"Have you done all the homework" — Shark Tank star Mark Cuban explains why most businesses fail

Mark Cuban, billionaire entrepreneur and Shark Tank investor, shared his thoughts on why most businesses fail in a video posted by Wired on October 25. He identified four key factors: sales, preparation, effort, and intelligence. Cuban emphasized the importance of preparation, stating:

"Have you done all the homework to know about your industry, your competition, your products, the profitability, your customer base, your demographics?"

He emphasized that no business can succeed without sales, adding that entrepreneurs need to be smart, curious, and willing to put in significant effort. Alongside his role on the Shark Tank, he is known for his extensive entrepreneurial portfolio, his ownership of the NBA's Dallas Mavericks, and his bestselling book, How to Win at the Sport of Business.

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Shark Tank star Mark Cuban's insights from the YouTube video

Cuban’s video offered more than just reasons for business failures—it had more advice, revelations, and candid opinions. Responding to a fan’s question about the most annoying business buzzword, Cuban declared his disdain for “cohort,” explaining,

"There's no reason to ever use the word cohort when you can use the word group. Say group, you sound stupid when you use the word cohort because you're trying to sound smart."

When asked if the customer is always right, Cuban gave a nuanced response, stating, "The customer is rarely right," but he added, that it does not mean one should not look after the customer. He emphasized that customers make choices but are not the ones driving innovation. Instead, it's the entrepreneur who must come up with the ideas.

Cuban also shared potential business opportunities, particularly in tech. He highlighted untapped markets like Alexa programming and AI prompt engineering. For instance, he suggested that individuals could teach others how to optimize their use of devices like Alexa or platforms like ChatGPT, noting,

"There’s new features coming out in ChatGPT and its competitors every single month. If you stay ahead, you’re gonna be the person in demand."

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Financial tips from Shark Tank investor Mark Cuban

Speaking on a podcast hosted by Jules Terpak on December 17, 2024, he recalled selling his company, Broadcast.com, to Yahoo! for $5.7 billion in 1999. While he acknowledged the role of luck and timing, Cuban’s approach to wealth was marked by caution and foresight.

Early on, after earning $2 million from selling MicroSolutions, he instructed his broker: "I want you to invest for me like a 60-year-old." His lifestyle reflected this conservative approach, as he bought a modest house, avoided luxury cars, and focused on experiences rather than possessions. Cuban explained, "I wanted to live like a student, just have fun."

Cuban emphasized adaptability as a critical skill for those who are navigating their career. In an interview with CNBC on October 31, he said,

"I can pretend that I’m going to predict where AI’s going … but I’d be lying. What I do know is I’ll pay attention, be agile, curious, and adapt."

This ability to evolve with changing trends has been a cornerstone of his success, from recognizing the potential of streaming services in the 1990s to championing AI today. Cuban also offered practical negotiation tips, underscoring patience and prioritization.

"The best dealmakers…are patient because they know what they’re trying to accomplish. They don’t try to win every deal point," he said.

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New episodes of Shark Tank air on Friday nights at 8/7c on ABC.