How did ‘Shark Tank’s’ Mark Cuban get rich?
They say money cannot buy happiness but most people would love to test that theory out for themselves firsthand. Even if one is not completely joyous, the fact remains that money does make solving life’s problems much easier. Just ask Mark Cuban, best known for his appearances on Shark Tank, who is worth $4.6 billion. In a recent CBS Morning interview he said he would be satisfied with just 1% of that, which if you do the math is still $46 million. So how did Mark make his money? What’s his secret? To understand that let’s first look at his childhood, his four simple rules for making money, and his major deal with Yahoo.
Mark Cuban’s childhood
Cuban did not come from generational wealth. He made his own way in the world. He was born and raised in Pittsburgh, Pennsylvania in a Jewish middle-class family. Norton Cuban, his father, worked as an automobile upholsterer. Mark describes his mother Shirley Cuban as “a housewife with a different job or different career goal every other week.” Cuban is the oldest child and has two younger brothers who now work for him. His brother Brian is a lawyer and his brother Jeff works in sales and management.
When asked if anyone could predict his success later in life, Cuban just laughed. “Oh my goodness, they would have predicted either I would be in jail because I was always, you know, hustling and doing things and jobs and – or that I would be running my own business, an entrepreneur,” he stated.
Mark started his first business at age 12 selling garbage bags to get the funds to pay for some expensive tennis shoes. At age 16 he bought and sold stamps. He was always looking for a unique way to make money and was not afraid to put in the hard work.
Mark’s college experience
Cuban began his college career early, skipping his senior year of high school and attending the University of Pittsburgh instead. After his freshman year he transferred to Indiana University were he would eventually graduate with a Bachelor of Science degree in management. He continued creating businesses even in college – including operating his own bar called Motley’s which taught him many life lessons.
“I learned a lot,” Cuban stated. “You learn that people work hard for their money and they want something that makes it worth their time. If you give people something that’s really special and memorable, even if you’re in college and it’s just about getting drunk for the cheapest price, then people will take that path of least resistance and try to have some fun.”
After college Cuban moved back home to Pittsburgh and got a job with Mellon Bank.
Mark’s first big sale
Cuban moved to Dallas to start his adult life in 1982. He struggled as most young adults do but finally found his footing starting the software company MicroSolutions. It was not easy but the company grew. Cuban sold it in 1990 for $6 million to CompuServe, walking away with around $2 million after taxes. Cuban thought he was going to retire and live the good life but he couldn’t help but start another company.
“I bought a lifetime pass on American Airlines, and [I said] I’m not going to work, I’m just going to party like a rock star in as many countries as I can,” were Cuban’s famous last words.
Cuban said he was “too competitive” to retire just then. Instead he partnered up with Todd Wagner and in 1995 the pair created the online streaming company Broadcast.com. This was at the height of the dot-com craze. There was big money to be made here and Cuban knew exactly how to do it. Yahoo soon took interest in Cuban and Wagner’s company. In 1999 they bought it for $5.7 billion in stock which made Cuban a billionaire. Cuban made sure to protect himself in this deal and hedged against the Yahoo! shares. This was smart because only a few years after the sale the company’s services were discontinued and the dot-com bubble burst.
Cuban believes with hard work anyone can accomplish what he has. He broke down his four rules for success for GQ Magazine.“If you want to be a millionaire, you can do it, but there’s a couple things you have to be able to accomplish,” Cuban stated.
The first rule is: “Find something you can be good at. Then, be great at it.”
The second rule is “know how to sell.”
For those that have a hard time with that, Cuban suggests reframing sales and thinking of it in a more positive light. “Selling isn’t about convincing, it’s about helping,” Cuban stated to the School of Hard Knocks.“When you understand what people need and want, you put yourself in a position to help them. Then you make good things happen, close deals and that’s how you create companies.”
His third rule is: “Be curious and always learning.”
His final rule is: “When you walk into a room, you [need to] know your s–t better than anyone else in the room. That’s when it’s time to start a company. Then, you can start to control your own destiny,” he concluded.