For the September 2017 edition of the Indie Business Book Club, we read The Power of Broke by Daymond John and Daniel Paisner. The book stands for the proposition that being broke financially is not an entrepreneurial death sentence if it's used as the fuel that drives you to think outside the box and make the risky moves that people who have money may not take. They just are not hungry enough.
I had been wanting to read this book for quite some time, but I had not taken the time to read anything much about it. Before now, I thought it was a book with tips from Daymond John. Since I watch him on television quite a bit on ABC's Shark Tank, I figured I was getting all the tips I needed from him.
Well, this book is not about Daymond's tips. Instead, it's a book filled with the stories of 13 uber successful entrepreneurs whose life stories are as fascinating as their business success. For example, did you know that Mark Burnett, the creator of the television shows The Voice (NBC), Survivor (CBS), Shark Tank, was once a nanny?
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A few thoughts on “the power of broke.”
Posted by Donna Maria on Tuesday, November 14, 2017
My Favorite Chapter
As always, it's hard to choose a favorite chapter. It's especially difficult in this case because all of the featured entrepreneurs are so amazing. How could any one not be a favorite?
Since I'm pressed here, I'd have to say that my favorite is Moziah Bridges and his mom, Tramica Morris, of Mo's Bows in Memphis, Tennessee. The story of how this 11-year old kid and his handmade bow ties landed on Shark Tank, and of how Daymond refused to fund him, or let anyone else fund him, is something you just cannot make up.
You can watch a clip of the Shark Tank episode featuring Moziah here
This clip does not show it, but in the book, Daymond shares that two sharks declined to invest in Mo's Bows, leaving him and Kevin O'Leary, also known as “Mr. Wonderful” and also known as being singularly focused on cash, as the final contenders.
Kevin offered $50,000 and a commission on every tie sold, and Daymond could tell Moziah wanted to take it. But Daymond saw more than dollar signs. He saw a person much like the young man he once was, just trying to hustle his way into the fashion world. (Daymond also saw a chance to do a good deed that would increase the good will associated with his personal brand as well. That was a stroke of genius, and I was glad to see Daymond admit to it.)
Daymond advised Moziah and his mom that they didn't need Kevin's money. Instead, if they raised their prices a little and hired people to make the bow ties, they'd make Kevin's $50,000 in no time, and they would not have to give up any equity in their business to do it.
Further, Daymond told them, what they really needed was a mentor, and Daymond offered to be Mo's mentor and help him grow his business without investors. The rest is history. Moziah's mother overruled the boy's tendency toward the cash (what 11-year old boy wouldn't be tempted!?), and they went with Daymond's offer.
If I remember correctly, it's the only successful deal in the history of the show where no money changed hands.
This proves up the power of a mentor. On the show, Daymond was generous and protective, Mo was smart and adorable, and Mo's mother was fierce and fabulous. Watch the entire episode if you can find it online.
Here are some other highlights from the book.
- The hustle is real: Gigi Butler To start her wildly successful cupcake business, Gigi cleaned houses in between baking and serving up cakes. When no one would loan her money to start her cupcake business, Gigi maxed out her credit cards to the tune of $100,000, drawing $35,000 on one at 14%, $22,000 from another at 17%, and the rest from another at 8%. Gigi leveraged her good credit and the fact that she was a homeowner to get her loans. At the time, Gigi also owed a business cleaning people's homes. After opening her first cupcake shop, she was able to pay off all of the contractors within 3-4 months. Her schedule was grueling. She'd get to the store at 4am, welcome staff members, work the counter until lunch, go clean two houses, work the store from late afternoon to closing, then go home and do administrative tasks for the business. Six years later, there were nearly 100 Gigi's Cupcakes stores in 24 states, generating $35M in annual sales. In 2016, the brand was acquired by a private-equity group, but it all started because a woman leveraged being broke and her talents with a vacum cleaner to chart her course. Check out Gigi's Cupcakes here.
- Play nice: Tim Ferriss Take a guy like Tim Ferriss. Today, he's a sought after speaker, angel investor, and one of the most popular bloggers and authors in the world. But just over a decade ago, he was a nobody trying to get the attention of a particular famous tech guru. He managed to do it simply by being nice to a woman who turned out, without him knowing it in advance, to be the celebrity tech guru's wife. Tim's unintentional acts of kindness and humility toward the woman impressed her enough to make an introduction. It's a perfect illustration of how important it is to be useful even when there's nothing specific in it for you.
It takes practice to do this, but today, we all can because we have access to social media. There isn't a person worth reaching out to that you cannot somehow connect to via some social media outlet. Check out Tim Ferriss here.
- Figure it out: Rob Dyrdek Rob wanted to enter a skateboarding contest, but he had no money. So, he convinced the hosts of a local skateboarding contest to allow him to sell 10 entry tickets in exchange for a waiver of his entry fee. It worked. At that and other contests, Rob garnered international attention because he was crazy. He performed skateboarding moves that everyone else had too much sense to try. But the best part is that this high school dropout knew early on that he could not make a living risking his life on four wheels indefinitely. Eventually, he graduated to pitching reality TV shows to networks, always making sure to offer something they were not already doing. Today, he has amassed millions of fans, and makes money by leveraging his media savvy personality as a brand ambassador for lifestyle brands that attract young kids like the one he once was. Check out Rob Dyrdek here.
Overall Reading Experience
I loved reading this book. The stories are interesting and they really draw you in. Daymond's down-to-earth style makes you feel like he sitting across from you telling you like it is. There was something to learn and apply in every single story.
Who Should Read The Power of Broke
Every entrepreneur who is motivated by seeing what can happen when you don't give up, and don't take “no” for an answer can get something out of this book. I especially recommend it for younger and new entrepreneurs who need a break from all of the “how to” business books. They are great too, don't get me wrong, but the never ending list of everything you must do as a new business owner can be overwhelming.
This book zooms out from the details and provides a high level overview of the big picture. Newbies need to get out of the weeds regularly, to see a whole story from the perspective of a few decades. That's how they can know what's possible for them if they hang in there too.
How to Join the Indie Business Book Club
Membership in the Indie Business Book Club is free, and you can join us here on Facebook.
About Daymond John
With a $40 budget, Daymond John, a native of Queens, New York, launched the global FUBU clothing brand. Because, he says, desperation breeds innovation, he hatched an idea for a creative campaign that eventually turned the brand into a $6 billion dollar phenomenon. Daymond is also one of the millionaire and billionaire investor “sharks” on ABC's wildly successful television show, Shark Tank. On the show, Daymond competes with other sharks for a chance to invest their own money in the ventures of American entrepreneurs who pitch their ideas on the show. Visit his website here.
Daniel Paisner is a collaborator and ghost writer who has helped to write dozens of bestselling and headline-making books with prominent entertainers, athletes, business leaders, and politicians. Visit his website here. Learn more about FUBU, and Shark Tank.
Buy The Power of Broke
Of course, you can also purchase the book at your favorite local book store, or, if you prefer listening to reading, on Audible.
Feedback and Share
Did you read along with us? What do you think of this book? Have you leveraged the power of broke in your life? In your business? How so? Free to share in the comments below, or share on Facebook, Twitter, and LinkedIn.