Some ideas are born on Ivy League campuses. Others, at a California Pizza Kitchen.
That’s where Mark Cuban and his college friend Todd Wagner were in 1995, eating lunch and talking about Indiana University basketball. They lived in Dallas, and had to listen to games on the phone with someone physically in Bloomington, Indiana.
“There’s got to be a way that we can listen to Indiana University basketball … over the internet,” Cuban recalled the two of them saying, during a MasterClass course released Thursday.
The idea blossomed into Broadcast.com, one of the first streaming platforms of its kind. Cuban and Wagner sold the company to Yahoo for $5.7 billion in stock in 1999. It remains Cuban’s most lucrative entrepreneurial endeavor, topping the $6 million sale of his first company, software business Microsolutions, in 1990.
Broadcast.com’s success can be at least partially linked to Cuban’s straightforward and inexpensive marketing strategy. Today, you only need an internet connection and a monthly subscription to stream videos. In the late 1990s, Cuban spent hours in virtual chatrooms like AOL convincing people to buy the right modems and download the right software.
“If it was exciting for me to listen to those games, it was going to be exciting to all Hoosiers fans everywhere, and obviously apply to all sports fans everywhere,” Cuban said.
One month in, Cuban had convinced 1,000 people to stream on Broadcast.com, he said. The company went public three years later.
Cuban still avoids spending money on ads and marketing today, he said. Instead, he promotes his companies by reaching out to journalists, giving interviews on podcasts and advertising through his own social media accounts, he said.
His pharmaceutical company, Cost Plus Drugs, has spent $0 on advertising since launching in 2022, he said: “My approach to … marketing and advertising is to figure out how little I can spend to increase my sales.”
Another reason Broadcast.com worked so well, said Cuban: luck. Skill and strategy can help make you wealthy enough to live a comfortable life, but you need luck to become a billionaire, he’s previously stated.
“I had to be friends with the right person, then I had to start a company that was in the technology industry right when the stock market for internet stocks was blowing up,” Cuban said during the MasterClass course. “All those things had to happen for me to become a billionaire.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” which features Mark Cuban as a panelist.
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