Mark Cuban's blog

My buddy Jason had a GREAT post about rules for startups. Read it, love it learn it.

Of course, anyone who has started a company has their own rules and guidelines, so I thought i would add to the meme with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them as well.

1. Don't start a company unless its an obsession and something you love.

2. If you have an exit strategy, its not an obsession.

3. Hire people who you think will love working there.

4. Sales Cures All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap

6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the john. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista... ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.

9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your Yobaby.com polo you sent them in public, you are mistaken and have no idea how to spend your money

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At Broadcast.com and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

These are all off the top of my head. But they have worked for me so far.

Unlimited choice seems to be the defacto "nirvana" when it comes to any and all things video. We all want what we want, when we want it, how we want it, for free if at all possible.

The reality is that even though we may index everything and anything digital and use search engines thinking we truly have access to everything, that is far from the truth. Google users "choice" goes as far as their search algorithms take the first results page. Rare is the search that goes beyond the 1st page. Which is exactly why SEO is so important to so many

We don't hunt through pages and pages of Digg or any other "wisdom of the crowds" engine. in fact, I've begun to use Mahalo (disclosure, Im an investor) more and more simply because it has a real person extend options beyond the basic algorithm.

Advances in storage technology have taken us to the point where we can and do put everything and anything on a hard drive and then make it available online. The choices far exceed our capacity to consume.

So how will we find new stuff ? New entertainment choices ?

Will it be purely from friends on social networks ? Will we verticalize and go to movie and music sites (or any other interest we may have) and join their social networks ? Will we just continue to trust Google and search engine algorithms to get us "the most relevant:" options with a suggestion here or there? Will it be a combination of the two ala Mahalo ? Or will we find "trusted brands" to guide us.

I know that TV networks want to be brands that we look to for specific types of entertainment. Spike wants to be for boys, USA Networks is all about crime, etc, etc.

At HDNet we focus our content on Men, 25 plus. Those who have graduated for the most part from Spike and want a mix of smarter programming and presentation. From Dan Rather to Torchwood to our brand of MMA, HDNet FIghts. We try to go older and smarter than other networks. But how do we get more people to connect. How do movies get people out of the homes to connect ? How does any tv show, let alone a tv network. What about a book ?

Is Oprah the best model ? Is she really a social recommendation engine with an outreach network of millions ? She obviously is a brand trusted by millions, are there others that could be as powerful ? Do they require a hit TV show ? A website , a blog, a Youtube channel ? What is the inflection point of impact in terms of numbers ? Or could Facebook or Myspace pages truly turn into trusted recommendation points that actually lead to purchases on a repetitive basis ?

If Mark Cuban on Facebook lists my favorite magazines, books, movies, what have you, will anyone care ?

I just don't think that people searching and results based on algorithms or context is the future of advertising and marketing.. There is another answer out there, the question is "what is it "?

This week the Soundtrack to Juno bounded to number one on the charts. A measly 65k units is all it took. Not great for a #1, but these days, its a great total for any theatrical soundtrack. Which raises a question. If a best selling soundtrack sells about 100k units, and 99pct of the rest sell under 10k units, is selling a soundtrack the best use of the music ?

I think not. Whether sold digitally or by CD, the reality of today's music and theatrical release market is such that music from movies would generate more total dollars for everyone if it were given away with the purchase of a movie ticket.

To release a major motion picture theatrically these days costs a lot of money. Not only does it cost a lot of marketing dollars to release a movie, not a single movie company in this country has any idea which money that it spends really drives people to theaters. Thats a problem. So where does music fit in ?

One way to entice people to get off the couch and attend more movies is to increase the value to customers. The most cost effective opportunity to increase value is to give away items to theater goers that have a very high perceived value, but a very lost cost of distribution.

Enter music.

How many people are going to rush out and buy the Soundtrack to the new Rambo movie ? But riddle me this. How many more people would go to the movie if they knew that their movie ticket stub had a code to unlock a free download of the movie's soundtrack ? Or if they bought a ticket online in advance of the release, they could download the soundtrack right from the online ticket site ?

Talk about a possible win win. Music publishers would make far more money getting paid a lump sump or for every song downloaded by ticket buyers than they would from sales of the soundtrack. The total cost per song to the studios would be a fraction of their marketing budgets and probably only in the thousands of dollars. The incentive to consumers to buy movie tickets, lets just say it would certainly be more than without the music.

And there is no reason to stop there. Why not offer downloads of the script to people who have already seen the movie (meaning the download of the script would start a couple months after the movie was released). It could be for free with a ticket stub code, or could be sold for a couple bucks per download without. Again, its just more value to the consumer, without much cost to the studio.

Bottom line, is that anything that can be delivered digitally as a download could be bundled into the value of a movie ticket and delivered from the ticketing site, the studio or from the theater's website. The cost to deliver a song, script or even video (like what you might find as extras on a dvd) digitally is nominal relative to the marketing investment required to get people to the theater.

Why not ?

I ordered a MacBook Air site unseen. That's a first for me.

As I write this I'm about to go workout and it dawns on me that I'm on my 3rd generation of Apple iPod. I started with the original, switched to a bigger version (to back up all my pics and show off my kids to my friends) and then for the holidays, got myself and wife an iTouch.

Goodbye ipod. With the new $20 dollar software that I downloaded yesterday, my iTouch gives me music, pictures and now email, calendar and a very cool basic GPS system that leverages the WiFi available. Touchtyping is still impossible for me on it, so it wont ever replace my phone for texting or primary mobile email, but its definitely encroaching on its territory. Solve the keyboard problem for fat fingered typists and I might even buy an iPhone.

I like the iTouch enough that I just sent an email to the Mavs IT head to see how we fans with iTouchs (and Wifi devices like Nokia among others) could leverage WiFi in the American Airlines Center before , during and after Mavs games, HDNet Fights and other events...

After many PC years, I've crossed over. Me the fanboy.

There once was a time when the release date of an album was exciting. For our favorite artists we knew when the last album came out and when the next album was due. If you loved the artist you bought it. If you didn't you either bought the single or you listened to the album with your friends and then decided.

As the price of records and then CDs increased year by year, spending 20 bucks for a CD became a purchase you needed to be sure of rather than a no brainer or impulse buy.

Then free became an option.

Then aggregating almost unlimited free music on a PC and then an IPOD became easy.

So here we are in 2008 and the only given in the music industry is that CD sales have and will fall. And fall. And fall.

Reading last weeks billboard, something interesting popped out at me. The song Low Rider by Flo Rida sold 467,000 units in a single week. There were 27 digital singles that sold more than 100k units in that week. The obvious trend continues that people are ready, willing and able to buy singles of songs they like.

So the question arises, why don't artists serialize the release of songs ? Why not create a "season" of release of songs, much like the fall TV season and promise fans that Flo Rida is going to release a new single every week or 2 weeks for the next 10 weeks ?

Sure, its not easy to come up with a great song every 2 weeks. But isn't that exactly the same problem you have with an album ? Maybe thats not the "creative process" for certain artists. That's a problem for them.

What we do know is that music fans will spend 99c and that its easier to ask them for 99c a week than it is to get 9.99 at one time from them for 10 songs.

Serializing the release of music also allows for the marketing arms to be in constant touch with sales and radio outlets. Rather than having to initiate marketing plans and hope to reinvigorate the interest in an artist, it becomes a digital tour that never ends.

If an artist commits to release music on a weekly or bi weekly basis, then consumers can make a commitment knowing they are going to get something new and hopefully exciting for their 99c. If the commitment is strong enough its feasible that artists could sell subscriptions to their serialized releases. My guess is that consumers will feel better about subscribing to an artist and getting a song a week or every 2 than dropping 10 dollars at a time for an album.

In reality thats exactly how I buy my music right now. I dont do it by artist. I go to iTunes and I go through the top 10 lists and listen to samples and thats how I determine what music I'm going to buy.

If there was an option when I bought a single to subscribe to an RSS feed that would send me a sample of that artists song when they released a single, I would add that RSS feed to my browser. Add a 1 click to buy, and chances are I'm going to buy a lot more music.

Is this idea so great I'm going to start a music label ? No chance. I wouldn't get in the music industry if you paid me. However, as a customer and a buyer of music, if I knew that my favorite artists were releasing music weekly, I would certainly check by every week or listen to what was in my RSS aggregator to see what new stuff they had for me.

Consumser are buying music 1 track at a time. I think people will pay 99c to get a single rather than steal it. I think people would rather steal a full album rather than pay 10 dollars or more for it.

Labels need to make the effort to get artists to deliver in a manner that realizes these perspectives.

The album is dead.

I had heard there was a 5k friend limit on Facebook. I just didn't take it to heart. Until I reached 5k and tried to add 5001., at which point FB reminded of the limit.

It was a weird moment, but actually one that I have come to respect and appreciate. Facebook went from being a way to broadcast information to 5k people, probably 4k of which I didn't know or even have a business link to, to a platform I either had to take seriously or walk away from.

I try to have open lines of communications with anyone who is interested in The Mavs, HDNet, HDNet Fights, 2929 Entertainment, Radical Buy or any of the many other businesses I'm associated with. If they had a question, I wanted to be able to at least acknowledge it, if not answer it. My email address, mark.cuban@dallasmavs.com is readily available across the net.

What I had not accounted for was that there were a lot of people who I had never met or had any connection to, who took the concept of FB "friending" literally. They wanted to interact as if we were long time friends. I was getting FB emails asking me how i was doing. What I was up to tonight. What did i think of X, Y, Z. Stuff that I was not going to tell a total stranger, even if they were my FB "friend"

So I started paring down "my friends". Based on where they lived, or what friends we did or didn't have in common, who they worked for and whether or not I thought there could be some, or any common ground. It was kind of a bizarre process of deciding who i didn't want as a :"friend". I actually felt bad "cutting" people from my friend list, but I really didn't have a choice.

I also had to make decisions on the 100 plus new friend requests I get per day. Could this person really be my friend ? Could this person really be someone i do business with ? Did I actually know this person ?

Its kind of a bizarre process of clicking on ignore and deleting friend requests. To any of you who I have deleted or ignored. Its nothing personal.

My new FB strategy is not exclusively about "friends" in the truest sense of the word. Its about three layers of "friends"

The first layer has my real friends. Those people who who I have actually met in real life and who I enjoy keeping in touch with. FB provides a great way to keep up with things with them via pictures, notifications, etc.

The 2nd layer is people who I have tangential connections to. They may just live in Dallas Fort Worth. They may be self proclaimed Mavs or MMA or movie fans, or in groups I'm in. For whatever reason there is something about them that I could connect to.

The 3rd layer is emerging as a very unique and interesting network in FB. Its what I will call "The Power Layer." These are people who in whatever industry they are in , retain some level of power. Having them as FB friends, although very simple and non committal, gives me some level of access to them, and them to me. These are people that if they sent me a FB mail, i would certainly read and respond to , and I think they would do the same.

Its what I could also call the one shot layer. If you have an idea or thought, you get 1 shot, per year to get their attention. Anything more than that probably could and would get me deleted. Everyone at this layer gets pitched continuously. Myself included. If you abuse it, you lose it.

I honestly was shocked at how many people that I really respect in the business world are on FB. It will be interesting to see if big business networking flourishes on FB or if participation on FB is just a way for "the Power Layer" to get a better understanding of, and to keep track of what is happening in the FB universe.

I love the feedback on my position on P2P traffic. The well thought out "You Suck", " Or "the internet isnt that way", or "The ISP is selling me 10mbs, I can use it anyway I want."

Guess what, business models do evolve over time. You may want your ISP to be exactly how you want it to be. You may read into your experience with them anything you want. But it can and will change if the economics don't work for them. No amount of whining about "what the internet is supposed to be" will change any of that.

You can argue about how fiber should make it all the way to your bathroom if you want, that won't create the capital for ISPs or force them to spend it the way you want them to.

Maybe instead we should look at some realities and options.

So I've come up with a better way to get rid of P2P without calling for an outright disabling of the protocol. Maybe ISPs should just treat upstream bandwidth the way cellphone companies treat minutes. Give users an option on how many upstream bits they want to be able to use and during what times of day.

Charge more during prime usage times, less during off hours. For most internet users, like probably 99pct of us, it wouldn't make a bit of difference in our bills or consumption. In fact, many of us could opt for cheaper plans because beyond the family photos or videos we may upload every now and then, or the rare backup of our hard drives, most people don't consume much outbound bandwidth at all.

Of course that probably wouldn't be the case for users and abusers of the P2P protocol and applications. Imagine what would happen when WOW users or the rare bit torrent WAREZ or illegal music or video downloader got their bills and realized that they could either throttle their upstream bandwidth and wait forever for their goodies (if they could get them at all ), or open the throttle and watch free downloads start to cost a lot of money. Think that would be fun ?

How are they going to feel when they get a bill for upstream bandwidth for periods when they werent even downloading anything, but their PCs were busy acting as seeds for other P2P clients ? Think they will enjoy paying that bill ?

So I take it all back. DONT block P2P traffic. Just charge for upstream bandwidth usage like cellphone companies charge for minutes. That way if P2P really is more efficient, it will be a non issue. More people will use P2P and will never have to worry about their upstream bandwidth charges.

Or, if its less efficient, it will survive for applications where the owner of the application is willing to pay for the bandwidth the application consumes at both the host and destinations. It could also survive if off peak pricing for upstream bandwidth is cheap enough that its worth it to the user to pay for the bandwidth and take delivery of files during that low priced time period. A truly market solution. Imagine that.

Let the "you suck" comments begin.

The surest way to get called names is to blog about something that people do or may disagree with. It doesn't matter what the topic is. It can be technology, sports, dancing, TV and probably something as benign as pizza.

The Hate and Noise to Content ratio seems to be increasing daily. The reality is, there is no such thing as a widely read blog without moderated comments that is profanity or hate free. Thats a shame.

So the question is, is it worth it to allow unmoderated comments ? Or is babysitting comments just part of the job of bloggers ? Or are comments just a waste of time under all circumstances ?

I'm not a Comcast customer. I happen to get service from Verizon, ATT and Time Warner at various locations where I pay for internet service.

If I was a Comcast customer, I would tell them, as I am now telling all the services I am a customer of:

BLOCK P2P TRAFFIC , PLEASE

As a consumer, I want my internet experience to be as fast as possible. The last thing I want slowing my internet service down are P2P freeloaders. Thats right, P2P content distributors are nothing more than freeloaders. The only person/organization that benefits from P2P usage are those that are trying to distribute content and want to distribute it on someone else's bandwidth dime.

Does anyone really think its free ? That all the bandwidth consumed with content being distributed by P2P isn't being paid for by someone ? That bandwidth is being paid for by consumers. Consumers who pay for personal, not commercial applications. When consumers provide their bandwidth to assist commercial applications, they are subsidizing those commercial applications which if it isn't already, should be against an ISPs terms of service.

Thats not to say there isnt a place for P2P. There is. P2P is probably the least efficient means of distributing content in the last mile. Comcast, Time Warner, etc should charge a premium to those users who want to act as a seed and relay for P2P traffic. After all, that is why P2P is used, right ? For content distributors to avoid significant bandwidth and hosting charges. That makes it commercial traffic far more often than not. So make them pay commercial rates.

That will stop P2P dead in its tracks. P2P isnt so good that people will use it when they have to pay for all the bandwidth it consumes. It will die a quick death. That will speed up my internet connection.

thats a good thing.

So hang in there Comcast

m

One thing continues to be a certainty in the technology world, NEVER challenge a sacred cow. If you do, the punches start flying. Of course the punches have to fly because the there isn't a real response otherwise.

I'm obviously not a huge P2P fan. Gordon Haff did a far better job than I explaining some reasons why. I think there. are valid applications for P2P on private networks, but nothing on the Internet that I think is worth surviving.

My position has nothing to do with Piracy. I think the MPAA and RIAA efforts towards piracy are a joke. They spend more money and waste more government resources than should be allowed. If they spent that money and time promoting why people should go to the movies and the value of owning music, those industries would benefit far more than anything they lose to piracy.

My position is not "if it uses bandwidth, its a bad thing". Flickr, Google Video, any host that pays for their bandwidth is all right by me. If they want to give it away, go for it. I actually think Google Video is a far better solution for audio and video distribution than any P2P solution. Google is willing to subsidize the worlds bandwidth for multimedia, why doesn't everyone take them up on their offer ? Go for it Google.

My position is not related to the Internet backbone. There is plenty of bandwidth there and will be for the short and as long a term as I can envision.

My position is related to the last mile. P2P is so incredibly inefficient. You send and receive the same bytes , which means for the portion of the file you are a seed for, you are at least 50pct inefficient. The more often you supply the bytes on your PC to others, the more you impose on the network. If there is a failure somewhere in the chain of delivery and assembly on the destination device , the error recovery process makes things far less efficient. All consuming more and more last mile bandwidth. The bandwidth that defines how fast my internet connection is.

I think the position that "you pay for the bandwidth, so you can use it any way you want" isn't reality and very flawed when it comes to P2P.

P2P "works" because those who install the clients are wiling to barter some of their bandwidth in exchange for getting a file that represents something of value to them. The bandwidth obviously has significant value to the person or company asking you to contribute it. That's why torrent clients and almost every P2P client requires you to contribute bandwidth in order to receive the goodies you want.

Bottom line, you are re-selling bandwidth. For those of you who like the buffet analogy, that's like saying you paid for the buffet, so its OK to take as much jello and mac and cheese as you can carry and walk outside the restaurant and sell it or trade it. Bizarre example, but it makes the point. Just because something is not metered and seemingly not suffering from any level of scarcity doesn't mean it isn't limited in availability and costly.

Because if it wasn't costly, we all would already have 1gbs to our home via fiber or free wireless everywhere.

The reality of our bandwidth to the home scenario today is that there isn't enough bandwidth to cure all ills. Last Mile Bandwidth is constrained and expensive to grow in multiples of what we all are ready and happily able to consume with legit applications

I personally don't want to see my connections slow down so P2P users can resell bandwidth to someone who isn't willing to pay for bandwidth in order to distribute their bandwidth consuming files.

but hey, that's me.