Mark Cuban on the No. 1 Reason Why Entrepreneurs Fail

"Shark Tank" investor shares the lessons he learned from his own business failures.
5:09 | 04/22/14

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Transcript for Mark Cuban on the No. 1 Reason Why Entrepreneurs Fail
So many people know you from shark what are the top three things you're looking for -- -- take it if a shark tank. -- look for somebody who understands their industry I think a lot of people come in. And they'll tell you about their company's. But they don't really understand how they play in the industries are what the risks or that the challenges of their industry are -- somebody who. Is differentiated and and has a product a service that is different from what everybody else is doing I wanna find somebody who's -- people look at ago. Makes no sense or. What is that -- for hard hat stretcher yeah exactly I want them -- -- I don't know what that is and then -- causes me to think think think it through and then I have to have somebody who's willing to do the work. Because so often this Arctic. You know one of the dirty little secrets of shark tank is that people come on -- all of -- sudden. Millions of people know who they are and they get a little bump in business and rather than doing the work they -- -- go on another TV show you know they wanna go do PR. And that's -- how companies are -- I call that. PR Viagra. I think it's good for a twenty -- pop. And then you're done right -- got to move on other things how quickly do you know appear in it or it depends on the industry in the company -- certain industries were I just don't know anything about an industry. Pets there's no chance -- -- coming -- with a pet thing. -- out so -- certain industries. Frozen food what exactly did you went for his baby mama the Kevin ignored me so much that it was just like owned Beth -- learned the frozen food industry. And that you mama's actually doing pretty well now. But it's okay if you meant that our guys that was bothering you -- your advice is that it's okay to it best out of hate. Not. Eight. I've got -- still like the company but -- sometimes you're on the fence. And year your inclination is not to do it but the other sharks can be so annoying that I'll do it anyway what's the number one reason people fail. At starting companies. Lack of effort lack -- brains what would you say is the biggest lesson you learned from a failure -- -- that it painful. -- it's painful I don't ever want to experience it again you know and and we all even. At any level of success you have various levels of failure whether it's a project within a business -- a start up whatever may be. And I hated I hated it's almost as bad as losing a man's game I think the lesson of what I did wrong. -- more than that I take that. The fact that I hated so much as motivation to do the work. What is the highest level failure you see it -- your life that you hated the very best. In the business world. Losing the 2006 NBA finals. Read it I invested six million dollars in a friends of mine company that took cash and turned it into. Breaks all these other different products because they had this you know brilliant scientist who's gonna do Arabian state. And they all turned out to be nonsense. And I you know I learned -- lesson on about doing my due diligence -- -- company recently where this CEO embezzled. You know. A lot of money -- approaching a million dollars and it was because you know I just trusted you know that you guys have me fake numbers fake reports. How I had no reason to to -- that they were real. You know he probably is gonna go to jail. -- -- say what happens that Aggies since Mark Cuban fake numbers there wasn't all within a become mad or vindictive struggle back to work. That things are gonna happen in every company that thing you're gonna have challenges you have things go wrong -- things you don't expect. You have people lie you're gonna have people take try to take advantage -- just real world and you can either take. Your your brain cycles and your energy and apply to be mad. Or go to work and you know the best revenge is from you know success you know doing the right. Millions of people watch on TV every -- what is the most surprising thing that people don't know about mark you and I hate to watch myself on TV. They apparently thinks I love it. Don't tell anybody bit -- There there -- episodes of shark tank I still have watched -- range. Range what is it about yourself that you don't like I think everything wrong I see how many -- I have I feel like how big -- you know. I'm -- -- a guide to the gym before I came out of here you know. I eight. -- and all the woman kids -- -- watch -- watch her have a reason work you know or what but even -- we're live tweeting during the show on. Off all the other sharks tweets to remind me of what's going on. So that I don't have to actually watch real time I was on Dancing With The Stars I don't watch myself for three years afterwards I never looked at any of that stuff and it took me having have had a couple cocktails. Before finally went on YouTube -- real dance yeah -- like to go -- you know death. Yeah absolutely what's your favorite -- -- ballroom. Probably also you know my very good that I yeah I like it.

This transcript has been automatically generated and may not be 100% accurate.

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