My Billion Dollar Shark Tank Investment: Daymond John

Daymond John 0:00 Why is your head in your hand, Daymond? Because AI is gonna turn this country into a civil war.

Codie Sanchez 0:05 The guest today, who is Daymond John. He is the founder of FUBU, which has done $6 billion in sales. He also is one of the most beloved members of Shark Tank, from somebody who had nothing to somebody who became one of the most successful CEOs of our time.

Daymond John 0:22 There's nothing new in this world. It's a new way to present it. The top companies in Shark Tank history, socks and a sponge.

Codie Sanchez 0:30 So would you rather be hungry or rich as a young person?

Daymond John 0:33 Hungry. It's all about understanding that you actually can do it. Stop taking all, getting all those things in your head. You need money to make money. Uh, uh, you know, I have to have an education. No you don't. Know your why. If you're waking up every day 'cause you're solving a problem for a person, you're bringing them joy, and you love it, then you can do that.

Codie Sanchez 0:54 Welcome back to the Big Deal podcast. I'm Codie Sanchez. The studio looks a little different today, and that's because I am in San Antonio about to go on a stage in front of thousands of people. But right after the guest today, who is Daymond John. He shares all the lessons learned from investing, from building big businesses, and from hustling, from somebody who had nothing to somebody who became one of the most successful CEOs of our time in a category nobody had ever done it quite like him before. I can't wait for you guys to hear this episode. He's a riot, and I took a lot of notes. Your career is incredible. You've been on Shark Tank, obviously. You've started a bunch of companies. You've invested in even more. You're on the internet. You got millions of followers. You speak all over the place. You get standing ovations. But I actually don't think very many people know that you invested in

Codie Sanchez 1:44 the most successful company that Shark Tank has seen thus far, Bombas, right?

Daymond John 1:49 Well, I tell everybody whenever I can that I'm the lead shark with the most successful investment in history, Shark Tank history, on all the Shark Tanks that exist around the world.

Codie Sanchez 2:03 Who would've thought it was a sock company, too? I, I had to actually Google the valuation.

Daymond John 2:08 It's a boring... Isn't that a boring company when you think about it?

Codie Sanchez 2:10 Yeah. $3.65 billion valuation.

Daymond John 2:13 Yeah.

Codie Sanchez 2:14 And so I kinda wanted to start there with just, what did you see? Because you were the only one that did it. Everybody else passed.

Daymond John 2:20 I wish I could say that I was a visionary on these type of things. Um, I wasn't. I saw great founders that cared about what they were doing. Um, and I actually tell... I went onto Shark Tank, uh, 'cause when they gave me the option, I would tell people it was '07, '08, I had 10 clothing companies and eight of them were dead because nobody's buying clothing when they can't pay their mortgage. So the, I went on to diversify my portfolio and not get only pitch clothing company 'cause I was known as the clothing company guy, so the last thing that I wanted to buy was clothing. I invested in these guys, um, but I, I, I, I found, I found that I had always had this theory that in business you have to make it first, then you should master your craft, and then you can matter. I can't help anybody else if I can't help myself. These guys flipped at me on the head and said, "No, D, you can make it and you can matter at the same time, because when we're buying, when we're selling a pair of socks, we're giving a pair away to those, uh, in the homeless community because that's the number one requested, uh, clothing item." And, and what they did was show people that, uh, you know, a kid and a mom, and anybody who's buying today, wanna know not only what did you do for me, but what did you do for somebody else. So a kid will sit across a, a table from a parent and say, "Yeah, you invested the office at the end of the year. I invested, uh, 10 times this year. Every time I bought this, I cleaned up the ocean. Every time I bought this, I stopped human trafficking. And by the way, I bought socks for myself, and for my friends' birthdays, I bought them socks 'cause they're helping people." Uh, and, and it just changed my whole way of thinking.

Codie Sanchez 4:00 That's fascinating. What, I mean, I think it's hard to tell if a founder is worth investing in or to know that a founder's gonna be a winner or not. You know, we invest in a ton of companies, and, and I still obviously get it wrong, too. What, what characteristics made you go, "No, no, no, these guys are different"?

Daymond John 4:19 Humble. Did their research, did their homework. Use what I call the power of broke. You know, the founders that believe that they need a ton of money, that's not the founder I want because money's gonna highlight your weaknesses. If you can't get the same customers with $200, then you ain't gonna get 'em with 2 million, right? You're just gonna get one customer at $200 and that amount at 2 million. So what I found was that what I loved about David and Randy, the founders, is he basically said, "Here's how I started the company. I have 50,000 people in my database that somehow had gotten a email somewhere or another from me in my Gmail or whatever the case is. I hit all 50,000. Hey, homeless, the homeless community needs socks, and I'm thinking about coming out with a sock company after the Toms model, ba, ba, ba, ba, ba. What do you think?" 50% of them said, "You're spamming me. Who the hell are you? Leave me alone." You know, another 50% kinda said, "I'm interested. Send me more information." And five or six people said, "Hey, A-hole, I'm your ex-girlfriend. Why the hell are you spamming about your stupid ass socks?" Whatever the case may be, but they were, they... You know, real true entrepreneurs and founders, they, they're, they're like Steve Jobs. They're the ultimate tweakers. You know, not twerking.

Codie Sanchez 5:36 [laughs]

Daymond John 5:37 Tweakers.

Codie Sanchez 5:38 Yeah. Well, I mean, I remember that. I, I think I, I did, I probably broke, like, a few GDPR email laws when I started my first company.

Daymond John 5:47 For sure.

Codie Sanchez 5:47 I was like, any person I met was on that list. You know, they were getting spammed. And I think you did some of that same stuff. Like, way, to go way, way back, when you started FUBU, you know, your stories are pretty incredible about some of the hacky things you did in the beginning. Like, stuff that now I think kids who are more risk-averse, like, increasingly they don't do as crazy of things. There's a lot of online interaction. Probably things that, you know, you did, people think, "Oh, I would never do that now." Like, what were some of the craziest unhinged hacks you did to start?

Daymond John 6:18 Well, remember when I started FUBU there was [laughs] ... Now I sound like your grandfather. "I ain't had no shoes." But when I started FUBU there was no internet. And it was barely soulful. I had to stand outside the Apollo Theater after those people got out in Harlem after watching the comedy show at the Apollo. And my customer feedback was what they told me about my shirts and my mother. I had to come home like this, "Yo, we gotta make the shirts look good. We gotta change the blue on that." So, um, and then when I sold you a shirt, there was no internet. I had to find you the next day. I had to go to your house. So all the things that I hacked, I used common sense. I used simple things. Uh, I happened to know, uh, a lot of artists, video artists, and I mean, music artists and various other things. I knew their cousins, their brothers, their uncles. I would know where they would shoot videos. I took 10 shirts for two years, the same 10. I'd go to every video set I could. I went to 40 video sets. I got kicked off of 18 of them, but the 22 that I got on, I would put it on an artist, and he'd shoot the video, and I'd take it back. Put it on another artist, take it back. Um, I remember, uh, I didn't have any money to advertise, but I remember seeing all those nasty storm gates outside the store they pull down. I'd go to every place I can. I'd go, "Hey, if you can let me paint a beautiful white sign of this company that I'm working with on the gates... Now, by the way, you have profanity on there and graffiti on there. If I put a beautiful white sign on there, when those gates are down, the kids are gonna see it. When you pull those gates up, because you're supporting a local company, they're gonna wanna come and support you." I spray-painted 300 gates from New York to New Jersey, "Authorized FUBU dealer." I didn't care that you were selling Chinese food. You were an authorized FUBU dealer. Uh, later on when Nielsen ratings... You remember that Nielsen rating? I mean, they're a big company called Nielsen and AQ and various other things. They were like, when I started making money, FUBU had its first million dollars to spend, and that's today is like $10 million. They said, "If you wanna put on MTV 30-second commercial, $6,000, 'cause here's how many people watch this. BET, 30-second commercial, $500." Okay, so you would think that I wanna buy for more people. Common sense. Let me see, BET. Last time I went to the projects, there was no Nielsen rating box, and all the cable was hooked up to some illegal line standing out there, and there was 15 million people sitting around one TV. I'm gonna own BET for $1 million, because it was just common sense.

Codie Sanchez 8:42 Maybe common sense for you, but it does seem like your brain just kinda works differently. Like, you, you, you looked at this market and said, "No, I don't want the ego play of, of MTV. I'm gonna actually go with where it converts. Like, I wanna make money on this. I don't wanna just be the big name."

Daymond John 9:00 I think that being dyslexic, I always say eight of the 12 Sharks are dyslexic, and I think that it's the fact that I didn't know if I read anything, if I was gonna read it accurately, and that I'd have to go out and do it. And I think common sense is common sense. But people try... You know, I think it was my mother always said to me, "You know, Daymond, every..." We're driving down the street, and she said, "You know, the..." We, we lived by JFK, and I saw planes, Empire State Building, all this stuff, and she said... I said, "How do men and women build these massive machines, Mom?" She said, "What are you talking about? Everything that start, everything that's created in this world, the car we're in, the street we're driving, it started with one person with one idea that took one action." "Okay, Mom, well, everybody's rich." "No, son, 65% of Forbes wealthiest 1,000 people are self-made men and women." They're not rich. Or somebody sitting here saying you need money to make money. Well, if you need money to make money, uh, the Fords, the Carnegies, and the Melons, they've done such great things for this country. The Rockefellers, uh, their kids have money, but their foundation do great stuff. But why don't they own the Teslas and the Facebooks and the Instagram of this world? Why? Because the first generation makes it, the second enjoys, and third will destroy it. So it's all about understanding that you actually can do it. Stop taking all, getting all those things in your head. You need money to make money. Uh, you know, I have to have an education. No, you don't. You don't need any of that stuff. You need to sit and listen to stuff like this and apply these simple rules every single day.

Codie Sanchez 10:23 So would you rather be hungry or rich as a young person?

Daymond John 10:26 Hungry, because rich doesn't mean anything. You know, you know, rich, it, it, r- There is no ultimate rich, right? A lot of people think, "Well, I'm rich." What is rich? You know, if, um, Jeff Bezos woke up with Mark Cuban's money, he would jump out the window. And if Elon Musk woke up with Jeff Bezos' money, he'd jump out the window. There, there is no... I mean, what is rich? Well, what, some working stiff who's working, you know, all day in an office, and on his deathbed or her deathbed, they're looking at a whole bunch of people who sucked them dry and said, "Man, I should've lived a better life"?

Codie Sanchez 11:06 You have kids-

Daymond John 11:07 I have kids

Codie Sanchez 11:07 ... obviously. Um, how do you make sure that they don't turn into that second or third generation that loses it all?

Daymond John 11:14 'Cause

Daymond John 11:15 I'm not leaving them anything. You know, I put it in my kids' head ever since I was young that, uh, then, that they were young, that they were not gonna get anything, the same as Buffett and everybody else has done. So what does that do? I have two little girls. Uh, well, they're, they're not little anymore. But it makes the... First of all, it stops all the scumbags around going, "Let me, let me, uh, try to become part of their life, because he's, they're gonna get something." So first of all, you stop 50% of the scumbags. They also create in their head, and it's true, the narration of, "I don't need his money." Not only do they not need my money, they don't even wanna be part of anything I'm doing, 'cause they wanna be independent people. Now, my two oldest girls, the internet wasn't around and social media wasn't around, so they didn't have a camera on them all the time, and the only time I ever interviewed, which was my potential biggest break ever, it was when Oprah's producer said, "We wanna come into your home and see your family," and I never wanted my girls to be under the pressure of being Daymond John's daughter. And they're off for being great, great human beings, and I think that that is one thing. I think, uh, other wealthy kids that I know have said sports has been great, because a kid don't care who your mommy and daddy is when they wanna hit you in the chin for a ball. Um, and now today, my youngest one That's gonna be a different challenge. It's a different day and age right now.

Codie Sanchez 12:37 Yeah, that's the hard part. I think about that a lot. I didn't grow up with anything, and so when my husband and I hopefully are blessed enough to have kids, you know, I- it's just a totally different equation. Like, if you fly private, do they have to fly commercial? Like, h-how do you do that?

Daymond John 12:52 You know, that's it. All of this is a challenge. You know, Liz Claiborne said to me one day that she grew up in wealth, and her father said, "The only thing I can't give you is adversity," and it's very, very hard. So I fly private s-some of the time. I don't fly all the time, and I remember when my daughter, when she... And I, I usually fly. When I'm with my family, I need to be someplace in time. By the way, I wanna tell the rest

Daymond John 13:15 of the world, flying private is a waste of time. Don't do it for other people's reasons. Man, that JetBlue sleep do- lay down is fantastic. Uh, if I go to California, New York, round trip is $100,000 privately. I gotta go to Teterboro. I get there probably about two hours earlier than you. If I wanna lay on the plane, well, I gotta go in the back and kind of by the bathroom area. I gotta see if I'm going to get a stewardess for the plane or not. It's $100,000. I save two... I, uh, the only thing I'll do is save two hours. For those two hours, if I go commercial, that's, I get paid $96,000 for those two hours, right? That I didn't get there on time with you. You know what I could do with that $96,000? And the plane, the not the worst part about the plane is I'm a little bit of a tree hugger. I don't wanna pollute the world for this stupid little plane, but the w- and those light jets, the light or mids, they can't take the wind like those big ones. But do you know the w- uh, the worst part about the plane? It's like getting a free pet. Now you gotta get shots for the little thing running around here. You gotta get diapers, and you gotta clean up this rug where it scooch on the carpet. You got the brown stain looking like planes with chocolate wheels are landing on your carpet. It's having the plane. Your friends are gonna wanna go on it, and then you're gonna go to Vegas and spend $200,000 on a Tuesday 'cause you got a plane. Don't get any planes. That's why you see athletes and lotto winners are bankrupt three years after leaving the league or winning the lotto because they don't have, they don't know how to use the tool of financial intelligence 'cause they, we gotta get a plane. I made those mistakes.

Codie Sanchez 14:55 Yeah. I, I think it's really smart, and it's, uh, these days I think people wanna look rich, not be rich, and what a dumb move. You know? Way better.

Daymond John 15:03 It, it is. But, you know, we're all human. What's your why? You know, somebody said, "Well, Daymond, you're famous. How many people are gonna see you on the plane?" Uh, I don't know. I could wear a mask. Now, a hot 20 people are gonna see me. Is my ego that big that I need to pay $96,000 so 20 people don't see me?

Codie Sanchez 15:22 Yeah. Well, plus, like, why is it a bad thing? Well, I mean, I always... Mario, Mario Lopez is, like, one of my favorite longtime actors, and he flies Southwest with his kid, and I think that is so fucking cool.

Daymond John 15:34 Barbara, unless somebody's paying for her, she'll fly coach. Daniel Libitki got a lot of money. He will never get on a plane with his kids unless it, he gets on a plane coach.

Codie Sanchez 15:48 I'm a little bit, I'm a little bit of a pain in the ass. I wanna be first class at least.

Daymond John 15:51 I'm not sitting... I'm not going coach.

Codie Sanchez 15:52 Yeah, I don't wanna be a coach.

Daymond John 15:52 No, I was acting all cool just now.

Codie Sanchez 15:54 I'll just say it. [laughs]

Daymond John 15:54 You know what? I started to get claustrophob- I, I've traveled 250 days a year. You know what I mean? I'm not... You know, listen, uh, who was it? Bill Gates rode the train up until they said you just have to stop riding the train due to your, you know, safety. I'm a New Yorker. I'm used to hopping in cabs, trains. You know, so it's just, you know, I, I... Don't do it for the wrong reasons. Do it for the right re- If the check is bigger than that plane ride and for the right reason and time constraint, yes, and if you're family, you know?

Codie Sanchez 16:24 Yeah. I think that's a good lesson for life in general. Like, the, if you can't really cash the check for a bigger reason, probably don't do it. Um, you know, I, I'm kinda curious.

Codie Sanchez 16:34 So you've been in clothing forever, since, since FUBU, and invest in a ton of other clothing companies. Are there brands today that you're like, "God, this one's underrated"? Like, these are-

Daymond John 16:46 This one

Codie Sanchez 16:46 ... sleepers.

Daymond John 16:47 They're getting it right?

Codie Sanchez 16:48 Yeah.

Daymond John 16:49 I like a company called Actively Black. They're the new version of FUBU to me, where they had the license for, like, Marvel. They had the license for Tupac, so they had Black Panther and stuff like that.

Codie Sanchez 17:00 That's smart.

Daymond John 17:00 Uh, you know, Nike still gets it right in a sense, um, and I'll just say a reason why. You know, they'll do a custom shoe for one person. You'll say a $30 billion company doing a custom shoe for one person, but what they're doing is they're putting that algorithm together of all those people that ordered these type of custom shoes with the same color, the size, the fit, and you're actually creating the line for them for the following year. I think Under Armour gets it right. They were able to successfully, uh, convert from shoes to now hunting apparel and various other things. I mean, I like, I like the Hokas because, uh, you know, I'm, I'm five-foot seven and a half, and when I wear Ho- Hokas, I'm five foot nine. I can finally look at my wife in the face. You know what I'm saying? Don't talk to me like that, baby. Um, you know, Louis Vuitton is the largest company in the world. They get it. They get it right. They get it right for the right reasons. Uh, I don't wanna go into how. There's so many ways that they get it right. Uh, Hermès. You know, I was watching the founder of Hermès speak one day on a 60 Minute interview, and he said, and I don't know if I wanna say it right, the right way, but he said, "Expensive is something you regret, but luxury is something that you never re- you, you don't regret." Now, I, I'm, I'm, I'm bastardizing the way he said it, but he basically said expensive is like, "Yo, look at this watch," and it's cool, but it's not that Rolex that you invested in. And an Hermès bag, he showed the process it took for one bag. Now, my wife has a bunch of Birkins, and she always says to me, "Honey, these are like investments." You know how much they appreciate. So I usually go to her and say, "Well, when are we gonna sell all these investments? They have appreciated a lot." And then I'm sleeping on the couch that night.

Codie Sanchez 18:43 [laughs] It doesn't work out.

Daymond John 18:44 But I think she's selling it for when I'm in the dirt.

Codie Sanchez 18:47 Exactly.

Daymond John 18:47 And then, you know, she's cool.

Codie Sanchez 18:49 That's her, her 401 [k] female version.

Daymond John 18:51 Yeah. Getting, getting pretty depressed.

Codie Sanchez 18:53 The richest people in the world didn't just build. They bought. They didn't come from riches. They used other people's money and a ridiculous amount of sweat. People will tell you you can't, yet didn't you know there isn't a multi-billion dollar business out there that didn't do some type of acquisition? Amazon, 110 companies bought. Facebook, 96. The Sage of Omaha himself started buying a gumball route. They didn't listen to those who said they couldn't. They found aging owners, made connections, took risks, repeated. Today, the hardest thing to do isn't buy a company. It's start and keep a profitable business. Around here, we don't hope and pray for profits. We buy them, real businesses, 56,000 of them, real profits. Custom deal box, so you can swipe left and right at your pleasure. Maps find businesses close to you. Off-market deals where no one else is even looking. This is how you become an owner. Well, I was curious because, like, it seems like there are some legacy brands that are resurging, like Abercrombie & Fitch. I never thought I'd see a day where that was cool again.

Daymond John 19:59 Mm-hmm.

Codie Sanchez 19:59 And, um, now one of the most successful, uh, clothing brands by market cap, huge growth numbers. Like, let's say you got your hands on a legacy brand, like Tommy Hilfiger, Calvin Klein, something like that. What would you do to turn around an old-school company?

Daymond John 20:15 Well, I have one. It's called FUBU.

Codie Sanchez 20:17 That's true.

Daymond John 20:18 And you have a good point. I- it's all about the execution, right? So you're... Ab- every brand will get rediscovered. Fashion pretty simple, every 10 years. There are one that will stand the test of time, Tom Ford, Chanel, um, you know, Louis Vuitton, uh, Hermès. But even my brand, FUBU, uh, I think it was a good question. Like, uh, I re- I, I got another brand, Coogi, that I, that I put out too, but I personally don't have the time to run FUBU the way it should be. It's in execution. And my partners and I, we never sold the brand because we love what it stands for, but we still do a good amount of business. But could we make, could I make it a probably a billion-dollar brand again? Yes, I could.

Codie Sanchez 21:08 Yeah.

Daymond John 21:08 It would be a whole different model. It would be, right now, I would have to go the way the world is. FUBU, when it first started, it was a surprise to see a African American-owned brand that, that was kinda like the first hashtag of clothing that people of all colors loved. So for a store to carry it, it showed we believe in w- this culture. Today, if I were to... And we have suits, and we've been Phili- Philippines and other stuff. But today, if I were to relaunch it today, what is FUBU? For us buyers, what do people wanna do now? They want independence. So I'd probably have, uh, uh, one male, one female in every college, and one male, one female in every high school. They would get per... on credit, they would get $1,000 worth of FUBU for $500 worth of credit. I'd bank it by one of the banks, JPMorgan Chase or, uh, whatever. And they would sell the clothing, and they would make $500 each allotment. And when they get to a certain point, they would get digital assets, maybe your podcast, maybe social media, maybe AI, maybe whatnot, Amazon, whatever the case is. And then when they time out of that school, they would bring somebody else in, very much like the Avon model. And that's what I would do because it would be then FUBU would be empowering us here while we sell to our community. That's what I would do with that brand.

Codie Sanchez 22:26 That's so interesting.

Daymond John 22:26 But I just don't have the time.

Codie Sanchez 22:28 Yeah, you would basically t- make it a streetwear brand again. You, it's not gonna be you on the street knocking on doors, but you're just gonna proliferate yourself.

Daymond John 22:35 Right. And instead of the FUBU guys being the FUBU guys-

Codie Sanchez 22:37 Yeah

Daymond John 22:37 ... I would have contests on who's the new FUBU guys and FUBU girls, and you would be the FUBU guy and FUBU girl in your community, in Detroit or Colorado or this school or that school-

Codie Sanchez 22:47 Yeah

Daymond John 22:47 ... for that year. Um, and you would create your own user-generated content, and we would sanction, put it on the site of saying, "If you're in this city, this is who you can go to get the product, whether online or here." But again, all this stuff is really easy to talk about.

Codie Sanchez 23:01 Yeah.

Daymond John 23:02 Execution is where it's at because I have my own ideas. And you see, I don't have time to execute them.

Codie Sanchez 23:10 What, uh, uh, do any other clothing companies do that? Like, I've never heard of somebody having, like, a Avon sort of style model.

Daymond John 23:17 I, I'm sure they do.

Codie Sanchez 23:18 Interesting.

Daymond John 23:19 Um, I'm sure that, like, uh, I know, I know, uh, my boy who used to own Young & Reckless, but he owns something called... I've got the jean company. What he would s- do is put in a box, um, a guy would pay $50 for it, 54 Denim, I think, and a man would get $100 worth of clothing for $50 a month in this box. And why was that a good model? Well, in the clothing business, the way the retail works, if I made it for 25, I sell it to Macy's for 50, and they sell it for 100. I'm s- the clothing company's still making the $25 it would send, to put in the box. However, here's the thing about especially guys, but anybody. If I know now that I got a, I got 100,000 guys, well, I know how many 34s I need, how many 36s I need, how many 38s, all the sizes. I got a lower form of return. Women, it's a little different because a woman, when she first buys a brand, if you sell her something, she's gonna buy two sizes 'cause she doesn't know if she's a 10, or she doesn't know if she's a 12. She doesn't know what, what, and the, the jeans fit a little different. But I'm gonna have a lower amount of returns. I'm gonna know who the customer is. And you know what they started doing after that? They started saying, "Hey, Gillette, you wanna put, uh, your new razor in all the boxes? You give me a million dollars." So there's different ways to have these subscription, these, these subscription/tiered model.

Codie Sanchez 24:40 So I know in our businesses- So right now, we, we own a bunch of boring businesses, so I-

Daymond John 24:45 Bunch of what?

Codie Sanchez 24:46 Boring businesses-

Daymond John 24:46 Yeah, uh-huh

Codie Sanchez 24:46 ... like an HVAC, roofing, painting, window cleaning. And I know for instance, in the painting business, we wanna like get a toe in by you saying, "We're, we'll paint some walls inside of the house," but what we really wanna do is like paint the exterior of your house. We wanna paint the whole thing. That's where we really make the money are the big projects, and then we get like one house on a block, and if we get one house on the block, we know, we do a door-knocking strategy, so like we'll at least get one to two others on that block. So we'll like maybe even lose money on the first house to get it on the second or third. I was curious in clothing, like what items sell and they just make the most money? Like-

Daymond John 25:24 Oh, you're talking about the bread butter-

Codie Sanchez 25:27 Yeah

Daymond John 25:27 ... the margin builders as we call it.

Codie Sanchez 25:29 Yeah.

Daymond John 25:29 Clothing makes z- almost zero money off of anything else besides jeans and T-shirts.

Codie Sanchez 25:35 Why?

Daymond John 25:37 Well, because jeans and T-shirts are easy to make, and people go through the T-shirts and stuff like that. I mean, Louis Vuitton, if you look at Louis Vuitton, I mean, when people leave, what do they really leave with? A belt, a wallet, or some kind of keychain, right? Those are margin builders as we call them in the business. In the business for the most part, almost 60% of all sales in clothing is black.

Codie Sanchez 26:02 Wow.

Daymond John 26:02 20% is white. The rest is just sprinkled, uh, in between.

Codie Sanchez 26:06 Interesting. This is a very dumb question, but I always wonder why... So if you go to like Chanel or, or Louis or whatever, you can buy a pair of shoes for like, I don't know, 600 to 800 bucks, but then if you wanna buy a shirt, like at Chanel, it's like $4,000. Why? Are they that much harder to make? Or the shoes seem like they would be more expensive to me to make.

Daymond John 26:27 Well, that's the, uh, it, it depends on what they're, what they're making in the Chanel, um, shirt, right? What product they're ma- and what is, what is... I mean, it could be cashmere, it could be a lot of other stuff.

Codie Sanchez 26:37 Yeah.

Daymond John 26:37 But the margin builder is gonna be the, the simple black dress.

Codie Sanchez 26:40 Interesting.

Daymond John 26:41 Right? But the shoe itself is once you make the shoe in the mold, uh, you can replicate that mold various different ways. A shoe is actually hard to build. Very, it's like, almost like building a car because what happens is in the shirt and stuff like that, it fits, it doesn't fit, but on a shoe, there's 130 pounds on that shoe. Uh, and the ER every single night in every single city is there with a woman who split her toes or her, broke her ankles due to those shoes. Um, so there's a lot of balance and a lot of stuff going in, but once you replicate that mold, you're gonna put that same mold together with a different upper different ways, yeah.

Codie Sanchez 27:18 Yeah, interesting. I never thought about that. It's always bothered me. I'm like, "How come I could buy that for 600 bucks, but that's 5,000?"

Daymond John 27:24 Yeah, because that 5,000 one, they're only making, you know, uh, 20,000 or, or they're making 5,000 units of that or 2,000 units globally with Chanel. And that shoe, they're making, you know, 40,000, 50,000 units of it, so they're buying by bulk.

Codie Sanchez 27:39 You're right. Okay, that, that explains it.

Codie Sanchez 27:41 Um, I wanted to talk obviously a little, a little bit about Shark Tank.

Daymond John 27:45 Yeah.

Codie Sanchez 27:45 Um, you've seen a ton of pitches.

Daymond John 27:49 Mm-hmm.

Codie Sanchez 27:49 And I've had friends actually pitch you. I've had friends get money. Ooh, I don't know if I've had friends get money from you, but I've definitely had friends pitch you and pitch all the, the sharks. If you had to break it down formulaically, what are you like, "This is a pitch that works and this is one that doesn't"? What is a good way to pitch to get money?

Daymond John 28:07 The pitch that doesn't work for sure is the people that immediately come in and they just, everything is hypothetical and they assume. They don't have a history of things, and they go... The, the number one thing that you can say that I immediately check out or I give you some kind of royalty offer like a Kevin O'Leary, 'cause I go, "This person's almost out of business," is, "This is a $50 milli- billion market, and if I only get 1%." I guarantee you every one of the sharks are almost out, or Kevin O'Leary will give you a finance offer 'cause he doesn't care if you do well or not. He just wants his money back, and he's taking a flyer on if he gets a percentage of the company down the road. The greatest pitches that I have seen, they're always a story. They're always very infomercial-feeling 'cause they're, what they're doing is they're introducing that a problem either exists that you know or exists that you don't know. They're talking about why, who they are and why they're qualifying that they're the person to solve the problem. They're giving you some kind of proof of concept or an essence on why. So it's like, "Hey. Hey, Codie. Uh, I'm Daymond John, and you know what? For years, uh, the hip-hop community has had to buy their clothing from other designers that didn't care about them, that said, 'Give me your money. I don't like you.' But I've been a fan of hip-hop for 10, 20 years, and I know everything about hip-hop, and I'm gonna create a clothing line called FUBU. There's no such thing called the internet, but if you're across the street and you see me, you know what I'm into because I'm FUBU. I am going to connect people through a community. And people in the past have had to, if they wanna buy African American type of clothing, they had to do Kente cloth clothing. Who wants to wear orange and green and red? I'm gonna create blue jeans like a blue jean. This is the cowboy, the Levi's of cowboys. We are the Levi's of the urban kid, and it was gonna be about 20% more, but it's gonna be quality in it. And if you invest right now, I got superstars like LL Cool J ready to wear it."

Codie Sanchez 30:10 Amen.

Daymond John 30:11 So you're qualifying yourself, you know, and telling the story.

Codie Sanchez 30:14 Yeah. Now, what about, um, you know, on Shark Tank, obviously it's a TV production. How much of it is actually like produced? Are there takes and they get to go again and like, is there a fake component of it?

Daymond John 30:30 No. There's only one component of it that in case I'm talking and I'm saying I'm out, and Barbara's just doing her normal rambling 'cause she didn't take her medicine and the mics don't pick it up. We do a day where nobody's there, and we say, "And for that reason, I'm out," so you catch the audio of the actual clean I'm out. But there is nothing produced. Remember, this is our own money, and ABC and Mark Burnett and them, they don't wanna get in the way of us spending, losing, or profiting off of money. Um, so an average pitch is one hour long, half an hour to an hour long, 16 cameras shooting it. So an hour pitch is 16 hours of footage for you to see eight minutes.

Codie Sanchez 31:13 Wow.

Daymond John 31:13 Takes us six to nine months to close the deals. We close about 60% of the deals. The guy who's with me in the room today pitched on Shark Tank 13 years ago, some little company called Hanukkah Tree Topper. We ended up licensing a lot of the company out and doing well with it, and been my, head of my sales for 13 years after that. Um, so it's real, real people, real businesses.

Codie Sanchez 31:35 Fascinating. What percentage of deals, like, actually made you money?

Daymond John 31:40 Make what?

Codie Sanchez 31:40 Made you money.

Daymond John 31:42 I don't even count what's made me money because if you really think about it, um, and Barbara's really good with her P&L. When you look at my staff, when you look at me traveling, when you look at the hours and time in it, um, I don't look at 'em, but, you know, I'm, I'm positive because of certain exits and shares that we've sold. I am positive, but, you know, it's, it's almost like the venture community. You know, I think 2 out of 10 is winners. I think we have 3 out of 10 because we have a baked in commercial.

Codie Sanchez 32:12 Yeah, 100%. You, you, I mean, you have the hardest part, which is distribution.

Daymond John 32:16 Yeah.

Codie Sanchez 32:16 I, y- the hardest part wasn't creating T-shirts. Those existed before. It was getting somebody to actually say yes and give you the cash.

Daymond John 32:22 Correct.

Codie Sanchez 32:23 And so, I mean, we see this all day. You know, "I have this brilliant AI strategy, and we're gonna change the world." And I go, "Awesome. Who have you sold it to?" And they go, "Well, nobody, but the second I get the money, what's gonna happen is I'm gonna sell it."

Daymond John 32:34 Mm-hmm.

Daymond John 32:35 Exactly.

Codie Sanchez 32:35 And you guys get to sell immediately. I mean, I had a few friends that came on Shark Tank, and I'm sure you guys saw that. Did you see a lot of people come on Shark Tank that were like, actually didn't want your money, they just wanted your distribution, so they gave you crazy fake offers?

Daymond John 32:46 They wanted, they wanted the, the, the, the, the commercial.

Codie Sanchez 32:49 Yeah.

Daymond John 32:50 Yeah, sure. Plenty of people. There was a certain time when a lot of people did that.

Daymond John 32:53 So what I do, uh, is, is pretty simple. After we do the deal, you know, um, in a handshake, I walk over to them and I send, I give them a piece of paper, very short one, and say, "Take it to your attorney." And it says on there something like, you know, um, "You're not gonna publicly shop this deal for another year after you air." Totally up to them to sign, but if I see them hesitating, I know that they're looking for a commercial. I don't mind you looking for a commercial. I get it. However, the serious, there's a serious matter. The show was founded in '07, '08 when we went through a very hard time in this country. You're only gonna have about 96 people that air. 1,000 people will see the producers, and 40,000 people applied. If you have $2 million in the bank and you have your hat in your hand asking for money and you have no, uh, no, you don't plan on closing with a Shark, you took that slot away from a family who risked everything, who their kids are not going to college. They're about to lose their house, and they want a Shark to desperately help them, and I think you're a selfish bastard for that. I think there's a lot of other places to pitch those ideas, and nothing wrong with founders who have money, but that show is for the American public, and that, and, and people don't understand you got a million dollars in the bank, not today, when people can't pay their mortgages. So that's, that's why I do it. I, I, I... So I have, I have a problem with people who try to abuse the platform.

Codie Sanchez 34:22 Yeah. I never thought about it that way, actually.

Daymond John 34:24 Yeah.

Codie Sanchez 34:24 I think a lot of people think about Shark Tank not from that sort of like, that deep heartfelt portion of it. It's just like, "Cool company. Give them cash. Bye."

Daymond John 34:32 No, we love, we love these people. These people are our partners. These people are people who are allowing us to invest in their dream. They're holding a space, and there's a fiduciary duty of investing in another person's dream.

Codie Sanchez 34:49 Yeah, I agree with that.

Codie Sanchez 34:50 Um, you know, let's go to the other side of that, which is I've certainly lost a lot of money doing deals, and, uh, and I, th- like, up to, to now, knock on wood, I don't know if I'll always be able to do that, but I have never lost money for other people, which is always, like, ki- kind of the line that freaks me out, you know? And that's probably a bad thing in some ways. I should probably get more comfortable with losing-

Daymond John 35:10 No

Codie Sanchez 35:10 ... some [laughs] money.

Daymond John 35:11 I can't sleep at night if I lose some money, and I lost money for probably about two guys.

Codie Sanchez 35:16 Yeah.

Daymond John 35:16 And I still till today, I wanna do it the right way. If I have another business that they can get in where they're gonna make their money back, I'm gonna make sure they're first up.

Codie Sanchez 35:25 Yeah. Yeah. The, the, the place where I regret investing the most was I invested some in the cannabis industry early on.

Daymond John 35:32 Okay.

Codie Sanchez 35:33 And it's not that I, uh, regret cannabis itself. I, I think I regret the way that it's happened, and now I think the THC levels are, like, too high, and I think the way we're doing it could actually be bad for people's health.

Daymond John 35:42 Sure.

Codie Sanchez 35:42 But I'm not a doctor. But I, I invested in the industry that really needed regulation to happen.

Daymond John 35:48 Sure.

Codie Sanchez 35:48 And if deregulation didn't happen, it wasn't going to, to really change. And so I remember, like, one deal, we almost lost 12 million, and then it got down to 1, you know, and we, we did a workout of the deal.

Daymond John 35:59 Excellent.

Codie Sanchez 36:00 But that was fucking awful, you know, terrible six-month period.

Daymond John 36:03 Uh-huh.

Codie Sanchez 36:03 But thank God, we only lost a million bucks, which sounds like a lot. I was wondering, what do you think's the most amount of money you've ever lost on a deal?

Daymond John 36:11 Uh, probably about 6 million.

Codie Sanchez 36:14 And did that hurt? Like, do you remember what happened?

Daymond John 36:17 I'm about to cry. Yes, it hurts. It hurts a lot. I don't wanna actually remember it. Yes, it hurts. Losing that kind of money hurts. Um, it hurts the wallet, but it hurts knowing that you put people to work, knowing that you didn't make maybe the right decisions. You could have done better. It's your job. What did I do wrong? Why didn't I see it? Did I let my ego get in the way? Did I pick the wrong people? Man, how are these people gonna look at me now? They trusted me. I don't know what they were gonna do with that money. Yeah, they may be wealthy, but it doesn't matter. That's not my problem. I'm c- can't count their money

Codie Sanchez 36:57 I think most entrepreneurs have something like that, like a moment where you kinda stood in the dark alone, maybe didn't tell your wife, didn't tell your kids. Everything was kinda going sideways. I've certainly had them. My, my dad calls it the head in the hands moment.

Daymond John 37:11 The what?

Codie Sanchez 37:12 The head in the hands moment.

Daymond John 37:13 Oh. Yeah.

Codie Sanchez 37:14 And, and I was curious, have you had one of those?

Daymond John 37:18 Plenty of time that I've had that. I have it now.

Daymond John 37:21 I have it now. You know, I was, I was speaking someplace, uh, and they said to me, "What are your hobbies?" I said, "Oh, you know, snowboarding, going to UFC fights, and fishing." And I said, "Wait a minute, I really haven't done none of that in the last year." They said, "Why?" I said, " 'Cause my head is in my hand." "Why is your head in your hand, Daymond?" Because AI is gonna turn this country into a civil war, because when the have-nots don't have anything, they're coming after us. So what am I doing right now with this AI that's clear that's gonna put me, my company, and my people in the right place to be that small percentage that's gonna be able to thrive? Because if I don't think and see where that puck is going right now, we're all in trouble, in my company and in every company. We're all in trouble. And then I start thinking about it. Wait a minute, what is AI gonna lose and not have? Never gonna have community. People are gonna need to piss, shit, and eat. People are gonna need medicine. If we are going into some kind of war or problem because 80% of the people are gonna be replaced by autonomous vehicles who are truck drivers, retail is gone, and then all of a sudden you got, uh, Amazon just, uh, bought 750,000 robots, so nothing there. If all those people are gonna need to feed their families, and they're gonna come after some of us, well, then I should invest in security companies and various other ways to make the place a safer place. So my mind is right there. Where is it going?

Codie Sanchez 39:03 Interesting. So what is your answer to that? What industries are you investing in today, and what are you telling your employees to do?

Daymond John 39:13 Well, I think that if robots are gonna be $30,000 apiece from, what do you call it, Tesla, in two years, they're gonna be 5,000 in five years. If people are moving further out, and they don't have enough income, well, then you can create better glamping in various areas. Imagine having 20 robots on 400 acres of land just cleaning and doing everything it needs to be so that you can create better communities for people. Um, if biohacking and health is coming around, imagine, uh, if you're getting people cleaner ways to take care of their body and their health that doesn't cost a lot because technology is showing people how to improve their lifespan. You know, if you don't know if you're talking on a screen to an, a robot or, or whatever the case is, community's gonna be bigger and better, so how do you create better communities so they can educate, and they can protect themselves? So we have to find the beautiful things that work in AI. Do I think we're gonna be s- gonna be good? Yes, I think we're gonna be great, but you have to be the one thinking about it now. You don't wanna be the person who's working at the library saying, "Why are you looking at Google? Come over here and look through an encyclopedia." You wanna be that person looking at Google saying, "How are we using it the best?" I like your idea. I love buying boring businesses. Because as fast as AI is, it's not gonna change the entire world. Like, my buddy, um, Matt Lieber, who has, um... who teaches trade, Crash Champions. You know, you can go to college now, and let's say you're a doctor. A doctor used to g- have to need 20 years of, uh, uh, education to look at a scan. AI will look at your scan quicker than a doctor will. Do you really need that? Now, trust me. Do me a favor. If you're gonna cut up, cut open people, go to college. But a kid graduating college today is gonna barely make 70, 80,000. A kid who does a trade, like in my buddy Crash Champions, or HVAC, or these things that people don't wanna do anymore, they're making 70,000 coming out of high school. They're not borrowing $500,000 to $700,000 worth of student debt that they're not gonna pay off until their 50s. And they can take college courses at the same time as being a HVAC person or owning a car wash. I think the world is getting really simple, and you've gotta go back to the basics, and then add, add AI to it.

Codie Sanchez 41:33 Yeah, that's smart. Well, it kinda goes back to your book, which I loved, um, The Power of Broke, about, you know, AI's not gonna hustle for you like a human. Like, the creative will become so much more important because the everyday will be way too easy. Like, it will be too easy to mass spam, mass email people, so you're gonna have to fi- Like, it actually might full circle revert back to the door knocking, back to the neighborhood signs.

Daymond John 41:58 It is.

Codie Sanchez 41:58 You know?

Daymond John 41:58 That's the point. You know, Rick Rubin said something the other day that was fascinating to me. He said, "You know, AI couldn't have told the Wright brothers to dream."

Codie Sanchez 42:05 Oof, what a line.

Daymond John 42:07 Right? The thing that makes us imperfect makes us perfect, the ability to say, "I'm gonna knock on all these doors, and I'm gonna tell them something a computer can tell them, but not with the emotion, 'cause I'm a pack animal. I'm gonna look them in the eye and say, 'See the house down the block we painted? Look how beautiful that house is. Yeah, you can get, uh, you can get painting from anyplace else. I'ma bust my ass to make sure this fucking house is perfect.'"

Codie Sanchez 42:37 One of my favorite lines from Daymond is, "The easiest thing to sell is the truth." And if you listen to Daymond talk, you'll hear him say again and again and again that the most important part of building a business is to do it your way with your unique angle, and there's an angle every single time. We obsess about this in the SMB boardroom, where we teach people what we call finding your avatar, which is finding the angle on your customer. Most people do not spend enough time thinking about brand, customer, avatar, and angle. So we obsess on it fre- for you. For one year, we work together with the best entrepreneurs who are focused on growth sustainably and wanna use our operating system in order to do it. If you are running a business that is on a path to do hundreds of thousands of dollars a year or millions of dollars a year, you're gonna wanna check out the boardroom and see if you're a fit. We will help you find your angle and your avatar.

Codie Sanchez 43:32 I love your take on brand, because I think that's one of your zones of genius, obviously. But, you know, we have this, uh, window washing company called Pink's. And-

Daymond John 43:42 What's it called?

Codie Sanchez 43:42 Pink's.

Daymond John 43:43 Pink's?

Codie Sanchez 43:44 Yeah. It's super cute. I should've brought one... I should've brought a hat for you. But anyway, it's these two young dudes, and, um, good-looking guys, dress real sharp in uniforms, kinda like throwback '50s era uni- uniforms, cursive, uh, like hand-stitched little pink towels they throw over their shoulders. They're good-looking dudes, all of them. Now there are, now, now there are 100 locations all over the country, um, but when it started, it was just two guys in, in Austin, and they do these, um, what do they call it, comp cleans, where they go to local businesses, like prominent institutions in Austin, and they do the, they clean them and make them look nice for free. And their whole thing is, like, bringing dignity back to window washing. Like, bringing dignity back. So when they go and pitch, you know, the commercial building, uh, sure, there's some big, huge company that they're pitching against that's probably cheaper, that's probably has better systems, but these two guys show up, and they look the guy in the eye, and they say, "We... Not only do I wanna do your first one for free, but, like, it's me and my buddy here, and we started this company, and we're gonna be out front with, like, our cool designed thing, and we wanna put you on Instagram," and they win. And so I do think this brand is gonna be so important in an era when, like, a lot of execution's cheaper.

Daymond John 44:58 You're 100% on, because you gotta remember, and I try to... I'm a very simple guy. There's nothing new in this world. I always say it. The Voice is not new. It's just American Idol. They just turn the chairs. And American Idol is Showtime at the Apollo, and Showtime at the Apollo is The Gong Show. It's not new. Young kid in college stood up and said, "Mr. John, I'll tell you what's new your old generation doesn't have. Emojis are new." No, they're not. They were called hieroglyphics, you moron. Go sit down. Now, there's nothing new in this world. It's a new way to present it. The top companies in Shark Tank history, socks and a sponge. Damn Scrub Daddy. Lori ate my lunch on it.

Codie Sanchez 45:38 That is a great fucking company.

Daymond John 45:38 And every time I go to the grocery store, I see that damn sponge smiling at me. $1.3 billion worth of sponges. She's slinging plastic like Happy Meals. She's killing our oceans. But you know my buddy Ryan Deiss out of, uh, Austin? You know Ryan?

Codie Sanchez 45:53 I do. Not, like, personally, but I know of him.

Daymond John 45:55 Ryan is a genius. He says, "Listen, let me show you. You know how you can market a..." He said he remembered marketing a, um, and Ro- and Roland. He remembered marketing a lawnmower company. He says, "I'm t-..." Uh, he, he said, "I remember I got a brand-new lawnmower. 'Oh, I'm gonna do it!'" He said, "And I remember I got out there, and I got that thing ready, and I forgot I needed gas. And I went to the gas station." He says, "I live in Austin. I left, I was 180 pounds. I got back, I was 160 pounds. I'm sweating. The day's gone. I got grass and bugs flying all over me." He says, "So I hired a lawnmower company. They came over, and it was Saturday after a hard day, w- a hard week of work. I hear the damn lawnmower outside. These guys are running around the yard. My wife's naked trying to get dressed, and she's like, 'Who the hell's in the yard?'" He said, "But then another company came back and said, 'You know what? We, we mow lawns during these hours when you're at work. You tell us when, because we wanna give you your Saturdays and your Sundays back.'"

Codie Sanchez 46:49 Good line.

Daymond John 46:50 "You tell us when you're at work. We'll tell you when we're gonna be there, and we will be there." Everything has an angle. There's nothing new in this world. So whether it is we're bringing the dignity back. When some people wanna feel good, come to our business. Everything, you see the people cleaning the windows? We're perfectionists in everything we do, from who we hire, to who we work with, to how these windows are gonna look. Great idea, and that's what you sell people that separate people. You know? People think, uh, you know, everything's new. You know what's the most powerful thing you could do now? Billboards. You can't swipe a billboard when you're on a highway. Oh, retail's dead. Yeah, open a retail in a, in a, in a airport. They can't get Amazon in there. It's a high-traffic, uh, place, and it's a, it's a person who knows how to pay a lot of money, 'cause they're not taking a, a train or a car, and they're paying 30% more.

Codie Sanchez 47:43 You know, it's so true, because I think what... You've had 10,000 reps 10,000 times from all of these companies that you've not only run, but invested

Codie Sanchez 47:51 in. And so one of the cool things I think you're doing now that I don't hear you talk about as much is the CEO Access program, and how you're kinda like sharing these pieces back to the next generation, not keeping it all to yourself. Can you talk a little bit about that?

Daymond John 48:03 CEO Access is me... It's a network of people like Codie. Right? It's to- yesterday's CEO used to be make it and they will come. Today's CEO is a person that they need to know who their brand is. The most successful CEOs I know, they're doing millions and billions of dollar, but nobody knows who they are, but yet the kid in the mail room gets pissed off over a decision you make and puts something on social media, and now you gotta fire 400 hardworking people in your company 'cause you didn't have the time to go get a spin doctor, handle PR, because nobody knows who you are. You know, everybody's a brand today. You remember, like we were talking about, information is easy to get. The new currency of today is attention. And so there's a million real estate brokers. There's only one Barbara Corcoran. There's a million... Well, not a million, but there's a lot of basketball owners, only one Mark Cuban, and by the way, there's a... I'm not even a great designer. I gotta tell you. Tom Ford and Karl Lagerfeld are rolling over saying, "How dare he call himself a designer? You put a 05 and a FUBU on a bunch of sweatshirts. That's it?" But I'm on Shark Tank and the world knows who I am, and I've advised every single living president till today. They haven't asked me for money. I can walk into any room and they know who I am and my name. I can open any company I want to, and I can walk into any room I want to because my name goes in the room before I do. There's a million real estate developers, but the most powerful man in this world today knew how to brand himself as not only real estate, and I'm not getting into politics. He's the president of the country. So when [smacks lips] you look at CEOs, they don't know who to talk to because they're running big companies, but once they were doing five million, they could talk to these people here, great. 50 million, these people here. Once they start to get to two million, two bill- 200 million, who they gonna talk to? Mark Cuban's not picking up the phone, and this person, even though they're doing great, can't help them. So that's what, uh, it is because when I go onto a show like with Codie, I go, "Hey, Codie, I got two or three great... I, I can't be on the show tomorrow. What, are the episodes all gonna be about me?" Hey, you're looking for people like Matt Ebert of Crash Champions or my buddy who's doing several billion changing the way hearing is, is being done. You would say, "I'm interested." When I take a stage like Aspire, can't, I can't, I can't take number, slot of one and, and at, at 1:00 and 4:00. When I go on the cover of Inc, I start bringing these people through. When I walk ringside at a UFC fight and I say to somebody, "You don't know this person?" Or I go to Vanity Fair and I introduce my buddy Brandon to, um, Tim Cook. That's what CEO Access is, walking CEOs in the room and not, and, and walking them in the, the right CEOs for the right reason, people who don't wanna be famous. They wanna be respected for the right reason as a voice of, uh, uh, authority in their space. But you can go to, uh, ceoaccess.com. I don't even know it half the time. It's just we qualify people. Um-

Codie Sanchez 51:06 We'll drop it in the show notes too.

Daymond John 51:07 Yeah, yeah. No, I, I-

Codie Sanchez 51:07 So go click the link

Daymond John 51:08 ... I, I do appreciate it.

Codie Sanchez 51:09 I love that. Well, why did you do that? Why not just keep it all for yourself?

Daymond John 51:13 'Cause first of all, I can't use it all myself. Second of all, it really happened because one of my buddies, who's a CEO of a very successful company, said, "Why don't you help me?" And I said, "Pssh, I'm the people shark. I'm helping the people." He's like, "Yeah, I know you're helping the people, but I know this man, and I know this person is some of the, one of the purest people on the planet." And I, and I... He said, "I understand you're helping everyday entrepreneurs. I think you should. But if you help me, you got more people like me thinking like you, and I'm gonna help millions of people." And I said, "Holy shit, I'm becoming the thing I was fighting against." And I decided to help him, and he decided to help so many more people. So if I can build an army of a couple people like that, um, you know, it's just, it's just great. See, it's why you help people.

Codie Sanchez 52:04 Yeah.

Daymond John 52:04 It's why we help people. You know, the people in our industry who they come, they go, they show jets, they show cars, they try to sell you this thing, nothing against them, but the people who are lasting a long time, they get on, they keep talking. They put out more and more books. They help more. The, they just wanna help because we've been rewarded-

Codie Sanchez 52:24 100%

Daymond John 52:24 ... for the people who helped us.

Codie Sanchez 52:26 Yeah, I mean, one, it's fun. There's like, I don't know that there's a better... It is selfish in some ways 'cause when-

Daymond John 52:31 Very selfish 'cause you learn how other people are doing things that you didn't even think about.

Codie Sanchez 52:34 Oh, totally, and then when you actually say like, "Oh, I..." I mean, how about this? How many people do you think DM you and email you per day asking for advice?

Daymond John 52:43 DM and email me per day, I would say 100.

Codie Sanchez 52:47 And then of those, how many, if you gave them the advice they asked for, would actually take action on it?

Daymond John 52:53 None.

Codie Sanchez 52:53 Yeah, [laughs] it's fucking-

Daymond John 52:54 What, like nine? Uh, one.

Codie Sanchez 52:56 Yeah, one maybe.

Daymond John 52:58 But when they do-

Codie Sanchez 52:59 Yeah, but w- when they do, it's incredible, and so I think the other part that's really cool is when you find pe- best predictor of future behavior is past behavior, right? So like when you find somebody who's just done the right thing, keeps moving, takes action, and then they take your ad- you know they're gonna take your advice and run.

Daymond John 53:12 Doesn't it feel good when you, when somebody... and you go, go, "Hey, you know what? Your book or what you said that day, I've been doing it, and I have this type of business." You go, "Really?"

Codie Sanchez 53:22 Yeah.

Daymond John 53:23 And then you feel like, "You know what? Honestly, that information was out there. You were gonna do it regardless. But thank God you got it from me."

Codie Sanchez 53:30 Yeah. It's a, it's a service.

Daymond John 53:32 'Cause in the community, there is people who obviously we don't know and we're, we're training-

Codie Sanchez 53:38 Yeah

Daymond John 53:38 ... but then it is me calling my fellow sharks because that's what we do. We say, "Hey, where you doing an interview at? One of my, one of my CEO Access people, we've been trying to get there." Dude, Nelly, of course, but oh, she's on The Apprentice. Katrina Camp and so we always say... I told Katrina, I said, "Katrina, here's what we're gonna do in the CEO Access crew. We're all gonna get Laverne & Shirley jackets. We're gonna have a secret, a secret, uh, you know, a secret handshake."

Codie Sanchez 54:05 She like it? Was she in for that?

Daymond John 54:07 She was like, "I'm cool with the, the jacket, but the handshake, no."

Codie Sanchez 54:09 [laughs] Oh, that stuff not so much.

Daymond John 54:12 No.

Codie Sanchez 54:12 All right. Let's talk, I wanna go high, and then I wanna go low. So when you... Let's talk about holding company structure really quickly. I think people think it's really sexy to own a bunch of businesses and invest in them, and then they probably don't realize a lot of the difficulties. Like, I mean, how much do you think you pay people just to oversee your companies that you have interests in?

Daymond John 54:34 Really good question. So I first, uh, I first, uh, did a lot of the deals, Shark Tank and off Shark Tank. I did a lot of the deals where I had an attorney look through them and this and that, and for the first year on Shark Tank, and the sharks are learning too, and that's why you said like being a little selfish. The first year, and the deal, the, the deal flow wasn't that good. The show was new. Nobody can understand it. I spent about $750,000 in attorney fees alone just to look at these deals. Now I put it through a VC software. It costs me $10,000 to do everything. Um, but brand managers looking over it, I could be at a quarter million dollars just looking at brand managers. We're not, not talking about CFOs. We're not talking about other things like that. Also, you know, I look at a lot of the deals I do, I do options on the deals Because, you know, I'm not trying to fill out all this corporate filing and stuff like that, and especially if you're late on your K-1s, then I'm late and all kind of stuff like that. So I try to do, if we hit certain numbers, then I can activate my options and my shares in a certain period of time.

Codie Sanchez 55:34 Yeah, I love that. Then you d- y- you basically, you don't have to deal with the tax consequences of it.

Daymond John 55:37 Correct. And then you know what? In three years, if it doesn't work out, well, the IRS says you're allowed to write that off.

Codie Sanchez 55:42 Yeah, and then also, y- you know, the, the company can keep your equity. "Hey, it didn't work out the way I wanted it to, so I'm not being selfish."

Daymond John 55:48 Yeah, so yeah, so what did I do? You know what? I went out, and I was a spokesperson for a long period of time. It didn't pop. Don't worry about it. Take whatever I did. It's yours.

Codie Sanchez 55:58 That's super smart. How many bank accounts do you think you have to manage all this?

Daymond John 56:03 Um, I probably have about 35 probably, maybe 40.

Codie Sanchez 56:11 Yeah. And what about when it comes for organizational structure? So, like, how do you think about the, the, the holding company that is Daymond John? Is that how you think about it? Is it a holding company?

Daymond John 56:22 You know, um, I wish, you know... I wish I was as organized as you may think I am. You know, I'm Willy Wonka, but the chocolate factory got a lot of shit going on in it. Um, but yes, I do have that. Um, I work with, uh... There's a lot of different things. I, I work with a guy named Hillel Presser, who is a really amazing attorney for asset protection-

Codie Sanchez 56:42 Yeah

Daymond John 56:42 ... for holding companies and various other things like that. He's one of 12 people out there that this is all they focus on because it's important. One thing about, it's very hard to make money, super hard to keep it. I'll give you an example. Uh, I have an RV. Um, and he was telling me, and I was like, "Okay, well, we got the RV." He said, "Put it under RV LLC. No problem." He said, "Who's the satellite radio?" "Satellite radio, my wife, 'cause, you know, we have a, a satellite radio account." He said, "You just pierced your corporate veil." He said, "Because if you get in an accident, they can just say, the judge will say you didn't respect your LLC because your wife is on that. It should've been under the RV's LLC." A lot of people don't realize this, and they can come after everything you own if God forbid you had an accident. That can happen with a... Y- it's a taxi cab model or the apartment model. You get one holding company, but each taxi cab has its medallion. It's this, it's that. A lot of people don't know about how to protect themselves against a lot of these things because unfortunately, the people listening to us, they're probably good people. The people that wake up every day to wonder how to screw you when you're running a real business, other people are going, "I don't have anything to run. I wanna scam you. I wanna put out the fake Shark Tank ads, all the Sharks invested in this pill. I wanna put out the if you only lo-..." I want... So there's a lot of, I hate to say it, there's a lot of bad people that they're looking every day on how to hurt you.

Codie Sanchez 58:10 Yeah, you know, one of my favorite mentors, he had this line. H- he has a breakfast he does, and it's once a month, uh, with a group of other big-time entrepreneurs, much bigger than me, and he goes, "There's a price of entry, though, for it." And he goes, "The only people that get invited to this breakfast are people that make," and it was a certain amount of money, so a certain amount of money, people that have been entrepreneurs and divorced before, and then finally, people who have been sued. He goes, "You gotta be sued, you gotta be divorced, and you gotta, uh, have made this much money, and then you gotta have lost this much money." He goes, "And then I know that you will know what it's been like to be an entrepreneur." [laughs]

Daymond John 58:46 [laughs] That is, that's hardcore.

Codie Sanchez 58:47 It's hardcore.

Daymond John 58:49 Yeah.

Codie Sanchez 58:49 And, you know, whether I believe all of that or not, there's a truth to it. Like, I have never... Have you ever met a successful entrepreneur that hasn't had to go through some type of lawsuit?

Daymond John 58:57 Absolutely. You know, you, you, you have to. Um, when you... You know, 'cause, 'cause, because the, the reason why I think as an entrepreneur you go through a lot of lawsuits is number one, you're taking a lot of swings. Number two, you're really trying to attach to other people 'cause you, you're this hopeless romantic that everybody wants to strive for better things in life, and then you do get someplace, and you start to move up here, and these people start to resent you or not understand. You know, you never hear the story of... You always hear, "You know, I helped start the company." No, you weren't shit. You didn't help start the company. You came along after we kinda started the company. You wanted a free ride. We had to move on, and now you're the one complaining. Uh, there's a big old five on all the FUBU jerseys. You ever seen this old five? It's homage to the five. Why? Because I always wanted to be five partners. There's only four of us. There's 10 people with that, with that fifth partner that never stuck around, so there's 10 people out there going, "You know, I'm the fifth member of FUBU." There's 10 of the fifth Beatles running around.

Codie Sanchez 1:00:09 I d- I don't think people talk about that enough because it seems to me like one of the most important deals you ever do is the people you partner with.

Daymond John 1:00:17 I've never had a pitch going, "Let me tell you something. I'm not gonna do anything I say I'm gonna do, and I'm gonna make excuses about every single other person around me, and no matter what, it's gonna be your goddamn problem."

Codie Sanchez 1:00:30 I wish somebody would. If we could read their mind, then we'd know that a lot of people think that way.

Daymond John 1:00:34 Yeah. N- nobody... Some re- Nobody ever said that to me.

Codie Sanchez 1:00:38 Yeah, but a lot of people do. But then I, you know, then I remember that that's the reason why it's easy for people who don't do that to win, not easy, but easier. Like, thank God.

Daymond John 1:00:47 If every single one of them knew what you and I were gonna do, there's no place for you and I.

Codie Sanchez 1:00:52 Exactly.

Daymond John 1:00:52 That's it.

Codie Sanchez 1:00:53 So you gotta appreciate the haters and the flakers,

Codie Sanchez 1:00:56 I think. Okay, I wanna end on one last question for you. Um, you got, you got a mic, and every entrepreneur you wanna speak to standing in front of you. What do you leave them with? What do you tell them?

Daymond John 1:01:10 What is your why? Are you doing it because you wanna do it, or are you doing it because your parents told you this is what success looks like? Are you doing it because you don't wanna take that o- you don't wanna put up that out of business sign because you're embarrassed of what the community's gonna say to you? Are you doing it 'cause you think that somehow you're gonna arrive at one moment, and the work is gonna stop? Why are you doing it? Because once you know why you're doing it, then you're going to know the goals that you need to set and the homework you need to do to enforce those goals. If you don't know why you're doing it, you need to go to a place to understand that why. I'm not a billionaire. I'm not a billionaire by choice. I'm offered often, you know, huge venture deals. A bank, very famous, well, the one of the most powerful banks said to me, Damon, you know what? I'll give you a 1.3 billion credit line. I'll put a merger and acquisition person over there with you. We bank the top thousand companies in the world. We know they have these initiatives for minority vending. Everybody will respect the fact that you're a minority vendor because of your history and you're on TV. We will give you the money. We want you to acquire, like in a hotel, we want you to acquire a rug company, a lighting company, a furniture company. We want to then put you into bid for this stuff and you will most likely get the contract because of who you are, the funding we have for you and your history. And I guarantee you, Damon, you probably will make an average of whatever, whatever. Hmm. I'm 56 years old. That's a 20-year run with 20,000 people working for me. I will be 76 at that time. The worst time of my life is when I had seven, eight homes and all my friends enjoyed the homes. I can only sleep in one bed. I have a little nine-year-old girl. She will never see me again if I go back to doing that. I already missed my 31 and my 26-year-old growing up because I was so busy working. Why would I do that? No. So what is your why? Why would I do that? So somebody could see me on a yacht? I can rent that yacht and give it right back to the owner and let that be their damn problem.

Codie Sanchez 1:03:38 No more pets.

Daymond John 1:03:39 Why are you doing it? Why do you not know your wife and your husband? Are you going out making sure that a lot of people see you that can't stand you? So why are you doing it? Know your why. But if you're waking up every day because you're solving a problem for a person, you're bringing them joy and you love it, then you can do that.

Codie Sanchez 1:03:59 Daymond John, this was amazing. Thank you so much for being here.

Daymond John 1:04:03 Thank you for having me.

Codie Sanchez 1:04:04 Daymond John is the man. If you guys liked this episode, wait until you see what's next. You are going to want to subscribe and you are going to want to follow along because our next guest is just as good as this one was. And I thought this one was incredible. Also, if you guys want to hear more about Daymond's new program, it's ceoaccess.com. I thought it was pretty incredible and I'm excited that he came and talked to us about it today. Lastly, I want to hear what you guys think about this episode. Drop in the comments for me. What questions should I have asked that I didn't? What was your favorite question? And what did you think was not a very good question? I'll hear all of them from you. I'll read all of them and I'll make sure that we do better every single time. Thank you for being here. You are a very big deal to me and to us.