Mark Cuban's Rules for Startups

Mark Cuban's rules for start-ups, and how my company broke almost all of them.

1. Don't start a company unless its an obsession and something you love. My company was started by some people obsessed and in love with the technology but my guess as to the primary motivation of the majority of the founders is that they say the dollar signs.
2. If you have an exit strategy it's not an obsession. Our founders all had exit strategies built in to the initial round of funding. The exit strategy was actually put in by a very unscrupulous investor but I think he got the founders to agree to it by giving them an out as well. None of them got the chance to use it.
3. Hire people you think will love working there. This we did in the tech department. Sales I can't really speak for.
4. Sales cures all. This is where we failed big time. We started off with decent revenues, built the revenues up to close to $1 million a month, and then let it die. We assumed credit risk for payments and got shafted for a couple million. Then we changed the business model to get rid of that risk and no more sales happened, and thus no more revenue. As a public company it seems that the CEO thought that our money should come from the public markets, not from sales.
5. Know your core competencies and focus on being great at them. This we did, although some people tried to do more.
6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. We didn't buy an espresso machine but we did spend tons of money on worthless crap that was not needed. Money that could have been reinvested into the company.
7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. We had offices. Big offices for some people. We had three suites in our building, two of them connected, the third, for C-level officers, was completely separate. The developers were in open cubicles. The developers were the only part of the company that functioned properly.
8. As far as technology, go with what you know. We did this to the most part.
9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. This we did at first but as the company grew (spent more money) we started putting in hierarchies. Things were to the most part kept flat but in some departments there were long, complicated hierarchies.
10. NEVER EVER EVER buy swag. We didn't do this other than spending fortunes attending trade shows which didn't get us a single customer. We didn't make branded swag though. Actually there were some golf balls, but that was it.
11. NEVER EVER EVER hire a PR firm. We hired several PR firms and dumped them, hired our own PR guy, then hired more PR firms. This goes back to the C-level people focusing on the public markets rather than the core business.

Make the job fun for employees. I think I did this as much as I could.

Financial Tips for those of us who don't reportedly own 30% of Facebook

Some common-sense financial tips, from theStreet.com.

Some thoughts on the Microsoft Facebook deal that is making huge waves today:

• Did Zuckerberg not want this deal?
  
• Microsoft took a 1-2% stake in Facebook for $240 million... Some tidbits of info about this.
• What exactly does a poke mean? Not being a regular Facebook user I am not exactly sure.
• Facebook downgrades its growth rate.
• If Zuckerberg does, in fact, own 30% of Facebook as has been reported, on paper he is now worth $5 billion. That must feel nice, but I can say from experience, it's horrible when you are worth a lot of money on paper and you don't cash out and end up with nothing. See an older post of mine for more details on this.
• I still hold by my belief that Facebook is going to crash when and burn when they are unable to turn their large user base into a large money base. While Apple reported such a good quarter last week, I think the stock is pretty much done with it's run. It's been down for the last two days. Want to hear something that will make you sick? I bought AAPL at $18 and sold it at $30 a few years back. Makes me sick to think about it, but not as sick as the above mentioned paper loss of 99% of my net worth.
• All of the above that is not from me is from Valleywag.
• And just in - Facebook is getting another $500 million from two hedge funds, bringing their take over the last two days to a hefty $750 million!
• And something about Facebook's value and growth... As a note, Facebook's users are growing at 2% a week - not active users, registered users. And as far as I know the revenue growth is pretty much non-existent.
• Some guy from Intel agrees with me.

In non-Facebook news:

• Google is once again being a little bit evil. Only like 2% evil or so but still...
• Sergey Brin tries to pass off the Facebook mess as something positive for Google. I don't think its positive for anyone except Mark Zuckerberg and the other early investors.
• Montage of Mark Cuban's all-too-brief stint on dancing with the stars.