How I Helped Mark Cuban Make a Billion Dollars and 5 Things I Learned from Him

Mark Cuban’s company, AudioNet (later named Broadcast.com), called me up in 1997 because they desperately needed my help in order for Cuban to become the billionaire he rightfully became.  They wined me, dined me, called me up every day, until finally I granted them their wish.

I don’t follow every aspect of Mark Cuban’s career. So I’m only going to discuss my own brief interactions with the periphery of his business life to explain what I’ve learned from him. Suffice to say, he’s enormously successful. He had a company Broadcast.com which he sold to Yahoo. And then Mark Cuban sold all his shares at the very top, walking away with billions, which he’s probably turned into a billion or so more. He then bought the Dallas Mavericks, started HDNet, made a ton of investments, had a very public battle with Donald Trump, had a very public battle with the SEC, etc.

(Mark Cuban on Dancing with the Stars. I like the way she is looking at him)

I called a friend of mine the other day, “Are you jealous of Cuban?” I asked him. And he said, “of course I am.”

Which is good because if he said, “no”, he would’ve been a liar. And if he said, “no, that guy just got lucky,” he would be the worst personality cocktail out there: stupid and mean.

Read More: The 100 Rules for Being an Entrepreneur 

What I learned from Cuban:

1) Create your luck. Most people I speak to about Cuban say he was lucky. He created a company with minimal revenues in the internet video/audio space, had the biggest IPO in history at the time (1998), immediately put the company up for sale, sold to the biggest Internet company (Yahoo), and then sold all his shares at the very top. How did he know to sell at the top? Is that the “luck” part everyone refers to? Or the fact that he started a company with no revs and was just “lucky” it was at the right time (the Internet bubble?)

It wasn’t luck at all. In chess there’s a saying, “only the good players are lucky”. Whenever a good player wins a game, the angry opponent often says, “ahh, you were just lucky”. But it always seems the good player gets lucky more than the bad player.

People are starved for love and affection. They thrash out everywhere to find it (business, games, relationships, etc) because they didn’t find it as children. And when they see someone else get love (money), they can’t understand it. Love doesn’t exist so how did X, Y, or Z get it? It must be luck.

In 1997, I had never heard of Cuban when AudioNet contacted me. AudioNet was the name of Cuban’s company before it changed its name to Broadcast.com.

At the time, my company, Reset, was putting together the first regular live online production of a TV show. The People’s Court with Ed Koch (a very prestigious TV show if you never watched it) wanted to stream live while it was being filmed. So people online could view it before it went on the air. I was very excited for several reasons.

The People’s Court with Judge Wappner was one of my favorites growing up. So now I was seeing from the ground floor how it was being made. A roomful of production assistants was going through every small claims court case on file. Hundreds or thousands of them. The most interesting ones were being pulled out for airing. We had our own office right next to this production room, where we would relax between airings. Then, we had a guy on site every day managing the streaming on the Internet. How many people watched every day back in 1997 online? Maybe 20? Maybe zero? But it was interesting. And they paid us well. I also loved being in the Hotel Pennsylvania, where it was being aired. Right across the street from Penn Station it was the site of many New York Open chess tournaments when I had been growing up. So I had fond memories. And also some bad ones.

AudioNet contacted us because they were dying for us to use their technology to do the live streaming. I forget the name of their local New York sales person. Very nice guy, persistent. “Listen,” he said, “Mark Cuban wants to go public and we NEED press releases. Press releases drive IPOs. This would be a great press release.”  We all laughed about that. We ended up using them.

Mark Cuban understood the game right from the beginning. Create a brand, be at the forefront of technology (but not too far ahead (no electric cars for him) ) get as many press releases going as possible, sell as fast as you can. He knew, probably five years in advance, that a bubble was occurring and this was the exact plan to maximize value from it. He probably extracted more from the initial Internet bubble than anyone else. It doesn’t happen by luck that you sell at the top. You have to know five years in advance when that top wil occur. And then have to have a very precise plan for being at the right spot at the right time at the very top.

I didn’t understand the game. For instance, in my company, I was a service business. Even though I was developing my own software to build websites. We were streaming many live events. We were doing many things that we could’ve called “products” and we could’ve headed down the IPO route by branding our products, speaking at events, etc. I probably had more revenues than half the companies that went pubic at that time. But I branded myself a service business, not a products business.

I had no business sophistication at all. All I wanted to do was make payroll, have a little extra (profit) and then sell my business as a function of my profits. This is fine in most business cycles (it worked) but I didn’t maximize the way Cuban did. I don’t want to chastize myself but I was right there, right at the same time, and with just as many good products that I had made as anyone else, but I didn’t properly plan for the events that were occurring (in retrospect) in plain daylight around me. In other words, I just simply wasn’t as smart as Cuban.

Everything is a game. Understanding the rules allows you to succeed.

2) Dont invest in ugly. A few years later, in 2004, I was starting a fund of hedge funds. I wrote Cuban to see if he wanted to invest. To his credit, he responded and said he didn’t like the specific strategy I was using. I was starting a fund of PIPE funds. PIPE funds invest directly into public companies by doing private deals with them so they could get stock at a discount or under other favorable terms. Companies do this because they need to raise the money. So, in other words, the worst companies around because they are incapable of raising money through other means. Mark felt the area was ugly and didn’t want to be involved.

We wrote back two or three times and each time he responded. I tried to argue with him but he knew where he stood and he remained there. No.

When companies he invested in did PIPEs, he would get out (notoriously, his back and forth with the SEC over his investment in MAMA and his selling when they did a PIPE)

So what happened? He was right. I smelled the writing on the wall in 2006 and began unwinding my fund before any implosion occurred. The implosion did occur in 2008, two years later, when funds couldn’t get out of illiquid positions in microcap companies and they all crashed in the financial crisis. Mark probably didn’t see the exact writing on the wall but once again he predicted an event that was yet to occur for another four years. What I learned: PIPEs had a bad reputation even in 2004, but I thought that created opportunity. Mark correctly realized that its ok to be an optimist in bad situations, but don’t be stupid. If you do too many crazy things then you become crazy. My investors came out ok but it could’ve been a lot worse and I should’ve just listened to Cuban from the beginning.

3) Get comfortable, then get rich. Most people think Cuban just stumbled into the dot-com boom, made his billions, and then that was that. This next thing I learned from Cuban is critical for any entrepreneur. He had already sold his first software company in the early 90s (I might be getting the dates wrong. I make a rule not to look anything up while I’m writing). I don’t know how much he made, but it was enough (10 milion?) for him to be comfortable for the rest of his life. So that allowed him the confidendence to stretch out his muscles and really go for the billion. So the rule is, get comfortable, and only then get mega-rich. If you try to go for the big number too early, you can end up miserable.

4) Bleed. Cuban’s been blogging at blogmaverick.com just about before anyone was blogging. All over that site you can see stories of his first company, of his thoughts on the Dallas Mavericks, about broadcast.com, etc. A great resource. He then used this excitement about blogging to invest all over the space (icerocket, weblogs, etc) and although those were successes I think he was doing it more out of fun than anything. And he used his blog to keep his name out there in the community. To keep building his personal brand. Thats very valuable.

5) Cuban’s Rules for Investing: Cuban made his billions and now he does what ever he wants. And pretty publicly. He buys movie chains. He produces movies (because he knows he has distribution for them). He loves basketball (the initial impetus for AudioNet was that he wanted to watch basketball games from his college over the Internet.) so he bought the Dallas Mavericks and has probably increased their value by several hundred million. It seems like there’s a few rules to Cuban’s investing techniques since the 90s:

1) Find something you are super excited about and know that at least another 100 million people can be super excited about it

2) Either start a company in that space or invest as much as possible in it. Also, strongly participate in it. Make sure you are the most excited user of your own product.

3) No matter what you are doing, get as much press as possible. Don’t use PR firms (maybe he does use PR firms but he certainly doesn’t need to. He creates his own PR). Be OUT there creating your own buzz with your own energy. PR firms can never do that for you. Too many companies rely on PR firms to create buzz. But it will never work. You have to create your own buzz and that adds many multiples of value to what otherwise would be your value.

4) Have a good bullshit detector. If things smell, get rid of them. If things are frothy, sell. Don’t break this rule.

5) Engage the customer. Cuban is probably the most accessible owner in the NBA. He talks to the fans. he blogs to entrepreneurs. In 2004 or 2005 I ran into Jason Calacanis who started weblogs, inc. He told me he cold-called Mark Cuban about his weblogs, inc blogging platform and Cuban immediately invested. Cuban responded to my emails about PIPEs even though he didn’t know me and wasn’t even interested in PIPES. Its hard work. For me I respond to up to 100 emails, comments, etc a day and still can’t keep up. Somehow Cuban has the energy to keep on doing what he’s doing even though he could’ve long disappeared by now (when’s the last time you hear from Todd Wagner, his old partner at broadcast.com. I’m sure he’s doing fine but he’s not as public as Cuban).

And yes, I’m jealous. The guy has the dream life. Not everyone can make a billion, though. So the challenge then is to make the dream life (or go far beyond what you thought the dream life would’ve been) by re-calibrating whats really important to you. In my mind, right now, I’m a trillionaire. And getting richer every day.

'Switzerland is extremely entrepreneur-friendly'

After working for a large company, Swedish-born Ann Söderblom, 31, recently took the plunge from employee to entrepreneur. Söderblom, who advises expats on how to start their own business, tells The Local why Switzerland is the perfect place to set up your own company.

Tell us about yourself.

I’m originally from Sweden, where I completed my studies in human-computer interaction and went on to do a consultancy internship in Barcelona, Spain. Five years ago, I decided to move to Switzerland to be closer to my sister who was living there and to try something new. It also helped that Switzerland has a few more months of summer than we do in Sweden. I then spent a few years working for large multinational companies, doing project management work.

What did you make of the Swiss working culture?

There is generally a good work-life balance here and people don’t tend to work crazy hours. Swiss departments also tend to be very organized with a clear hierarchical structure. However, this hierarchy is not necessarily so good for women and the distribution of management positions tends to be very male-dominated. That’s one of the reasons why I prefer to work for myself.

Although, working for a multi-national corporation also meant I was very much a part of the expat community. In the last couple of months I am trying to be more integrated into Swiss communities by learning some Swiss German words and chatting with neighbors.

Tell us about your business.

My business, Söderblom Design, helps international people in Switzerland start their own business. I help them both with corporate identity and with making the transition from employee to entrepreneur the least stressful possible. My two current clients have a copywriting business and a life-coaching business. 

What made you decide to become your own boss?

I’ve wanted to have my own company since the age of 15, a dream that I kept alive while studying and working in big corporations.

When I was 15, I'd spend weekends, evenings and vacations producing and selling t-shirts, organizing and catering for events, sewing prototypes for children’s toys and later importing Japanese tableware. At first, I didn’t sell anything but it was all a good learning experience.

I learned a lot through making mistakes and hands-on experience. Finally, in 2011, I started doing corporate design work for a few clients, which inspired me to start Söderblom Design so I could pass on my knowledge with others.

Was it difficult to settle in?

When I arrived here, I had to apply for a work permit through the kreisburo, which was a very straightforward process. And when I started my own business, I got a treuhand (financial advisor) to take care of taxes for me.

I haven’t found the bureaucracy too bad here! Switzerland is really an efficient country when it comes to dealing with authorities.

So far, I’ve had no problems getting by with a basic level of German – but then most of my work is in English.

What advice would you give someone hoping to set up their own business in Switzerland?

I 'd say that starting a business is pretty much the same everywhere in terms of the fundamentals. Perhaps my best advice would be not to quit your job straight away but to start small and test your business ideas at weekends and in your evenings to see how it goes. Then start making a profit and you can scale it up over time.

One classic rookie mistake is keeping your idea secret because you think someone is going to steal it, when you really need to tell as many people about it as possible and get lots of feedback.

I'd also recommend learning just a few words in Swiss German as it gets people to open up a lot more. But you'll also find that people will be very happy to switch to high German – if you speak it.

Is Switzerland a good place to be an entrepreneur?

It's a very entrepreneur-friendly place. Not only are the taxes good, but there are lots of events where entrepreneurs can showcase and test their ideas — like the Technopark in Zurich, the Blue Lion initiative, Venture Kick and the Start-up Weekend for tech start-ups.

Would you ever go back to working as an employee?

Not very likely. Once you’ve tasted the freedom of having your own business, it’s quite hard to go back.  

Eluding the Illusion of Time: Douglas Karr on Priorities, Resources, and the Value of Quality

When your goal is to meet a deadline for a project, time can sometimes become your biggest enemy.

It’s not that I don’t understand the work involved to complete a particular task at hand; it’s all of the other unanswered questions that come along with working with clients and teams. I don’t know if my client will provide the resources in time. I don’t know that our team’s resources will be consistently applied. I don’t know if we’ll run into problems with the technology. I just don’t know.

What I do know is that I’ll be held accountable. The problem is that I won’t be held accountable for the result – I’ll be held accountable for the deadline.

When Will it All Get Done?

Recognizing this, I pad project schedules for safety. That said, I am putting my contract and relationship with my client at risk by taking my time estimate, doubling it, and doubling it again… eventually ending up at 4 times the original estimate.

It’s not that I’m lying or trying to delay the project — it’s that I want to ensure it’s done correctly and exceeds the expectations of the client. And, of course, I want to ensure that the client will get the hand-off when they expect it. There are often downstream repercussions when a project isn’t completed on time. This is the critical moment in our relationship. If the client asks their internal staff, the staff will say it takes a fraction of the time. If the client asks a competitor, they’ll undercut me for sure. It’s a critical moment because the only reason why the client would accept my estimate at this point is because they trust me. If they trust me, we’ll move forward. If they don’t trust me, we’ll end the relationship.

It has nothing to do with time and very little to do with the results. Time is an illusion.

What’s Your Hourly Rate?

When I started my business, I responded to one ornery prospect with a rate of $250.00 per hour. He grimaced and literally berated me for the next five minutes or so. He said he could hire someone for one-tenth that rate and there’s no way he would pay it. I asked how much he would pay. He responded $75.00 per hour. So, I told him that I could do it for $75.00 per hour, but that it would take me three times as long as my original quote. I smiled. He didn’t. So I walked.

The illusion of time appears again. Within that discussion, the value of the project at hand wasn’t discussed — only my hourly worth as a human being. If he interviewed 10 people who ranged from $25.oo per hour to $250.oo per hour, I’m confident that the $25.00 per hour contractor would get the contract. I’m also confident that the results were disastrous. Just about every day, we meet with clients who have completely blown their budgets on cheap contractors who couldn’t get the job done.

We don’t manage retainers nor track hours anymore. We set budgets with our clients and have them hold us accountable that the value we generate is greater than the monthly subscription we charge. We like to measure that in increased visibility on search, social, improved conversion rates, and – ultimately – more dollars to the bottom line.

How do you Manage Time?

I don’t. Ten years ago, I started the Marketing Technology Blog and grew a sizable following online. The authority I built, combined with the following, began to drive demand for my services. The demand was enough that I launched my agency 5 years ago. Suddenly, I was a CEO and a blogger. I was recruited to write Corporate Blogging for Dummies. My influence grew, my network grew, and my business grew.

On a daily basis, I have to respond to a dozen or so tweets, a handful of Facebook status updates, dozens of PR pitches, hundreds of emails, a few phone calls an hour… and I need to execute for the clients who are paying my agency. I am surrounded by an amazing team that barely keeps me from drowning and thankfully keeps our clients afloat.

You can’t balance a checkbook when you don’t have enough money to cover the checks. The same goes for time management. When the demand for your time exceeds the number of minutes in the day, there is no time management. At that point, we’re not really managing time — we’re managing priorities.

Prioritization over Preservation

Some folks tell me that what this means is that I’m not charging enough, or I need to grow my business, or I need to say no… but that’s not who I am. I want to stay affordable to most businesses. I want to help more clients improve their marketing results. I want to stay engaged with my following on social media. I want to read every email from a new startup or a public relations professional. I love my disaster of a life!

The result is that I turn away business. Not because of the time it will take or the money it will pay, but because it’s not a fit for my style of work. I’m sure many of you are shaking your heads and some of you probably think I need psychological help, but I don’t. I’m absolutely content with finding and working with businesses that appreciate the value and commitment I bring to their company, instead of holding me accountable for over- or underestimating timelines made for self-preservation.

And I’m not alone. Virtually every client I work with is resource-challenged, and the demands continue to grow. Our service, sales, and marketing staff now balance a plethora of social mediums, a barrage of emails, and the interruption of meetings. They face increased expectations of developing content, nurturing leads, improving customer retention, and acquiring new business — all with less money, fewer people, and just a handful of tools.

Visualization Management

The key to our success isn’t managing time, it’s managing priorities. We balance our publication, our speaking schedules, our sponsors and sponsorships, our audience and our community alongside our clients’ demands. Because of these myriad responsibilities, we use a ton of visualization tools. From cashflow in our accounting platform, to analytics for our audience, to email visualization tools to handle bulk actions (check out Mailstrom), to MindManager and ProjectDirector for identifying obstacles and opportunities to drive business results.

In my opinion, time management is as dead as the corner office, the personal assistant and the flashy gold watch. It’s simply not how we’re working anymore. We have a fixed amount of resources, not a flexible amount of time. The challenge for every successful business is to prioritize their resources effectively — not based on deadlines, but on results.