In this 10-minute video, GQ Sports interviews Mark Cuban, the well-known entrepreneur, venture capitalist, businessman and television personality.
Cuban was not born with a silver spoon. In fact, he was a self-made billionaire who came from a humble background. He was a middle class kid, with his father doing upholstery on cars and mother doing odd jobs. Cuban touched on three main things in this informative interview:
- How he made his first $1 million and turned it into $1 billion.
- How he spent the money.
- 4 rules of becoming a millionaire.
1. Making money & accumulating wealth
World’s first garbage bag door-to-door subscription. (0:25)
- Asked his dad for new sneakers.
- His father’s response: those tennis shoes you got on, they work. When you have a job you can buy whatever you want.
- His father’s drunk friend chimed that he got many boxes of garbage bags and joked that Cuban could sell them to get money for his sneakers.
- He sold Cuban the bags for $3 and Cuban resold for $6.
- Cuban went door-to-door in the neighborhood to sell the gabage bags.
- Don’t miss Cuban’s sales pitch. (0:54)
- “Every time you need garbage bags, all you ever have to do is call me.”
- Don’t miss Cuban’s sales pitch. (0:54)
High school (1:16)
- Realized high school was not his thing.
- Wanted to learn as much as he could about business.
- Age 16: took classes at night at the University of Pittsburgh.
- Age 17: dropped out of high school all together and went to Pitt full time.
First $1 million
- Cuban’s driving motivation all along: time (instead of money). (1:39)
- How can I control my own destiny? How can I control my own time?
- Very quickly, Cuban talked about that he earned his first $1 million (actually $6 million!) from selling a computer software consulting service called MicroSolutions that he founded right out of college. (1:49)
- But you can find the details of how Cuban created and sold MicroSolutions , as well as his other entrepreneurship and business stories in his book: How to Win at the Sport of Business: If I Can Do It, You Can Do It📘.
- The $6 million payout: (1:56)
- $1 million to employees;
- $2 million to partner;
- $2 million to himself.
- First thing he did: bought a lifetime pass on American Airlines, went around the world, and partied like a rock star.
- Didn’t really buy other things (e.g., bigger house or nice car ) than the air pass. He cared about freedom!
- Invested the money into the stock market → personal wealth: $20+ million.
First $1 billion: creating the first streaming company. (2:30)
- In 1995, his friend Todd Wagner brought the idea of internet to Cuban, suggesting there should be a way to use internet to listen to Indiana basketball.
- They founded AudioNet, which they turned into Broadcast.com by adding video.
- Broadcast.com went public → personal wealth: $300+ million.
- Sold the company to Yahoo in stock. → personal wealth: $1 billion.
- Realizing the stock market was volatile and feeling it would crash because it was so highly priced.
- Do not be greedy. Pigs get fat, hogs get slaughtered.
- Exited the stock market 3 months before the internet stock market cratered.
- Lesson: When you chase dollars, it never works well.
- Protect your wealth and do not get greedy.
- Realizing the stock market was volatile and feeling it would crash because it was so highly priced.
2. Spending the money
After making billions of dollars, Cuban spent his money on three purchases.
Purchase 1: Gulfstream G5 jet (4:35)
- Cost: $40 million.
- Reason: Cuban values time (as he mentioned earlier in the video).
- The most valuable asset you can ever own is your time.
- He bought the jet online, making it the biggest online purchase in the history of the internet.
Purchase 2: Dallas Mavericks (the NBA basketball franchise) (5:38)
- Cost: $285 million.
- Motivation: noticed tickets were not sold out even for the first game of the year. Thought he could do better than this. → Bought and owned Mavericks in two months.
- Worked with other sales persons to see Mavericks tickets.
- Cold called former customers to sell the tickets for the new season.
- Made ticket price lower than the price of McDonald’s and even offered free tickets for the first game.
- Cold called former customers to sell the tickets for the new season.
- Made working environment better so that employees were happy.
- Lesson: Align your interest with the interests of the people you work with, they are going to work for you. (7:22)
Purchase 3: Home (8:11)
- Cost: $12.5 million
- A couple spent $25 million building a house. But because of the stock market crash, they were forced to sell the house after living there for only 8 months.
- Cuban got only one day to decide whether to buy the house or not. He only saw pictures of the house but never visited at the time.
- Lesson: You can’t ever take wealth for granted. You can’t ever think it’s always going to be there.
- More from the perspective of the couple.
3. Key things to do to become a millionaire (9:20)
Rule 1. Find something you can be good at and then be great at it.
Rule 2. You have to know how to sell.
- You have to be able to sell because you don’t want to be in a position where you’re dependent on other people.
Rule 3. Be curious and always be learning.
- The one thing that’s certain about business is that it changes every single day.
Rule 4. It’s time to start a company when you can do the three things above.
- Thats then you can start to control your own destiny.