The Rules of Startup Success, According to Daymond John

The ‘Shark Tank’ investor and entrepreneur reflects on the wisdom he’s gained from backing hundreds of startups–and learning to assess himself honestly

Despite his success investing in hundreds of startups as an investor on Shark Tank, as well as his experience building FUBU into a clothing brand that has grossed more than $6 billion, Daymond John is very honest about his limitations. “I can’t help every business. If that were the case, FUBU would be Nike,” John told the virtual audience at the Inc. 5000 Vision Conference Wednesday. 

Knowing your own limitations is nearly as important as knowing what makes you successful, John said during an interview with Inc. editor-in-chief Scott Omelianuk. He went on to offer several thoughtful takeaways that apply to founders at every stage of building and running their companies. 

Never stop learning.

During the Covid-19 pandemic, John has been stuck at home as much as anyone else. How has he spent his time? Taking as many digital courses as he can. 

“I need to know better the cost of customer acquisition these days. I need to make more informed decisions” as an investor, he admitted. So he’s delving into whatever he can find on internet marketing, digital conversion tactics, and more. “Never stop learning–that’s what true entrepreneurs do,” he said. “They learn slowly and they’re in it for the long haul.” 

Always take care of current customers before trying to find new ones.

John said he learned this tip from spending time with billionaires who’ve built their wealth over time. When he advises companies, he always favors one that are looking to scale versus those that are trying to move into new markets. He likens it to the McDonald’s tactic of super-sizing a customer’s fries.

“It’s very hard to acquire new customers rather than upsetting them,” he said. “Before you look for new customers, take care of your customer complaints. They’re raising their hands and saying, ‘I need more love.’ Take care of them and they’ll be your new ambassadors.”

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