The Maverick Mark Cuban

It’s only fitting that an unconventional type like Mark Cuban would own a professional basketball team called the Mavericks. Unlike most sports team owners, who typically prefer to inhale the altitudinous, climate-controlled air of a luxury suite well above the playing surface, Cuban likes to be in the sweaty thick of it at his courtside seat, as close to the action as possible without having to set a pick.

While all owners, naturally, have a substantial financial investment in their teams, what sets Cuban apart is his emotional investment in the Mavericks’ success. Like any typical fan, he’ll cheer, boo, trash talk, jump up and down, and share high-fives throughout the course of a game and walk out of the stadium with a sore throat for his efforts. Unlike the average fan, however, Cuban has tallied more than $2 million in fines for his enthusiastic outbursts, for everything from outspoken criticism of league officials and referees to once even running into the fray at midcourt when a fight broke out between some Mavericks players and the Cleveland Cavaliers. That’s not the kind of behavior you tend to associate with, say, George Steinbrenner.

But it is just what Mavericks’ fans love so much about Cuban. Set aside the minor fact that he’s a multibillionaire who signs the players’ checks and goes home to a 24,000-square-foot mansion every night, and he comes across as a pretty regular guy. Hey, he’s even got a blog! (www.blogmaverick.com)

Humble Beginnings

Not surprisingly, Cuban’s path to achieving multibillionaire status also followed an unorthodox trajectory. After graduating from the University of Indiana, Cuban, like so many recent college grads, bounced around from job to job, mostly unsure what career path to follow. All he knew was that he planned to earn enough money to retire by age 35. Among the many possibilities he explored were running a bar, giving dance lessons, selling TV repair franchises, and starting a powdered milk business. Back then, he says, he was able to rationalize this scattershot career-finding approach by chalking it all up to the educational process.

“In every job I would justify it in my mind – whether I loved it or hated it – by saying that I was getting paid to learn and every experience would be of value when I figured out what I wanted to do when I grew up,” he says. Cuban says he also supplemented all this on-the-job training by spending untold hours at the library poring over business-oriented materials.

“I read books about successful people,” he says. “In fact, I read every book or magazine I could get my hands on. I would tell myself that one good idea would pay for the book and could make the difference between me making it or not.”

The Blinking Cursor Beckons

In 1982, at age 24, Cuban decided it was time to “get serious.” Clearing a space on the floor of the three-bedroom Dallas apartment he shared with four buddies, he sat down and compiled a list of all the different careers he would love to pursue. One of the career options he wrote down: computers. The fact that he knew next to nothing about computers or technology made little difference (today he admits cheating to pass the one computer course he took in college).

Within days, however, Cuban found himself talking his way into an entry-level sales job at the first retail software store in Dallas. If nothing else, he figured, now he’d have the opportunity to test his theory about how far he could go with exclusively on-the-job training.

“As fired up as I was about the job, I was scared,” he says. “Why? Because I had never worked with an IBM PC in my life and I’m going to be selling software for it. So what do I do? I do what everyone does: I rationalize. I tell myself that the people walking in the door know as little as I do, so if I just started reading the manuals, I would be ahead of the curve. That’s what I did. Every night I would take home a different software manual – Peachtree, PFS, Dbase, Lotus, Accpac, and so forth – and read it. Every night I would read some after getting home, no matter how late.”

Cuban’s RTFM-based approach (“Read the F***ing Manual,” for those of you not versed in geekspeak) to retail software sales proved successful. Thanks to his growing familiarity with many different software programs, Cuban could assess customers’ needs and provide honest comparisons among the various systems. Within six months he had developed a steady customer base and even built up the store’s consulting business, which essentially consisted of Cuban offering to come out in person to customers’ offices to install the new systems.

A Young Maverick Gets Shot Down

These consulting activities soon got the energetic young Cuban into hot water with his employers, however. One day he was asked to meet at a prospective customer’s office first thing in the morning to finalize a deal. Doing so meant Cuban would not be able to open the store on time, however. Figuring that closing the sale was a higher priority, Cuban chased the business. He arrived at the store bearing a wide grin on his face and a $10,000 contract in hand. The grin disappeared when his unsmiling boss dropped the axe – Cuban was out of a job.

Determined not to let this setback stall his climb to the top, Cuban acted immediately. He got drunk. Once the hangover subsided, however, the entrepreneur within reemerged and Cuban struck out on his own with MicroSolutions, a one-stop (and one-man) computer hardware and software vendor and installer. What he lacked in the typical trappings of business (a phone, office, investors, or even a computer of his own), Cuban more than made up for with moxie – and an active customer list. After calling all his former retail store clients, Cuban got his first nibble from a lighting store looking for a new accounting system.

“After going out to meet with them it came down to this – I offered to refund 100 percent of their money if the software didn’t work for them, and I wouldn’t charge them for my time for installing and helping them,” he says. “In return, they would put up the 500 bucks it would take for me to buy the software from the publisher, and I could use them as a reference. This was my ‘no money down’ approach to start a business. They said ‘yes.’ I had a business.”

You Gotta Have Faith

Another customer gave Cuban an office and a phone, and soon MicroSolutions was a bona fide business. Cuban says that the most important factor allowing him to make any sales in those early days was that customers had faith in him.

“They were small companies that I got to know very well,” he says. “People took me under their wing and trusted me, not because I was the most knowledgeable about computers, but because they knew I would do whatever it took to get the job done. People trusted me with keys to their offices. They would find me there when they arrived in the morning and I was there when they left. I made $15,000 that first year. I loved every minute of it.”

MicroSolutions grew steadily, thanks in equal parts to Cuban’s energetic selling efforts and to co-owner Martin Woodall’s ability to keep Cuban’s enthusiasm from over- extending the company. Their client list eventually grew to include such industry bigwigs as IBM, Novell, 3Com, Apple, and Sun Microsystems. In 1990, the two sold the company to CompuServe for $6 million. Cuban recalls the congratulations he received at the time on his accomplishments, with little mention of the hard work that got him there.

“People told me how lucky I was to sell my business at the right time,” Cuban says. “Later, when I took that money and started trading technology stocks that were in the areas that MicroSolutions focused on, people told me how lucky I was to have expertise in such a hot area. Of course, no one wanted to comment on how lucky I was to spend time reading software manuals, or Cisco router manuals, or sitting in my house testing and comparing new technologies.”

The next few years Cuban bounced around, exploring the advantages that wealth offers to a dilettante eager to dip his finger into a number of pies. He took acting classes, appearing in two highly forgettable films, and played the market, nearly doubling his net worth by anticipating trends in the tech sector. He also traveled extensively, visiting 11 different countries during one 11-month period.

Cuban Gets the Hookup

By 1995, Cuban was ready to get back in the game. Or, more precisely, many games. Cuban and college buddy Todd Wagner found they shared a frustration that from their Dallas homes they had no way to listen to Indiana University basketball games. And so, armed only with a Packard Bell server and an ISDN line, the two launched AudioNet, a Web-based platform allowing fans everywhere to tap into broadcasts of their hometown teams’ games.

Beyond the sports sphere, Cuban saw a greater potential for the company – helping companies distribute real-time audio of business announcements, product releases, seminars, presentations, and training videos worldwide. At a time when tech industry heavyweights like IBM and Microsoft had yet to realize the Internet’s potential, Cuban’s vision represented a then-uncommon clarity of understanding where the Web was headed.

As indefatigable as ever, Cuban took the AudioNet ball and ran with it, selling all the while. He tirelessly pitched television and radio stations, college and professional sports teams and leagues, and hundreds of companies in an effort he and Wagner referred to as “the sprint.” In three-and-a-half years they signed more than 900 deals, a rate of approximately one new account every 36 hours.

“It’s nonstop,” he told an interviewer at the time. “Early on, Todd and I asked ourselves a question: What price do you have to pay to win? That price is ‘the sprint.’ You have to build your business faster than anyone else. There’s no finish line. There’s never a point where you can say, ‘We’ve made it.’ You have to acquire as much content as you can, and to build as many barriers to entry by others as you can, as fast as possible.”

By 1999, then-renamed Broadcast.com boasted more than 800,000 unique users per day and a client list including major league baseball, NHL hockey, NCAA basketball, Microsoft, Dell, CNN, and hundreds of radio stations across the country. That year the company tallied 1.5 million online viewers for the Victoria’s Secret live New York fashion show, at the time the most watched live event in the history of the Web.

Then Cuban got “lucky” again. Just as the Internet boom was peaking and tech stock values skyrocketing, he and Wagner decided to take a break from “the sprint,” and unloaded Broadcast.com on Yahoo! in exchange for $5.7 billion worth of stock. Just 40 years old, Mark Cuban had sold his way from mere multimillionaire status into the elite club of Internet billionaires.

Following the Bouncing Ball

But what to do with all the extra time and piles of money burning a hole in his newly installed in-home bank vault? As the story goes, Cuban was courtside at a Mavericks game with friends watching his hapless hometown team go down in defeat yet again. He reportedly turned to a friend and commented, in exasperation, that he could do a better job running the team. A “Why don’t you put your money where your mouth is?” moment ensued, which eventually led to Cuban’s February 14, 2000, purchase of the team for $285 million from an owners’ consortium that included Ross Perot.

Taking over a moribund franchise where losing had become the norm, Cuban immediately infused the Mavericks’ organization with a new energy. Just some of the costly innovations he brought to the team included a giant, eight-sided, high-definition screen scoreboard hanging 35 feet above the arena floor, additional women’s bathrooms to reduce lines, a private players’ practice gym constructed 30 feet below ground, and specially-designed massage chairs on the sidelines to replace the traditional wooden bench. In total, Cuban spent an extra $420 million revamping the arena alone.

The players appreciated the effort, and so did the fans, who eagerly took the new owner up on his offer to send emails to him directly. In fact, Cuban admits that the ideas for many of the innovations he’s introduced (such as the suggestion for a three-sided 24-second clock that could be seen from every seat in the house) originated with fan emails.
Within two years, the Mavericks, who throughout the 1990s had typically played to a half-empty arena, were selling out every game.

Cuban’s attitude toward building the Mavericks’ franchise can be summed up by his frequent directive that everyone involved with the team “have fun and make money.” But just as important has been Cuban’s larger recognition that his primary competition doesn’t come from the Los Angeles Lakers or the Miami Heat; it comes from movies, TV, shopping, NASCAR, and all the other entertainment properties battling for consumers’ rapidly diminishing attention spans.

Matt Fitzgerald, the team’s senior VP of marketing and communications, was hired away from Coca-Cola because Cuban felt that traditional marketing in the NBA had become too closed-minded and insular. Fitzgerald says that the Cuban approach to running an organization is almost unheard of in the corporate world.

“We don’t subscribe to a lot of the traditional types of research, such as focus groups, because we see the arena as a giant focus group every night,” Fitzgerald says. “We’re not afraid to try things. Quite frankly, a lot of things we do don’t work, but it’s ok because we just move on. It’s all about doing a lot of little things. “In the world I came from, there was a lot of vacillation back and forth: ‘Should we do it? Shouldn’t we do it?’ With Mark, it’s just an email away. He could say, ‘That’s stupid, that sucks, no way.’ Or he could say, ‘I love it. Go ahead and do it.’ We just move. We move. We move. We move.”

While Cuban’s radical approach to running a sports franchise has won him and the team thousands of new fans, few of those fans reside in other owners’ boxes or among the ranks of league officials. Most of his fines have come as a result of his comments about league mismanagement or poor officiating. In one particularly memorable incident he brazenly declared that while league director of officials Ed Rush may have been a good referee, “I wouldn’t hire him to manage a Dairy Queen.”

Dairy Queen corporate management took umbrage, letting Cuban know that they didn’t appreciate the slight of being associated with lackluster NBA officiating. Never one to shy away from a golden PR opportunity, Cuban accepted the company’s challenge to take over operation of one of their franchises for a day. And so, on January 8, 2002, more than a thousand Mavericks fans waited in two-hour-long lines to keep their team’s owner busy whipping up Blizzards at the Dairy Queen in Coppell, TX.

The Joy of Winning

Much as the fans lapped up Cuban’s antics and enthusiasm for the team, none of that would have mattered much if the team didn’t perform on the court. Prior to Cuban’s arrival on the scene in 2000, the Mavericks had not posted a winning season since before the Berlin Wall fell. For the years 1990 to 1999, the franchise compiled an underwhelming 194-512 win-loss record. No wonder Cuban felt he could do a better job running the team.

Which he did. Almost as soon as he pulled into the reserved stadium lot parking space marked “Owner,” the team started winning. In Cuban’s first full season the Mavericks made the playoffs, a feat Dallas fans had not experienced in over a decade. Since then the Mavericks have yet to post a losing record, this past season reaching the NBA finals for the first time.

Although the team fell short of winning the championship, losing in six games to the Miami Heat, the Mavericks’ ascension to the NBA’s elite level has more than justified Cuban’s iconoclastic approach to team ownership. The organization’s future, both in the win-loss column and the bottom line, appears locked in place.

Making Money, Making Movies

The team’s owner, by contrast, is keeping on the move. For a guy who claimed he hoped to fill the days following his 35th birthday with typical retirement activities such as shuffleboard, bingo, and hiking his pants up to his chest, Cuban sure stays active. In addition to helming the Mavericks, he is a thorn in the NBA’s side. Cuban, along with Broadcast.com partner Todd Wagner, runs 2929 Entertainment, a film development and production company. The company produced the Oscar-nominated documentary, Enron: The Smartest Guys in the Room, as well as Akeelah and the Bee and the Oscar-winning George Clooney film Good Night, and Good Luck.

2929 Entertainment also owns HDNet, a high-definition subscriber-supported satellite network offering sports, news, and entertainment programming. Cuban’s stated goal for the company is no less than revolutionizing the way movies are made, marketed, released, and distributed – oh, and viewed too. Which is why in 2003 he purchased Landmark Theaters, the largest arthouse chain in the country. By bringing the same excitement and innovative thinking that made the Mavericks a success, Cuban thinks he can dramatically improve upon the movie-going experience.

“As a theater owner, I know that I have to make sure my customer has a great time every time out,” Cuban says. “People go to movies to have fun away from home. You can cook your own meals, but we go to restaurants. Theaters have done a terrible job of creating the perception that movies are a great value. People will pay more for a hamburger and fries at Friday’s than for a movie and popcorn and think the hamburger was a better value than a unique film experience. That’s called terrible execution and marketing by the theater industry.”

As a shot across the film industry’s bow, this past January Cuban’s company premiered Academy Award-winning director Steven Soderbergh’s latest film, Bubble, in theaters, on HDNet for home viewing, and on DVD – all at the same time. This represents a radical departure from the traditional industry practice of staggering each release date, ostensibly to eliminate cannibalism among the different media. Cuban dismisses this idea as outdated and counterintuitive.

“Bread tastes better while it’s hot, so we’re gonna deliver it hot,” he says. “We’ll say to consumers, go to theaters if you want to have an out-of-home-experience. ‘If you can’t get away because you can’t find a babysitter for the kids that night, fine – we’ll charge you a premium to see it during that first opening weekend. But you see it that night, where you want it, how you want it.’ The awareness factor when a movie first releases is way up here [he holds his hand high], why wait for it to ebb again, then put all this effort into pushing it back up again?”

Most people in the movie business are afraid of change, Cuban argues, because they’ve grown comfortable with the existing system. He admits that this is a problem – but for someone else.

“That’s their problem,” he says. “It’s not my system – I don’t have a business to protect. I have a business to build. I control the whole supply chain. If I’m right – the whole thing accelerates. If I’m wrong, I still have great content. And I’ll work with filmmakers to make it strong for them.”

Life of a Salesman

And so, for Cuban, “the sprint” continues. In the meantime, while profiles describing the Mavericks owner’s outlandish success will likely continue to focus on his talents as a master pitchman, visionary, entrepreneur, or just what an inveterate bigmouth he is, few will recognize the role his rare and unique sales talents have played in his success. Cuban admits that throughout his career, his greatest selling strength has always been the ability to put himself in the customer’s shoes.

“Whether I’m selling software, Web broadcasting services, high- definition television, or a movie company, I have a knack for knowing what the customer needs,” he says. “Then I try to apply what I know about technology to those customers and create new ideas that will help them.”

Cuban also understands that the close of a sale is not the end of the relationship – in fact it’s just the beginning. Sales, says the former disco instructor, is a never-ending dance where the best salespeople work tirelessly to sign up new customers while simultaneously

“It’s like being a good lover,” Cuban says. “You ask your customers what they like, then you give it to them. If they liked it and they say ‘yes,’ you do it again.” •