1-Sentence-Summary: The Power Of Broke shows you how to leverage having no money into an advantage in business by compensating it with creativity, passion and authenticity.
When I first saw Shark Tank, I had no idea who any of the sharks were. The first I learned about was Mark Cuban. Then followed Barbara Corcoran. Finally, last year, I got wind of a book called The Power of Broke, and guess who the author is? Daymond John, yet another shark, and that’s when I learned how he made his money.
FUBU, short for “for us, by us” was one of the first fashion brands targeted at the black community and is now worth $6 billion. But it started on $40. Daymond used the money to buy some cotton and cloth and knit an overpriced, but cool hat he’d seen. When his first good sales day came a few months later, he sold 80 hats for $10 a piece – and promptly lost the money, because he crashed into another car while counting it at the wheel.
But you know what happens when a shark tastes blood, and so Daymond continued to hack his way through business, right around the one thing he didn’t have: money. Now he knows this wasn’t an obstacle. It was an advantage.
In The Power of Broke, he shows you how you can leverage it like he did. Here are my 3 lessons:
If you have no money, you’ll automatically find resources others don’t look for.
The power of broke helps in all four stages of growing a business.
Starting a business gets easier by the day, so start now.
Trust me, you don’t need money to make money. If you don’t believe it, after Daymond’s lessons, you will. Let’s go!
Lesson 1: Being broke allows you to find resources others can’t see.
Gary Vaynerchuk often talks about wishing everybody was an immigrant and it’s because as an immigrant, your default setting is that you have to prove yourself. You’re looking for opportunity where other people see only problems. Well, being broke is similar to being an immigrant.
You know that old saying “necessity is the mother of invention?” When you don’t have anything, it forces you to use whatever you’ve got, leading you to use resources in new, creative ways other people don’t see.
In 2012, I went to a Steve Aoki concert. One of my good friends was a fan of his and we happened to be in Chicago that weekend, so we saw the crazy, club-climbing, cake-throwing DJ, who was immensely popular already. But he too comes from humble beginnings.
At 19 years old, Steve started a music label with $400 and a few friends, cramming up to 13 of them into his apartment, which was the office. They’d produce a single, get Steve a gig for $100 and sell it after the show – out of the trunk of his car. Until they could afford to make another one.
He got this resourcefulness from his father, Rocky Aoki, an immigrant. Back in the 60s, Rocky drove an ice-cream truck around New York City, until he had saved $10,000 to open a Sushi restaurant, which has now become the little-known restaurant chain Benihana – with 5,000 employees.
When passion, creativity and authenticity are all you’ve got, you’ll use them, and that often works out better than having money, but none of these things.
Lesson 2: The power of broke isn’t reserved for startups, it’s helpful in all four stages of business growth.
The power of being broke isn’t limited to when you’re starting. Daymond says there are four stages in a business’s journey to success and it’s helpful in all four.
Item. Initially, you’ll have no name, no logo, no brand and no marketing. Just a product or service that (hopefully) satisfies a need. How good can you make it without money?
Label. Once you do give your product a name, customers have something they can remember and ask for. In 1992, Daymond and his four first employees showed up to a trade show they couldn’t even afford the booth at. All five slept in one room, but what they represented was FUBU, not themselves. They managed to collect $300,000 in orders.
Brand. A logo, a style, a brand presence all eventually follow. But even here you can be creative. In 1997, LL Cool J, who was once Daymond’s neighbor, pulled another marketing stunt for the brand: he wore his FUBU hat in a commercial he recorded for the GAP and even slipped the brand’s meaning into his rap. That helped a lot, and it was free.
Lifestyle. When your brand reaches this status, people are used to good quality and seeing it around, even treat it like a status symbol. The power of broke still works. Apple made their headphones white so everyone would recognize them and that color didn’t cost a dime more than black.
You see, no matter where you are in your journey, the creativity of a broke beginner is always available to you. But chances are that’s exactly what you are, which means it’s time to actually begin.
Lesson 3: There’s no better time than to start using the power of broke than now, because running a business gets cheaper and cheaper.
Every single day new technologies are released by the millions. A lot of them, especially software, are free. Product Hunt alone gives you access to thousands of tools you can use. Maintaining a website is cheap. Blogging is free on a platform like Medium.
In short: This is the opportunity of a lifetime. If you haven’t started a business by now and want to, today is the day. The creativity that results from a lack of money is now more valuable than ever. It’s time you used it.
Of course people have used it for a long time. Steve Jobs sold his car to fund the first few products Apple made. Michael Dell didn’t know computers well, so he designed one for amateurs like himself. In the 90s Daymond started FUBU without knowing how to draw and only being able to stitch a straight line.
The greatest basketball player of our time is 4″ shorter than the average NBA height. Like another famous basketball star said: “Limits, like fears, are just an illusion.”
Never was this more true than now, so get out there and embrace it.
My personal take-aways
This book holds a very singular and focused message: being broke is an advantage. Nonetheless, there are many more built around it, which are hidden inside the stories Daymond tells. Definitely worth your attention!