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Shark Group CEO Daymond John talks about Black Entrepreneurs Day, Peloton, Musk-Twitter deal

Shark Group CEO Daymond John joins Yahoo Finance Live to share his thoughts on Black Entrepreneurs Day, the latest from the Musk-Twitter lawsuit, and what Peloton's next steps should be.

Video transcript

SEANA SMITH: Access to funding and concerns about credit availability are two big challenges minority business owners are facing today. That's according to a new report from Bank of America. And Shark Tank's Daymond John is looking to help. He's announced plans for the third annual Black Entrepreneurs Day that will feature big names, including Spike Lee, Venus Williams, and Shaquille O'Neal. We want to bring in Daymond John, the Shark Group CEO and founder of Black Entrepreneurs Day.

Damon, it's great to see you once again to have you back here on Yahoo Finance. Congratulations on the announcement that you made today, the third annual Black Entrepreneurs Day. Just give us a sense right now-- this, of course, happening later this month at a time when the economy is slowing down. Business conditions are changing very rapidly. Give us a sense of just what you're hearing from business owners and entrepreneurs today.

DAYMOND JOHN: Yeah, I think, I mean, listen, you're reporting, and I'm hearing it a lot from watching you with inflation and everybody being squeezed. And we're just looking at the challenges with Ford, Tesla, and everybody else. The supply chain is still being somewhat bottlenecked and figured out. It's getting tougher out there, you know? And that's the challenge.

And that's why, as I launch Black Entrepreneurs Day for the third year, it's about access to capital, and it's about more information on how to operate a business these days because we still have to start cutting, and the cutting is not over. I think we have some time to keep cutting because these prices and inflation and the supply chain is problematic.

DAVE BRIGGS: Yeah, shocking, Daymond, to see 40% of Black business owners say they think they'll never have equal access to capital. Is that problem getting better? And the people that might be at your conference-- Shaquille O'Neal, Venus, let alone, her sister, Serena, Spike Lee-- how are they changing that atmosphere?

DAYMOND JOHN: Well, the system-- it is somewhat getting better in one sense, but on the flip side, it's not. A lot of people, a lot of corporations after George Floyd, had dedicated a lot of funds. And it was their internal mandate to go out there and to address some of these matters. That's why we love working with JPMorgan Chase Wealth Management. And they have-- their criteria is to deploy $30 billion over the next couple of years.

But a lot are pulling back. They're pulling back because they're looking at these things in line items. I'm not taking it personal. They're saying, hey, if we got to reduce our-- a lot of the stuff we're doing by 30%, well, something like these type of programs, they're just looked at as line items. They cut them when we always say that the people who need it the most get cut the first.

And that's something that needs to be readdressed because when more issues come around, they're going to be the ones with their pants down. And the press and a lot of people are holding them to their word of, what did you say about two years ago?

Now, why Shaquille O'Neal, Spike Lee, and Venus, so on, is to have people identify with people who are in great positions, but to talk more about their losses and where they failed, and how they overcame those things, and how they had to continually educate themselves because many of us African-Americans did not come from legacy wealth. So our parents and grandparents could not share this information of when to scale back and deal with tough times like this.

SEANA SMITH: Daymond, talking about empowering these business owners, showing them what success looks like, I guess, how do you better prepare them for the future? We talk about the fact that access to funding is so tough for many minorities, that the numbers are pretty drastic, just the gap between access to funding. I guess, what do we need to do in order to close that gap?

DAYMOND JOHN: Well, the challenge is what you need to do with any entrepreneur, whether African-American or not, is you have to constantly educate yourself on how to improve your business. And often, that is the structure of your business. A lot of times, when I meet with entrepreneurs, they literally cannot take in the capital because they don't have QuickBooks, or they don't have other sources so I can really trace where the money came from and where my money is going. A lot of times, it's internal structure.

And then it's always like any other business, going back to what is the core of your business. And, you know, I believe that we should always spend 20% on looking forward into improving the business.

And then but at times like this, you need to go full out on who is your customer, why are you and how you over providing for them, where can you cut the fat and make it through these times and get as lean as possible. You have a restaurant start becoming a ghost kitchen and various other things like that, then you've got to recalibrate your business because you've got to get lean right now because winter is coming.

DAVE BRIGGS: You built the iconic clothing brand FUBU. Another icon frankly has been Kanye West, what he's done with Yeezy, up 30% in '21, $1.7 billion to Adidas alone, let alone his partnership with Gap. He's been very critical of both those relationships, Daymond. And today, we learned from the Wall Street Journal that his partnership with Adidas has been put under review. The problem is certainly not access to capital for Kanye. What is, do you think?

DAYMOND JOHN: A big thing is communication through what Kanye expects, you know? And is everybody on the team from the top down in line with that? And did they agree upon that? Business is-- it's moving often, right? And when the things were good and everything was going great, that's fine, but when supply chain issues come and/or maybe they have over inventory or they order too much, well, they're going to have to adjust those numbers.

And as much as Kanye is somebody who's leading it, the theory of business, who pays the most saves the most, you know? And if Adidas and those people have a massive amount of inventory they have to let go, or they have to start cutting prices to retailers or not, they don't have the people walking through their doors anymore, you got to make adjustments.

So I don't know what those agreements are. And I'll leave it up to all of them, but it's not always as one-sided as what we see. Kanye happens to have a loud voice. But we haven't really heard from the people who are dealing with the supply chain and all the other things that they have challenges with.

SEANA SMITH: David, sticking with retail, another consumer facing brand I want to ask you about is Peloton because once again today, they're in the news, announcing another round of cuts, a fourth round of job cuts this year. From your perspective, I guess, what does a company like Peloton, what do they need to do in order to turn things around and get investors back on board?

DAYMOND JOHN: That's a really good question. I thought Peloton would have been sold a long time ago because they happen to have a captivated audience 45 minutes to an hour on viewing a screen. And I would have thought that one of the Netflixes of the world or the Amazons of the world would have just grabbed them due to eyeballs. So that's still not off the table at the moment.

But I really don't know what they could do right now. I think that's over my pay grade because they are suffering. And I did invest in Peloton, not after the bump, but after they brought it back down, but it kept going back down. And I'm like, what the hell did I do? So, you know, I wish I had the answer to that, but I don't have the answer to that.

DAVE BRIGGS: It has been interesting watching, just sipping from a fire hose, the amount of news coming out of there. Daymond, you often quote Elon Musk and talk about his leadership style and his innovation over the recent years. What do you make of the latest twists and turns? Suddenly, he's back in on buying Twitter.

DAYMOND JOHN: You know, I think he's a sharp negotiator, you know? And Ellen is always three or four steps ahead. He's already had-- he has a plan for this thing. And I think he's just basically doing what we all do. You go to the house, you put a bid on it, you get everybody out of the way.

And then you start sending the engineers in there, and you find out all the things that you would like to have adjusted sooner or later before the seller gets seller's fatigue. Or you get them to go down on pricing, and you get them where you want them. So I think it's just a negotiation. And the crazy thing is he's using the same exact platform that he's purchasing to help negotiate what he wants to do. He's brilliant. I will never try to think ahead of Elon Musk.

SEANA SMITH: Yeah, Daymond, I guess, just your reaction to how he's handled this acquisition so far, and also heading in to a company where the culture, obviously, has gone through many a roller coaster ride, to say the least, over the last several months. As someone who has a very successful track record, I guess, how do you kind of write that chip?

DAYMOND JOHN: How do you write the chip of their culture?


DAYMOND JOHN: Challenging at the moment. You have to almost get to the theory of crashing and burning or slashing all leadership because it really comes from a leadership standpoint and getting all the old guards out of the way. And because today is very hard to get a workforce that really wants to work for you. They want to work for culture. They want to work for purpose. So I believe that it's really going to be cleaning house when you get there of all the people that are at the top.

DAVE BRIGGS: All right, Daymond John, wanted to tell you, you did a great job on "Masked Singer." You're looking svelte, man. You look like you have really been working it out, brother. Good to see you. Black Entrepreneurs Day, October 27 at New York City's Apollo Theater. The website-- Please check it out. The deadline-- the 12th. Good to see you, sir.