How I Built This with Guy Raz - FUBU: Daymond John (2018)

Episode Date: November 4, 2019

Daymond John grew up during the 1980s in the heart of hip hop culture: Hollis, Queens. In his early 20s, he was working at Red Lobster and trying to figure out how to start a business. Eventually, he stumbled on the idea of making clothes for fans of rap music. In 1992, he started FUBU (For Us By Us) and began selling hats outside of a local mall. Three years later, FUBU was bringing in $350 million in sales. Today, he's a judge on Shark Tank, and a motivational speaker and author. PLUS in our post-script "How You Built That," we check back with Loren and Lisa Poncia who turned a 100 year-old family business into an organic beef supplier: Stemple Creek Ranch. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Airbnb.ca.ca. slash host. Hey, everyone, so before we start the show, I just want to let you know that we are very, very close to selling out our live show in Denver, Colorado. It's happening November 13th at the Paramount Theater, and I'll be interviewing Kurt Richardson, creator of the Otterbox phone cases. This show is supported by American Express. It's our last live show of the year, so please come see us in Denver on November 13th. If you want to get tickets, go to nprpresents.org, and I hope to see you there. So Damon John's story starts with $40 worth of fabric and a four-letter word. Fubu. For Us, Buy Us. He wanted to make hats and jerseys and jackets for hip-hop artists and their fans. And even as his brand began to explode,

Damon held on to his day job as a waiter at Red Lobster. And if you haven't heard this episode, or even if you have, it is one of the funniest and most inspiring episodes of how I built this. It first ran back in April of last year. Take a listen. You come back to New York with $300,000 worth of orders. How are you going to finance that? That was a big question right there. I didn't know what I didn't know.

I didn't have any financial education. I didn't even have an accountant at the time. So I went to all the banks I could, and I got turned down my 27 of them. 27 banks? Yeah. It was so bad loan sharks were turning me down. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

I'm Guy Raz, and on today's show, how Damon John went from wading tables at Red Lobster to building Fubu, one of the biggest hip-hop clothing brands ever covered. created. So as with any history, there's some disagreement over what I'm about to tell you, but by and large, lots of people will say that hip-hop was born in the Bronx, probably in 1973. And the Bronx was the center of hip-hop culture for most of the rest of the decade. But by the early 80s, hip-hop's center of gravity started to ship to Queens, specifically a neighborhood in Queens called Hollis. This is the neighborhood where some of the most influential names in hip-hop grew up, Russell Simmons, L.L. Cool J., and of course, all three members of Run DMC.

You might even remember their song Christmas in Hollis here. I'll do you the favor. Okay, so Hollis is kind of crucial to understanding how Damon John was able to build a global brand of hip-hop apparel. A brand he started from the trunk of his car. Because as hip-hop culture started to explode, So too did Damon's little clothing label called Bubu. It's a brand that to date has sold over $6 billion in apparel. Now, today, you might know Damon as one of the sharks on Shark Tank. He's confident and smart and always well-dressed. But you might not know about his backstory,

his childhood, Ian Hollis, and the challenges he faced from a very early age. Right around my about 11 years old, a 12 years old, my parents separated, got a divorce and I would never see a speak to my father ever again. So my mother's dreams of getting a further education just didn't happen at the moment. So you haven't seen your dad since you were 12? I did not. And so it was just you and your mom at that point? Just me and my mom struggling trying to work it out.

And how did she make a living? Well, mom was an executive assistant. So she worked for Lehman Brothers, American Express. And she would have her little side hustles. She would probably, you know, sew clothes and try to sell them. She would go and open up, you know, maybe a little kiosk at a flea market and buy goods and resell them. So mom would do a whole bunch of things such as that to make some extra ends meet, but she would also just mainly be a secretary or executive assistant for people.

So you're growing up in Hollis in the late 70s, early 80s, and it was kind of a tough neighborhood, right? I mean, did it, did you feel safe as a kid? Like, did you feel like you had a pretty normal childhood? I felt safe. It was a great time. It was what I think is the last of those old school neighborhoods where everybody knew each other and, you know, all the kids had to go inside before the lights came on on the street lights. I mean, my mother used to always say I had to be either faster than the Concord or faster than the lights on the Empire State Building.

And the reason was that the Concord would land approximately, I think, I think 7.50 or 730, you know, during the night. Wow. Yeah, JFK. At JFK. So when we all the kids heard the ground rumble because the Concord was landing, you had to be in the house by the time that rumbling stopped. But during the winter months when, you know, it was still landing that late at night, but yet it was getting dark at 5 o'clock. Your parents would say you need to be home by the time you see that lights come on on the Empire State Building. So it was a very great community, you know. A lot of barbecue. cues and cookouts and fun stuff like that. But that would all change around 86, 87, or we

stopped feeling safe when crack started to devastate, you know, our neighborhoods and we would start hearing of deaths and things that nature. And maybe that's because I'm at 16 or 18 years old and I'm, you know, and I'm driving and I'm seeing more of the world. But also crack was starting to devastate every neighborhood across the country. Yeah. So how were you living, um, you know, in a neighborhood environment where you had the crack epidemic, you had friends who were kind of getting caught up in it and selling drugs. And how were you able to, had you avoided? I've always been somewhat analytical. And I remember doing the math one day about, you know, if I would have worked in McDonald's and if I would have sold drugs over the course of five years, where when I make more money and it looked like I would make more money at McDonald's.

Hmm. because if you look at the drug dealer who has to pay for all the attorney fees and everything else every once in a while to get caught, and if they, out of five years, if they had to stay in jail two and a half or three of those years, and then you have to look over your shoulder and you end up maybe dead, then how, and they have no medical, how much really would they're bringing home? How much were they netting? So I looked at that and I said, well, I'd rather work at McDonald's. Yeah. You, as a kid, did you sort of dream about the things that you wanted to do?

that's the kind of person you want to become? Earlier on in life, I really dreamed that I wanted to be maybe a pilot. I really didn't know what else I wanted to be in life. You know, I had no idea until rap music really started coming around, and I figured I wanted to be working in rap music, but I didn't know how to do that if I couldn't rap sing, dance, or produce. I really didn't know how to do that. I tried, well, I could dance a little bit.

I actually did do some kind of dancing, hoping that Run DMC or LL Kouj or Russell Simmons would discover me. At one point, I did get an offer to dance for a group named Houdini. They were going on a tour. Yeah, I got an offer to break dance for them. And my mother said, no way in the world are you going on tour? It sounds like you were a pretty good kid. Like, you didn't really fight with her that much.

He didn't rebel. No, I think I may have one or two arguments with my mother during the court. Maybe now I'm 49. I've had three arguments with her in 49 years. Wow. Yeah, probably two of them. them were when I was in my 20s. Did you, was college ever something that you considered when you finished high school?

I did. I did consider it now, but I'm dyslexic and reading all was presented a challenge. Science and math, no problem I could do in my sleep, you know, that was a challenge. And I said to myself, I'm going to take off one year, you know, getting out of school. I said I was going to take off one year. And that one year became five years, 10 years. What were you doing in that year off that you took up from college? In that time, I was working here and there, but I also was partying, you know, dating as many girls as I could. You know, the normal kid thing, you know, 18 to 20. I turned around again, I looked and I said, I don't have anything.

And not only do I not have anything, I don't even have an education to fall back on. So, again, looking at all the friends that I lost, and then talking about all the kids that I thought were not, bright, but yet they were coming back from college and I was a waiter in Red Lobster serving them. And I said, maybe I'm the idiot here. You were a waiter at Red Lobster? I was a waiter, yeah. I was having a great time as a waiter. But I was also learning from Red Lobster. You know, they would issue these quarterly books on, you know, their P&Ls basically and what was working, what wasn't working. I was, you know, learning how to service people? You were reading their quarterly P&Ls when you were a waiter? I mean, how many waiters at Red Lobster or any company will

take the time to do that? I don't know, but that's not my problem. I was reading them. So, all right. So you are clearly thinking about bigger things. If you are waiting tables or red lobster and you're reading their quarterly reports and their P&Ls, like, you're doing this because you have a plan. Did you have a plan? I didn't know what the plan was going to be, but I knew they're just like working out every single day and just like anything else trying to educate myself. I had the ability to put various different things in my body or my mind, you know, drugs and rock and roll and rap music and drinking all the time. I can put that in and so how productive I was going to be later on or I can put in P&L statements and listen to Tony Robbins and listen to Jay Abraham and think and grow rich and seven highly effective habits of whatever people.

And you were reading that stuff? You were listening to Tony Robbins and reading Stephen Covey? All day, all day, every day. When you were 21, 22, that's what I was. No, I was listening that stuff when I was 16 and often I'd question myself and say, am I doing the right thing? Am I on the right path? Because at the end of the day, I started to set my goals pretty low that I just wanted to be

somebody who can take care of their family and have a decent house. And I wasn't sure what kind of business I was going to have if it was going to be a business at all, but I wanted to have a steady income. I didn't want to just, you know, just be roaming the streets. Yeah. And how does this idea of making, apparel. Fubu, how does it even begin? What's a story? Well, so the funny story is that I would talk about that with my girlfriend at the time. I was living with a woman. She was a little bit older than me.

She was 30. I think I was 20. I think she worked for American Express, one of them, and very supportive, but I would give her my ideas all the time. And, you know, I remember she would laugh at some of them. And then one day I asked her to borrow $800. No, I asked her to borrow $500. No, I asked her to borrow $500 for this idea I had called Fubu, and she said no. I would leave her after that, of course. I left her after that. Well, the funny story, I left her after that, and I remember maybe about 15 years ago,

something she's still my friend, but she came to my office and she heard my secretary talking about my houses and all this type of stuff that we had to take care of from a financial standpoint, let me wire the money. And she was like, you still want that $500 for Fubu? Well, God bless her. She's a great person. Okay, so how did you come up with the idea for Fubu?

So, you know, I was spending so much money going out and buying clothes that the hip-hop community love to buy. And they could be ski jackets, timberland boots, and whatever the case is. And we started to hear rumors that, you know, clothing companies or power companies just didn't want rappers, African Americans, inner city kids, whoever, they didn't want people wearing their clothes. But I started to get fed up to hear about all these type of brands. And I wanted to create a brand that loved and respected the people who loved and respected hip-hop. And I called it Fubu, For Us Byest. For Us By-S.

And so what was the first article of clothing you made? Well, I didn't make anything at first, to be very honest. What I first did is I got a bunch of labels and I just went and bought champion shirts. I just put my fubu on top of the champion. You got labels printed that said fubu on it. Uh-huh. And I just wore them on top of my champion shirts just because I wanted somebody to say, I didn't want anybody to even know it was mine because it was just one shirt.

It's not like I could resell it to somebody because let's say a sweatshress shirt is $30. Well, I bought the championship shirt for $30. So what are we going to sell it to you for? Right, right. You know, so I just tagged all the clothes I have. And then I started to see this hat that was on a lot. of these rappers and it didn't look like it was made by a major clothing company and it looked like a ski cap not with a ball on the top but with a little tied like a shoe string on the top yeah

and i knew how to make those my mother showed me how to make those um because the first one i bought was about twenty dollars i went all of town madhattan i couldn't find it anywhere and when i finally found it if you added the gas the tolls i paid 30 dollars for this thing and i showed my mother the hat and she said you know you can't afford to just you pay that kind of money for something you can make for $2 and she's told me to go to the store and get some fabric. I went to the store. I got $4 worth of a fabric. I came back. I sewed a bunch of hats and now all of a sudden I wasn't thinking from a commercial standpoint, but I bought the same roll of fabric. So I have now this big roll of striped fabric fabric and I made 80 hats. So I decided to go stand on the corner and sell them. So you brought

this roll of fabric home and what? You like cut out patterns and sewed them together? They were really easy. You know, the pattern. It wasn't even a pattern. It was just a straight square. You take the square. You fold it over. You sew one side and then you flip it in and out. So, and then you sew it on the top and you tie the string on the top. You're done. You just had to sew a straight line. It was one square with one straight line. And then you just tied it on top and there you go. You had the same exact look. It was like taking a sleeve, right? And folding it in half and using the part, you know, and then putting on your head and the top that's open, you just tie it with a string. Wow. And those just like, those were really popular. Like lots of hip hop artists and kids were wearing those kinds of hats. Yes. And nobody and no major corporation was making them. So there's no place to find them. So where do you find them with guys like me selling them on the street corner? So I made 80 of them. It took me probably about three hours. I made 80 of them. And I hit that, I hit that street corner and I sold all of them. You know, and a lot of people go, what are you talking about standing in the corner? Because I know a lot of people may be listening to this and they may not live. in a condensed area.

But trust me, it's not that I stood the corner outside my house. I went to the shopping area and a place called Coliseum Mall where people were actually going into shop. So I caught people while they were walking in that mall and out of that mall by standing on the corner. And did you, did the hats have the Fubu label on them at that point? I did. I did. I put the Fubu logo on the front of the hats, yeah.

And people will buy them. And how much, do you remember how much you sold those hats for? I sold them for 20, but if you didn't have 20, it would be. 17, you didn't have 17, they were 15, you didn't have 15, they were 10. If it was my last two hats, they were $3. And they were costing you like $2, $3, right? $2.3, I don't think so because I bought $4 worth of fabric and created 80 hats. So that means they were 50 cents. Wow. So you come home that night and you must be thinking, wait a minute, I've got something here. Well, I was on my way home and I remember counting on my way and I was

so excited counting the money. I just couldn't believe that I actually came up with a concept and I sold it and I was it was depending on whether I I could sell it or not and then I just looked up and bang I hit a car and I remember that guy getting out and it was a nice car and I remember him going getting out and I said man I don't have any insurance I'm sorry he said all right you know how much cash you got on you I said I don't know $800 he said I don't know $800 he said all right give me it I'll take it and he took the money you left no in just a moment I've Damon earned that $800 back and then some and then some more. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's 1992 and Damon John has made and lost his first $800 selling Fubu hats. But the word about his brand is spreading around town. So he keeps making more hats. And then he decides to branch out to T-shirts as well. I started really, you know, refined the way I made the hats, get better quality of hats, you know, get better Fubu logos on them, and then start to put T-shirts there and then start to say, okay, well, I can't just hang out here in the mall and sell these T-shirts. So where can I get a booth at or where can I go to? So I started to look at other places and outlets.

Then I started walking over the stores that were outside that mall saying, hey, I'm usually outside this mall on the weekends. But if I can't be here, can I put some shirts in your place or hats in your place on consignment? So I just started trying to figure any and every way out that I can increase my sales and my exposure of the product. How did you find the stuff? Did you, we're just going to like shops and buying a bunch of T-shirts? Yeah, I was going to physical shops down on the Lansing Street area where people knew they can go and buy shirts. And then I was starting to order as many catalogs as I could of people that were selling sweatshirts. So like CCM, the Jersey company, would sell CCM jerseys.

They would blank. Or I would go to Boulder, the Boulder Company in Boulder, Colorado. They would sell sweatshirts. So I would just start to source as many places as I could find something of high quality that had no name on it. And they were using it for that purpose. They were premium companies. They were the same company that would sell it to any, you know, large, large company so you can put your company name or logo on it. And you were literally sewing the labels on?

I was ripping the old labels out. I was sewing these labels in. I would then start going to screen printers and start putting screen printing on the shirts. Then the next step up after that was to go to embroidery places to start embroidering the shirts to get a higher quality. I kept improving the product and improving the quality and to basically see the resistance or the acceptance of customers. What level would they buy it at? How much would they pay 30? Would they pay 60, 90?

Did they like extra large, large red? I wanted to just really start to understand the customers. So I had to keep going back and improving whatever I was doing. And, I mean, this is like pre-internet. So it's like today you can just type up, you know, in Google, screen printing, silk screen printers or whatever. I mean, how did you find? Isn't that nice? How did you locate all these places that were willing to do this for you?

Yellow pages, cold calling. If you drive into New York City, you'll see some sign on a bridge to say New Jersey, the embroidery capital of the, of, The embroidery capital of the world. So what do I do? I take a train in New Jersey. I started walking around. Wow. I started walking around saying, you know, embroidery places.

You know embroidery places. I mean, just not stopping. Getting up at 6 o'clock in the morning and just hitting the subway. All the while working at Red Lobster at night, right? All the while working in Red Lobster at night and sewing the hats and delivering the hats at the same time and trying to source the goods. Yeah, I mean, just but enjoying and loving what I was doing. It was kind of like this new discovery, this path that I was going down that was just so. excited about. And to say that, I also had to say that through 89 and 92, I closed the business

three times because I ran out of money. Because all these development costs, all the gas, all this going on those trains and cars to go in these places, I would run out of money. But I would only run out of like a $500,000, and before you know it, you know, I'm walking down the block. Someone would say, hey, aren't you the little kid that sells food? I say, yeah, they were like, I need some more. I've been looking for you. What do you mean? You've been looking for you. What do you mean? for me. I need some more. And I would keep opening the business back up because the business started to call me instead of me calling the business. Did you ever get like, were you ever in a situation where you were selling stuff on a street corner and like, I don't know, city

officials came up and asked for a permit or anything like that? Yeah. I mean, that had happened once or twice, but the best permit ever when you're selling stuff on the streets is being able to run faster than them. That was a great permit. So, okay, so okay, there's, there's, There's clearly a demand on the street for your clothes at this point. But when did you decide it was it was time to take it to the next level? So when I finally got to the level of 1992 and my friend Jay Alexander came back from fighting Desert Storm and he had had a couple of dollars, he said, I want to put in some money and I want you to take this thing serious. And my plan at that time in the neighborhood was the big black guys in the neighborhood, they had little options on. what they can have to be very stylish.

So they had to go to Rochester big and tall and get a big white shirt or a black shirt or they had to pay a lot of money to get their stuff custom made for them because nobody was really making. If somebody was really tall or heavy, basically, right? You're right. Right.

So what we did was we just found a place that made 4X, 5x, 6x, 6X, 6x shirts, and we made 20 of those shirts because we made 20 of them because we knew that if we gave these guys, these shirts, These guys were normally bodyguards. Not all of them, of course, right?

But the ones we did give were the bodyguards. They were in front of the clubs. They were bouncers or something like that. And we knew that they would not just wear it once and wear something else. Like the more stylish kids who don't want to be seen in something twice. We knew that these guys do wear it forever. Wow. So that was our first plan of attack.

For the first six months, get these same 20 shirts out to these guys. And that's what we did. And we just would do that. And before you know it, these guys were walking billboards. And the artist started to say, what am I, my chopped liver? Yeah. Why are you giving it to, you know, this guy over here and I can't get any. I'm like, well, I don't know.

We don't really make it your size. You're not going to really wear it. No, I'll wear it. I don't know. Are you sure? Yeah, I'm sure. You know, that was our strategy when we first started to really launch it. And did people, I mean, at that point were people like, did they know what Fubu was

or were people still saying, what is this Fubu thing? Well, they started to know a little bit about it in the tight community we're at. And then there's one thing that's, there's one thing that. just put me on the map was we would dress these two or three bodyguards that work for a guy in New York named Ralph McDaniels. And Ralph McDaniels show Video Music Box has probably, it's probably been on longer than MTV or came out the same year. And Ralph is really known for breaking most of the music artists from, I would say, 85 all the way to 98. They all had to really, really beg him to go on his show. And we put him on the bodyguards around Ralph. And we found out.

that Ralph was going to Teddy Riley's concert or Teddy Riley had a weekend that he used to throw in Virginia. So we said, all right, we're going to take the train down there because we know he's not going to know as many people in Virginia. So we'll be able to get

to Ralph easier and we got to Ralph and he said, I'm looking at your stuff. I know who you are. I want to put you on my show. Wow. And he did this interview with us and we were so scared to death, but he told everybody that you know, fool was the next best thing. Wow.

I think we had 50 shirts. And I owe Ralph so much as being one of my mentors and somebody who was a mentor to the community that he really put us out there. And after that, all the rappers, all of them were ready to wear our stuff because Ralph gave us the thumbs up. So I guess, I mean, around this time, 92,

Fubu, this is becoming bigger. I mean, you start to realize that this has potential to become something more than just a side-prud. project, obviously. Yeah. So what was your next move? How are you able to get it more exposure? Well, now it was about time to put my game face on and it was about time to start looking at the numbers and being a real businessman even though I wasn't. So I started to put this plan together on how many retail stores would take my product, how many we can ship and start taking out ads such as write-on and Blackbeat magazine and how can we start shipping these shirts across the country and also how many street. Corners, can we sell them on with, in regards to flea markets, the street corners, and I started to do that. I started to reduce my hours at Red Lobster and I started to put in more hours here.

And then I started to bring in two and three other partners to help with the man hours that we needed. Except all that would require a lot of money. That would require a lot of money at first. So, of course, you know, like many businesses, I leverage my credit cards, you know, up until I think my partners and I, all of us leverage our credit cards up to pay about $50,000. with a very high interest rate, which is not the smartest thing to do. And then it all culminated to when I decided to go out to the Magic Trade Show in Las Vegas. This is a famous, like, industry trade show where, like, apparel and stuff. Yeah, so it's the Magic Trade Show.

The Magic stands for Men's Apparel Guild in California. It's held in Nevada. I know. I'm a little confused at myself. But that's where all the stores go twice a year, and they basically say, you know, they'll go and see your Ralph Lorenz, your Nikes, your Fubis of the world, and they'll say, okay, this is what we want to come in for spring, this is what we're going to come in for fall. And as I would go out to that show, my friends and I would scrape up our money and we would all go on

buddy passes and standby. My mother happened to work for American Airlines at that time. So we all flew into California and flew into Nevada and took the buses over because it was too busy to go into Vegas being on standby. Yeah. And we got a small hotel room, a couple of miles away from the trade show. and we put our clothes all in the corner of the hotel room, slept on the beds and on the floor, and we would sneak into the Magic Trade Show.

Wait, you didn't have a booth at the Magic Trade Show? No, we didn't have a booth. We didn't even have passes to go into it. Those pasts, we probably had, you know, we probably each one of us had on us, maybe $30 a piece by the time we got there. So we'd sneak into the trade show. Wait, you would just go, so you stuck into the trade show.

You didn't have a booth there, but you would just go around, and talk to people about your shirt? I would have the Fubu on and I would see brands that I felt were like ours. So if I would see Timberlin or what other cases, I'd stand outside their booth and say, hey, how you doing? Hey, I got this new brand named Fubu. And some people would be like, would say, Fubu? The For Us Buy and stuff?

You're here? Where are you? Where's your booth? Come on. I walk over your booth. Wow. All right. Well, instead of walking over my booth, you want to hop in a cab or a bus because my booth is over at the Mirage

hotel. Oh, they're showing at the garage hotel? No, no. No, no. They're not really, you know, there's up in the room. So it worked it out. And, you know, we would write $300,000 in orders, and that's when I would realize how much capital I really needed. You walk away from that show without even a booth with $300,000 in orders. How are you going to finance that? That was a big question right there. I didn't know what I didn't know. And I wasn't part at that time, knowing all the things I know now, I wasn't part of the Chamber of Commerce. I didn't have any financial education. I didn't even have an accountant at the time. So I went to all the banks I could and I got turned down my 27 of them. You said, hey, I've got this business and can I get a loan?

Yeah, I didn't know how to fill out a loan application. I didn't know how to, you know, as much as I was reading P&Ls, how can I write a P&L on a business that I never have grown past, you know, 200 shirts at a time or 5,000 shirts at the time, right? I didn't know how to project what $300,000 would turn to. And I kept getting turned down by banks. 27 banks. Yeah. It was so bad loan sharks were turning me down.

Oh, my God. And that doesn't happen, man. I mean, you were, I guess, in your sort of mid-20s, still living at home with your mom. Yeah. And banks are looking at you. You had no sort of history of having a business. So they're thinking, you know, why are we going to take this? risk? Why would they take the risk? I had no history in this business. I had, you know, I had really, I couldn't

collateralize the home. I couldn't do it at the time because my mother wasn't allowing me to go and put that up at risk. So, you know, I don't blame them. I wouldn't have gave myself the money, you know. And then my mother, I remember coming home and she came home and she said, you know, you've been working on this house as long as I have, you put as much money as you could into this house. And we have some equity in this house and we need to go out and I wouldn't do this if you didn't have $300,000 in orders because this is all we have. Let's go out and let's take out as much equity as we can on this house. And once you sell the clothes, you put the money right back in and hopefully you'll have a nice profit. So she goes out and she gets a $100,000 loan on our house.

So your mom really, I mean, that's kind of a crazy risk that she took on you. I mean, she really believes it. She must really believe this was going to work. It was a really big risk. So I don't know anything about manufacturing. I may know stuff about, you know, putting an embroidery on a T-shirt, stuff like that. But as far as I know, I've only heard about manufacturing is over in China. But I'm not going to risk my money over in China. So what happens is my mother moves out. My friends all move in my house. So they start all paying $75 a week for the room that they would rent out of my house. So I have now six, six friends all living in my home. And all the furniture I couldn't sell. I took out in the backyard and we all chopped it up and we burned it all

in the backyard because we wanted to make room in the house for sewing machines because we weren't going to trust $100,000 of our money overseas with somebody we don't know because we knew that we just weren't sharp in that area. Wow. So we get all these sewing machines, we get a cutting room, we hire a bunch of seamstresses and we hire somebody to cut the fabrics and trim the fabrics and we create a factory in the middle of in the middle of Hollis Queens. In the house, you decide that you are going to be the factory to fulfill these orders of $300,000. My house is a big version of Airbnb meets a factory.

How hard were you, did you have to work to fulfill those orders? It was hard. I think we filled about $75,000 worth of those. orders until I turned around and I only had $500 left in the bank and I was about four months later on the mortgage. Wow. Again, I didn't have financial intelligence at the time and what was happening was I was paying for the setup of the machines and bringing all the rural goods here. So I had to pay for all that in advance. Then I was paying for the salaries of the people that were working there for me and that money was going out.

The stores, when they received the goods, they didn't want to pay you for. 15, 30, 60, 90 days. And my lack of financial intelligence was starting to just underline how this company was never going to go anywhere. And now I made $70,000 worth of the goods that I have a $300,000 order on. And the stores are starting to say, you're not delivering this in time. We're going to start canceling the orders. Wow. So this is like, what, like 95, 96? Yeah, this is right around 95. It sounds like you're close to going bankrupt. I'm close to going bankrupt and losing the house and losing all the orders that I had. Those stores are not going to trust me again because if they're waiting six months for something to come in,

when they give you these orders, it's the orders that they're not giving somebody else that they could be turning other goods. So now they're losing faith in me. And it got to be, it was a really, really dark time. I see this a lot now in entrepreneurs who don't realize what they don't know. So were you panicking? Yeah, I was panicking. I was panicking for sure. I didn't know how to get out of it.

And then my mother comes over to me and says, I have an idea. And I said, what? She said, you need a strategic partner. Huh. And I said, what the hell is a strategic partner? And? She said, it's OPM, Damon. You know, OPM doesn't have to be other people.

people's money. It could be other people's manufacturing, mind power, manpower, marketing. I said, all right, well, what do you mean? She said, I need $2,000. So I didn't have $2,000. I go back to a Red Lobster and I work for a month. And I come back home and I give her $2,000 and said, what are you going to do with the money? She said, I'm going to take an ad in the newspaper. And I said, that could be the stupidest thing I've ever heard in my life. Like asking people if they want to fund your company, like taking an ad out in the paper? Classified ad. And what did the ad say?

Million dollars in orders need financing. And what happened? Did people start calling the number? Yeah, so 33 people call that ad. 30 of them, 125% interest had to live in their attic for collateral. Pitches of loved ones in case I got lost. You know, offers I can't refuse. These are loan sharks. Yeah.

But three of them were real, and one with Samsung. Samsung like the Korean... The Korean conglomerate. The $200 billion privately held Korean conglomerate. Somebody at Samsung saw that classified ad and was interested. Samsung, the head of Samsung's textile division. Because Samsung makes everything from nuclear reactors to cars to phones. And the textile division saw it and said,

hey, why don't you come in? I like this opportunity here. We finance textiles. And the deal with us was that they would finance the manufacturing and manufacturing and distribution of our product. But we had to sell $5 million worth of clothes in three years to keep the deal. Wow. And so you went there to meet with them. And was the person that you met with in New York?

Yeah, of course. I was nervous. I wanted to present it. I brought my mother with me. So later on, you know, my partner's at Samsung would say, you know, first meeting we ever had for a particular. potential investment or whatever structure that somebody brings their mom. I'm like, hey, well, mom's pretty smart, so I'm going to bring her with me. And, you know, I didn't think I was going to hit $5 million worth of clothes in three years.

I barely even sold the first $300,000 worth of clothes. But I had known my customers so well because of all those things that I was doing that as we started to put the brand out there, we did about $30 million in three months. So Samsung, this huge textile manufacturer, all of a sudden, is making your clothes. and distributing it. You're going from like a tiny little mom-paw shop to working with the biggest textile maker, one of the biggest in the world. Yeah, but I mean, the work was still up to us. They were just financing. We still had the market. Even though they had to manufacture, they manufactured in the source of funding the manufacturing. We would have to find the, you know,

we'd have to find the factory. The factory would have to be up to par. And we'd say, okay, why are the money over here? Here's who we're working with. I mean, all of it still, landed on us, the only area where I felt that obviously it was giving us the ability to scale is, number one, the stores knew they were going to get their goods in time. Yeah. How did you get, you know, entree into the big retailers to carry your products? Well, that really wasn't hard at that point because we had already had six or seven years full of, you know, really servicing specialty stores really well. And retailers, it actually, we would have to, we would have to stop. the retailers. We'd have to not allow them to purchase because some of the kids would look at some of these big retailers and say, well, now Fubu's not cool anymore because it's in these big

retailers. You know, this, I guess, like 10 years before Fubu starts to really take off, Adidas struck a really famous deal with Run DMC after my Adidas, which was one of the first times a major company did a branding deal with any musical artist. And I wonder if a lot of these big box stores like Macy's or the other companies that want to carry Fubu. Were they trying to jump on that on the hip hop bandwagon? Did they see this as a hugely potentially profitable market that they wanted in on? They did. So they, first of all, they were scared. I actually did hear many stories say we don't want, you know, a lot of those type of people in the store because they're going to have shootouts and or shoplift. I saw a large retailer did ask me to

take the picture of myself and my three other partners off the hang tag because I said we look like a gang. Wow. So you got to understand the ignorance of some of them. Were you, when you were running up against that kind of racism and bias and people kind of judge you, even before you walk through the door, did that, did that anger you? No, not at all. I don't know where these people, I don't know, when somebody's bias or something like that, I don't know what they've been exposed to in their life. You know, maybe they weren't around certain other people and maybe they just. need that one person or the other person in their life to come into their life to hopefully

show them the difference of people or people. I also felt that I wouldn't be here if everybody knew what I knew. So if they all were that smart, then there would be no place for Dame and John. So I can't spend my life being worried about what other people think or the ignorance or the challenges they may have had grown up. They may have just had the wrong family members in their life telling them the wrong things. But, you know, I'm, I'm, listen, the glass is half full, and I believe love doesn't come into color or gender. And we have a, there's so many beautiful people in this world that the people who don't understand that are suffering. So, 1996, Damon, you get this, this deal. You do this deal with Samsung. Within two years, Fubu is doing

$350 million in revenue. I mean, that, yeah, that's insane. sane. I mean, how do you, what happened? I don't know. It's all the fog sometimes, you know, it was this rocket ship, but it was having really great partners and mentors all around and being able to have these systems put in place where we could start scaling. But if you want to simplify it, you know, if the men's division of what we were doing, we were doing approximately, let's say, argument's sake, we were doing $100 million. By that time, by three years, what happens is After year one, you get a license comes aboard. Jordash was our first license, and they came aboard, and they started doing ladies' clothes.

So now we're doing 100, say, 150 million in men's. They're doing 100 million alone in ladies. Wow. And you start to put other licenses on. So bags, shoes, boots, fragrance, suits, bedding. And each one of those are doing 15 or 10 or 5 million apiece, socks and things of that nature. And that's how the scalability got to think. 350, but, you know, $350 million in the fashion business is great, but it's not, you know,

listen, Underarm is doing $3 billion or $4 billion. Puma's doing $12 billion, you know. There's real numbers that are out there, even though I'm extremely proud of what happened, but that's how we started to scale. And who was buying, who was buying food? Who were your customers? So many people. So in America primarily, you know, African American and.

or people who loved rap music of all colors. I remember, you know, we first put in sync in one of our ads. You know, we started getting so many calls from stores in Nebraska and Ohio. Like, hey, you know, this is not just a black thing. And then when you start to have too many goods or overruns of goods, then you sell it to the places such as Burlington and T.J. Max. And those customers come in and they're price conscious customers. They're just not looking for a brand.

They're looking for some good old draws. They're good old socks, good old jeans, and they brie, and a lot of us, I see so many parents and grandparents with my stuff on going, I didn't know this was Fubu until I looked at the label. I had it for 10 years. My son bought it for me. So Fubu just has its own interpretation from various different people. Okay, so you had this like several years of this incredible expansion and growth. And at some point, like at a certain point, Fubu was everywhere. Then I guess you did something interesting, which is sort of, you feel.

mystic way to describe this. In 2003, you semi-retired the brand, at least in the U.S. Was that, I mean, was that because Fubu was like over-exposed or what? Well, what we did was we reduced most of the distribution of it. I mean, we still obviously kept by categories, but we would really narrow down to just a couple of stores, just to test the product and see how it was going. Because we felt that it just needed to cool down. And more importantly, we would reduce all the logo.

as we could. So because people, you know, they already had 10 years of Fubu in their closet. They already thought that, you know, it may not have been for them at the moment because, you know, it goes through cycles, you know, and a hot brand last five or maybe six years, maybe seven years. So we kind of just slowed the brand down. And were you, I mean, was Fubu, did it seem at that point that it was kind of time to to wind it down a little bit because it wasn't, I don't know, wasn't making as much money? Well, I think it was you didn't want to force it on the consumer. That's how I felt. And I think that, you know, if the stores weren't like, oh, my God, I have to have it, then, you know, we needed to find something else to give to them and just put, you know, not on a back burner, but kind of just slowed down.

So it was just really adjusting the way the visibility of the product. You had a completely just a total change of career path in some ways in like late 2008, I guess, when you became a TV star. Because I mean, a lot of these other labels were run by people who were kind of well-known in the hip-hop community like Russell Simmons and Puffy and Jay-Z. And you were kind of quiet. I mean, people didn't necessarily know you as well. They knew the brand, right? all of a sudden, you become a TV star by becoming a shark on Shark Tank. How did that happen?

Yeah, so I wanted to start paying it forward and educating people on what I went through and trying to, again, show them where the landmines were. So I started writing books, and I wrote a first book called Display of Power, and it talked about the fact that we all have the same engine underneath our hoods, but are you going to tap into what drives you and what can make you a rock star, make you proficient, and bring you success? And I started to go on to stations like MSNBC, Donny Deutsch, CNBC talking about the book. And Mark Burnett's, you know, Mark Burnett's, you know, crew saw me.

And he had a show called Dragons then that was already popular in Europe and Japan coming over to America. And he said, he wanted me to be a shark. And I said, yeah, whatever. Why not? Let's try. So it sounds like the show sucks. It doesn't matter. But I'll go on anyway.

I went for an audition. And they ended up using the pilot. as the first couple of episodes, Shark Tank. And before I know it, the show that I thought would never get anywhere and sucked with these, you know, five business people just talking business all the time. Who wants to see that? Before I know it, you know, we're going into our 10th year. Do you ever, when you're in the shark tank and those, you know, those like entrepreneurs come out, do you ever go back to you trying to pitch your company to Samsung? Like, do you ever think about how you felt?

No. I don't because I remember I was so unprepared. I don't even, I give those people that walk in front of us way more respect than I give myself when I was pitching because those people are night and day comparison to Dame and John. So I value what they're doing. And I do though. I care for them because, you know, I love to see the people up there that they put all the work in and they just need a little extra step. And so I value their guts and I value their, their entrepreneur. spirit. So last question for you, Damon. How much of your success do you think is because of just your hard work and your intelligence and your skill and how much because of luck? Very hard. I always contradict myself because I don't believe that there is anything such as luck. I just believe it's determination and drive meets opportunity. But when I look back and I sit there and I say, see who I am, you know, on this national platform, able to change lives, father of three and a Pisces. I say to myself, wait a minute, you know, something's, God has had to bless me in various different ways. And that's why I worked so hard to try to pay it forward to other people because it's got to be some kind of luck.

I don't know why I was chosen. I have no idea, but a lot of it is determination dry. But I think there is a bit of luck on what's going on in my life. Damon John, founder of Fubu, since those early days selling Fubu shirts on street corners in Queens, He's grown as net worth to an estimated $300 million. As for Shark Tank, he's put about $8.5 million of his own dollars into companies featured on the show. No word on how much money he's made or lost from those investments. And please do stick around because in just a moment, we're going to hear from you about the things you're building.

In 1987, dozens of federal agents surrounded a trailer park in Ozark, Missouri. Their target, the white supremacist threatening violent revolution. I have eight teams of freedom fighters prepared to start a race war nationwide. The agents fired tear gas, arrested him, and found a massive arsenal. C4 plastic explosives, hand grenades, thousands of rounds of ammunition. So years later, why did the FBI stop watching him? That story, unembedded from NPR. Hey, thanks so much for sticking around because it's time now for how you built that.

And today, we're updating a story that first ran about... about a year ago. It comes from Marin County, California, and it actually starts more than 120 years ago. Yeah, my great-grandfather immigrated from Italy in 1897, and we have been farming or ranching here since then. That's Lauren Pancha from Tomales, California, where he runs Stemple Creek Cattle Ranch. Oh, yeah, you can see cows all over our ranch. We have a few with white faces or speckled faces, but most of them are all black. all-black Angus beef cattle, the same kind as parents raised when Lauren was growing up. And even though he loved the ranch, he eventually moved to Sacramento to work in pharmaceutical sales. But about 13 years ago, Lauren realized he wanted to get back to those cows in Marin.

I felt like it's either now or never. I'm 30. You know, it's totally okay if we try and fail. But if I don't even try, I'm not going to be fulfilled as a person. So Lauren talked about it with his wife, Lisa. I mean, I knew, obviously, since I met him, how passionate Lauren was about agriculture. And I was up for the adventure. So Lisa quit a good paying job at a law firm, and they moved back to Marin to join Lauren's parents on the ranch. But we were still ranching the way that my great-grandfather had ranched at the time. And we needed to change some things up and actually make it a profitable business.

Otherwise, we weren't going to be able to survive. And we essentially asked Lauren's parents if we could take over the running of the ranch. Thankfully, they had the vision and they were brave enough to say okay. Salisa and Lauren started to make some changes. For starters, they no longer wanted to auction off their cattle to a feedlot. They wanted to raise them until they were slaughtered and then sell the beef directly to customers. And because they saw that more people were demanding healthier food, they decided to raise them. the cows organically on grass instead of grain.

But all of that took a lot of time and a lot of money. We invested a lot of our personal assets in the business. Like we didn't have an investor, we didn't have, you know, seed money. We were the seed. I remember having this conversation with Lisa multiple times and Lisa's saying, well, when are we actually going to pay ourselves to do this? Both Lauren and Lisa kept day jobs that paid the bills while they certified the pasture and the cattle. There was many people in our lives that just thought we were completely insane

because we had two children during these years and we were running around seven days a week juggling all of these balls. It took them three years to fully convert to being an organic ranch and to build up a base of customers. First at farmers markets, then at local stores, and they kept working on different ways to go easier on the environment. In fact, they've become one of the first farms in the U.S. to actually measure their carbon levels. And now they're not only carbon neutral, they are actually what's known as carbon positive. Managing the operation and the property the way that we do, applying compost and rotational grazing, we're actually sequestering more carbon than we're emitting. It's just incredible. Anyway, a few years

ago, Lauren was able to quit his day job in sales to work full time on the ranch. And this year, they're projecting gross revenue of over $4 million. And that money doesn't just come from beef sales, but from tours and an Airbnb on the site. Plus, since we last checked in with them, they've renovated a 150-year-old barn for weddings and conferences. And all of that on the same ranch started by Lauren's great-grandfather. I think my parents are like totally proud to see us back and our business thriving. And they're always talking about us. and they're always our biggest fans.

To hear more about Stemple Creek Ranch or hear previous episodes, head to our podcast page, how I built this.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to our show this week. You can subscribe at Apple Podcasts

or wherever you get your podcasts. And while you're there, please do give us a review. You can also write to us at hibt at npr.org. and if you want to send a tweet, it's at How I Built This or at Guy Raz. Our show was produced this week by Rumtin Arablewee, who also composed the music. Thanks also to Candice Lim, Julia Carney, San Asmeshkampur, Neva Grant, and Jeff Rogers. Our intern is Sequoia Carrillo. I'm Guy Raz, and you've been listening to How I Built This.