Why Mark Cuban is Fed Up With Both Political Parties | Working Capital

Introduction You're sort of like a martian to me. I think of you as like another species. My kids think the same thing. Really? Why do they think it? Because they're teenagers. Well if we're in agreement, maybe it's true then. What does it feel like when you win? I mean, it feels good, but it means I'm just on to the next thing. Do you ever feel satisfied? Yeah I feel satisfied because I know I'm learning. I love to learn, right? And I know I'm still competing. You know, when I first started I was the youngest guy in the room, you know? And people were like, "Oh you're too young", whatever. Now I'm the oldest guy walking in the room like, "Well what's this guy know about technology or AI? Why are you trying to compete with all these big companies? They're gonna kick your a**." I'm like, "Let's go." You know? That's motivating to me. He's sort of the type of person that I understand least in the world. His whole life it's about competition and beating the competition. And he said that he wakes up thinking about the competition. And I think that's actually insane and I can't imagine existing that way. We're gonna figure out if there's something wrong with me or something wrong with him. I think it might be me. America has its fair share of eccentric billionaires. Mark Cuban is not quite that, in a lot of ways, the weirdest thing about him is how aggressively normal he seems. But for weirdness, it's hard to top hearing one of the richest people in the country say that paying taxes is something that they look forward to. One of the most patriotic things that you can do when you're wealthy is pay your motherf****** taxes. Whether it's hard balling investors on "Shark Tank." You can't be that stupid, Robert, to even think there's any legitimacy. Lashing out at basketball refs on the court, or dunking on anti-diversity, equity and inclusion cranks on social media, Mark Cuban lives for combat. Bam. You know, when I'm missing a shot or whatever. It seems to make him happy. Like genuinely happy. Cuban's venture into healthcare The latest target of his good natured wrath is the American healthcare system, which he's aiming to disrupt with his latest venture, Cost Plus Drugs. So I got a cold email from Dr. Alex Oshmyansky who wanted to build a compounding pharmacy in Denver to make generic drugs that were in short supply. And it was right around the time that Martin Shkreli was getting ready to go to jail and so I had been reading about that. And it was apparent to me that if he was able to raise the price of Daraprim, this was not an efficient market. So the question was why? And so working with Alex and talking to Alex, the key element that was missing in the industry is transparency. Role of drug middlemen It was and is dominated by three big pharmacy benefit managers and they set pricing, despite their claims otherwise. And so we felt like if we could create a company that was completely transparent and show our costs, et cetera, that it would start to bring back the one thing that was missing in the healthcare system, which was trust. So we started CostPlusDrugs.com. And if you go to the website, you put in the name of the medication, we'll show you our actual costs- Yeah. our 15% markup. And if you want it delivered via mail order, it's $5 to the pharmacist, $5 for shipping. And the prices are just dramatically cheaper. US government's relationship with pharmacy benefit managers So do you feel like it's a failure of government that you have to be doing this? No, no. It's definitely not a failure of government. Well I take that back. It's not a failure of government from a legislative perspective. Okay. Okay? It's a failure of government in that by choosing to allow companies that, the PBMs that they work with for Medicare Part D or Medicare Advantage, then they're reinforcing the fact that there's no transparency because of the contracts that they've signed with them have no transparency. Right. Right? For the most part. And then it's a bigger failure on the part of all the companies that self-insured, particularly the big companies. If you're a CEO of a big company, medium-sized company, your company, right? Your core competency is not worrying about healthcare costs. Right. Right? You work with an employee consultant or whatever it may be, and you just think they're doing their job. But the reality is, healthcare costs have become your second largest line item right after payroll. So when you ask, "Why are we where we're at?" Yeah. It's not because we should have legislated against them. It's because the government should say, "Okay, if you're gonna be part of Medicare you have to be transparent to us on your actual costs, you have to be transparent to us in your markups, you have to be transparent in your prices and we're gonna publish all those things. And if you try to game it by using offshore companies to do, you know, rebates, then we're not gonna work with you". Right. It's gotta be straight net pricing. If the government did that with Medicare and Medicare Advantage and those partnerships, it'd be a whole different game. Are the pharmaceutical companies too powerful? Are you talking about the manufacturers or the PBMs or... All of it. The PBMs, yes. Because now they're vertically integrated and becoming more so, and so we hear a lot of talk about regulatory capture, but it's scale capture, where they basically- Can you explain that? A scale capture is where they go into a company and they say, "We're so big, if you don't do work with us, you're not gonna be able to get all the services and prices and everything." Right. "And we're not gonna share with you what we're doing with everybody else, but we're the biggest, so you must know that we're good." No one ever got in trouble for doing business with IBM. Right. Right? That type of concept. And it's just been a disaster. And you know, we hear story after story about people who can't afford their healthcare, can't afford their medications, and it doesn't have to be that way. And I really truly believe that there is a straight line from where we are today to completely fixing healthcare in the United States if we can get, in particular big companies to become transparent in their negotiations and to publish what they do. It's not that hard. So what needs to change? If for the Medicare Advantage program, they just don't, they don't approve anybody for Medicare Advantage that works with the big three PBMs. Right? The big companies, they stop working with the big three PBMs and publish their contracts. That happens, we're looking at the United States of America as the shining light of a healthcare system. Cuban's entrepreneurial spirit While Cuban often points to the market failures of America's healthcare system, he still has a strong faith that markets and entrepreneurs will point the way towards solutions to many of society's problems. So obviously at some point we were going to talk about Ayn Rand. You used to be a bit more of a libertarian. I still am, but there's times when you adjust, right? I'm not a hardcore Ayn Rand anymore. Yeah. Right? Because just reality sets in. Yeah. And I'm more about- Do you really like her writing? Oh, I loved them. Really? Loved them. You loved "Atlas Shrugged" or "The Fountainhead"? Loved it. "The Fountainhead" especially. Yeah. More than Atlas, oh my God. Howard Roark was like that- When I was like 13, I read it, it was like Time Magazine had like a hundred books you have to read before you die. And I was obsessed with every moment trying to learn stuff. So I tried, I had no idea who Ayn Rand was and I'd never heard of her. And I read "Atlas Shrugged" and I thought it was just a book about trains. You know? I had no idea what it was. But see, I always had an entrepreneurial spirit. Yeah. And so as a kid wanting to be an entrepreneur, Howard Roark standing up to everybody and anybody and speaking to power and not caring. I try to, you know- Yeah. Part of that is still in me every single day, right? Yeah. Our conversations, you could see that come through. Right now the who is John Galt and the government's gonna destroy everything. No, that's not me, right? Right. I'm not saying it's my political mantra. Yeah. Right. Not by a long shot. But I would read "Fountainhead" over and over and over again. Really? And I had to stop reading it 'cause I would get too jazzed up. And it wasn't about Ellsworth Toohey and a who's bad and who's good, right? It was just Howard Roark, just these were his principles. Right. He busted his a**. He didn't care what anybody else thought about him. You could agree with him, you could disagree with, he didn't care, right? Yeah. Now I'm not trying to make myself Howard Roark, right? Right? But I don't care. Right? You could agree with me, you could disagree with me, there's nothing about what any of them say that impacts my life so far, you know, one way or the other. But I'm gonna be motivated to do what I think is right. To me, that was a huge positive. What's your relationship with that type of celebrity? Right? You did "Shark Tank" for how many seasons? 15. 15. Do you like being a kind of, you were getting mobbed on the way in here, do you like being a kind of... I know what I'm getting into when I go somewhere, right? Right. And so it's not a bad thing, it just is what it is. Yeah. I mean, it's fun, you know? 'Cause it allows me to connect to anybody anywhere. I can walk into any room and somebody, 90% of the time they're gonna know me. Right? Maybe not by sight, but know of me and I can have a conversation talking about anything. So it opens the door for people who I might not otherwise get to meet, right? Or get to talk to, which is a great thing. But overall, yeah, it's been a positive except for just social media. Right? Just because all the hate that's inevitable on social media, that gets annoying. Couldn't you like hire someone to like filter through that for you or something? No. What good is that? Why would I do that? I don't know. I mean, if I were you, I would not spend like two seconds on social media. No, but I wanna learn. Right? I wanna learn- What are you learning on social media, in your mentions? Well, there's the bulls***. It's just like, if I'm talking about Cost Plus Drugs. Yeah. Right? And I'm hearing from different patients. Or there were times when there were like, "Can you get this drug?" Yeah. And we look and we can get this drug. So then I'm responding back saying, "Okay yeah, we'll get it". And we help this person. Or there's times like when talking about DEI where there'll be somebody who says, "Okay, here's why I disagree," and I'm like, "Okay. That's a good point." Right. So once you take out, you know, there's signal and there's noise. And if you get rid of the noise and you're willing to realize that Twitter's not real life. Yeah. Or Threads for that matter, right? Any opportunity I have to learn something- Right. is a good day. Right? Anything that I picked up that is n plus one, versus where I was before, that's amazing, right? I credit most of my success to being good at reverse engineering. How can- The internet is crawling with starry-eyed optimists trying to reverse engineer wealth by mimicking the mindset of billionaires. You wanna make a million bucks a year, you gotta do this. But even though I'm the opposite of a hustler in every way imaginable, I am still fascinated by what goes on in Mark Cuban's head. Cuban's competitive streak Your brother said something about you once in like the early 2000s, that he doesn't even think it's about the money, he thinks it's just about the competition for you. He's right, yeah. And you've said something to the effect of, you wake up every day thinking about the competition. Why? I'm just competitive. Why? You know, that's who I am. You know? I've played sports my entire life. I still go out there and play pickup and if I miss a shot, I get mad. Why? I'm just competitive. I won't play golf. You know, because I'm so competitive I don't have the time to put into it. I've golfed once in my entire life, other than putt putt and Topgolf type things. Literally once in my life and it was with a customer in 1989 and I was with my club, bam! You know, when I'm missing a shot or whatever. And I'm like, I can't do it 'cause I can't get good at it. You know? What'd the customer think? He didn't care, he was gonna still do business. He was kicking my a** anyway, so he was happy. Yeah. But yeah, so I mean, I just love to compete, for whatever reason I do. So are you most excited about something like that when it's the uphill part of it, or? Well yeah, because I mean, think about the goal. If you're trying to change healthcare in the United States of America, that's a never-ending project, right? There's always gonna be something new, something changes. Right. Right? And we're just starting at the lowest denominator. You know? You inventory some pills and you sell the pills, right? We buy drugs and we sell drugs and, you know, but our real product is trust. And so how can you extend that to all of healthcare? That's a forever project. With something like the Mavs, when you bought the team they were not doing well, right? No, they were awful. So what was that journey like? It was fun. I'm a basketball junkie. Yeah. Right? And so- Did you wanna be a basketball player when you were a kid? Yeah, of course. I wanted to be an athlete and I- When did you realize that was not gonna happen? When I was six. No, probably when I was like 12. I was the kid that always made the all-star teams, always was the best player. Yeah. Till I got about 12 and then everybody passed me by, right? I always blame my dad for those genetics. But with the Mavs, I had this big tall German guy named Dirk Nowitzki and so all I had to do was not screw it up and then just give them some confidence. And it was fun because I love basketball, I could get out on the court and shoot with them, play one-on-one with them. Yeah. You know? And even now to this day, I'll go and before a game, get out there and get shots up and it's fun and it's a diversion too. So during those 48 minutes, when the game's being played- Right. Everything else is, you know, outta mind. And I can yell at the refs and scream for the game, take out all my aggressions and just be chill the rest of the day. You retired once, right? And it didn't take? Yeah that was just to go party. I bought a lifetime pass on American Airlines and I just wanted to get drunk with as many people as I could, right? Fake retired. Fake retired. You know what I mean? It was just like, I just wanna have fun, I just want- Yeah. You know, my dad, it's just like time's the one thing you can't get back. Yeah. You know, you just have to enjoy your life. And so I just do what I like. I like to learn, I mean that's what gets me jazzed up. To me, everything I consume creates new opportunities as an entrepreneur. Yeah. That's why, you know, even though I didn't take tech in college or computers in college, once I got into them, I was like, "Okay, this is me." Right. Right? Combine that with business and okay maybe I can do things that are impactful. Right. And so, you know, taking that same concept, it's that same mission of competitiveness, why would anybody go into an industry like a pharmacy business, where it's dominated by three big companies and everybody says you're gonna get your a** kicked. So do you spend your time trying to understand them? Is it a lot of research? Like how does it work- No, I don't care about them. 'Cause everything Cost Plus Drugs is doing is outside of the big three PBMs. Right. So it's understanding them, but knowing that this industry is so opaque and isn't in the best interest of the customers, what an amazing opportunity, not just as an entrepreneur, but to change healthcare in this country. You know, if I said, Olivia, you know, I heard you had an idea to change healthcare, you could be retired, but it's so impactful and it's such a unique opportunity. Right. Right. Wouldn't you go for it? It's just the way I look at it. I mean, you know, some people wanna put their names on buildings. The idea that, you know, and look, maybe there's a 3% chance it'll happen, but that's, you know, so you're saying there's a chance type thing, right? But that 3%, oh my God. You know? Is Cuban considering a presidential bid? It's 2024 in the United States of America and people, you know, still have healthcare debt that's putting them into bankruptcy. Can't afford their medications and have to make choices between food and rent and shelter and daycare. That's f***** up. Yeah. Right? And so retired or not, the ability to have a chance to change that, who wouldn't? Among journalists and certainly the political press, there's this sort of disbelief that you could be so obsessed with this and there's not a political ulterior motive, right? That you're not preparing to run yourself. No, I'm not preparing to run. Yeah. No. Do I recognize that if I fix something like this or have an impact that it makes sense, because that's completely different than a traditional political candidate. Yeah, of course. And that's why I get the questions. But when I'm 95 and looking back, I'd rather just say, "Okay, I was there, you know, for Jake's games, I was there for Alyssa's regattas, I was there to help Lex in college." I don't wanna lose that. Right. That's everything. Yeah. You know? And I don't think I was as good at it as I should have been when they were younger. And now I wanna be great at it. So no running for office for you? Not while, you know, you never say never, right? But not while they're teenagers, right? Okay. But then I'll age out at that point, that would be the antithesis. Well that aging out is like 90, 95. Well yeah. But yeah. Yeah. So by the time that it makes sense for me, potentially, I'll be too old. Yeah. As you might imagine, Cuban is a busy man. So naturally we had to fit ourselves into his schedule. Backstage at South by Southwest and during a pause for a quick snack break. Where do you want me? You're good right there. What should we talk about? Whatever you want. Confidence - or lack thereof - in US government I'm just wondering when you said that, that if he were being given last rights, you would still vote for him. I just sort of thought, well that does not inspire confidence- In Biden, yeah. No, no. In our government, in Oh no, there's a lot of reason not to have confidence in our government, right? Because I'm a big fan of rank choice voting, for sure. Because the way we select our candidates is through a power structure. And the way we vote for our candidates is through a primary system where, you know, a greater percentage of the primary voters lean towards extremes, whether it's right or left. And so you have to have candidates in order to not get primary who lean towards those extremes. And that's also the people who give money to those people. That's not the way to pick candidates, it's just wrong. And the fact that the way the two party systems work, just, you know, the idea that, you know, parties vote unilaterally, right? They all vote the same despite representing districts or states that are all across the country. That's just insane. There's no way you can represent your constituencies and every time from New York and, you know, California, it's the same. Or Alabama and Arizona are the same. That's insane, right? But that's how our politics are right now. Cuban's plan to get rid of both political parties And so if I could wave the magic wand, I'd get rid of the two parties, right? I mean, I tried to find, I went and talked to a couple lawyers actually, and I hadn't talked about this before. Like is there any way we could file any type of antitrust actions against both parties? Because, and you can't do it for political reasons, but if anybody out there, if anybody out there has been, you've tried to buy something from either of the major parties, like a mail list, and they said no because you weren't part of the party, let me know. Then we can sue them for antitrust and just try to take them down. Because they're, you know, they don't help the situation, they hurt. So are you optimistic about the future of American government? Am I optimistic about the future of America? Yes, absolutely, positively. I see what's going on with Gen Z and I love it. Right? I think they're entrepreneurial, I think they're inquisitive, I think they're different than their parents and their grandparents. In terms of American government, it just depends what happens these next four years. Right? The jury's still out. Generally, no. But I think, you know, we need to get to a point where we have technologically literate candidates, or at least strong technological literacy in the top of government. Because, you know, we need to be able to introduce AI in order to make government more efficient and productive so that it's not just about, "Okay, you gotta spend more money to get more," but you can get more and spend less. And I think there's opportunities there to do it smartly, but there's nobody there who knows how to do it or that they would push it. The thing about presidency, from my perspective, is you don't know what comes next. It's not like you're selling widgets, right? Or you're building buildings. You just don't know what's going to come next. And there's no way any one person can have all the wisdom or knowledge that they need to deal with the uncertainties of the office. And who do I trust more to bring in smart people? I think that's a greater skill because the hardest part about being president isn't doing what you already know, it's dealing with the things you don't know. You were talking about your parents not going to college and you come from a working class background. Do you ever have guilt about how hard they worked? And your mother worked odd jobs, right? Your father did car upholstery. Yeah. Not guilt. I mean, I appreciate what they gave me, you know? And I try to give back to them. Once I made money, it was just like, whatever you wanna do, you just go do. Your mother died, right? In 2022. Yeah. Couple years ago. Yeah. Like any parents, there were good things and bad things about them. And as you know, their kid, I'm sure they'd say the same thing about me. But that's just life. You know? I don't, there's no good reason just to hate people or why do you feel this hate? You know, what's the point? What does it change? I'm trying to find some darkness within you and I can't find it and it's very frustrating. There's plenty of darkness in there somewhere, I guess. You seem to be just kind of like a happy person. Yeah. I mean, I was happy when I was broke, you know, I was enjoying my life. I liked it less than I do now, right? But, you know, I just deal with the same s*** everybody else does. I just don't have to worry about anything related to finances. You know, I still stress about my kids, I still want them to... I mean, that's what freaks me out more than anything, because that's being a parent. You know, every parent goes through that. I'm not afraid of losing or failing, that's not it at all. I just, I'm afraid of losing or failing to my kids. That's it all. Yeah. You guys good? Yeah. We need Mark. Okay. Thank you. He's like, thank God. Yeah, gotta go. There's something about people like that who need to be going constantly that I find really fascinating, where it doesn't seem like there's a lot of built in like stillness in their life. And he wants to always be learning and, you know, he's so competitive. But he didn't really have an answer about why he's like that. But maybe that's a job for like a therapist, not for me to figure out.