On his messaging app Cyber Dust, Cuban shared some surprising advice today about how aspiring entrepreneurs should go about starting a business. He recounted a recent question he received: "How early on is it necessary to secure funding when working on a new business venture?"
Cuban's reply? He doesn't think it's necessary...at all.
"You should do everything possible not to raise funds. Sweat equity is the best equity. I would turn to crowdfunding like Kickstarter before I would look for investors," Cuban said.
Some other tips from Cuban:
- Don't try to sugarcoat what it's like working at a startup to potential employees. "I tend to tell people that they will have to live like students and starve, but they will get equity and share in the upside."
- You don't need to rely on extensive focus groups to determine if your customers are satisfied with your products. All you need to do is, "ask your customers if they will buy [it] again. If they won't you have your answer."
- Similarly, you don't need to come up with a complicated strategy to beat your competitors. "You make your customers happier than the competition can. If you can't, don't start the company."
- Finally, don't obsess over finding a mentor in your field. Cuban said he did not rely on mentors to help him make decisions early in his career. And when asked, "do you think it is important for entrepreneurs to have a mentor?" he replied with a simple "No."