Mark Cuban is a billionaire who knows a thing or two about the mogul grind. He owns the Dallas Mavericks and is a star on the hit entrepreneur reality TV show “Shark Tank.” In an interview on the podcast “How I Built This” he talks about what he would do if he had to build an empire from scratch. Mark admits he might not become a billionaire, because in addition to hard work it takes an immense amount of luck as well. However, he’s convinced he would become a multi-millionaire.
Here’s what he would do if he lost it all and had to start over:
Step 1 – Go out and get two jobs. He would get a job as a bartender at night and a sales job during the day. He’s had success as a salesmen in previous jobs and would draw on that skillset to generate income.
Step 2 – Between selling a product with substantial commissions and working as a bartender he would save enough capital to start a new business.
And from there my friends the rest would be history, according to Mark.
Only if it were that easy. It’s tough starting a business and convincing people to give you their hard earned money for your product or service, unless you’re a drug dealer. Wait a minute isn’t marijuana legal now?
I’m on it!
He does make one very good point, you have to do something to generate startup revenue. It’s not going to fall off a tree and hit you in the head. If you can generate enough revenue with one job great, but if not then pick up a second. You won’t do it forever, just enough time to generate the seed capital to make your next move. From there you can put your money to work for you in a number of ways.
If you could start any business what would it be? Hit me on the Gram.
Hype is a live-streaming video app currently available for the iOS platform. It’s live streaming with a lot more bells and whistles than you’ve seen on the likes of Facebook Live and Periscope. For instance, broadcasters can easily incorporate multimedia into their streams i.e. layer in photos, videos, music, GIFs, etc. This allows for more creative freedom to help broadcasters engage, entertain and ultimately build their following.
There’s a lot of competition in this space. It’s going to be tough to break through, especially with the juggernaut, Facebook copying every cool feature of its competitors these days.
The old Vine crew broke through once let’s see if they can do it again. We’re rooting for ya. Excuse me as I get my popcorn and enjoy this show.
Many investors frown upon startups that only have one founder. This makes a lot of sense because it is extreeeemely challenging to start a company and even more stressful when you don’t have a co-founder to shoulder some of the pressure. I was the sole proprietor of a frozen yogurt shop for a few years before I sold it and let me tell you… running a small business can be more stressful than you can imagine (and also rewarding). There’s no one that can really fully understand the pressures except another partner who’s in the trenches with you. So imagine the angst of running a startup that’s raised millions of dollars the pressures of developing a thriving business is even greater. With all of that stress on one person it seems companies with one founder should be less successful.
First let me preface this by saying I’m not rich, so take this advice with a grain of salt. I do pretty well for myself and since I’ve been following these principles I’ve established a good trajectory toward one day joining that 1% club I’ve been hearing about. In my life I’ve had the privilege of hanging around a lot of uber wealthy individuals. I’ve jotted a few notes down along the way and it’s only right that I share the wealth with my fellow Moguls on the Grind.
Keys to Building Wealth:
1: Pick a High Paying Career
Yeah I know what they say about pursuing your passion and all, but if your passion pays minimum wage maybe you should pursue your passion on the side and if you blow up from it then cool. My advice is to choose a career that pays well. It makes it that much easier to save and jump starts you on the path to generating significant wealth. Here’s a list of top paying gigs that might be worth taking a look at.
An alternative to picking a career that pays well is getting a side job to generate extra income i.e. driving for Uber/Lyft, Postmates, etc. The bottom line is take action to increase your net income.
As you advance in your career or generate more revenue be cognizant of “Lifestyle Creep,” the more you earn the greater the temptation is to increase your expenses. You’ll want to avoid this if you’re interested in getting rich.
2: Save a Minimum of 20%
A lot of financial advisors suggest saving a minimum of 10% each paycheck for retirement. I’m of the ilk that you should save as much as you can without going insane. Have fun every now and then but stack your paper. In addition to the 10% saved for retirement purposes, save an additional 10% for near term expenses/emergency funds. In other words save at least 20% of what you make (and more if you can).
3. Say No to the New Car (and other expensive wants)
You’ve got a little cash saved and you’re doing well in your career. Resist the urge to buy a new car. This is a surefire way to remain in debt and slow your wealth creation. Remember you don’t need the latest and greatest just to keep up with the Joneses. The goal is to be rich not look rich! Now let’s stay focused. Run your existing car into the ground then if you need a new car pay with cash.
Interesting story, A close friend of mine was fortunate to play a number of years in the NBA, at the height of his career while making millions, he was getting around in a Toyota Prius and his wife drove an old Mercedes Benz that used vegetable oil for fuel.
Like the rapper Nas once said “By the time you can afford it the car aint important.”
4. Make a Strategic Home Purchase.
I think owning real estate is an important vehicle for creating wealth. My wife and I currently own two properties. My philosophy on real estate is this: If you’re going to be paying someone’s mortgage why not pay your own or have someone paying the mortgage for you (a tenant in an investment property)? Of course you have to get into a position to purchase real estate, hence this is why we do steps 1, 2 and 3.
When it comes to real estate, there’s only 3 things you need to remember, location! location! location! Agents say (and history confirms), the extra money you spend purchasing in desirable neighborhoods in a good school district is money well invested (high demand equals higher returns).
5. Start a Business
The first 4 points listed above will get you to a solid foundation and generate wealth for you, but I found one thing very common among the super wealthy that I’ve had the privilege of meeting. The majority of them created their own businesses. Whether it’s their own Sports Agency, PR Firm, Tech Startup etc. They all took a chance, in fact they took several chances. They’ve failed plenty of times in business but they learned from those hard lessons and came back even stronger.
If they can do it, you and I can do it. Let’s get to work!
What are some of your tips for wealth building. Hit us on the Gram.
“By the time you can afford it, the car aint important.” Nas (around the 2:30 mark)
Well here’s an interesting “Did You Know” for ya… Facebook recently surpassed the behemoths Disney and Comcast in ad revenue. During the first 9 months of 2016 Zuck and gang brought in $9.1 billion in North America. For the same period Comcast and Disney generated $7.6 billion and $6.7 billion respectively. Digital media’s highly targeted ads appear to be besting the old media stalwarts. $9.1 billion is a 65% increase over the previous year’s revenue for the same period. That’s impressive and all but they’re not doing $21.5 billion in revenue like Google is for the same period, says the hater.
What if I were to tell you that you could be a venture capitalist too. Is that something you would be interested in? Venture capitalism is not just for the wealthy anymore. In May, President Obama passed a rule, part of the 2012 JOBS Act, that allows regular folks like you and I to invest in startups by taking equity positions in them, via crowd-sourcing sites such as IndieGoGo. Previously only accredited investors, individuals with an annual income of at least $200k per year or a net worth of least $1m could play in this arena.
IndieGogo has responded to this opportunity by recently launching equity crowd funding site, Equity IndieGoGo. Now entrepreneurs can offer more than a pat on the back and a cool t-shirt to people who invest in their dream. Entrepreneurs can offer actual equity to investors. It’s a win win for all.
Investments on the Equity IndieGoGo platform start at $100 and investment bank, MicroVentures, handles all transactions including cap table calculations and other back-end investment logistics.
Are you the next Chris Sacca, billionaire VC? What startups will round out your portfolio?
Are you on track for retirement? Here’s a few rules of thumb courtesy of the good folks over at Fidelity Investments.
Wanna hear it? Well here it goes:
At age 35, you should have saved an amount equal to your annual salary.
At age 45, you should have saved three times your annual salary.
At 55, you should have five times your salary.
When you retire at age 67, you should have eight times your annual pay.
Start early! The sooner you begin saving the longer you have for the interest on your money to compound. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Live below your means and shun debt like the plague. To paraphrase Nas “These are some jewels for your skull that you can sell if you chose.” In other words heed this valuable advice folks.
What’s the best way to eat an elephant? One bite at a time of course.
In other words when faced with a huge task it’s best to break it down into smaller parts. This makes the challenge less daunting and more manageable.
What is my overall goal?
What do I want to accomplish this week?
What do you want to accomplish today?
Write it down
Write the answers to these questions down. It’s uncanny how when you write things down on paper they become a little more real.
Then the most important step of all is….. Drum-roll please
We can talk all day about setting goals but it means nothing without taking action and putting the work in to make them real.
Sometimes we find ourselves lacking motivation, which is why it’s also good to have an accountability partner. This individual can help keep you motivated on those lazy days. They should be striving to attain a goal of their own, together you’ll keep each other honest, encourage one another, bounce ideas of each other, share knowledge of strategies and tactics that are working, etc.
These are just a few tips that have worked for me and what I’ve observed among some of my more successful peers. What are some of your tactics?
YouTube has hired Lyor Cohen as their first “Global Head of Music”.
When you think about it, the tech companies are becoming the new record labels, sooo this makes perfect sense. I mean Jay Z’s Tidal exclusively distributed Kanye’s “Life of Pablo” for a while. Apple has an association with Dr. Dre, cutting exclusive deals with top artist like Drake and now, Youtube has hired music industry giant Lyor Cohen. I see where we’re going with this.
Not familiar with the name Lyor Cohen? Well certainly you’re familiar with some of his work. In the 90’s he was the president of Def Jam. Under his regime Kanye West, Ludacris & DMX were signed. Lyor was also instrumental launching the careers of Mariah Carey, Nickelback and Sum 41.
In the 2000’s he ran “Warner Music Group”, where he was the first major record label to sign a licensing agreement with YouTube.
In 2013 Lyor founded “300 Entertainment” a quasi-record label/marketing comp/distribution company. Fetty Wap and Young Thug are some of their signature artist.
It will be interesting to see if Lyor can leverage the seemingly infinite resources of Google/YouTube to transform the industry. Will he succeed or fall flat? Get your popcorn ready.
Are you changing the game and making moves? Hit us up on IG and let us know. #MogulGrind
Prior to our workout (hence the reference to running stairs in the video) I had the legendary sports agent and investor David Falk share a few gems with the MogulGrind community. David is best known for being Michael Jordan’s agent. He also negotiated professional sports’ first $100m contract for Alonzo Mourning, and built one of the most powerful sports empires in history. During his peak in the 90’s he was considered the second-most powerful man in the NBA behind the Commissioner David Stern. That’s just to name a few of his accomplishments…
Keys from the clip:
Don’t get complacent
Innovation and creativity are the keys to the future
Always shoot for the stars (aim high)
Never settle for second best
Constantly improve yourself (educate your mind, improve your health, stay ahead of the curb)
In the startup world you often see headlines of company X raising a gazillion dollars in a Series A, B or C round of funding. What does this actually mean? Like most people on the outside looking in all I really knew was the companies were receiving funds in order to continue growing their businesses. Anything after that was Greek to me. I decided to dive a little deeper and here’s what I discovered.
Seed Round – So you’ve come up with a great idea but you need funds to get the idea off the ground and really test if there’s a market for your product or service. You’re planting the seedfor your business. Once you’ve tapped out of finances from friends, family and your personal stash to jump start the business, in comes Angel investors. These investors typically provide the funds for this early stage of your business for a percent of the company, naturally. Angel investors are wealthy individuals with a minimum net worth of $1 million who earn over $200k per year in income. During the Angel round of investing startups typically raise $150k to $2m.
Series A Round – Now that the business has developed a track record and has exhibited good signs that it’s a going concern it’s time to improve the product and begin scaling up. This is where the big boys and ladies come in. Venture Capital firms invest heavy paper aka boat loads of cash in exchange for their piece of the pie (of course) and lending their expertise and knowledge. Series A rounds typically raise approximately $2m to $15m.
Series B Round – This round is similar to the previous one. Many of the same VC players are involved. The goal here is expanding the company’s reach, acquiring the proper talent for the organization, increased marketing and advertising takes place in this round. The funds raised at this stage run between $7m to $10m.
Series C Round – At this point you’re clearly a successful company. You may need funds for a strategic acquisition, or expansion into foreign markets, etc. In addition to the VC firms, Angel and other early investors you have some new faces. Hedge Funds, Investment Banks and Private Equity Bankers enter the fray here. They have a ton of cash and expertise that they infuse into the company to continue the expansion.
IPO – The Investment Bankers can help bring the company to public markets via an “Initial Public Offering.” This allows us common folk to get a piece of the pie by purchasing shares via our favorite trading platforms/brokerages. We own a portion of the company and in exchange they receive funds (the cost of each share purchased) to further develop the business.
Now you know your A,B,C’s!
Check out Investopedia for more details on the different stages of funding.
Looks like we have a new player in the venture capital business (See what I did there? Basketball… Kobe… Player? Ok moving on). This is good news for Moguls on the Grind changing the world through entrepreneurship. Kobe has partnered with former CEO of Web.com, Jeff Stibel to create Bryant Stibel. The $100 million fund is currently self-funded by the two partners (must be nice or silly, didn’t anyone ever tell Kobe about O.P.M. It’s better to invest with Other People’s Money). The duo intend to focus on media, technology and data ventures. Currently the fund is closed to outside investors (stop being selfish Kobe, we talked about this already).
Bryant and Stibel have been investing together for some time now. The firm has positions in 13 companies, including notable investments such as: The Players’ Tribune, LegalZoom and Alibaba.
Well played Kobe. Cheers to even greater success off the court.
Forerunner Ventures is a women only investment firm killing it in the male dominated venture capital industry. Let’s take a closer look at this company that’s flown under so many people’s radar.
Forerunner Ventures was founded in 2003 by Kirsten Green. The company specializes in e-commerce investments. They’re philosophy revolves around capitalizing on the growing trend of shoppers ditching brick and mortar businesses for online shopping. This investment strategy is clearly paying dividends. Since July of this year, 2 startups have sold for at least a $1 billion (unicorn status). Dollar Shave Club was acquired by Unilever for $1 billion and Jet.com acquired by Walmart for $3.3 billion. Can you guess the only venture capital firm with the wisdom (or luck) of having invested in both companies? You guessed it, Forerunner. Their investment in Dollar Shave Club alone is expected to earn over $40 million for the firm. Nice!
Some of Forerunner’s other notable investments include Birchbox, Warby Parker and Hotel Tonight. Is there another billion dollar exit around the corner? We shall see.
Are you the founder of a game changing startup? We’d love to hear your story. Hit us on the Gram.
5 Years ago Ashton Kutcher and friend Guy Oseary invested $500k in a little known company called Uber. That investment is worth a cool $50 million today. Not bad for the “Dude, Where’s My Car” actor. Ashton and Guy, along with a 3rd investor formed a company called A-Grade Investments. Before long they had billionaires such as Mark Cuban, David Geffen and Eric Schmidt begging for a piece of the action (well maybe not begging). After their initial home run with Uber, A-Grade was able to easily raise funds for further investments. The company subsequently invested early in startups that are now household names such as Pinterest, Aribnb, Spotify, Uber, Shazam and Skype. Over 6 years Ashton and gang have turned $30 million into $250 million. Let the good times roll!
Hmmmm maybe we should start a Mogul Grind Investment Fund. We have top talent that can give Ashton a run for their money! I’m on it MGs.