5 career lessons from Shark Tanks Daymond John on running a business

5 career lessons from Shark Tanks Daymond John on running a business5 career lessons from Shark Tanks Daymond John on running a businessFUBU apparel CEO and Shark Tank Judge Daymond John got his start as an entrepreneur by mortgaging his mothers house in Queens for $100,000 and turning it into a clothing factory.But as he partners with eBay for National Small Business Week, he says he definitely wouldnt advise new entrepreneurs to go the way he did.John talked with Ladders about the lessons hes learned over the course of his 30-plus-year career in business.Dont take crazy risksI would say dont mortgage the house for $100K, he told Ladders with a rueful laugh. Because I didnt realize what a stupid move I was making when I did that. It turned out for all the better, but knowing what I know now, I was very close to losing the house and everything I had.Follow Ladders on FlipboardFollow Ladders magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and m oraStart smallYou dont need the five-year lease and the $20,000 website, John cautions. Short-term goals for new businesses should be building a very small community that understands who you are and selling to them and improving the trust you have. John recommends initially selling a very small scope of products, not trying to spread yourself too thin. Once you know your customer really well, then youll be able to duplicate that on a much larger scale.He knows from his own mistakes not to bite off mora than he can chew too soon When I first started with FUBU, like any designer, I wanted to make all colors to match all sneakers, he told Ladders.But customers didnt want every color Now knowing what I know, 60% of your sales are always going to be black, no matter what Now I know that my customer loved an extra large, so I would have not made small, and I know the most theyre going to pay is $29 for a screen-printed shirt, and the most theyll pay is $39 for an embroidered shirt. I did nt know all that initially and I had a large, large line and I had a whole bunch of inventory that I was sitting on I couldnt get rid of because I decided to over-commit.E-commerce means more information and controlJohn says that the fundamental difference between brick and mortar and e-commerce is how much intel you can get on your customers and how you can scale.You hit way more people with e-commerce even if you have an existing retail shop and your analytics often are a little more accurate because a retail shop, when a person comes in, you dont necessarily know if theyre buying it for themselves, their husband, for their wife, or its a special occasion. And unless you have a form where they can enter the data, when they leave, you dont know where they went. You dont know how to maybe get them back.When you are servicing on a digital platform such as eBay you can find who your customers are, you know their analytics, their demographics, you can email them, there are ways to ove r-service them You can hit people all over the world instead of necessarily in one small community.FUBU got into e-commerce between 1999 and 2000. We saw that it was a way to empower ourselves a little bit more. We did have 27 retail shops but if we were selling purely to a retailer, then if the retailer decided to discount it, we were powerless if the retailer decided to merchandise it next to a competitor or if they decided to just keep it in the back and not even bring it out because, whatever they werent paying attention, and again, we didnt know, we didnt have any data at all because theyre not going to give us the data on whos exactly shopping. They didnt even know the data on who was shopping at Macys, JCPenneys. We wanted to be a little bit more in control of our destiny, so we started to sell online.Dont give your product to your product away to friendsWell, listen, you give 10 t-shirts away to your friends or family Grandmas always gonna come back no matter how disgusting that shirt is and say Oh baby, everybody at my job loves it even though grandma and the people at the job hate it. But they dont want to hurt your feelings.But you get somebody who has a lot of different options and who are taking their hard-earned money out of their pockets and handing it to you theres proof of concept, thats why you see on Shark Tank. We always say, What are your sales? And you dont have to be selling $1 million, you can be selling something that is $10. But if I found out that you sold 50 of them in two hours because you decided to stand out on the corner and sell them, you have a million dollar absprache ahead of you Because if you dont know who your customer is, then youre taking my money and youre using it as tuition to find out who your customer is so, thats why you shouldnt give away anything, you gotta sell it first to see if you have a real viable product.Tell a storySmall businesses make it easy and attractive for people to buy from them if they create a narrative, John told Ladders.How are small businesses telling their story? he asked. People can buy from anybody and they want to know why theyre buying into your story. Many entrepreneurs, he said, have created their product out of fulfilling a need or a void in the market. So people want to support brands and products like that. One of my top companies on Shark Tank even taught me a lesson. Theyre a company called Bombas Socks I think they were doing like $800,000 in business when they first started, and now I think theyre gonna do about $100 million annually. And the reason why I feel this so great is, first of all, the product is king, the sock is really amazing, but more importantly, I think, every sock they sell, they give away a pair to the homeless because they know the homeless have a challenge caring for their feet and getting clean socks.That kind of give-back is important to consumers today and is an attractive story to support. I found that today, the consumer, they want to know that every single time they purchase something, theyre giving to a cause or something near and dear to them, or even not near and dear to them just something they know is going to help others so at the end of the year, they look at their 400 purchases and they say Listen, Ive donated money towards stopping human trafficking, Ive donated money towards saving animals, clean water, and homelessness.No matter who you are, you need to tell a story and you need to build your community around that story, and people will support you more whether its from a charitable side or whether youre making a really amazing product but youre not selling it at a high cost because you feel that a family needs to be able to afford this product. Retailers have to tell a story and then people will die to support them. I didnt put three sleeves in a shirt, I just made a t-shirt, but there was a story behind it and thats why people bought into it.You might also enjoyNew neuroscience reveals 4 r ituals that will make you happyStrangers know your social class in the first seven words you say, study finds10 lessons from Benjamin Franklins daily schedule that will double your productivityThe worst mistakes you can make in an interview, according to 12 CEOs10 habits of mentally strong people