How Mark Cuban Hustled His Way to the Top
Mark Cuban is the epitome of the American Dream.
Growing up, his parents — a mother with a restless ambition, and a father who worked as an upholsterer — instilled in him a strong work ethic. Gradually, the kid from Pittsburgh schemed his way through college, became an overnight billionaire, an NBA team owner and a beloved personality on “Shark Tank.”
Worth somewhere around $3.7 billion, Cuban has lead an interesting life. Check out these 18 facts about the business mogul.
He Started Hustling as a 12-Year-Old in Pittsburgh
When Cuban was 12 years old, he asked his father for a new pair of sneakers. His father just watched his shows, said they seemed fine, and that if we wanted new ones he’d have to go get a job and buy them himself.
Cuban, being 12, had no idea how to do that. But one of his father’s friend had an idea. The guy had some garbage bags he needed to offload, and he suggested Cuban go door-to-door and sell them for a profit.
According to Business Insider, which transcribed Cuban speaking on a Bloomberg podcast: “They were 100 for six bucks, what I sold them for — they cost me three bucks, so I made three bucks a box. And I would literally go door to door to door: ‘Hi, does your family use garbage bags? And who could say no? So that's where I learned to sell. Literally. Every objection [I'd reply], ‘Of course you use garbage bags, and I bet you pay more than six cents a piece.’”
It was his earliest foray into money making schemes, which was something he’d pursue into his young adult years.
One more scheme from Cuban’s childhood: he would buy baseball cards, repackage and sell them from a park bench in Pittsburgh. His sales pitch: each pack would be guaranteed to have a Pittsburgh Pirate.
He Schemed a Way to Pay for a Semester at Indiana University
Cuban could barely afford Indiana University (he picked it because it was the cheapest business school in the top 10) so he schemed up ways to pay his way through school.
He gave disco lessons to sorority girls for $25 an hour. And he made enough to pay for a semester using a chain letter. The chain letter scheme consists of a list of people, with instructions to send a certain amount of money to the person at the top of the list, crossing it out, adding yours at the bottom, and forwarding it on.
In other words, a pyramid scheme.
And it worked: As Cuban told CBS News, “I paid for school with a chain letter and I would wake up in the morning, go to my mailbox and there would be checks there. And that's how I paid for my junior year."
Then He Opened a Bar
Speaking with Men’s Journal, Cuban described how he opened a bar during his college days.
The place was called Silver Dollar, and he and his friends were renting it out to throw parties, which were successful. So the owner told Cuban he might as well buy it. He named it Motley’s Pub.
It didn’t last too long. Cuban opened the bar on Sept 29 and it closed a few months later that following February. Here’s why, as told to MJ:
“We had a wet T-shirt contest, and there were pictures of the contestants in the Bloomington newspaper. Unfortunately, a probation officer recognized a picture of one of her parolees, who happened to be a 16-year-old on probation for prostitution. That was the sorry end of Motley’s Pub.”
He Was Quit-Fired From His First Post-Grad Job
After graduating Indiana University, Cuban moved back to Pittsburgh. When he was 22, he landed a job at Mellon Bank working data entry.
In an effort to get noticed, he started sending suggestions to the CEO by sending notes and a magazine clipping about how corporations could save money withholding social security. He wrote a newsletter with updates on current projects and tried to start a club where younger employees could talk with senior executives.
“I thought my boss would love me for doing these things,” Cuban wrote in Forbes. “Instead, my boss called me into his office one day and ripped me a new one. ‘Who the f--- do you think you are?’ he yelled. I told him I was trying to help Mellon make more money. He told me I was never to go over him or around him, or he'd crush me. I knew then it was time to get out of there. That's how I found myself back in Indiana, then on the road to Dallas.”
The Journey to Dallas
Cuban then decided to take a shoddy old car down to Dallas.
He didn’t have much of a plan, so he showed up at a small apartment rented out by five other college friends. The $600-a-month apartment was packed, so Cuban had to sleep on the living room floor that reeked of cheap beer, according to the Dallas Morning News.
His clothes were stored in the corner and were wrinkled. His roommates sometimes called him “Slobbins.”
He and his friends worked odd jobs, doing whatever they could to make rent. Cuban worked as a bartender, constantly searching the jobs ads through reading glasses held together with tape.
He Was Fired From His Second Post-Grad Job
Cuban nabbed a second job at a software company called Your Business Software, where Cuban hawked software while also having to open the shop, sweep the floors and clean up.
One day Cuban sold $10,000 worth of software, but had to go close the deal. So he left someone in charge while he went out and grabbed the check, which would of course help the business.
“I figured when I came back he'd be thrilled to death, right? Fired me on the spot," Cuban said to CNBC.
Additionally, this boss was more interested in how Cuban dressed (“two-for-$99 polyester suits. You didn't have to dry-clean them, you just ran through the rain a few times”), than how much money he could make the business itself. Which seemed to be a recurring theme, and something he learned from.
“Just time after time ... the companies I worked for that didn't do well, they didn't focus on the results that mattered to the business. They focused on how well they looked and the show,” he said.
Turning a $500 Loan into a $6 Million Company
Now knowing about how to install software, he went on to found his own company called MircoSolutions. Except he didn’t have any money, or credit.
So he went to the same company that he had made the $10,000 deal with — he took back the check — and asked for a $500 loan, as he told Inc. during a conference. If he couldn’t make the business work, Cuban told them he’d work off the debt. They gave it to him, and the rest is history.
MicroSolutions, which sold and installed software, grew to $30 million in revenues over its seven-year run. Cuban sold it for $6 million to CompuServe in 1990, pocketing $2 million after taxes. He was 32 years old.
Hitting the Stock Market
After the sale, Cuban decided he would retire for a while. At least from business.
That $2 million was going to be his “nest egg” and he was going to protect it. Instead of investing it aggressively, he went to broker with the intent to invest his $2 million “not like I was 30 years old, but as if I were 60 years old,” he wrote in Business Insider.
However, Cuban knew too much about tech companies, about which would fail and which would prosper; it would be stupid to sit on that money. After a year his broker “broke me down” and started using his market knowledge to trade stocks.
According to the New York Times, Cuban made another $15 million on the stock market over five years. He also learned a good deal about the market.
And then came Broadcast.com.
Starting on the Billionaire Path
Broadcast.com began in 1989 as a company called Cameron Audio Networks by Cameron Christopher Jaeb, who wanted a way for people to listen in on sporting events online.
In 1994, Jaeb met Cuban, who liked the concept and invested $10,000 for a two percent stake. Then the first of two life-changing deals happened: Cuban took control of the company while Jaeb would keep 10 percent equity with a $2,500 monthly salary. By 1998 the company was known as Broadcast.com and became public with the backing of Morgan Stanley.
He Built the Hype for Broadcast.com
The early days of Broadcast.com showed Cuban an interesting behind-the-scenes look at the dog-and-pony show that was raising money via a road show.
“The road show is just that. A company getting ready to sell shares visits the big mutual funds, hedge funds, pension funds — anyone who can buy millions of dollars of stock in a single order. It's a sales tour. Seven days, 63 presentations,” wrote Cuban.
And during that time, he and his partner hired consultants and worked tirelessly to know the answers to any question an investor could throw at them. There wasn’t any need.
“Of the 63 companies and 400-plus participants we visited, I would be exaggerating if I said we got 10 good questions about our business and how it worked. The vast majority of people in the meetings had no clue who we were or what we did. They just knew that there were a lot of people talking about the company and they should be there.”
“The lack of knowledge at the meetings got to be such a joke between Todd and I that we used to purposely mess up to see if anyone noticed. Or we would have pet lines that we would make up to crack each other up. Did we ruin our chance for the IPO? Was our product so complicated that no one got it and as a result no one bought the stock? Hell no. They might not have had a clue, but that didn't stop them from buying the stock. We batted 1.000. Every single investor we talked to placed the maximum order allowable for the stock.”
The stocks soared. On its first day, Broadcast.com opened at $18 and closed at $62.75.
Then Yahoo Made Him a Billionaire
Less than nine months after its public launch came Cuban’s second life-changing deal: Yahoo approached Cuban to acquire his company.
The tech giant was gearing up to be the next big thing, and thought Broadcast.com was going to lead it into the new age with its upcoming Yahoo Broadcast Services. Cuban and his partners sold Broadcast.com to Yahoo for $5.7 billion worth of Yahoo! stock. Cuban then sold the stock he received, making him a billionaire.
It was an insanely smart and lucky move.
According to the Motley Fool, “Yahoo’s stock price dropped by more than 96% from January 2000 through September 2011. To put this in perspective, $1 billion in Yahoo stock would have fallen in value to just over $34 million.”
The deal was a spectacular win for Cuban and an infamous disaster for Yahoo. The dotcom bubble would burst, and Yahoo would shutter its broadcasting services in 2002.
Then He Did a Naked Dance
After getting all that sweet Yahoo stock, Cuban was sitting at his computer, refreshing the page over and over again.
Also, he was naked.
“And so I am sitting there naked one morning. Naked. Bam, bam, bam, refresh, refresh,” Cuban said during a conference at OZY Fest, as reported by CNBC. ”[The price] gets up there — and then I did my little naked billionaire dance.”’
Of course, he couldn’t stay naked forever — or he could, but then he wouldn’t be able to go those Mavs games.
The first big purchase he made as a billionaire was a private jet.
“Honestly, when I first really made a lot of money, I bought a plane. That was my all-time goal because the asset I value the most is time, and that bought me time,” said Cuban.
And Then He Bought the Dallas Mavericks
In 2000, Cuban struck a deal with Ross Perot Jr. to buy the Dallas Mavericks for $285 million.
Despite initial skepticism, Cuban proved to be a huge boon. He gave Mavs players expensive gifts, talked up the team to everyone who would listen and pulled PR stunts to make sure they did.
After the purchase, Cuban worked at a Dallas bar, worked at a Dairy Queen and shot hoops with the Harlem Globetrotters, according to the Star-Telegram.
“He bought us a new plane, he got us a new arena, we started staying in nice hotels, we started to have food after games and after practices, and he just put Dallas basketball back on the map,’” Mavs player Dirk Nowitzki told the newspaper.
It wasn’t all smooth sailing — something all Mavs fans know.
The NBA Might Not Like Him Very Much
While the Mavericks might love Cuban as their owner, the NBA doesn’t.
Over the course of his 18-year ownership, Cuban has amassed $2.4 million in fines from the basketball authority. He was famously fined $500,000 for saying NBA’s head of officiating, Ed Rush, “wouldn’t be able to manage a Dairy Queen.” That’s what led to him working at Dairy Queen that one time.
He was fined multiple times for screaming at officials, and sometimes the opposing team, for $25,000. Most recently he was hit with a $600,000 fine for “tanking,” where a team purposely loses games to get a better draft position.
But Charities Love When He Swears
Every time Cuban is hit with an NBA fine, he matches it dollar-for-dollar with a charity.
In 2014, he donated $100,000 to the iBellieve Foundation, which raises money for Hunter syndrome, matching his fine for swearing at a referee during a game.
In another non-NBA fine instance, he cursed twice while playing a 2015 celebrity “League of Legends” video game match. Each fine cost him $15,000. Then he went on to donate $30,000 to the Cybersmile Foundation, an anti-bullying nonprofit.
He’s Still (Relatively) Prudent with Money
Aside from the big jet purchase, Cuban said, according to CNBC, “I've lived in the same house for 18 years and still have the same cars.” He also says he’s “still a slob.”
But that’s just Cuban being humble. According to the New York Times, Cuban has “eight properties, two private jets and a yacht,” all of which make up about 10 percent of his net worth.
His Mansion Isn’t Slovenly
While Cuban may still consider himself a slob and carried the Slobbins nickname in his 20s, we’re sure the billionaire keeps his house clean.
According to D Magazine, Cuban’s home in Dallas is a 23,676-square foot mega mansion with an estimated land value of $10.928 million. The property has six garages totaling 4,838 square feet.
The home itself has five wet bars.
He’s Still Trying to Buy a Baseball Team
Cuban has been looking to buy a major league baseball team since 2005. Unfortunately, he keeps getting outbid or just shut out.
In 2005, he tried to buy the Pittsburgh Pirates, but was told the team wasn’t for sale. In 2008 he tried and failed to buy the Chicago Cubs for $1.3 billion, most likely because MLB owners didn’t like his outspoken nature. In 2010, he lost a $600 million bid to buy the Texas Rangers. And in 2012, he lost a bid for the Los Angeles Dodgers by the second round.
There’s still time: fifty years ago, Mark Cuban was selling re-packaged baseball cards from a park bench. It’s not unfathomable that one day he’ll be buying and selling whole teams.