Billionaire Mark Cuban says successful people aren't afraid to go broke: 'When you've got nothing to lose, you go for it'
Before becoming a billionaire, Mark Cuban slummed it in an apartment with five other guys, sleeping on the floor and using "nasty" towels taken from a Motel 6.
Those circumstances may seem pretty bleak, but they're exactly what drove Cuban to put his all into entrepreneurship.
"When you've got nothing to lose, you go for it. And when your back's against the wall, you're sleeping on the floor and your buddies are stepping over you to go to their job and you're starting this company, you realize, 'OK, I've only got one direction," Cuban, a star of ABC's "Shark Tank," said during a panel at SXSW last month.
Cuban, who has an estimated net worth of $6.5 billion, referenced his "Shark Tank" co-star Daymond John's phrase "the power of broke," saying it's "one of the defining elements" of any successful business owner.
"You either go, I quit [my job], I'm an entrepreneur ... or I can't do it. I can't give up that safety," Cuban said. "There's no person on this planet who hasn't had that 'Oh my god, I got this idea' [moment]."
Most people consult with friends and explore their idea on Google, but ultimately never follow through, Cuban said. The biggest underlying psychological reason, he added: fear of sacrificing a regular paycheck for the unknown.
In Cuban's case, his childhood talent for salesmanship convinced him that he could successfully chart his own path as an adult. He sold trash bags door-to-door as a pre-teen, and stamps and coins as a teenager.
As a college kid, Cuban and some friends promoted parties at a Bloomington, Indiana, bar — doing well enough that when the bar shut down, he bought the building and turned it into a popular hangout spot, he said.
Getting "busted" for being under 21 years of age was irrelevant, Cuban added.
"That's the power of being an entrepreneur," he said. "And we all have it. But taking that first step and finding the things we're good at are the challenges."
If you're scared of taking the leap, you can turn your fear into fuel, fellow SXSW panelist and Small Business Administration administrator Isabella Guzman said — it just takes practice and preparation.
"Businesses start and fail constantly," Guzman said during the panel. "Half of businesses don't succeed past five years, but finding what you're good at and arming yourself with those tools and resources so that that fear can be reduced is really critical."
Guzman's federal agency offers several resources and programs to make entrepreneurship seem less daunting, including "over 1,600 resource partners around the country," "financial and capital readiness" training and more than $4 billion in federal grants available yearly, she noted.
"There are incredible grants for capital for businesses, especially those that are early stage and need support and technical assistance," Guzman said. "But our model of growth is to get you funded and also connect you to the largest buyer in the world, which is the [Small Business Administration's] federal marketplace."
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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