This isn’t quite a continuation of part 1, but I happened to stumble across an interview I did last year for Young Money Magazine that covers a lot of the things that I probably would have included in part 2. 🙂
YOUNG MONEY TALKS TO CUBAN: During an exclusive interview with YOUNG MONEY, billionaire Mark Cuban shared his thoughts on using the fear of failure as a motivator, beating the competition, and why investing in the stock market may not be such a good idea.
YM: What is the key to recognizing a profitable business opportunity?
CUBAN: Knowing the industry very well. Most people think it’s all about the idea. It’s not. EVERYONE has ideas. The hard part is doing the homework to know if the idea could work in an industry, then doing the preparation to be able to execute on the idea.
YM: What personal characteristics should a person possess in order to become a successful entrepreneur?
CUBAN: Willingness to learn, to be able to focus, to absorb information, and to always realize that business is a 24 x 7 job where someone is always out there to kick your ass.
YM: Did you set career goals for yourself while you were in college? If so, what were they?
CUBAN: To retire by the age of 35 was my goal. I wasn’t sure how I was going to get there though. I knew I would end up owning my own business someday, so I figured my challenge was to learn as much as anyone about every and all businesses. [I believed] that every job I took was really me getting paid to learn about a new industry. I spent as much time as I could, learning and reading everything about business I could get my hands on. I used to go into the library for hours and hours reading business books and magazines.
YM: Do you consider yourself an innovator? Why?
CUBAN: No. I don’t really have new ideas, but I manage to combine information in ways most people hadn’t considered. They aren’t new ideas, it’s just that most people don’t do their homework about their businesses and industry, so there is usually a place to sneak in and do something a little different. You just have to make sure what you want to do can sustain a business and make it profitable rather than be a niche that can be crushed [by the competition].
YM: What advice would you give young adults just struggling to move up in the business world?
CUBAN: 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. I would also say it’s hard not to fool yourself. Everyone tells you how they are going to be”special,” but few do the work to get there. Do the work.
YM: What types of opportunities would you pursue if you were starting over today? CUBAN: I just started a business called HDNet. There never is one area that has a door open to everyone. Try to find an area with something you love to do and do it. It’s a lot easier to work hard and prepare when you love what you are doing. YM: What would you tell entrepreneur hopefuls who are afraid of failing?
CUBAN: It’s good [for them]. I’m always afraid of failing. It’s great motivation to work harder.
YM: What is the most important piece of advice you could offer someone who’s just starting a business?
CUBAN: Do your homework and know your business better than anyone. Otherwise, someone who knows more and works harder will kick your ass.
YM: Did you have to sacrifice your personal life in order to become a business success?
CUBAN: Sure, ask about five of my former girlfriends that question… I went seven years without a vacation. (from the time I got fired from a job, and started MicroSolutions) I didn’t even read a fiction book in that time. I was pretty focused.
YM: Do you have any general saving and investing advice for young people?
CUBAN: Put it in the bank. The idiots that tell you to put your money in the market because eventually it will go up need to tell you that because they are trying to sell you something. The stock market is probably the worst investment vehicle out there. If you won’t put your money in the bank, NEVER put your money in something where you don’t have an information advantage. Why invest your money in something because a broker told you to? If the broker had a clue, he/she wouldn’t be a broker, they would be on a beach somewhere.
Thanks Mark, I am a business owner too and it\’s great to get an inside look at your thinking about building a business. Very helpful and encouraging to know that there are some people who have to break out of the mold and be their own boss and tips on how to go about it. I left my corporate job a few years ago and have never looked back and never plan to.
Comment by Vicki -
Mark,
Thank you so much for this post. You really helped reinforce the reasons that I am in business for myself. A Fellow Clevelander of mine,Jim Kukral, was kind enough to link to your post. Two things are needed for success:
1.Really hard work
2. Creating your own luck
Happy New Year!
Joel Libava
Cleveland
http://thefranchiseking.typepad.com/about.html
Comment by Joel Libava -
Thanks for the great advice. Now for the hard part, implementation.
Comment by VIP Realty -
You are so right. You are awesome Mark! People who don\’t get will always call successful people lucky. I agree with you completely on work ethic. THAT is why the people that work hard are generally more successful. No matter how many times it is said or advertised most people just won\’t work that hard. The one thing I will disagree with is the stock market. Maybe for people, once again, who don\’t want to work at it, but the stock market is a great money maker if done right with even just a little effort. I will say that you do such a good job of picking up on trends before the rest of the population.
Comment by bill ross -
Thanks for sharing…this was terrific reading.
Comment by Susan Lewis -
it gave me strength and hope .Thanks Marks . Thank you Very much .
Comment by Prashant -
I never finished the business plan. I was overwhelmed with all that I did NOT know about the various aspects of what I wanted to do including various existing and upcoming government regulations, etc. But the big thing is that even though this was a very valuable idea, I did not have the passion for it. Had I had the passion I could have overcome the obstacles. Instead reading senate proceedings, and looking into the other aspects of the business that I did not know (being deliberately vague here – I may find the passion someday and at least write up and sell the business plan) just bored me to no end.
Comment by wow powerleveling -
“God has created each of us with a unique purpose.”
There is some validity to this. Take the whole religious aspect out of it. Take God out of it. I think that there are certain “talents” that EVERYONE has. Some have quite a few. THe thing is that MANY people NEVER discover what their talent is, or figure it out and throw it away. Two of Mark’s talents are business, & computers. Actually, I would say business and passion for knowledge cause that’s what taught him about computers. The reading, and the passion for it. He wasn’t a prodigy or anything in terms of computers. He was not Bob Metcalf or Steve Wozniak. But I digress…
Comment by runescape money -
Very interesting but WHERE DO YOU GET YOUR ENERGY FROM? You seem to be bursting out of the seams with energy.
Comment by Steve -
A couple of things…
“Thinking Outside the Box”
– Your idea does not have to be totally unique or out of the box. How many times have you seen something and thought “why didn’t I think of that?” I bet you never asked yourself that about the Segway, but maybe you did about the “Chip Clip” or something. The idea has to be VIABLE (has a market or fills a need), and it has to inspire YOU.
This is what I think is the key. You have to have the combination of a viable idea, and passion for it. I had an idea once. It had to do with medicine and computers. I discussed the idea with a few key people. All of them thought that it was a remarkable idea, and one that was worth potentially billions. I never finished the business plan. I was overwhelmed with all that I did NOT know about the various aspects of what I wanted to do including various existing and upcoming government regulations, etc. But the big thing is that even though this was a very valuable idea, I did not have the passion for it. Had I had the passion I could have overcome the obstacles. Instead reading senate proceedings, and looking into the other aspects of the business that I did not know (being deliberately vague here – I may find the passion someday and at least write up and sell the business plan) just bored me to no end. I couldn’t stand it. I did not have the passion too continue and I let it die away. It was a depressing realization. However, I now have another idea that I am very passionate about and am working on. Not a billion dollar idea (though it could possibly be one day), but a multi-million dollar idea at the least, and it combines several things that I am very passionate about. THere is a ton I don’t know, but at least now I love reading and learning about it. I look forward to the next business tome I must read about the industry, rather than dread it. I now fell like I *CAN* do this! I *WILL* follow through and give this a shot!
“God has created each of us with a unique purpose.”
There is some validity to this. Take the whole religious aspect out of it. Take God out of it. I think that there are certain “talents” that EVERYONE has. Some have quite a few. THe thing is that MANY people NEVER discover what their talent is, or figure it out and throw it away. Two of Mark’s talents are business, & computers. Actually, I would say business and passion for knowledge cause that’s what taught him about computers. The reading, and the passion for it. He wasn’t a prodigy or anything in terms of computers. He was not Bob Metcalf or Steve Wozniak. But I digress…
So Mark has these 2 talents (and others as well). HE found those talents. He honed them and worked at them. You can say that God gave him these talents, and he himself found them within himself thru destiny, luck, or whatever. You can rationalize it any way. God & Destiny, luck, Karma, whatever. A Rose by any other name… So I think there is validity in the “God endowed” arguement and the counter arguements as well.
“Imagination is more important than knowledge”
That’s the Einstein quote. Lots of people can learn to code on a computer. That’s knowledge. How many will have the imagination to create Lotus 1-2-3? With the imagination you can find those with knowledge, or gain it yourself. With the knowledge and no imagination, you’ll always be working for others.
A related quote would be Edisons description of the process of invention. “1% inspiration, 99% perspiration”. You have that idea, that creative spark. That’s the 1% and the MOST IMPORTANT part (as Einstein related). Then comes the work to realize the fruition of the idea or goal. I would guess that 99% of the people fail not because that don’t have that 1% inspiration, but because they can’t get that 99% perspiration. They give up, or whatever.
Buffett vs Cuban:
Buffet is an exception to the rule. Your average investor, or broker, or whatever is no Warren Buffet. It is exceedingly difficult to succeed like Buffet has (just look at how many on the Forbes list got their wealth solely via the Stock market). However, there are MANY that got wealthy via entrepreneurship (sp?). I think that that is the point he is making. There are a couple of people that made well over 100 million by winning the lottery. That doesn’t mean that just anyone can do it. Sure, they have luck, Buffett has skill. Give me some leeway here and understand my point! 🙂
Brain21
Comment by Brain21 -
Fortunately, there are voices like yours who lead by example and set the stage for logic rather than ramming lies and half truths down your throat. As a guy who thinks real estate is a much better investment even at it’s most basic of forms, volitility has always been the markets mantra so to speak.
I have had a bathroom/toilet related idea for some time now and made many contacts (3m in Saint Paul, and some other paper giants in Wis.) but never shot off the idea on paper or anything physical. I trust you Mark and with this mass appeal idea, it could make massive amounts of money. If you would be interested, email me @ values@valueprep.com and I’ll run it by you to see what you think. PS. It is definitely not ‘fly by night’!
Anyhoo, I really love your ideas & Dirks pretty J.
Later,
B.
http://valueprep.com
Comment by Brian faxless loan guy Maloney -
Mark,
Talk to me about the possiblity of Mic’g up a MAVS player during home games so fans could rent a device to hear him. I would pay to get the fed thru my DVR as well..
Brenda B.
214-264-0666
Comment by Brenda B -
I agree with you and think others missed your point entirely. Invest your time and money where you have an advantage. You’ll beat out every other opportunity hands down.
Comment by Mike C -
Completely disagree on not investing in stocks as long as you are in for the long haul. The only 20 year periods in this century where stocks did not outperform savings accounts was if you got in in the mid 1920’s, before the market lost 90% of its value. Unless you think that kind of crash is likely to happen again, you are better off in stocks.
Comment by Steve -
Last time I checked, Warren Buffett was ahead of Cuban on Forbes Wealthiest. Buffett has never invested in anything other than the stock market and acquiring wholely owned companies. He didn’t invent a widget like Mark. Warren consistently finds great companies to invest in even in sideways markets like we find ourselves in. He’s been doing it since before Cuban was born. It’s called value investing. Maybe Cuban shouldn’t diss the stock market as a tool to gain wealth when someone like Warren has MUCH more wealth than Cuban and has ONLY used the stock market. Warren buys companies bigger than anything Cuban owns. The stock market is only risky to those that don’t know what they are doing.
Comment by Nate -
Mark, thanks for sharing your inspirational story. I look forward to Part 4 and your book. I’m currently doing tedious work at a computer company…zzzzz.
But i’ve recently found happiness there. I realized how useful and interesting the experience was. And I have started to view it as being paid to learn. As I make connections, my goal is to absorb as much as possible and build discpline to achieve whatever else I must for success. 🙂
Comment by Bryan Withay -
Reading back to your post about Donald Trump, it’s a striking contrast about the difference in your relationship to money as opposed to his. His seems to be make money and tons of it, and screw everyone else. There’s no win-win with The Donald. He wins. You lose.
I believe you and I are likeminded in that money is a means to executing cool ideas. I’m not even close to financial freedom, but my desire to be very wealthy is fueled not because I want cool cars, or a big house, but because I have so many cool ideas for companies that I want to start. Ultimately dealing in the currency of ideas is the way to live.
Comment by Marc Lefton -
Kevin,
You are correct about God making all things possible. Zeus has blessed us in so many ways!
Comment by Tim T -
Which one is more important? Einstein thought imagination was the more important factor. I have 2 ideas not invented yet, ready for the real world. Mark, thanks for your comments that one has to execute and make sure the idea is a valuable one. I believe one is up your ally. Related to sports. May be a small killer app. Checking through the patent process right now, you are right, the idea is a lot easier than the process to market. When I figure out the patent stategy of it, maybe I’ll buzz you an e-mail and disclosure agreement, and well, who knows?
Comment by ShadNet -
Hi Mark
Great interview. Did you feel you retired at 35?? Until I read that, I thought I was the only one that was going for that goal.
Comment by Mike O'Krongli -
Mr. Cuban– I am curious about you last comment in the above about the stock market and why you have such a negative view. I am a broker and am in total agreement that it is not a perfect instrument by any means, as evidenced in the last few years. However, I was under the impression that your personal wealth, along with the vast majority of the wealth in this country, has been created through the market and am very interested in your thoughts on this subject if you would ever care to post them. Thank you. Mavs in the W column again tonight!!!
Comment by Brad -
Dan,
Whether Mark is a billionare or a refuge in Iraq, the point is God has created each of us with a unique purpose. Our relationship with Him is where we find true significance and meaning in our lives. Its not about money. Its not about us. Its about Him. After all, He created us.
I don’t believe God gave Mark his money. I believe God gave Mark the skills and abilities to create his wealth. All I am saying is that since Mark’s life has turned out like it has, I hope he doesn’t neglects his relationship with God (as we all shouldn’t). This will be especially hard for him since the world will constantly pull him away from God. How tragic if he were to leave this world missing the point of it all. Not only Mark, but any of us.
Thanks for your comments. You made me think twice.
Comment by Kevin -
Mark, I read that interview when it came out. It totally changed the way I look at investments. Thanks!
Comment by eh-D -
Kevin, do you really think that God gave Mark Cuban all his money? anyway that Jeremiah quote is about the Israelites.. not Mark Cuban. sure spirituality is important, but if God is giving out money, where’s my billion dollars?
Comment by Dan -
Mark,
You said,”I would also say it’s hard not to fool yourself. Everyone tells you how they are going to be”special,” but few do the work to get there. Do the work.”
In Jeremiah 29:11 God says,
“For I know the plans I have for you, declares the Lord – plans to prosper you and not to harm you, plans to give you hope and a future.”
In Ephesians 2:10 God’s word says, “For we are God’s workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do.”
Mark, don’t fool yourself. Every decision, every stroke of “luck” and every moment you spent learning and preparing was known in advance by God. He knew where you were going and He knows where you are headed now. Obviously, He has unimaginable good works for you to do. Why else would He have guided you to the position you are in today.
You fear failure? What about failing on an eternal scale? Don’t blow it, Mark. Find His purpose for your life. That’s all that really matters.
“For what does it profit a man to gain the whole world, and forfeit his soul?”
Comment by Kevin -
In response to the comment, “[I believed] that every job I took was really me getting paid to learn about a new industry.” I feel the same way. My past couple of jobs, part time or other, have really taught me a lot. Corporate culture, business, working with others, but I have disliked the actual job function. I’ve made the best of each situation in order to create the opportunity I need to make me successful. One day it will come. Thanks for the uplifting words, Mark.
Jason.
Comment by Jason Puckett -
While Mark Cuban is right, that there is a lot of seemingly irrational activity (and extraordinary volitility) in the market at the moment, it is not appropriate to “throw the baby out with the bathwater” and abandon all investment vehicles. As a trivial example, short term investment-grade bonds can provide much better rates than checking account interest rates with only nominally more risk.
I, for one, would like to see Mark Cuban start a publicly traded closed-end private equity fund focusing on early stage equity investments in technology companies. Instead of merely criticizing the irrational investment decisions of others, he could provide a great alternative investment opportunity to individual investors (most PE funds are only open to institutions and VERY wealthy individuals). He has substantial industry knowledge, a fairly conservative investment philosophy, and would probably make an excellent fund manager. He would also get to pocket a large share of the substantial management fees for this type of fund.
I recently graduated college and my Internet company has started to generate positive cash flow, and I have had some trouble finding attractive investment opportunities. Many successful fund managers are keeping a large percentage of their assets in cash, and Mark Cuban is only the most vocal of many people frustrated with the recent irrationality and volitility of the market. Mark Cuban should take the opportunity to provide a useful product to retail investors while earning a decent return for himself. That would certainly be more productive than just dissing the markets.
AC
Comment by Anonymous Coward -
The article is online at the Young Money Magazine website:
http://www.youngmoney.com/entrepreneur/entrepreneur_profiles/041703_01
Comment by Dane Carlson -
I love this story – very inspirational – keep it coming. I just quit practicing law to work on business plans and get my entrpreneurial groove on, so thanks for the motivation!
Comment by Jeff -
You need to “think outside the box” & come up w/ an idea completely out of left field to beat the competition. In other words the best advantage you can use is the one no one else thought of yet.
Comment by PJ -
That sounds way too hard!!!
Comment by Peter Broen -