According to a billionaire, the ‘number one sin’ an entrepreneur can make when starting their own business begins with money.
Dallas Mavericks owner and an essential investor on hit show Shark Tank, Mark Cuban, provided some good career advice on a podcast interview with Ryan Seacrest.
He told Ryan Seacrest that the biggest mistake an entrepreneur can make is thinking they need to raise money.
“I think the biggest mistake people make is once they have an idea and the goal of starting a business, they think they have to raise money.” – Mark Cuban pointed out.
“Once you raise money, that’s not an accomplishment, that’s an obligation. Now, you’re reporting to whoever you raised money from.” – He continued.
Mr Cuban indicated that by getting outside help, it adds further pressure to business owners since they have added another voice in the room – which complicates the dynamics of decision making.
He went on advising entrepreneurs to grow a business the old-fashioned way – which is to hustle and grind all the way from bottom.
“If you can go out there and start it on your own — like I started out by selling garbage bags — whatever it is … try to find something that you can make or that you can buy yourself and sell to people around you, then ask for referrals and grow the business that way, and you can turn it into something enormous,” Cuban insisted.
My Final Two Cent
While I agree the points made by Mr Cuban, I do like to argue that there are businesses that become a success after raising funds.
Yes, sometimes having another voice in the decision making process can slow things down, but if that ‘other’ voice brings in a lot of value to the table (e.g. expertise, network, experience etc), then, that changes everything.
I don’t think Mr Cuban is completely right in this case. But I don’t feel I’m completely wrong either.
One thing I’ve learned from my time running businesses, is that you’re often wrong on day one. It is your job to figure things out and become less wrong through trial and error – as Mr Elon Musk puts it. It’s just the way business works.