TV Shark’s $4,000 Lunches Offer Help to New EntrepreneursAllison Prang
Two banners showing images of entrepreneur Daymond John, a co-founder of the FUBU clothing line and one of the resident predators on ABC’s “Shark Tank” television show, loomed at the front of a hotel meeting room as fledgling business owners and would-be entrepreneurs filed in.
Some in jeans, others in office attire, they were drawn by local radio spots or Twitter messages advertising the Daymond John Academy, a free, two-hour workshop “for entrepreneurs by entrepreneurs.” An online registration form for the sessions -- currently touring major U.S. cities -- promises tips on how to get products to market fast, raise capital, line up manufacturers, secure shelf space in big-box retailers and “grow massive wealth in business using Daymond John’s strategies.”
A recent session at the Hilton Dallas Lincoln Centre in Dallas did little more than touch on such topics. Academy staff members in crisp power suits resembling John’s made clear that attendees who wanted more detail on, say, the value of celebrity endorsements should attend a three-day version. Cost: $1,497.
John -- whose only appearance at the Dallas workshop was in a recorded video message -- makes no apologies if the free session operates mostly as a way to promote the paid workshop. The idea is to provide some information and networking opportunities for attendees, he said in an interview. And if people learned something in the free sessions, think of all they could get out of the three-day workshops, he said.
“It’s immense, you know?” he said. Attendees are allowed to bring a business partner or spouse, and if they’re not satisfied after day one, they can get a full refund.
“Most everyone that has taken the class has been overwhelmingly happy,” said Mike Huska, one of John’s partners in the year-old academy. At the first few sessions, some attendees had expected to see John in the flesh, he said -- though the company’s marketing made no such promise.
“Since then, however, we have gone even further to be sure it’s clear the workshop is not conducted by Daymond himself, but by his team and business partners,” Huska said in an e-mail.
Sergio Godinez, who co-owns Versa Printing Inc., a company in Dallas, said he attended the free workshop because he’s a regular “Shark Tank” viewer and he wanted to see what the academy had to offer. On the show, John and other investors, including Mark Cuban, the billionaire owner of the National Basketball Association’s Dallas Mavericks, respond to pitches from entrepreneurs trying to raise capital.
While Godinez said he has no plans to sign up for the three-day version -- his company has already matured past needing it, he said -- he called the price fair. Compared to other training his company has bought, it’s cheap, he said.
“I would say it was helpful,” said Elaine Mellon, an author and inventor in New City, New York, who attended a three-day workshop in May.
John spoke for an hour or so on one of the days. “It was wonderful, yeah,” Mellon said.
Mellon said she was looking for guidance on how to promote her book, “Unreal Education: Beyond Report Cards,” which is aimed at helping parents through the special education system. She also wanted information on how to market her idea for a new plastic toiletry item. (Mellon said she didn’t want to describe it in detail; while she has a filed a provisional application for a patent, she said her invention could be easily copied.)
The most important lessons she gained from the three-day workshop were the specifics of what goes into a business plan and the ingredients of a sound pitch when soliciting investors and potential buyers, she said.
While the academy has yet to turn a profit, John said he intends to make money from eventual corporate sponsorships -- a strategy that’ll keep the price low, he said.
“The notion that he could take this and run with it is not far-fetched at all,” said Michael Niederman, chairman of the television department at Columbia College Chicago. “Shark Tank,” which returns for its fifth season on Sept. 20, serves as prominent advertising for John’s business acumen, he said.
“Exposure’s exposure on a certain level, particularly when you’re being legitimized by ABC Television,” he said.
Randy Sollenberger, a spokesman for Mark Burnett, the show’s producer, didn’t respond to requests for comment.
The cost of John’s advice can grow, depending on the format. Through another company, Game Changer Meetings LLC, he offers a menu of one-on-one contact: a 30-minute phone call with him goes for $1,500; a one-hour face-to-face meeting is $3,000; or lunch or dinner for $4,000, plus the cost of the meal.
Game Changer’s website says part of the fees will go to charity, including nonprofits that help small business owners and young people in underserved communities. How much? That’s “kind of loose,” and may vary depending on which celebrity a customer wants to talk to, said Sandy Han, a spokeswoman for John. The company offers one-on-one sessions with other “game-changers”: New York radio personality Angie Martinez, Victoria’s Secret model Selita Ebanks and PR specialist Jonathan Cheban, who’s widely known for his appearances on “Keeping Up With the Kardashians.” Each of them identifies “a charity of his or her own choosing and a portion of the proceeds are donated,” according to the website.
John’s own experience as an entrepreneur began in high school, when he started making tie-top hats -- knitted caps with ends at the top that tie together -- and selling them on the streets of Queens. His products caught on, and eventually he converted his mother’s house in Brooklyn into a makeshift factory. With partners, he founded the FUBU clothing line. The initials stood for “For Us, By Us.”
The company was unique for how long it survived past the end of the “urban market” trend in the mid-1990s, said Marshal Cohen, retail industry analyst at the NPD Group in Port Washington, New York. Even so, the line isn’t thriving as much now as it was back then, he said.
“It’s hard to find here in the states,” Cohen said of FUBU products. John relaunched FUBU as FB Legacy in 2010; that company contains a variety of brands, Cohen said.
In 2009, John joined the cast of “Shark Tank.” The experience made him want to work as a consultant to entrepreneurs, he said, as he realized that the people behind many startups lacked basic information.
The survival rate for new U.S. business establishments is about 49.3 percent after five years, according to the federal Bureau of Labor Statistics. About 193,000 new U.S. businesses were created in the first quarter of 2012, while 181,000 shut, BLS data show. The Kauffman Index of Entrepreneurial Activity, which uses Census data and tracks sole proprietorships as well as business establishments, reported the equivalent of 514,000 new business owners a month in 2012, down from 543,000 in 2011.
Regardless, there’s rarely been a better time to start a new business, said Susan Fronk, president of Turning Point Consulting Group in Woodbury, Minnesota. Startups’ high failure rates can’t be attributed solely to the economy, she said. Owners who don’t know what it takes are also to blame, and that creates an opportunity for ventures like John’s academy.
“I think what he’s doing is a good idea, let me just say that,” Fronk said.