Power Players

Mark Cuban: This is the one lie all successful entrepreneurs tell

Dallas Mavericks Mark Cuban smiles during the game between the New York Knicks and the Dallas Mavericks at Madison Square Garden on January 30, 2019 in New York City.
Elsa | Getty Images Sport | Getty Images

You have to be able to lie yourself to get started as an entrepreneur, tech billionaire Mark Cuban says.

"One thing that entrepreneurs, we all do, we lie to ourselves. All the time. You have to," Cuban, the owner of the Dallas Mavericks and a judge on ABC's "Shark Tank," said in a keynote speech on Tuesday at an event for Dallas Startup Week.

Cuban goes on to explain that most entrepreneurs are so terrified when taking the first steps toward launching a new business that they have to lie to themselves in order to psych themselves up enough to move ahead. Cuban warns against being a "wantrepreneur," or someone who has an idea for a business, but can't convince themselves to go beyond just talking about putting that idea to work.

"Behind the lie are the 'wantrepreneurs,'" Cuban said in his speech. "The people who talk about doing it, but don't take that step. And then you lie to yourself a little bit and you say, 'I can do this.' You're scared s---less, but you know you can do this. You take one small step."

In Cuban's case, he seemingly faced long odds to become a billionaire when he arrived in Dallas at the age of 23 "with $60, hole in my floorboard, case of oil in the trunk & a floor to sleep on in Dallas," he said in 2017. But even though Cuban soon got fired from a job selling software, he didn't allow himself to let his dire situation dent his confidence. He formed a software company called MicroSolutions that he sold in 1990 for $6 million.

Bill Gates, Mark Cuban and Alexis Ohanian all limit their kids' tech use–just like Steve Jobs did
Bill Gates, Mark Cuban and Alexis Ohanian all limit their kids' tech use–just like Steve Jobs did

Cuban makes it clear that, though you might need to lie to yourself to get a confidence boost when you're starting out, entrepreneurs still have to "know when you're lying to yourself and when you're telling the truth," he says. That's because every business owner has to strike that balance between having blind faith in their ideas and being able to see the harsh reality when necessary.

"You have to look at your own company and be brutally honest with yourself and say, 'What do we do well?' That's great. But also be honest and say, 'What do we not do well? Where are our challenges? And then how can we improve them?'" Cuban told Amazon Insights for Entrepreneurs last year.

Cuban touched on that idea again in Dallas on Tuesday, saying in his speech that "no company, no product is perfect" and that every entrepreneur needs to be able to spot, and address, their own company's weaknesses before their competitors do it for them.

"What's wrong with your company? Because if you don't know how to kick your own a--, somebody else is going to show you," Cuban says. "And, when that happens, you're out of luck."

Don't Miss:

How Mark Cuban started with just $60 in his pocket and became a billionaire

Mark Cuban says this is Shark Tank's 'No. 1 success story' after start-up sells for $22 million

Like this story? Subscribe to CNBC Make It on YouTube!

Mark Cuban: "One of the great lies of life is follow your passions"
Mark Cuban: "One of the great lies of life is follow your passions"

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