Menu
Sign In Pricing Add Podcast
Podcast Image

Lex Fridman Podcast

#422 – Mark Cuban: Shark Tank, DEI & Wokeism Debate, Elon Musk, Politics & Drugs

Fri, 29 Mar 2024

Description

Mark Cuban is a businessman, investor, star of TV series Shark Tank, long-time principal owner of Dallas Mavericks, and founder of Cost Plus Drugs. Please support this podcast by checking out our sponsors: - Listening: https://listening.com/lex and use code LEX to get one month free - Cloaked: https://cloaked.com/lex and use code LexPod to get 25% off - Notion: https://notion.com/lex - Eight Sleep: https://eightsleep.com/lex to get special savings - Shopify: https://shopify.com/lex to get $1 per month trial Transcript: https://lexfridman.com/mark-cuban-transcript EPISODE LINKS: Mark's X: https://twitter.com/mcuban Mark's Instagram: https://instagram.com/mcuban Cost Plus Drugs: https://costplusdrugs.com Shark Tank: https://abc.com/shows/shark-tank Dallas Mavericks: https://www.mavs.com PODCAST INFO: Podcast website: https://lexfridman.com/podcast Apple Podcasts: https://apple.co/2lwqZIr Spotify: https://spoti.fi/2nEwCF8 RSS: https://lexfridman.com/feed/podcast/ YouTube Full Episodes: https://youtube.com/lexfridman YouTube Clips: https://youtube.com/lexclips SUPPORT & CONNECT: - Check out the sponsors above, it's the best way to support this podcast - Support on Patreon: https://www.patreon.com/lexfridman - Twitter: https://twitter.com/lexfridman - Instagram: https://www.instagram.com/lexfridman - LinkedIn: https://www.linkedin.com/in/lexfridman - Facebook: https://www.facebook.com/lexfridman - Medium: https://medium.com/@lexfridman OUTLINE: Here's the timestamps for the episode. On some podcast players you should be able to click the timestamp to jump to that time. (00:00) - Introduction (11:10) - Entrepreneurship (26:03) - Shark Tank (36:29) - How Mark made first billion (1:02:39) - Dallas Mavericks (1:08:05) - DEI debate (1:43:58) - Trump vs Biden (1:46:20) - Immigration (1:55:53) - Drugs and Big Pharma (2:11:53) - AI (2:16:05) - Advice for young people

Audio
Featured in this Episode
Transcription

0.089 - 23.973 Lex Fridman

The following is a conversation with Mark Cuban, a multi-billionaire businessman, investor and star of the series Shark Tank, longtime principal owner of 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 Elon Musk and Jordan Peterson.

0
💬 0

25.868 - 33.031 Lex Fridman

And now a quick few second mention of each sponsor. Check them out in the description. It is in fact the best way to support this podcast.

0
💬 0

33.311 - 53.06 Lex Fridman

We got listening for, well, listening to things like research papers, Cloak for protecting your personal information, Notion for taking notes and collaborating on those notes with your team, Eight Sleep for naps, and Shopify for shopping or creating shops on the internets. Choose wisely, my friends.

0
💬 0

53.8 - 75.708 Lex Fridman

Also, if you want to work with our amazing team where I was hiring, or if you just want to get in touch with me, go to lexfriedman.com slash contact. And now onto the full ad reads. Never any ads in the middle. I try to make these interesting, but if you must skip them, please do check out our sponsors. I enjoy their stuff. Maybe you will too. This episode is brought to you by listening.

0
💬 0

76.428 - 94.678 Lex Fridman

an app, a website that allows you to listen to academic papers, listen to a bunch of stuff. I think you can listen to emails, to websites, all of that. I haven't tried that aspect of it. I should, probably, to listen to emails. I wonder how that would work. They have a Chrome extension, but I don't think it's through the Chrome extension.

0
💬 0

95.238 - 119.019 Lex Fridman

Anyway, the way I use it, and I think the original use case, which I think is awesome, is listening to research papers. And this includes super, super technical papers or more narrative-driven philosophical papers. For example, you can take the Turing paper on the Turing test. Obviously, the paper title is not the Turing test. I think it's called Computing Machinery and Intelligence.

0
💬 0

120.4 - 140.776 Lex Fridman

And of course, you can go to super technical papers, and I use it for that as well. I often do the following. I'll print out the paper, because the haptic feedback of a sheet of paper is really powerful for me. So I'll take notes on that with a highlighter and with a pen. I will also take notes on a PDF, and I will also listen to it over and over and over.

0
💬 0

140.836 - 162.808 Lex Fridman

So for me, the process of reading an academic paper is one that requires returning to it over and over and over again, unless I'm doing a quick skim. So for skimming, I can look at the PDF and quickly skim and then listen to certain parts that I find useful. So sometimes related work is really powerful because it summarizes in a nice way where the field stands. I'll listen to that.

0
💬 0

163.268 - 172.292 Lex Fridman

Sometimes the abstract is good to listen to. Sometimes the abstract introduction related work jump into the conclusion. If there's a methods in the paper, you listen to that. Anyway.

0
💬 0

173.172 - 197.103 Lex Fridman

I will basically use the listening function while I'm walking over to get some coffee or I'm on a run, and I'll listen to different parts of a paper to get a sense of what that paper contains and the main idea and so on that can build on. Or, as I said, to review a thing I've already returned to many, many, many times. And I have a large number of favorite papers that I've returned to many times.

0
💬 0

198.012 - 222.392 Lex Fridman

It's super easy to upload a paper. They have really nice AI voices that pronounce stuff well. And also just at the sentence paragraph level, the kind of narration style they have. is really, really nice. And obviously, SAI improves. They will keep improving. So jump on board now and enjoy this whole process. I highly recommend it.

0
💬 0

222.872 - 245.845 Lex Fridman

Normally, you would get a two-week free trial, but listeners of this very podcast get one month free. So go to listening.com slash Lex. That's listening.com slash Lex. This episode is also brought to you by Cloaked. As I mentioned last time, it's a thing that I always thought and hoped would exist, and now I know it exists, and it is awesome.

0
💬 0

246.245 - 256.288 Lex Fridman

It's a platform that lets you generate a new email and a new phone number every time you sign up for a website, so you can hide your actual email and your actual phone number from the world.

0
💬 0

257.228 - 285.253 Lex Fridman

I think of it as a kind of privacy layer that protects you from the wild, wild west of the internet where many, many services and companies desperately want your data and the in, the contact, the way to contact you. So Cloaked allows you to take the power back to give you some control of this relationship. to where your email remains a private email address.

0
💬 0

285.973 - 304.889 Lex Fridman

But this aspect of it is just a kind of super awesome feature. It's also a password manager, and I highly recommend you use a password manager. And so this is combined password manager and the ability to generate as part of the usual generation of a new password when you send it up to a thing. It also generates emails and phone numbers.

0
💬 0

305.469 - 318.237 Lex Fridman

And soon I read, which is interesting, they can generate credit cards. Sometimes places require credit cards for sort of quote unquote free trial. So if they can actually pull that off, which I don't know how they're going to do, it's pretty awesome.

0
💬 0

319.178 - 341.831 Lex Fridman

And in general, I'm just a big supporter of companies innovating how to maintain people's privacy in this internet age where there's so much money to be made from people's data. So it's an interesting sort of technological and business challenge of how to protect the data. So, hats off to Cloaked for doing a great job.

0
💬 0

342.412 - 363.285 Lex Fridman

Plus, the interface, as you mentioned, is super nice, which is really important because the kind of sign-up process to a new website should be effortless, and Cloaked doesn't get in the way. Go to cloaked.com slash Lex to get 14 days free, or for a limited time, use code LexPod when you sign up to get 25% off an annual Cloaked plan.

0
💬 0

364.446 - 386.917 Lex Fridman

This episode is also brought to you by Notion, a note-taking app that I've been using forever, but they have awesome team collaboration tools. Man, it must be forever ago that I first saw Notion recommended to me, but it was always the cool kids that were using Notion. And when I started using Notion, it was the first time I really sort of deliberately thought

0
💬 0

388.178 - 406.672 Lex Fridman

my note-taking process to be more 21st century-like. So to use technology for the first time. So I'm really happy I did that. Obviously now with the new wave of large language models, Notion is probably the best way best integration of large language models into the note-taking process that I've seen.

0
💬 0

407.493 - 427.312 Lex Fridman

It can do all kinds of stuff like summarize text, it can generate the first draft for text, it can do bullet points, all that kind of stuff. Now, for the team collaboration part, you can ask it questions about the stuff it knows, and it can look across all the documents, the notes, the wikis, the projects, And it can answer questions based on everything it knows across those documents.

0
💬 0

428.072 - 452.664 Lex Fridman

And it can generate sort of summaries and reports about those documents. So I think it's an incredible team collaboration tool in that regard. You can try Notion AI for free when you go to notion.com slash lex. That's all lowercase notion.com slash lex to try the power of Notion AI today. This episode is also brought to you by Eight Sleep and the beautiful, wonderful power of naps.

0
💬 0

454.105 - 485.392 Lex Fridman

I'm now back in Austin. I was traveling a bit and it's one of the things I really look forward to when I come back home. It's a cold bed surface with a warm blanket. You can control the temperature of the bed on each side separately. A nice nap is truly heaven. I could be in the worst mood and a nap just kind of helps that mood, whatever that is, to dissipate, to just disappear into the ether.

0
💬 0

487.713 - 510.229 Lex Fridman

Wherever my mind goes, it returns quickly refreshed, renewed, and ready to take on the day once again. I'm a huge supporter of naps. I don't care. I don't care what anybody says. Naps are huge. Actually, it's funny you mention that when I was at Google, they have these nap pods. I'm sure a lot of tech companies have nap pods. I feel like Google invented the nap pod.

0
💬 0

511.389 - 533.408 Lex Fridman

But I think a lot of people weren't sort of confident enough or were a little bit embarrassed to use the nap pod. I did too. It felt kind of weird. So I would just like put my head down on the desk and sleep right on the desk. I really didn't care. But when I did use the nap pods, they were pretty epic. Because it kind of keeps out the rest of the world. So there's a sense of privacy in it.

0
💬 0

533.548 - 557.878 Lex Fridman

It's pretty cool. But nothing compared to Eight Sleep. You can check it out yourself and get special savings when you go to eightsleep.com. This episode is also brought to you by Shopify, a platform designed by anyone to sell anywhere, anything with a great looking online store. Even I, friends, can figure out how to do it in a few minutes. I create a store, lexferman.com slash store.

0
💬 0

558.258 - 578.065 Lex Fridman

I think it is where there's a bunch of shirts. Now, that store is super minimalist, and I'm a big fan of minimalism, but you can get super fancy, and it integrates with a lot of third-party apps. I use it for on-demand printing of the shirts. So it's another service that does the printing and the shipping of the shirts, so you don't have to think about anything.

0
💬 0

578.085 - 604.34 Lex Fridman

You could sort of outsource all of it. But you can use Shopify to basically sell anything. And it's cool to have this thing. that enables the efficient, accessible way of creating a node in the capitalist machine, in the capitalist network, the living, breathing network of capitalism, where the invisible hand of the market does its work.

0
💬 0

605.06 - 631.488 Lex Fridman

Yes, there are downsides to capitalism, but there's a lot of upsides. Giving the power to the individual creators and the makers, the builders, to build and sell their stuff, I love it. One of the most beautiful things that humans can do is to create, and I will continue to celebrate their ability to create. And I'm glad Shopify is making it easier for them to make money off of their creations.

0
💬 0

632.288 - 653.819 Lex Fridman

Sign up for a $1 per month trial period at Shopify.com slash Lex. That's all lowercase. Go to Shopify.com slash Lex to take your business to the next level today. This is the Lex Friedman Podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Mark Cuban.

0
💬 0

670.717 - 681.961 Lex Fridman

You've started many businesses, invested in many businesses, heard a lot of pitches privately and on Shark Tank. So you're the perfect person to ask, what makes a great entrepreneur?

0
💬 0

683.162 - 702.993 Mark Cuban

Somebody who's curious. They want to keep on learning because business is ever-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 to adapt and make the changes. And somebody who can sell. Because no business has ever survived without sales.

0
💬 0

703.714 - 714.51 Mark Cuban

And as an entrepreneur who's creating a company, whatever your product or service is, if that's not the most important thing and you're just dying and excited to tell people about it, then you're not going to succeed.

0
💬 0

714.71 - 716.431 Lex Fridman

But it's also a skill thing. How do you sell?

0
💬 0

716.451 - 736.098 Mark Cuban

What do you mean by selling? Selling is just helping. I've always looked at it 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.

0
💬 0

736.458 - 754.751 Mark Cuban

I'll bring them to your house and drop them off to streaming platforms. Why do we need streaming when we have TV and radio? Well, you can't get access to your TV and radio everywhere you go. So we kind of break down geographic and physical barriers and cost plus drugs. What's the product that we actually sell? We sell trust.

0
💬 0

756.152 - 766.08 Mark Cuban

In a simplistic approach, we buy drugs and sell drugs, but we add transparency to it. And bringing transparency to an industry is a differentiation and it helps people.

0
💬 0

766.34 - 769.202 Lex Fridman

Trust in an industry that's highly lacking in trust.

0
💬 0

769.702 - 770.103 Mark Cuban

Exactly.

0
💬 0

770.823 - 781.036 Lex Fridman

Okay, so what's the trick to 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 it or can you develop it?

0
💬 0

781.297 - 798.261 Mark Cuban

Oh, you can definitely develop it. Yeah, I mean, because selling garbage bags door to door was easy, right? You guys like... 12-year-old Mark going, hi, my name is Mark. Do you use garbage bags? You know what the answer is going to be, right? Can I just drop them off for you once a week whenever you need them? You just call and I'll bring them down? Sure. So that was easy.

0
💬 0

798.562 - 812.633 Mark Cuban

But I'm sure you've been rejected. Oh yeah, of course. Not everybody says yes. What was your percentage? I don't remember, but it's pretty close to 100%. Oh, okay. So that's why you don't remember. Yeah, right. Because who's going to say no to a 12-year-old kid who's going to save time and money?

0
💬 0

813.234 - 836.332 Mark Cuban

But typically my career where I've started companies, it's to do something that other people aren't doing, whether it was connecting PCs to local area networks and at microsolutions. And the salesmanship was walking into a company and just saying, look, talk to me and I can help you improve your productivity and your profitability. Is that important to you? And the answer is obviously always yes.

0
💬 0

836.392 - 850.841 Mark Cuban

And then the question is, can I do the job and can I do it cost effectively? And so you didn't have to be a born salesperson to be able to ask those questions, but you have to be able to be willing to put in the time to learn that business. And that's the hardest part.

0
💬 0

851.141 - 858.55 Lex Fridman

I'm sure there's a skill thing to it, too, in like how you solve the puzzle of communicating with a person and convincing them.

0
💬 0

859.371 - 878.018 Mark Cuban

Yeah, I mean, there's skill from the perspective that I read like a maniac. Then like now you can give me an example of any type of business and it'll take me two seconds to figure out how they make money and how I can make them more productive. And I think that's probably my biggest skill, being able to just drill down to what the actual need is, if any.

0
💬 0

878.538 - 890.963 Mark Cuban

And then, you know, from there 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?

0
💬 0

891.403 - 902.834 Lex Fridman

So figure out how this kind of business makes money in the present, and then figure out, is there a way to make more money in the future by introducing a totally new kind of thing? Correct. And you can just do that with anything? Pretty much, yeah.

0
💬 0

903.815 - 924.189 Mark Cuban

And you think you're born with that? No, I worked at it. Because going back to what I said earlier 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 world we were born into, which is absolutely true. If you're not a voracious consumer of information, then you're not going to be able to keep up.

0
💬 0

924.229 - 946.457 Mark Cuban

And no matter what your sales skills or ability are, they're going to be useless. What'd you learn about life from your dad? You mentioned your dad. My dad did upholstery on cars, you know, got up, went to work every morning at 7 o'clock, came back 5 or 6, 7 o'clock, exhausted. And I learned to be nice. I learned to be caring. I learned to be accepting.

0
💬 0

947.757 - 968.136 Mark Cuban

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. And I think he didn't have business experience. So as I got into business, he would just say, sorry, Mark, I can't help you. I don't understand what you're doing. Neither one of my parents had gone to college. You've got to figure it out for yourself.

0
💬 0

968.216 - 985.673 Mark Cuban

But he was also very insistent that he worked at a company called Regency Products where they did upholstery on cars. And he would bring me there to sweep the floors, not because he wanted me to learn that business, because he wanted me to learn how backbreaking that work was. I mean, he lost an eye in an accident at work, a staple broke.

0
💬 0

986.834 - 993.559 Mark Cuban

And the only thing he wanted from my brothers and I was for us to never have to work like that, to go to college, to figure it out.

0
💬 0

993.799 - 1002.846 Lex Fridman

You said to be nice. That said, you also said that when you were first starting a business, you were a bit more of an asshole than you wish you were. you would have been. Absolutely, yeah.

0
💬 0

1002.906 - 1015.496 Mark Cuban

Because I was more of a yeller. I was, you know, I didn't have- No, really? Yeah. What you see on the sidelines, you know, with me at a Mavs game, maybe a little bit, but I also didn't have any patience for somebody I thought-

0
💬 0

1016.337 - 1037.351 Mark Cuban

wasn't using my kind of common sense right because i was always on the go go go go go when i particularly when i was younger just trying to be successful trying to get to the point where i had independence and i would tell this to people you know either you're speeding up and 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

0
💬 0

1038.191 - 1057.165 Mark Cuban

Did you have trouble with the hire fast, fire fast part of running a business? Yeah, always. Because I hated firing people. Because 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.

0
💬 0

1057.185 - 1074.074 Lex Fridman

So I always delegated that. Well, this is a tricky thing. When you're working with somebody and they're not quite there... And you have to decide, are they going to step up and grow into the person that's the right or they're not? And in that gray area is probably where you have to fire. It was hard.

0
💬 0

1074.194 - 1094.996 Mark Cuban

Yeah, for sure. Because it's obviously a failure somewhere in the process. What did we do wrong? And when I would interview people for jobs... I think 99% of the people I've ever interviewed, I've wanted to hire because in my mind, it was like, okay, I can figure out how to make this person work, right? And then they wouldn't.

0
💬 0

1095.036 - 1101.84 Mark Cuban

And then, you know, people at the company would be like, Mark, you suck at this, you know? And so I always delegated the hiring.

0
💬 0

1101.86 - 1110.126 Lex Fridman

Yeah. I mean, I'm the same. I see the potential in people. I see the beauty in people, which is a great way to live life. But when you're running a company, it's a different thing.

0
💬 0

1110.146 - 1124.793 Mark Cuban

It's different. And you got to know what you're good at and what you're bad at, right? I was good at, I was a ready, fire, aim guy, and I always partnered with people who were very anal and perfectionist because where I could just go, go, go, go, go, go, they would keep me inside the baselines.

0
💬 0

1125.013 - 1127.514 Lex Fridman

They would do the due diligence, I suppose.

0
💬 0

1127.534 - 1146.278 Mark Cuban

Yeah, or just, yeah, the detail work, the dot the I's and the cross the T's. What does it take to take that first leap into starting a business? That's the hardest part. It really depends on your personal circumstances. Like I got fired. I mean, I was sleeping on the floor, six guys in a three bedroom apartment, so I couldn't go any lower. So there was no downside.

0
💬 0

1146.598 - 1159.161 Mark Cuban

Yeah, there was no downside for me starting a business. And it was just like, you know, I was 25 when we started MicroSolutions and, you know, I just gotten fired. And it was like, look, I'm a lousy employee. Um,

0
💬 0

1159.801 - 1181.185 Mark Cuban

I'm going to just start going to some of my prospects that I had in my job and ask them to front the money that I needed to install some software and found this company, Architectural Lighting, who put up $500 for me. That allowed me to buy software and have 50% margins and You know, that's how I started my company. But like by way of advice, would you say, I mean, it's a terrifying thing. Yeah.

0
💬 0

1181.305 - 1197.755 Mark Cuban

I mean, you've got to be in a position where you're confident. You know, I get emails and approached by people all the time. You know, what kind of business should I start? That tells me you're not ready to start a business, right? Either you're prepared and you know what you don't. You know, in the United States with the American dream, everybody kind of

0
💬 0

1199.344 - 1210.65 Mark Cuban

always looks at themselves and say, okay, you know, I have this idea, right? And then you go through this process of saying, okay, you know, you talk to your friends or family, what do you think? And then almost always, oh, it's a great idea, right?

0
💬 0

1210.67 - 1229.573 Mark Cuban

Then you go on Google and you say, oh my God, no one else is doing it without thinking, you know, 10 companies had gone out of business trying the same thing, but okay, it's on Google. And then people stop. right? Because that next step means, okay, I have to change what I'm doing in my life. And that's not easy for 99% of the people.

0
💬 0

1229.893 - 1251.528 Mark Cuban

Some people look at that as an opportunity to 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 to deal with the consequences of changing your circumstances. And that's the first thing, you know, do you save money?

0
💬 0

1251.568 - 1267.606 Mark Cuban

You know, so you have, you know, if you have a job, do you have a mortgage? Do you have a family? You've got to save money. You can't just walk. I mean, they've got to eat and they've got to have shelter. But on the other side of the coin, if you've got nothing, it's the perfect time to start a business. Yeah, desperation is a good catalyst for starting a business.

0
💬 0

1267.686 - 1281.069 Lex Fridman

But in many cases, the decision, as you're talking about, you're going to have to make is to leave a job that's providing some degree of comfort already. So I suppose when you're sleeping on the floor and there's six guys, it's a little bit easier.

0
💬 0

1281.089 - 1283.75 Mark Cuban

It's really easy, right? Particularly when you get fired and you don't have a job.

0
💬 0

1284.27 - 1310.559 Mark Cuban

you know and you're looking at bartending at night to try to pay the bills and so um it wasn't hard for me but to your point it really comes 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 to give up to put the money aside um if you have obligations um you'll put in the work to learn as much as you can about that industry so that when you start your business you're prepared

0
💬 0

1311.399 - 1325.429 Mark Cuban

And you can always, you know, at night, on weekends, whenever you find time, lunch, start making the calls to find out if people will write you a check, you know, transfer you money to buy whatever it is you're selling. And by doing those things, you can put yourself in a position to succeed.

0
💬 0

1325.83 - 1345.521 Mark Cuban

It's where people just think, okay, you know, Geronimo, I'm leafing off the edge of a cliff and I'm starting a business. That's tough. But sometimes that's like the way you do it though. There's always examples of any situation or scenario, right? But I mean- Yeah, but if you're going into a new business, you're going to have competition unless you're really, really, really, really, really lucky.

0
💬 0

1345.941 - 1353.343 Mark Cuban

And that competition is not going to just say, okay, let Lex or Mark just kick our ass. And so you've got to be prepared to how you're going to deal with that competition.

0
💬 0

1354.523 - 1362.985 Lex Fridman

What do you think that is about America that has so many people who have that dream and act on that dream of starting a business?

0
💬 0

1363.786 - 1382.86 Mark Cuban

You know, I think we've just got a culture of consumption and more. And to get more, you've got to, creating a business gives you the greatest potential upside and the greatest leverage on your time, but it also creates the most risk.

0
💬 0

1383.461 - 1395.33 Lex Fridman

So that capitalist machine, there's a lot of elements by contrast. uh, the respect for the law, like an entrepreneur can trust that if they pull it off, the law will protect them. There won't be a government.

0
💬 0

1395.35 - 1399.212 Mark Cuban

Hopefully that's still the case. Yeah. Well, yeah, there's always, uh, yeah.

0
💬 0

1399.272 - 1400.573 Lex Fridman

Other countries. Right. Right.

0
💬 0

1400.653 - 1410.239 Mark Cuban

So us versus other countries, like Joe Biden, of all people said to me, um, it was at an entrepreneurship conference that when he was vice president, he had put together and, uh,

0
💬 0

1411.019 - 1434.898 Mark Cuban

we had gone up there from a bunch of us from shark tank to talk to young entrepreneurs from around the world and he said to me mark you know the one thing that separate i've been to every country around the world and the one thing that separates us is entrepreneurship we're the most entrepreneurial country in the world and there's no one else who's even close and when you look at the origin of our big you know the biggest companies in the world for the most part

0
💬 0

1435.626 - 1453.751 Mark Cuban

There's an American origin story somewhere behind there. And I think that just gets perpetuated on itself. We see those Horatio Alger stories. We see examples of the Jeff Bezos of the world, the Steve Jobs of the world. And those are the types of people we want to copy.

0
💬 0

1454.391 - 1471.093 Lex Fridman

Yeah, we want to be really careful and try to really figure out what that is because we don't want to lose that. 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.

0
💬 0

1471.133 - 1488.067 Lex Fridman

One of the things that troubles me is that we don't enough celebrate the entrepreneurs that take risks and the entrepreneurs that succeed. It seems like success, especially when it comes with wealth, is immediately matched with distrust and criticism and all that kind of stuff.

0
💬 0

1488.087 - 1512.247 Mark Cuban

Yeah, it's changing for sure because you can go back just 12 years, right? Traditional media dominated, let's just say, through 2012. That was the peak of linear television. Newspapers weren't as strong, but they still had some breadth and depth to them. And then social media comes along and everybody gets to play in their own sandbox and share opinions with people who think just like them.

0
💬 0

1513.047 - 1536.837 Mark Cuban

And it also gives them the opportunity to amplify those feelings. And I think that's where celebrating entrepreneurs really started to subside some. There were always people who were progressive that were like, billionaires are bad or millionaires are bad, depending on the time period. But you didn't really see it on an ongoing basis, right? It wasn't gonna be on the evening news.

0
💬 0

1536.917 - 1556.869 Mark Cuban

It wasn't going to be in the front page of the newspaper. It was going to be if you read a book and someone talked about it, or you read a magazine and there was an article talking about this progressive movement or that progressive movement, whatever it may be, or political parties. But now... All of that is front and center on social media.

0
💬 0

1557.509 - 1568.437 Lex Fridman

And we're trying to figure out how we deal with the mobs of people and the virality of it all. I think we'll find our footing and start celebrating greatness again. Well, I mean, that's the whole reason I do Shark Tank.

0
💬 0

1568.557 - 1582.667 Mark Cuban

That's true. That show celebrates the entrepreneur. It's the only place where every single minute of every single episode, we celebrate the American dream. And the reason I do it is we tell the entire country and it's shown around the world even.

0
💬 0

1583.028 - 1602.882 Mark Cuban

We're amazing advertising for the American dream and I don't even know how many countries, but every time somebody walks onto that carpet from Dubuque, Iowa or Ketchum, Idaho, that sends a message to every kid who's watching, seven, eight, nine, 10, 12 year old kid, that if they can do it from Ketchum, Idaho, you can do it.

0
💬 0

1603.222 - 1624.322 Mark Cuban

If they can have this idea and get a deal or even present to the sharks and have all of America see it, you can do it. And that, I mean, I'm proud of that. The 15 years of that is just, it's just been insane. You know, now kids walk up to me and go, yeah, I started watching you when I was five or 10 and I started a business because I learned about it from Shark Tank. And so, you know, I think

0
💬 0

1625.883 - 1633.465 Mark Cuban

It celebrates it, and we convey it, and I don't think it's going away, but there are different battles we have to fight to support it.

0
💬 0

1633.685 - 1648.708 Lex Fridman

Yeah, I love even when the business idea is obviously horrible. Just the guts to step up. To be there. To believe in yourself, to really reach. I mean, that's what matters. Because some of the best business ideas are probably...

0
💬 0

1649.728 - 1665.757 Mark Cuban

uh maybe even you and shark tank will laugh at oh for sure you know without question the good ones we're not going to recognize every good one and then sometimes we'll just motivate people to work even harder to get it done because of what we say to them and that's fine too you know there's been great success stories that we said no to

0
💬 0

1666.297 - 1672.902 Lex Fridman

What stands out as like a memorable business you've been pitched on Shark Tank? What's the best one that stands out?

0
💬 0

1672.922 - 1694.466 Mark Cuban

There's no best one, right? They're all different. They're all best in their own way, I guess. The stupid ones. And, you know, we haven't had any, you know, world-changing, earth-shattering ones, right? Because those... aren't gonna apply to Shark Tank. They don't need us, right? So we typically get businesses that need some help at some level or another.

0
💬 0

1695.186 - 1715.86 Mark Cuban

But there's ones I've passed that I wish, like Spikeball, do you know what Spikeball is? So it's this rebounding net that you can put on the beach and you have these yellow balls and you play a game of, it's just a competitive game, but they're killing it. To beaches in New York or LA, you'll see kids playing it all the time. And it was a fun game that I wish I had done a deal with.

0
💬 0

1716.14 - 1726.726 Mark Cuban

And there's been others. And you passed. And I passed. They were getting some traction and they wanted to create leagues, spike ball leagues. And they wanted me to be the commissioner. And I don't want to be a commissioner of a new spike ball league.

0
💬 0

1728.183 - 1732.505 Lex Fridman

So you have to kind of have this gut feeling of, will this scale?

0
💬 0

1732.565 - 1751.356 Mark Cuban

Will this click with people? Of course. Yeah. Can it be protected? Is it differentiated? Is it something that makes me think, why didn't I think of that? Or is it just a good, solid business that's going to pay a return to the founder and may not be enough of a business to return to an investor? Yeah.

0
💬 0

1751.816 - 1762.001 Lex Fridman

Yeah, and I guess the question you're trying to see, will this scale, this promise, will the promise materialize into a big thing?

0
💬 0

1762.221 - 1781.954 Mark Cuban

Well, see, I don't even care if it's going to be a big thing, right? Because it's all relative to the entrepreneur. We had a 19-year-old from Pittsburgh, Laney, who came on with this simple sugar scrub. And there was nothing outrageously special about it. I didn't see it becoming a $100 million business. I thought it could become a $2, $3, $5 million business that paid the bills for her.

0
💬 0

1782.395 - 1803.6 Mark Cuban

And that was good enough. And six months after the show aired, she called me up. She goes, Mark, I've got a million dollars in the bank. What am I going to do? I'm like, enjoy it. Put aside money for your taxes and go back to work. Mm-hmm. And so it doesn't have to be a huge business. It's just gotta be one that makes the entrepreneur happy. But then there's the valuation piece.

0
💬 0

1804.36 - 1807.442 Lex Fridman

Do a lot of the entrepreneurs overvalue business?

0
💬 0

1807.762 - 1831.235 Mark Cuban

Yeah, I mean, that's the nature of it, right? I mean, and that's really where the biggest conflicts in Shark Tank happen. That's in the valuation. They think this is the best business ever. We had one lady, a couple that came on, and they had this scraper for cat's tongues, right? Nice. Bizarre. The most bizarre pitch ever. I love it.

0
💬 0

1831.275 - 1836.478 Mark Cuban

And they had this insane valuation, and it was on because it was corny and fun TV, not because it was a good business.

0
💬 0

1836.678 - 1839.919 Lex Fridman

Oh, really? Okay. You didn't see the potential. None.

0
💬 0

1839.939 - 1840.499 Mark Cuban

Yeah, none.

0
💬 0

1841.519 - 1843.46 Lex Fridman

There's a lot of cats in the Walmart. Yes, there are.

0
💬 0

1843.84 - 1845.6 Mark Cuban

They'll go do very well without me.

0
💬 0

1846.661 - 1852.562 Lex Fridman

So how do you determine the value of a business, whether it's on Shark Tank or just in general? It's actually really easy, right?

0
💬 0

1852.942 - 1874.106 Mark Cuban

So if you take, just to use an example, a business that's valued at $1 million, and I want to buy 10% of that company for $100,000, right? then in order for me to get my money back, they've got to be able to generate $100,000 in after-tax cashflow that they're able to distribute. Can they do it or can they not?

0
💬 0

1875.407 - 1896.592 Mark Cuban

And if it's a $2 million valuation, whatever the valuation is, that's how much cash, after-tax cash, they have to generate to return that money to investors. Or the other option is, do I see this as business potentially having an exit? Do they have some unique technology or do they have something specific about them that some other company would want to acquire?

0
💬 0

1897.032 - 1904.078 Mark Cuban

then the cash flow isn't as, I don't want to say important, but isn't going to guide the valuation.

0
💬 0

1904.438 - 1909.563 Lex Fridman

And how do you know if a company is going to be acquired? So it's the technology, like the patents, but also the team?

0
💬 0

1909.583 - 1917.269 Mark Cuban

Yeah, it could be any of the above, right? It could be a super products company that I think is going to take off.

0
💬 0

1917.722 - 1921.646 Lex Fridman

And how do you know if they can generate the money? You made it sound easy.

0
💬 0

1922.046 - 1937.9 Mark Cuban

Yeah, I mean, can the person sell? 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. That's where Barbara Corcoran's the best. She can look at a person and hear them talk for 20 minutes and know, can that person do the job and do the work?

0
💬 0

1938.36 - 1963.503 Lex Fridman

can you tell if they're full of 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 in terms of their understanding of the market or also like or exaggerating what they're thinking do all that kind of stuff can you see through that yeah for sure just by asking questions you know so if if they are um delusional at some level

0
💬 0

1964.444 - 1986.503 Mark Cuban

or misleading at another level i'm gonna i'm gonna call them on it you know so you get people trying to sell supplements that come on there and it's a cure for cancer or whatever it may be or there's this latest fad that you know increases your core strength without doing any exercises you know shit like that i'm just gonna bounce i'm gonna pound on them right i still love that i still love the trying

0
💬 0

1987.164 - 1994.233 Mark Cuban

You know, give them credit, right? Because they know all of America is going to see it. And they're deluded themselves to believe this story so strongly.

0
💬 0

1994.253 - 1997.818 Lex Fridman

I mean, there's a delusional aspect to entrepreneurship, right? Like you just...

0
💬 0

1999.084 - 2023.815 Mark Cuban

See, that's a great question. Do you have to be ambitious and set aside reality at some level to think that you can create a company that could be worth $10, $100, $1 billion, right? Yeah, at some level, because you don't know. It's all uncertainty. But I think if you're delusional, that works against you. Yeah. Because everything's grounded in reality. You've got to execute.

0
💬 0

2023.835 - 2036.182 Mark Cuban

You've got to produce. You can have a vision, right? And you can say, this is where I want to get to, and that's my mission, or this is my driving principle. But you still got to execute on the business plan, and that's where most people fail.

0
💬 0

2036.482 - 2049.049 Lex Fridman

Yeah, you have to be kind of 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 first principles, the basics of how to build the thing, how much it's going to cost, all of that.

0
💬 0

2049.349 - 2067.178 Mark Cuban

Yeah, I mean, because if you can't do the basics, you're not going to be able to do the bigger things. And at the same time, you've got to be able... One of the things that entrepreneurs do that I always try to remind any 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...

0
💬 0

2068.158 - 2092.109 Mark Cuban

situation that's never going to change right and there's always somebody i call them leapfrog businesses there's whoever's competing against you you know if you do a b or c they're going to try to do c d and e right and you better be prepared for that to come because otherwise they're out of business too so you're never in a vacuum you're always competing against sometimes an unlimited number of entrepreneurs that you don't even know exist who are trying to kick your ass

0
💬 0

2092.805 - 2107.369 Lex Fridman

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 the beginning, the product you have should be the thing that carries you a long time. Yeah.

0
💬 0

2107.389 - 2129.322 Mark Cuban

Because I mean, that's, that's your riskiest point in time. Right. And so if you've done your homework, which includes going out there and testing product market fit, um, 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 and you sell whatever it is, and you've raised money or whatever,

0
💬 0

2130.452 - 2143.497 Mark Cuban

And just to pivot, you've already shown that you haven't been able 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.

0
💬 0

2143.837 - 2149.699 Lex Fridman

Well, I also mean like the micro-pivots, which is like iterative development of a thing. Oh, yeah.

0
💬 0

2149.779 - 2165.747 Mark Cuban

Oh, yeah. Just iterations. Yeah. Yeah. You know, entrepreneurship being, having any business is just continuous iteration, continuous. Your product, your sales pitch, your advertising, you know, introducing new technology. How do you use AI or not use AI? Where do you use it? What person is the right person?

0
💬 0

2166.307 - 2175.812 Mark Cuban

There's just a million touch points, you know, that you're always reevaluating in real time that you have to be agile and adapt and change.

0
💬 0

2176.312 - 2180.954 Lex Fridman

But especially in software, right? It feels like business model can evolve really quickly too.

0
💬 0

2180.974 - 2188.497 Mark Cuban

Like how are you going to make money on this? Software for sure. Because, you know, anything digital. Because it can change in a millisecond.

0
💬 0

2188.897 - 2191.798 Lex Fridman

Speaking of which, how did you make your first billion?

0
💬 0

2192.338 - 2216.996 Mark Cuban

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 – used this new thing called the internet, this is late 94, early 95, to be able to listen to Indiana University basketball games, because that's where we went to school.

0
💬 0

2217.896 - 2236.762 Mark Cuban

And he was like, look, when we would listen to games, we would have somebody in Bloomington, Indiana, have a speakerphone next to a radio, and then we would have a speakerphone in Dallas, and a six-pack or 12-pack of beer, and we'd sit around listening to the game, because there was no other way to listen to it. So I was like, okay, my first company, Micro Solutions, I'd written software,

0
💬 0

2237.282 - 2262.263 Mark Cuban

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 this company called AudioNet and effectively became the first streaming content company on the internet. And we're like, okay, we're not sure how we're going to make this work, but we were able to make it work. And we started going to radio stations and TV stations and

0
💬 0

2263.243 - 2289.018 Mark Cuban

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 largest multimedia site on the internet, took it public in July of 1998. It had the largest first day jump in the history of the stock market at the time. And then a year later, we sold it to Yahoo for $5.7 billion in Yahoo stock.

0
💬 0

2291.42 - 2297.745 Mark Cuban

and I owned right around 30% of the company, give or take. And so after taxes, that's what got me there.

0
💬 0

2298.146 - 2314.541 Lex Fridman

Well, there's a lot of questions there. So the technical challenge of that, you're making it sound easy, but you wrote code, but still in the early days of the internet, how do you figure out how to create this kind of product of just audio at first and then video at first.

0
💬 0

2314.561 - 2327.831 Mark Cuban

A lot of iterations, right, like you talked about. We started in the second bedroom of my house, set up a server, I got an ISDN line, which was 128K line, and set up, downloaded Netscape server

0
💬 0

2328.872 - 2347.684 Mark Cuban

And then started using different file formats that were progressive loading and allowing people to connect to the server and do a progressive download so that the audio, you can listen to the audio while it was downloading onto your PC. Yeah, was it super choppy? So you were trying to figure out how to do it? Oh yeah, for sure, for sure. It would buffer. It wasn't good, but it was a start.

0
💬 0

2349.065 - 2353.006 Lex Fridman

But it was good enough because it's the first kind of... Yeah, because there was no other competition, right?

0
💬 0

2353.026 - 2374.374 Mark Cuban

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 third-party software companies, Zing and Progressive Networks and others that took it a little bit further. So we partnered with them and I started going to local radio stations where literally we would... set up a server right next to it.

0
💬 0

2374.574 - 2399.866 Mark Cuban

I had a $49 radio, the highest FM radio that I could find. And we take the output of the audio signal from the radio with these two analog cables, plug it into the server, encode it, and make it available 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 go wherever I could find bodies.

0
💬 0

2400.306 - 2424.283 Mark Cuban

And I'd say, okay, we've got this radio station, KLIF in Dallas. It's got Dallas sports and Dallas news and politics. And if you're in an office or you're outside of Dallas, connect to audionet.com, and now you can listen to these 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.

0
💬 0

2425.044 - 2440.717 Mark Cuban

The laws were different then, so we could literally go out and buy CDs and host them and just let people listen to whatever music. And we went from 10 users a day to 100 to 1,000 to hundreds of thousands to a million over those next four years.

0
💬 0

2440.737 - 2444.318 Lex Fridman

How did you find the users? Is it word of mouth? Word of mouth. Just word of mouth.

0
💬 0

2444.398 - 2445.538 Mark Cuban

Didn't spend a penny on advertising.

0
💬 0

2445.558 - 2451.559 Lex Fridman

So the thing you were focusing on is getting the radio stations and all that? Well, radio and TV, anything, any content at all. Did you pick up the phone? How'd you?

0
💬 0

2451.639 - 2474.426 Mark Cuban

Wherever I could, like everything 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 Minimum Copyright Act of 97, whenever it kicked in. So literally anything that was audio- We would put online so people could listen to it. And if you think about somebody at work, they didn't have a radio most likely.

0
💬 0

2474.446 - 2494.459 Mark Cuban

And if you did, you couldn't get reception. Definitely didn't have a 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 during the day just exploded. Because whoever's sitting next to you, what are you listening to, right? And that was the start of it.

0
💬 0

2494.499 - 2510.817 Mark Cuban

And then in early 98, we started adding video and just other things. And we ended up with thousands of servers. There was no cloud back then. And just pulling together all those pieces to make it work. But where we really made our money was by taking...

0
💬 0

2512.048 - 2539.265 Mark Cuban

that network that we had built, and then going to corporations and saying, look, it's 1996, 97, 98, and to communicate with your worldwide employees, what they would do is they would go to an auditorium that had a satellite uplink, and then they would have people go to theaters or ballrooms and hotels that had satellite downlinks, and they would broadcast the product introductions, whatever.

0
💬 0

2539.805 - 2559.574 Mark Cuban

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, when Intel announced the P90 PC, we, you know, charged them $2 million or whatever to do that. When Motorola announced a new phone or a new product, we would charge them.

0
💬 0

2559.914 - 2576.445 Mark Cuban

And so we used the consumer side to do a proof of concept for the network. And then we would take that product knowledge and go to corporations, and that's how we made our revenue. And there was some selling there with the corporations. Yeah, a lot of selling there, but we were saving them so much money, and they were technology companies.

0
💬 0

2576.485 - 2579.849 Mark Cuban

They wanted to be perceived as being leading edge, and so it was win-win.

0
💬 0

2580.709 - 2599.183 Lex Fridman

How much technical savvy was required? You said a bunch of servers. At which point do you get more engineers? How much did you understand could do yourself? And then also, Once you can't do it all yourself, how much technical savvy is required to understand enough to hire the right people to keep building this and innovating?

0
💬 0

2599.263 - 2616.311 Mark Cuban

I did all the technology, and then we hired engineer after engineer after engineer to implement it. Wow. Yeah. From putting together a multicast network to software to... just all these different things. Was this like a scary thing? It's terrifying, right?

0
💬 0

2616.391 - 2637.544 Mark Cuban

Because as we were growing, trying to keep up the scale and literally we're buying off the shelf PCs and then, you know, server cards as 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 resources. So, you know, like there was...

0
💬 0

2638.834 - 2661.695 Mark Cuban

There was a time when Bill Clinton and all the Monica Lewinsky stuff happened. They released the audio of their interviews of him or something like that, right? And we literally, I knew at that point in time when that was released, everybody at work was going to want to listen to it, right? So we had to take down servers that were doing Chicago Cubs baseball, right?

0
💬 0

2662.816 - 2671.844 Mark Cuban

And just make all these on-the-fly decisions because we didn't have the tools to analyze or be predictive. But yeah, it was all technology-driven and marketing.

0
💬 0

2673.405 - 2682.573 Lex Fridman

The acquisition by Yahoo, can you tell the story of that? But also in the broader context of this internet bubble. This is a fascinating part of human history.

0
💬 0

2682.593 - 2705.89 Mark Cuban

Yeah. So on the acquisition side, we were the largest media site 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, because there was nobody there. And so it became obvious to Yahoo, AOL, and others that they needed a multimedia component. And we had the infrastructure, sales, all that stuff.

0
💬 0

2707.031 - 2730.043 Mark Cuban

And so Yahoo, when we went public in 98, or right before I think it was, they made an investment of like $2 million, which gave us a connection to them. And then after we went public, they decided they needed to have multimedia. And so in April of 99, we made a deal. And then July of 2000 is when it closed.

0
💬 0

2732.264 - 2738.609 Lex Fridman

And can you explain to me the trickiness of what you did after that?

0
💬 0

2738.709 - 2748.596 Mark Cuban

Oh, the collar? Yeah. Okay. So when we sold to Yahoo, we sold for $5.7 billion in stock, not cash. And so I looked at...

0
💬 0

2751.44 - 2780.278 Mark Cuban

after microsolutions um when i sold that um i took that money and initially i told my broker i wanted to invest like a 60 year old man because i wanted to protect it um but then he started asking me all kinds of questions about all these technologies that i understood like networks i had installed we had become one of the top 20 let's say um systems integrators in the country at one point in time we're the largest ibm token ring um installer in the country it was crazy right

0
💬 0

2780.758 - 2799.881 Mark Cuban

Banyan. Wow. Blast from the past. I mean, so anyway, so these Wall Street bankers or analysts rather that were the big analysts of the time would call me up because they would ask my broker, what does he know about 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 it's working.

0
💬 0

2799.901 - 2813.454 Mark Cuban

I'd see the stock, they say something, the stock would go up 20 bucks. Right. So I'm like, well, and my broker was like, you need to, you know, this better than they do. You need to invest. So I started buying and selling stocks and this was in 1990 and was just killing it.

0
💬 0

2813.554 - 2834.586 Mark Cuban

I was making 80, 90, a hundred percent a year 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 nine months. It was great, right? But the point being, as it goes forward, so when we sold to Yahoo, I already had a lot of experience trading stocks.

0
💬 0

2835.247 - 2857.813 Mark Cuban

And I had seen different bubbles come and go, a bubble for PC manufacturers, a bubble for networking manufacturers. They went up, up, up, up, up, and then they came straight down after the hype, or somebody just leapfrogged them. And so when we sold to Yahoo, I was like, I've got to be next to my name. That's all I need or all I want. I don't want to be greedy.

0
💬 0

2857.953 - 2877.379 Mark Cuban

And I'd seen this story before where stocks get really frothy and go straight down. And I knew that because all of what I had was in stock, I needed to find a way to color it and protect it. So understanding stocks and trading and options and all that, my broker and I, we went and shorted an index that had Yahoo in it.

0
💬 0

2877.779 - 2893.944 Mark Cuban

And so the law at the time was you couldn't short any indexes that had more than 5% of that stock in it, right? Of the Yahoo stock. And so I took pretty much 20 some million dollars, everything I had at the time, and I shorted the index.

0
💬 0

2893.984 - 2904.729 Lex Fridman

This is fascinating, by the way, because it's based on your estimation that this is a bubble. Or just mind not wanting to be greedy. Sure. So the foundation of this kind of thing is you don't want to be greedy.

0
💬 0

2904.849 - 2928.44 Mark Cuban

Yeah. I mean, how much money do I need, right? Where other people were saying, oh, I think you can go up higher, higher, higher. 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 guys, Joe Kernan was on there. Don't you feel stupid now that Yahoo stock has gone up, you know, X percent more?

0
💬 0

2928.48 - 2930.901 Mark Cuban

I'm like, yeah, I feel real stupid sitting on my jet. Yeah.

0
💬 0

2932.233 - 2937.815 Lex Fridman

But so, I mean, there is some fundamental way in which bubbles are based on this greed.

0
💬 0

2937.975 - 2959.125 Mark Cuban

Oh, for sure, for sure. Yeah, and I'd seen it before, right? Like I just said. And so what I did was we put together a collar where I sold calls and bought puts. And as it turned out, when the market just cratered, I was protected. And, you know, over the next two, three years, whatever it was, it converted to cash, paid my taxes, et cetera. But it protected me.

0
💬 0

2959.145 - 2977.977 Mark Cuban

And as it turns out, it was called one of the top 10 trades of all time. And what was even more interesting out of that period, my broker at that time was at Goldman Sachs. And I had asked him to see if there was a way to trade VIX, the VIX, right? The volatility index. And there wasn't, right? And so...

0
💬 0

2978.857 - 2987.861 Mark Cuban

one of the people that Goldman that we were working with to try to create this actually left Goldman and created indexes that allowed you to trade the VIX.

0
💬 0

2988.481 - 2993.424 Lex Fridman

It's not trivial to understand that it's a bubble. I mean, you're kind of lessening

0
💬 0

2994.324 - 3016.981 Mark Cuban

your insight into all of this by saying you just didn't want to be greedy but you still have to see that it's a bubble yeah i mean yeah obviously if i thought it was going to keep on going up and it was there was intrinsic value there i would have stayed in it but it wasn't so much yahoo it was just the entire industry you would back then you know like we're looking at the the magic seven or whatever it is stocks now and people are asking is in a bubble and when you

0
💬 0

3017.617 - 3036.81 Mark Cuban

I would get into cabs and people would just start talking about internet stocks. There were people creating companies with just a website and going public. That's a bubble, right? Where there's no intrinsic value at all. And people aren't even trying to make operating cap profits. They're just trying to leverage the frothiness of the stock market. That's a bubble. You don't see that right now.

0
💬 0

3036.83 - 3047.397 Mark Cuban

There's not companies, you don't see any IPOs right now for that matter. So I don't think we're in a bubble now, but back then, yes, I thought we were in a bubble, but that wasn't really the motivating factor.

0
💬 0

3047.637 - 3067.259 Mark Cuban

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 we see a rush of companies who are skins on other people's models or or just creating models to create models that are going public then yeah that's probably the start of a bubble

0
💬 0

3067.859 - 3096.77 Mark Cuban

um but that said my my 14 year old was bragging about buying nvidia you know with me and in his robin hood 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's one thing to pay attention yeah we're flirting with it yeah um you said that becoming a billionaire requires luck yeah can you explain yeah i mean there's no business plan where you can just start it and say yeah i'm definitely going to be a billionaire

0
💬 0

3097.429 - 3109.974 Mark Cuban

you can, you know, if I had to start all over, could I start a company that made me a millionaire? Yeah. Cause I know how to sell and I know technology and I've learned enough over the years to do that. Um, could I make 10 million, probably a hundred million? I hope so.

0
💬 0

3110.614 - 3135.932 Mark Cuban

Um, but a billion, just something good has got to happen, you know, timing, timing, you know, internet stock market was going nuts right when we started, you know, and that certainly I couldn't predict or control. Um, You know, it's like AI right now. AI has been around a long, long, long, long time. And the Nvidia processors, or GPUs rather,

0
💬 0

3136.809 - 3162.382 Mark Cuban

You couldn't predict that now's the time that they were going to get to that cost-effectiveness where you could create models and train them, and although it's expensive, it's still doable. We had ASICs for custom applications, and we had CPUs that were leading the way, but GPUs were more for gaming and then crypto mining. And then all of a sudden, they were the foundation for AI models.

0
💬 0

3162.742 - 3178.854 Lex Fridman

So I think... luck being essential to 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.

0
💬 0

3179.515 - 3197.267 Lex Fridman

That said, there's some examples of 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 a lot of really interesting, powerful decisions for many years with Amazon to make it successful.

0
💬 0

3197.367 - 3212.095 Mark Cuban

But he was really able to 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 all that money. It was possible to raise that money. Yeah.

0
💬 0

3212.395 - 3220.837 Lex Fridman

I mean, what about somebody you get sometimes feisty with on the internet, Elon? But we couldn't even look at Zuck and Bill Gates and Warren Buffett.

0
💬 0

3221.197 - 3224.918 Mark Cuban

Look, Zuck was just trying to get laid, right? And it took off and you wrote some good stuff.

0
💬 0

3224.938 - 3228.259 Lex Fridman

Aren't we all? Right, it's that level, right? The foundation of human civilization.

0
💬 0

3228.579 - 3239.596 Mark Cuban

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 2007 when the iPhone came out. Apps took off in 2011, 2012.

0
💬 0

3240.737 - 3263.005 Mark Cuban

And if you were there with the right app at the right time, and even Facebook, you know, in 2004, the bubble had burst and, you know, the price for computers had fallen enough and kids in school all needed computers or laptops. If he had tried to do something like that, you know, five years earlier, I mean, it was too young, but, you know, five years earlier or five years later,

0
💬 0

3264.019 - 3267.585 Mark Cuban

You know, or Friendster might've been the ultimate, or MySpace.

0
💬 0

3268.267 - 3269.829 Lex Fridman

Friendster, I remember Friendster.

0
💬 0

3270.01 - 3273.216 Mark Cuban

Or MySpace. I had a MySpace account and that was before Facebook.

0
💬 0

3273.635 - 3283.518 Lex Fridman

Yeah, the timing is important, but there's like the details of how the product is built, the fundamentals of the product, like what- But that's what gets you, when the opportunity is there, right?

0
💬 0

3283.818 - 3302.404 Mark Cuban

That's what allows you to take advantage of that opportunity and the kismet of it all, right? You've gotta be, because it wasn't like any of the people I mentioned, there weren't others trying the same thing, right? You had to be able to see it. You had to be able to visualize and put together a plan of some sort, or at least have a path. And then you had to execute on it.

0
💬 0

3303.064 - 3314.771 Mark Cuban

and do all those things at the same time, and have the money available to you. Because it wasn't like, whether it was Google or Facebook, they raised a shitload of money. It wasn't bootstrapping it that got them there.

0
💬 0

3315.011 - 3323.856 Lex Fridman

And raising money is not just about sales. It's about the general feeling of the people with money at that time. And proximity.

0
💬 0

3325.16 - 3335.05 Mark Cuban

If Chuck wasn't at Harvard and he was at Miami of Ohio University or he was at Richland Community College, same idea, same person, same execution and nothing.

0
💬 0

3335.951 - 3344.482 Lex Fridman

I believe in the power of individuals to find their to realize their potential no matter where they come from.

0
💬 0

3344.502 - 3346.643 Mark Cuban

I agree, I agree 100% with that, right?

0
💬 0

3346.683 - 3347.563 Lex Fridman

But luck is required.

0
💬 0

3347.643 - 3357.654 Mark Cuban

Yeah, I mean, scale is, the only delta is scale, right? We're not all blessed with the access to the tools that you need to... to hit that grand slam.

0
💬 0

3357.754 - 3367.199 Lex Fridman

But then also, billion is not the only measure of success, right? Absolutely not, right? Everybody defines the success in their own way. How do you define success, Mark Cuban?

0
💬 0

3367.66 - 3388.152 Mark Cuban

Waking up every day with a smile, excited about the day. People always say, well, when you get that kind of money, 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 got to work on being happy when you're broke, I guess. Well, you're just being happy, right?

0
💬 0

3388.172 - 3396.878 Mark Cuban

If you were miserable in your job before, there's a good chance you're still going to be miserable if that's just who you are. That's a pretty good definition of success, by the way.

0
💬 0

3397.098 - 3401.861 Lex Fridman

Thank you. How do you reach that success by way of advice to people?

0
💬 0

3402.602 - 3426.178 Mark Cuban

You know, we talked about 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, this is miserable, we're awful, we don't have this, we don't have that.

0
💬 0

3426.979 - 3442.949 Mark Cuban

We celebrated the things we did have and never knew about the things we didn't have. And so I think you have to be able to find your way to whatever it is that puts a smile on your face every day. Some people can do it and some people can't.

0
💬 0

3443.26 - 3447.062 Lex Fridman

It's not always about the smile or the smile on the outside. It could be a smile on the inside.

0
💬 0

3447.082 - 3449.223 Mark Cuban

Yeah, whatever it is, right? Whatever makes you feel good.

0
💬 0

3449.263 - 3462.848 Lex Fridman

The struggle, even the struggle with your dad, the really, really hard work can be a fulfilling experience because the struggle leading up to then seeing your kids.

0
💬 0

3463.388 - 3480.22 Mark Cuban

Exactly right. Because that was my dad's grand slam, right? Seeing three kids go to college, be successful, you know. spend, be able to spend time with him. And that was the other thing, you know, he really made me realize is the most valuable asset isn't the money. It's your time.

0
💬 0

3480.86 - 3495.734 Mark Cuban

That's why, you know, from a young age, I wanted to retire because I wanted to experience everything that I possibly could in this life. And, you know, he got joy from us. I get joy from my kids. And that's the most special thing you ever can have. Yeah.

0
💬 0

3496.567 - 3501.03 Lex Fridman

Beautifully said. You have made some mistakes in your life.

0
💬 0

3501.25 - 3501.85 Mark Cuban

Yeah, a lot of them.

0
💬 0

3503.171 - 3507.454 Lex Fridman

One of the bigger ones on the financial side, we could say is Uber.

0
💬 0

3507.934 - 3524.318 Mark Cuban

Yeah, we call that not doing something. Yeah, it wasn't a mistake. It was just, I mean, it was a mistake. I like how you tried to. Yeah. I always try to look at mistakes, the things you did that didn't turn out as opposed to things you did to, you know, the negative. But can you tell the story of that?

0
💬 0

3524.359 - 3535.829 Lex Fridman

And maybe it's just interesting because it is illustrative of like how to know when a thing is 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.

0
💬 0

3536.129 - 3563.263 Mark Cuban

So the backstory of that 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 would spend a lot of time with Travis. And it's funny because back then, that was like 2006, I was an investor at Box.net with Aaron Levy. And, oh, there's one other company there.

0
💬 0

3563.763 - 3584.709 Mark Cuban

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 be, have astronomical success, right? But so Red Swoosh had its issues, you know, because I was looking at peer-to-peer as kind of stealing bandwidth from the internet providers when bandwidth was a scarce commodity.

0
💬 0

3585.809 - 3602.599 Mark Cuban

And so, you know, what Travis did with that, though, was great. You know, he convinced gaming companies who wanted to do downloads of the clients for those games to use his peer-to-peer and Red Swoosh. And, you know, he busted his ass, and I think he sold it for $18 million. So he did well.

0
💬 0

3603.099 - 3621.311 Mark Cuban

And so it was natural for him to come to me, and I still have the emails, you know, and ask me about Uber Cab. And I thought, okay, this is a great idea. I really, really like it. I said, you're going to, and he showed me his budgets and I think they were raising money at 10 or $15 million or whatever.

0
💬 0

3622.111 - 3640.805 Mark Cuban

And I'm like, your biggest challenge is going to be, you're going to have to fight all the incumbent taxi commissions. They're going to want to put you out of business. That's going to be a challenge. And I think you don't have enough money designated for marketing to get all that done. And I said, I'd invest, but not quite at that valuation, right? Never came back to me. Yeah.

0
💬 0

3642.443 - 3659.036 Lex Fridman

Yeah, I mean, there's some lessons there connected to what you're doing now. We'll talk about it, cost plus drugs. It's like looking at an industry that seems like there's a lot of complexity involved, but it's like hungry for revolution. For sure. And the cabs are that.

0
💬 0

3659.316 - 3682.034 Mark Cuban

Yeah, for sure, right? They were dominated by an insulated few. They were not very transparent. You didn't know the intricacies there. They were very politically driven and old boy, incestuous network. And like I told him, Travis, the best thing about you is you'll run through walls and break down barriers. The bad thing about you is you'll run through walls even if you don't have to.

0
💬 0

3683.058 - 3693.962 Lex Fridman

Yeah, and there you kind of have to see, is it possible to raise enough money? Is it possible to do all this? Is it possible to break through? And it's kind of a fascinating success story with Uber.

0
💬 0

3694.643 - 3707.649 Mark Cuban

I think he tried to go too big. He had too big an ambition, which cost him in the end, not financially and personally, but just in terms of being able to stick it out with them. Yeah. But that's what makes him a great entrepreneur.

0
💬 0

3707.669 - 3716.716 Lex Fridman

Well, it's a fascinating success story. You have certain companies like Airbnb just kind of go into this thing that we take completely for granted.

0
💬 0

3717.197 - 3730.027 Mark Cuban

And change it all. Just change it all. Yeah, Belinda Johnson, who worked as our general counsel at Broadcast.com, was Brian's GC and chief operating officer. So yeah, they had a smart, smart, smart, smart team.

0
💬 0

3730.928 - 3741.076 Lex Fridman

And they believed in it. I mean, it's a beautiful story because you're like, all right, all the things that annoy you about this world, like they're inefficient and just seem like a pain in the ass.

0
💬 0

3741.116 - 3747.581 Mark Cuban

I probably would have said no like a lot of people did to Airbnb because I'm like, I don't want people sleeping in my bed.

0
💬 0

3747.761 - 3756.388 Lex Fridman

I would have too. I was like, this is not going to work. I've done like couch surfing and stuff and it was always, it didn't seem right. It didn't seem like you could do this at a large scale.

0
💬 0

3756.408 - 3758.89 Mark Cuban

To monetize it, yeah, but he did. More power to him.

0
💬 0

3760.097 - 3776.649 Lex Fridman

In 2000, I think January, you purchased a majority stake in the NBA team Dallas Mavericks for 285 million. So at this point, maybe you can correct me, but it was one of the worst performing teams in franchise history.

0
💬 0