25 Mar What can we learn from Mark Cuban?
As part of our “What can we learn from” series, this week I wanted to talk about Mark Cuban, the owner of the Dallas Mavericks, angel investor on ABC’s Shark Tank, and self-proclaimed “serial entrepreneur”. With a net worth of over $2.5 billion, there is no doubt that the man has been successful when it comes to business, so let’s see what lessons we can learn from him.
Mark Cuban made his first billion when he sold his website broadcast.com to Yahoo! shortly before the dot-com crash. But before the crash Mark wisely chose to diversify his investments. In other words, instead of putting all his eggs in one basket (tech) and assuming that things would always stay the same, he decided to invest in many businesses – including a movie studio and special-made bidets.
2) Be a contrarian
Mark Cuban is not afraid to play by his own rules and to say and do some pretty controversial things. While staying within the limits of the law, Mark tries to be as creative and ambitious as he can be. Unlike other team owners, Mark sits right next to the bench during games and lives the action along with his players. He criticizes popular decisions if he thinks they are bad (like the recent push by the NFL to have more airtime), and he embraces strange business ideas even if no one else believes in them. In fact, he is among the three angel investors who make the highest number of deals on Shark Tank, earning him an average of 6% ROI for each deal.
3) Know when to say “no”
That being said, Mark Cuban doesn’t throw his money foolishly away. He says no to two out of every three pitches that he hears on the show. Why? He has learned to evaluate risk and to know whether or not there will be a market for a particular idea or invention. He also knows who to get involved with and whether a person has their head in the clouds or firmly planted on the ground.
Even if you never plan on buying an NBA franchise and starring in a hit TV show, these three lessons can help you as you evaluate different investments and try to swim against the current. A diverse number of investments will keep you protected even in tough economic times. I buy real estate, of course, but I also get money from joint ventures with a number of entrepreneurs I know and have even invested a payment processing system that makes me money 24 hours a day.
Being a contrarian is so important, because the current financial system is set up to benefit the few who know the rules. And knowing when to say “no” will help you to avoid harmful peer pressure and to only put your money where you are convinced it will do well.
Thanks, Mark, for the great life lessons.
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