Article first published as Eleven Startup Tips From Mark Cuban on Technorati.
Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs and Richard Branson.
Mark Cuban is a lifelong serial entrepreneur, launching his startup career with a variety of teenage schemes, including buying and selling collectable stamps to pay for college.
In 1983 he founded MicroSolutions, a personal computer software reseller and system integrator, headquartered in Dallas, Texas. He steadily grew MicroSolutions over the next seven years and eventually sold it to CompuServe in 1990.
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Five years later he co-founded Audio.net, which was initially focused on creating a portable device for receiving satellite broadcasts of sporting events. As noted in Optimistic Pessimism, most business models are non-linear and Audio.net’s was no exception. Its value proposition and market positioning morphed over several years, eventually coalescing around Internet broadcasting.
In 1998, the newly christened Broadcast.com went public and set the record (since broken) for the largest single-day price appreciation, rising nearly 250%. As is true in comedy, timing is everything in business. Mark and his team sold Broadcast.com, to Yahoo! in 1999 in a $5.7 billion stock transaction. Even after Yahoo’s stock tanked following the dot bomb crash, Mark and his senior team still walked away with a whole lot of Chicklets.
Mark has spent the past decade diversifying his wealth, while having a hell of a lot of fun. In addition to owning the Dallas Mavericks professional basketball team, he has been involved in a variety of television and theatrical projects. He is also a provocative and skilled writer, sharing his thoughts at BlogMaverick.
Mark’s Startup Tips
The most difficult aspect of compiling this article was narrowing down Mark’s comments to ten quotes. I easily could have included 50-comments that provide insight and inspiration to entrepreneurs.
- Risk? What Risk?
"Because if you're prepared and you know what it takes, it's not a risk. You just have to figure out how to get there. There is always a way to get there." [Tweet this quote]
Mark’s view of risk is common to most successful entrepreneurs. Where the majority of rational people see danger, entrepreneurs see opportunity. Through diligent preparation and dogged perseverance, entrepreneurs avoid foolhardy risks. They know that once they commit to a particular endeavor they will make it succeed.
- Business Is A Game – Money’s Just The Score
"Being rich is a good thing. Not just in the obvious sense of benefitting you and your family, but in the broader sense. Profits are not a zero sum game. The more you make, the more of a financial impact you can have."
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Although cash is a convenient measure of success, most entrepreneurs do not consider money to be success, unto itself. As Mark notes, "Success is being able to wake up every day with a smile on my face, looking forward to the day. Which is exactly how I described it when I was broke, sleeping on the floor."
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In many ways, true success is a state of mind, as the never-ending litany of affluent, high-profile, unhappy celebrities in rehab can attest. However, as noted in Why You (And Your Employees) Work, an adequate amount of money fosters a positive outlook on life. It is the definition of adequate that is tricky. Entrepreneurs should never forget that wealth is not an end unto itself. Rather, "Money is a scoreboard where you can rank how you're doing against other people." [Tweet this quote]
- Hard Sell
"I still work hard to know my business. I'm continuously looking for ways to improve all my companies, and I'm always selling. Always." [Tweet this quote]
Entrepreneurs are constantly selling. Such selling goes beyond promoting a company’s products and services. Entrepreneurs must sell in order to raise money, recruit employees and establish partnerships. They must keep on selling in order to maintain high employee morale. Selling at a startup is not an event, it is a process. As such, it must be a core competency.
In addition to selling, hard work is a recurring theme of entrepreneurial success, as underscored in my interview with Guy Kawasaki. "Sweat equity is the most valuable equity there is. Know your business and industry better than anyone else in the world. Love what you do or don't do it."
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Wily entrepreneurs constantly seek ways to improve their value proposition because the more value they can deliver to their end-users, the more their sweat equity will be worth.
- Speaking Of Luck
"All that matters in business is that you get it right once. Then everyone can tell you how lucky you are." [Tweet this quote]
Mark has his share of detractors, many of whom claim his success involved a healthy dose of luck. To this criticism, Mark would likely reply, "There are no shortcuts. You have to work hard, and try to put yourself in a position where if luck strikes, you can see the opportunity and take advantage of it... but few do the work to get there. Do the work."
The timing of the sale of Broadcast.com was impeccable. However, it is unfair to dismiss timely execution as simply "luck." Yahoo could have purchased a variety of Internet based video companies when they acquired Mark’s venture. According to Mark, "It doesn’t matter how many times you almost get it right. No one is going to know or care about your failures and neither should you. All you have to do is learn from them and those around you."
- Bro It Up
"It is so much easier to be nice, to be respectful, to put yourself in your customers' shoes… than it is to try to mend a broken customer relationship."
As noted in Time Wounds All Heels, honesty and empathy are common traits among serially successful entrepreneurs. In fact, dishonesty is a handicap. It may result in short-term gains, but it reduces the population of credible people willing to work with you in the long-term. Eventually, disrespectable people are forced to work with other people of ill-repute.
- Don’t Fail To Fear
"I'm always afraid of failing. It's great motivation to work harder." [Tweet this quote]
Kevin O’Connor, Co-Founder of DoubleClick and current Co-Founder and CEO of FindTheBest recruits employees who have a deep-seated fear of failure. In THIS recent infoChachkie interview, Kevin noted that, "It’s not that people want to win so much, it’s that they don’t want to lose. Winning is very fleeting and winning is an instant. Losing is with you forever. We find people who want to be Navy Seals, that one percent." Mark would no doubt agree, as he once admitted, "I had more than a healthy dose of fear, and an unlimited amount of hope, and more importantly, no limit on time and effort."
- Game On
"The key is having great players. But there are a lot of teams that have All Stars and haven't been able to put it together."
All Stars have a variety of temperaments. Some are counter-productive douche bags, as made clear in Some People Are Indispensible, But No One Is Irreplaceable. When recruiting your team, star capabilities are not sufficient. Startup employees should be evaluated based on their productivity, coupled with the relative amount of maintenance they will require. Avoid high-maintenance All Stars who do not foster an A+ Game in their teammates.
- Don’t Just Be Better, Be Different
"When you've got 10,000 people trying to do the same thing, why would you want to be number 10,001?" [Tweet this quote]
Harvard Professor Michael Porter encourages startups to attempt to "do different things" rather than "do the same things better" than their competitors. Mark agrees with Mr. Porter, "Wherever I see people doing something the way it's always been done, the way it's 'supposed' to be done, following the same old trends, well, that's just a big red flag to me to go look somewhere else."
- Avoiding An Ass Kicking Is A Good Thing
"Do your homework and know your business better than anyone. Otherwise, someone who knows more and works harder will kick your ass."
Failure is one thing. Getting your ass kicked is something else altogether. Hire people with Humble Pride who take an ass kicking by a competitor personally. Such employees’ humbleness ensures that they will never put their well-being before that of the company. However, their pride causes them to rebuke failure and consider it to be a personal affront.
"What does it take to be a successful entrepreneur? It takes willingness to learn, to be able to focus, to absorb information, and to always realize that business is a 24/7 job where someone is always out there to kick your ass." In your company’s early days, surround yourself with employees who kick ass rather than people willing to accept an ass kicking.
- Remix Redux
"I don't really have new ideas, but I manage to combine information in ways most people hadn't considered." [Tweet this quote]
As Kirby Ferguson has pointed out in his brilliant video series, Everything (including startups) Are A Remix. Ideas are worthless, unless they are coupled with effective execution. Mark echoes this sentiment, "Most people think it's all about the idea. It's not. EVERYONE has ideas. The hard part is doing the…preparation… to execute on the idea."
Combining existing ideas in novel ways is the key to successful innovation. Once you achieve a deep understanding of a particular industry’s ecosystem, underlying technologies and competitive landscape, you may be able to leverage Mark’s insight that, "there is usually a place to sneak in and do something a little different."
"Do your homework and know your business better than anyone. Otherwise, someone who knows more and works harder will kick your ass."
- Reject Rejection
"Every ‘No’ gets me closer to a ‘Yes’" [Tweet this quote]
As an operational entrepreneur, I generally translated the word "No" to "Not Now." I (almost) never took rejection personally, nor did I expend an inordinate amount of my precious time trying to overturn a steadfast objection. I usually opted to circumvent an objection, rather than struggle to convert a naysayer to a believer. In general, an entrepreneur’s time is better spent cultivating like-minded customers, employees, partners and other stakeholders, rather than converting non-believers. Thus, I agree wholeheartedly with Mark’s assertion that, "Rejection has only been a distraction, not a roadblock." [Tweet this quote]
Note: This is an installment in the Iconic Advice series. Other installments include: Jeff Bezos, Steve Jobs and Richard Branson.
