I’ve received many hours of free consulting from the owner of the Dallas Mavericks, Mark Cuban. He’s given me insights into what has made him successful and what I need to do to take myself to a level of success greater than what I have now. Normally a few hours spent with him would cost a pretty penny, I imagine. But not so with the special deal I got.
You see, I just finished watching season 1, 2, 3, and season 4 (the first 3 episodes) of ABC television’s “Shark Tank”. It’s a reality TV series where hopeful entrepreneur’s enter a large conference room to present their idea or business. There are five investors/sharks (sharks because sharks smell blood and feast, a parallel to the sharks scooping up pieces/ownership shares of businesses in the show), of which Mark Cuban is now one (as of the start of season 3).
The free consulting came with only one caveat. And that is that I observed, listened to, and deciphered everything Mark Cuban was saying and doing in the Shark Tank.
What Did Mark Cuban Tell Me?
He told me to hustle
If there’s one thing that makes Mark Cuban smile, it is hustlers and problem solvers. He can sense one immediately it seems. In season 3, episode 15, Phil Dumas presented the “Unikey” – a feature rich mobile app paired with an electronic device to open locks. When Phil was negotiating down to 40% equity from 42.5% from Mark Cuban and Kevin O’Leary, Phil offered them seats on the (just now formed) board of directors. Mark and Kevin accepted and at the end of the show, Mark mentioned that Phil is a problem solver and got the deal.
He said suing, crappy patents, and legal battles are one thing wrong with this country – out work, out hustle, and out deliver the competition
In season 4, episode 3, “FuzziBunz”, a cloth diaper company with an innovative design came forward. They’d sold a lot of units, but had trouble with copy cats selling their product and infringing on their patent. Sales were still high, but profit margin’s were low. Mark mentioned to Tereson Dupuy (the owner) that the problem isn’t so much the competition and legal battles. If she truly wanted to be successful, she’d out-work, out-deliver, and be a step above any copy cats.
I can see where Mark is coming from here. You can spend your time focusing on infringements and copy cats, or you can focus on your businesses and continue to innovate and deliver. I still find myself wondering about patents and copyrights. Are those truly important to protect people and their ideas, or should all ideas be shared and those who deliver the best be left to stand ahead. It’s not something I have an answer to, just questions :)
It pays to listen – he says be patient and see where things are going – jump in if it makes sense to do so and you have a better offer
In season 4, episode 3, Matt Franklin and Mike Lane presented “PostureNow”, a strap device for the arms, shoulders, and back that ensures correct posture when the shoulders slouch forward. Mark mostly sat back and listened to the negotiations as the talk centered around patents and Matt and Mike’s measly $5,000 initial investment which was earning them so much in sales now. After Matt and Mike argued with Damon and there were other offers, Mark was asked for his thoughts.
Mark told Matt and Mike to let them go – as in let the other offers go and to talk about what is right. Mark understands that there are two of them and giving up 40% or more of the company means someone else has more equity than either of them. So Mark told them 35% + 35% for each of them and 30% for Mark Cuban as long as a royalty is paid until Mark Cuban gets his money back (due to the evolutionary stage of the product) and Mike quits his job.
Notice the additional subtle conditions on the deal beyond just simple percentages. Mark knew the two of them wanted to keep reasonable equity percentages. He also knew for it to be successful they’d both need to do it full time. He got what he wanted after everyone else simply shouted out “greedy” offers.
He says work full time on your business and don’t dabble – he doesn’t invest in dabblers
Anytime someone on the show comes on that seems only somewhat vested in their business, you can bet that Mark Cuban is going to say he’s out and not invest. Mark believes that business success comes from complete focus and hard work (and a good idea doesn’t hurt). Food for thought for me who likes to dabble in many different things…
On another side note, Mark does not invest in anything not proven or scammy. He’s right out on those and won’t even accept gifts from the entrepreneur’s if they fit this bill. Ryan Naylor introduced an energy/ion bracelet in Season 3 episode 6 and passed them out to the Sharks. The bracelet is supposed to help your balance and energy. Mark said it’s simply the placebo effect. Mark rejected the gift and was out right away.
I give Ryan his props for creating a website and attracting a lot of natural organic search engine traffic and for making money with good margins. But I have no idea if it’s an idea that works. I’m skeptical by nature, so that is my first reaction…
Time is a precious resource
Mark Cuban values his time. He won’t invest in anyone who is going to waste his time or not fully invest their time in their business. Mark wants to help people, but does it with the caveat that those people are investing their time and energy in their business. Don’t waste the time of an investor with an unreasonable asking price with no proven sales/profit.
I wonder if Mark Cuban ever sleeps with all the investing and work he is doing. He’s certainly built an empire and employing many people. I can tell he’s competitive and driven to be the best at what he does…
What Does This Mean For You and Me?
I think the message from Mark Cuban is very simple. Innovate with great ideas (using technology is a plus). Don’t get caught up in patents and legalities. Out work and out innovate the competition. Stay aware of your competition and do better than they are. Lastly, don’t dabble – put your focus into your business and don’t look back.
I think a conversation with Mark Cuban and I would be like this:
— Start Conversation —
Jeremy: Hi Mark, it’s very nice to meet you in person.
Mark: Nice to meet you Jeremy, so tell me, what do you do?
Jeremy: Well, I’m a web developer/programmer by day and do a few things on the side.
Mark: A few things on the side? What is that? Can you be more specific?
Jeremy: Sure, I’ve made a few websites, have a personal blog, and am trying some new things.
Mark: How long has this been going on?
Jeremy: About 3 1/2 years now.
Mark: And how much do you make from this?
Jeremy: Well, about $75 a month. $65 net profit after domain and server costs.
Mark: $65 is low for 3 1/2 years of work. Have you been doing this full time?
Jeremy: Not at all, it’s been more like tinkering around with things. What should I do?
Mark: What do you think you’re best at?
Jeremy: Websites, mobile apps, connecting with people.
Mark: Look, you’re a developer. You’re also good with people. You’re just not hustling and interacting with people. You also haven’t narrowed down a specific idea or market. If I were you, I’d use those two skills – development of websites and mobile apps, along with your ability to connect with others and start solving people’s problems using technology.
Jeremy: Makes sense. Sounds like the first order of business is finding that market need and putting my technology and people skills to work.
Mark: Yes, but not just that – you need to be committed and give it 100%. No more casual web surfing, no more wasting time on Facebook. Pure 100% focus, effort, determination, and problem solving. Can you do that?
Jeremy: I believe I can. Thanks for the quick chat Mark!
Mark: Glad I could help, now go get ’em.
— End Conversation —
I have the skills and can certainly learn the additional skills I need to. I’ve just lacked focus and consistent effort. Laziness has never equaled success. Thanks for the guidance Mark…
- Saw Mark Zuckerberg Speak Today
- The CTO
- Examining My Google Search Traffic
- November 2014 Food Drive
- You Are the White Knight