Mark Cuban shows us that it's not enough to play by the rules as they are defined. If you are going to achieve greatness as a startup, you need to find your EDGE...which means you have to outmaneuver your competition before they even engage with you on the competitive battlefield. You have to change the rules to your advantage and not just play by the rules as they are given to you. Never fall into the trap of not anticipating how a giant competitor will try to run you out of business someday...because it will happen every time if your startup matters in the first place.
Mark Cuban:
You have to ask yourself, who are you competing with? And whatever you do, you have to ask yourself, what's your edge?
Mark Cuban:
If you're trying to compete with me, you better know a whole lot more than I do about whatever business we're in. Because otherwise, I'm going to kick your ass.
Mike Maples:
These words from Mark Cuban illustrate a fundamental lesson of greatness. If your startup is going to be legendary, you must have the edge. Let's talk about why.
Mike Maples:
Welcome to Starting Greatness, a podcast dedicated to ambitious founders who want to go from nothing to awesome super fast. When you're a startup founder, you have to channel your inner James Bond, your MacGyver, your Wonder Woman. I'm going to help you win by curating the lessons of the super performers, but before they were successful. So without further ado ...
Speaker 3:
Ignition sequence, start.
Mike Maples:
Let's get started.
Mike Maples:
It's no secret that Mark Cuban loves basketball, the feeling of releasing the ball spinning from your hands as it lofts its way to the rim, and how the net makes a swish sound as the ball sails through, or the rush of owning an NBA championship team like the Dallas Mavericks in 2011.
Mike Maples:
Cuban often compare sports to startups, but believes that startups are much harder. In sports, you know exactly what to do, how many games, how many players and the like, but in startup competition, most of the rules are defined by competitors, who take the initiative, rather than fixed rule books. And it's going on 24/7, 365 days a year.
Mike Maples:
As a result, Mark believes that to win in business, you need to do more than just play the game well. You need the edge. So how do you get the edge? You remain on constant alert. You continuously learn from your experiences as well as others, so that you can make your business win, no matter how fluid the situation gets.
Mike Maples:
The edge is about shaping things, by taking the initiative, rather than being a reactor. And it's about keeping your offense on the field as much as you can, while forcing your competition to play defense, always.
Mike Maples:
When you have the edge, you realize that the business you're in is not just about you and your team and the rules for how they're defined today. It's about the competition around you, and your determination to win market.
Mike Maples:
Mark, in our conversation, describes this as kicking your own ass. So how do you kick your own to sharpen your edge? There are many ways, but three stand out in particular.
Mike Maples:
The first is will. Willpower involves two things. The first is the willingness to prepare, and the second is the grit to see things through. Mark Cuban says that legendary Indiana basketball coach Bobby Knight once told him, "Lots of people have the desire to win, or maybe even the will to win, but very few people have the will to prepare to win.
Mike Maples:
You can't just will your way to victory without having a plan that plays to your strengths and your competitors' weaknesses. Having the will to prepare to win means having clear goals. It also means getting real about identifying obstacles and problems that stand in your way, which leads to the second key part of the edge: focus.
Mike Maples:
In any startup or any business, there's a battle being fought, that above all battles, it's the one you must win, the one that matters more than all the others. As the leader, you must make sure you know which battle this is, and that you focus on winning it above all other things.
Mike Maples:
One of the masters at picking his battles was Bill Gates, when he ran Microsoft. One of his approaches was to take a think week at his family's vacation home in Hood Canal. He would emerge with clarity about the most important battle the company had to win.
Mike Maples:
In 1991, Bill's Windows Everywhere memo defined the critical battle around doing everything possible to make Windows successful, and the specific ways to make the strategy real, across all of their product initiatives. A few years later, in 1995, Gates came back from his think week and wrote his famous Internet Tidal Wave memo.
Mike Maples:
This time, he defined Microsoft's most important battle as winning the transition to the Internet. Gates immediately began deploying people in massive numbers to Internet Explorer, and other initiatives to aggressively embrace and extend the Internet. This is where focus, resilience and determination are so important.
Mike Maples:
We often jump to the next thing as a defense mechanism to avoid the realities of dealing with hard problems that must be solved with the current critical battle. Or we get lost in our interest and curiosity to pursue too many opportunities, that we drown in them, without ever accomplishing our most important goal.
Mike Maples:
Think back to Microsoft in 1995. They had hundreds of products. Everyone was approaching them, wanting to partner around applications, devices, consumer, enterprise, Pen computing, even porting their software to new chips and hardware. They were literally at the center of everything happening in the tech industry at the time. But Bill understood that Microsoft's response to the Internet Tidal Wave would define the company in the next decade.
Mike Maples:
He knew that failing to engage all of his energy into this one battle would jeopardize everything the company had worked so hard to build, from the early days of the PC revolution. He knew that succeeding in all these other areas would be meaningless, if he did not do everything possible to win this one key battle.
Mike Maples:
As the leader, you should only be focused on how to fight this one battle, when it comes to your startup. If there's other battles that matter, too, delegate. Even then, Cuban says it's best to have a single leader for every battle, someone who can bring the same level of maniacal focus and intensity.
Mike Maples:
Which brings me to the third part of the edge, constant competitive awareness. In our discussion, Mark emphasized that you always want to think about how a giant competitor could put you out of business. If you as a listener are leading a startup right now, and don't have an answer to this question, you are subjecting your startup to unacceptable risk.
Mike Maples:
It's easy in the early days to think that our product is great before we have big competition gunning for us, but we should always ask, "How could a big company at our market, and crush us?" Once again, this is an area where it's utmost important staff focus.
Mike Maples:
What would it look like for a massive competitor to come into your market and try to beat you? What would that look like? What can we do now to be ready before it happens? How can we stop the possibility of it happening?
Mike Maples:
To answer questions like these, I suggest you use the principle that I mentioned in my interview with Mark, called allocentrism. Allocentrism is about putting yourself in the shoes of the other, rather than thinking about yourself. You can't fall victim to the common trap of thinking of the competition through the lens of what you would do, or why you think your product is better, or why customers should like you more.
Mike Maples:
You need to give your competitors the benefit of the doubt, and assume they will be smart. You need to spend ample time imagining how your competition might play offense, what capabilities they might have to change the rules, or to create new barriers that threaten your startup.
Mike Maples:
Like chess, the key to allocentrism is the need to think of your challenger' moves, before they actually play them, so that you remain one step ahead. You want to anticipate potential competitive moves, and build whatever barriers you possibly can, before your competitor makes them, to stymie their efforts to succeed at taking your business in the future.
Mike Maples:
Let me provide a personal example. Earlier in my startup career, I was a co-founder of Motive, a company that delivered tech support over the Internet. We had a piece of software that ran in either computers from companies like Dell, or in software from vendors like PeopleSoft, or in broadband connections from service providers like AT&T.
Mike Maples:
Every quarter, we would consider a competitor or a set of competitors. Our CTO would try to assess the competitive technologies and capabilities, and what would be a realistic plan of attack, given their tech stack and expertise? Our sales and marketing people would look at how they get distribution, and visualize how they might attack us from a go-to-market perspective.
Mike Maples:
One quarter, we studied Microsoft. We asked ourselves, "What if Microsoft gave software away in Windows, that performed a lot of the roles our current software performed, for our PC OEM customers? What if they came up with new instrumentation and APIs that were incompatible with ours?" We concluded it was a very big threat, too much of one for us to tolerate.
Mike Maples:
Sure enough, Microsoft eventually did announce they would bundle software. They called it PC Health, and put it in the Windows operating system. But because we had thought about this in advance, we were ready for this big battle. We knew that customers bought from us for a bigger reason than the software that ran on the products they shipped. They wanted us to integrate the telemetry we gathered from products into their call center, and their support operations, along with our CRM systems, and other backend call center support software knowledge basis.
Mike Maples:
So we accelerated our efforts to deliver features that added value outside of individual computers running Windows. Most importantly, we got our customers bought into these features, as well as future roadmap features that would shift the terms of the competition, but far in advance of the threat. Because we were ready, and because we had gotten our customers ready, Microsoft's efforts to potentially replace us, never really took hold as they might have, If they'd caught us by surprise.
Mike Maples:
So back to the benefits of allocentrism. the most obvious one is the one we just discussed. It allows you to not get surprised in a way that puts you out of business.
Mike Maples:
But another very important benefit is it increases the confidence of your team. You want to be competitively prepared, from a morale perspective. The whole team will be much braver and more reassured. If they are already prepared for what might happen.
Mike Maples:
You see, there's a better way of thinking about giant competitors when they enter your market, and that is, that they're validating that your market matters, and making it mainstream. Think about it. What meaningful market is ever not going to attract a big competitor some day? The inspiring way to lead is to help the team know that this is a sign of progress. It's a step closer to greatness, if you execute, and if you already have a plan.
Mike Maples:
So what does this mean for you and your startup? The bottom line is, it's not enough to merely play well by the rules. Mark Cuban shows us that we must embrace the edge, if we're going to level up our own leadership abilities and achieve our wildly ambitious goals. And if you only take away one point from this episode, let it be this.
Mike Maples:
You must understand how a giant competitor would approach putting you out of business. Understanding and focusing on this existential threat in the future is key to your greatness. It's what lets you keep the edge, always.
Mike Maples:
Thanks for listening to this Lesson of Greatness. If you found this episode insightful, you might also enjoy my Lessons of Greatness episode called, You Have to Take the Initiative. In it, I discuss Commander John Boyd, whose work on agile competition when the stakes are life and death, is instrumental for founders who want to maintain the edge and maintain the initiative. Here's a preview of Commander Boyd's insights.
Commander John Boyd:
You have to take initiative. In other words, do you want to be a shaper or do you want to be a reactor? I can take initiative, whether I'm in the offense, and defense, or wherever I'm in, whether they move forward, backwards, backwards, or any direction.
Mike Maples:
I appreciate you listening and I'd love to have you subscribe wherever you get your podcasts, so you don't miss an episode. And if you like the show, I'd be grateful if you could leave us a review on Apple podcasts.
Mike Maples:
Until we catch up again, I hope you never let go of your inner power to do great things, in whatever matters to you. Thank you for listening.