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My First MillionMartin Shkreli Reveals How He Made His First $100 Million (#445)
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CHAPTERS
- 0:00 – 2:02
Cold Open and Setting Up the Shkreli Interview
A clip of Martin Shkreli on PubMed opens the show. Shaan Puri then introduces Shkreli as a controversial figure, previews the topics, and asks listeners for their reactions.
- •Shkreli says PubMed holds 36 million biomedical papers and that patient sifting can lead to a fortune
- •Shaan describes him as controversial and never boring
- •Preview covers his drug price story, his dislike of corporate-speak CEOs, and his new AI startup
- •Shaan says the show aims to understand how interesting people think rather than judge them
- 2:02 – 8:04
Working for Jim Cramer and Breaking the Fourth Wall
Shaan asks about working for Jim Cramer as a teenager. Shkreli describes the early hedge fund world, his unusual schooling, and his habit of blunt confrontation, including grilling a CEO about not owning his own stock.
- •Hedge funds were a small asset class when he started
- •He says he was irreverent in high school too and thinks people take authority too seriously
- •He recounts the CNN reporter he invited onto his stream and asked to be his plus one
- •He pressed a CEO for 20 minutes on why he owned none of his company's stock
- 8:04 – 21:00
Why Hedge Funds Never Made Him Money
Sam asks how Shkreli made his first money. He says he never earned money in hedge funds, describes the fund's problems, and explains why the industry is hazardous and requires an obsessive love of markets. He also describes his psychological struggle with doubling down on losing positions.
- •He ran roughly an $8 million fund and took no fees
- •He says many top hedge funds were shut down by regulators and that the job carries legal risk
- •He says Cramer is addicted to stocks and that hedge fund work only suits people with that obsession
- •His weakness was trading discipline, especially the urge to double down
- •Running a fund taught him what Wall Street wants, which helped him as an operator in biotech
- 21:00 – 28:44
Founding Retrophin: Turning $2 Million into a Billion
Shkreli explains how he found a drug that Bristol Myers had dropped, researched a new use through PubMed, and built a company around it. The drug later won FDA approval as Filspari.
- •He licensed an abandoned hypertension drug for $2 million and had trouble paying the second million
- •He pivoted to a rare kidney disease after research on PubMed
- •Wall Street was skeptical because the evidence rested on a soft endpoint
- •He did a reverse merger after Peter Thiel did not do the deal, and the drug became Filspari
- •He made his money on the research side, not by raising prices
- 28:44 – 33:38
Illiquid Wealth, the Board Fight, and Prosecution
Shkreli explains his shrinking ownership stake and why paper wealth left him without cash. He then describes the board fight that, in his telling, led to his prosecution, and his decision to start Turing.
- •His stake fell from 90% to about 15-20% by the 2014 IPO
- •Banks would not lend against his new, unseasoned stock
- •He says the board used law enforcement as a weapon, citing a revolving door between corporate law and prosecutors
- •He says he was acquitted of those charges
- •After losing control of the company he started Turing
- 33:38 – 43:23
Defending the Daraprim Price Increase
Shaan asks Shkreli to explain the drug pricing controversy, and Shkreli argues that setting price is a business owner's right. He lays out his pricing logic, and in response to Shaan he says no one lost access to the drug.
- •He says it is not a crime to choose your product's price
- •He argues healthcare triggers an emotional entitlement that other products do not
- •He favors pricing against the cost of the alternative care and says drug companies need windfall profits to offset failure risk
- •He says insurers, not patients, pay and that Daraprim was under 0.1% of an insurer's budget
- •He says zero percent of patients lost access
- 43:23 – 52:34
Rejecting Corporate Vanilla and Cultural Self-Censorship
Sam argues that Shkreli's smug tone cost him, while Shkreli says he could have played the polished executive but chose not to. They discuss how corporate life suppresses personality.
- •Sam says Shkreli's logic was sound but his delivery hurt him
- •Shkreli says he gets standing ovations at Ivy League schools for keeping a personality
- •He criticizes bland big-company CEOs
- •Sam notes the world wants people to be vanilla but questions the cost to others
- •Shkreli says he sees healthcare spending as demand-driven and says his new company is a kind of penance
- 52:34 – 58:48
Post-Prison Money, the FTC Case, and Making Money to Be Uncomfortable
Sam asks what Shkreli does with his money after prison. He describes paying his fines, selling the Wu-Tang album, and the FTC's monopoly suit, and says he is confident he could rebuild. Shaan links this to Naval's idea of being a person who gets rich.
- •He paid about $8 million in criminal fines and turned a profit selling the Wu-Tang album
- •The FTC sued him personally and won a $60 million judgment, which he is appealing
- •He says he is indemnified in part and is not trading until it is resolved
- •He says he makes money to be uncomfortable and wants bigger challenges
- •Shaan cites Naval's idea of being a person who gets rich
- 58:48 – 1:02:26
The Fun Strikes Back Movement at Stanford
Shaan describes the Fun Strikes Back student movement at Stanford, including the story of the sand island party and the school's crackdown on campus social life. Shkreli connects it to regulators and prosecutors and to the endless meta-game of apologies.
- •Students won an election on a platform of fun, fraternities, and weirdness
- •The sand island party story illustrates the lost campus culture
- •Fraternities were removed and neighborhoods turned into numbered blocks
- •Shkreli wonders what his prosecutors did in college
- •He says non-apology apologies lead to an endless meta-game
- 1:02:26 – 1:06:28
Writing and AGI Predictions
Sam raises Shkreli's newsletter predictions. Shkreli discusses how hard it is to write while running a business and shares his views on AGI, including bold predictions about AI and society.
- •He says writing is hard for an entrepreneur and he stayed busy working in prison
- •He predicts AI-human marriage and AI voting rights
- •He cites John Carmack raising his AGI estimate and says AGI is more profound than the internet
- •He says Google and Facebook had comparable technology but missed the product
- 1:06:28 – 1:13:24
Launching Dr. Gupta AI
Shkreli unveils DrGupta.ai, an AI physician chatbot, and explains his reasoning. He criticizes Mark Cuban's pharmacy venture and describes the product, his claims about GPT-4's medical knowledge, and his goal of a massive company.
- •Dr. Gupta is a free AI doctor, with 50 free messages and a $20 monthly plan
- •He argues most healthcare spending goes to physicians and could be reduced with AI
- •He calls Mark Cuban's pharmacy approach unworkable because pharmacy margins are thin
- •He says GPT-4 scores 90% on the USMLE
- •He blames the AMA for restricting doctor supply and predicts no physicians in 50 years
- 1:13:24 – 1:24:46
Liability, Accelerationism, and the DL Software Team
Shaan asks how an AI doctor avoids being sued out of existence, and Shkreli answers with disclaimers and a net-benefit argument. He also explains the e/acc movement, the company's structure, and how he recruits engineers and rallies a team.
- •He compares AI mistakes to self-driving car deaths and argues for pushing the technology forward
- •He says the site disclaims that Dr. Gupta is not a real doctor
- •He says the product knows every language and cannot be easily blocked
- •The company is called DL Software with three software products
- •He says his YouTube streams and energy help him recruit engineers
- 1:24:46 – 1:32:05
The Flo Rida Photo and Being Yourself
Sam brings up the red polo and Bugatti photo that fueled the Pharma Bro image. Shkreli explains the stock trade behind it and says he chose to stay true to himself rather than conform.
- •The photo came from a $20 million short on Vital Therapies, with a joke on the Flo Rida song
- •Sam says the photo amplified the media's stereotype
- •Shkreli says he does not regret his interesting life
- •He says he would not conform, citing know thyself
- •He says he was provoked, including by Hillary Clinton's tweet
- 1:32:05 – 1:42:16
Heroes, Bill Gates's Chair Jump, and Twitter Ban
Shaan asks about Shkreli's inspirations, and he names Vince McMahon, Bill Gates, and several self-made businessmen. The hosts joke about Gates's chair jump, and Shkreli ends by discussing his bans from Twitter, Tinder, and other platforms.
- •He says he embraced being the bad guy, inspired by wrestling heel Vince McMahon
- •He admired Bill Gates for being unapologetic when widely disliked
- •He also names Soros, Henry Nicholas, Tom Peterffy and Robert Smith
- •The hosts discuss the Bill Gates chair-jump interview
- •He is banned from Twitter after seven years and now uses @marty_catboy
