🔍
How Did Mark Cuban Even Get Rich? - The World's "Luckiest" Billionaire - YouTube
Channel: unknown
[0]
INTRO:
Nowadays, the main reason most people know
[2]
Mark Cuban is because of Shark Tank and the
Mavericks.
[5]
He’s famous for making offers with short
lifespans and pouncing on entrepreneurs whenever
[10]
he feels that something is off.
[22]
His bombastic personality and bloated ego
are also hard to miss.
[26]
Despite these quirks though, Mark is by far
the most reliable Shark on the show following
[30]
through with 87.5% of the deals that he makes
on air.
[34]
That’s nearly double all the other sharks,
but when you consider that he’s worth 5
[39]
times more than the rest of the regular sharks
combined at $5.93 billion, it’s not surprising
[44]
that he’s able to be much more lenient with
his deals.
[47]
While Mark often talks about how he had to
hustle to make it to the top, it’s never
[50]
made clear how exactly he made his money.
[53]
So here’s how Mark Cuban became the only
regular billionaire on Shark Tank.
[58]
YOUNG ENTREPRENEUR:
Taking a look back, Mark was born on July
[64]
31, 1958 in Pittsburgh, Pennsylvania to a
Jewish immigrant family.
[68]
His father’s side were immigrants from Russia
and his paternal grandfather had changed the
[72]
family name from Chabenisky to Cuban when
he arrived at Ellis Island.
[76]
Meanwhile, his mother’s side were immigrants
from Romania.
[79]
In the US, Mark’s father was making a living
as an automobile upholsterer while his mother
[83]
was a homemaker.
[84]
Mark’s family wasn’t particularly wealthy,
but from a very young age, Mark was always
[89]
trying his best to make money in any way he
could.
[92]
When he was 12, for instance, he sold garbage
bags door to door until he could afford some
[96]
expensive basketball shoes.
[98]
Similarly, when he was 16, the Pittsburgh
Post-Gazette went on strike, and Mark leveraged
[102]
this opportunity to sell newspapers from Cleveland
to Pittsburgh.
[106]
Clearly, Mark was doing pretty well for himself
as a teenager, but he had no interest in just
[111]
sticking around at the same level.
[112]
He would grind through high school and graduate
a year early which allowed him to enroll in
[116]
the University of Pittsburgh.
[118]
Originally, Mark chose this college because
he was a big fan of the Pittsburgh Steelers,
[122]
but after just one year, he decided that it
was much better to choose a college based
[125]
on finances.
[126]
So, he would transfer over to Indiana University
in Bloomington because it offered the cheapest
[130]
tuition out of the top 10 business schools.
[132]
Mark never ditched his entrepreneurial side
though; in college, he helped run a pub and
[137]
taught disco lessons.
[138]
But soon enough, his college days would come
to an end in 1981 when he graduated with a
[142]
bachelors in business administration specializing
in management.
[146]
Following college, Mark would move back to
Pennsylvania and secure a job at Mellon bank.
[150]
At the time, Mellon bank was in the process
of switching from paper to computers, and
[154]
this really showcased to Mark the potential
of computers.
[157]
But, Mark didn’t stick around for long though,
just one year later, Mark decided to move
[161]
to Dallas, Texas and picked up jobs as a bartender
and a salesman at a company called Your Business
[165]
Software.
[166]
Even today, Mark says that if he had to start
over from scratch, being a salesman during
[170]
the day and a bartender during the night is
exactly what he would do.
[174]
This way, he would have a stable income from
bartending and a scalable income from selling.
[178]
Unfortunately for Mark though, he would get
fired from his sales job during his first
[181]
year because one day, he was meeting with
a client instead of opening up the store.
[186]
Instead of looking for another job though,
Mark decided that it was time to start his
[189]
first company.
[191]
MICROSOLUTIONS:
Mark’s first company was a software consulting
[196]
service called MicroSolutions.
[198]
The business was basically a copy of Mark’s
former employer Your Business Software, but
[202]
Mark felt that he could do it way better than
them, and that’s really all you need.
[206]
One of Mark’s core business principles is
that execution is way more important than
[210]
the idea.
[211]
He says that everyone has a great idea, but
very few people are able to execute.
[215]
Mark also preaches that following your passion
is one of the great lies of life.
[219]
If he had followed his passion, he says that
he would’ve ended up as a failed basketball
[223]
or baseball player.
[224]
Instead, Mark has always insisted on following
opportunity, and the opportunity with MicroSolutions
[229]
was that Mark had already built up a client
base at his old job.
[232]
So, he just had to convince them to switchover,
and being the hustler that he is, this wasn’t
[237]
too difficult.
[238]
Aside from building up a solid client base
including people like Ross Perot, Mark was
[242]
quick to adopt new technologies such as remote
screen sharing, client-server software platforms,
[246]
and of course the internet.
[248]
By 1990, MicroSolutions had grown to $30 million
in revenue and this stellar performance started
[253]
to attract some acquisition offers.
[254]
And that same year, Mark would sell MicroSolutions
to CompuServe for $6 million which worked
[259]
out to about $2 million after taxes for Mark.
[262]
Adjusting for inflation, we’re talking about
around $4.2 million which is nowhere close
[266]
to being a billionaire, but Mark was more
than happy with this amount.
[270]
You see, Mark was never trying to become a
billionaire, he just wanted to be financially
[274]
free and enjoy life.
[276]
And $4.2 million was more than enough to do
just that.
[280]
One of Mark’s first orders of business after
cashing out was spending $600,000 on an American
[284]
Airlines unlimited pass.
[285]
As the name suggests, this allowed Mark to
travel on American Airlines first class unlimited
[290]
times.
[291]
Mark says that over the next 5 years, he used
the pass to travel the world and party like
[304]
a madman.
[306]
Apparently, the long term cost of the ticket
came out to just 12 cents per mile.
[311]
To put that in perspective, the average airfare
costs roughly 11.5 cents per mile, so about
[316]
the same amount, but Mark was flying in first
class.
[319]
This was clearly a terrible business decision
by American Airlines and that’s probably
[323]
why they discontinued the pass, but the pass
is still valid for people who already bought
[328]
it.
[329]
And today, Mark is 1 of 25 people who still
have the pass.
[332]
Mark clearly had a blast globe trotting through
the early 1990s, but it didn’t take him
[337]
long to jump into yet another business.
[340]
BROADCAST.COM
Mark didn’t found this next company; in
[344]
fact, he wasn’t even looking to get involved
in another business.
[348]
But when the opportunity popped up, he couldn’t
refuse.
[351]
One of his friends from college, Todd Wagner,
introduced Mark to a man named Cameron Jaeb.
[355]
Cameron had started a company called Cameron
Audio Networks in 1989 specialized in streaming
[360]
out of town sports games.
[361]
Originally, Cameron was attempting to sell
handheld satellite devices to broadcast the
[365]
sports games, but in the early 1990s, he switched
over to streaming over the internet.
[370]
Being a massive basketball fan, Mark was super
interested in the idea and he would agree
[374]
to invest $10,000 in return for 2% of the
company which valued the business at $500,000.
[380]
This was actually a rather high valuation
for the business given that they hadn’t
[384]
even launched yet.
[385]
Cameron was still working on negotiating streaming
rights with broadcasters, but despite the
[389]
early nature of the business, Mark became
increasingly interested with time, and he
[393]
would actually offer to take over the company.
[395]
Cameron agreed presumably because he didn’t
expect the company to grow that fast or that
[399]
big, but this would turn out to be a massive
mistake for Cameron.
[403]
Mark rebranded the company as AudioNet and
launched the service in September of 1995.
[407]
He would eventually change the name again
to Broadcast.com in 1998.
[412]
In the meantime, the business was growing
pretty nicely as they were able to accumulate
[416]
570,000 users within the first few years.
[419]
Ideally, this business should’ve been worth
a couple million dollars, maybe ten million
[423]
at max, but this was during the height of
the dotcom bubble.
[426]
When Mark took the company public in 1998,
the stock soared 250% on the first day of
[431]
trading which valued the company at $1 billion.
[433]
Having a 30% stake in the company, Mark’s
net worth jumped to $300 million.
[439]
Later on in 1999, Mark would diversify the
company into video streaming as well helping
[443]
Victoria’s Secret live stream a fashion
show.
[446]
That same year, Yahoo would offer to purchase
the company for $5.7 billion, and to Mark,
[451]
taking the deal was a no brainer as it would
net him roughly $1 billion.
[455]
Today, this acquisition is regarded as one
of the worst acquisitions of all time as Yahoo
[459]
would end up shutting down the service in
2002.
[462]
Honestly though, I think the failure of the
business was mostly Yahoo’s fault.
[466]
I mean just take a look at how big streaming
is today.
[469]
We have YouTube, Twitch, Netflix, Hulu, Prime
Video, and so much more.
[474]
Netflix itself is worth $250 billion today,
so I think Yahoo threw away a massive opportunity
[480]
with Broadcast.com.
[481]
The same could be said about Mark as well.
[484]
Instead of selling the company, he could’ve
tried to navigate the company through the
[487]
dotcom crash, and if he was successful in
growing it into something like YouTube, he’d
[491]
be worth tens of billions today.
[493]
But, Mark preferred to just take the $1 billion
upfront, and you can’t really blame him
[498]
for that.
[499]
Anyway, after the acquisition, Mark dumped
all of his Yahoo stock within a year which
[502]
was really smart given what was coming.
[504]
And with that Mark was officially a billionaire
not only on paper but in cash.
[510]
GETTING LUCKY:
Mark is actually super transparent about getting
[514]
extremely lucky with Broadcast.com.
[517]
First of all, he was super lucky to get introduced
to Cameron, then he was super lucky that Cameron
[521]
agreed to let Mark takeover the company, and
finally, he got super lucky that Yahoo offered
[525]
to purchase the money losing company for billions.
[528]
Mark says that if he started over, getting
to millions and tens of millions would be
[531]
no problem, but in terms of reaching a billion,
he’d have to get lucky again.
[536]
Anyway, after the sale, Mark began to splurge
his newfound wealth.
[539]
In October of 1999, he purchased a Gulfstream
jet for $40 million over the internet which
[544]
won him a world record for making the largest
single e-commerce transaction.
[547]
Shortly after, Mark bought the Dallas Mavericks
for $285 million in January of 2000.
[552]
Mark wasn’t really trying to make an investment
with the team.
[555]
He really just loved basketball and wanted
to help grow a team to the top, but this has
[560]
ironically turned into a fantastic investment
thanks to the team’s stellar performance.
[564]
Before Mark bought the Mavericks, they only
won 40% of their games, but in the ten years
[568]
following his purchase, the Mavericks won
69% of their games and they even won the NBA
[573]
finals in 2011.
[574]
Today, the Mavericks are valued at $2.7 billion
which is nearly a 10x on Mark’s investment.
[579]
Mark has also been trying to get into the
show business for quite some time, and though
[583]
Shark Tank is extremely successful today,
the same cannot be said about Mark’s initial
[588]
endeavors.
[589]
One of Mark’s first attempts at starting
a TV show was in 2004 when he produced a show
[592]
called The Benefactor.
[593]
The show was kind of like the Apprentice.
[596]
16 contestants would compete in various challenges
to try to win $1 million, and Mark would judge
[600]
their performance throughout the show.
[602]
But unfortunately, ratings were so bad that
the series was canceled before the first season
[606]
was fully aired.
[608]
Around the same time, Mark also bought Magnolia
Pictures and Landmark cinema, and though these
[612]
have been good investments, they’re nothing
spectacular.
[616]
Something spectacular was just around the
corner though.
[619]
SHARK TANK:
Mark first appeared as a guest shark in 2011,
[625]
and it didn’t take long for him to become
a regular shark.
[627]
Ratings for the show have ballooned ever since
he joined the team, and he’s one of the
[631]
most sought after sharks by entrepreneurs.
[633]
Within the first 10 seasons of Shark Tank,
Mark made over 100 deals on air, and given
[637]
that he has the highest closing rate, we can
assume that most of these went through.
[641]
In terms of money invested, as of 2015, Mark
had invested a total of $19.85 million on
[647]
air, and this figure is probably closer to
$40 million today which is the highest on
[651]
the show.
[652]
In terms of percent of net worth invested
though, Mark is the lowest as he hasn’t
[656]
even invested 1% of his net worth because
he’s just too big of a baller.
[660]
Anyway, Mark has a reputation for making short
life span offers and he loves to hate on supplement
[664]
companies, but at the end of the day, Mark
always has the entrepreneurs’ backs.
[669]
Originally, Shark Tank entrepreneurs were
forced to either give the production company
[672]
2 percent of their profits or 5% equity in
the company if they wanted to appear on the
[676]
show.
[677]
Honestly, this is a pretty fair deal given
that sales usually explode after a Shark Tank
[681]
airing, but Mark felt that the production
company was already making more than enough
[684]
money and that they didn’t need to eat into
entrepreneurs’ businesses.
[688]
So, he threatened to leave the show if the
company didn’t drop the Shark Tank tax,
[692]
and given how important Mark is to the show,
the company agreed.
[695]
And that’s how Mark Cuban went from a teenage
boy selling garbage bags to being everyone’s
[699]
favorite billionaire on Shark Tank.
[701]
Do you guys think Mark just got lucky with
Broadcast.com?
[704]
Comment that down below.
[705]
Also, drop a like if you wish that you were
as lucky as Mark.
[709]
And of course, consider joining our discord
community to suggest future video ideas and
[712]
consider subscribing to see more questions
logically answered.
Most Recent Videos:
You can go back to the homepage right here: Homepage