Entrepreneurs

CEO of Mark Cuban-backed start-up shares 5 mistakes you need to avoid

Mark Cuban shares his few specific rules on how to launch a start-up.
David Paul Morris | Bloomberg | Getty Images
Mark Cuban shares his few specific rules on how to launch a start-up.

How do you get the attention of serial entrepreneur and investor Mark Cuban? For 27-year old Breeze CEO Ned Ryan, there were two main factors: He built an innovative company and avoided the common mistakes many young entrepreneurs make.

At age 24, Ryan co-founded Breeze, a service that gives prospective Uber and Lyft drivers access to flexible, short-term car leases. The company leases Toyota Priuses, which it choose for the vehicle's fuel mileage economy, and charges drivers a weekly fee of around $195 that varies by city, plus a one-time fee of $99.

Breeze has raised $16 million in funds to date and counts "Shark Tank" judge Mark Cuban as an investor. While Ryan declined to disclose how much Cuban has invested, he said Mark Cuban's team approached Breeze.

"It's tremendously helpful to be able to bounce ideas off a successful entrepreneur like Mark," Ryan said. "I think he absolutely appreciates rethinking the infrastructure required to power new forms of transportation."

So what's this young entrepreneur's key to success? He credits avoiding (and learning from) these five mistakes that some young entrepreneurs make:

1. Don't be scared of roadblocks

"As an entrepreneur, you'll inevitably experience extreme ups and downs, but don't get too high or too low on good or bad news," Ryan wrote in an email to CNBC. "Otherwise, your team may become complacent after a big win or lose morale after a setback."

Ryan and his team learned this lesson first hand after they found out that their initial business model did not comply with regulations. The team's initial business model of renting out vehicles to Uber and Lyft drivers turned out to be illegal.

Ned Ryan started Breeze when he was 24 years old.
Source: Breeze
Ned Ryan started Breeze when he was 24 years old.

While the shock had the team "freaking out," Ryan and his crew successfully pivoted from the rental model to the leasing model. The result? A company that, despite not reaching profitability yet, has 75 employees and operates in six cities: San Francisco, Los Angeles, Seattle, Chicago, Washington, D.C. and Boston.

2. Don't stray from your values

"Your values don't have to be witty or original, but they should paint a comprehensive picture of how you expect your team to behave, communicate and build," Ryan said. "Embed these items deeply into your hiring, onboarding and performance review processes."

Ryan said that "pure hustle" played a key role in building Breeze. He also said that keeping an open mind to different options in business strategy is important.

3. Don't resist change

"Within your company, employees' roles may evolve as the business grows. Don't get hung up on job titles or to someone staying in a particular role long term," he said.

In fact, one of Breeze's first employees has worked in nearly all of Breeze's six locations in different roles.

"You can't be afraid to change someone's role for what's required for the business. Recognizing talents at certain times in your business history is really important," Ryan said.

4. Don't be impatient

"It's tempting to build everything at once, but resources are finite at a start-up," Ryan said. "Instead, incorporate your team's ideas into a long-term product roadmap to keep everyone focused and on schedule as you work towards your end goal."

5. Don't micro-manage

"The key thing is the trust component," Ryan said. "Learn to delegate key responsibilities to your team, or else you'll become a bottleneck for the organization and impede progress."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."