From the moment you meet Mark Cuban, you know you’re in the company of a natural entrepreneur. He simultaneously exudes the charm and warmth you’d expect from any great salesman whilst speaking with the knowledge and gravitas you would expect from someone who is regarded as of the world’s most successful business leaders.
Since the age of 12, Mark has been a natural businessman. Selling garbage bags door to door, the seed was planted early on for what would eventually become long-term success. He graduated from Indiana University (where he briefly owned the most popular bar in town) and moved to Dallas. It was a after a dispute with an employer (who wanted him to clean instead of closing an important sale) that he created MicroSolutions, a computer consulting service. He went on to later sell MicroSolutions in 1990 to CompuServe. In 1995, Mark and long-time friend Todd Wagner came up with an internet based solution to not being able to listen to Hoosiers Basketball games out in Texas. That solution was Broadcast.com – streaming audio over the internet. In just four short years, Broadcast.com (then Audionet) would be sold to Yahoo for $5.6 billion dollars.
In 2000, he acquired the Dallas Mavericks – overseeing the Mavs competing in the NBA Finals for the first time in franchise history in 2006 – and becoming NBA World Champions in 2011. They are currently listed as one of Forbes’ most valuable franchises in sports. In addition to the Mavs, Mark is one of ABC’s “Sharks” on the hit show Shark Tank and an investor in an ever-growing portfolio of businesses.
In this exclusive interview, I spoke to Mark Cuban about developing the entrepreneurial mindset, what it takes to succeed in business
Q: How did you develop your entrepreneurial mindset?
[Mark Cuban]: I’ve always been competitive, goal-oriented and self-sufficient. It’s like I tell my kids, ‘you have to go figure life out…’ – My dad was the same way; neither of my parents went to college and so it was like, ‘we can’t help you… if you want to do this, you’re going to have to figure it out…’ and that’s how I got started. I realized early on that I had to develop confidence in selling- whether it was selling garbage bags door to door, or anything else. Learning to sell took away some of the fear and gave me confidence to start any kind of business.
Q: How did you get over the initial fear of starting a business?
[Mark Cuban]: Fear depends on your context, and how much you think you have to lose. You may be young or broke and have nothing to lose. In that case? Either you figure out a way to get something, or you don’t get it. Simple. That’s like Shark Tank – one of the reasons I do the show is because so many kids and families watch it- and it helps people get over that initial hesitancy to start a business. There was a time I was living with 6 guys in a 3-bedroom apartment; what did I have to lose? If a failed, I was still broke – and if it worked? Maybe I wouldn’t be broke. As I got more successful, I had to be more prepared – and I think that is where people fall short. Everyone has ideas, everyone goes to Google to look up ideas to see if anyone else is doing it…. They’ll run it by friends… and then stop, dead stop… because they’re afraid people might look down on them if they fail – or because they think they need to go out and raise a lot of money in order for it to work. Here’s the thing – you need to just get out there and try it. Taking that first step is your biggest competitive advantage; most people won’t do it.
Look; I named my book How to Win at the Sport of Business for a reason – I’m competitive. If I’m not doing something, if I’m not looking at companies, if I’m not investing something in those companies my creative juices are like, ‘Mark, come on, you’ve gotta do something!’ – it’s like going to play basketball – if you put me on a court, even though everyone’s 40 years younger than me, I’m still going to try to complete to win – that’s the competitive spirit. Whatever business you’re in, you have to want to compete and win. That’s the mindset.
Q: Why is sport used so often as an analogy for business?
[Mark Cuban]: Business and sport are both about competition. You’re not working in a vacuum, and you can’t go back to the start when you’re losing. If I figure out the strategy and get way ahead of you, you can’t just start-over. In sport, like in business, there’s someone out there trying to take it all away from you. Your competitors aren’t sat there thinking, ‘you know what, let’s just split the marketplace…’ they’re saying, ‘you know what, if I have a chance to take 100% of the market, and I can do it legally, that’s exactly what I’m going to do…’
Your competitors are looking for the product, idea or feature that gives such a competitive advantage that they can take all your customers away from you. That’s exactly what they’re going to do. You need to work like someone’s trying to take it all away from you, because they are.
Q: How do you maintain your focus in business?
[Mark Cuban]: In business, you can drown in opportunity. When things are going well, you stay with it – no-one wants to quit anything that’s fun and going well. it’s when things start to slow down, or you’re worried about competitors or have uncertainty… then you start to think, ‘I’m an entrepreneur, I can start something else…’ and that’s the biggest challenge for any growing company – you hit that first resistance, or any other challenge, and start thinking ‘do I pivot because this is harder than I thought? Or do I dig in?’ – it depends on your responsibilities…. I’ve always thought about my employees and customers first, I can’t let them down – and they always bring my focus back. I never want to be the guy who says, ‘yeah, I wanted to do this, but I didn’t have the perseverance to stick it out…’
Necessity is the mother of invention, and so a lot of the time – you’ll find that when your back is against the wall, that’s when you’ll come up with your best ideas. Right now, during this pandemic, some of the world’s greatest businesses will be invented.
Q: How do the best businesses stay competitive?
[Mark Cuban]: Being an entrepreneur doesn’t mean you have one shot, or one idea, or start one company. Just look at Amazon – what makes them the best company in the world is that they keep inventing things to make their business better, and they know how to create product. Sometimes it doesn’t work, like the phones, and then other times its revolutionary, like AWS or their delivery service.
You have to keep optimising your business, you have to re-earn your customer’s business every single day – it’s not just about listening to them, but anticipating what they don’t realise they need, and staying ahead of them.
There’s always change in life, not just in the pandemic- but across technology, culture, everything. Those changes impact your business – maybe a little, maybe a lot – and you have to remix all those changes and put them together in a way that puts you in a better position to serve your customer and move forward.
If you find yourself saying, ‘this is my company, this is the way it always is, and this is the way I want it to be…’ you’re probably going to be in trouble – especially now.
This pandemic has been a complete reset on the business world – every business is trying to decide how much of their legacy business to retain, what’s going to be different… Every entrepreneur and CEO in the world is saying, ‘we don’t know what it’s going to be like on the other side, so how do we invent the future? do we patiently wait and see what happens? Do we react to it? How do we invest? How do we deal with this new economy?’
One day there wasn’t hip hop, and then there was. You know, there are generations that had no idea what hip hop was, then it was there. What’s the business hip hop of this post pandemic world? Who’s going to be the Rapper’s Delight of the post pandemic world?
Q: How are you able to successfully enter multiple markets and industries?
[Mark Cuban]: One of the greatest skills you can have as an entrepreneur is loving to learn. I read all day, and my kids have taught me how good YouTube is as a learning resource to get additional knowledge that I wouldn’t have utilised before.
AI is the perfect example. AI has been around for a long time, but now that computing power has caught up, it’s becoming important. It’s going to drive what happens in the future. You don’t just naturally absorb AI, it’s not an extension to something else. I had to make a real commitment to learn it. I’ve started to read books like The Master Algorithm and Rebooting AI – I’ve been taking machine learning tutorials, taking introduction to AI, introduction to Neural Networks… I’ve been going through code to see how to build three-layered neural networks in JavaScript. None of this will make me an expert in AI, but it gives me the tools to be able to call BS where I need to and- most importantly- apply it to business so I can see where machine learning has applications, and neural networks can be used, and how the different techniques and technologies fit together. When people started talking about how AI would change everything, I didn’t have a clue – but now I recognise and understand how it will, and the risks and opportunities that come with that.
The risks are important; just because you build AI, it doesn’t mean you will get it right – and worse still, we’re evolving into a world with AI haves and have-nots. The biggest companies in the world- Facebook, Amazon, Netflix, Google and Microsoft are spending billions hiring thousands of engineers and data scientists- they can afford to do it. They can afford to test, train and make mistakes. For small businesses, AI will probably look like a spreadsheet or some SaaS that they buy that has some logic built into it. For me, trying to understand how we bring the capabilities of AI to smaller businesses is a challenge that I’m trying to dig through. I’ve got a company called Node.Ai that’s working on that.
Learning continuously lets me jump between industries.
I’ve got a tech background, and I can apply technology to industries – so when I got into sports, we hired a head of statistics (we now call it analytics) and I also hired my old stats prof’ from the University of Indiana to do analytics for the Math back in 2001 when most people didn’t even know what analytics was. It was no great stroke of genius by me – I was just applying what I learned from one industry to another, and then layering on top.
As long as you keep on learning, you’re going to have a competitive advantage – potential entrepreneurs are afraid to take that first step, but also scared of putting in the time for learning, for reading…. You have to learn to love learning.
Q: What does philanthropy mean to you?
[Mark Cuban]: I’ve been very fortunate; my next dollar isn’t going to change my life; it is what it is from a marginal value and utility point of view. That’s obviously not the case for other people and so I look for points where I can leverage that dollar to work- I like to find people or groups in need, and rather than creating a charity or working through a charity, I’ll pay their bills. I like to have a direct impact and try to be very efficient. In my experience, when you work with larger charities, efficiency can drop considerably.
I have a lot of access and get a lot of ‘deal flow’ from a charitable perspective. I’d rather directly pay for someone’s heart transplant or surgery… I’d rather find 10 people who can’t afford their surgery because insurance turned them down and just pay their bills. Direct support doesn’t give me the same tax deductions, but that’s OK – I want to directly impact people…
It’s the same with the Mavs foundation and my own foundation. We’re seeing so much need from healthcare workers, and even death-care workers (those who work for funeral homes), along with bus drivers and the many people who are unsung heroes at the front-line, putting themselves at risk. I want to provide them with direct assistance, maybe we pay for their food, for their insurance and healthcare… whatever it is. I can help provide something that is of immediate financial, emotional and practical benefit – and I can do it without the fluff of some big fundraiser and having to sell tables for a gala.
If it was upto me, I would have a law that requires all charities in a specific area (for example, cystic fibrosis, lung cancer, whatever..) to go through a process of consolidation every few years so we don’t have 10, 15, 20 charities competing to serve the same community. If you merge them together, you’ll make them more efficient.
There is so much inefficiency in philanthropy because of ego and many other reasons. Typically everyone’s heart is in the right place, but we need to drive people to make an impact and be efficient.
Q: What do you hope your legacy will be?
[Mark Cuban]: My biggest legacy is my kids. Beyond my family? I haven’t done my best work yet – I have a long way to go. I’m proud of the success I’ve had in business, I’ve reached a lot of goals that I never thought I would, and my life feels unreal, like a dream. I may not look 25 years old, but I feel like I am, and I know I haven’t done my best work yet.
If you would’ve told me, when I was a little kid, that I’d be in this position now, I would have laughed at you and said ‘okay, fine, thanks, I’ll try’. And they always say ‘if you could go back, what would you change?’ – for me? not a damn thing.