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

Mark Cuban 0:00 The person who controls the algorithm controls the world, right? And if you are committed to one specific platform as your singular source of information, or affiliated platforms, then whoever controls the algorithm or the programming there, controls you.

Lex Fridman 0:20 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 like DEI, wokeism, gender, and identity politics with the likes of Elon Musk and Jordan Peterson. This is the Lex Fridman Podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Mark Cuban.

Lex Fridman 0:55 You 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?

Mark Cuban 1:07 Somebody who's curious. They wanna keep on learning 'cause business is ever-changing, it's never static. Um, 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. Um, and somebody who can sell, because no business has ever survived without sales. 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, and excited to tell people about it, then you're not gonna succeed.

Lex Fridman 1:39 But it's also a skill thing. How do you sell? What do you mean by selling?

Mark Cuban 1:42 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?" 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 'em to your house and drop 'em off." To, you know, streaming, um, 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, you know, Cost Plus Drugs. You know, what's the product that we actually sell? We sell trust. Um, in a simplistic approach, we buy drugs and sell drugs, but we add transparency to it. And bringing transparency to an industry is, is a differentiation, and it helps people.

Lex Fridman 2:30 Trust in an industry that's highly lacking in trust.

Mark Cuban 2:33 Exactly.

Lex Fridman 2:35 Okay. So what's, 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?

Mark Cuban 2:45 Oh, you can definitely develop it. Yeah, I mean, because selling garbage bags door-to-door was easy, right? Because like (knocks on table) 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 'em off for you, you know, once a week? Whenever you need 'em, you just call and I'll bring 'em down?" "Sure." So that was easy.

Lex Fridman 3:02 But I'm sure you've been rejected.

Mark Cuban 3:04 Oh, yeah, of course. Not everybody says yes.

Lex Fridman 3:06 What's your per- what was your percentage?

Mark Cuban 3:08 I don't remember, but it's pretty close to 100%. (laughs)

Lex Fridman 3:10 Oh, okay, never mind. So that's why you don't remember. (laughs)

Mark Cuban 3:13 Yeah, right. 'Cause who's gonna say no to a 12-year-old kid who's gonna save them time and money? But, you know, typically in my career where I've started companies, it's to do something that other people aren't doing. Whether it was connecting PCs in, to local area networks in, at MicroSolutions and, you know, 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. 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.

Lex Fridman 3:53 Yeah.

Mark Cuban 3:54 And that's the hardest part.

Lex Fridman 3:55 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.

Mark Cuban 4:03 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, um, productive. And I think that's probably my biggest skill, being able to just drill down to what the actual need is, if any. 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?"

Lex Fridman 4:35 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?

Mark Cuban 4:43 Correct.

Lex Fridman 4:45 And you can just do that with anything.

Mark Cuban 4:46 Pretty much, yeah.

Lex Fridman 4:48 (laughs) And you think you're born with that?

Mark Cuban 4:50 No, I worked at it. Because, you know, 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," you know, which is absolutely true. If you're not a voracious consumer of information, then you're not gonna be able to keep up, and no matter what your sales skills or ability are, they're gonna be useless.

Lex Fridman 5:12 What'd you learn about life from your dad? You mentioned your dad.

Mark Cuban 5:16 My dad did upholstery on cars, you know, got up, went to work every morning at seven o'clock, came back five or six, seven o'clock, exhausted. And I learned to be nice, I learned to be caring, I learned 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, he didn'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 understand what you're doing." He never went, neither one of my parents had gone to college. Um, "You've gotta figure it out for yourself." But he was also very insistent that, um, he, you know, 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 back-breaking that work was. I mean, he lost an eye in an accident at work, um, a staple broke.Um, and he... The only thing he wanted for my brothers and I was for us to never have to work like that, to go to college, to figure it out.

Lex Fridman 6:18 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 have been.

Mark Cuban 6:25 Absolutely, yeah, yeah. Because I was more of a yeller. I was, you know, I didn't have-

Lex Fridman 6:31 Oh, really? Mark Cuban? (laughs)

Mark Cuban 6:32 (laughs) 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 wasn't using my kind of common sense, right?

Lex Fridman 6:43 Yeah.

Mark Cuban 6:43 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, w- we'll stop and drop you off at the next station. But let's go where you go."

Lex Fridman 7:02 Did you have trouble with the hire fast, fire fast part of running a business?

Mark Cuban 7:06 Yeah, always, 'cause I hated firing people, 'cause it meant, one, it was an admission of a mistake in the hiring. And, 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. (laughs) So I always delegated that.

Lex Fridman 7:23 Well, this is the tricky thing. When you're... 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, that's the right or they're not?"

Mark Cuban 7:34 Mm-hmm.

Lex Fridman 7:34 A- and, and that grayer area is probably where you have to fire.

Mark Cuban 7:37 Was hard. Yeah, for sure, because, you know, there... It's obviously a failure somewhere in the process. You know, 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 th- and then they wouldn't, and then, you know, people at the company would be like, "Mark, you suck at this." You know? And so I, I always delegated the hiring.

Lex Fridman 8:06 Yeah. I mean, I'm the same. I see the potential in people, I see the beauty in people, and which is, which is a great way to live life, but when you're running a company, it's a different thing.

Mark Cuban 8:14 It's different. And you gotta know what you're good at and what you're bad at, right?

Lex Fridman 8:17 Yeah.

Mark Cuban 8:17 I w- I was good at... You know, I was a ready, fire, aim guy, and I always partnered with people who are very anal and perfectionist, because where I could just go, "Go, go, go, go, go," they would keep me in- keep me inside the baselines.

Lex Fridman 8:29 They would do the due diligence, I suppose.

Mark Cuban 8:31 Yeah, or, or just... Yeah, the detail work, the dot the Is and the cross the Ts.

Lex Fridman 8:35 Uh, what does it take to take that first leap into starting a business?

Mark Cuban 8:38 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-

Lex Fridman 8:46 Christ.

Mark Cuban 8:46 ... I couldn't go any lower. (laughs) So there was no downside.

Lex Fridman 8:50 Thought it was the bottom.

Mark Cuban 8:50 Yeah, there was no downside from 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, I'm a lousy employee." Um, I'm gonna just start going to some of my prospects that I had at my, 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.

Lex Fridman 9:22 But, like, by way of advice, would you say... I mean, it's a terrifying thing.

Mark Cuban 9:25 Yeah, I mean, you've gotta 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 it or you don't. You know, in, in the United States, with the American dream, everybody kind of 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, your family, "What do you think?" And then almost always it's, "Oh, it's a great idea," right? Then you go on Google and you say, "Oh, my God, no one else is doing it," without thinking, you know, 10 companies have gone out of business trying the same thing.

Lex Fridman 10:02 Yeah.

Mark Cuban 10:02 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. 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 to deal with the consequences of changing your circumstances. And that's the first thing, you know. Do you save money, you know, so you have... You know, if you have a job, do you have a mortgage? Do you have a family? You gotta save money. You can't just walk, you know? I mean, they've gotta eat and they've gotta have shelter. But on the other side of the coin, if you've got nothing, it's the perfect time to start a business.

Lex Fridman 10:49 Yeah, desperation is a good catalyst for starting a business.

Mark Cuban 10:52 Yeah.

Lex Fridman 10:52 But in many cases, the decision, as you're talking about, you're gonna have to make, is to leave a job-

Mark Cuban 10:57 Mm-hmm.

Lex Fridman 10:57 ... that's providing some degree of comfort already.

Mark Cuban 11:00 Mm-hmm.

Lex Fridman 11:01 So, and I suppose when you're sleeping on the floor and there's six guys, it's a little bit easier?

Mark Cuban 11:05 It's really easy, right?

Lex Fridman 11:06 (laughs)

Mark Cuban 11:06 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, um, it wasn't hard for me, but to your point, it, 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 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, or transfer you the money to buy whatever it is you're selling. And by doing those things, you can put yourself in a 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.

Lex Fridman 11:57 But sometimes that's, like, the way you do it, though.

Mark Cuban 11:59 There's always examples of any situation or scenario, right?

Lex Fridman 12:02 Sure. (laughs)

Mark Cuban 12:02 Right. But, I mean-

Lex Fridman 12:03 Anecdotal evidence for everything.

Mark Cuban 12:05 Yeah, but if you're, if you're going into a new business, you're gonna have competition unless you're really, really, really, really, really lucky.

Lex Fridman 12:10 Yeah.

Mark Cuban 12:10 And that competition is not gonna just say, "Okay, let Lex or Mark just kick our ass."

Lex Fridman 12:14 Yeah.

Mark Cuban 12:14 And so you've gotta be prepared on how you're gonna deal with that competition.

Lex Fridman 12:18 What, 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?

Mark Cuban 12:28 You know, I think we've just got a culture of consumption and more. (laughs) You know? And to get more, um, you've got to... You know, creating a business gives you the greatest potential upside and the greatest leverage on your time. Um, but it also creates the most risk.

Lex Fridman 12:47 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-

Mark Cuban 12:59 Hopefully that's still the case, yeah.

Lex Fridman 13:01 Well, yeah, there's always, uh, there's always some-

Mark Cuban 13:03 Yeah, us versus other countries.

Lex Fridman 13:04 Yes. Yeah.

Mark Cuban 13:04 Right, right. 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 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, there's an American origin story somewhere behind there. And I think, you know, that just gets perpetuated on itself. We see those Horatio Alger- Alger stories. We see, um, examples of the Jeff Bezos of the world, the Steve Jobs of the world. And those are the types of people we, we want to copy.

Lex Fridman 13:58 Yeah, we wanna be really careful and try to really figure out what that is because we don't wanna lose that.

Mark Cuban 14:04 For sure.

Lex Fridman 14:05 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? What... But also culture, like who we celebrate. One of the things that troubles me is that we don't enough celebrate the, uh, the entrepreneurs that take risks and the entrepreneurs that succeed. It seems like success, especially when it comes with wealth, is, uh, immediately matched with distrust and criticism and all that kind of stuff.

Mark Cuban 14:32 Yeah, well, it's changing for sure because, you know, you can go back just 12 years, right? Traditional media dominated, let's say to- through 2012. You know, that was the peak of linear television, you know. Newspapers weren't as strong, but they still had some, some breadth and depth to them. Um, 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. And that an- and it also gives them the opportunity to amplify, um, 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. It wasn't going to be in the front page of the newspaper. Um, 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, um, talking about, you know, this progressive movement or that progressive move, whatever it may be. Um, you know, and then, or political parties. But now all of that is front and center on social media.

Lex Fridman 15:41 And we're trying to figure it out how we deal with the, with the mobs of people and the virality of it all. And, um,

Lex Fridman 15:48 I think we'll find our footing and start celebrating greatness again.

Mark Cuban 15:51 Well, that, I mean, that's the whole reason I do Shark Tank.

Lex Fridman 15:52 That's true. That, that show celebrates the entrepreneur. That's true.

Mark Cuban 15:56 It's the only place where every single minute of every single episode, we, you know, 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, we, you know, we're, we're amazing advertising for the American dream in I don't even know how many countries. But every time somebody walks onto that carpet from Dubuque, Iowa or Ketchum, Idaho, you know, 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. 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. Um, the 15 years of that is just, it, it's just been insane. You know, now kids walk up to me and go, "Yeah, I started watching you when I was 5 or 10."

Lex Fridman 16:44 (laughs)

Mark Cuban 16:44 "And I started a business because I learned about it from Shark Tank."

Lex Fridman 16:47 Yeah.

Mark Cuban 16:47 And so, you know, I think, you know, we're being cel- 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.

Lex Fridman 16:58 Yeah, I love even when the business idea is obviously horrible.

Mark Cuban 17:00 (laughs)

Lex Fridman 17:01 Just, just, just the guts to step up.

Mark Cuban 17:04 To be there.

Lex Fridman 17:05 To believe in yourself, to really reach. I mean, that's what matters. I mean, 'cause like some of the best business ideas are probably, uh, maybe even you on Shark Tank would laugh at.

Mark Cuban 17:17 Oh, for sure. You know, without question. The good ones, we're not gonna recognize every good one, and then sometimes we'll just motivate people to work even harder to get it done-

Lex Fridman 17:24 Yes, yes.

Mark Cuban 17:25 ... 'cause of what we say to them, and, and that's fine too. You know, there's been great success stories that we said no to.

Lex Fridman 17:30 What stands out as like a memorable business on, uh, you've been pitched on Shark Tank? What, what's the best one that stands out in memory right now?

Mark Cuban 17:37 There's no best one, right? They're all different. Um, they're all best in their own way, I guess. The stupid ones and, you know... We haven't had any, you know, world or world-changing, earth-shattering ones, right? Because those aren't gonna apply to Shark Tank. They don't need us, right?

Lex Fridman 17:55 Yeah.

Mark Cuban 17:55 You know, so we typically get businesses that need some help at some level or another. Um, but there's ones I've passed that I wish, like Spikeball. Do you know what Spikeball is?

Lex Fridman 18:02 Mm-hmm.

Mark Cuban 18:03 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, you know, it's just a competitive game, but they're killing it.

Lex Fridman 18:10 Mm-hmm.

Mark Cuban 18:10 So if you go to beaches in New York or LA, you'll see kids playing it all the time. And it, it was a fun game, um, that I wish I had done a deal with. There's, and there's been others.

Lex Fridman 18:21 And you passed.

Mark Cuban 18:22 And I passed.... they, they were getting some traction and then they wanted to create leagues, Spikeball leagues, and they wanted me to be the commissioner. And I don't wanna be a commissioner of a new Spikeball (laughs) league.

Lex Fridman 18:32 So you have to kinda have this gut feeling of, "Will this scale? Will this click with people?"

Mark Cuban 18:38 Of course. Yeah. Can it be protected? Is it differentiated? Is it something that makes me think, you know, "Why didn't I think of that?"

Lex Fridman 18:44 Mm-hmm.

Mark Cuban 18:44 Um, or is it just a good, um, solid business that's gonna pay a return to the, the founder, and may not be enough of a business to return to, um, an investor?

Lex Fridman 18:56 Yeah, I mean, and I guess the question you're trying to see, will this scale? There's promise. Will the promise materialize into a big thing?

Mark Cuban 19:06 Well, see, I don't even care if it's gonna be a big thing, right? It- it... 'cause it's all relative to the entrepreneur. We had a 19-year-old from Pittsburgh, Lainey, 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 two, three, five million business that paid the bills for her, and that- that was good enough. And, you know, six months after, um, the show aired, she called me up, she goes, "Mark, I've got a million dollars in the bank. What am I gonna do?"

Lex Fridman 19:36 (laughs)

Mark Cuban 19:36 I'm like, "Enjoy it."

Lex Fridman 19:37 Yeah.

Mark Cuban 19:37 "Put aside money for your taxes and go back to work."

Lex Fridman 19:40 Mm-hmm.

Mark Cuban 19:40 You know? And so it doesn't have to be a huge business. It's just gotta be one that makes the entrepreneur happy.

Lex Fridman 19:45 But then there's the valuation piece. I mean...

Mark Cuban 19:47 Right.

Lex Fridman 19:48 Do- do a lot of the entrepreneurs overvalue-

Mark Cuban 19:51 Yeah, of course.

Lex Fridman 19:51 ... business?

Mark Cuban 19:52 Yeah. I mean, that's- that's the nature of it, right? I mean, and that- that's really where the biggest conflicts in Shark Tank happen, uh, that's in the valuation. They, you know, they- they think this is the best business ever, you know. There... we had one lady, um, couple that came on, and they had this scraper for cats' tongues, right? It was-

Lex Fridman 20:10 (laughs) Nice.

Mark Cuban 20:10 ... bizarre. Most, one of the- the most bizarre pitch ever.

Lex Fridman 20:14 I love it.

Mark Cuban 20:14 Um, you know, and they had this insane valuation and it was on because it was corny and fun TV-

Lex Fridman 20:19 Yeah.

Mark Cuban 20:19 ... not because it was a good business.

Lex Fridman 20:21 Oh, really? Okay. Yeah, you didn't see the potential? (laughs)

Mark Cuban 20:24 None. Yeah, none.

Lex Fridman 20:25 There's a lot of cats in the world, Mark. Come on.

Mark Cuban 20:27 Yes, there are. And they'll go do very well without me. (laughs)

Lex Fridman 20:30 (laughs) So how do you d- determine the value of a business, whether it's on Shark Tank, or just in general?

Mark Cuban 20:35 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% of that company, um, 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 that they're able to distribute. Can they do it or can they not?

Lex Fridman 20:58 Mm-hmm.

Mark Cuban 20:59 Right? And if it's a $2 million value, what, uh, 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 they, you know, do I see this as business potentially having an exit, right? Do they have some unique technology or do they have, um, something specific about them that some other company would want to acquire? Then the cash flow isn't as, as, um, imp- not, I don't want to say important, but isn't going to guide the valuation.

Lex Fridman 21:28 And how do you know if a company's gonna be, uh, acquired? So it's the technology, like the patents, but also the team? Is it the-

Mark Cuban 21:34 Yeah, it could be any of the above, right? It could be, it could be a- a super products company that, um, I think is gonna take off.

Lex Fridman 21:42 And how do you know if they can generate the money? What's, what's the-

Mark Cuban 21:44 Well, it de- well-

Lex Fridman 21:45 You made it sound easy, you know?

Mark Cuban 21:46 Yeah. I mean, is- can the person sell, you know? And if not them, can I do it, or someone on my team do it for them?

Lex Fridman 21:52 So you're looking at the person?

Mark Cuban 21:54 Yeah. Oh, 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?

Lex Fridman 22:02 Can you tell if they're full 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 their understanding of the market, or also, like-

Mark Cuban 22:17 Oh, yeah.

Lex Fridman 22:17 ... or exaggerating what they're thinking to do, all that kinda stuff. Can you see through that?

Mark Cuban 22:21 Yeah. Oh, for sure, just by asking questions.

Lex Fridman 22:22 Mm-hmm.

Mark Cuban 22:23 You know? So if, if they are, um, delusional at some level or misleading at another level, I'm gonna- I'm gonna call 'em 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 'em, right?

Lex Fridman 22:48 See, I still love that. I still love the trying, just trying.

Mark Cuban 22:51 No, I- it's, you know, give 'em credit, right, because they know all of America's going to see it, and they're deluded themselves to believe-

Lex Fridman 22:56 Yeah.

Mark Cuban 22:56 ... this story so strongly.

Lex Fridman 22:58 I mean, there's a delusional aspect to entrepreneurship, right? Like, you just...

Mark Cuban 23:02 I- I don't... See, that- that's a great question. Um, do you have to be ambitious and, you know, set aside reality at some level to think that you can create a company that could be worth 10, 100 billion dollars, right? Um, yeah, at some level, 'cause you don't know. It's all uncertainty. But I think if you're delusional, that works against you, um, you- because everything's grounded in reality. You've got to execute. You've got to produce. You know, you can have a vision, right, and you can say, "This is where I wanna get to, and that's my mission or this is my driving principle," but you still gotta execute on the business plan, and that- that's where most people fail.

Lex Fridman 23:40 Yeah. You have to be kinda 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, how to... like the, you know, the first principles, the basics of how to build a thing, how much it's gonna cost, all of that.

Mark Cuban 23:53 Yeah. I mean, uh, 'cause if you can't do the basics, you're not gonna be able to do the bigger things, and at the same time-

Lex Fridman 23:57 Yeah.

Mark Cuban 23:58 ... you've gotta be a... One of the things that entrepreneurs do that I- 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, um, finite s- situation that's never gonna change, right? And there's always somebody, I call 'em leapfrog businesses. There's whoever's competing against you, you know, if you do A, B, or C, they're gonna 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, uh, uh, sometimes an unlimited number of entrepreneurs that you don't even know exist, who are trying to kick your ass.

Lex Fridman 24:37 And the tricky part of all this too is you might need to frequently pivot, especially in the beginning.

Mark Cuban 24:43 Hopefully not.

Lex Fridman 24:45 So you think, like, in the beginning, the product you have should be the thing that carries you a long time?

Mark Cuban 24:51 Yeah, 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 that... And you've raised money or whatever, just to pivot? (laughs) 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.

Lex Fridman 25:28 Well, I also mean, like, the, the, the micro pivots, which is like iterative development of a thing, you know?

Mark Cuban 25:33 Oh, yeah. Oh, yeah. That's not... Yeah, just iterations, yeah.

Lex Fridman 25:35 Yeah.

Mark Cuban 25:35 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's the right person? There's, there's just a million touch points, you know, that you're always re-evaluating in real time, that you have to be agile and adapt and change.

Lex Fridman 26:00 But especially in software, it feels like business model can evolve really quickly too.

Mark Cuban 26:05 Oh, of course.

Lex Fridman 26:05 Like, how are you gonna make money on this?

Mark Cuban 26:07 Yeah. With software, for sure, because...

Lex Fridman 26:09 Yeah.

Mark Cuban 26:09 You know, anything digital, because it can change in a millisecond.

Lex Fridman 26:13 Speaking of which, how did you make your first billion?

Mark Cuban 26:16 So my partner, Todd Wagner, and I, um, had... Would get together for lunches. And we were at California Pizza Kitchen in Preston Hollow in Dallas, and he was talking about, um, how we could use this new thing called the internet, this is late '94, early '95, to be able to listen to Indiana University basketball games.

Lex Fridman 26:40 (laughs) Okay.

Mark Cuban 26:40 'Cause tha- that's where we went to school.

Lex Fridman 26:41 Mm-hmm.

Mark Cuban 26:42 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, you know, 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, 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 this company called Audionet, and effectively became the first streaming content company on the internet. And it... We were like, "Okay, we're not sure how we're gonna make this work," but we were able to make it work, and we started going to radio stations and TV stations, and, you know, music labels and everything. And, um, evolved to 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, uh, in July of 1998. It had the largest first-day jump in the history of the stock market at the time.

Lex Fridman 27:50 (whistles)

Mark Cuban 27:50 And then a year later, we sold it to Yahoo! for $5.7 billion in Yahoo! stock, and I owned, you know, right around 30% of the company, give or take. And so after taxes, that's what got me there.

Lex Fridman 28:02 Well, there's a lot of questions there. So the technical challenge of that, you're making it sound easy, but, uh, you wrote code, but still, in the early days of the internet, how do you figure out how to create this kind of, uh, product, of, of, of just audio at first and then video at first?

Mark Cuban 28:18 A lot of iterations, right? Like you talked about. Um, 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, and then started using different file formats that were progressive loading, and allowing people to connect to-

Lex Fridman 28:40 Okay.

Mark Cuban 28:40 ... the server and do a progressive download, so that the audio, you can listen to the audio while it was downloading onto your PC.

Lex Fridman 28:47 Yeah, was it super choppy? So you're trying to figure out how to-

Mark Cuban 28:49 Oh, yeah, for sure, for sure. It would buffer, it was, yeah, it was, it was, it wasn't good, but it was a start.

Lex Fridman 28:53 But still was good enough 'cause it's the first, kind of?

Mark Cuban 28:55 Yeah, because there was no other competition, right? There was nobody else doing it.

Lex Fridman 28:58 Yeah.

Mark Cuban 28:58 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, um, Progressive Networks and others, that were, 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, I had a $49, um, radio, the highest FM radio that I could find. And we'd 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, and I'd say, "Okay, we've got this radio station, KLIF in Dallas, that's got Dallas sports and Dallas, um, 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, one radio station, and then it was five, then it was 10, then it was video content, then it... Um, the laws were different then, so we could, um, literally go out and buy CDs-

Lex Fridman 30:12 Mm-hmm.

Mark Cuban 30:13 ...and host them, and just let people listen 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.

Lex Fridman 30:25 How did you find the users? Uh, d- is it word of mouth?

Mark Cuban 30:27 Word of mouth.

Lex Fridman 30:27 Just word of mouth.

Mark Cuban 30:28 Okay. Didn't spend a penny on advertising.

Lex Fridman 30:29 So the thing you were focusing on is getting the radio stations and all that.

Mark Cuban 30:32 Oh, radio and TV, anything, any content at all.

Lex Fridman 30:34 Did you pick up the phone? What'd you do... Uh, how'd you, how-

Mark Cuban 30:36 I would, I, I, wherever I could.

Lex Fridman 30:38 What-

Mark Cuban 30:38 Like everything that was public domain, I'd go out and buy a video or a cassette, whatever it was, you know. Um, and this was before the, the DMs, the Digital Millennium Copyright Act of 90 se- whenever it kicked in. So literally, anything that was audio-

Lex Fridman 30:52 (laughs)

Mark Cuban 30:52 ... we would put online so people could listen to it.

Lex Fridman 30:54 Yeah.

Mark Cuban 30:55 And if you think about somebody at work, they didn't have a radio most likely. 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, you know, during the day would... just exploded.

Lex Fridman 31:14 Mm-hmm.

Mark Cuban 31:14 Because whoever'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, um, we started adding video and just other things, and we had ended up with thousands of servers, you know, there was no cloud back then, um, and just pulling together all those pieces to make it work. But where we really made our money was by taking that network that we had built and then going to corporations and saying, "Look, you know, in 19..." 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, like theaters or ballrooms, um, and hotels that had satellite downlinks, and then would broadcast, you know, the 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. Um, 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. And so we used the consumer side to do a proof of concept for the network, um, and then we would take that knowledge and go to corporations, and that's how we made our revenue.

Lex Fridman 32:34 And there was some selling there with the corporations.

Mark Cuban 32:36 Yeah, a lot of selling there, but we were saving them so much money.

Lex Fridman 32:39 Yeah, I think so.

Mark Cuban 32:39 And they were technology companies, they wanted to be perceived as being leading edge.

Lex Fridman 32:43 Yeah.

Mark Cuban 32:43 And so it was win-win.

Lex Fridman 32:44 Uh, how much technical savvy was required? You said a bunch of servers. Like 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 innovate it?

Mark Cuban 33:03 I did all the technology, and then we hired e- engineer after engineer, after engineer to implement it. And so...

Lex Fridman 33:09 Wow.

Mark Cuban 33:10 Yeah.

Lex Fridman 33:11 Okay.

Mark Cuban 33:11 Um, from putting together a multicast network to, um, software, to just all these different things.

Lex Fridman 33:17 Was this like a scary thing? Like, uh, it...

Mark Cuban 33:19 It was terrifying.

Lex Fridman 33:20 Yeah.

Mark Cuban 33:20 Right? Because as we were growing, trying to keep up with 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, you know, resources. So, you know, like there was, there was a time when, um, Bill Clinton and all the Monica Lewinsky stuff happened.

Lex Fridman 33:47 Mm-hmm.

Mark Cuban 33:48 They released the audio of, um, their interviews with him or something like that, right? And we literally...

Lex Fridman 33:56 (laughs)

Mark Cuban 33:56 We... I knew at that point in time when that was released-

Lex Fridman 33:59 Yeah.

Mark Cuban 33:59 ... everybody at work was gonna wanna listen to it, right?

Lex Fridman 34:01 Yeah. Yeah.

Mark Cuban 34:01 So we had to take down servers that were doing Chicago Cubs baseball, right? (laughs) You know, and just make all these on-the-fly decisions because there was no... We didn't have the tools to analyze or pred- be predictive, but yeah, it was, it was all technology-driven and marketing.

Lex Fridman 34:17 Um, the acquisition by Yahoo!, can you tell the story of that? But also in the broader context of this internet bubble.

Mark Cuban 34:24 Sure.

Lex Fridman 34:24 This is a fascinating part of human history.

Mark Cuban 34:26 It was crazy time. Yeah. So on the acquisition side, we were the largest media site on the internet and it wasn't close.

Lex Fridman 34:32 Mm-hmm.

Mark Cuban 34:32 There was nobody close. We were YouTube, and relatively speaking, we would be 10X YouTube relative to the competition because there was nobody there. Um, 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. Um, 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.

Lex Fridman 35:16 And, uh, can you explain to me the trickiness of what you did after that? What you-

Mark Cuban 35:23 Oh, the c- the, um, the collar?

Lex Fridman 35:25 Yeah.

Mark Cuban 35:25 Okay. So when we sold to Yahoo!, we sold for $5.7 billion in stock, not cash. And so I looked at... I, you know... After MicroSolutions, um, when I sold that, um, I took that money, and initially I, I told my broker I wanted to invest like a 60-year-old man 'cause I wanted to protect it.

Lex Fridman 35:45 Yeah.

Mark Cuban 35:45 Um, but then he started asking me all kinds of questions about all these technologies that I understood, like networks I had un- installed. We had become one of the top 20, let's say, um, systems integrators in the country. At one point in time, we were the largest IBM token ring, um, installer in the country. It was crazy, right? Banyan-

Lex Fridman 36:05 Wow.

Mark Cuban 36:06 ... and then Blast from the Past. I mean... So anyway, so these Wall Street bankers, or, um, or analysts rather, um, that were the big analysts of the time would call me up 'cause they would ask my broker, "What does he know about this product, this pro-" And I knew them all, what was working and not working, right? And so the ones that worked, uh, you know, I'd say that it's working and I'd see the stock. They'd say something, the stock would go up 20 bucks, right? So I'm like-... well, and my broker's 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. I was making 80, 90, 100% a year, um, 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 (laughs) . It was great, right? But the point being is, it goes forward. So when, um, we sold to Yahoo!, I already had a lot of experience trading stocks. And I had seen different bubbles come and go. We had a bubble for PC manufacturers, a bubble for networking manufacturers. They went up, up, up, up, up, and then they came straight down be- after the hype, or somebody just, um, leapfrogged 'em. And so when we sold to Yahoo!, um, I was like, "I've got a B next to my name."

Lex Fridman 37:19 Mm-hmm.

Mark Cuban 37:19 "That's all I need or all I want. I don't wanna be greedy." And I'd seen this story before, where stocks get really frothy and go straight down, and I knew that because all my- of what I had was in stock, I needed to find a way to collar 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. 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? That- of any one s- of the Yahoo! stock. And so, um, I took pretty much 20 some million dollars, everything I had at the time, and I shorted the index.

Lex Fridman 37:58 This is fascinating, by the way, 'cause it's based on a- your estimation that this is a bubble.

Mark Cuban 38:02 Or just my not wanting be- to be greedy.

Lex Fridman 38:04 Sure. Oh, so you're- the foundation of this kind of thing is, uh, you don't wanna be greedy.

Mark Cuban 38:09 Yeah. I mean, how much money do I need, right?

Lex Fridman 38:11 Yeah.

Mark Cuban 38:11 You know, where other people were saying, "Oh, I think it can go up higher, higher, higher," I was- I, I went on CNBC and, um, I told 'em what I had done, and they were like... And Yahoo! stock had gone up significantly from the time I had, I had collared. And one of the guy, Joe Kernen, was on there, "Don't you feel stupid now that Yahoo! stock has gone up, um, you know, X percent more?" I'm like, "Yeah, I feel real stupid sitting on my jet." (laughs)

Lex Fridman 38:36 (laughs) Yeah. But, so you're- I mean, there is some fundamental way in which bubbles are based on this greed, this engine of greed.

Mark Cuban 38:42 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, it converted to cash, paid my taxes, et cetera. But, um, it protected me, and, 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, um, 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, there wasn't, right? And so one of the, the people at Goldman that we were working with to try to create this actually left Goldman and created indexes that allowed you to, to trade the VIX.

Lex Fridman 39:32 Well, it's not trivial to understand that it's a bubble. I mean, you're kind of lessening your insight into all this by saying you just didn't wanna be greedy. But you still have to see that it's a bubble.

Mark Cuban 39:43 Yeah, I mean, yeah. Obviously, if I thought it was gonna keep on going up and it w- there was intrinsic value there, I would've stayed in it. But it, it wasn't so much Yahoo!, it was just the entire industry. You would, back then, you know, l- like, we're looking at the, the magic seven or whatever it is stocks now, and people are asking, "Is it in a bubble?" And when... 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, you know?

Lex Fridman 40:09 Yeah.

Mark Cuban 40:09 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. There's not companies... You don't see hardly any- you don't see any IPOs right now, for that matter. So, you know, 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.

Lex Fridman 40:32 Do you think it's possible we're in a bit of an AI bubble right now?

Mark Cuban 40:35 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-

Lex Fridman 40:47 Yeah.

Mark Cuban 40:47 ... to create models that are going public, then yeah, that's probably the start of a bubble. Um, but that said, my, my 14-year-old was bragging about buying NVIDIA, you know, with me in, in his Robinhood account. He tells me the order, I place it, and he was like-

Lex Fridman 41:01 (laughs) .

Mark Cuban 41:01 ... "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 to."

Lex Fridman 41:08 Yeah, we're flirting with it.

Mark Cuban 41:09 Yeah.

Lex Fridman 41:10 Uh, you said that becoming a billionaire requires luck.

Mark Cuban 41:14 Yeah.

Lex Fridman 41:14 Can you explain?

Mark Cuban 41:15 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." 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. 100 million? I'd- I hope so. Um, but a billion just, something good has got to happen, you know? Um-

Lex Fridman 41:39 The timing?

Mark Cuban 41:40 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's been around a long, long, long, long time, and the NVIDIA processors, or GPUs rather, you could predict that now's the time that they were gonna be- get to that cost effectiveness where, you know, you could do- you could create models and train them, and although it's expensive, it's still doable. You know, we didn't really even... We had ASICs, right? For custom applications. And we had CPUs that were leading the way. But GPUs were more for gaming and then crypto mining. And now all- then all of a sudden, they were the foundation for AI models.

Lex Fridman 42:27 So I think...... luck being essential to become 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, uh, you're grateful. 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."

Mark Cuban 42:51 Mm-hmm.

Lex Fridman 42:51 You know? We mentioned Jeff Bezos.

Mark Cuban 42:53 Uh-huh.

Lex Fridman 42:53 It seems like he did a lot of really interesting powerful decisions for many years with Amazon to make it successful.

Mark Cuban 43:01 But he was really able to raise money, right? A lot of money. And people were really dismissive of him because they weren't, um, making... They weren't profitable and we, he, we were in an environment where it was possible to raise all that money.

Lex Fridman 43:15 It was possible to raise that money. I mean, what about somebody you get sometimes, uh, feisty with on the internet, Elon. But we're gonna even look at Zuck and Bill Gates and Warren Buffett. All the-

Mark Cuban 43:25 Look, Zuck was just trying to get laid, right? And it took off and he wrote some good song.

Lex Fridman 43:29 Aren't we all? Isn't that the-

Mark Cuban 43:30 Right. At some level, right? Yeah.

Lex Fridman 43:31 ... foundation of human civilization?

Mark Cuban 43:32 Right. But, um, 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. And if you were there with the right app at the right time. And even Facebook, um, 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, he was too young, but, you know, five years earlier or five years later, you know, well Friendster might've been the ultimate, or MySpace.

Lex Fridman 44:12 Friendster. (laughs) I remember Friendster.

Mark Cuban 44:14 Or MySpace. I had a MySpace account and that was before Facebook.

Lex Fridman 44:17 Yeah. The timing's important but there's like the details of how the product is built, the fundamentals of the product. Like, what-

Mark Cuban 44:24 Well-

Lex Fridman 44:24 What... So, but that's what gets you the... When the opportunity is there, right? That's what allows you to take advantage of that opportunity and- You need the opportunity.

Mark Cuban 44:31 ... the kismet of it all, right? You've gotta be a... 'Cause it wasn't like any of the people I mentioned, there weren't others trying the same thing.

Lex Fridman 44:37 Yeah.

Mark Cuban 44:38 Right? You had to be able to see it. You had to be able to visualize it and put together a, a plan of some sort, or at least have a, a path. And then 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 whether it was Google or Facebook, you know, they raised a shit load of money. It wasn't bootstrapping it that got them there.

Lex Fridman 44:59 And raising money is not just about sales, it's about the, the general feeling of the people with money at that time.

Mark Cuban 45:07 And proximity. If-

Lex Fridman 45:09 Oh, yeah. Sure.

Mark Cuban 45:10 ... if Zuck 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.

Lex Fridman 45:20 I believe in the power of individuals to find their... To realize their potential no matter where they come from. But-

Mark Cuban 45:29 I agree. I agree 100% with that, right?

Lex Fridman 45:30 But luck is required.

Mark Cuban 45:32 Yeah. I mean, scale is... The only delta is scale.

Lex Fridman 45:34 Yeah.

Mark Cuban 45:34 Right? Where, you know, we're not all blessed with the access to the tools that you need to, to hit that grand slam.

Lex Fridman 45:42 But then also a billion is not the only measure of success, right?

Mark Cuban 45:45 Absolutely not, right? There's a... Everybody defines the success in their own way.

Lex Fridman 45:49 How do you define success, Mark Cuban?

Mark Cuban 45:51 Waking up every day with a smile, excited about the day, you know? I was... You know, people always say, "Well, when you get that kinda money, does it make you happy?" And, and my answer always is it... If you were happy when you were broke, you're gonna be really, really, really happy when you're rich.

Lex Fridman 46:07 (laughs) But you gotta work on being happy when you're broke, I guess.

Mark Cuban 46:11 Well, you're just being happy, right?

Lex Fridman 46:12 Yeah.

Mark Cuban 46:12 If you were miserable, you know, in your, in your job before, there's a good chance you're still gonna be miserable if that's just who you are.

Lex Fridman 46:19 That's a pretty good definition of success, by the way.

Mark Cuban 46:21 Thank you.

Lex Fridman 46:21 Uh, how do you reach that success, by way of advice to people?

Mark Cuban 46:26 You know, we talked about my dad, uh, my parents. The... I never looked at my dad and said, "Okay, you're not successful." He busted his ass and when he came home, you know, he... 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're, you know, we don't have this, we don't have that." You know, we, we celebrated the things we did have, and, um, never knew about the things we didn't have.

Lex Fridman 46:56 Mm-hmm.

Mark Cuban 46:56 You know? And, and so I think, you know, 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.

Lex Fridman 47:07 It's not always about the smile or the smile on the outside. It could be a smile on the inside.

Mark Cuban 47:11 Yeah, whatever it is, right? Whatever makes you feel good.

Lex Fridman 47:13 Yeah, yeah. The s- the struggle, and even the struggle like with your dad, the, the really, really hard work can be, can be a fulfilling experience because, uh, the struggle leading up to then seeing your kids and-

Mark Cuban 47:27 Exactly right. Right, because that's-

Lex Fridman 47:29 ... seeing your family.

Mark Cuban 47:29 That, that was my dad's grand slam.

Lex Fridman 47:31 Yeah.

Mark Cuban 47:31 Right? Seeing three kids go to college, be successful, you know, spend t... Be able to spend time with them. And that was the other thing, you know, he really made me realize is the, the most valuable asset isn't the money, it's your time. 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. Um, and that's the most special thing you ever can have.

Lex Fridman 48:00 Beautifully said. You have made some mistakes in your life.

Mark Cuban 48:05 Yeah, a lot of 'em. (laughs)

Lex Fridman 48:07 (laughs) One of the bigger ones on the financial side, uh, we could say is, uh, Uber.

Mark Cuban 48:12 Yeah, we call that, um, not doing something. Yeah, it wasn't a mistake, it was just... I mean, it was a mistake. (laughs)

Lex Fridman 48:17 (laughs) Yeah.

Mark Cuban 48:18 But-

Lex Fridman 48:18 I like how you tried to-

Mark Cuban 48:19 Yeah.

Lex Fridman 48:19 ... cut a joke. (laughs)

Mark Cuban 48:20 You know, I, I, I always try to look at mistakes as things you did that didn't turn out as opposed to things you didn't do.

Lex Fridman 48:24 Yeah.

Mark Cuban 48:24 You know?

Lex Fridman 48:25 True.

Mark Cuban 48:25 Um, the negative.

Lex Fridman 48:26 (laughs)

Mark Cuban 48:26 But, um, yeah.

Lex Fridman 48:27 But what... Can you tell the story of that? And may- maybe it's just interesting 'cause it- it is illustrative of like how to know when a thing is going to be big and not, and what are the f- fundamentals of it and how to take the risk or not and all this kinda stuff.

Mark Cuban 48:39 Right. So the backstory of that is Bill Gurley came to me and said, um, "Mark, there's this guy, Travis, that has this company Red Swoosh, which is a peer-to-peer networking company that, um-"... "I think you can help." And so I invested, and would spend a lot of time with Travis. And it, it's funny, because back then, that was like 2006, I was an investor at, at, um, Box.net with Aaron Levie. And, oh, there was one other company, but there were three of them wh- where there'd be emails between, uh, you know, where I'd introduce him and we'd all talk in these emails. And they'd all gone to be... have astronomical success, right? Um, but, so Red Swoosh had its issues, you know, 'cause I always look at peer-to-peer as kind of stealing bandwidth from the internet providers, when bandwidth was a scarce commodity. Um, 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 on 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 natural for him to come to me, and I still have the emails, uh, you know, and ask me, um, about UberCab.

Lex Fridman 49:53 Mm-hmm.

Mark Cuban 49:54 And I thought, "Okay, this is a great idea. I really, really like it." I said, "You're gonna..." And he showed me his budgets, and I think they were raising money at $10 or $15 million, or whatever. And, um, I'm like, "Your biggest challenge is gonna be you're gonna have to fight all the incumbent taxi commissions. They're gonna wanna put you out of business. That's gonna be a challenge. And I think you don't have a mon- 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.

Lex Fridman 50:25 (Laughs) Yeah. I mean, there's some lessons there connected to, uh, what you're doing now. We'll talk about it, Cost+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.

Mark Cuban 50:41 For sure.

Lex Fridman 50:41 And the g- the cabs are that.

Mark Cuban 50:43 Yeah, for sure, right? They were, they were dominated by an insulated few. They were not very transparent. You didn't know the intricacies. They were ve- very politically driven. Um, and old boy, incestuous network.

Lex Fridman 50:56 Yeah.

Mark Cuban 50:56 And-

Lex Fridman 50:56 Yeah.

Mark Cuban 50:56 ... to Trav, you know, 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," (laughs) "even if you don't have to," you know?

Lex Fridman 51:07 (inhales) Yeah. And there, you kinda have to see, is it possible to raise enough money? Is it possible to do all this?

Mark Cuban 51:12 Yeah.

Lex Fridman 51:12 Is it possible, is it possible to break through? And it's kind of a fascinating success story with Uber, is...

Mark Cuban 51:18 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, you know, in terms of being able to stick it out with them. Um, but, you know, that's what makes him a great entrepreneur.

Lex Fridman 51:32 Well, it's a fascinating success story. You have like certain companies like Airbnb, that just kinda go into this thing that we take completely for granted.

Mark Cuban 51:41 And change it all.

Lex Fridman 51:42 Just change it all.

Mark Cuban 51:43 Yeah.

Lex Fridman 51:43 And it's-

Mark Cuban 51:43 Yeah, Linda Johnson, who worked as our general counsel at Broadcast.com, was, you know, was Bryan's, um, GC and chief operating officer. So, yeah, they, they had a smart, smart, smart, smart team.

Lex Fridman 51:55 And they believed in it, and they... I mean, it's just a, it's a, it's a beautiful story, 'cause 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, pain in the ass-

Mark Cuban 52:05 And see, and I probably would have said no, like a lot of people did to Airbnb-

Lex Fridman 52:08 Yeah.

Mark Cuban 52:08 ... because I'm like-

Lex Fridman 52:09 That's not gonna work.

Mark Cuban 52:09 ... "I don't want people sitting in my-"

Lex Fridman 52:10 Yeah.

Mark Cuban 52:11 "... sleeping in my bed."

Lex Fridman 52:12 I would have too. I was like, "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 could do this at a large scale.

Mark Cuban 52:20 To, to monetize it, yeah. But he did. More power to him.

Lex Fridman 52:24 In 2000, I think January, you purchased a majority stake in the, the NBA team, Dallas-

Mark Cuban 52:31 Uh-huh.

Lex Fridman 52:31 ... Mavericks, uh, for $285 million. So, at this point, maybe you can correct me, but it was one of the worst performing teams in franchise history. Uh-

Mark Cuban 52:42 It's true.

Lex Fridman 52:42 (laughs) How did you, how did you help turn it around?

Mark Cuban 52:45 Um, I had this big tall guy named Dirk Nowitzki.

Lex Fridman 52:48 Mm-hmm.

Mark Cuban 52:48 And I let him be Dirk Nowitzki, right?

Lex Fridman 52:50 (laughs)

Mark Cuban 52:50 And I got out of the way. Um, but I think more than anything else, um, there was the turnaround on the business side, and then there was the turnaround on 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." Um, you know, back then, they had three or four coaches that were responsible for everything. And I was like, "Okay, we spend more money training people 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 different development coaches, one for each player. And everybody thought I was just insane. But, you know, it sent the message that we were gonna do whatever it took to win. And once p- the guys believed that, you know, winning was the goal, as opposed to just making money, attitudes changed, effort went up, and, you know, the rest is history.

Lex Fridman 53:45 So, the assets of the business here are the-

Mark Cuban 53:47 The players.

Lex Fridman 53:48 ... the players.

Mark Cuban 53:48 Yeah, for sure. And then on, on the business side, the first question I asked myself is, "What business are we in?" And I really didn't know the answer im- immediately, but within the first few months, it was obvious that, you know, the, the entire NBA thought we were in the business of basketball. We were not. We were in the experience business. When you think about sporting events that you've been to, you don't remember the score, you don't remember the home runs or the dunks. You remember who you were with.

Lex Fridman 54:15 Mm-hmm.

Mark Cuban 54:15 And you remember why you went. "Oh, it was my first day with the girl who's now my wife," or, "I went with my buddies, and he threw up on the person in front of us." You know, "My dad took me, my aunt, my uncles took me." Those are the experiences you remember. And once, um, I conveyed to our people that this is what we were selling, that what happened in the arena, um, off the court was just as important as what happened on the court, if not more so. Because if, you know, mom or dad are bringing the 10-year-old, you have to keep them occupied.

Lex Fridman 54:43 Mm-hmm.

Mark Cuban 54:43 Because they have short attention spans. And so, you know, uh, I would get into fights with the NBA. You know, put aside the refs, but getting aside... in fights in the NBA, I would say the NBA ain't nothing but attorneys, right? Because they had no marketing skills whatsoever, and to their credit, you know, they realized that was a problem and started bringing in better and better and better marketing people.

Lex Fridman 55:00 So, part of the selling is you're selling the team, selling the sport, selling...... the people, the idea, the all of it, like just the-

Mark Cuban 55:09 Well, yeah, the experience. So if you, have you ever been to an NBA game?

Lex Fridman 55:12 Uh, Miami Heat.

Mark Cuban 55:13 Do you remember walking into the arena-

Lex Fridman 55:15 Yeah.

Mark Cuban 55:15 ... and you feel the energy?

Lex Fridman 55:16 Yeah.

Mark Cuban 55:16 Right? That's what makes it special.

Lex Fridman 55:18 Yeah, the energy is everything, especially playoff games, yeah.

Mark Cuban 55:20 Right, for sure, right? And even a regular season game, right, even against the worst team, you know, that's where we get, you know, because the tickets are, tend to be a little bit cheaper on the resale market, that's where parents will bring their kids. And so you hear kids screaming the entire game, and the parents are thrilled to death, right, they got to do something with their kids. The kids are thrilled to death because they got to see basketball, an NBA game, and scream at the top of their lungs. And, you know, if it turns out 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 with people you've never seen be- That's such a unique experience that's unique to sports, and we never sold that. And that's exactly what we started selling.

Lex Fridman 56:01 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-

Mark Cuban 56:07 Good.

Lex Fridman 56:07 ... the main sport.

Mark Cuban 56:08 Good.

Lex Fridman 56:08 I was like, "Oh, wow. Okay."

Mark Cuban 56:09 It's fun, and it's different, right?

Lex Fridman 56:10 The energy was just like-

Mark Cuban 56:11 Yeah, the energy in a, in a stadium is completely different than the energy in an arena. You know, you can, you know, in the stadium, particularly if it doesn't have a roof, it's hard to, to bottle that energy. You feel it, and you see, like I'm from Pittsburgh, so there's the Terrible Towels and people screaming, "Def- defense," and everything-

Lex Fridman 56:26 Yeah.

Mark Cuban 56:26 ... at Steelers games. But in an arena, you, the energy level is just n- indescribable.

Lex Fridman 56:33 So how much of it is the selling the tickets in person, but also, uh, versus what you see on TV? So when you're owning a team, do you get any other cut for the what's shown on TV?

Mark Cuban 56:44 Yeah. Yeah, we, yeah. So the, there's a TV deal that's done with either a local TV broadcaster, and we get all of that, or, um, a network broadcaster like ABCC, um, ESPN, TNT, whatever, and then we get 1/30th of that.

Lex Fridman 56:58 So what role does the TV play in, like turning a team around?

Mark Cuban 57:01 It keeps fans connected. Look, when a team is doing really well, it's easy, right?

Lex Fridman 57:05 Right.

Mark Cuban 57:05 There's more viewers. Everybody's more excited. Um, and when you're not, it, you know, there's still gonna be hardcore fans, and, and, you know, general fans and kids that like to watch the game.

Lex Fridman 57:15 What about like the personality of the people in the, in the, in the stands? Like, I mean, clearly you're part of the legend of the team, uh, because (laughs) you're literally there going, "Wow."

Mark Cuban 57:26 Yeah, screaming, yeah, the whole game, right? Yeah. It, it's funny, you know, you, the way I am here is how I am, you know, 24 hours a day unless there's a Mavs game.

Lex Fridman 57:34 Yeah.

Mark Cuban 57:35 You know? And, and for whatever reason, that's where I let out all that stress and frustration.

Lex Fridman 57:39 Yeah.

Mark Cuban 57:39 Um, but yeah, I mean, it's not so mu- The fans, you know, the sixth man, right? We need fans to bring that energy, and, you know, amplifying that as much as we can is important.

Lex Fridman 57:49 You've had a beef recently on Twitter, on X, with Elon over DEI programs. What to you is the essence of the disagreement there?

Mark Cuban 57:59 I wouldn't call it a beef, right? I, it's just-

Lex Fridman 58:02 It's a bit of fun?

Mark Cuban 58:03 Yeah. It's fun for me, right?

Lex Fridman 58:05 (laughs)

Mark Cuban 58:05 Um, I just, you know, it's his platform. He gets to run it any way he please. He pays for that right. And so I have total respect for whatever choices he makes, even if I don't agree with them. But because it's his platform, people are less likely to, um, disagree with him, uh, particularly somebody who's of, who's got a platform themselves. And so when we start talking about DEI, and it's just de facto racist, and this stuff, uh, stuff that I just think is nonsense, I have no problem, you know, sharing my opinion. Um, and, you know, if he disagrees, okay, he can disagree. I don't care, you know? And i- 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.

Lex Fridman 58:57 Yeah, you, in your comments, well, you do a bit of snark too, but, uh-

Mark Cuban 59:01 In t- yeah, little bit. (laughs)

Lex Fridman 59:03 (laughs) But you, you're pretty, um, let's say rigorous in your response. So there is some exchange of ideas. There's some snark, there's some fun, all that kinda stuff. And, uh, you do voice the opinion that represents a, a large number of people, and it's great. I mean, that, that's what's the-

Mark Cuban 59:19 Thanks.

Lex Fridman 59:19 ... it's really beautiful. Uh, but just lingering on the topic, what to you is the good and the bad of DEI programs?

Mark Cuban 59:28 Really simple, right? D is diversity, and that means you just expand your pool of potential applicants to people who you might no- not otherwise have access to, you know, to look where you didn't look before, to look where other people aren't looking for quality employees. Um, that simple. And the E in equity means when you hire somebody, you put them in a position to succeed. The I, inclusion, is when you've hired somebody and they may not be typical, if you will, right? You show them some love and, and give them the support they need so they can do their job as best they can and feel comfortable and confident going to work. It's that simple.

Lex Fridman 1:00:07 So that's a beautiful ideal. When it's implemented, implemented poorly perhaps, or in a way that doesn't reach that ideal, do you see maybe when it's, uh, quota based, do you see that it can result in essentially racism towards Asian people and white people, for example?

Mark Cuban 1:00:27 There's a lot to unpack there, right? Um, so first, you can't do quotas. They're illegal unless the- you're, um, and I'm not the lawyer on this subject, but unless you're, you're trying to repair something that's happened in the past, like some discrimination that's happened in the past. So th- it's not quota based, and I think that's really just kind of a, a straw man that, that people put out there. Now, does that mean that there aren't DEI programs that are implemented poorly? Of course not. There are everything that's implemented poorly in one company to another, right? Sales, marketing, um, human resources. You can pick any element of business and find companies that implement it poorly. Um, but that's the beauty of capitalism in a free market, or mostly free market, where if you make these choices and they are the wrong choices, you're gonna lose your best people. You're not gonna be able to hire the best people. You're not gonna execute on 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're having the discussion. So when I'm in a different group of people off of X, the feedback's completely different (laughs) , right? Um, but to your question of reverse racism, yes, it happens. There's, I mean, 'cause people are people. There's no, you know, there's no human being that is 100% objective. And it's also, there's very, very, very few jobs that can be determined on a purely quantitative, quantitative basis, right? How do you tell one good jan- one janitor 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 talked earlier about firing people 'cause of you made mistakes. And, you know, yes, there's discrimination against any group, w- white, Asian, Black, green, orange, whatever it may be. But I truly believe that there's far more discrimination against people of color than there are people who are white. And I think it's, it's become a, a straw man that reverse discrimination because of DEI is, is prevalent or near ubiquitous.

Lex Fridman 1:02:47 Uh, well, much of American history was defined by intense radical racism and sexism.

Mark Cuban 1:02:55 Mm-hmm.

Lex Fridman 1:02:57 But in the recent years, there's, uh, a correction, and I think the nature of the criticism is that there's an overcorrection where DEI programs at universities and companies are often, when they're not doing their job well, are often hard to criticize. Because when you criticize them within the company or so on, you can... They have a very strong immune system-

Mark Cuban 1:03:21 Right.

Lex Fridman 1:03:21 ... whether you c- they c- if you criticize a DEI program, it seems like it's very easy to be called racist.

Mark Cuban 1:03:28 Mm-hmm.

Lex Fridman 1:03:28 And if you're called racist or sexist, that's, that's a sticky label for some reason.

Mark Cuban 1:03:33 So you're getting into the culture of organizations, right, and leadership within organizations. And accepting any type of criticism, put aside DEI. When I criticized the referees in the NBA, I got fined, right? That was their ob- 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 company and I'm publicly criticizing or even internally criticizing a sales plan or a product, our product sucks, right? Where, like, there was a Google engineer that got fired for saying, you know, Google had AGI, right? And nobody believed they did, and they knew that created problems. Wasn't DEI related, but it was, you know, saying something publicly that was to the, in, 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 something within an organization because you think there's a problem and there's people speaking out saying, "Look, you, we're getting it wrong. I think I'm, I'm a victim of all this in the company," right? Then, you know, leadership has gotta make a decision. Do, do they agree or not agree? Are they right or are they wrong? Is it to the, the, positive, is it positive or negative to the company? And you decide. So, you know, this conversation that conservatives are being, um, silenced in organizations now, um, I just, I haven't seen it. You know, I've talked to... And then the other side of the, your question, I think, I'm packing it, is, um, what's driving all this? Put aside universities for one in- in corporate America. When I talk to people in corporate America about, um, DEI, they always start talking about 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 force you? Did they coerce you? Did, did you lose control of your company?" "No, it's not me. It happens to other people." Then I talk to other people, same thing. So I get, you know, uh, try not to go one-on-one and t- Twitter conversations on this topic. So in the DMs, I'll talk to people who are really f- um, conservative, and I'll ask the same question. Um, and I'll be like, "Well, who's forcing you to do this?" "Well, it's the ideology that's everywhere. You see it in, don't, didn't you see the Harvard thing, you know, and University of North Carolina?" I'm like, "I've never had anybody try to push me in this direction to do this. This was my business choice. I'm not trying to tell other people, 'You have to do this.' You make your own business choices." And so where companies have made their business choices, and if somebody doesn't feel confident or comfortable with it, they may feel they're being discriminated against. There was something I just read in the Wall Street Journal where the Wall Street Journal had a company interview two million people, right? And the difficulty in firing and how people, when they were fired, m- 40% of the people who were fired felt like it was wrong that they were doing a great job. Yet, they then I talked about the HR person going through the hassle of trying to explain to this person through performance reviews that they weren't doing a good job. Yet, the people still thought they were doing a great job, despite being told they're not doing a good job, right? So I see that as being an analogous to all this, you know, this huffing and puffing about, um, reverse discriminations and conservatives not being able to speak up. Because if 40% of people who have been fired don't believe they should have been fired, there's, there's a disconnect somewhere in how you think you're doing your job. And, um, if you just feel like, "I can't speak up because of it," um, because of you're white and that doesn't comport well with DEI programs-... a lot of things are gonna happen, right? Either you're gonna, that's gonna come up in your performance review. HR or your, your boss is going to have to address it in some way. It's gonna get to HR at some level and then decisions are going to have to be made. And comm- and you can't just fire somebody because they spoke up, right? Somebody's gonna have to communicate with you. And so I think a lot of... I just, I, 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 authority within organizations and ask them who's forcing them, you know, to implement these ideologies, nobody says, nobody says yes, that there is somebody. And, but on Twitter, it sounds great.

Lex Fridman 1:08:22 It is true for conservatives, but in general, you can sell books, you can get likes-

Mark Cuban 1:08:26 Yes.

Lex Fridman 1:08:27 ... when you talk about this ideology. And, and there's a degree to which is, is this woke ideology in the room with us right now? (laughs) Uh, meaning, like it's this boogey monster that we're all kinda, uh-

Mark Cuban 1:08:38 Or is it a positive?

Lex Fridman 1:08:40 I guess another way to say that is they don't highlight a lot of the positive progress that's been made in the positive version of the word woke, in terms of correcting some of the 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 censorship," and all that kind of stuff. It's sometimes hard to see when you're in it, that this kind of stuff-

Mark Cuban 1:09:05 For sure.

Lex Fridman 1:09:05 ... is happening. It does seem difficult to criticize DEI programs, not horribly difficult, terrible, they're this monster that infiltrates everything. But it is difficult and it requires great leadership.

Mark Cuban 1:09:20 So where, where have you criticized it and been condemned?

Lex Fridman 1:09:23 Uh-

Mark Cuban 1:09:23 Academic or-

Lex Fridman 1:09:24 Academic, yeah.

Mark Cuban 1:09:25 Okay. Aca- academic, let's, two different worlds.

Lex Fridman 1:09:28 Companies and academic, yeah.

Mark Cuban 1:09:29 Two different worlds.

Lex Fridman 1:09:30 But I also think it's not... I really wanna point my finger at the failure of leadership, of basically firing mediocre people, like people that are not good at their job. The problem to me is DEI's defense mechanism, like immune system, is so strong that the shitty people don't get fired. So the vision, the ideal of DEI is, is a beautiful ideal. It's just like, uh-

Mark Cuban 1:10:01 Well, maybe it's 'cause I'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 for the ideology in a university. I can see, you know, you look at the, the, the amount of money spent on it. And so while the, the goal is right, um, the way they implement it in universities, the way they implement most things in universities is wrong, right? There's a reason why tuition has gone up, you know, a multitude of, uh, or a, a multiple of inflation, um. They're not well-run organizations 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 DEI in universities at all.

Lex Fridman 1:10:46 That's mostly focused on companies.

Mark Cuban 1:10:47 100%, right, because that's where, where I exist. But at the same time, like I read Christopher Ruffro's book where he talks about the kind of the genealogy of wokeism and, and ideology. But then he 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 conservative movement 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, I, to me, that's just a conflict in a lot of the underpinning of this con- of the whole DEI conversation that a lot of it, and a lot of which goes through Christopher Ruffro right now.

Lex Fridman 1:11:41 Let's continue on a theme of fun exchanges on the internet. So Elon tweeted, "The fundamental axiomatic flaw of the woke mind virus is that the weaker party's always right." In parentheses, "Even if they want you to die." And you responded at length, but the beginning is, "The fundamental axiomatic flaw of the anti-woke mind is that it allows groups with historical power to play the victim by taking anecdotal examples and packaging them into conjured conspiratorial ideology that threatens to upend the power structures they have been depending on." So, uh-

Mark Cuban 1:12:21 It says it all, right? (laughs)

Lex Fridman 1:12:24 (laughs) Well, there, 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 people that can crave power and hold onto power and sacrifice their ideals.

Mark Cuban 1:12:45 Okay, put aside universities, okay?

Lex Fridman 1:12:47 Damn it. (laughs) Yeah, I mean, I-

Mark Cuban 1:12:48 Because I'm not gonna argue that universities implement DEI well, right?

Lex Fridman 1:12:52 Yeah.

Mark Cuban 1:12:52 And I'm not gonna tell you that, um, you know, they need to be spending 20 some million dollars a year on DEI positions. To me, that's insane. Um, do I look at the Harvard and North Carolina decision and say it was a great decision? No, because, you know, I think having a diverse student body helps make for, um, kids who are better prepared for the real world.

Lex Fridman 1:13:21 Mm-hmm.

Mark Cuban 1:13:21 But I'm not running a university, so it's not my choice. Maybe at some point in the future I will, but not now. Um, and in terms of the corporate side of it, who's telling anybody what to do?

Lex Fridman 1:13:37 Well, maybe you can give me some help.

Mark Cuban 1:13:41 Sure. I'm here to help you, Lex.

Lex Fridman 1:13:44 There's an example in the AI world of, uh, a system called Gemini-

Mark Cuban 1:13:51 Yeah, I mean-

Lex Fridman 1:13:51 ... uh, 1-5 from Google.

Mark Cuban 1:13:52 ... and everybody was Black or whatever, people of color. But-

Lex Fridman 1:13:54 George Washington was Black.

Mark Cuban 1:13:55 Right.

Lex Fridman 1:13:55 Nazis were Black.

Mark Cuban 1:13:57 So why, why is it when that came out, it was a big uproar, but when somebody wr- so who, uh, who was it? One of the people who were f- trying to fuck with me. Um...

Narrator 1:14:08 (laughs)

Mark Cuban 1:14:08 I forget which one. Um...

Lex Fridman 1:14:09 There's so many. (laughs)

Mark Cuban 1:14:10 Yeah, but, um, he pointed out to, um, Elon that Grok, Elon's AI, was woke when it answered certain questions. And other people have pointed out other things to Elon about Grok, Grok, Grok, whatever they, however it's pronounced, um, 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 reflection of all their culture." Now Google comes out and says it's a mistake, and then they dox the guy, um, who is the product manager or whatever of AI, of that product, um, who... And then they go back and look 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.

Lex Fridman 1:15:01 It's not the end of the world, but, uh, Google's so much, uh, dependent on trust, that trust that Google Search has, as objective as possible, um, channel into the world of information. And so that brand is really important for-

Mark Cuban 1:15:18 Yeah, see, you're, you're over... You're giving them too much power. Um, and maybe I'm, I'm not recognizing the power, right? So I'll tell you a personal experience. Um, up until a month ago, maybe, if you put in keto gummies, Shark Tank keto gummies into Google, it would show up with scammy ads, scam ad after scam a- and I would get emails, um, up until a month ago from elderly people asking