In the last 30 years, “Shark Tank” investor and Dallas Mavericks owner Mark Cuban has not only built his own companies but invested in over 120 others.
In his book “How to Win at the Sport of Business,” the billionaire shares his importany tips for new entrepreneurs. The tips are listed below.
1. Don’t start a company unless your heart is in it.
Large sums of money and strong connections won’t matter for the success of a business if its founder does not have the desire to crush the competition.
2. Don’t obsess over an exit strategy.
It’s fine if you plan on one day selling your company for a large sum of money, but that goal cannot distort your judgment in scaling the company, Cuban says.
3. Hire people who fit your company’s culture.
When hiring, you should look to build a team with diverse backgrounds and perspectives, but it’s necessary that they share core values so that they can work together for a common purpose.
As Virgin chairman Richard Branson writes in his book “The Virgin Way”: “As important as it is to look at what a candidate has achieved elsewhere, I have always believed that the single most important thing to consider is ‘personality fit.’ By that I mean, is this someone whose way of being, sense of humour, and general demeanour will dovetail easily with your company’s culture?”
4. Understand that “sales cure all.”
Cuban explains that the greatest lesson he learned in his 30s is that any company, regardless of management issues, can be made to scale if they’ve developed an audience.”
“If you can generate sales you can have a successful company,” he says.
5. Spend liberally on recruiting employees who will play an essential role.
“Know your core competencies and focus on being great at them,” Cuban writes. “Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap.”
6. Don’t worry about perks from the outset.
It’s great that Google provides its employees with high-quality food, massage therapists, and scooters, but your company isn’t Google. When you’re building a business from the ground up, stock some drinks and maybe some coffee and snacks in the office, but spend your dollars on what actually matters.
7. Use open offices.
Don’t cramp your employees into cubicles and shut yourself off from them in a private office.
“Open offices keep everyone in tune with what is going on and keep the energy up,” Cuban writes.
8. Use technology you’re comfortable with.
When it’s just you and a few employees in the trenches, don’t worry about the software and hardware everyone else in your industry is using. Stick with what you know and move onto better products and company-wide standards once you’ve established your footing.
9. Keep the organization flat.
“If you have managers reporting to managers in a startup, you will fail,” Cuban writes.
A nascent company is better off without complicated office politics.
10. Don’t waste money on swag.
If you want to create a few T-shirts with your company’s logo for you and your team, that’s fine, but don’t think anyone else will want one.
“If your people are at shows and in public, it’s okay to buy for your own folks, but if you really think someone is going to wear your YoBaby.com polo when they’re out and about, you are mistaken and have no idea how to spend your money,” Cuban writes.
11. Don’t hire a PR firm.
Cuban is adamant about his belief that a PR firm can’t help a startup in a way that justifies paying them.
A PR firm will call or email people in the publications you already read, on the shows you already watch and the websites you already surf. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them a message introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communication with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.
12. Keep things fun.
And finally, make sure that your employees enjoy their work and aren’t burning out.
Mark Cuban explains that at his first busineas, MicroSolutions, he would give out $100 bills to his salespeople when they had a record month, and made a ritual of occasionally going to a local bar after work and ripping Kamikaze shots as a team.