Billionaire business owner and star of the hit TV show the Shark Tank Mark Cuban knows a thing or two about startups. No doubt Cuban has made a buck or two with his own businesses, considering he is the current Guinness record holder for the largest single e-commerce transaction in history, paying $40 million for his Gulfstream V jet in October 1999.
Business Tips from Mark Cuban
In his book How to Win at the Sport of Business: If I Can Do It, You Can Do It, Cuban lists these twelve items as some of the most important factors for startups to remember when carving out their path to success.
- Don’t start a company unless it’s an obsession and something you love.
How can you commit 110% to a business you aren’t in love with?
- If you have an exit strategy, it’s not an obsession.
If you are building your startup with the eventual goal of selling it off then you clearly are not as passionate about the product or service as you let on.
- Hire people who you think will love working there.
Have a prospective employee describe a job they have held that they loved. If an employee has never been passionate about a job before what makes you think they will start now?
- Sales Cure All. Know how your company will make money and how you will actually make sales.
How will your startup survive without sales? Know your customer and hire people that know how to sell to them.
- Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but aren’t as expensive to pay.
Understand where your company shines and hire the best people you can for those key areas.
- An espresso machine? Are you kidding me? Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.
Quit trying to impress yourself and your employees and get to work. Unless you are very very lucky your widget isn’t going to sell itself, and no amount of fancy coffee is going to help. Quit wasting your money.
- No offices. Open offices keep everyone in tune with what is going on and keep the energy up. If an employee is about privacy, show him or her how to use the lock on the bathroom. There is nothing private in a startup. This is also a good way to keep from hiring executives who cannot operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over a personal secretary, run away. If an exec won’t go on sales calls, run away. They are empire builders and will pollute your company.
Perhaps one of the most overlooked tips. Startups are all about teamwork. If you have built the right team then they need to play together. There are no secrets in a startup (at least not among your employees).
- As far as technology, go with what you know. That is always the most inexpensive way. If you know Apple, use it. If you know Vista, ask yourself why, then use it. It’s a startup so there are just a few employees. Let people use what they know.
Why reinvent the wheel? If your chosen technology has gotten you this far then trust it to carry you through to success. You will save money and likely make more sales using technology you are familiar with.
- Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.
Have you ever heard the old saying “too many chiefs and not enough Indians”? Build your organization with a few competent, passionate managers with people skills and assign subordinates to them then see how smoothly things operate. With a little direction your people will be capable of far more than you ever expected.
- Never buy swag. A sure sign of failure for a startup is when someone sends me logo-embroidered polo shirts. If your people are at shows and in public, it’s okay to buy for your own employees, but if you really think people are going to wear your branded polo when they’re out and about, you are mistaken and have no idea how to spend your money.
Swag is a huge waste of money. If you can spend $1,000 on key chains but can’t pay for a professional LinkedIn profile that will actually help you reach new customers then your priorities are screwed up.
- Never hire a PR firm.
A public relations firm will call or email people in the publications you already read, on the shows you already watch and at 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.
- Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out $100 bills to salespeople. At Broadcast.com and MicroSolutions, we had a company shot. The Kamikaze. We would take people to a bar every now and then and buy one or ten for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party.
Keep your employees enthusiastic about your brand and culture and they will spread it for you.