In the mid-1990s, just before the dot-com bubble, Mark Cuban was approached by a friend about a business idea.
As a sports fan, his friend Todd Wagner told Cuban that it would be profitable to open an audio company on the Internet where users could listen to sports games online. He sold the possibilities, Cuban agreed, and in 1995 the duo created AudioNet, which later became Broadcast.com.
At the time, the internet was a very new concept for most people, so Cuban and Wagner faced many critics who did not believe the company would succeed.
“When I told people about the vision, they said, ‘You’re crazy. I’m going to turn on my TV. I’m going to turn on the radio,'” Cuban said in a recent episode of “Starting the Greatness podcast.”
“People laughed at me.”
But it didn’t matter to Cubans.
“I knew this was a winner,” said Cuban of Broadcast.com. “I had no doubts in my mind.”
On the one hand, Cuban saw a market for streaming “which we called network transmission or transmission over the Internet”, he told “Starting Greatness”.
Cuban said he “firmly believes that streaming will take over the entire television” because “he believes in the price-performance curve of PCs [personal computers] and broadband, and as PCs continue to become more powerful, the price of disk drives and bandwidth would continue to fall. “
That, said Cuban, “was a fundamental building block for streaming.”
“I had a vision that we would follow that path.”
As soon as the co-founders started to market the company, Cuban said that he noticed an increasing demand from those who wanted to listen to sports games or music during the working day, but could not keep a radio on his desk.
“I saw very quickly that user adoption was huge,” said Cuban. “Nobody used it and said they don’t have to.”
Then, as Broadcast.com added the ability to watch video with audio, “most of our revenue came from streaming corporate events and general meetings,” he said. That was “the real money maker for us”.
Broadcast.com also had a growing consumer base, because it was simple for us.
“I knew that for you to hear OR [University of Oklahoma] sports, I was the path of least resistance, “said Cuban.” I knew that anyone who wanted to watch or listen to a Mavericks game, I was the path of least resistance. “
“There may have been some competition to try to do the same thing and copy us, but we were the only way of least resistance.”
In 1999, Broadcast.com was acquired by Yahoo for $ 5.7 billion in shares.
So, said Cubano, “if you have the technology working in your favor, if you are the path of least resistance and if you have consumption, just go ahead. These are the pieces that create a gap that are really difficult to replicate. . “
The experience led Cubano to be more open-minded and to trust his courage to invest in companies or ideas that others might find “crazy,” he said. Today, this includes their investments in companies focused on cryptocurrency and blockchain.
Investing in these companies today has “the same feeling as the early days of the Internet,” Cuban told “Starting Greatness”.
“You really have to believe in your product” to be successful.
Disclosure: CNBC has the exclusive cable rights outside the network for “Shark Tank”.
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