In the mid-1990s, just before the dot-com bubble, Mark Cuban was approached by a friend about a business idea.
As a fellow sports enthusiast, his friend Todd Wagner told Cubans that it would be profitable to start an Internet audio business where users could listen to sports games online. Cubans sold the possibility, and in 1995, the duo created AudioNet, which later became Broadcast.com.
At the time, the Internet was a very new concept to most people, so Cuban and Wagner faced many critics who did not believe the company would succeed.
“If I were to tell people the vision, they would say, ‘You’re crazy. I’ll just turn on my TV. I’ll just turn on the radio,'” Cuban said in a recent episode of the “Start Greatness” podcast.
“People laugh at me.”
But that did not matter to Cubans.
“I knew it was a winner,” Cuban told Broadcast.com. “I had no doubt in my mind.”
First, Cubans saw a market for streaming, “what we used to call network broadcasts or Internet broadcasts,” he said, “Starting greatness.”
Cuban said he “believes streaming will take over entire television” because he “believes in the price-performance curve for computers” [personal computers] and broadband, and that the price of disk drives and bandwidth will continue to decline as computers become more powerful. “
This, Cuban said, “was a fundamental foundation for streaming.”
“I had the vision that we would follow this path.”
After the co-founders started marketing the company, Cuban said he noticed a growing demand from those who wanted to listen to sports games or music during their work day but could not keep a radio on their desk.
“I saw very quickly that user adoption is huge,” Cuban said. “Nobody used it and said they did not need it.”
“When Broadcast.com offered the opportunity to watch video with audio, most of our revenue came from industry events and all-encompassing events,” he said. “It was ‘the real money maker for us.’
Broadcast.com also had a growing consumer base because it was simple for us.
‘I knew it to be able to listen to OU [University of Oklahoma] sports, I was the path of least resistance, “Cuban said. I knew that anyone who wanted to watch or listen to a Mavericks game was the path of least resistance. “
“Maybe some competed to try to do the same thing and copy us, but we were the only way out of the least resistance.”
In 1999, Broadcast.com was acquired by Yahoo for $ 5.7 billion.
That’s why Cubans say, “if you have the technology in your favor, if you have the path of least resistance and if you have consumed, then you just have to go for it. These are the pieces that create a moat that is really hard to to repeat. “
The experience has led to Cuban being more open-minded and trusting that his gut is investing in companies or ideas that others may ‘find crazy’, he said. Today, it includes its investments in companies that deal in cryptocurrency and blockchain.
Investing in today’s companies has ‘the same feel of the early days of the internet’, Cuban told ‘Starting greatness’.
“You really have to believe in your product” to succeed.
Disclosure: CNBC owns the exclusive cable rights outside the network on ‘Shark Tank’.
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