When Mark Cuban started the company that made him a millionaire, he was almost at rock bottom — and he doesn’t think that was a coincidence.
“If you have nothing, it’s the perfect time to start a business,” Cuban told the “Lex Fridman Podcast,” in an episode that aired last year.
He cited himself as proof: He had recently been laid off from his job at a computer store and was sleeping on the floor of a three-bedroom apartment with six roommates when he launched his first startup, a technology company called MicroSolutions, in 1983. .
“I couldn’t go any lower,” Cuban, now 66, said. “There was no obstacle for me to start a business.”
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After nearly seven years—during which a secretary allegedly nearly bankrupted the company, and Cuban himself, with forged checks—Cuban sold MicroSolutions to CompuServe for $6 million, becoming a millionaire in the process. He became a billionaire after his future technology company, a streaming audio service called Broadcast.com, was sold to Yahoo for $6 billion in 1999.
The serial entrepreneur and startup investor currently has a net worth of $7.79 billion, according to Bloomberg.
“If you want to take that next step, you have to be able to deal with the consequences of changing your circumstances,” Cuban said, noting that people with jobs, children or mortgages may have good reasons to be uncertain with the uncertainty of enterprise. “Starting a business gives you the biggest upside potential and the biggest leverage on your time, but it also creates the biggest risk.”
You can at least partially mitigate the risk by saving at least six months of living expenses, Cuban recommended in a 2023 interview with Wired. And you should research the industry of your future business intensively ahead of time, he said on the podcast.
“I get emails and people approach me all the time [saying]’What kind of business should I start?’ This tells me that you are not ready to start a business,” he said.
Other successful entrepreneurs often agree: When starting a business, you need to take your research seriously and commit—both personally and financially—to see your idea through, for better or for worse.
“First, build conviction by learning more about what you want to do. Don’t just do some of the sketchy work,” billionaire serial entrepreneur Jay Chaudhry told CNBC Make It last year. “Second, start by putting your money in. That’s actually part of testing your conviction. If you really have conviction, you’ll take a chance on yourself.”
Knowing what it feels like to struggle—and being comfortable with the idea of doing it again—can also give you a useful perspective.
“I know what the bottom feels like. I don’t mind if I come back. So I’m just going to put all the potatoes on the table,” Jake Loosararian, CEO and co-founder of the $633 million robotics firm. Gecko Robotics told CNBC Make It last year, adding, “That’s actually a superpower. Those scars allow you to act with confidence and courage and the will to do [your goals] become reality”.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.
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