When Marc Cuban started the business that made him a millionaire, he was almost at rock bottom – and he doesn’t think it’s a coincidence.
“If you have nothing, now is the perfect time to start a business,” says Cuban said the “Lex Fridman Podcast”, in an episode broadcast last year.
He cited himself as proof: he had recently been laid off from his job at a computer software store and was sleeping on the floor of a three-bedroom apartment with six roommates when he launched his first startup, a technology company called MicroSolutions , in 1983.
“I couldn’t go any lower,” said Cuban, now 66. “There was no downside for me to start a business.”
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After approximately seven years, during which a secretary almost bankrupted the companyand Cuban himself, with fake checks – Cuban sold MicroSolutions to CompuServe for $6 million, becoming a millionaire. He became a billionaire after his next technology company, an audio streaming service called Broadcast.com, was sold to Yahoo for $6 billion in 1999.
The serial entrepreneur and startup investor currently has an estimated net worth of $7.79 billion, according to Bloomberg.
“If you want to take the next step, you have to be able to deal with the consequences of a change in circumstances,” Cuban said, noting that people with jobs, children or a mortgage can have good reasons to be uncomfortable with the uncertainty of entrepreneurship. “Starting a business gives you the greatest growth potential and the best leverage on your time, but it also creates the most risk.”
You can at least partially mitigate the risk by saving at least six months of living expenses, Cuban recommended in a Wired interview 2023. And you should research your potential company’s industry intensively in advance, he said on the podcast.
“I get emails all the time and people ask me, ‘What kind of business should I start?’ “That tells me you’re not ready to start a business,” he said.
Other successful entrepreneurs often agree: When starting a business, you need to take your research seriously and commit – both personally and financially – to seeing your idea through to fruition, for better or worse .
“First of all, build conviction by learning more about what you want to do. Don’t just do some superficial work,” billionaire serial entrepreneur Jay Chaudhry told CNBC Make It last year. “Second, start by investing your own money. This is actually part of testing your belief. If you really have conviction, you risk your chance.”
Knowing what it’s like to struggle – and being comfortable with the idea of starting again – can also give you a useful perspective.
“I know what the bottom looks like. I don’t mind if I go back there. So, I’m just going to put all the chips on the table,” said Jake Loosararian, CEO and co-founder of $633 million robotics company Gecko Roboticstold CNBC Make It last year, adding, “It’s actually a superpower. These scars allow you to act with confidence, courage and the will to make (your goals) a reality.”
Disclosure: CNBC has exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.
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