What does Mark Cuban say about startups?

Startups are a popular topic for discussion. I started a startup fifteen years ago. Most businesses fail in the first year or two mostly because the person in charge just doesn’t have what it takes to compete, or perhaps because there is not enough market for their service. In my opinion, a startup should be done by someone who knows his business inside out. The business might be new, but the business person should be seasoned. What seasoning? Cajun! The problem is that we normally do not have all of the skills we need, nor do most of us have the discipline that we need. Lastly, we normally create our startups in our 20’s or 30’s when we just aren’t seasoned! People who create businesses in their 50’s tend to do better. They have had a lot of experience going through problems at work, dealing with things, mastering people skills, hiring, firing, and seeing the long term effects of decisions. Young people just can’t duplicate that. But, what would Mark say if he were guiding you?

I read an article on Entrepreneur written by Mark Cuban himself where I learned what his “rules” are for entrepreneurship. It makes a lot of sense when you see it from the long run. Here are some of Mark’s points with my commentary below.

1. Don’t start a company unless it’s an obsession and something you love.
Honestly, if you are not obsessed with your work,how can you succeed? You need to take your work home with you, talk about it with your friends. If your friends don’t say, “Is your business the only thing you talk about?” Then you are not in the right space for success if you ask me.

2. If you have an exit strategy, it’s not an obsession
Warren Buffet buys stocks that he would keep for life. Of course he buys and sells just like the rest of us. But, he wouldn’t buy the stock if he didn’t have absolute faith in the company. Your business should be the same in my opinion. I have a friend who is always talking about exit strategies. I don’t want an exit strategy. My business is my baby. I agree with Mark on this point as well.

3. Hire people who think will love working there
It is not easy to hire people who will love working for me. My work is nitpicky and grueling. Everyone I hire I have trouble with. Why? Because they don’t love the work. I agree once again with Mark’s point (3), however living up to this standard is tough. I might have to go through one thousand people to find one who loves working for me. It might be easier if my job included photographing bikini models.

4. Sales cure all. Know how your company will make money and how you will actually make sales.
The best business model in the world doesn’t work if you can’t make sales. I started my company with a product that sold — advertising that works and courses that get you in business fast. But, not all business have realistic products to sell. Better see if your idea sells before you invest too much in it.

5. Know your core competencies and focus on being great at them.
I focus on the core competencies of my business. However, over time the competencies changed. Mark says to hire the best in your core areas. But, what if they are hard to find or don’t exist in a niche market? I hired people who understood my products well, used them for themselves with great results and were masters of selling my wares. My business did well as a result. I guess I followed Mark’s advice fifteen years before I read it.

6. An espresso machine? Coffee is for closers.
I disagree with Mark here. Sure, you don’t want a corporate culture of people who gossip all day in the coffee room. But, coffee is a stimulant, and many people need it to get that burst of energy in the beginning of the day. Small amounts of coffee have been proven to be good for your heart as well. I drink my coffee before I “go to work” which for me involves rolling out of bed and commuting five feet to the left where my computer is. I just have a Starbucks dougle shot.

7. No private offices. Open offices…
Mark claims that there is nothing private in a startup. By no offices, I think he means private rooms in an office suite.There is also no room for those who want swanky comforts like personal secretaries or flying first class. In my opinion, if everyone is not on the same page in a startup, you will have a lot of friction, disloyalty, and trouble. Even in a small business that has been around for a long time, users, cheaters, lazy people, and troublemakers can cause a lot of grief even if there is only one of them.

8. As far as technology, go with what you know.
I disagree with Mark here even though he is richer and smarter than I am. You might start off with technology you know. But, technology changes fast, and what is right for your startup may easily be very different than what you are familiar with.

9. Keep the organization flat.
Having managers that report to managers can create all types of complications. I’m not sure what Mark means by keeping it flat. If you are the owner, then everyone needs to either report to you, or you need to devise an internal system of checks and balances where everyone checks everyone else’s balances.

10. Never buy swag.
Having logos on company outfits is not critical in a startup. Perhaps that is the opposite of what a startup needs. Maybe everyone needs to wear atypical outfits. The main point is that people’s hearts need to be uniform in a startup — not their clothing.

11. Never hire a PR firm.
I cannot comment on this point as I have no experience with or without PR.

12. Make the job fun for employees
An engaged employee is much more productive and fun to be with than a disengaged one. Contests, parties, events, and other fun ways to work get people in the right mood. Conversely, not being mean to people is another good way to maintain a neutral mood. If an employee is so much trouble that you have to spoil the mood just to deal with them — perhaps you shouldn’t be dealing with them assuming you can live without them.

If I were Mark, I would include point 13: Have an insatiable desire to learn and master new skills and hire others with that same desire. Thanks for reading my commentary. Hope you liked it!

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