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Mark Cuban’s Rules for Startups and Entrepreneurs

The 'Shark Tank' investor's rules of successful investing.

Sharks at the "Shark Tank" Season 8 Premiere at Viceroy L'Ermitage Beverly Hills in Beverly Hills, CA.

Mark Cuban, the billionaire entrepreneur, Shark Tank alumni, and Dallas Maverick owner, has some insights on how to build a successful start-up. Over the years, Cuban has invested in over 200 companies besides building his own. He says:

Love What you Do

Start something that you love and are obsessed about. This kind of investment of feelings helps when times get tough, and you are driven to your wit's end. The obsession and love for what you do keep you going. There are many companies that have fallen by the wayside because of a lack of conviction in what one was doing. He says, it is sad because most would have weathered the storm and come out stronger on the other side, if they had persisted.

“Success is about making your life a special version of unique that fits who you are – not what other people want you to be.” – Mark Cuban

Cuban says build a team of people who are as committed to your vision as you are. That way, during tough times, you will not have people moving away or leaving. A solid team is a good investment that drives any business forward, according to him. He says in a blog, “I have learned to hire people in whom I can build trust, and let them take the ball and run with it.”

Do your research

Do thorough research of the industry that you are interested in entering. Blindly following the herd does not benefit anyone. Find out the potential risks and benefits of entering that sector.

“It really does involve knowing an industry well, which is why I avoid investing in industries I don’t know,” Cuban said. “You need to turn over every rock and open every door to learn your industry. This process never ends.”

Be flexible

If you have a business plan and along the way you discover some other realities, then be flexible enough to change course slightly. If a small tweak in the business in terms of product design, supply chain, pricing, or sales makes a difference, then incorporate it.

Mark Cuban also adds here that build on your core competencies. Do not scatter energies in trying to do too many things together and being "scatterbrained with different ideas and projects". The following quote illustrates this point perfectly: “Win the battles you are in before you take on new battles.”

For example, if your business has many verticals, do not try to expand too soon, first get the feel of the market in your core business, and then take steps to expand. Learn to walk before you run is a good adage to go by.


Initially, sweat equity is the best equity as far as Mark Cuban is concerned. Do not look for funds right at the start. It limits your independence and adds a burden. If you are strapped for cash, go the crowdfunding route rather than finding investors.

“You should do everything possible to not raise funds,” he says. “Sweat equity is the best equity. I would turn to crowdfunding [sites] like Kickstarter before I would look for investors.”

“You execute better than they can,” Cuban wrote. “Do a better job and have a compelling differentiation that you always build on.”

Fill the gap, add value

Adding to the research point, he advices that you should find the niche market in any industry you enter. Fill the gap, find a service, product, or enterprise that fulfills a need not met by anyone. He says it is the age of information, and the company should be able to deliver and add value to the customer. Build trust and perceived value in your product and sales. You cannot trust that the product will attract customers on its own. There is competition for attention, and you need to go that extra mile in customer support to build value.

Mark Cuban has written a book, "How to win at sports of business", which has more insights for future entrepreneurs.


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