Daymond John is always juggling multiple projects–you just don’t hear about all the ones that fail, he says. Randi Zuckerberg, also a serial entrepreneur with failures under her belt, wanted to dwell on this for a minute during her SiriusXM radio showDot Complicated. She says too many people are fooled by the media’s portrayal of entrepreneurs, and that makes them paralyzed by fear of failure.
“The key is just to try 12 things,” she says, “11 of them are going to suck, one of them is going to change your life.”
John agrees. The Shark Tank investor estimates he started about 20 businesses before striking gold. It was when he felt so burnt out, so exhausted that he wanted to go back to working as a waiter, when FUBU was born. When the iconic fashion line became his passion and really took off, he realized he’d been starting businesses for the wrong reasons–purely to make money. Even today, he says, he still tries a bunch of companies at once and fails at most of them.
After more than two decades of entrepreneurship and seven seasons on Shark Tank, John is quick to answer when Zuckerberg asks him for the ‘must dos and must don’ts’ of pitching for investment.
Don’t focus on market size.
Saying that you’re entering a billion or four-billion-dollar market means nothing to an investor because it says nothing about your company’s opportunity, John says. If you focus on comparing what another company sold for, he’ll think you don’t have enough knowledge about what’s going on in the market and how your particular strategy and product will fare.
Don’t say you’re creating something new–you’re not.
Instead, you’re creating a new form of delivery, according to John. “Twitter, I always say, was a note on a pigeon’s leg a million years ago,” he says. But John admits people have different views on this issue. He tells Zuckerberg about a recent conversation with a friend who says creating a new product is all about gathering existing things and putting them together in a new way. His analogy? A PB&J. “Peanut butter’s been around for a million years, and jelly’s been around for a million years–you put them together and you have a peanut butter and jelly sandwich.” Either way you slice it, it’s important to be humble and aware that existing products have led to your iteration.
Do let your passion show.
John wants to invest in entrepreneurs whose knowledge and excitement are infectious. Show your passion; show your knowledge. Make the investor want to talk to you every day, he says. “The reality is, after we get through all the paperwork, can I stand talking to you, probably every day, for the next seven years of my life?”
Do connect on a human level.
Yes, investors hope to make a return on your company. But John cautions against assuming every investor is just in it to make money–some also want to save the world. Find out what issues an investor wants to work on and show them how they can profit in a personal way.
Do bring up past failures.
John often says he likes entrepreneurs who have failed. He encourages pitches to be transparent and demonstrate experience–the wins and the losses. Any seasoned investor is going to do their homework and find out anyway, and they would most likely empathize with your failure if they knew about it from the get-go.
After all, adds Zuckerberg, if you’re so perfect and your business is doing so well, why are you in there pitching?