FLORIDA, September 8, 2012 — The world of business has always been unabashedly ruthless. Dogs eat not only dogs, but cats too. To say “every person for him or herself” is a huge understatement.
Keeping this in mind, one might wonder how Mark Cuban managed to remain such a personable guy.
One of our time’s foremost business magnates, some might consider him to be living proof of the idea that the sky is the limit. After all, how many people can say they own both an NBA team and a film distributorship? That, of course, is just scratching the surface.
In a candid discussion with me, Cuban shares his opinions about what it takes to succeed in the Great Recession, how the internet has changed the face of business, why American can still succeed, and much more.
Joseph F. Cotto: The Great Recession has hit small business owners particularly hard. Are there any timeless economic strategies that they could use to whether the storm?
Mark Cuban: Absolutely. When your competition is hurting, that is the chance to attack and build your business. Small businesses have the advantage of being lean and mean. They can move and adjust much faster and with more innovation than their bigger competitors. I have run businesses through multiple recessions and have always looked at them as opportunities.
Sure my income may have suffered. It was painful, but when we came out of it in my industry, my company was far ahead of where it was.
Cotto: Many believe that when the economy rebounds, the new normal will not be familiar to most Americans. Has the age of globalization left our country in the dust, as some say?
Cuban: Hell no. Anyone who says we have gotten left in the dust by globalization is a moron. We are in a entrepreneurial renaissance. The cost to start a company has dropped to next to nothing.
Fifteen years ago if you wanted to sell shoes, you had to open a store. Have inventory. Advertise in the local paper and on radio. Today, you find a distributor, set up a free website on Shopify, set up a blog, Twitter and Facebook account to promote them and start selling. It is no easier to create a customer base than it was, but it is far cheaper, and rather than just the people in your neighborhood as your customers, you have the world to sell to. And those folks in the neighborhood that you would have forced to buy shoes at your store? They are now your Facebook friends and you can still force them to buy from you :)
The same applies to almost any type of business. It is far, far, far easier and cheaper to start a business than it ever was. Today, far more businesses fail for lack of brains and effort than for lack of money and connections.
Cotto: How might the United States remain competitive with rising economic powers, such as China and India?
Cuban: Did you know that the most successful people in China are leaving in droves? They are doing everything they can to get their money out. There is a backlog of people coming from India.
It sounds like a great story because China has a boom economy compared to ours, but with individual economic freedom comes the desire for personal liberty as well.
Cotto: The internet has changed the face of our society. What do you think that its biggest impact on the business community has been?
Cuban: The cost to start a tech company has dropped to 10 percent of what it was 10 years ago. Now anyone with a laptop, smartphone, broadband connection and an account of Amazon AWS can start a tech business.
That has led to an amazing movement of business processes to the cloud. And we aren’t talking businesses buying these services from huge tech companies. Companies run by kids, like Box.net, Chargify.com and many others are doing business with huge Fortune 500 companies.
That has had a big impact on the traditional hourly worker. It hasn’t impacted knowledge workers or tradespeople, but if you don’t have a specific skill, every company in this country is looking for a way to automate you and if your skills are in the “administration sciences,” i.e., human resources, purchasing and the like, they are trying to automate those processes as well.
So the new normal is that if you don’t have a skill that is in demand, you are going to have to go online and find the tools necessary to create a specific skill set that is in demand. I don’t think workers anywhere in the world have accepted that, but self training online in order to become skilled in a job in demand is going to be the new normal for workers.
Cotto: More than a few claim that online shopping will eventually render most bricks and mortar institutions obsolete. Do you share this view?
Cuban: I think many brick and mortar businesses are obsolete. The smart ones will evolve to be showrooms, to be experiential “show you how to use the product,” and will offer service. Traditional retail will have to completely change.
Cotto: College educations have become very expensive over the last several years. A growing number of businesspeople now believe that student debt outweighs the advantages of having a degree. What is your opinion on this subject?
Cuban: I think students need to start to become smart shoppers. I think you still need to go to college. You still need to learn how to learn and to develop a desire to learn for the rest of your life. But I also think that its a huge mistake to take on huge amounts of debt. There are plenty of universities that are reasonably priced. You are just going to have to be smart and pick one that you can learn at rather than the ones that are the best party schools or have a great football team.
Cotto: You have been involved in a plethora of business ventures, from MicroSolutions to Magnolia Pictures. What is it like to manage such a diverse career?
Cuban: Fun. I’m incredibly competitive. To me business is the ultimate competition. I don’t have to work, but I work a lot and love it.
Cotto: Career diversity is an essential component of remaining competitive during times of economic hardship. How might the average American go about diversifying his or her career?
Cuban: I don’t know that diversity is the right word. I can tell you that I spend as much time as I can learning about new technologies. I literally will find time to read software manuals. I will read business books. I know that our world is changing so rapidly that no matter how diverse my background is, I’m going to fall behind. It takes time. It takes commitment.
If you want to achieve financial success, and I’m not saying that should be the goal for everyone. I was happy when I was broke. I just have a lot more fun being rich. But if you define success at all by how much money you have, or the things you want to do and pay for, then you can’t just have a job and go home. You have to know that part of your career development is always learning and always striving to stay ahead of your peers.
Cotto: What has been the most rewarding aspect of your career?
Cuban: My first two companies, when I sold them, I created a lot of wealth for everyone who had worked for me for more than a few months.
Cotto: How did you came to be one of the world’s foremost business magnates? Tell us a bit about your life and career.
Cuban: That’s a long answer, they can buy my book for $2.50 on Amazon if they care :0
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