When Mark Cuban started the company that made him a millionaire, he was nearly at rock bottom — and he doesn’t think that was a coincidence.
“If you’ve got nothing, it’s the perfect time to start a business,” Cuban told the “Lex Fridman Podcast,” in an episode that aired last year.
He cited himself as proof: He’d recently been fired 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 tech company called MicroSolutions, in 1983.
“I couldn’t go any lower,” said Cuban, now 66. “There was no downside for me starting a business.”
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After roughly seven years — during which a secretary allegedly almost bankrupted the company, and Cuban himself, with forged checks — Cuban sold MicroSolutions to CompuServe for $6 million, becoming a millionaire in the process. He became a billionaire after his next tech company, an audio streaming service called Broadcast.com, 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 that next step, you have to be able to deal with the consequences of changing your circumstances,” Cuban said, noting that people with jobs, children or mortgages may have good reason to be uncomfortable with entrepreneurship’s uncertainty. “Creating a business gives you the greatest potential upside and the greatest 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’ worth of living expenses, Cuban recommended in a 2023 Wired interview. And you should intensively study your prospective business’ industry ahead of time, he said on the podcast.
“I get emails and approached by people all the time [saying], ‘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 you start a business, you need to take your research seriously and commit yourself — both personally and financially — to seeing your idea through, for better or worse.
“First, build conviction by learning more about what you want to do. Don’t just do some of the cursory work,” billionaire serial entrepreneur Jay Chaudhry told CNBC Make It last year. “Second, start by putting in your own money. That actually is part of testing your conviction. If you really have conviction, you’ll take a chance on yourself.”
Knowing what it feels like to struggle — and being comfortable with the idea of doing it again — can lend you some useful perspective, too.
“I know what the bottom feels like. I don’t mind if I go back. So, I’m just going to put all the chips on the table,” Jake Loosararian, CEO and co-founder of the $633 million robotics firm Gecko Robotics, told CNBC Make It last year, adding: “That actually is a superpower. Those scars allow you to act with confidence, courage and a will to make [your goals] become reality.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.
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