In the mid-1990s, just before the dot-com balloon, Mark Cuban was approached by a friend about a business idea.
As a fellow sports fan, his friend Todd Wagner considered the Cuban to be profitable to set up an internet audio company where users could listen to sports games online. Sold on the possibility, the 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 Cubans and Wagner faced many critics who did not believe the company would succeed.
“When I told people the vision, they would say, ‘You’re crazy. I’ll turn on the TV. I’ll turn on the radio, “Cuban said in a recent episode of the” Starting with Greatness “podcast.
“People would laugh at me.”
But that didn’t matter to the Cuban.
“I knew this was a winner,” Cuban told Broadcast.com. “I had no doubt in my mind.”
First of all, the Cuban saw a market for streaming, “which I then called network broadcasting or internet broadcasting,” he said, “Starting with greatness.”
The Cuban said he “firmly believed that streaming would take over all television,” because he believed in the price-performance curve for PCs. [personal computers] and broadband and that as computers continue to become more powerful, the price of disk drives and bandwidth would continue to decline. “
This, said the Cuban, “was a fundamental foundation for streaming.”
“I had that vision that we would follow this path.”
Once the co-founders started marketing the company, the 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 the adoption of users was enormous,” said the Cuban. “Nobody used it and he said he didn’t need it.”
Then, as Broadcast.com added the ability to watch audio videos, “most of our revenue comes from streaming corporate events and hands-on meetings,” he said. He was “the real producer of money for us.”
Broadcast.com also had a growing consumer base because it was simple for us.
“I knew this so that you could listen to OU [University of Oklahoma] athletically, I was the path of the least resilient, “said the Cuban.” I knew that anyone who wanted to watch or listen to a Mavericks game, I was the path of the least resilient.
“There may have been some competitors trying to do the same thing and copy us, but we were the only way with the least resistance.”
In 1999, Broadcast.com was acquired by Yahoo for $ 5.7 billion in stock.
That’s why, said the Cuban, “if you have the technology that works in your favor, if you are the least resilient path and if you have consumption, then you just have to go after it. These are the pieces that create a ditch that are very difficult to replicated. “
The experience made the Cuban more open-minded and confident in his gut to invest in companies or ideas that others might find “crazy,” he said. Today, it includes its investments in cryptocurrency and blockchain-focused companies.
Investments in those companies today have “the same feeling as in the early days of the Internet,” said the Cuban “Starting with Greatness.”
“You have to really believe in your product” to succeed.
Disclosure: CNBC owns the exclusive off-network cable rights to Shark Tank.
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