna Karan New York and Tommy Hilfiger.

To this day, FUBU remains a major international player. “The brand is huge in Asia thanks to that Samsung deal. It’s also doing great in South Africa, Brazil, France and Germany,” John says.

He’s also excited about another recent deal. “We just partnered more closely with Wal-Mart in the United States,” John says. “Our footwear was doing well in Wal-Mart, and our goal now is to become a Levi’s-level player on the urban side in their stores.”

Another intriguing twist in the new social media world dates to 1996. “Back then, I locked up the logo and name ‘FB,’ in certain apparel and categories. We’re the only company that can it use globally. We’re hoping to do a co-brand deal with Facebook in the future,” John says.

He also says that the FUBU has had certain tenets of direct response built into its marketing over the years, though — unsurprisingly — no DRTV. However, John says more DR-style marketing is seeping into one of his other clothing brands, especially online.

“With Coogi, we do a lot of online and E-mail direct response: Monday sales, couponing, holiday half-offs. DR like that,” he says. “We’ve also done social media DR, including with the FUBU re-launch, asking consumers, ‘Why are you one of the FB people?’”

Jumping Into the ‘Shark Tank’

Three years ago, John’s profile got another boost when he joined the cast of ABC’s entrepreneurial business show “Shark Tank,” produced by the acclaimed reality TV creator Mark Burnett.

“Initially, when I was approached, I was told I’d spend $1 million to $2 million per season investing in these products, and I thought they were out of their minds,” John says. “But then, when it became clear that Burnett, Sony and ABC, were involved, I took another look. I was already spending that on investments, all in the apparel space, and I needed to diversify. So I took the deal.”

But that wasn’t the final hiccup. John had to switch gears and turn down “Shark Tank,” when he learned it was an exclusive reality TV deal, meaning he couldn’t be involved in other reality show deals. Why? Because he had an interest in another reality show. Perhaps you’ve heard of it: “Keeping Up With the Kardashians.”

“Kris Jenner came to me and said, ‘Are you crazy? You have a chance to make a bigger name here,’” John recalls. “Next thing I know, I was suddenly ‘fired’ from the Kardashians’ show. But really, it was Kris and Khloe saying they couldn’t stand in the way of my own opportunity.”

As one of the “Sharks,” John and four other prominent executives listen to business pitches from everyday people hoping to launch their company or product to new heights. Investing his own money in every project, John becomes partners with the entrepreneurs helping turn their dreams into a reality.

But the most important thing that John’s gained from being involved in the show is the personal exposure. “We all go thru different phases in life. Some people might respect me, and some others might have a preconceived notion about me because of FUBU,” he says. “But on the show, people saw me in action and that broke a certain amount of stereotypes.”

Expanding Expertise and Influence

While John is best known for FUBU, one of the key reasons he was selected for “Shark Tank” is his success as a consultant for Fortune 500 companies, celebrities and more. “Starting in 1998, at FUBU’s early peak, many companies began to ask me to come in and speak or consult,” John says. “Whether it was for an hour, a day or a year, they wanted my expertise.”

Due to the increasing amount of requests from major companies, Shark Branding was formed to provide companies with the marketing insights that have made John’s companies successful over the years. The firm consults companies on innovative strategies to connect with their consumers more effectively by associating with the world’s most influential celebrities, musicians and personalities.

Early on, there was one problem. “They’d do a watered down version of what I told them to do,” John says. “They’d hire a young hip-hop kid with no experience, put him in charge with a little budget, and they’d fail. When that kept happening, a number of companies wanted me to begin executing for them. Once that happened, I started owning the product integration with reality shows, music and other outlets.”

Now, whether it’s activating a celebrity endorsement or integratiSharks on Anderson Cooper 360ng product in a music video, companies rely on Shark Branding to utilize John’s contacts and relationships to produce real results and sales. And John, who has worked with celebrities like Muhammad Ali, Lennox Lewis, Pitbull and the Kardashians, has the contacts to make the right connection — something he says many companies fail at.

“From a sensibility standpoint, I understand both the brand and the artist when they are trying to connect,” John says. “What is the brand’s fear? Then I look at it from other side: what’s going to make the talent cool? It has to make sense. You can’t be J-Lo and Fiat. Why did the brand do it? Why did J-Lo do it? Did it make sense to the consumer?”

As it became clear that his talent in this space was perhaps as powerful as it was with FUBU, and his success on “Shark Tank” was pushing his recognizability to new heights, he rebranded the Shark Branding business. “The first thing we do is that consulting and brand representation business — matching brands and celebrities for mutually beneficial results,” John says. “The next aspect is speaking and books.”

LL CoolJJohn’s 2007 entrance into the literary world with “Display of Power” tells the story of his journey and provides a roadmap for those who aspire to succeed in business and in life. He followed up his with his second book, “The Brand Within: How We Brand Ourselves, From Birth to the Boardroom,” which examines the loyal relationships companies seek to establish with the public by attaching celebrities to their brands and the instantaneous impulses consumers exhibit when purchasing a product.

The final aspect John calls “product delivery.” It consists of companies he acquires and products he invests in, which is where his work in DRTV fits. He says this aspect operates from a theory similar to that of “The 4-Hour Work Week” author Tim Ferriss.

“When an entrepreneur comes in with a new product, I can’t set up all of the good ones with funding and distribution,” John says. “But, if you have that and value the relationships I can drive for you with small to mid-sized companies, they’re always looking for new products that they know can deliver. If there’s value to that relationship, I will take a percentage of the business and put it into our portfolio of partners.”

John also has been testing DRTV concepts — with products like Last Lid and Treasure Chest Pets — that include a more full investment. “With Last Lid, we wanted to take advantage of the ‘Shark Tank’ platform and see how the relationship was working,” John says. “It’s not working as well as we’d like at this point, but we’re intrigued and looking to expand, thanks to the hard work of the Medicos. We love working with them and love the DRTV model for certain products.”

Sidebar: Music Helps Define the Man

Daymond JohnDaymond John made a name for himself by creating the powerful hip-hop/urban fashion brand FUBU. So, when you ask him to come up with defining moments in his life, it’s not surprising that both revolve around music.

“The first is a moment I walked on to a stage in Philadelphia when I was about 14 years old,” he recalls. “There was a massive hip-hop tour in town and I had gotten a job pushing speakers and working the event. It was a who’s who of 80s rap: the Fat Boys, LL Cool J, Big Daddy Kane, Run DMC and so many more. This was the music I loved, the music that I grew up with — but it was so new. The shows I knew were for 100 people in the park or at house parties. In between sets that day, I was on stage working and looked out to see 25,000 people in the colors and clothing of hip-hop. When Run DMC hit the stage, the crowd erupted and my life turned from black-and-white to Technicolor. I lived and died in hip-hop, in the music. And, even though I couldn’t rap and I could only dance a little, my life had changed. I knew had to be part of it.”

A second moment came later, after he’d become successful. But it was no less personal. “When I read ‘Think and Grow Rich,’ the one book that many of the wealthiest people in world point to as a motivator,” John says, “what struck me was the talk about goal setting — if you set them and work at them, they will manifest no matter what.”

As a child, John was a huge fan of the musician Prince — and he had set a goal. “From the moment ‘1999’ came out, I knew I was going to be there somehow when he performed the song at the turn of the century, whether it cost $5 or $5 million,” he recalls. “I got a call in October 1999, asking me if I wanted to come to Minneapolis for Prince’s New Year’s Eve show. Not only did I get to go, but I got pulled up next to him on stage when he sang it. Lo and behold, I set that goal, and when Prince played the midnight special that night, there I was.”

About the Author: Thomas Haire

Thomas Haire

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