i'm a man i'm a man i'm a video man
- The person who controls the algorithm
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- The following is aconversation with Mark Cuban,
a multi-billionaire businessman,
an investor and star ofthe series "Shark Tank,"
longtime principal ownerof the Dallas Mavericks,
and is someone who is unafraid
to get into frequent battles on X.
Most recently over topics of DEI, wokeism,
gender, and identity politics
with the likes of ElonMusk and Jordan Peterson.
This is the Lex Fridman podcast.
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And now, dear friends, here's Mark Cuban.
You've started many businesses,invested in many businesses,
heard a lot of pitchesprivately and on "Shark Tank."
So you're the perfect person to ask,
what makes a great entrepreneur?
- Somebody who's curious,they wanna keep on learning,
'cause business isever-changing, it's never static.
Somebody who's agile.
Because as you learn new things
and the environment around you changes,
you have to be able toadapt and make the changes,
and somebody who can sell,
because no business hasever survived without sales.
And as an entrepreneurwho's creating a company,
whatever your product or service is,
if that's not the most important thing
and you're just dying andexcited to tell people about it,
then you're not gonna succeed.
- But it's also a skillthing. How do you sell?
What do you mean by selling?
- Selling is just helping.
I've always looked atit about putting myself
in the shoes of another person
and asking a simple question,can I help this person?
Can my product help them?
From the time I was 12 years old,
selling garbage bags door to door
and just asking a simple question,
"Do you use garbage bags?Do you need garbage bags?
Well, let me save you some time.
I'll bring them to yourhouse and drop them off."
To, you know, streaming.
Why do we need streamingwhen we have TV and radio?
Well, you can't get accessto your TV and radio
everywhere you go.
So we kind of break downgeographic and physical barriers.
And, you know, Cost Plus Drugs.
You know, what's the productthat we actually sell?
We sell trust.
In a simplistic approach,we buy drugs to sell drugs,
but we add transparency to it.
And bringing transparency to an industry
is a differentiation, and it helps people.
- Trust in an industry that'shighly lacking in trust.
- Exactly.
- Okay, so what's the trickto selling garbage bags?
Let's go back there.At 12 years old, what?
I mean, is it just your natural charisma?
I guess a good question to ask,
are you born with itor can you develop it?
- Oh, you can definitely develop it.
Yeah, I mean, because sellinggarbage bags door to door
was easy, right?
It was like (bangs knuckles)12-year-old Mark going,
"Hi, my name is Mark, doyou use garbage bags?"
You know what the answer'sgoing to be, right?
"Can I just drop them off for you?
You know, once a week,whenever you need them,
you just call, and I'll bring them down."
"Sure."
So that was easy.
- But I'm sure you've been rejected.
- Oh yeah, of course.Not everybody says yes.
- What was your percentage?
- I don't remember, butit's pretty close to 100%.
- Oh, okay, never mind. Sothat's why you don't remember.
- Yeah, right.
'Cause who's gonna sayno to a 12-year-old kid
who's gonna save him time and money?
But you know,
typically my career whereI've started companies,
it's to do something thatother people aren't doing.
Whether it was connecting PCsand to local area networks
and at MicroSolutions.
And you know, the salesmanshipwas walking into a company
and just saying, "Look, talk to me
and I can help youimprove your productivity
and your profitability,is that important to you?"
And the answer is obviously always yes.
And then the question is, can I do the job
and can I do it cost effectively?
And so you didn't haveto be a born salesperson
to be able to ask those questions,
but you have to be able tobe willing to put in the time
to learn that business.
And that's the hardest part.
- I'm sure there's askill thing to it too,
in like how you solve the puzzle
of communicating with aperson and convincing them.
- Yeah, I mean, there'sskill from the perspective
that I read like a maniac.
Then like now
you can give me an exampleof any type of business
and it'll take me twoseconds to figure out
how they make money and how Ican make them more productive.
And I think that'sprobably my biggest skill,
being able to just drill down
to what the actual need is, if any.
And then, you know, fromthere, being able to say,
well, if this is what this company does,
and this is what their goal is,
how can I introduce something new
that they haven't seen before?
And is that a business that I can create
and make money from?
- So figure out how this kind of business
makes money in the present.
And then figure out,
is there a way to makemore money in the future
by introducing a totallynew kind of thing.
- Correct.
- And you can just do that with anything.
- [Mark] Pretty much, yeah.
- And you think you're born with that?
- No, I worked at it because, you know,
going back to what I saidearlier about curiosity,
you have to be insanely curious
because the world is always changing.
My dad used to say,
we don't live in the worldwe were born into, you know?
Which is absolutely true.
If you're not a voraciousconsumer of information,
then you're not gonna be able to keep up.
And no matter what yoursales skills or ability are,
they're gonna be useless.
- What'd you learn aboutlife from your dad?
You mentioned your dad.
- My dad did upholsteryon cars, you know, got up,
went to work everymorning at seven o'clock,
came back five or six,seven o'clock, exhausted.
And I learned to be nice.
I learned to be caring, Ilearned to be accepting.
Just, you know, qualities
that I think he really tried to pass on
to myself and my two younger brothers
were just be a good human, you know?
And I think, you know, hedidn't have business experience.
So as I got into business,he would just, you know,
say, sorry, Mark, I can't help you.
You know, I don't understandwhat you're doing.
He never went,
neither one of my parentshad gone to college.
You've gotta figure it out for yourself.
But he was also veryinsistent that, you know,
he worked at a companycalled Regency Products
where they did upholstery on cars.
And he would bring methere to sweep the floors,
not because he wanted meto learn that business,
because he wanted me to learn
how backbreaking that work was.
I mean, he lost an eyein an accident at work,
a staple broke.
And the only thing hewanted for my brothers and I
was for us to neverhave to work like that,
to go to college, to figure it out.
- You said to be nice.
That said, you also said that you
when you were first starting a business,
you were a bit more of an asshole
than you wish you would've been.
- Absolutely, yeah, yeah,because I was more of a yeller.
I was, you know, I didn't have.
- No really, Mark Cuban?
- You know, what you seeon the sidelines, you know,
with me at a Mavs game,maybe a little bit.
But I also didn't haveany patience for somebody
I thought wasn't using mykind of common sense, right?
Because I was always onthe go, go, go, go, go.
Particularly when I was younger,
just trying to be successful,
trying to get to the pointwhere I had independence.
And I would tell this to people, you know,
either you're speeding upand getting on the train,
or you know, we'll stop
and drop you off at the next station,
but let's go where you go.
- Did you have trouble withthe hire fast fire fast
part of running a business?
- Yeah, always, 'causeI hated firing people.
'Cause it meant, one, it was an admission
of a mistake in the hiring.
And two, the salesperson in me
always wanted to come out ahead.
And I was always horrible at firing.
But I always partnered with people
who had no problem with it.
So I always delegated that.
- Well, that's the tricky thing
when you're working with somebody
and they're not quite there,and you have to decide,
are they going to step upand grow into the person
that's the right, or they're not.
And in that gray area isprobably where you have to fire.
- Well, it's hard. Yeah, for sure.
Because, you know,
there is obviously a failuresomewhere in the process,
you know, what did we do wrong?
And when I would interviewpeople for jobs, I mean,
99% of the people I've everinterviewed I've wanted to hire,
because in my mind, it was like,
okay, I can figure out howto make this person work.
Right, and then they wouldn't,
and then, you know, peopleat the company'd be like,
Mark, you suck at this.
You know? And so I alwaysdelegated the hiring.
- Yeah, I mean, I'm the same.I see the potential in people.
I see the beauty in people,
and which is a great way to live life.
But when you're running acompany, it's a different thing.
- It's different.
And you gotta know what you're good at
and what you're bad at, right?
I was good at, you know, Iwas a ready, fire, aim guy,
and I always partnered with people
who were very anal and perfectionist
because where I could justgo, go, go, go, go, go.
They would keep me inside the baselines.
- They would do the duediligence, I suppose.
- Yeah, or just, yeah, the detail work,
the dot the i's and the cross the t's.
- What does it take totake that first leap
into starting a business?
- That's the hardest part.
It really depends on yourpersonal circumstances.
Like, I got fired.
I mean, I was sleeping on the floor
with six guys in athree bedroom apartment,
so I couldn't go any lower.
So there was no downside.- That's the bottom.
- Yeah, there was no downsidefor me starting a business.
And it was just like, you know,
I was 25 when we started MicroSolutions,
and, you know, I'd just gotten fired
and it was like, look,I'm a lousy employee.
I'm gonna just start goingto some of my prospects
that I had at my job,
and asked them to frontthe money that I needed
to install some software,
and found this company,Architectural Lighting,
who put up $500 for me thatallowed me to buy software
and have 50% margins.
And, you know, that'show I started my company.
- But like, by way ofadvice, would you say?
I mean, it's a terrifying thing.
- Yeah, I mean, you'vegotta be in a position
where you're confident.
You know, I get emails
and approached by people all the time,
you know, what kind ofbusiness should I start?
That tells me you're not readyto start a business, right?
Either you're prepared andyou know it, or you don't.
You know, in the United States,with the American dream,
everybody kind of alwayslooks at themselves
and say, okay, you know,I have this idea, right?
And then you go throughthis process of saying,
okay, you know, you talkto your friends or family,
what do you think?
And they almost always, oh,it's a great idea, tight?
Then you go on Googleand you say, oh my God,
no one else is doing it,without thinking, you know,
10 companies had gone outtabusiness trying the same thing,
but okay, it's on Google,and then people stop, right?
Because that next step means,
okay, I have to changewhat I'm doing in my life.
And that's not easy for 99% of the people.
Some people look at that as an opportunity
and get excited about it.
Some people get terrified,
because it's okay, maybe I'm comfortable,
maybe I have responsibilities.
And so whatever your circumstances are,
if you want to take that next step,
you have to be able todeal with the consequences
of changing your circumstances.
And that's the first thing.
You know, do you save money?
So you know so you have,you know, if you have a job,
but you have a mortgage,do you have a family?
You've gotta save money. Youcan't just walk, you know?
I mean, they've gotta eat andthey've gotta have shelter.
But on the other side of thecoin, if you've got nothing,
it's the perfect time to start a business.
- Yeah, desperation is a good catalyst
for starting a business,but in many cases,
the decision as you're talking about,
you're gonna have tomake, is to leave a job
that's providing somedegree of comfort already.
So I suppose when you'resleeping on the floor
and there's six guys,it's a little bit easier.
- It's really easy, right?
Particularly when you get fired
and you don't have a job, you know,
and you're looking at bartending at night
to try to pay the bills.
And so it wasn't hard for me,
but to your point, it reallycomes down to preparation.
You know, if it's important enough to you,
you'll save the money,you'll give up, you know,
whatever it is you need togive up to put the money aside.
If you have obligations,you'll put in the work
to learn as much as youcan about that industry
so that when you start yourbusiness, you're prepared.
And you can always, youknow, at night, on weekends,
whenever you find time,lunch, start making the calls
to find out if people willwrite you a check, you know,
or transfer you the money to buy
whatever it is you're selling.
And by doing those things,
you can put yourself ina position to succeed.
It's where people just think,okay, you know, Geronimo,
I'm leaping off the edge of a cliff
and I'm starting a business, that's tough.
- But sometimes that's likethe way you do it, though.
- There's always examples ofany situation or scenario.
Right, but I mean.
- [Lex] Anecdotal evidence for everything.
- Yeah, but if you'regoing into a new business,
you're gonna have competition
unless you're really, really,really, really, really lucky.
And that competition isnot gonna just say, okay,
let Lex or Mark just kick our ass.
And so you've gotta be prepared
on how you're gonna dealwith that competition.
- What do you think that is about America
that has so many peoplewho have that dream
and act on that dreamof starting a business?
- You know, I thinkwe've just got a culture
of consumption and more, you know,
and to get more, you've got to, you know,
creating a business gives youthe greatest potential upside
and the greatest leverage on your time,
but it also creates the most risk.
- So that capitalist machine,there's a lot of elements,
by contrast, the respect for the law.
Like an entrepreneur can trustthat if they pull it off,
the law will protect them,there won't be a government.
- Hopefully that's still the case, yeah.
- [Lex] Well, yeah,there's always something.
- Yeah, us versus othercountries, you're right, right.
So us versus other countries,
like Joe Biden of all people said to me,
it was at an entrepreneurship conference
that when he was vicepresident, he had put together,
and we had gone up there, abunch of us from "Shark Tank"
to talk to young entrepreneursfrom around the world.
And he said to me, "Mark, you know,
the one thing that separate,
I've been to everycountry around the world,
and the one thing that separatesus is entrepreneurship.
We're the most entrepreneurialcountry in the world,
and there's no one else who's even close."
And when you look at theorigin of our big, you know,
the biggest companies in theworld, for the most part,
there's an American originstory somewhere behind there.
And I think, you know, thatjust gets perpetuated on itself.
We see those Horatio Alger stories,
we see examples of theJeff Bezos of the world,
the Steve Jobs in the world,
and those are the typesof people we want to copy.
- Yeah, we wanna be really careful
and try to really figure out what that is,
because we don't wanna lose that.
- [Mark] For sure.
- We wanna protect the whatever, you know,
and that's a lot of the discussions about
what's the right way to do government,
big government, small government,what's the right policies?
But also culture, like who we celebrate.
One of the things that troubles me
is that we don't enoughcelebrate the entrepreneurs
that take risks and theentrepreneurs that succeed.
It seems like success, especiallywhen it comes with wealth,
is immediately matched with distrust
and criticism and all that kind of stuff.
- Yeah, it's changing for sure,
because, you know, you cango back just 12 years, right?
Traditional media dominated,let's just say through 2012,
you know, that was thepeak of linear television.
You know, newspapers weren't as strong,
but they still had somebreadth and depth to them.
And then social media comes along,
and everybody gets toplay in their own sandbox
and share opinions with peoplewho think just like them.
And it also gives them the opportunity
to amplify those feelings.
And I think that's wherecelebrating entrepreneurs
really started to subside some.
There were always peoplewho were progressive
that were like, billionaires are bad,
or millionaires are bad,depending on the time period.
But you didn't really see iton an ongoing basis, right?
It wasn't gonna be on the evening news.
It wasn't going to be in thefront page of the newspaper.
It was going to be, if you read a book
and someone talked aboutit, or you read a magazine
and there was an articletalking about, you know,
this progressive movement orthat progressive movement,
whatever it may be, youknow, or political parties.
But now all of that is frontand center on social media.
- Yeah, we're trying tofigure it out how we deal
with the mobs of peopleand the virality of it all.
And I think we'll find our footing
and start celebrating greatness again.
- Well, I mean, that's thewhole reason I do "Shark Tank."
- That's true. That showcelebrates the entrepreneur.
That's true.
- It's the only placewhere every single minute
of every single episode, you know,
we celebrate the American dream.
And the reason I do it iswe tell the entire country,
and it's shown around the world even.
You know, we're amazingadvertising for the American dream
in I don't even know how many countries.
But every time somebodywalks onto that carpet
from Dubuque, Iowa orKetchum, Idaho, you know,
that sends a message toevery kid who's watching,
seven, eight, nine, 10, 12-year-old kid
that if they can do it fromKetchum, Idaho, you can do it.
If they can have this idea and get a deal,
or even present to the Sharks
and have all of Americasee it, you can do it.
And that, I mean, I'm proud of that.
The 15 years of that, isjust, it's just been insane.
You know, now kids walkup to me and go, yeah,
I started watching youwhen I was five or 10,
and I started a business
'cause I learned aboutit from "Shark Tank."
And so, you know, I think, you know,
it celebrates it and we convey it.
And I don't think it's going away,
but there are differentbattles we have to fight
to support it.
- Yeah, I love even when
the business idea's obviously horrible,
just the guts to step up.
- [Mark] To be there.
- And to believe inyourself, to really reach,
I mean, that's what matters.
I mean, 'cause like someof the best business ideas
are probably, maybe even youand "Shark Tank" will laugh at.
- Oh, for sure.
You know, without question, the good ones,
we're not gonna recognize every good one.
And then sometimes we'lljust motivate people
to work even harder to get it done
'cause of what we say tothem, and that's fine too.
You know, there's beengreat success stories
that we said no to.
- What stands out aslike a memorable business
you've been pitched on "Shark Tank"?
What's the best one thatstands out on in memory?
- There's no best one,right? They're all different.
They're all best intheir own way, I guess.
The stupid ones.
And you know, we haven'thad any, you know,
world changing earthshattering ones, right?
Because those aren't gonnaapply to "Shark Tank."
They don't need us, right.
You know, so we typically get businesses
that need some help atsome level or another.
But there's ones I've passedthat I wish, like Spikeball.
Do you know what Spikeball is?
So it's this rebounding netthat you can put on the beach
and you have these yellow balls
and you play a game of, you know,
it's just a competitivegame, but they're killing it.
So if you go to beaches in New York or LA,
you'll see kids playing it all the time.
And it was a fun game that Iwish I had done a deal with.
And there's been others.
- [Lex] And you passed.
- And I passed.
They were getting some traction,
and they wanted to createleagues, Spikeball leagues,
and they wanted me to be the commissioner.
And I didn't want to be a commissioner
of a new Spikeball league.
- So you have to kindahave this gut feeling
of will this scale, willthis click with people?
- Of course.
Yeah, can it be protected?Is it differentiated?
Is it something thatmakes me think, you know,
why didn't I think of that?
Or is it just a good solid business
that's gonna pay a return to the founder
and may not be enough of a business
to return to an investor?
- Yeah, I mean, and I guess
the question you're trying to see,
will this scale, there's promise,
will the promise materializeinto a big thing?
- Well, see, I don't even care
if it's gonna be a big thing, right?
'Cause it's all relativeto the entrepreneur.
We had a 19-year-oldfrom Pittsburgh, Laney,
who came on with a simple sugar scrub.
And there was nothingoutrageously special about it.
I didn't see it becoming ahundred million dollar business.
I thought it could become atwo, three, $5 million business
that paid the bills for her.
And that was good enough.
And, you know, six monthsafter the show aired,
she called me up, she goes, Mark,
I've got a million dollars in the bank.
What am I gonna do? I'm like, enjoy it.
Put aside money for yourtaxes, and go back to work.
You know, and so it doesn'thave to be a huge business.
It's just gotta be one thatmakes the entrepreneur happy.
- But then there's thevaluation piece, I mean.
Do a lot of the entrepreneurs overvalue?
- [Mark] Yeah, of course.
- The business?
- Yeah, I mean, that'sthe nature of it, right?
I mean, and that's really
where the biggest conflictsin "Shark Tank" happened.
That's in evaluation.
They, you know, they thinkthis is the best business ever.
You know, there we had onelady couple that came on
and they had this scraperfor cat's tongues, right.
- [Lex] Nice.
- It was bizarre. Themost bizarre pitch ever.
- [Lex] I love it.
- You know, and they hadthis insane valuation,
and it was on becauseit was corny and fun TV,
not because it was a good business.
- Oh really? Okay, yeah, youdidn't see the potential.
- [Mark] None. Yeah, none.
- There's a lot of cats inthe world, Mark, come on.
- Yes, there are. And they'llgo do very well without me.
- So how do you determinethe value of a business,
whether it's on "SharkTank" or just in general?
- It's actually really easy, right?
So if you take, just to use an example,
a business that's valued at $1 million,
and I want to buy 10% ofthat company for $100,000,
then in order for me to get my money back,
they've gotta be able to generate $100,000
in after tax cash flow thatthey're able to distribute.
Can they do it or can they not, right?
And if it's $2 million,whatever the valuation is,
that's how much cash, aftertax cash they have to generate
to return that money to investors.
Or the other option is, do they, you know,
do I see this as businesspotentially having an exit?
Right, do they have some unique technology
or do they have somethingspecific about them
that some other companywould want to acquire?
Then the cash flow isn't as,
I don't wanna say important,
but isn't going to guide the valuation.
- And how do you know if acompany's gonna be acquired?
So it's the technology, like the patents,
but also the team, is it?
- Yeah, it could be anyof the above, right?
It could be, it could bea super products company
that I think is gonna take off.
- And how do you know ifthey can generate the money?
What's the, you made itsound easy, you know?
- Yeah, I mean, can the person sell?
You know, and if not them, can I do it,
or someone on my team do it for them?
- So you're looking at the person.
- Yeah, for sure. Yeah.
Barbara Corcoran's the best.
She can look at a person andhear them talk for 20 minutes
and know can that persondo the job and do the work?
- Can you tell if they'refull of shit or not?
So one of the things with entrepreneurs,
they're kind of like we said overvaluing,
so they're maybe overselling themselves,
but also they might be full of shit
in terms of theirunderstanding of the market,
or also like, or exaggeratingwhat their thing can do,
all that kind of stuff,can you see through that?
- Yeah, for sure. Just byasking questions, you know.
So if they are delusional at some level
or misleading at another level,I'm gonna call them on it,
you know, so you get people
trying to sell supplementsthat come on there
and it's a cure for canceror whatever it may be.
Or there's this latest fad that, you know,
increases your core strengthwithout doing any exercises.
You know, shit like that,I'm just gonna bounce,
I'm gonna pound on them, right.
- See, I still love that.
I still love the trying, just trying.
- No, you know, give them credit, right?
Because they know all ofAmerica's gonna see it,
and they're deluded themselves to believe
this story so strongly.
- I mean, there's a delusional aspect
to entrepreneurship, right, like you just.
- See, that's a great question.
Do you have to beambitious, and, you know,
set aside reality at some level
to think that you can create a company
that could be worth 10, 100,a billion dollars, right?
Yeah, at some level.
'Cause you don't know,it's all uncertainty.
But I think if you're delusional,that works against you,
because everything's grounded in reality.
You've got to execute, you'vegot to produce, you know,
you can have a vision, right?
And you can say, this iswhere I want to get to,
and that's my mission, orthis is my driving principle,
but you still gotta executeon the business plan.
And that's where most people fail.
- Yeah, you have to be kindof two brained, I guess.
You have to be able to dip into reality
when you're thinking about like,
the specifics of the product,how to design things,
like the, you know, the first principles,
the basics of how to build the thing,
how much it's gonna cost, all of that.
- Yeah, I mean, 'cause ifyou can't do the basics,
you're not gonna be ableto do the bigger things.
And at the same time,you've gotta be able,
one of the things that entrepreneurs do
that I always try to remindany that I work with on,
is we all tend to lie to ourselves.
Our product is bigger,faster, cheaper, this or that.
As if that is a finite situation,
that's never going to change, right.
And there's always somebody,
I call them leapfrog businesses.
Whoever's competing against you, you know,
if you do A, B, or C, they'regonna try to do C, D, and E.
Right, and you better beprepared for that to come,
because otherwise they'reout of business too.
So you're never in a vacuum.
You're always competing against
sometimes an unlimitednumber of entrepreneurs
that you don't even know exist
who are trying to kick your ass.
- And the tricky part of all this too
is you might need to frequently pivot,
especially in the beginning.
- Hopefully not.
- So you think like in thebeginning, the product you have
should be the thing thatcarries you a long time.
- Yeah, because I mean
that's your riskiest point in time, right?
And so if you've done your homework,
which includes going out there
and testing product marketfit, you should have confidence
that you're gonna be able to sell it.
Now if you didn't do your homework
and you go out there andyou sell whatever it is,
and you've raised money orwhatever, just to pivot,
you've already shown
that you haven't beenable to read the market.
And so it's not that pivots can't work
and always don't work, they can,
but more often than not, they don't.
You pivot for a reason.
That's because you made a huge mistake.
- Well, I also mean like the micro pivots,
which is like iterativedevelopment of a thing.
- Oh yeah, oh, that's not,yeah, just iterations, yeah.
You know, entrepreneurshiphaving any business
is just continuous iteration, continuous,
your product, your salespitch, your advertising,
you know, introducing new technology.
How do you use AI or notuse AI, where do you use it?
What person's the right person?
There's just a milliontouch points, you know,
that you're alwaysreevaluating in real time
that you have to be agileand adapt and change.
- But especially in software,
it feels like business modelcan evolve really quickly too.
Like how are you gonna make money on this?
- Software for sure.
Because you know, anything digital,
because it can change in a millisecond.
- Speaking of which, how didyou make your first billion?
- So my partner Todd Wagner and I
would get together for lunches,
and we were at California Pizza Kitchen
in Preston Hollow in Dallas.
And he was talking about
how we could use this newthing called the internet.
This is late '94, early '95,
to be able to listen to IndianaUniversity basketball games.
'Cause that's where we went to school.
And he was like, look, whenwe would listen to games,
we would have somebodyin Bloomington, Indiana
have a speakerphone next to a radio.
And then we would have aspeakerphone in Dallas,
and you know, six pack or 12 pack of beer.
And we'd sit around listening to the game
because there was noother way to listen to it.
So I was like, okay, my firstcompany, MicroSolutions,
you know, I'd written software,done network integration.
And so I was comfortable digging into it.
And so I'm like, okay,let's give it a try.
So we started thiscompany called AudioNet,
and effectively became
the first streaming contentcompany on the internet.
And we're like, okay,
we're not sure how we'regonna make this work,
but we were able to make it work.
And we started going to radiostations and TV stations
and you know, music labels and everything.
And evolved audionet.com,
which was only audio at the beginning,
to broadcast.com in 1998,which was audio and video,
and became the largestmultimedia site on the internet.
Took it public in July of 1998.
It had the largest first day jump
in the history of thestock market at the time.
And then a year later we sold it to Yahoo
for $5.7 billion in Yahoo stock.
And I owned, you know, rightaround 30% of the company,
give or take.
And so after taxes,that's what got me there.
- Well, there's a lot of questions there.
So the technical challenge of that,
you're making it soundeasy, but you wrote code,
but still in the earlydays of the internet,
how do you figure out how tocreate this kind of product
of just audio at firstand then video at first?
- A lot of iterations,right? Like you talked about.
We started in the secondbedroom of my house,
set up a server.
I got an ISDN line, which was 128K line,
and set up, downloaded Netscape server,
and then started usingdifferent file formats
that were progressive loading
and allowing people toconnect to the server
and do a progressivedownload so that the audio,
you can listen to the audio
while it was downloading onto your PC.
- Yeah, and was it super choppy?
So you're trying tofigure out how to do it.
- Oh yeah, for sure, forsure. It would buffer.
It was, yeah, it wasn'tgood, but it was a start.
- But still was good enough,'cause it's the first, kind of.
- Yeah, because there wasno other competition, right?
There was nobody else doing it.
And so it was like, okay,
I can get access to this, this, or this.
And then there were some thirdparty software companies,
Zing and Progressive Networks
and others that took ita little bit further.
So we partnered with them,
and I started going tolocal radio stations
where literally we would setup a server right next to it.
I had a $49 radio, the highestFM radio that I could find.
And we'd take the output ofthe audio signal from the radio
with these two analog cables,plug it into the server,
encode it, and make itavailable from audionet.com.
Then I would go on UUNET bulletin boards.
I would go on CompuServe,I would go on Prodigy,
I would go on AOL, I'd gowherever I could find bodies.
And I'd say, okay, we'vegot this radio station,
KLIF in Dallas, it's got Dallas Sports
and Dallas news and politics.
And if you're in an officeor you're outside of Dallas,
connect to audionet.com,
and now you can listen tothese things on demand.
And that's how we started.
And it started with one radio station
and then it was five, then it was 10,
then it was video content,
then the laws were different then.
So we could literally go outand buy CDs and host them
and just let peoplelisten to whatever music.
And we went from, you know,10 users a day to 100 to 1,000
to hundreds of thousands to a million
over those next four years.
- How did you find theusers? Is it word of mouth?
- Word of mouth.
- [Lex] Just word of mouth.
- Didn't spend a penny on advertising.
- So the thing you were focusing on
is getting the radiostations and all that.
- Oh, radio and TV,anything, any content at all.
- Did you pick up the phone?What'd you, how'd you?
- Wherever I could, likeeverything that was public domain,
I'd go out and buy a video or a cassette,
whatever it was, you know.
And this was before the DMs,
the Digital MillenniumCopyright Act of '97,
whenever it kicked in.
So literally anything that was audio
we would put online sopeople could listen to it.
And if you think about somebody at work,
they didn't have a radio most likely.
And if you did, youcouldn't get reception.
Definitely didn't havea TV, but you had a PC,
and you had bandwidth available to you.
And the companies weren't up on firewalls
or anything at that point in time.
So our in-office listening,you know, during the day,
just exploded, becausewhoever's sitting next to you,
what are you listening to, right?
And that was the start of it.
And then, you know, in early'98 we started adding video
and just other things.
And we had ended up withthousands of servers.
You know, there was no cloud back then.
And just pulling together allthose pieces to make it work.
But where we really made our money
was by taking thatnetwork that we had built
and then going to corporations and saying,
look, you know, in it's 1996, '97, '98,
and to communicate withyour worldwide employees,
what they would do is theywould go to an auditorium
that had a satellite uplink,
and then they would havepeople go to like theaters
or ballrooms and hotels thathad satellite downlinks,
and they would broadcast, you know,
their product introductions, whatever.
And so we said to them, look,
you're paying millions of dollars
to reach all your employees,when you can do it.
Pay us a half a million dollars,
and we'll do it just on their PCs at work.
So we did, you know, whenIntel announced the P90 PC,
we, you know, charged them$2 million or whatever
to do that.
When Motorola announced anew phone or a new product,
we would charge them.
And so we used the consumer side
to do a proof of concept for the network.
And then we would take thatknowledge and go to corporations
and that's how we made our revenue.
- And there's some sellingthere with the corporations.
- Yeah, a lot of selling there.
But we were saving them so much money.
And they were technology companies
they wanted to be perceivedas being leading edge.
And so it was win-win.
- How much technical savvy was required?
You said a bunch of servers.
Like at which point doyou get more engineers?
How much did you understand,could do yourself?
And then also, once youcan't do it all yourself,
how much technical savvy is required
to understand enough tohire the right people
to keep building this and innovation?
- I did all the technology,
and then we hired engineerafter engineer after engineer
to implement it.
And so, yeah.
From putting together amulticast network, to software,
to just all these different things.
- Was this like a scary thing? Like is.
- It's terrifying, right.
Because as we were growing,trying to keep up with the scale
and literally we'rebuying off the shelf PCs,
and then, you know, server cardsas the technology advanced,
and hard drives, and things would fail.
And we would have to, you know,
we didn't have machine learning back then
to do an analysis of, you know,
how to distribute server,you know, resources.
So, you know, like there was a time when
Bill Clinton and all theMonica Lewinsky stuff happened.
They released the audioof their interviews of him
or something like that, right.
And we literally, I knewat that point in time
when that was released,
everybody at work was gonnawanna listen to it, right?
So we had to take down servers
that were doing ChicagoCubs baseball, right.
You know, and just make allthese on the fly decisions
because there was no, we didn'thave the tools to analyze
or be predictive.
But yeah, it was all technologydriven and marketing.
- The acquisition by Yahoo,can you tell the story of that?
But also in the broader contextof this internet bubble.
This is a fascinating part
of human history, yeah.- Sure, it was crazy.
So on the acquisition side,
we were the largest mediasite on the internet.
And it wasn't close.There was nobody close.
We were YouTube,
and relatively speaking,we would be 10X YouTube
relative to the competition'cause there was nobody there.
And so it became obviousto Yahoo, AOL, and others
that they needed a multimedia component.
And we had the infrastructure,the sales, all that stuff.
And so Yahoo, when we went public in '98,
or right before, I think it was,
they made an investmentof like $2 million,
which gave us a connection to them.
And then after we went public,
they decided they neededto have multimedia.
And so in April of '99, we made a deal.
And then July of 2000's when it closed.
- And can you explain to me
the trickiness of what you did after that?
Which is the?
- On the collar.
- [Lex] Yeah.
- Okay, so when we sold to Yahoo,
we sold it for $5.7billion in stock, not cash.
And so I looked at, you know,
after MicroSolutions, when Isold that, I took that money
and initially I told my broker
I wanted to invest like a 60-year-old man
'cause I wanted to protect it.
But then he started askingme all kinds of questions
about all these technologiesthat I understood.
Like networks I had installed.
We had become one ofthe top 20, let's say,
systems integrators in the country.
At one point in time
we're the largest IBM tokenring installer in the country.
It was crazy, right?
Banyan, that name, blast fromthe past, I mean, so anyway,
so these Wall Streetbankers, or analysts rather,
that were the big analystsof the time would call me up.
'Cause they would ask my broker,
what does he know aboutthis product, this product?
And I knew them all,
what was working and not working, right.
And so the ones that worked,you know, I say that's working.
And I'd see the stock, they say something,
the stock would go up 20 bucks, right.
So I'm like, well, and mybroker's like, you need to,
you know this better thanthey do, you need to invest.
So I started buying and selling stocks.
And this was in 1990,and was just killing it.
I was making 80, 90, 100% ayear over those next four years
to the point where guy came in
and asked to use my trading history
to start a hedge fund, which we did.
And I sold within ninemonths. It was great, right?
But the point being, as it goes forward,
so when we sold to Yahoo,
I already had a lot ofexperience trading stocks,
and I had seen differentbubbles come and go.
The bubble for PC manufacturers,
a bubble for networking manufacturers,
they went up, up, up, up, up.
And then they came straightdown after the hype,
or somebody just leapfrogged them.
And so when we sold to Yahoo, I was like,
I've gotta B next to my name.
That's all I need, or all Iwant. I don't want to be greedy.
And I'd seen this story before
where stocks get reallyfrothy and go straight down.
And I knew that because allof what I had was in stock.
I needed to find a way tocollar it and protect it.
So understanding stocks and trading
and options and all that.
My broker and I, we wentand shorted an index
that had Yahoo in it.
And so the law at the time was
you couldn't short any indexes
that had more than 5% ofthat stock in it, right.
Of any one of the Yahoo stock.
And so I took pretty much20 some million dollars,
everything I had at the time,and I shorted the index.
- This is fascinating by the way.
'Cause it's based on yourestimation that this is a bubble
- Or just my not wanting to be greedy.
- Sure, so the foundationof this kind of thing is
you don't wanna be greedy.
- Yeah, I mean, how muchmoney do I need, right?
You know, where other people were saying,
oh, I think it can go uphigher, higher, higher.
I was like, I went on CNBC,and I told them what I had done
and they were like,
and Yahoo Stock had gone up significantly
from the time I had collared.
And one of the guy, JoeKernen was on there.
"Don't you feel stupid nowthat Yahoo stock has gone up,
you know, X percent more?"
I'm like, "Yeah, I feel realstupid sitting on my jet."
- But I mean, there issome fundamental way
in which bubbles are based on this greed.
Just greed.- Oh, for sure, for sure.
Yeah. And I'd seen it before,right, like I just said.
And so what I did waswe put together a collar
where I sold calls and boughtputs, and as it turned out,
when the market justcratered, I was protected.
And, you know, over thenext two, three years,
whatever it was, it converted to cash,
paid my taxes, et cetera.
But it protected me.
And as it turns out,
it was called one of thetop 10 trades of all time.
And what was even moreinteresting out of that period,
my broker at that timewas at Goldman Sachs.
And I had asked him tosee if there was a way
to trade the VIX, right,the volatility index.
And there wasn't, right.
And so one of the people that Goldman
that we were working withto try to create this
actually left Goldman
and created indexes thatallowed you to trade the VIX.
- Well, it's not trivial tounderstand that it's a bubble.
I mean, you're kind of lesseningyour insight into all this
by saying you just didn't wanna be greedy.
But you still had tosee that it's a bubble.
- Yeah, I mean, yeah,
obviously if I thought itwas gonna keep on going up,
and there was intrinsic value there,
I would've stayed in it.
But it wasn't so much Yahoo,
it was just the entire industry.
Back then, you know, like we'relooking at the magic seven
or whatever it is stocks now.
And people were asking, is it in a bubble?
And when I would get into cabs
and people would just starttalking about internet stocks,
there were people creatingcompanies with just a website
and going public.
You know, that's a bubble, right?
Where there's no intrinsic value at all.
And people aren't even tryingto make operating cap profits.
They're just trying toleverage the frothiness
of the stock market.
That's a bubble. Youdon't see that right now.
There's not companies,you don't see hardly,
you don't see any IPOsright now for that matter.
So, you know, I don't thinkwe're in a bubble now,
but back then, yes, Ithought we were in a bubble,
but that wasn't reallythe motivating factor.
- Do you think it's possible
we're in a bit of an AI bubble right now?
- No, because we're not seeing
funky AI companies just go public.
If all of a sudden wesee a rush of companies
who are skins on other people's models,
or just creating models to create models
that are going public, then yeah,
that's probably the start of a bubble.
But that said, my 14-year-old
was bragging aboutbuying Nvidia, you know,
with me in his Robinhood account.
He tells me the order, I placed it,
and he was like, oh yeah,it's going up, up, up.
You know, and I'm like, yeah,we're not quite there yet.
But that's, you know, that'sone thing to pay attention to.
- Yeah, we're flirting with it.
You said that becoming abillionaire requires luck.
Can you explain?
- Yeah, I mean there's no business plan
where you can just start it and say, yeah,
I'm definitely gonna be a billionaire.
You know, if I had to start all over,
could I start a companythat made me a millionaire?
Yeah, 'cause I know how tosell and I know technology
and I've learned enoughover the years to do that.
Could I make 10 million? Probably.
100 million? I hope so.
But a billion, just somethinggood has got to happen.
You know.
- The timing.
- Timing, you know,
internet stock market was goingnuts right when we started,
you know, and that certainlyI couldn't predict or control,
you know, it's like AI right now,
AI's been around a long,long, long, long time.
And the Nvidia processors, or GPUs rather,
you couldn't predict that now's the time
that they were gonna getto that cost effectiveness
where, you know,
you could create models and train them
and although it's expensive,it's still doable.
You know, we didn't reallyeven, we had Asics, right,
for custom applications
and we had CPUs that were leading the way,
but GPUs were more forgaming and then cryptomining,
and then all of a sudden
they were the foundation for AI models.
- So I think luck being essentialto becoming a billionaire
is a beautiful way to see life in general.
First of all, I personally think that
everything good that's ever happened to me
is because of luck.
I think that's just a good way of being.
It's like you're grateful.
That said, there's some examplesof people that you're like,
they seem to have done a lot of,
they seem to have gotten lucky a lot.
You know, we mentioned Jeff Bezos.
It seems like he did alot of really interesting,
powerful decisions formany years with Amazon
to make it successful.
- But he was really ableto raise money, right?
A lot of money.
And people were really dismissive of him
because they weren't profitable.
And we were in an environment
where it was possible to raise that money.
- It was possible to raise that money.
I mean, what about somebody you get
sometimes feisty with on the internet?
Elon, who couldn't even look at Zuck
and Bill Gates and Warren Buffet.
- Sure, look, Zuck was justtrying to get laid, right.
And it took off, and hewrote some good stuff.
- Aren't we all?
Is that a foundationof human civilization.
- Right, at some level, right.
But yeah. So more power to him, right.
You can't take anything away from him.
But yeah, Snapchat, same thing, took off.
Apps didn't take off in 2007when the iPhone came out.
Apps took off in 2011, 2012.
And if you were there with theright app at the right time,
and even Facebook, you know,in 2004 the bubble had burst,
and you know, the price forcomputers had fallen enough
and kids in school allneeded computers or laptops.
If he had tried to dosomething like that, you know,
five years earlier, Imean, he was too young.
But, you know, five yearsearlier or five years later,
you know, or Friendstermight've been the ultimate,
or MySpace.
- Friendster, I remember Friendster.
- Or MySpace, I had a MySpace account,
and that was before Facebook.
- Yeah, the timing's important,
but there's like the detailsof how the product is built,
the fundamentals ofthe product, like what?
- Well, so, but that's what gets you,
when the opportunity is there, right?
That's what allows you to takeadvantage of that opportunity
and the kismet of it all, right?
You've gotta be,
'cause it wasn't like anyof the people I mentioned,
there weren't others tryingthe same thing, right.
You had to be able to see it,
you had to be able to visualize it
and put together a plan of some sort,
or at least have a path, andthen you had to execute on it.
And do all those things at the same time,
and have the money available to you.
Because it wasn't like, whetherit was Google or Facebook,
you know, they raised a shitload of money.
It wasn't bootstrappingit that got them there.
- And raising money isnot just about sales,
it's about the generalfeeling of the people
with money at that time.
- [Mark] And proximity.
- Oh yeah, sure.
- If Zuck wasn't at Harvard,
and he was at Miami of Ohio University,
or he was at RichlandCommunity College, same idea,
same person, same execution, and nothing.
- I believe in the power ofindividuals to find their,
to realize their potential nomatter where they come from.
- I agree, I agree 100% with that, right.
- [Lex] But luck is required.
- Yeah, I mean, scale is, theonly delta is scale, right.
You know, we're not all blessedwith the access to the tools
that you need to hit that grand slam.
- But then also,
billion is not the onlymeasure of success, right.
- Absolutely not, right.
Everybody defines theirsuccess in their own way.
- How do you define success, Mark Cuban?
- Waking up every day with asmile, excited about the day.
You know, I was, you know,people always say, well,
when you get that kind ofmoney, does it make you happy?
And my answer always is,
if you were happy when you were broke,
you're gonna be really,really, really happy
when you're rich.
- But you gotta work on beinghappy when you're broke,
I guess.
- Well, you're just being happy, right?
If you were miserable, youknow, in your job before,
there's a good chance you'restill gonna be miserable
if that's just who you are.
- That's a pretty good definitionof success, by the way.
- [Mark] Thank you.
- How do you reach that successby way of advice to people?
- You know, we talkedabout my dad, my parents.
I never looked at my dad
and said, okay, you're not successful.
He busted his ass.
And when he came home, you know,
we enjoyed our time together, right?
There was nothing at any point in time
where I felt like, oh, thisis miserable, we're awful.
You know, we don't havethis, we don't have that.
You know, we celebratedthe things we did have,
and never knew about the thingswe didn't have, you know?
And so I think, you know,
you have to be able to find your way to
whatever it is that puts asmile on your face every day.
And some people can doit and some people can't.
- It's not always about the smile
or the smile on the outside.
It could be a smile on the inside.
- Yeah. Whatever it is, right,whatever makes you feel good.
- Yeah, the struggle, even thestruggle, like with your dad,
the really, really hard workcan be a fulfilling experience
because the struggle
leading up to then seeing your kids and.
- Exactly right, right.
Because that was my dad's grand slam.
Right, seeing three kids goto college, be successful,
you know, be able to spend time with him.
And that was the other thing, you know,
he really made me realize
is the most valuable assetisn't the money, it's your time.
That's why, you know, from ayoung age, I wanted to retire
because I wanted to experience
everything that I possiblycould in this life.
And, you know, he got joy fromus. I get joy from my kids.
And that's the most specialthing you ever can have.
- Beautifully said.
You have made some mistakes in your life.
- [Mark] Yeah, a lot of them.
- One of the bigger oneson the financial side
we could say is Uber.
- Yeah, we call that notdoing something, yeah.
It wasn't a mistake, it wasjust, I mean, it was a mistake.
(both laughing)
- But I like how you tried to.
- Yeah, yeah, I alwaystry to look at mistakes
that things you did that didn't turn out
as opposed to things you diddo, you know, the negative but.
- What can you tell the story of that?
And maybe it's just interesting,'cause it is illustrative,
like how to know when a thingis going to be big and not,
and what are the fundamentals of it
and how to take the risk and not,
and all this kind of stuff.
- Right, so the backstory ofthat is Bill Gurley came to me
and said, Mark, there's this guy Travis
that has this company Red Swoosh,
which is a peer-to-peer networking company
that I think you can help.
And so I invested and wouldspend a lot of time with Travis
and it is funny 'cause backthen that was like 2006,
I was an investor atbox.net with Aaron Levy
and, oh, there was one other company,
but there were three of them
where there'd be emails between,
you know, where I'd introduce them,
and we'd all talk in these emails
and they'd all gone to haveastronomical success, right.
But so Red Swoosh had its issues.
You know, 'cause I alwayslook at peer-to-peer
as kind of stealing bandwidthfrom the internet providers
when bandwidth was a scarce commodity.
And so, you know,
what Travis did withthat though was great.
You know, he convinced gaming companies
who wanted to do downloads ofthe clients for those games
to use his peer-to-peer in Red Swoosh.
And you know, he busted his ass,
and I think he sold it for$18 million, so he did well.
And so it was naturalfor him to come to me.
And I still have the emails, you know,
and asked me about Uber Cab,
and I thought, okay, this is a great idea.
I really, really like it.
I said, you're gonna, andhe showed me his budgets,
and I think they were raising money
at 10 or $15 million or whatever.
And I'm like, your biggestchallenge is gonna be,
you're gonna have to fight
all the incumbent taxi commissions.
They're gonna want toput you outta business.
That's gonna be a challenge.
And I think you don't have enough money
designated for marketingto get all that done.
And I said I'd invest, butnot quite at that valuation.
Right, never came back to me.
- Yeah, I mean there's some lessons there
connected to what you're doingnow, we'll talk about it.
Cost Plus Drugs is likelooking at an industry
that seems like there's alot of complexity involved,
but it's like hungry for revolution.
And the cabs are that.
- Yeah, for sure, right.
They they were dominatedby an insulated few.
They were not very transparent.
You didn't know the intricacies.
They were very, very politically driven,
and old boy incestuous network.
And to Trav, you know, andlike I told him, Travis,
the best thing about you
is you'll run through wallsand break down barriers.
The bad thing about you isyou'll run through walls
even if you don't have to, you know?
- Yeah, and there you kind of have to see,
is it possible to raise enough money?
Is it possible to do this? Is it possible?
Is it possible to break through?
And it's kind of a fascinatingsuccess story with Uber is.
- I think he tried to go too big.
He had too big an ambition,which cost him in the end,
not financially andpersonally, but just, you know,
in terms of being able tostick it out with them.
But, you know, that's whatmakes him a great entrepreneur.
- Well, it's a fascinating success story.
You have like certaincompanies like Airbnb,
just kind of go into this thing
that we take completely for granted.
- [Mark] And change it all.
- Just change it all.
- Yeah, Belinda Johnson, whoworked as our general counsel
at broadcast.com was, you know,
was Brian's GC andChief Operating Officer.
So yeah, they had a smart,smart, smart, smart team.
- And they believed in it.
And they, I mean, it's just,it's a beautiful story.
'Cause you're like, all right,
all the things that annoyyou about this world,
like they're inefficient,
and they just seem like a pain in the ass.
- And see, I probably would've said no,
like a lot of people did toAirbnb, because I'm like.
- [Lex] That's not gonna work.
- I don't want people sleeping in my bed.
- I would've too, I waslike, this is not gonna work.
I've done like couch surfing and stuff.
And it was always, it didn't seem right.
It didn't seem like you coulddo this at a large scale.
- To monetize it. Yeah, buthe did, more power to him.
- In 2000, I think January,you purchased a majority stake
in the NBA team DallasMavericks for 285 million.
So at this point, maybeyou can correct me,
but it was one of theworst-performing teams
in franchise history.
- It's true.
- How did you help turn it around?
- I had this big tallguy named Dirk Nowitzki,
and I let him be Dirk Nowitzki, right.
And I got out of the way,
but I think more than anything else,
there was the turnaroundon the business side.
And then there was the turnaroundon the basketball side.
And on the basketball side,
I just went in there immediately, said,
whatever it takes to win,that's what we're going to do.
You know, back then theyhad three or four coaches
that were responsible for everything.
And I was like, okay,
we spend more money trainingpeople on PC software
than we do developing
the most important assets of the business.
So I made the decision to go out there
and hire like 15 differentdevelopment coaches,
one for each player.
And everybody thought I was just insane.
But, you know, it sent the message
that we were going to dowhatever it took to win.
And once the guys believed that, you know,
winning was the goal asopposed to just making money,
attitudes changed, effort went up.
And you know, the rest is history.
- So the assets of thebusiness here are the players.
- The players. Yeah, for sure.
And then on the business side,
the first question I asked myself is,
what business are we in?
And I really didn't knowthe answer immediately,
but within the first fewmonths, it was obvious that,
you know, the entire NBA
thought we were in thebusiness of basketball.
We were not, we were inthe experience business.
When you think about sportingevents that you've been to,
you don't remember the score.
You don't remember thehome runs or the dunks.
You remember who you were with,
and you remember why youwent, oh, it was my first date
with the girl who's now my wife.
Or I went with my buddies,
and he threw up on theperson in front of us.
You know, my dad took me,my aunt, my uncle took me.
Those are the experiences you remember.
And once I conveyed to our people
that this is what we were selling,
that what happened inthe arena off the court
was just as important aswhat happened on the court,
if not more so.
Because if you know mom or dadare bringing the 10-year-old,
you have to keep them occupied
because they have short attention spans.
And so, you know, I wouldget into fights with the NBA,
you know, put aside the refs,
but getting in fights in the NBA,
I would say NBA, nothingbut attorneys, right?
Because they had nomarketing skills whatsoever.
And to their credit, you know,
they realized that was aproblem and started bringing in
better and better andbetter marketing people.
- So part of the sellingis you're selling the team,
selling the sport, selling the people,
the idea, the all of it, like just the.
- Well, yeah. The experience.
So have you ever been to an NBA game?
- Yeah, the Miami Heat.
- Do you remember walking into the arena?
And you feel the energy, right.
That's what makes it special.
- Yeah, the energy is everything,especially playoff games.
- Right, for sure, right.
And even a regular season game, right.
Even against the worst team, you know,
that's where we get, youknow, because the tickets
tend to be a little bitcheaper on the resale market.
That's where parentswill bring their kids.
And so you hear kidsscreaming the entire game,
and the parents arethrilled to death, right?
They got to do something with their kids.
The kids are thrilled to death
because they got to seebasketball, an NBA game,
and scream at the top of their lungs.
And, you know, if it turnsout to be a close game
and that ball's in the air,
and if it goes in, you know,
everybody's hugging and high fiving people
you've never seen before in your life.
And if it misses
you're commiserating withpeople you've never seen before,
that's such a unique experiencethat's unique to sports.
And we never sold that.
And that's exactly whatwe started selling.
- I have to say, like,just going to that game
turned me around on basketball
'cause I'm more of a football guy.
So basketball wasn't like the main sport.
I was like, oh, wow, okay.
- It's fun, 'cause it's different, right?
- [Lex] Energy was just like.
- Yeah, the energy in astadium is completely different
than the energy in an arena.
You know, you can, youknow, in the stadium,
particularly if it doesn't have a roof,
it's hard to bottle that energy.
You feel it, and you see,like, I'm from Pittsburgh,
so there's the terrible towelsand people screaming defense
and everything at Steelers games.
But in an arena, the energylevel is just indescribable.
- So how much of it is theselling the tickets in person,
but also versus what you see on TV?
So when you're owning a team,
do you get any of the cutfor the what's shown on TV?
- Yeah, yeah, we, yeah.
So there's a TV deal
that's done with eithera local TV broadcaster
and we get all of that.
Or a network broadcaster likeABC, ESPN, TNT, whatever.
And then we get 1/30th of that.
- So what role does the TV play in like,
turning a team around?
- It keeps fans connected.
Look, when the team is doingreally well, it's easy, right?
There's more viewers,everybody's more excited.
And when you're not, you know,
there's still gonna behardcore fans and, you know,
general fans and kids thatlike to watch the game.
- What about like, the personality
that people in the stands,
like I mean clearly you'repart of the legend of the team
because you're literally there going wild.
- Yeah, screaming, yeah,the whole game, right?
Yeah, it's funny, youknow, the way I am here
is how I am, you know, 24 hours a day
unless there's a Mavs game.
You know, and for whatever reason,
that's where I let out allthat stress and frustration.
But yeah, I mean, it'snot so much the fans,
you know, the sixth man, right?
We need fans to bring thatenergy, and, you know,
amplifying that as muchas we can is important.
- You've had a beefrecently on Twitter, on X,
with Elon over DEI programs.
What to you is the essenceof the disagreement there?
- I wouldn't call it abeef, right? It's just.
- [Lex] It's a bit of fun?
- Yeah, and it's fun for me, right?
I just, you know, it's his platform.
He gets to run it any way heplease, he pays for that right.
And so I have total respectfor whatever choices he makes,
even if I don't agree with him.
But because it's his platform,
people are less likelyto disagree with him.
Particularly somebody who'sgot a platform themselves.
And so when we start talking about DEI,
and it's just de factoracist and this stuff,
stuff that I just think is nonsense,
I have no problem, youknow, sharing my opinion.
And, you know, if he disagrees,
okay, he can disagree, I don't care.
You know, and it's fun to engage,
but he doesn't really engage, you know,
he just comes back with snark comments,
which is, you know, his choice.
- Yeah, in your comments,
well, you do a bit of snark too, but.
- Yeah, a little bit now and then.
- But you're pretty, let'ssay, rigorous in your response.
So there is some exchange ofideas, there's some snark,
there's some fun, all that kind of stuff.
And you do voice the opinion
that represents a large number of people.
And it's great. I mean,that's really beautiful.
But just lingering on the topic,
what to you is the good andthe bad of DEI programs?
- Really simple, right? D is diversity.
And that means you just expand
your pool of potential applicants
to people who you might nototherwise have access to.
You know, to look whereyou didn't look before,
to look where other people aren't looking
for quality employees.
That's simple.
And the E in equity meanswhen you hire somebody,
you put them in a position to succeed.
The I in inclusion iswhen you've hired somebody
and they may not betypical, if you will, right?
You show them some love andgive them the support they need
so they can do their job as best they can
and feel comfortable andconfident going to work.
It's that simple.
- So that's a beautifulideal when it's implemented.
Implemented poorly, perhaps,
or in a way that doesn't reach that ideal.
Do you see maybe when it's quota based,
do you see that it can result in
essentially racism towards Asian people
and white people, for example?
- There's a lot to unpack there, right?
So first, you can't do quotas.
They're illegal unless you're,
and I'm not the lawyer on this subject,
but unless you're tryingto repair something
that's happened in the past,
like some discriminationthat's happened in the past.
So it's not quota based.
And I think that's reallyjust kind of a straw man
that people put out there.
Now does that mean thatthere aren't DEI programs
that are implementedpoorly, of course not.
There are everythingthat's implemented poorly
in one company to another, right?
Sales, marketing, human resources.
You can pick any element of business
and find companies thatimplement it poorly.
But that's the beauty ofcapitalism in a free market
or mostly free market, whereif you make these choices,
and they are the wrong choices,
you're gonna lose your best people.
You're not gonna be ableto hire the best people.
You're not gonna executeon your business plans
in the way that we discussed,
regardless of the size of the company.
And it also, I think,
depends on where you'rehaving the discussion.
So when I'm in a differentgroup of people off of X,
the feedback's completelydifferent, right?
But to your question of reverseracism, yes, it happens.
I mean, 'cause people are people.
There's no, you know,there's no human being
that is a hundred percent objective.
And it's also, there'svery, very, very few jobs
that can be determined
on a purely quantitative basis, right?
How do you tell one goodjanitor from the other,
who's the best, right?
How do you tell one salesperson that you're hiring
versus another you're hiring?
'Cause they haven't sold your product yet.
So you don't know, we talkedearlier about firing people
'cause you made mistakes.
And you know, yes, there'sdiscrimination against any group,
white, Asian, Black, green,orange, whatever it may be.
But I truly believe
that there's far more discriminationagainst people of color
than there are people who are white.
And I think it's become a straw man
that reverse discrimination because of DEI
is prevalent or near ubiquitous.
- Well, much of American history
was defined by intenseradical racism and sexism.
But in the recent years,there was a correction.
And I think the nature of the criticism
is that there's an overcorrection
where DEI programs atuniversities and companies
are often, when they'renot doing their job well,
are often hard to criticize.
Because when you criticize themwithin the company or so on,
they have a very strong immune system
where if you criticize a DEI program,
it seems like it's veryeasy to be called racist.
And if you're called racist or sexist,
that's a sticky label for some reason.
- So you're getting into
the culture of organizations, right?
And leadership within organizations,
and accepting any type ofcriticism, put aside DEI.
When I criticized the referees in the MBA,
I got fined, right?
That was their option.
I knew what I was getting into, right?
Not that they're completely analogous,
but it's cause and effect.
If I'm in a major companyand I'm publicly criticizing
or even internally criticizinga sales plan or a product,
our product sucks, right?
Where like, there was a Google engineer
that got fired for saying, youknow, Google had AGI, right?
And nobody believed they did.
And they knew that created problems.
It wasn't DEI related,
but it was, you know,saying something publicly
that was in the CEO's eyes
to the detriment of the company, right?
So I think those are all analogous.
If you're trying
to accomplish somethingwithin an organization
because you think there's a problem,
and there's people speaking out saying,
look, we're getting it wrong.
I think I'm a victim of allthis and the company's, right?
Then, you know, leadershiphas gotta make a decision.
Do they agree or not agree?Are they right are they wrong?
Is it to the positive?
Is it positive or negative to the company?
And you decide, so, you know,
this conversation that conservatives
are being silenced in organizations now.
I just, I haven't seen it.
You know, I've talked to,
and then the other sideof your question I think,
unpacking it, is what's driving all this?
Put aside universities for one minute.
In corporate America,
when I talk to people incorporate America about DEI,
they always start talkingabout ideology, right?
And like, I've talked to Bill Ackman,
who you've had on, right?
And when I asked him, "Well, Bill,
you run your own companies,who's telling you what to do?"
"They are."
"Who's they?"
"Well, it's the universities, you know,
the people who have this ideology of DEI."
I'm like, "Did they forceyou? Did they coerce you?
Did you lose control of your company?"
"No, it's not me. Ithappens to other people."
Then I talk to other people, same thing.
So I get, you know, trynot to go one-on-one
and Twitter conversations on this topic.
So in the DMs
I'll talk to people whoare really conservative,
and I'll ask the samequestion and I'll be like,
"Well, who's forcing you to do this?"
"Well, it's the ideologythat's everywhere, you see it."
Didn't you see theHarvard thing, you know,
in University of North Carolina.
I'm like, I've never had anybody
try to push me in thisdirection to do this.
This was my business choice.
I'm not trying to tell otherpeople you have to do this.
You make your own business choices.
And so where companies thatmade their business choices,
and if somebody doesn't feel confident
or comfortable with it,
they may feel they're beingdiscriminated against.
There was something I just readin "The Wall Street Journal"
where "The Wall Street Journal"
had a company interviewed2 million people, right?
And the difficulty in firing,
and how people, when they were fired,
40% of the people who werefired felt like it was wrong,
that they were doing a great job.
Yet then it talked about the HR person
going through the hassle oftrying to explain to this person
through performance reviews
that they weren't doing a good job,
yet the people still thoughtthey were doing a great job
despite being told they'renot doing a good job, right?
So I see that as beingan analogous to all this,
you know, this huffing and puffing
about reverse discriminations,
and conservatives notbeing able to speak up
because if 40% of peoplewho have been fired
don't believe they should have been fired.
There's a disconnect somewhere
in how you think you're doing your job.
And if you just feel like Ican't speak up because of it,
because you're white,
and that doesn't comportwell with DEI programs,
a lot of things aregoing to happen, right?
Either that's gonna come upin your performance review,
HR or your boss is going tohave to address it in some way.
It's gonna get to HR at some level,
and then decisions aregoing to have to be mad,
and you can't just fire somebody
because they spoke up, right.
Somebody's gonna haveto communicate with you.
And so I think a lot of, I just,
I just don't trust the supposed volume
that people say it's happening at
versus everything I've read and seen.
And when I talk to people
in positions of authoritywithin organizations,
and ask them who's forcing them, you know,
to implement theseideologies, nobody says,
nobody says yes, that there is somebody.
But on Twitter, it sounds great.
- It is true forconservatives, but in general,
you can sell books, you can get likes
when you talk about this ideology,
and then there's a degree to which
is this woke ideology inthe room with us right now?
Meaning like it's this boogie monster
that we are all kind of.
- Or is it a positive?
- I guess another way to saythat is they don't highlight
a lot of the positiveprogress that's been made
in the positive version of the word woke
in terms of correcting some ofthe wrongs done in the past.
So, but that said, you know,if you ask people in Russia,
a lot of them will say,there's no propaganda here.
There's no sense of sharingand all that kind of stuff.
It's sometimes hard tosee when you're in it
that this kind of stuff is happening.
It does seem difficult tocriticize DEI programs.
Not horribly difficult, terrible.
They're this monster thatinfiltrates everything.
But it is difficult, and itrequires great leadership.
- So where have you criticizedit and been condemned?
Academic or?
- Academic. Yeah.
- Okay, academic, two different worlds.
- Companies and academic, yeah.
- [Mark] Two different worlds.
- But I also think it's not,
I really wanna point my fingerat the failure of leadership
of basically firing mediocre people,
like people that arenot good at their job.
The problem to me isDEI's defense mechanism,
like immune system is so strong
that the shitty people don't get fired.
So the vision, the ideal ofDEI is a beautiful ideal.
It's just like.
- Well, maybe it's 'causeI'm an entrepreneur,
when I see an ideal that, you know,
you try to implement it and support it
and get to that point.
But universities and companies
are night and day different, right?
I can see an argument forthe ideology in a university.
I can see, you know,
you look at the amountof money spent on it.
And so while the goal is right,
the way they implement it in universities,
the way they implement mostthings in universities is wrong.
Right, there's a reason whytuition has gone up, you know,
a multitude of, or amultiple of inflation.
They're not well-runorganizations across the board.
So I'm not gonna argue with that at all.
So when you've seen me argue with DEI,
I haven't waded into DEIin universities at all.
- So it's mostly focused on companies.
- A hundred percent, right?Because that's where I exist.
But at the same time, like Iread Christopher Rufo's book
where he talks about kindathe genealogy of wokeism
and ideology, but thenhe gets to the point,
and I hope I'm remembering this right,
where he says that the response to it
is decentralized activism, if you will.
That's not the word he used,to try to counter that DEI.
And that seems to me to be
counter to the whole conservativemovement right now, right?
Other than school boards, right.
Where it's centralized and, you know,
the Republican candidate
is all about centralized power in him.
And you know, to me that's just a conflict
in a lot of the underpinningof the whole DEI conversation.
That a lot of, and a lotof which goes through
Christopher Rufo right now.
- Let's continue on a theme
of fun exchanges on the internet.
So Elon tweeted, "Thefundamental axiomatic flaw
of the woke mind virus
is that the weaker party isalways right," in parentheses,
"even if they want you to die."
And you responded at length.
But the beginning is, "Thefundamental axiomatic flaw
of the anti-woke mind
is that it allows groupswith historical power
to play the victim bytaking anecdotal examples
and packaging them intoconjured conspiratorial ideology
that threatens to upendthe power structures
they have been depending on," so.
- It says it all, right?
- Well, there's a tension there.
So yes, but both can be abused, right?
Both positions of power can be abused.
There's power in DEI,
and there's shitty peoplethat can crave power
and hold onto power andsacrifice their ideals.
- Okay, put aside universities, okay.
- Dammit, yeah, I mean.
- Because I'm not gonna argue
that universitiesimplement DEI well, right?
And I'm not gonna tell you that, you know,
they need to be spending 20some million dollars a year
on DEI positions, to me, that's insane.
Do I look at the Harvardand North Carolina decision
and say it was a great decision?
No, because, you know, I thinkhaving a diverse student body
helps make for
kids who are betterprepared for the real world.
But I'm not running a university,so it's not my choice.
Maybe at some point in thefuture I will, but not now.
And in terms of the corporate side of it,
who's telling anybody what to do?
- Well, maybe you can give me some help.
- Sure. I'm here to help you, Lex.
- There's an example in the AI world
of a system called Gemini 1.5.
- Yeah, I mean,
everybody was Black orwhatever, people of color.
- [Lex] George Washingtonwas Black. Nazis were Black.
- So why is it when that cameout, it was a big uproar.
But when somebody, so who, oh, who was it?
One of the people who weretrying to fuck with me?
I forget which one.
- There's so many people.
- Yeah, but he pointed out toElon, that Grok, Elon's AI,
was woke when it answeredcertain questions.
And other people have pointedout other things to Elon
about Grok, Grok, Grok,however it's pronounced,
that was leaning left or woke, right?
And Elon's response was, oh, it'll change.
It's a mistake. We're fixing it.
When it happens to Gemini and Google,
it's the end of the world.
Look how woke they are.
And it's a reflectionof all their culture.
Now Google comes outand says it's a mistake.
And then they doxx the guywho's the product manager
or whatever of AI, of that product,
and then they go back andlook at his old tweets, right?
And show that he's very left-leaning
and very, you know, DEI supportive.
And that's the end of the world.
- It's not the end of the world.
But Google is so much dependent on trust.
That trust a Google search
has as objective as possible a channel
into the world of information.
And so that brand isreally important for us.
- Yeah, see, you're over, you'regiving them too much power.
And maybe I'm notrecognizing the power, right?
So I'll tell you a personal experience.
Up until a month ago, maybe,if you put in keto gummies,
"Shark Tank" keto gummies into Google,
it would show up with scammyads, scam ad after scam ad.
And I would get emailsup until a month ago
from elderly people
asking me why the gummies weren't working,
and why the companies were charging
all this money on a month by month basis
when they tried to cancel.
And they said it was the number one deal
on "Shark Tank" of alltime, right, on all Shark.
It was a mistake.
- Well, there's fraud, there'smistakes, but the mistakes.
- No, but why didn't Google fix it, right?
The just didn't happen once over one week,
over two weeks, right.
And because it was hard to fix.
As it turns out,
I was working with themto try to find a fix,
and we would both look at the same page.
And if you were inside of Google
within the google.com domain,it would show one page.
If you were outside ofGoogle, it would show another.
And it took us lookingat it at the same time
for anybody to realize it.
Meaning that there's alot of technology problems
that are hard to fix.
- They're super complex.
And we could talk about itforever with social media,
the criticism towards Google,towards other companies,
when they're based in Silicon Valley,
there could be an ideological drift
into a ideological bubble
outta which the technology is created.
And they could be blindto the obvious bias
that's becomes inherent to.
- Yeah, but they got billions of customers
who are not gonna, sowhat you're saying is
the free market stops withartificial intelligence,
that people don't payattention and respond.
That Google doesn'tlisten to the responses,
that people inside of Google
will ignore their ownbest financial interest
and even their own bestpersonal interests.
'Cause they know they'regonna get doxxed now
by Elon and others.
And so I just don't see that.
And Elon's not allowed tomake those same mistakes, but.
- [Lex] No, no, no.
- He is allowed to make thosemistakes, but Google isn't.
- Oh no, Elon is 100% should be criticized
for the ridiculousness ofoverstatements that he makes
about various products.
He's having a bit offun, like you are, also.
And I also believe in the free market,
but it's not always efficient.
You know, there's like a delay.
- It just takes time. Yeah, it's fine.
- So, which is why Elon isimportant when calling out,
I think overstating thecriticism of Gemini,
but Elon and others are just.
- Gemini wasn't even a fullyavailable public product yet.
- It's still a bias thatresonates with people.
- That's the way neuralnetworks work though, right?
That's why there'll be millions of models
because weights andbiases putting together,
you know, a neural network.
- But, well, no, so likethe Black George Washington
is a correction on topof the foundation model,
to keep it quote unquote sort of safe.
One of the big criticisms ofall of the models, frankly,
probably even Grok a little bit less so,
is they're like tryingto be really conservative
in the sense of trying to becareful not to say crazy shit.
- [Mark] Of course.
- Because we don't know how the thing.
- It's brand new, and weknow what happens, right?
And they do it on thefront end with prompts,
and they try to do it on the back end
with the neural networks thatare underneath them, right?
And it doesn't always work.
And that's why there'sgonna be millions of models
rather than just, you know,four foundational models
or five that everybody uses.
- Well, I guess the main criticism
is you want to have some transparency
of all the teams that areinvolved, and that this kind of,
to the degree there'sa left-leaning ideology
within the companies, itdoesn't affect the product.
- But that's the beauty of.
- The free market.
- Yeah, that's where themarket corrects it, right?
And not only from the outside,
because everybody youknow is going to test it.
Like when YouTube first cameout, or not first came out,
when after Google boughtthem, you used to be able,
there used to be different commands
you could give it, right?
There were line prompt commandsthat you could give it,
and you could find all thenasty porn that got loaded
before they kicked it off, right.
And it was just the nastiest shit ever.
And even now to this day,
if there's some horrific, tragic event,
somebody's loading it up, right?
Now I know that's not direct to your point
of internal influenceto the output, right?
But people on the outside
are gonna check for that now, right?
It's almost like thenew bug contest, right?
To try to find bugs in software.
And then on the inside,if it's all left-leaning,
and all you have isleft-leaning employees,
because you know, most conservativeswon't wanna work there,
then again, that'sself-correcting as well.
- That's the hope.
But it can self-correct indifferent kinds of ways.
You can have a differentcompany that competes
and becomes more conservative.
I mean, my worry is thatit's kind of becomes
like two different worldswhere there's like.
- Already is.
- No, come on. Don't give up.
- Oh, I'm not giving up.
So where does this gois the question, right.
What happens next?
And I mean, going back, I mean,
I've been in so many PCrevolutions, right, or evolutions.
Where porn was the big issue, right.
Now we don't even talkabout porn being an issue,
even though, you know, ifevery post on Twitter now has,
you know, LinkedIn biofor a porn post, right?
We don't even thinkthat's a negative anymore.
That's just an accepted thing.
And now it's become very,
where are your politics on Twitter?
But again, as you extendthat and things grow,
as AI models become moreefficient and trainable on less,
for a lot less money, or evenlocally on a PC or a phone,
we're all gonna have our own models,
and there's gonna be millions and millions
and millions of models, andnot just foundational models.
Now maybe they're builtsome on open source,
maybe, you know, it'll be copypasta
where you can just cut andpaste and create your own model
and train it yourself.
Maybe it'll be mixture ofexperts where, you know,
maybe it'll be a meta front end.
Like we're working on a project
where we take 30 different AI models,
and there's just a meta search engine
where it searches all of them,
and you can compare all the outputs
and see what you think is the best,
kinda like a search engine, right?
Because you might get is DEI good, right?
You know, is the COVIDvaccine good, right?
You're gonna get a variety of outputs,
and you have to makethat decision yourself.
That's what I think is gonnahappen with AI as well,
because I think brands,there's no way the Mayo Clinic
and the Harvard Medical School
are just going to contribute all their IP
to ChatGPT or Gemini or whatever,
it's gonna have to be licensed
or they're gonna do their own.
- Yeah, I mean, that'sa very hopeful message.
But that said, you know, human history
doesn't always autocorrect really quickly,
self-correct really quickly.
Sometimes you get intothis very painful things.
You have Stalin, you have Hitler,
you can get to places very quickly
where the ideological thingjust builds on itself.
And like you, but.
- Twitter is not real world,you know, there's 20 that.
- Twitter's not realworld. That's true, yes.
But you could still have anation captured by an ideology.
I think America has been really good
at having these two blue and red
always at tension with eachother, dividing the populace.
And in the process of doingthat, figuring stuff out,
like, almost likeplaying devil's advocate,
but like, in real life.
- And, you know, and that'sfair and that's right.
You know, as opposed to Pravda
telling you everythingyou want to know, right.
And everybody believing it
'cause there's controlof everything, right?
And so going back towhat you said earlier,
people in Russia don't thinkit, you know, invading Ukraine,
you know, a lot of them seeit as a positive, right?
I'm sure you have relatives andfriends who think, you know,
it's the best thing thatever happened, right?
Because they believe in Putin and.
- They're denazifying Ukraine,
they're removing the Nazis from Ukraine.
- Right, because that'sexactly what Putin said.
And you know, we don't haveone uniform media outlet.
That's the difference.
Even though people like totalk about mainstream media
as being the source ofa lot of the friction,
there is no such thing asmainstream media anymore.
You know, Fox is thebiggest cable news channel
with the biggest audience,
and they call everybodyelse mainstream media.
You know, it's insanethe things that we accept
from our sources of information.
To me, that's the bigger problem.
The bigger problem is trying to figure out
what is free speech
and what is the line oftolerance for free speech,
and at what point does hateful free speech
crowd out other people, right?
Putin's the master of that.
You're going to jailor you're gonna be dead
if you disagree, right?
No, God, help us if we everget to that point here.
But the person who controls the algorithm
controls the world, right?
And if you are committedto one specific platform
as your singular source of information,
or affiliated platforms,
then whoever controls thealgorithm or the programming there
controls you in a lot of respects.
And I think that's where ourbiggest problem has been.
We get people attached to
specific platforms andapps and media outlets,
and they become part of that team,
and they identify as such.
And either you're part ofthe team or you're not.
And that to me is the fundamental problem.
It's not woke ideology,
because I never felt anypressure to make the choices
that I've chosen in, you know,
including diversity,equity, and inclusion.
And I've never forced anybodyor told anybody to do it.
I've just said, here's my experiences.
Whenever I've talked to people
who talk about the wokeideology, no one ever got forced.
I mean, if you look atDylan McDermott, right?
If there was a way to gauge
the number of impressionsthat she had, right?
And where they sourced from,
I'd be willing to bet any amount of money
that 90% plus of the impressions
and discussions of Dylan McDermott
were on right-leaning media.
- Several things actually,well let's even go there.
You gotten a bit of abeef with, again, fun,
with Jordan Peterson about this.
- That's the guy whose nameI couldn't think of, yeah.
- So the topic there wasthe gender transition
and Dylan Mulvaney,
can you explain the nature of the beef?
I mean it's an interestingclaim you're making
that most of the people
who are concerned aboutthis are conservatives.
- Yeah, just the point is thatif you looked at impressions,
like when you run an ad,
you're curious about impressionsand who sees them, right?
But if you look at the impressions
related to Dylan McDermott,I would, like I just said,
I bet 90% or more werein conservative media,
and you know, I don't knowhow many followers she had,
250,000 followers or whatever
when the Bud Light ad came out.
And if it weren't for KidRock shooting, you know,
gun shooting at DylanMcDermott Bud Light cans,
she'd be long forgotten.
- Yeah, but most of the peoplethat care about censorship
are gonna be free speech advocates.
So like most people that careabout Putin suppressing speech
or anybody else suppressing speech
are going to be like libertarian.
So I get there's probablyan explanation of that.
The criticism that JordanPeterson could provide,
I guess he said thatDylan Mulvaney popularized
the kind of mutilation, right,in his view, that can affect,
there's a very seriouslife changing process
that a person goes through.
And when that's applied to a child,
it can do a lot of harm to a person if.
- But my point still holds.
I don't know how many kids were following.
And you can look at the followers list,
it's not like it's hidden, right.
Back then, if they had 250,000 followers,
and now we're on TikTok, you know,
where he might get 50 somethousand views or likes, right?
I don't know how many views but likes.
I've never seen any evidence
that Dylan McDermott influenced the people
to transition their gender.
As he transitioned to her,
it was documented on TikTokover the course of a year.
And again, when you go back
and look at the views on thoseTikToks, it was, you know,
it wasn't like enormous.
- Yeah, but the trends start, right?
It could be what worriespeople is for young kids,
there to be a trend of,
especially when you feel like an outsider,
you feel not yourself, less than yourself,
all this kind of stuffthat kids feel like,
that if it's because popularenough it is a trend,
you would gender transitionwithout meaning to do that.
It's just part of a trend.That's the worry they have.
- Yeah. But that is a big stretch, right?
To think that all thethings that have to happen
before you transition gender, right.
And I'm not saying kidsmight identify, you know,
find it cool or, you know,in the moment expedient,
if you will, to dressup as the other gender.
Great. Who cares, right?
But to go through theactual physical transition,
like I don't remember whatthe numbers were that I read,
but I do remember that thelatest numbers that came out
in terms of transitioningwere from "JAMA,"
which is a medical association that said
from 2021 to 2022, the numbers went down.
But the bigger point isthere are no numbers for 2023
when post-Dylan McDermott.
So there's no way to knowif the assertion is true,
even marginally true.
Now you can easily suggest it, right?
But you can say that
about any social media influencer, right?
You know, kids are dyingbecause, you know, I mean,
it's just like whenpeople like accuse Trump
of potentially influencingpeople to, you know,
inject bleach into theirveins, you can't, you know,
that's a big old leap to say that
because you know, Trump says it
that people are gonnastart, you know, injecting,
and then they findsomebody who actually did,
and it's like, oh, it must be true.
You know, this is a trend now.
I just, I'm just not buying it
that there aren't enoughroadblocks in the way.
Now I'm not saying itnever happens, right?
And for me, to me, you shouldhave to wait until you're 18
to actually have anysurgery to transition.
And if your parents approve it earlier,
then you can have aconversation with your doctor.
But you're suggesting thateverybody in that process
to go to transition a minor, is corrupt.
That the doctor, thesociologist, the psychologist,
all the people involved,
the hospital where thesurgery is happening,
the insurance companythat's paying for it,
they all have beencorrupted by this trend.
I just don't see that.
- Well, not corrupted,but you know, people,
it's back to the DEI thing,there could be pressure,
and we are.
- Pressure to operate.
So think about all the peoplewho have to be complicit.
To do an operation.
- It's not complicit likeevil complicit, it's more.
- No, it is evil complicit, right?
Because somebody, in hospitals right now,
they won't perform abortionsbecause of state law.
In Alabama, they stoppedIVF treatment immediately
after that ruling by thatjudge, right, the Qanon judge.
To think that they'renot gonna pay attention
to the possible consequences
of being the hospitalthat does transgender,
that gives doctors operating rights there,
and not be aware of therisks associated with it
and double check?
To me, that's just insane.
They're risking their entirebusiness and livelihood
and personal relationships
for not checking that this14-year-old, you know,
boy who wants to be a girl or vice versa,
is there waiting for surgery,that I just don't see that.
- In America, yes.
But if we look at humans ingeneral, and Jordan Peterson,
I think unjustly, incorrectly,brought up Auschwitz.
- Yeah, that was ridiculous.
- But if we look, to me,
World War II is a very interesting time.
It does reveal a lot about human nature,
and that humans are ableto commit atrocities
without really speaking up.
The point I wanna make is thatwhen you're in this situation
where everybody is around you,is committing an atrocity,
you can be sort of the good German and.
- [Mark] Yeah, but.
- I mean, human nature is such
that you can do all these things.
- But that is in a time of war.
- Yeah, but it's still human nature.
It's interesting to a remember that's.
- It's a time of war.
When you feel like there'snationalism, patriotism,
everything that comes up.
Russia, right. You know.
The moms of the kids sent to be, you know,
sent to Ukraine who didn'tcome back, in Russia,
feel certainly different than
the everyday Russian who'sjust taking, you know,
whatever information that's available
from a unified controlled media.
- Yeah, but, you know, weshould remember human nature.
It's interesting.
- I'm not dismissing human nature at all,
but there's a difference,I think that human nature,
self-preservationinfluences those decisions.
There's nothing aboutself-preservation involved in DEI,
wokeness, you know, transgenderism,
to compare it to aAuschwitz, that's insane.
- Yeah, tell thatcomparison is almost always,
probably always is insane.
Comparison betweenanything and the Holocaust.
- [Mark] I agree.
- I think there's a name for that rule,
but once you bring up Hitler,the conversation ends.
- [Mark] Goes away.
- I do appreciate you bringing up Trump
and bleach as an example.
So continuing on fun exchangesbetween you and Elon,
you said, "If they werehaving Biden's last wake
and it was him versus Trump,
and he was being given last rites,
I would still vote for Biden."
To which Elon replied caricaturing you.
"If Biden were a flesh eating zombie
with five seconds to live,or upon being reelected,
Earth would plunge into a1,000 years of darkness,
I would still vote for him."
That's basically quotingyou but a caricature.
And you responded "WhileI have your attention.
Wanted to say thank you.
Your consultants at Tesla followed up
about using Cost Plus Drugs,"
but which we'll talk about,"to save the company money.
Truly appreciate it."
And in parentheses, "My limitis 300 years of darkness."
Very well done, Mark.
What's your intuition
if we just stick on Bidenand Trump for a sec?
What's your intuition why Biden would make
a better president than Trump?
- Look at it at the basics, right?
If you look at the people he's hired,
there hasn't been any turnoverin his cabinet at all.
If you look at the people he's hired
over the course of his career,
or while he was vicepresident in particular,
there's nobody who's turned on him
and came out and written booksand made public statements
about how he's bad for the country.
Now, compare that to Trump.
The people closest to him,almost all of them turn,
unless there's a financialrelationship involved.
And to me that says everything.
- The dynamics of the teamis important to you when you.
- If you're gonna be the mostpowerful person in the world,
you better know how tomanage and lead, right.
And that's not to say Bidenhasn't made a a lot of mistakes.
I mean, immigration, theborder is a horrific mistake.
And hopefully he recognizes that.
And I don't like the fact thathe doesn't admit his mistakes
and just say, okay, I gotta fix it.
Or I made a mistake inAfghanistan, whatever it may be.
Right, the position of Commanderin Chief and President,
you're gonna make mistakes.
Then I look at the otherguy, never admits a mistake.
And the list is long.
- What do you think aboutthe immigration situation?
A lot of conservativesare using that sort of,
the theory is that thereason it's happening
is because they would beable to illegally vote.
- That's insane.
- [Lex] For Biden.
- Yeah, you can't be anillegal immigrant and vote.
And now in a lot of states,because of the conservatives,
they've passed laws saying youhave to show identification.
When I voted in Texas, you had to show,
you know, state identification.
They can't vote, you can'tregister as an illegal alien
that I'm aware of to vote.
- Yeah, but of course thatstory really worries me.
Enables or serves as a catalyst
for questioning thelegitimacy of an election.
- But I remember going to thedebate with Trump in 2016,
and he was debating Clinton,and one of the things he said
was, we don't even know if thiselection will be legitimate
if I lose.
This was in 2016 beforehe was even elected.
And that was where he wasgoing. That's just what he does.
He's never admitted a mistake.
The guy's failed a zillion times.
Most people say, okay,I learned from them.
You know, I read a book about Roy Cohn,
and, you know, Roy Cohn wasthe ultimate deny, deny, deny.
And that was one of Trump's mentors.
And you can see almosteverything of Roy Cohn ever did
in the same way that DonaldTrump approaches things.
- But given how drastic theimmigration situation is,
that story becomes more believable.
- Yeah, of course it does, right?
But the facts are still the facts, right.
And in red states, they'regonna be checking every ID,
they're gonna be makingsure that it's not the case.
And you know, you canalso make the argument,
well, in a blue state, it doesn't matter.
In the swing states, they'restill gonna be checking
'cause they know Trump isgonna sue the shit out of them
when he loses.
You know, and so again,that's where, you know,
people will take thoseself preservation steps
to keep their job and do the right thing.
There's still enough people whowill believe in this country
in how amazing it isto do the right thing.
And a lot of the premise
of what some conservativesare saying and doing,
the underpinning of it is
that their fellow citizenswill not do anything,
not some things, anything,
if that serves the bestinterests of this country.
And to me, that's just wrong.
You know, that is justmisleading and wrong.
- I just worry about, I don'tcare about Trump or Biden,
I care about democracy.
And I just worry, I worry aboutthe viral nature of the idea
of this illegal immigrants.
- But it's just, it'svery functional, right?
Either they get across, there'sa thousand different ways,
an unlimited number of ways
to enter the United Statesof America undetected, right.
And the south border, whereit's the easiest and the worst.
And Biden needs to takesteps to reduce that.
Remember when Biden was vice president
and Obama was president,
they called Obama the deporter in chief.
He had no problem deporting people.
And I think if I had to guess,and this is just a guess,
that when they looked at
the initial statistics forimmigration when Biden took over,
they thought there wasroom for more immigrants,
not because they wouldvote, but, you know,
you can make an a fiscal argument
that in a world where the birthrate is flat to declining,
we need immigrants, right.
And immigrants typically don't, you know,
don't have a higher crime rateor anything than, you know,
indigenous American citizens,
indigenous isn't the rightword, but American citizens.
And so they made a calculated mistake,
they made a decision that was wrong,
and now they have to fix it,
or it's gonna hurt them severely.
But I don't buy, you know,like what Elon's pushing
that the whole reason is they are voters
and will become voters.
- And we should say the obvious,
you're a descendant of immigrants.
- [Mark] Yeah, for sure.
- And the immigrants is whatmakes this country great
and many parts of thediversity of this nation.
And we should probably keep the people
that are like already beenin this country for a while
and are killing it, likePhD students and all this.
It's like we're just.
- That's not what DonaldTrump wants though.
He wants to ship them all out, right.
There's just a whole lot of hyperbole
when it comes to talking to all,
about talking about all of thesethings we're talking about,
when it's right versus left.
My team versus your team.My tribe versus your tribe.
The only way to stand out is hyperbole.
The hard part, and why Ilike this conversation is,
how do you distinguishhyperbole versus reality?
And I get where you'regoing, Lex, where it's like,
what the smallest spark sometimes
can cause people to change,
and then that spark becomes bigger
and it becomes more widespread,
and then all of a suddenyour country has changed.
It's not what you thought it was.
I get that completely, right.
And yes, you always have to beon top of that to make sure,
but a lot of that comes fromlack of leadership, right.
And lack of trust, becausethere's nobody who's saying,
all right, Republicans,
that's all hyperbole, andyou're wrong for that.
Democrats, you fucked upon immigration, right?
You fucked up in Afghanistan, right?
Here's where you madethese mistakes. Own it.
There's nobody who says, right,
we're not gonna just bring in Republicans
if the Republicans win.
And then, you know, and then nobody says,
we're not gonna just bring in Democrats.
We're gonna bring in a mix, right.
We're gonna try to getbalance on the Supreme Court.
There's just, there's noleadership that's doing it.
That's the fundamental problem.
It's not about the ideology of woke,
it's not the, no leadership.
- Yeah, leadership andyeah, there's, it's just,
whatever systems we've created,
it's really frustrating thatif you don't like Trump,
it really is Trump Derangement Syndrome.
Like he's definitely Hitler.
And if you don't like Biden,he's senile lizard person.
That's just. (laughs)
- Right, everybody gets labeled, right.
And because that works on social media.
Look, if Elon changed the algorithm
just by taking himself out of it.
Seriously, I'm notsaying don't post, right,
post all you want,
but you know, if youlook at his followers,
they're almost all right-leaning.
If you look at the peoplehe engages with positively,
they're almost all right-leaning.
And if you look at the people
he engages with negatively like me, right?
I consider myself an an independent,
but I lean left on the DEI topic, right?
That influences the algorithm.
And so you see what you seebecause of what he says.
- Yeah, well, I mean, for sure.
But there could be a lot ofinfluential people on Twitter
that influence the algorithmand all that kind of stuff.
I do feel it's not even aboutideology where you lean,
it's about like the algorithm,not prioritizing drama
be like the attention grabbing thing,
or the lower lizard version of that,
where like people just want the drama,
they want it to fight it out.
- When I last read through allthe stuff on their algorithm,
right, maybe it's changed,whoever has the biggest account
and gets engagement on that account
influences what people see the most.
- Yeah, I mean that's interesting.
I don't know if that's,to the degree that's true.
- [Mark] Pretty sure it's still the case.
- Pretty rigorous description
of the way the algorithm works.
It's actually kind of fascinating.
There's that clustering ofpeople based on interests.
- Right, but I think theycalled the nearest neighbor,
right, approach, and Ithink that's what they do.
And so whoever has the biggest account,
has the most neighbors, whoin turn have their neighbors
who in turn have their neighbors.
And that's how theydiscern what comes next.
- But there's a clustering still.
So like, if you don'tgive a shit about Elon.
- And you're not gonna not following them.
Yeah, you're not following.
- You're not gonna have an influence.
He's not gonna have an influence.
- When you get a break,
just create a burner account on Twitter,
and see who they recommend to you.
- [Lex] Elon.
- And not just Elon, I meanthe people that Elon likes.
And I'm saying that's notElon saying add this person,
add this person, and suggest this person,
this person, and this person.
I'm saying that's what the algorithm is.
- Yeah, there should betransparency around that for sure.
- [Mark] There is.
- That's the key.
- There is, and that'sthe whole point, right?
He knows there's transparency,and he knows the impact.
That's why when I say
take yourself outta the algorithm, right?
Don't include his account,
that changes, I think, theoutput of the algorithm.
- Well, when he wasn't owning Twitter,
he was one of the biggest accounts,
if not the biggest account already.
- It wasn't, but still,like, even like the Kim,
well, the Kim Kardashianaccounts, whatever, right?
It wasn't open source, toElon's credit, it is now.
So I couldn't see it to know, right.
So I didn't get the senseone way or the other
of one element beingdominant over the other.
But obviously conservativesfelt that left-leaning
was more dominant back then.
- Yeah. I would love tosee numbers on all of this.
- [Mark] Yeah, you be stoked.
- DEI, everything like this,
sometimes anecdotal datareally frustrates me.
It frustrates me primarilybecause of how sexy it is.
Like people just love.
- That's a great way to describe it.
- Love a story.
And I'm like, God dammit, thisis not science. This is this.
- It's not even common sense, you know?
- Well, no, I think anecdotal stories
often have a wisdom in them like.
- No doubt, right?
There's something to begained from seeing them.
- There's a signal there,
but like how representative is that signal
of the broader thing.
- Right, there's a wholelot more noise than signal
more often than not.
- All right, so as Imentioned, Cost Plus Drugs,
there's so many questions I can ask here,
but what's the big question?
What's broken about our healthcare system?
- There's no transparency.
And the lack of transparencyleads to lack of trust,
and when you can't trustthe healthcare system
other than maybe your doctor,that's a broken system.
- So what aspect of the system
that Cost Plus Drugs is trying to solve?
- So the thing we're tryingto solve for is trust.
And the way we feel we get there
is through complete transparency.
So when you go to costplusdrugs.com
and you put in the name of the medication,
if it's one of the 2,500and growing that we carry,
we will first show you our costs,
what we actually pay for it.
Then we'll show you our 15% markup.
Then we'll show the pharmacyfill fee and shipping.
And that's your total price.
And that alone, that transparency alone,
is completely revolutionizing
how drugs are priced in America today.
And it's led to, youknow, research being done
comparing our pricing to CMS,
and ours being cheaper, you know,
than even the government is negotiating,
et cetera, et cetera, et cetera.
And so just that transparencyalone had an impact,
and saved millions of people
hundreds of millions of dollars or more.
- And maybe it resultsin more transparency
in other parts of the system too.
Seeing the business of it.
But what do the so-calledmiddlemen companies.
So the PBMs.
- The pharmacy benefit managers.
- Thank you.
CVS, Caremark, Cigna's Express Scripts,
and United Health's Optum Rx.
They control majority of the market.
What do they do wrong?
- They put profits over everything, right?
And they know in an industrythat's completely opaque,
they can pretty much do what they want
and nobody gets to see whatthey're doing in detail.
And so, you know, the firstthing when you sign a contract
with one of those big PBMs
is says you can't disclose any of this.
And the fact that you can't be disclosed
means they could tell Lexuscompany that they're being,
you know, they're getting a great price
and they're only being charged x,
and they can tell Mark's company,
oh, you're getting a great price,
and we're charging Mark x plus, right?
But Mark doesn't know any better
'cause there's no way to know.
- The markup is not transparent.
- The cost isn't transparent,the markup isn't transparent,
you know, and, you know,there's different things.
You know, like I wasjust talking to a company
in a presentation a couple days ago,
and they took the step toleave the big three PBMs
to go to a rebate-freePBM that was smaller.
And what they said led to the decision,
they had a contract with the PBM
for these things called rebates, right?
Where depending on the volumeof medications you buy,
they'll kick back to youa percentage of them.
And as it turns out,
when they compared what was contracted for
to what they actually got,
they were getting underpaidevery single year.
They just don't care, right.
They'll take products, there'sa drug called Humira, right?
And it is the number onerevenue drug in the country.
And there's also a biosimilar,multiple biosimilars,
but one we carry called YUSIMRY.
And Humira, the pre-rebateprice is about $8,000 per month.
And after rebates, dependingon the size of the company,
it'll be anywhere from3 to $6,000 a month.
You can go to your doctor
to prescribe that biosimilarYUSIMRY, and you pay $594.
But those big three PBMs
won't allow their clients to get YUSIMRY
because they don't geta rebate on YUSIMRY.
So they'd rather keep adrug on their formulary,
even though their patients would save,
you know, their customerswould save a lot of money.
They'd rather keep adrug and exclude another
because they'll make a lot more money.
- So the CVS Caremark spokesperson,I think responded to you
Phil Blando, with the usual language
that so deeply exhausts me.
But I was wondering ifthere's any truth to it.
Employers, unions, healthplans and government programs
work with CVS Caremark
precisely because we deliver for them,
lower drug costs, better health outcomes,
and broad pharmacy access throughour true cost cost vantage
and choice formulary initiatives.
We are the leading agentof change, innovation,
and transparency in the market.
- That's a whole lot of nothing.
- So they are not transparent.
- No, no. Call them up.
You go to Cost Plus Drugs,we'll give you our price list
of all 2,500 plus drugs.
- [Lex] The actual cost.
- The actual cost, andwhat we sell it for.
'Cause it's just a plus 15%.
Call up any of the big three companies
and ask them for the same thing.
They're gonna laugh at you.
It's so bad in fact, if you dobusiness with them right now
and you just ask for your claims data,
meaning, you know, howmany people use Humira
that we're paying, andwhat are we paying for it?
They won't even give it to you
unless you really, reallyscream and yell at them.
And then they'll charge youand take six months to get it.
So like when we moved away from them,
we wanted to get what our claims data was
to understand what wewere gonna be facing.
They wouldn't give it to usuntil like six months later.
I forget the exact month.
And then they charged us forit as well. Our own data.
- On the CEO front, you said that CEOs
don't understand healthcare coverage
and it's costing them big.
What's the connection betweenCost Plus Drugs and companies?
- So I can speak for my own companies,
and this applies to allcompanies, you know,
bigger companies that self-insure,'cause we self-insured.
When I finally, when we started Cost Plus,
I finally said, okay, it'stime for me to understand
how I'm paying for my healthcare
for my employees and their families.
And the first thing I looked at
was a lot of these companies use
employee benefits consultants.
And turns out I was getting,
I was paying $30 per employee per month,
which was millions of dollars a year.
And they were just sendingus to the companies
that paid them the biggest commissions.
I'm like, how fucking dumb am I, right?
So I'm like, okay, we're cutting that.
And then I looked at ourmedication, our prescription deal
that goes through thePBMs that we were using,
and that the consultant connected us with.
And I took a list of, this wasearly on in Cost Plus Drugs,
a list of the generic drugs that we sold
that cost more than $30,
that the Mavericks alsohad purchased, right?
We were able to get that claims data.
And it turns out we spent$169,000 with that PBM,
one of the big three PBMs.
And it would've cost us buyingfrom Cost Plus Drugs $19,000.
And that's just a simple example.
Then I looked at the insuranceside of things, right?
We self-insure, so thereweren't premiums per se,
but we were getting charged$17.15 per employee per month
just to use the network thatthey put together for us,
you know, providers, hospitals, whatever.
And I'm like, all right,are there companies
that won't charge us to puttogether these networks?
Turns out there's a lot of them.
And that those insurancecompanies and those PBMs
are also responsible fordetermining what claims,
what to authorize and what to deny, right?
So for a drug, it may be, all right,
this is an expensive drug.
But before they'll allow,
before they'll saythey'll pay for the drug
that your doctor wantsto prescribe for you,
you have to try these three other drugs
in what's called step up therapy, right?
To see if these other cheaper drugs work,
or they're not even necessarily cheaper.
They may just be being pushed
because they're getting a higher rebate.
And so I'm like, that's insane.
I want my employees to get the medication
that the doctors say is best.
And so I didn't realizethose were the intricacies
of how my health or wheremy healthcare dollars went.
There's not a single CEO who does.
Because that's not a corecompetency that they need.
And the CFOs, that's nottheir core competency.
And the HR people, they contribute
and they understand it some
because they're dealing with the claims,
but they spend most of theirprescription drug-related time
or healthcare-related times
trying to get preauthorizations approved.
So you know, your kid breakstheir arm or you get sick,
and you go to the doctor,
and before the doctor willdo a surgery or do whatever,
they have to go to the insurancecompany, get preauthorized.
and then they always say no, right?
And then you have to go back
and somebody has to argue for you.
And that just eats up employee time
because you know, I'msick or my kid's sick
and you're wasting mytime, eats up HR time.
The CEOs don't know any of this, right?
So what I'm saying is, one,the smartest thing to do
is to get a healthcareCEO at every company
with over let's say, 500 employees,
that focuses on all these things.
You'd save a shitload of money.
And two, health careis your second largest
line item expense after payroll.
And in some companies there's hundreds,
billions of dollars, right?
And you don't understand it,
and you're letting these guys rip you off?
And it's because these bigCEOs don't understand it
and are getting ripped off
that the industry is the way it is,
because that allows theopacity to continue.
- That's fascinating.
So that most companies outsource, offload,
sort of the expertiseon the healthcare side
when they really should be,internally there should be
an expert that.
- Yes, because it's thewellness of your employees
and their families.
- [Lex] And it costs a lot of money.
- Yeah, but if youremployees aren't healthy
or if they're worried about their kids,
and what is more worrisome and detrimental
to the performance of a company, right?
A DEI program, or, (laughs)
or having to go to HR andscream and yell and explain,
and your doctor wastingtheir time doing same thing
to get authorization fora surgery or a medication.
It's insane.
- What made you decide
to step into this cartel-like situation
where so much is opaque?
- So I got a cold emailfrom a Dr. Alex Oshmyansky
who's my co-founder.
He's a radiologist bytrade, and a physicist,
and a smart motherfucker.
And he had a pharmacythat he wanted to create,
a compounding pharmacy, thatwould manufacture generic drugs
that were in short supply.
Because it happens all the time
that things aren't available.
I'm like, you're thinking too small,
we should do somethingon a much bigger scale.
And then it was right around the time
they were sending the pharmacybro, Martin Shkreli to jail.
And so I was reading up on that,
and he increased the priceof this drug Daraprim,
I think it was like 7,500%,
or increased a low cost drugto $7,500, one of those.
And I'm like,
well if he can just jackup the price to this drug
and charge more and get away with it,
this has to be an incrediblyinefficient market.
And so the question is,why is he able to do it?
And it was immediately apparent
that it was a lack of transparency.
And so can we start a company
that is fully transparent with our costs,
our markup, and our sellingprice, and see if it works?
And so we went for it andit took off immediately.
I mean, you know,
you read a press release froma company saying, you know,
they were creating acost advantage program
basically pretending to replicate us.
We haven't been in businesstwo years. How insane is that?
- Did you get a lot of pressure to mean,
I'm sure they're verygood at playing games.
Like so cartel-typesituations they protect.
It feels like healthcare like
is very difficult to get in there.
- It very, yeah, it does.
I mean, and the wholeindustry is an arbitrage,
but we don't work inside the system,
we work outside the system.
And so we don't work withthose biggest companies.
The biggest companies withthe most dominant control,
you know, it's very insulatedand very controlled,
like you said.
We work outside them,we won't work with them.
And so because of that,
we don't have access to every medication
because they've told a lot ofthe big brand manufacturers
that if they work with us,
they'll take them off their formularies
or change the rebate structure
so that they won't be prescribed as much.
- That's dark.
- Yeah, it is dark. Butwe'll get past that, right?
Because there's a downstream impact
of all this in the rebates,
and the greediness ofthose big three PBMs.
When you go to a localpharmacy here in Austin, right?
And let's just say you have,you have a friend here, right,
that is on Medicare or Medicare Advantage,
and they go to a local pharmacy
and they get a drug that costs $600.
Well, in the insurance company, that $600,
the pharmacy first buys that drug
for probably that price minus 5%, so $570.
Then there's probablya copay by the patient,
and that's probably $20.
So now the net investmentthat the pharmacy,
the local pharmacy has forthat brand medication is $550.
Where it gets really fuckedup is those big three PBMs,
they're not reimbursing them $550 or more,
they're reimbursing them $500 or less.
And literally those community pharmacies
are eating that loss.
And as a result,
they're going outtabusiness left and right.
And the most insane part of it is, yes,
with corporate employerinsurance, that happens,
but it happens more with Medicare Part D
and Medicare Advantage.
It happens all the time with those,
almost with every script.
So the government is complicit
in these community pharmaciesgoing out of business.
So how does that connectto Cost Plus Drugs?
And what we're doing and the big brands.
The big brands know
that if all these communitypharmacies are going,
tens of thousands of themare gonna go out of business
because of the way this pricing is,
they're gonna lose a connection
between their brand medications
and grandma and grandpa and Aunt Sally,
and all that business
is gonna get transferredto the big companies,
and they're gonna have even less leverage.
So they're working with usto come up with programs
that are very supportiveof independent pharmacies,
and that's gonna allowus to break the cartel.
Because it's in their best interest
not to allow them to beso vertically integrated
that they destroy the entire community
and independent pharmacy industry.
- Is there other aspectsof the healthcare industry
that could use this kind of
transparency and revolutionizing?
- Yeah, so what we're gonna do
with our own healthcare, right?
We're not gonna be in thebusiness of selling healthcare
or anything like that or operate.
But the things we do for my companies,
we're only gonna do deals with providers,
healthcare providers,
that allow us to becompletely transparent.
So that whatever contracts wedo, we're gonna post them all,
whatever pricing we get,we're gonna post them all
so that every company who'sour size or even bigger
will have a templatethat they can work on,
which will take it away from
the big three insurancecompanies and the big three PBMs.
Because now without that transparency,
they have to use consultants
who are getting paid by those big three,
you know, those big companies,
and aren't giving them the best response.
And so now that transparencywill overcome that.
- And you're using your,how should I say it?
Celebrity, your name, tokind of push this forward.
- It's the only companyI've ever put my name on.
- It's weird that peoplearen't getting into this space.
Like, public people, you know, like big,
there's not like a big,you know, you look at tech,
there's like these like, likeCEOs are open and public,
and public and they're pushing the company
and they're selling everything
and it's like all transparent.
But you don't see that in healthcare?
- No, because it's a big business,
and most people, like if I was25 trying to start a company,
I'd work in the system.
'Cause if I can build up bigenough, they would just buy me,
and I'd make, you know,money and buy a sports team.
But I don't need that money now.
- Let me ask you about AI,
you got in a little bit of anargument about open source.
I think you stepped inbetween Vinod Khosla
and Mark Andreessen.
You think AI should be open sourced?
- Yeah, for sure. Yeah.
- So like all thatdiscussion we've been having
about like Google and so on, one of the.
- Okay, two different things.
Meaning that Meta'sdoing open source, right?
And that's a good choice for them.
I think that's a smart choice, right?
But it's just a businessdecision for everybody else.
I don't think it should be forced.
- Forced, yes, yeah, right.
And even Google's open sourcingsome of the models and.
- Because they're all, that'sa very incestuous industry
where, you know, the people allwork together at some level.
They read the same papers, theygo to the same conferences.
You know, it's like the early days
of streaming and the internet
where people use the sametechnology everywhere,
and now they just try different things.
And you get one smarter or two,
a couple smart people in onecompany like Anthropic, right?
And they do things a littlebit better and efficient.
Model efficiency gets better.
So, you know, it's just a business choice.
But I don't think it should be forced,
but I think it's asmart business decision.
- Open sourcing is asmart business decision.
It's a tricky one.
I mean Google is a pioneer in that
with TensorFlow in the AI space.
That's a tricky decision to get.
- [Mark] It really, really is, right?
- To give away the code.
- Go back to historically, you know,
there was digital computing,which was a dominant player,
and they thought, andIBM to a certain extent
thought that they wouldn'tbe subject to a problem
with the PC industry.
And then all of a sudden,
and with their mainframes and everything,
they had captive software.
They wouldn't use off theshelf software, right?
So for a Digital Equipmentmainframe or an IBM mainframe,
you needed softwarethat was written for it.
There was nothing off the shelf.
And when the PC industry came along,
it was the exact opposite.
There was, you know,MSDOS and then Windows,
things that were off theshelf that every PC could use.
And that changed how peoplethought about software.
And I think the samething will happen here,
where it's going to be, asmodels become more efficient
and easier and less expensive to train,
I think there'll be morereasons to open source.
- Yeah, that's the hope.
And it creates more competition
and a lot of differentdiversity of approaches
in how they're implemented, deployed,
what kind of productsthey create, all of that.
Vinod compared it, the danger of that,
to the Manhattan Project that.
- Yeah, yeah. I'm not buying that.
- You don't see the parallels
between nuclear weapons and AI.
- No, no. I think, I'm notan AI fatalist at all, right.
I'm an AI optimist, but it's not to say
that there isn't a lot of scary shit
that can happen with it.
Militarily, you know, like I said earlier,
I'm a big believer thatthere's going to be millions
and tens of millions of models,
and people will take their expertise
and either get hiredfor it and contribute,
or create their own models and license.
So that, you know, yousee now with this thing
called mixture of experts, right?
Where you connect things.
And people can take their expertise
and we'll be able to take that expertise
and retain it in a way thatthey want to retain it.
So, you know, I don'tthink there's gonna be
one medical database.
I told this to people ata couple big companies
that were doing healthcare initiatives.
Branding is so importantin the healthcare space,
you know for hospitals,you know, the Mayo Clinics,
the MD Andersons, they're huge brands,
and I don't think they're justgonna give up their expertise
to some, you know,singular model, you know,
and say, okay, you know,whatever expertise we have
is available to you in Gemini or ChatGPT
or you know, so-and-so'sversion of Meta's opensource.
I just don't, there's just,that would be business suicide.
And so I think you'regonna see each of them
have their own models,
and update them as theygo and license them.
- Yeah, and yeah, makemoney from the expertise.
- You have to, you have to.- And don't the wages.
Yeah, yeah, yeah.
Any expertise evolves and growsand all that kind of stuff.
And you want own that growth.
What advice would yougive to young people?
You have an exceptionallysuccessful career.
You came from little, made a lot.
What advice would you give them?
- Love your life, right.
You know, find the things thatyou can enjoy. Be curious.
You don't have to have all theanswers when you're 12, 15,
I get emails from 13,15-year-old kids, right?
- [Lex] What do I do?
- What do I do? Right.
You know, I feel like I'm being held back.
I'm like at 15, you feellike you're being held back?
But just be curious.
'cause you don't have to have the answers.
You don't have to know
what you're gonna be when you grow up.
I'm a hardcore believerthat everybody has something
that they're really,really, really good at.
That could be world class great.
Every single human being on this planet.
And the hard part is justfinding what that is.
And in some places havingresources to enable it.
But be curious so youcan find out what it is.
I didn't take a technology.
I took one technology class in college,
Fortran programming, andI cheated on it, right?
I mean, it wasn't until Igot a job at Mellon Bank
and I started learning how to program
in this thing called RAMIS,
this scripting computinglanguage, that I realized, oh,
this is interesting to me and I like it.
And that's what got me, youknow, a job selling software
and the, you know, going on from there,
you just don't knowwhat that's going to be
until you go out andexperience different things.
So for anybody young out there listening,
you know, enjoy your life,find things to smile about.
Be curious, read, watch, you know,
expose yourself to as manydifferent ideas as you can
because something's gonnaclick at some point.
You may be 15, you maybe 25, you may be 55,
but it can happen.
- One thing to mention issometimes it's difficult,
or your parents, people around you,
might not be conduciveor might not be of help
in finding the thing you're good at.
In fact, like in my own life, you know,
the society was such that,
I don't know if they've helped much
at the thing I was good at.
I'm still not sure whatthat is. But I think.
- I think interviewingdone pretty well for you.
- Well, it's not even, there was a thing
where I saw the beauty in people.
Like I, very intensely.
So you can call that empathy,all that kind of stuff.
- Some will call it wokeness.
- Wokeness, super woke,awoke, I guess you could say.
Just super woke. That's me.
And you know, but in theeducation system, I came up,
and it was a very hardmathematics, you know,
science and so on.
And it didn't notice thatwhatever that was and mean.
But you know, you haveto keep the flame going.
You have to try to find yourway and see what that's useful.
And like others around youmight not always notice it.
So it might take time.So it could be lonely.
You can really have to find the strength
to believe in yourself.
- Oh, for sure.
You know, and I'll tellyou one other quick story.
1992, I went to Moscow State University.
To teach kids how to start businesses.
- Wow.
- 'Cause I had sold MicroSolutions,and I wanted to travel,
and I took Russian in high school.
My Ruski is like (speaks Russian).
- Good enough to remember that.
- Yeah, right, yeah.
But it was interesting to me,
and I bring it up becausejust, they didn't,
they didn't know what theword profit meant, right.
But at the same time, I wouldgo around and meet people,
and there were, it was as entrepreneurial,
like right after the Soviet Union fell,
entrepreneurship went through the roof.
I mean a lot of it was mafia driven,
but you know, people foundthat spark, you know,
because I think that that is natural.
And so you just neverknow when and how and when
the circumstances willcome together for you
to be able to take advantage.
- That spark is reallyimportant to comment on is,
in Russia and Ukraine,
I think the system kind ofsuppresses that spark somehow.
'Cause you said you saw thenatural entrepreneurship,
but there's not the entrepreneurialspirit once you grow up
in both of the nations.
I mentioned there is.
- [Mark] No, I believe it, right? I mean.
- Actually the Ukraine,
but there's something aboutthe system that kind of,
you know, be reasonable.- Without question.
- Be, you know, be.
- There would be noreason for me to go over
to do what I was doingif it was otherwise.
- But that's the thing
that really can help a country flourish.
- You know, it's gonna beinteresting with Ukraine,
if they're able to survive this, right?
Because as horrific as it is, you know,
as you saw across Europeafter World War II,
the rebuilding creates opportunities.
- Rebuilding creates opportunities.
But you know, first the warhas to end. How that ends.
- [Mark] I don't know either.
- Is a really complex path.
What gives you hope aboutthe future of humanity?
- Just looking in my kids'eyes, just, you know,
talking to them and seeing their spirit,
their friend's spirit.
And obviously we'reblessed as can be, right?
And it's not the same for every kid,
but I do, you know, I getemails that I respond,
don't respond to all ofthem, but from 13, 14,
15-year-old kids aroundthe world, you know,
'cause "Shark Tank's" shown everywhere,
asking me business questions.
And it's just like they took the time.
They were that curiousand that interested.
And I see it when I talkto schools, you know,
when I go to different groups,that spark in kids' eyes,
that there's something bigger and better
and exciting out there.
And that's not to saythere's not fear, you know,
climate, and any other number of things.
But that's the beauty of kids.
And I think Gen Z really embodies that.
And to me that's just really exciting.
- They dream, they dream big.
They see the opportunityfor making the world better.
It's cool, it's cool to see young people,
and in their eyes, that dream.
And I could be the one to do it too,
which is a super problem.
- You know, that's funny 'cause I,
when when I go talk to likeelementary school kids, right?
One of the things I do, Isaid, okay, let's look around.
You see that light there, oneday that light didn't exist.
Then somebody had the idea,
then somebody created a product of it,
and now your school bought that.
You see that chair? Chairsdidn't always look like that.
Somebody had that idea. Why not you?
So when you walk outand what I make them do,
ask yourself, why not me?
Why can't I be the oneto change the world?
- Thank you for thatbeautiful hopeful message.
And thank you for talking today, Mark.
You're fun to follow.I'm a big fan of yours.
- Same.
- But you're also an importantperson in this world.
I really appreciate everything you do.
- Well, I appreciate it.
Thanks for saying that Lex,
and keep on doing what you're doing.
This was great. I really enjoyed this.
- Thanks for listening to thisconversation with Mark Cuban.
To support this podcast,
please check out oursponsors in the description.
And now let me leave you withsome words from Oscar Wilde.
"Imagination was given to man
to compensate him for what he's not.
And a sense of humor was provided
to console him for what he is."
Thank you for listening, andhope to see you next time.