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Mark Cuban: You Only Have to Be Right Once…If You Take Big Enough Swings Along the Way | Starting Greatness with Mike Maples

Check out the Starting Greatness Episode Page & Show Notes

Key Takeaways

  • Risk is a necessary component of success
    • “If you’re going to start something great and have a B next to your net worth, you have to take a bet on a different future than most people see” Mike Maples
    • Chances of success may be less than 10%, but the upside is so asymmetrically large that you only have to be right once
    • All it takes is being right one time
  • Escalate your commitments as you escalate your certainty
  • As things start to go your way, you have to speed up
  • Competitors will see you and how fast you’re going
  • If you don’t speed up, you’ll be behind
  • “Most people don’t put in the time to learn, and you’ve got to always be learning. That to me is the greatest trait of any entrepreneur” Mark Cuban
  • “There’s got to be value in return on everything you do as a startup, and if you don’t recognize that, that’s a red flag” Mark Cuban
  • Don’t start a company, unless it’s an obsession and something you love
  • If you have an exit strategy, it’s not an obsession

Intro

You Only Have to Be Right Once

  • Mark has made many mistakes throughout his career
    • Nobody tends to remember them
  • “But you’re right one time and now all of a sudden, people call you an overnight success, even though it might have been 10 years in the making, but you learn” Mark Cuban
  • Mark used every failure as a learning opportunity
    • “I think I learned more from the companies I got fired from or left than I did from the companies that I really enjoyed. I learned what not to do. And sometimes that’s more important than anything” Mark Cuban
  • Most people think of risk as something negative
  • Risk is a necessary component of success
    • “If you’re going to start something great and have a B next to your net worth, you have to take a bet on a different future than most people see” Mike Maples
    • Chances of success may be less than 10%, but the upside is so asymmetrically large that you only have to be right once
    • All it takes is being right one time
  • Escalate your commitments as you escalate your certainty
  • As things start to go your way, you have to speed up
  • Competitors will see you and how fast you’re going
  • If you don’t speed up, you’ll be behind

Continuous Learning, The Greatest Trait of Entrepreneurs

  • “Most people don’t put in the time to learn, and you’ve got to always be learning. That to me is the greatest trait of any entrepreneur” Mark Cuban
  • Especially in technology, it’s a continuous search for new knowledge
    • In the 80s many people taught they didn’t need PCs or the internet
    • Now it’s with AI and crypto
      • Your whole company may be disposed of by AI at some point
      • If you don’t understand it you’re toast
      • If you learn it and can integrate it, you’ll gain an edge

12 Cuban Rules of Startups

  • 1. Don’t start a company, unless it’s an obsession and something you love
    • Entrepreneurs work tremendously hard, if they don’t love it, they can’t last
  • 2. If you have an exit strategy, it’s not an obsession
    • When early entrepreneurs think about exiting they signal that they’re not committed for the long run
    • Many advisors suggest early startups to plan their exit strategy before pitching to VCs
      • That’s often counterproductive
    • Some of Mark’s favorite investments involve profitable companies that didn’t exit but keep sending him his share of quarterly profits
  • 3. Hire people you think will love working there
    • “If they’re nine to fivers, it’s tough” Mark Cuban
  • 4. Sales cure all
    • No company in history succeeded without sales at some point
    • It’s more about gross margins than top-line revenues
    • “If you’re just buying sales (by paying for advertising), it’s going to catch up to you at some point” Mark Cuban
      • Mike calls it “fake growth” 
      • Most fake growth startups get forgotten or bailed out
  • 5. Know your core competencies and focus on being great at them
    • Competitors will try to copy you, so you should be great at what you do
      • Have the drive to continue improving
    • Sometimes you have to pivot, but more often you’ll win by focusing on your strengths
      • “Revenue chasing” is when you build features outside of your core competency  or strategy just because a customer requested it
  • 6. Spend liberally on core employees
    • Outside of your core, hire for people who fit your culture but are cheap
    • When in doubt, hire for stress reducers that fit the culture and support your core competency
      • Those are the people you can’t live without
      • The ones you give raises to even if they didn’t ask
    • Hire slow and fire fast
      • Once you find a stress creator, you have to get rid of them quickly
      • They infect the culture
  • 7. An espresso machine. Are you kidding me?
    • Every penny you have is precious
    • When you buy an espresso machine (or similar office stuff) you communicate to investors that you had no better way to spend it
      • “There’s got to be value in return on everything you do as a startup, and if you don’t recognize that, that’s a red flag” Mark Cuban
    • If you have to buy it, use your own money, don’t put it on the company balance sheet
  • 8. No offices and no privacy
    • In good startups, you can feel strong positive energy when you walk around an open office
    • There will be a time when you’ll need to have offices
      • When you’re still under 100 people open offices work better
      • They keep the organization flat, without managers reporting to other managers, etc….
  • 9. Let people use the technology they already know
    • When starting out, you want to get a return on all your time
    • You shouldn’t force your people to switch to new technologies because there’s a learning curve that makes you slow down
  • 10. Never, ever, ever buy swag (to give away)
    • Nobody you give it away to will wear it
  • 11. Never hire a PR firm
    • PR firms make the process longer and more costly
    • Mark prefers to reach out directly to the content creator
      • It’s always better to have direct relationships
    • If you are new to an industry or in other special cases, there may be a case to work with PR firms
  • 12. Make the job fun for employees
    • In startups, there’s always a lot of stress
    • You want people to have fun and be happy to go to work

Lessons Learned From Broadcast.com

  • Broadcast.com started as an online service to allow people to listen to sports games over the internet
    • Mark started as an investor and advisor and then became VP
    • In ‘98 they started doing video streaming as well
    • The most profitable segment were corporate events for companies like Motorola and Intel
  • You have to really believe in your product
    • At the time satellite TV was picking up and many people laughed at broadcast.com
    • Mark believe in the increasing performance and decreasing prices for PCs and the internet
  • Starting a company you should ask yourself
    • What makes you unique to implement this?
    • Are you solving a problem for your users?
    • Is your technology the path of least resistance for users to accomplish their goals?
  • If you can answer positively all those you have to go for it

Kicking Your Own Butt

  • Mark likes to ask “What would I do if I were competing with me?”
    • He always asks entrepreneurs on Shark Tank “how would you kick your own ass?” 
  • No one can know your weaknesses like you
    • You have to anticipate that some competitors will see them and act accordingly
  • If there’s an opportunity in your market, you can be sure that competitors will come
  • Just because big companies enter your market, it doesn’t mean you’re doing the right thing
    • You have to continue to push and make sure you stay ahead
    • Facebook is entering many secondary markets but hasn’t been really successful in any of them
      • You shouldn’t use that to validate your market
      • Rather use it as motivation and energy to push harder
      • “They can be stupid a lot longer than you can be solvent” Mark Cuban
Starting Greatness with Mike Maples : , ,
Notes By Giorgio Parlato

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