Mark Cuban: Shark Tank, DEI & Wokeism Debate, Elon Musk, Politics & Drugs | Lex Fridman Podcast #422

Introduction (00:00:00)

• Whoever controls the algorithm controls the world.
• Mark Cuban is a multi-billionaire businessman, investor, and star of Shark Tank.
• He is known for his frequent battles on social media over topics such as DEI, wokeism, gender, and identity politics.
• Cuban started many businesses and has a lot of experience in the business world.
• He is a self-made billionaire who started from scratch.
• Cuban is known for his work ethic and his ability to take risks.
• Cuban believes that DEI and wokeism are important issues that need to be addressed.
• However, he also believes that these issues are often used as a way to divide people and create conflict.
• Cuban argues that it is important to focus on common ground and work together to solve problems.
• Cuban is a fan of Elon Musk and his work.
• He believes that Musk is a visionary who is changing the world for the better.
• Cuban also agrees with Musk's views on free speech and the importance of open dialogue.
• Cuban is a registered independent and does not identify with any political party.
• He believes that the current political climate is very divisive and that it is important to find ways to bridge the divide.
• Cuban argues that we need to focus on common ground and work together to solve problems.
• Cuban believes that the war on drugs has been a failure.
• He argues that we need to legalize drugs and regulate them in order to reduce crime and improve public health.
• Cuban also believes that we need to provide more support for people who are struggling with addiction.

Entrepreneurship (00:00:54)

• Key qualities for successful entrepreneurs include curiosity, adaptability, and salesmanship.
• Sales involve understanding and meeting others' needs, and transparency can be a powerful differentiator in industries lacking trust.
• Curiosity and a thirst for information are essential in a constantly changing world, and sales skills can be developed through practice and learning about different businesses.
• Mark Cuban emphasizes the importance of recognizing one's strengths and weaknesses and partnering with complementary individuals.
• The hardest part of starting a business is taking the first leap, which depends on personal circumstances.
• Preparation, saving money, and learning about the industry are crucial steps before starting a business.
• Competition is inevitable in business, and entrepreneurs must be prepared to face it.
• The American culture of consumption and the potential for high rewards attract many to entrepreneurship.
• The US stands out as the most entrepreneurial country globally, with a strong legal system that protects entrepreneurs.
• Mark Cuban highlights the importance of celebrating successful entrepreneurs despite the distrust and criticism they often face, especially in the age of social media.

Shark Tank (00:15:48)

• Mark Cuban believes that Shark Tank celebrates the American dream and inspires young people to pursue entrepreneurship. He appreciates the courage of entrepreneurs who pitch their ideas on the show.
• When evaluating potential investments, Cuban focuses on scalability, differentiation, and the ability of the business to provide a return to both the founder and investors.
• Cuban determines the value of a business by assessing its potential to generate after-tax cash flow and its acquisition potential.
• He emphasizes the importance of execution, being grounded in reality, and having a vision for the future.
• Entrepreneurs should conduct thorough market research and testing to ensure demand for their products and be prepared to face competition.
• Pivoting should only be done when necessary, and entrepreneurship involves continuous iteration and adaptation.

How Mark made first billion (00:26:13)

• Mark Cuban co-founded Audionet, which evolved into Broadcast.com, the largest multimedia site on the internet in the late 1990s.
• Broadcast.com pioneered internet streaming, starting with audio and later adding video, and was acquired by Yahoo in 2000 for $5.7 billion.
• Cuban achieved his first billion through the sale of Broadcast.com and made significant profits by trading stocks in the early 1990s.
• After selling his company, he employed a hedging strategy to protect his wealth during the dot-com bubble crash, which proved successful and was recognized as one of the top 10 trades of all time.
• Cuban believes luck plays a significant role in becoming a billionaire, emphasizing the importance of being in the right place at the right time with the right product, but also stresses the need for a well-built product, a clear vision, and effective execution.
• He acknowledges the role of greed in fueling bubbles and emphasizes the importance of recognizing intrinsic value when assessing investments.
• Cuban does not believe we are currently in an AI bubble and highlights examples of successful entrepreneurs like Jeff Bezos, Mark Zuckerberg, and Elon Musk.
• He believes in the power of individuals to realize their potential regardless of their background but acknowledges that luck and access to resources play a significant role in achieving success.
• Cuban defines success as waking up every day with a smile and excitement for the day, emphasizing that happiness should not be solely dependent on wealth.
• He advises people to find what puts a smile on their face and shares his experience with his father, who provided a happy and fulfilling home environment despite financial struggles.
• Cuban acknowledges making mistakes, including missing out on investing in Uber, but views them as learning opportunities rather than failures, emphasizing the importance of understanding the fundamentals and taking calculated risks when evaluating potential investments.

Dallas Mavericks (00:52:24)

• Mark Cuban purchased the Dallas Mavericks, a struggling team, for $285 million and transformed it by prioritizing player development and hiring 15 development coaches.
• Cuban recognized the Mavericks as an "Experience business" and focused on creating a memorable and enjoyable atmosphere for fans at the arena, believing that the unique experience of attending live sports events sets them apart from watching on TV.
• As the team owner, Cuban receives a share of the revenue from local TV broadcast deals, which play a role in building the team's legacy by keeping fans engaged, especially during successful seasons.
• The personalities of individuals like Cuban and the energy of the fans in the stands contribute to the team's legend and amplify the fan experience, with fans serving as the crucial "sixth man" for the team's success.

DEI debate (00:57:49)

• Mark Cuban and Elon Musk debated the implementation of Diversity, Equity, and Inclusion (DEI) programs on Twitter.
• Cuban believes that DEI is a positive concept when executed correctly, but poorly implemented programs can lead to issues like reverse racism and illegal quotas.
• Cuban argues that criticizing DEI programs is difficult due to the risk of being labeled as "racist" or "sexist," which can have negative consequences within organizations.
• Cuban questions the claim that conservatives are being silenced by DEI initiatives and suggests that universities play a significant role in shaping DEI implementation in Corporate America.
• Cuban cites a study indicating that a large portion of fired individuals believe they were performing well, highlighting the need for open communication and addressing concerns within organizations.
• DEI implementation in universities is seen as problematic, contributing to rising tuition costs and inefficient operations.
• Decentralized activism is viewed as a potential counter to DEI, but it conflicts with the centralized power dynamics of the conservative movement.
• Both woke and anti-woke positions can be abused, leading to the exploitation of DEI for personal gain.
• Google faced criticism for displaying scammy ads for "keto gummies" on its search results, raising concerns about ideological biases within tech companies.
• Elon Musk is criticized for making exaggerated statements but is also seen as important for calling out issues in the tech industry.
• The bias in neural networks is a complex issue, and transparency is needed regarding the teams involved in developing these models.
• The free market can help correct ideological biases in tech companies, as users and competitors test and challenge their products.
• AI models are becoming more efficient and accessible, allowing individuals to create and train their own models, leading to a diverse range of outputs and opinions.
• The Mayo Clinic and Harvard Medical School are unlikely to contribute all their intellectual property to large language models like ChatGPT or Gemini, opting instead to license their content or develop their own models.
• Human history does not always self-correct quickly, and ideological extremism can lead to dangerous situations, as seen with leaders like Stalin and Hitler.
• America's political system of tension between blue and red has allowed for the exploration of different ideas and perspectives, preventing a single ideology from dominating.

Trump vs Biden (01:33:42)

• Mark Cuban was thankful to Elon Musk's consultants at Tesla for following up about using Cost Plus drugs to save the company money.
• Cuban believes Biden would make a better president than Trump based on the dynamics of their respective teams.
• While Biden has made mistakes, such as the situation at the border and in Afghanistan, he is willing to admit them and work on fixing them.
• In contrast, Trump has made numerous mistakes and never seems to acknowledge or attempt to correct them.

Immigration (01:36:04)

• Mark Cuban warns against the spread of misinformation, particularly the false claim that illegal immigrants vote in the US, and criticizes the use of hyperbole and tribalism in political discourse.
• Cuban argues that the current immigration situation is a result of the Biden administration's miscalculation and emphasizes the positive contributions of immigrants to the US economy and society.
• He criticizes Donald Trump's divisive rhetoric on immigration and highlights the lack of leadership and trust in the political system as fundamental problems leading to extreme polarization.
• Cuban also expresses concerns about the influence of social media algorithms, particularly on Twitter, in shaping people's perceptions and potentially creating echo chambers.
• He stresses the importance of transparency around the impact of influential accounts on social media algorithms to address concerns of bias and ensure a balanced presentation of information.
• Cuban cautions against relying solely on anecdotal data, emphasizing the need for critical evaluation to separate signal from noise and avoid misinterpretations.

Drugs and Big Pharma (01:45:37)

• Mark Cuban and Dr. Alex Hansy co-founded Cost Plus Drugs, a transparent pharmaceutical company, to address inefficiencies and lack of transparency in the healthcare industry.
• Cost Plus Drugs aims to solve the problem of trust by providing complete transparency in drug pricing and challenging the existing cartel-like practices in the pharmaceutical market.
• The company operates outside the traditional healthcare system and collaborates with brand-name manufacturers to support independent pharmacies.
• Middlemen companies, such as PBMs, prioritize profits over patients' well-being and engage in opaque practices that disadvantage patients and smaller competitors.
• Employee benefits consultants often receive commissions from PBMs and insurance companies, leading to higher costs for employers and potentially delaying or denying access to necessary medications.
• Cuban suggests that companies with over 500 employees should hire a healthcare CEO to focus on optimizing healthcare spending and ensuring employee well-being.
• The current system leads to independent community pharmacies going out of business due to low reimbursements from big pharmacy benefit managers (PBMs).
• Cost Plus Drugs plans to expand its transparent approach to other aspects of the healthcare industry.

AI (02:01:38)

• Mark Cuban believes AI should be open-sourced.
• Open-sourcing AI is a smart business decision as it creates more competition and diversity in approaches.
• Cuban does not see parallels between AI and the Manhattan Project and is an AI optimist.
• He believes there won't be a single medical database and that healthcare brands will retain their expertise and license their own AI models.

Advice for young people (02:05:49)

• Mark Cuban advises young people to explore their passions and strengths by exposing themselves to various experiences.
• He encourages them to find what they are truly good at and not be discouraged by societal expectations or limitations.
• Cuban highlights the significance of nurturing one's passions and believing in oneself, even when others may not recognize or support one's talents.
• He observes the natural entrepreneurial spirit in Russia after the fall of the Soviet Union but notes that the systems in Russia and Ukraine may suppress this spirit as individuals grow up.
• Cuban expresses hope for the future of humanity by observing the spirit and resilience of his children and their friends.
• He sees a spark in kids' eyes when they realize there's something bigger and better out there, despite the challenges they face.
• Cuban believes Gen Z embodies this spirit of dreaming big and seeing opportunities to make the world a better place.
• He encourages young people to ask themselves "why not me?" and believe in their ability to change the world.