A lot of people know Daymond’s story. When he was still really just a kid, he put a lot of work into a line of clothing for hip-hop fans, musicians, and dancers. Daymond had no idea how successful FUBU was going to be, but he was too broke and too invested to give up. In a lot of ways, being broke was what made him a success, and gaining success was what left him broke again (for a while).
It’s no secret that Daymond’s first attempt to invest in someone else’s business was a huge failure. He partnered with two very talented designers for a women’s line, but he didn’t stay as involved as he should have, and lost $20 million as he just tried to throw money at every problem that came their way. As great a success as FUBU was, this experience was really what formed Daymond’s entrepreneurial and investing philosophy.
YOU CAN’T JUST THROW MONEY AT YOUR PROBLEMS
When Daymond started FUBU, he had a $100,000 loan and nothing else. He knew that he had to make every penny count if he was going to pay that loan back, help his mom keep her house, and create a successful business.
When you don’t have much, you learn to use all that you have and to make it go a long way. When you’ve turned a profit and you have some extra cash, you can get a false sense of security about your business. Then, when you have an issue, you find yourself saying, “Okay, what’s it going to cost me to fix it?” Instead of weighing your options and finding the best solution, you just pay it. Of course, then you have another problem, and the same thing happens again and again…until you don’t have anything to show for your business but a stack of bills.
YOU THINK YOU CAN’T FAIL
When you’re just getting started, failure seems like it’s lurking around every corner. Not only are you working to save money and find creative solutions to stretch your funding, but you’re also always looking for ways to avoid failing. You know your exit strategies, and you have your eye on the competition.
Once you’ve turned a profit, you start to feel like you’re out of the woods. You think that you’ve found your niche and established your business, so you’ll be good to go from then on. The thing is, if you’re not working on growing and scaling your business or readying it to be bought by a larger brand, you’re not doing anything good for yourself. The longer you sit on your laurels, the more likely someone else is to come up with a better product or a better business plan. Before you know it, your customers will be gone, and you won’t know how to fix the problem.
Take it from Daymond. He got ahead of himself with FUBU and went from making $350 million to watching his designer gear show up in discount bins all over the country. Then Daymond tried to fix all of the issues with his next investment by putting more money on the pile (and basically setting it on fire). Since then, he’s learned that the best way to achieve success is to pretend you’re broke and on the verge of failure. If you stay hungry, you’ll always have your eyes open for the next great move or opportunity for your brand.