Mark Cuban, the business man, entrepreneur and owner of the Dallas Mavericks, missed his mark on a potential deal with an up-and coming company. Cuban has had much success in his life and has worked hard to become a business mogul and household name. Along with the Dallas Mavericks, he is the owner of Landmark Theatres, Magnolia Pictures, and AXS TV, just to name a few. He thrives at helping startup businesses grow to become profitable, as displayed in the hit show “Shark Tank”, where he stars as a wealthy shark investor. He is constantly asked to support startup companies looking to grow their business with financial help, promotion, and/or proper financial advice and he is always looking for new ways to help the Dallas Mavericks with technology and science.
Cuban ultimately takes a risk on a business and hopes that in the long run it will be worth it. One company, he decided to take that risk on, was Box.net (later Box, Inc.), an online file storage company. It all came about when founder Aaron Levie sent Cuban an email, from his USC dorm room, asking to have him write about his company on Cuban’s popular blog. Long story short, Levie got more than he asked for; Cuban decided to invest $350,000 as the first outside capital into the company.
Things started to look good for Box, as Levie dropped out of college and was focused full-time on his new business, which actually stemmed from a school project. It seemed like the company and this new partnership was going really well, until a curveball came along. The year after Cuban had invested into Box.net, he and Levie disagreed about the ideal course for Box. Cuban was worried about the newly rumored GDrive competitor, a Google product, and felt that to excel against this competition, it would be essential to implement a way that every user would have to pay to use the services of Box. On the other side, Levie wanted Box to become a freemium service and felt that was the best route to take. Cuban wanted to take a different path for the company and Levie wasn’t having it. Unable to agree, Cuban walked away from Box, selling his shares at cost.
According to PandoDaily, “if the company were to price its IPO between $3 billion to $5 billion, its valuation would have increased between 1,500-times to 5,000-times since the time of Cuban’s investment. Just 5 percent of Box at the high end of that IPO valuation range would be worth a cool $250 million.” With that being said, many people are now questioning if Mark Cuban made a huge mistake. If you look at the potential growth and revenue of the company and if it has much success after going public, it will look negatively on Cuban for deciding to walk away. However, Levie seems to have no hard feelings about Cuban’s decision. In multiple interviews from Levie, he credits Cuban with giving him the best advice he’s ever received. “To trust your gut and not hedge when you know you’ve got a winner”. Early on, Levie wanted to incorporate a peer-to-peer version of Box and Cuban gave him great advice to stick with his current version and platform, which is what it still consists of today.
As mentioned earlier, Cuban constantly incorporates his tech and entrepreneurial side with the Mavericks. In fact, he has integrated some grand ideas and innovations within the team. One of those is called Fatigue Science. This company offers services focused on fatigue-related risk management and human performance optimization. With the NBA’s demanding schedule, it’s no wonder that many of the players don’t get much sleep. Fatigue Science is designed to find out how their performance is impacted by how long they sleep.
Another company, MuscleSound, has recently teamed up with the Mavericks. MuscleSound is a startup software company that looks to improve athletes’ performance and reduce injury by measuring by measuring muscle glycogen levels pre- and post-performance in real-time using portable, high-frequency ultrasound technology. This technology could detect injuries before they happen and be a real life saver for the team. Lastly, U-Lace, a recently discovered brand from “Shark Tank”, has been invested in by Cuban. These new customizable shoe laces allow for shoe laces to be worn in different colors and patterns. Thanks to Cuban’s help they have been put in all gift shops in the American Airlines arena and their sales have lifted significantly.
Clearly, Cuban is used to achieving success both on and off of the court. Even though he walked away from Box Inc., they are still making big strides in the clouds storage industry. There are several new competitors, but with Box being one of the first to break into this segment, along with the stamp of approval early on from Cuban, it has helped it expand significantly.
Cuban has to make decisions on a daily basis about companies he is doing business with, especially for the Mavericks. He bases his decisions off of what he feels will not only be best for the company but for his self, as well. He decided to walk away from the Box on good intentions and in no way, tarnished Levie’s name. It was a business move and Levie ultimately stood up for what he believed in. Cuban probably lost some money in the long run but helped a small start-up, made-up in a college dorm room, become a billion dollar company.