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Mark Cuban on His Relationship To Wealth and Risk and Why Silicon Valley Investors Are Like Old Hollywood

Mark Cuban is a serial entrepreneur, investor, and owner of the Dallas Mavericks. His career began with his founding of MicroSolutions, a company he went on to sell to CompuServe in 1990. Then in 1995 Mark co-founded Broadcast.com - streaming audio over the internet. In just four short years, Broadcast.com (then Audionet) was sold to Yahoo for $5.6 billion dollars. Following the acquisition in 2000, Mark acquired the Dallas Mavericks where since his taking over they have competed in the NBA Finals for the first time in franchise history in 2006 - and becoming NBA World Champions in 2011. They are currently listed as one of Forbes' most valuable franchises in sports. If that was not enough, Mark is also one of ABC's "Sharks" on the hit show Shark Tank.

Updated on April 14
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Key Smash Notes In This Episode

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He got a job selling PC software in Dallas. Mark did not know anything about the software, but he knew how to read the manual and to figure things out.

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Mark Cuban says money does not necessarily make you happy, but it gives you control of your time and enables you to do things, which you might not be able to do without money.

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Mark's got a great advice from his basketball coach Bobby Knight: "Everybody's got the will to win but it's only those with the will to prepare that do."

Risk becomes more acceptable if you can understand what the risk entails, instead of just taking a blind risk.

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On one hand, when people come out of the lockdown, if they see something new and something different, something exciting, they're going to buy it. There's gonna be some amazing world class companies created in this time.

Digital meetings and remote healthcare are going to accelerate. Robotics and AI are going to accelerate to compete with overseas overfacturing, ...etc.

On the other hand, this doesn't necessarily change the macro economics. The trends that have negatively impacted businesses are going to get worse..

Retail was already struggling with its back against the wall because of digital sales, the Amazons and Walmarts, ...etc. That's going to get worse.

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Mark looks for investments that can return his share in cash flow. For example, if he invests $100K for a 10% of the company, that means this company needs to be able to make $1M in cash flow to give Mark his money back.

Although this thesis does not guarantee a lot of big exists, it also means Mark is not going to lose a lot of money. He can always work with the entrepreneur to help a business like that to make more money.

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Mark Cuban says Silicon Valley today is like the old Hollywood. Everybody wants to be an actor, everybody wants to be an entrepreneur. Your employees are there only until they can take a chance to go start something news, or go somewhere else with a better potential return.

There is a lot of money and investors are just throwing that money at potential companies, in hopes of a good return. This leads to a lot of bad habits and bad culture.

In Mark's view, almost any successful company that had started in recent past would be more successful by being based outside of Silicon Valley.

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If you want to be a successful entrepreneur, you have got to be authentic and self-aware, work hard and take on risks. Faking it does not work.

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They don't think it's important. They think sales comes with any good product. Mark suggest there has never been a company in the history of companies that has ever succeeded without sales; you can't make money without sales.

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First, know the vision for your organization and figure out how to align people and goals.

Second, hire slow and fire fast, and put your people to work. You are never going to accelerate unless you delegate.

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