Mark Cuban is worth an estimated 10.4 billion dollars today, according to Bloomberg, and the story he tells most often about how that fortune started has nothing to do with Broadcast.com or the Mavericks. It starts in a dorm hallway at Indiana University, where a broke junior with a tuition bill came up with a scheme he now describes plainly as basically a scam.
The pitch that worked because it had to
The setup was simple and, by Cuban's own account, not exactly original. He went door to door through his dorm asking residents to hand over 100 dollars each. He kept 50 of it and put the contributor's name on a list, with the promise that as more people joined underneath them, they'd move up the list and eventually get paid out by the people who signed on after. It's a structure anyone who has ever gotten a chain letter will recognize immediately, and Cuban has never pretended otherwise.
Why he still tells it, scam label and all
What makes the story stick isn't the mechanics, it's that Cuban owns the ugliest word for it himself instead of waiting for someone else to use it. He's said he made sure his own friends got their money back, a detail that softens the story just enough to keep it tellable, while the plain admission, basically a scam, does the opposite work of making it sound more credible, not less. The envelopes of 50 dollar payments that kept showing up covered his junior year expenses, and the story has outlived the hustle itself by becoming a fixture of how Cuban explains where his instincts came from.
