Calling all entrepreneurs and those thinking about it! We have all heard rags-to-riches stories of entrepreneurs who began with nothing but their bare hands. Take someone like Dr. Dre, who started as a DJ in Los Angeles’s South Central district, moved on to become a successful producer and is now the owner of a headphone empire, as well as a high-ranking executive at Apple Music.
Stories like his can be inspiring, but are also easily dismissed as something that only a happy few can achieve – specifically, those with exceptional talent and timing. But there is also power to be found in being broke as described in the book, The Power of Broke by Daymond John and Daniel Paisner.
Have you ever had to come up with something for dinner when you’re stuck with only two or three ingredients? If so, you might remember that limitations like this can often result in some of the tastiest meals.
This is just one example of the truth in the old saying, “Necessity is the mother of invention.” Or, to put it another way, being short on resources can generate real creativity and inspiration that would otherwise never emerge.
Having a million dollars to launch a business doesn’t mean it will be successful. On the contrary, already being rich can take away the passion and innovation that long-term success requires.
But with an empty bank account, it’s clear that your only chance for success is to dig deep and become innovative. It’s like being a basketball player who has one shot to win the game, but they’re at half-court with only a second left on the clock; there’s no other option but to go for it and take the spectacular shot. It’s also important to realize that innovation comes from a singular vision that starts from the bottom up, not the top down.
It doesn’t matter if it’s entertainment, fashion or technology, ideas grow organically from the ground up – they aren’t inspired by executives dumping a bunch of money on a project. And when an idea really takes off, it’s usually because people respond enthusiastically to something real and authentic.
Take Art Basel, for example, one of the world’s biggest art fairs, which takes place in Switzerland, Hong Kong and Miami Beach. While it has many established artists on display, many visitors get more excited about the unfunded street artists who are seen as being more genuine and “authentic.”
This played a key part in coauthor Daymond John’s success with FUBU, which stands for For Us, By Us. The clothing line was inspired by the way real people in the streets were dressing, not by designer studios.
You can also think of your brand as a personal relationship with your customer; like any good relationship, it has to be built on solid foundations. So be true to yourself – otherwise, the relationship is doomed to fail.
If you’re familiar with the Rocky movies, you know that Rocky’s career falls apart when he lets his success get to his head and starts throwing money around. To get back on top, he realizes that he needs to rediscover his passion and hunger to win. A similar principle applies to business, as being hungry can keep you focused on your growth and help you stay realistic about what’s within reach.
A great way to stay hungry and successful is to think like a shark by knowing your waters while keeping focused on your target. On ABC’s reality TV show Shark Tank, one entrepreneur after another pitches their product or idea to investors. And if there’s one thing the show teaches, it’s that investors want to hear that an entrepreneur has a clear understanding of both their market and their goals.
In one case, the show’s investors rejected an affordable athletic shoe company called Forus because the entrepreneurs had their target market down, but still wanted to expand in a way that took them well outside that market. With this in mind, an investment would have done them a disservice by encouraging them to focus on the wrong demographics.
This is why an entrepreneur who uses the trunk of their car to sell a cheap product might have a better chance with an investor. If they can sell 50 units in under five minutes, it proves that they have a perfect understanding of their market.
Some people are born with certain advantages while others start out at a disadvantage – but even if you have to work harder than others just to get on equal footing, don’t let it get you down.
If you’re a homeowner, you might have equity in your house that you can invest. But if you’ve taken out a loan, make sure you put money aside so you can make payments until your business starts earning money. Extra money can also come from small things you don’t need.
If your car is just sitting in a garage every day, maybe you can sell it, like Steve Jobs did with his car to help buy the components for the first Apple computer. It may be that not everyone will notice or appreciate your authenticity, but it’s important to stick to your guns nevertheless. Remember that you don’t need to please everyone; it’s far more important that you remain true to yourself.
Being broke only means you can’t spend money to make things look fancy. Instead, use the Power of Broke and the fact that you’re in a can’t-lose situation to let your personality shine through.
When Daymond John started FUBU, he knew he was going to be competing for shelf space with other clothing lines. But through his brand, he could show how much his community and clothing meant to him.
And it didn’t take any extra money to do so. In fact, John used the Power of Broke, which forced him to spend very little money extremely wisely, to display his authenticity to the black community.
John was one of the first designers to give his clothes away to hip-hop artists, who in turn wore them in music videos and helped solidify FUBU’s place in the fashion world. John then focused on Black Entertainment Television (BET), a US cable network that focuses on the black community. This way, John could reach his target audience easily, cheaply and directly. Since the Nielsen ratings company used very few black households to measure ratings when John started out, BET appeared to have a very low amount of viewers, so they charged very little for advertising. This worked in FUBU’s favor, as it allowed the brand to reach a wide audience for very little money.
This is the kind of opportunity that you should keep an eye out for when things are looking bleak – one that allows you to stay in your market and stay authentic.
Check out my related post: How to fail at everything and still win big?