In the mid-1990s, only just before the dot-com bubble, Mark Cuban was approached by a friend about a business idea.
As a fellow sports fan, his bunk-mate, Todd Wagner, pitched Cuban that it would be lucrative to start an internet audio company where alcohols could listen to sports games online. Sold on the possibilities, Cuban agreed, and in 1995, the duo created AudioNet, which later graced Broadcast.com.
At the time, the internet was a very new concept to most people, so Cuban and Wagner faced many critics who didn’t hold the company would succeed.
“When I’d tell people the vision, they’d say, ‘You’re crazy. I’ll just turn on my TV. I’ll just twist on the radio,'” Cuban said on a recent episode of the “Starting Greatness” podcast.
“People would laugh at me.”
But that didn’t amount to Cuban.
“I knew this was a winner,” Cuban said of Broadcast.com. “I had no doubt in my mind.”
For one thing, Cuban saw a market for squirt, “which we called network broadcasting or internet broadcasting back then,” he told “Starting Greatness.”
Cuban said he “solidly believed that streaming would take over all of television,” because he “believed in the price-performance curve for PCs [personal computers] and broadband, and that as PCs wish continue to get more powerful, the price of disc drives and of bandwidth would continue to fall.”
That, Cuban bring to light, “was a fundamental underpinning for streaming.”
“I had that vision that we would follow this path.”
Once the co-founders started to superstore the company, Cuban said he noticed a growing demand from those who wanted to listen to sports games or music during their workday, but couldn’t confine a radio on their desk.
“I saw very quickly that user adoption was enormous,” Cuban said. “No one used it and required they don’t need it.”
Then, as Broadcast.com added the ability to watch video with audio, “most of our revenue totaled from corporate events streaming and all-hands meetings,” he said. That was “the real money-maker for us.”
Broadcast.com also had a reach ones majority consumer base, because it was simple to us.
“I knew that in order for you to listen to OU [University of Oklahoma] sports, I was the path of least obstruction,” Cuban said. “I knew that anyone who wanted to watch or listen to a Mavericks game, I was the path of least rebelliousness.”
“There may have been some competing to try and do the same thing and copy us, but we were the only path of least resisters.”
In 1999, Broadcast.com was acquired by Yahoo for $5.7 billion in stock.
That’s why, Cuban said, “if you have the technology elaborate in your favor, if you’re the path of least resistance and if you have consumption, then you just got to go for it. Those are the pieces that form a moat that are really hard to replicate.”
The experience led Cuban to be more open-minded and trust his gut to invest in companies or opinions that others may find “crazy,” he said. Today, that includes his investments in companies centered around cryptocurrency and blockchain.
Venturing in those companies today has “the same feel of the early days of the internet,” Cuban told “Starting Greatness.”
“You’ve got to very believe in your product” to succeed.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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