--:-- Erik Torenberg: I look at business as a sport and I just love to compete. I just like to be intellectually challenged. I'm an independent. I don't care about parties. I care less. I want to be where different viewpoints are. An intellectual response rather than just a "you suck" response that you get on social media.
--:-- Erik Torenberg: What happens when AI collides with salesmanship, streaming era sports, and America's most broken industry, healthcare? On today's episode, I'm joined by Mark Cuban, entrepreneur, Dallas Mavericks co-owner and founder of Cost Plus Drugs. We get into why he likes fiery group chats, the sales playbook behind modern politics, how algorithms and AI are reshaping media, what he fixed first in U.S. healthcare, and discuss the hard-won lessons from owning an NBA team in the streaming era. Let's get into it.
--:-- Erik Torenberg: Mark, thanks for coming on the podcast.
--:-- Mark Cuban: Thanks for having me on. Excited to be here.
--:-- Erik Torenberg: So we spent a lot of time last couple years or so, but most of that time digitally and on group chats. One question that often I get in the group chat sphere is, how do these billionaires have so much time to be on group chats? To which I say, oh, that's actually the highest form, Maslow's hierarchy of needs. Once you really make it, then you want to argue with your friends and have interesting conversations. What's your reflection on what you get out of these or what you spend time on?
--:-- Mark Cuban: You want to learn. You want to challenge yourself. You want to see what other people think and why. In a world that's changing the way it is, I want to be where different viewpoints are and have it be an intellectual response rather than just a "you suck" response that you get on social media.
--:-- Erik Torenberg: One of the things I appreciate most about one of our group chats is that you're one of the lone dissenters. Originally, it was on the election. It had more of a right-leaning crowd, and you were one of the most prominent Democrats.
--:-- Mark Cuban: I was a dissenter. I'm not even a Democrat. I was just a dissenter.
--:-- Erik Torenberg: And willing to sort of be independent. What did you get out of that? Just get sharper, get your argument smarter?
--:-- Mark Cuban: It wasn't even so much that. To me, there were a lot of things that didn't make sense. And to them, it didn't make sense where I stood. I wanted to get to the root of why people came to those conclusions. Typically it just came down to trust. But you don't know that's going to be the underpinning logic until you ask the questions. I think a lot of people presume in any type of group chat that you know where everybody stands and you think you understand why. But it's until you start challenging them. And then on top of it, it makes me reconfirm why I feel how I feel. That's a win for me as well.
--:-- Erik Torenberg: Totally. I'm an independent. I don't care about parties. I could care less. Have you ever supported a Republican?
--:-- Mark Cuban: Oh, yeah. I don't care. I voted for Republicans. I just don't care. I tried to look at each individual issue. I actually voted for George Bush. We can argue about the quality, but it's about the alternatives. In terms of the comparisons to Trump, we're both salespeople. I think that is a strength for me to understand him. At his heart, he just knows how to do PR and sales. That's who he is. That's how I've grown my businesses. People always hear me talk about "sales cures all" and you have to understand your market and context. He's brilliant at it. He understands how to sell, how to use PR, where leverage comes and when it doesn't exist, and how to zig and zag when it doesn't work. Those are skills of people who have built businesses. Those are entrepreneurial skills. When you actually run the business, you have to do all the work behind it. As a politician, that's not always the case.
--:-- Erik Torenberg: When did you realize that business people would have platforms that would give them distribution advantages in reaching customers?
--:-- Mark Cuban: Just when social media came out. I was very early. Right when Twitter started, not 2006, but 2009 at South by Southwest, when they were all pumping it up. When it was all about "where's the party at?" Social media is aspirational at some levels. I own the Mavs, so it was informational. With the technology background, it was informational there as well. I could reach into different domains and interact with people. That creates a platform. Each platform has its own look and feel, and you just learn how to deal with it accordingly.
--:-- Mark Cuban: It's going to be really interesting because of AI. AI has multidimensional impact on how you create content and how that content is absorbed. Effectively, we all have our own feed. No two people have the exact same feed. What Trump has done well is learn how to flood the zone so that no matter what that algorithm finds for you, he's going to find a way to you, whether it's positive or negative. Then you look at Kamala and Brat Summer and "fell off a coconut tree." Brilliant. She had everything going for her. But the Democrats didn't have anybody who knew how to sell.
--:-- Mark Cuban: Going back to your question, it's not so much reality stars or business people with followings. It's people who know how to use algorithms and understand how they work. Now as AI is evolving very quickly, knowing how to use AI and what's the impact on social media. If it takes two seconds to generate on Veo, and then pretty soon that becomes a GenTick, and then it's "okay, just videotape everything I do and create videos and flood every single account we create." Then all of a sudden, do people find themselves saying, "I'm going to use social media less because it's all AI generated and I don't know what's real. There's nothing social about it." Or do they think talking babies and gorillas as videos is the way to communicate? It's going to be fascinating over the next three years because we don't know that part.
--:-- Mark Cuban: We may find ourselves in a scenario where we diverge from the traditional salesperson putting it out there, Trump, and find our way to understanding how we do this. It's just like polling. Polling is useless now. You're always behind. Any one social media comment can change how everybody feels in a nanosecond. How do people start integrating surveys? I'm continuously surveying with all those questions we get online. What direction does that take us? How do I integrate that into video creation? What's the limit?
--:-- Erik Torenberg: You experimented with a social network a few years ago. When you look out five years from now, ten years from now, do you think there's a new platform that emerges or do you think it's this fragmented ecosystem that we have now? What is your prediction for the future of social?
--:-- Mark Cuban: Look at Blue Sky. They've been around for a little while, but then all of a sudden when Trump got elected, their usage just boomed. I call it the fragmentation. People didn't like Elon, and it's not just that. They moved. But now it became its own side. I think it won't be social media, but there'll be media. It depends on how much you believe in AI and where you think it'll go. I always look at it as creative people will be able to amplify their creativity and iterate incessantly. That will create some amazing, incredible things. Are you just going to put it on X? Are you going to put it on LinkedIn? Are you going to put it on Blue Sky? Are you going to put it on TikTok? You don't have control of the algorithm.
--:-- Mark Cuban: I think there will be something new. How people connect to that content will be the foundation of it. I think we're tired of rage bait. We're tired of the fact that the algorithm presents what you seek effectively. Instead, we are going to get unique offerings that don't seem to make sense right now. Part two to that is if you go on X and use Grok, it almost always, unless it's something Elon is individually interested in, comes up with a legitimate answer. People say, "Hey Grok, tell me which," and it doesn't give them what they expect. I think that's a huge positive. It's the same on other platforms where you can go to ChatGPT, Perplexity, whatever you use, and ask questions. You'll see a reduction of misinformation, I hope. With the reduction of misinformation, you're going to have less rage bait. With less rage bait, what's the connection? Hopefully it's better quality content.
--:-- Erik Torenberg: When you did your social network maybe five years ago, was that like a Snap competitor?
--:-- Mark Cuban: No, it was 10 years ago. 12 years ago. It was more because of what happened with the SEC where I got charged for insider trading. They basically took anything and everything I said out of context. I gave them everything I had and got cleared in like 15 minutes. The point was I wanted something that was truly private. It still exists today, but I use it mostly for internal communications with our employees.
--:-- Erik Torenberg: Let's go back to the messaging on Democrats and Republicans. If you were in charge of the DNC and controlled both the platform and the messaging, what would you advise?
--:-- Mark Cuban: First, you've got to have people that know how to sell. Second, you have to know what people want to buy. People want to buy, quote unquote, just a better life. What the Democrats do is they project. They extrapolate. "Trump did this, so it's the end of the world." The Republicans are just like, "What's the price of tea in China?" Because I drink tea from China. They deal directly with what's happening with you today. 99% of people in this country, that's what they care about first. I would go to the Democrats and say, "Look at the price of beef." The Democrats miss that. They're so intent on the T-word. Everything is just a trigger word because they want people yelling and screaming at rallies. That's great. Just like Trump did, if you have 10,000, 15,000 people with Bernie and AOC and you want to get them all riled up, it's a pep rally. Say what you've got to say for the pep rally.
--:-- Mark Cuban: But if you want to get people to pay attention, I'll give you an example. I was in Indiana. I have a Shark Tank company, Guardian Bikes. We moved 80% of their manufacturing to Seymour, Indiana. They invited me in and we celebrated. They've grown from $200,000 at Shark Tank to $120 million now. We had a Q&A and somebody stood up. They started getting the question and I just blurted out, "I don't watch the news." The place went nuts. It just erupted. Of all the things we talked about for an hour and a half, that by far got a 10x response. That said volumes to me in terms of where people's heads are at. They don't want to deal with all that shit anymore. They don't want to hear about the end of democracy. They don't want to hear that Trump is an ultimate cancer. Put aside whether or not you believe it's true. That's not the goal. The Democrats always lose track of the goal. They lose sight of what the end game is. If you want to replace Trump, if you want to win the midterms, it's not about ripping on Trump. That's been said for the last 10 years. How are you changing people's lives?
--:-- Mark Cuban: I got into it with somebody else on the Democrat side via email about oligarchs and billionaires. "Go get them." I'm like, fine, I'll pay more taxes. I don't care. But do you think, other than the 942 billionaires in this country, other than getting people riled up, how are you changing anybody's life? People want to know that you're impacting their life. They want to know that things are going to be better. We hear about housing, about whether they should go to college or not, the threat of AI in their mind. All these different things they truly worry about and talk about at the dinner table. How often do the Democrats talk about it? Then it's like, "Let's go get the billionaires." I'm like, okay, if you want to reduce income inequality, then go to the billionaires and give them incentives. Companies incentives, not the individual 942. Your taxes will go from 27% to 21% if everybody gets equity in the company on an equal percentage of take-home pay relative to the CEO down to whoever. Now you have appreciable assets. When people have appreciable assets beyond just a home, if it appreciates they can buy a home, and the wealth gap doesn't increase. It gets closed down.
--:-- Mark Cuban: I was curious about all this, so I went to Perplexity. What's the earnings of people who are in ESOPs, employee stock ownership plans, versus everybody else? It's dramatically higher. It's not even close. They make more than union employees. There's less turnover. There's a lot of good reasons. You don't have to be in power as a Democrat to go to the local employer and say, "We're going to protest you unless you create an ESOP plan that everybody gets to participate in at the same level as a percentage of earnings as the CEO."
--:-- Erik Torenberg: I think that's the best form of UBI. Instead of free money, just upside in our S&P 500, upside in the economy.
--:-- Mark Cuban: There's places for UBI too. If you're a caretaker taking care of your parents, I've got no problem with that because you're paying for it one way or the other through Medicare or Medicaid. But to your point, appreciable assets change your life. If you don't have any, there's no way you can keep up because the stock market's going up.
--:-- Erik Torenberg: Do we think the sort of socially progressive, economically populist combination — AOC in a different way, Bernie without the socialism — is that the future of the Democratic Party?
--:-- Mark Cuban: He learned from Trump. He's the progressive Trump. Just lie. "Day one, groceries are going to be cheaper. I'll just open the grocery store because I'll sound more progressive that way. Day one, buses are free." Then everything else, he kind of mealy-mouths back to the middle and gives a little bit on the edge for the progressives to be happy. He's smart. He starts saying, "I'm reducing grocery prices. Trump is increasing. I'm reducing them day one." "Well, we have the House back. We are going to reduce grocery prices." "How are you going to do it?" "We're going to do it. Trust me." That's the bifurcation between Trump fans and Trump haters.
--:-- Erik Torenberg: In terms of substance, do you think the future Democrat Party is more like Bernie Sanders' economic populism or more marketable?
--:-- Mark Cuban: I think whatever gets results. I give Bernie credit because he was the first to talk about a living wage. It took him decades, but we've gotten there. He kept pushing through, so he deserves a lot of credit. But it more plays to his base than anything else. Elizabeth Warren had the CFPB. You can argue both sides, but she got something done. I don't know what the Democrats are doing that's getting shit done. That's the change in their focus, and that's what's going to guide what type of candidate. They've got to be able to sell. They've got to understand technology and be able to implement technologies. I said this to Jason Calacanis 15 years ago: "If we can improve efficiency and reduce the cost of government, you can increase the money you give to people. Take half the savings, here's a bigger check." That's what the Democrats could be doing. "We want to give you more money." That's what the Republicans do. "Great, we're making a promise." Democrats: "We're going to use AI, and if we need to give UBI, if we need to tax robots, we're going to tax robots — the whole Bill Gates thing, a quarter hour, dollar an hour, whatever — and then we're going to take the benefit of that and write you a check. That's going to be your UBI or your tax credit." They just don't think like that. They don't think, "Where is the solution? How do I get there? How do I sell it in a form that's easy to digest so people understand it?" They don't get that AI is going to change everything. How can we not use this in government to be more effective?
--:-- Erik Torenberg: Let's go deeper there because I know AI is one of the things you wanted to chat about. When you look out at the next few years, what do you think is underappreciated or underrealized about how AI is going to change a specific category or a specific way of life?
--:-- Mark Cuban: I think it democratizes a lot of things, particularly education. I understand the fear, and the first pass is never the way it ends up. I've got two kids in college now and one in high school. Hell yeah, they cheat with it. They do. But then I started talking to this teacher from Pennsylvania. She emailed me and said, "What can I do to integrate AI into my classroom where it's not just them giving me answers to questions?" I said, "Make it more like Jeopardy." She said, "Okay, here are the four causes. Use ChatGPT to find the four causes of the American Revolution and write up what it says. Then we're going to discuss in class, and you pick which one you think is the most impactful." Just changing the paradigm of how they would do things.
--:-- Mark Cuban: Back to your question, democratization of education is key because a kid with a cell phone and internet access can go to any large language model and ask anything. "Hey, I'm eight years old and I want to learn to speak Polish because my grandmother's from Poland. Would you put together a class for me and teach me how to speak Polish?" It will. How else are they going to do that? Sign up for Duolingo? "I'm really curious about baseball. Who are the best baseball players and why? Teach me about the statistics behind it." Always on tutor.
--:-- Erik Torenberg: How about in healthcare? It's an area you've spent a ton of time in with Cost Plus Drugs. Healthcare is like 20% of the economy. In the future, is that number going higher or lower?
--:-- Mark Cuban: It'll go higher, but because we're going to get some amazing treatments. The product will get better. The service will get better. Now you get single treatment cures that might cost $3 million. That jacks up the total cost. But in terms of how we do healthcare, everything I do, I put into ChatGPT first and share it with the doctor. Then I ask my doctor, "Do you use this stuff or OpenEvidence?" Like, hell yeah, we do. I think healthcare will get better qualitatively. We'll benchmark ourselves a lot more, and that'll make us healthier in a lot of ways.
--:-- Mark Cuban: Where the challenge is, other than the obvious optimization and processes in hospitals, is how we value IP. If I'm MD Anderson, if I'm Stanford, any research hospital, any scientist in healthcare, you're an idiot if you publish it. You're an idiot if you patent it, because it's immediately going to get absorbed into a large language model. You've lost control of it and you've lost ownership of it. I've said this as I've talked to CEOs of research hospitals: you need to silo your stuff. Take what you siloed and either do your own model or put it out to bid. Let the foundational models compete because they're in a death war. They need specialized data. They need all the data they can get, specialized or general. Everything that's accessible on the internet, they're getting or got. People who are creating new things, whether healthcare or anything for that matter, are going to start siloing it and putting it out to bid.
--:-- Mark Cuban: Even within the government. We see all these research grants getting pulled. I told somebody I know in the administration, "No, keep doing it, but put it out to bid for the models to get access to it." Back to your question, it will change because there'll be millions of models as opposed to just singular foundational models. I've talked to folks at Microsoft, Meta, and other places. I think they disagree. They think all this information is going to be available so the hospital system or the university or the grantors will just say, "Go ahead and take it." Hell no.
--:-- Erik Torenberg: So you think there'll be a flourishing of startups that will have access to specialized data and either put it to bid or...
--:-- Mark Cuban: Or just like MD Anderson will have their own large language model. You'll just have to know where to go. Just like right now, ChatGPT is not going to give you the same answers as Perplexity or Claude. You're going to go and use multiple of them. You'll say, "Here's the input, the output I got here, here, here," and you'll put it in somewhere else to have them assemble it. I think there'll be millions of models. There'll be front ends for those models that can't go out and do a million of them, but that help curate what's best for what you're trying to accomplish.
--:-- Erik Torenberg: If you could wave a wand and change anything about how we do healthcare in this country, or where we can learn from other countries, what would you change?
--:-- Mark Cuban: Get rid of the insurance companies and the PBMs because they do all they can to not take risk. They do all they can to introduce opacity to the system. On the drug side, if you look at all the other countries we're trying to do MFNs to match their pricing, they don't have PBMs. The biggest PBMs cause all the problems. We get emails all the time from people on Medicare Part D for drugs who come to Cost Plus Drugs because we're cheaper than their co-pays. That makes no sense, but it's the federal government that approves those plans. Those plans in Medicare Part D are run by individual insurance companies.
--:-- Mark Cuban: Think about how healthcare works here. You have an insurance company. Let's pretend you self-insure. You're one of the bigger companies. An insurance company comes to you knowing you self-insure and puts together a list of plans. No one ever asked why those plans were defined the way they were. They just assumed we get our choice of plans and we picked them. There's an inverse relationship between premium and deductible. They never do credit checks on the deductibles. Younger people take the higher deductibles because they presume they're going to be healthier. But half of the people making the determination to use the higher deductible plan don't have enough money for the deductible. We've got an insurance system driven by these insurance companies, even if the risk is absorbed by companies or partially by taxpayers, that are designing plans they know the people buying them can't afford to utilize.
--:-- Mark Cuban: What happens then? That turns the hospital into a subprime lender. People go in either through the emergency room or they show up not knowing what their deductible is. The hospital will loan them money because they want them to be able to pay the deductible so they can then charge the insurance company or the employer if they're self-insured. But wait, there's more. Let's say someone goes in, gets a hip replacement, pays their $5,000 deductible, and they owe $10,000. The insurance company, even though they have a contract that says it's $15,000 between the provider and the payer, doesn't just write the check for $10,000. They say, "We'll give you $7,000. If you don't like it, come and get us." When you talk to a hospital CFO, they say, "We lose 3% to 5%. We can lose as much as 50% on the subprime lending." They have to invent all these costs to compensate for what's happening on the payment process.
--:-- Mark Cuban: Then you have the preauthorizations. Most of the preauthorizations get approved after everything is said and done, but they get the time value of the money of the premium and not having to pay it. They've eaten up all these doctors' time, and the doctors are the ones getting underpaid. You're going in for a heart transplant, and the doctor might make $10,000 unless it's a big name surgeon. I want my doctor making a shit ton of money. You have this connectivity between all the pieces that really hasn't been thought out. Those insurance companies either own the PBMs or are owned by the PBMs. Because they're together and they're vertically integrated to own clinics and other providers, they have all these intercompany transfers that allow them to game the system.
--:-- Mark Cuban: With the ACA, depending on the circumstances, the insurer has to pay out 80 to 85 percent. It's called the medical loss ratio. You would think that's straightforward. But if you're vertically integrated, you can put some over here, put all the profits into your PBM, and show that you spent all this money because you wrote that check to the PBM. One of the biggest insurance companies had $161 billion of intercompany transfers. That's 0.3% of our GDP. Just moving money around to make more money.
--:-- Erik Torenberg: So if you'd get rid of them, who should take the risk? Would you replace anything?
--:-- Mark Cuban: Healthcare is easy. Presuming you get the right doctor, you go to the doctor and they tell you what's right or wrong. "Go home. Wrong? Okay. What do I need?" Once you know what you need, there's only two questions, whether it's medication, surgery, whatever it is: How much does it cost? And how do you pay for it?
--:-- Mark Cuban: Yeah. Costplusdrugs.com is still the only pharmacy company that publishes an entire price list. The only one. And we've been in business three and a half years. That in and of itself is crazy.
--:-- Mark Cuban: But then once you get into the system, right, and you don't know what anything costs, then they can charge you whatever. And then in terms of how do you pay for it, that's who takes the risk. Deductibles are going up no matter whether it's Medicare Part D, even Medicare Part A and B have higher deductibles. Medicare Advantage shrinks the network and creates networks. So out-of-pockets are going up. Patients are the first line of defense that the insurance companies are trying to push the risk on.
--:-- Mark Cuban: But better in my mind is to combine a kind of market where you get rid of the insurance companies, there's no premiums. Get rid of the big PBMs, there's no manipulation of the funds with intercompany transfers. You create tools that allow patients or their employers working with them to go out there and find the best solution for them and to shop. Hopefully you've saved a lot of money from not paying premiums and you can pay for what you need. What you can't pay, the government will owe you that money if it stays within the price parameters that have been set. It's negotiating without negotiating.
--:-- Mark Cuban: They've done that to a certain extent, reference-based pricing with Medicare and Medicaid for Medicaid patients. So now, if you or I can pay for it, we just pay for it. But we've saved all that money in not paying premiums. Slowly but surely, we're getting more and more reinsurance options for individuals for catastrophic insurance. So in case the worst thing happens, you have an option. That's one place of risk. If you're not paying premiums to an insurance company, you can pay for your reinsurance. If your hip replacement is $15,000 and you have $3,000, you can use financing, but it's guaranteed by the government. Kind of like we do with college or with houses.
--:-- Mark Cuban: The most important thing we have available to us, our healthcare, the government... it's like whatever. If you take the risk and allocate it within a price control — price control is the wrong word — but if you're a patient shopping for care and it stays within the benchmarks that are set, go for it. If you want to spend more because the doctor doesn't participate and you want to get better, go for it. All of a sudden you've got all this money that's not being paid in premiums that's available to people to use to save. That's how I would look at it.
--:-- Erik Torenberg: So you've built Cost Plus Drugs partially because you have this distribution advantage, the capital advantage to get it started. Let's imagine you were a young entrepreneur, mid-20-something Mark Cuban in 2025, trying to be immensely successful like you've been. How would you think about that? What would you pursue?
--:-- Mark Cuban: For Cost Plus Drugs?
--:-- Erik Torenberg: No, you as an entrepreneur. If you were just getting out of college right now.
--:-- Mark Cuban: Oh, I'd be all AI every day. I think the disconnect — I said this 10 years ago, I got crushed. In 2017, I said AI is going to put programmers out of business, beginning stage programmers. People said I was an idiot. But now, big companies are going to find ways to use AI. They're going to reduce. You saw Salesforce or whoever laid off people. Small companies have no clue. There are only 22,000 companies with 500 or more employees. 30 million companies, a lot of them are single entrepreneurs, but 5 million have 500 or less. That's where you want to go try to get a job.
--:-- Mark Cuban: If you're AI native because you've been using it through your four years of college, they need you. Maybe they have one person who's picked it up, two people. If you have a business background, which you can learn in school, and you become an AI native, you can walk into a small company and say, "I can help you." I can create agents for you that will go out and look for things.
--:-- Mark Cuban: One of my Shark Tank companies is Rebel Cheese. They added a direct-to-consumer business. They created an agent that compares the weight that comes off a scale for what they're shipping or the box type and what they were invoiced by UPS or FedEx and compares it to the price list. They always got overcharged. This little company is saving thousands of dollars a week just by using an agent. It's not anything difficult or advanced. Being able to walk into a company and say, "I can do this, I can do this, I can do this" — it's no different than what systems integrators have done for decades. That's what I did in my first company, Micro Solutions. "You don't understand PCs, you're a small company. I do, I know networks, I can program. I'm going to write you an application that emulates what you're doing, but faster." Now it's no longer about emulation. It's about how do we change the process by removing pieces to make you more efficient, more productive, more profitable.
--:-- Erik Torenberg: So you rode the PC wave, then you rode the internet wave with broadband, you had a big outcome there. If you were starting a company today, would you try to build a foundation model company or a vertical application?
--:-- Mark Cuban: No, neither.
--:-- Erik Torenberg: What would you do?
--:-- Mark Cuban: I literally would hone my business skills as much as possible. Domain knowledge will be more valuable. Domain knowledge combined with understanding of AI is the win.
--:-- Erik Torenberg: So you would go to some sector that hasn't yet been disrupted by AI and build it? Or just small companies?
--:-- Mark Cuban: Regardless of sector.
--:-- Erik Torenberg: But if you wanted to start something that could be big one day.
--:-- Mark Cuban: If I work with one shoe company and I analyze what they do, then I say, "Okay, I'm going to charge you X per transaction. I'm going to do the agent for you and I'm going to monitor the agents." It's SaaS at one level. But it's customized SaaS where, as AI advances, the model advances and the agent advances. At Cost Plus Drugs, we have a robotics factory and we use AI agents to monitor everything. Our cost to run the factory is a fraction of pretty much everybody other than India and China, and we'll catch up to that. Understanding how business works, having that domain knowledge, being able to apply it, and then being able to scale it by taking it to all those companies in similar circumstances or creating agents that modify the agents based on the information you're getting from all your customer companies — that's the new SaaS potentially.
--:-- Erik Torenberg: I want to zoom out and talk about general business success and advice. The internet lists your net worth at over $8 billion. One thing is that typically when people become super wealthy, it's because of one big thing. But it seems like you've compounded wealth over decades. The biggest liquidity events are the company you sold and the Mavs. What do you think is the through line when you look at your career and the ways you've made money that others can learn from?
--:-- Mark Cuban: I look at business as a sport. I just love to compete. That keeps me going. There's always something new and always something changing. I just like to be intellectually challenged. When I first started, I was always the youngest guy walking in the room. Now I'm the oldest guy walking in the room. I like kicking everybody's ass where I can. You went and got your CS degree from Harvard. Fuck you. I don't care. I like that challenge. I understand patterns and I understand being able to create new things. That's served me really well.
--:-- Mark Cuban: Cost Plus Drugs — we launched in January of 2022. We're serving millions of customers. We're changing people's lives. Everybody thought I was an idiot. We're working outside the system. Amazon, everybody else said, "We're going to work with the big PBMs because that's where the money is." I said, "No, they're the problem. You don't work with the problem." It's the innovator's dilemma. We're going to take what they can't do. When you run with the elephants, there's the quick and the dead. We got to be quick and aggressive. I think that's a big part of my skill set.
--:-- Mark Cuban: Whether it's starting AudioNet, the first streaming company, HDNet, the first all high-def network, Cost Plus Drugs, what I do with the Mavs in terms of bringing in technology — it was always about what Steve Jobs said best: everything's a remix. It's about taking what I know, learning whatever's coming up and what new technologies, and remixing it to apply to something different.
--:-- Erik Torenberg: When you bought the Mavs, did you have a sense that 20 years later it could be worth an order of magnitude more?
--:-- Mark Cuban: No. It wasn't a business. I paid $285 million for the Mavs in 2000. In 2010, the NBA couldn't even sell the New Orleans franchise. There were no buyers. The valuation had gone down, not up.
--:-- Erik Torenberg: So you thought it was a bad purchase from a financial perspective.
--:-- Mark Cuban: From a financial perspective, it was awful. I was losing money every year. It had nothing to do with money. But I loved it. That was the key part.
--:-- Erik Torenberg: I think it elevated your profile in a way that probably helped your other businesses.
--:-- Mark Cuban: Oh, for sure. And then Shark got me to Shark Tank and the rest is history. The way I looked at it back then is I'm having fun. I'm blessed. I'm going to make use of my time so I enjoy every minute of it. What changed the economics of the NBA was linear media being competitive. That goes back to things I look for. I always look for death wars. Where you've got competitors that one's going to win and one's going to lose, and they have to go all in. Just like with AI right now. They're spending tens of billions of dollars a year. They're making obscene amounts of cash flow and spending it all. They're paying a billion dollars to people to come over. What does that tell you? Anything you can sell to them that really differentiates them, they're going to buy.
--:-- Mark Cuban: With the Mavs, I didn't see it as an investment. But it wasn't until the death wars hit linear television. Then all the TV deals went skyrocketing. That's the difference between 2025 and 2010 in terms of why NBA teams have gotten so much more valuable — it's TV. A little bit of real estate so you can build around, but it's 100% streaming and TV.
--:-- Erik Torenberg: The question becomes how long does this sustain? Major League Baseball didn't get a deal done with ESPN and saw their rights start to decline. But it was right around the time Peacock bought just one NFL playoff game and got like 100 million new subscribers. That set a benchmark. This season with the NBA, how well that does in terms of driving subscriptions and reducing churn is going to make or break everything for all sports.
--:-- Mark Cuban: Exactly.
--:-- Erik Torenberg: One thesis I have is that value capture will reflect value creation when the market gets more efficient. NBA players don't have equity in the league. I wonder if in the future they're going to band together.
--:-- Mark Cuban: I don't think you can, because father time is undefeated. The price of the franchises now are so high. How much can you give them? I'm not going to say it's never going to happen, but it could be a question. There are only like two players that fill an arena: Steph and LeBron. When Luka played for the Mavs — and I had nothing to do with the trade — we didn't play to sold-out buildings. He would draw fans, don't get me wrong, but not every building was sold out. When Giannis would come to Dallas, it didn't necessarily mean we were going to sell out. The whole concept of what drives attendance has changed dramatically. What drives viewership on television — fans are fans of the players more than they are the teams. When we grew up, you were a Steelers fan, a Pirates fan.
--:-- Erik Torenberg: That's why I wonder if they're going to team up and say, "Wembanyama, the new generation, we could start a new league."
--:-- Mark Cuban: It's expensive. Start a new league? There's a lot of infrastructure. The NBA is its own. Even with Caitlin Clark, most of the WNBA teams aren't making money. Even in the NBA, most teams aren't making money before revenue share.
--:-- Erik Torenberg: I know you were dismayed at the Luka trade. I was so devastated by it. It seemed so unfair for the Mavs not to get picks back or Austin Reeves. I was complaining to my girlfriend. I even remember reading a conspiracy theory that it was on purpose to take the value of the franchise to then move to Las Vegas. How do we not get more for Luka in this trade?
--:-- Mark Cuban: I wish I knew. I wish I knew. But then the Cooper Flagg thing — the world works in mysterious ways. The basketball gods were looking highly upon us.
--:-- Erik Torenberg: I have a dream to be a part owner someday. I've wondered if the strategy is either to compete for a championship or do the Oklahoma City Thunder where you trade for picks.
--:-- Mark Cuban: I think the Thunder methodology is better now with the new CBA. Every new CBA creates transitional issues. Your decisions were made in a legacy environment and they just changed all the rules. It's even more difficult with the second apron because the problems of being over it are far more draconian than anything we've ever seen. I think the patience approach that San Antonio and OKC have taken is going to lead the way. With me, I was never patient. That worked against me a lot. I wanted to win now. We have Dirk. Let's get there.
--:-- Erik Torenberg: What's something you would have done differently?
--:-- Mark Cuban: We kept Steve Nash. Drafted Giannis. I think I just would have been more patient and waited guys out to see how they turn out, rather than throwing in a draft. At the time, if you didn't have a pick from 15 or below, the odds of them being a player was minimal. If I was getting somebody that I could re-evaluate, that worked in my favor. But now draft picks have become so much more valuable. That's changed the valuation approach.
--:-- Erik Torenberg: I heard one argument sympathetic to the Luka trade: he's a legendary, iconic player, but so expensive. With the way contracts are structured, if you kept giving him the supermax, how much room do you have to build? It's kind of like the Trae Young problem. Some of these players are so expensive, but are you really going to win a championship?
--:-- Mark Cuban: Can you have two max players? That's the challenge. In the past, you could reward somebody with a max contract knowing you had some wiggle room. More importantly, you could always find a way to get off that contract. Not anymore. If you have your one generational player, you pay them whatever it takes. Because of the max contracts, they by definition are undervalued. The generational player, you always pay whatever it takes. It's the next person. If they're not a generational player, how do you deal with that? That's the hard part. You saw with certain players that teams couldn't get off of them, either because of age or they were a max player by the rules of the game four years ago but they're not any longer. That's where the challenges happen.
--:-- Erik Torenberg: If you were making decisions for the Mavs now, what would you be thinking about? What are the big questions?
--:-- Mark Cuban: Develop Cooper, first and foremost. We've got AD, Anthony Davis, Kyrie who will be coming back, Klay. Having those Hall of Famers there — you couldn't ask for anything better in terms of development support. We have to focus on staying healthy, getting Kyrie back.
--:-- Erik Torenberg: It's interesting to think about two timelines. The Warriors tried to do it, but they couldn't exactly pull it off. These older players and then Cooper — it's hard, like where the Warriors are now. Father time is undefeated, and you're trying to stay committed to the guy who got you there. The players aren't dumb. They know they only have a finite number of years left. They're trying to maximize their earnings.
--:-- Mark Cuban: The whole second apron restrictions really just kicked in last year. Teams are having to deal with it. You're seeing players get stretched. The strategy is changing right in front of our eyes. I think there will be fewer max players coming up.
--:-- Erik Torenberg: It used to be that to win a championship, you had to have one of the best players in the league. The Pistons were an exception. I'm a Knicks fan. I wonder if the Knicks have a possibility to question that. Do you think you have to have one of the five best players in the league?
--:-- Mark Cuban: It sure helps. It depends on the skill set. What's changed a lot in the last 10 years is there used to always be one guy on the court who couldn't shoot, who couldn't get a bucket. They were there for defensive purposes or to protect the rim. Now they all can score offensively at some level. Whether it's the Knicks or anybody else, if you have enough guys who can put pressure on the defense — that's why the Knicks made the deals they did. But if there's one guy you're playing against that's always the best player on the floor and you don't have that player, it's going to be tough.
--:-- Erik Torenberg: I think what the Knicks are asking, I guess Boston is asking, is can offense win championships? If you just stack the...
--:-- Mark Cuban: The Knicks have got some defenders. But Brunson and KAT are weak defenders. It's going to be tough. Once you get to even against Indiana — Indiana didn't have a top five player. Haliburton is good, maybe top 15. But he was better in that moment because you can do matchups over and over again across seven games. You can play certain players off the court. You saw KAT not even being out there at certain times.
--:-- Erik Torenberg: If the Pacers won the championship, that would have really questioned things. And they took them to seven games. Their best player got hurt.
--:-- Mark Cuban: Dallas is one of the deepest teams right now. Stay healthy.
--:-- Erik Torenberg: There are so many teams like the Raptors, the Bulls, the Kings, kind of in perpetual mediocrity. They're expensive and old. You just have to rebuild, admit they're rebuilding. Part of the problem is there's a salary cap floor. You have to spend up to a certain amount.
--:-- Mark Cuban: It's the deal we do with the players. They want more money spent. 90% of the salary cap is a lot of money. It's like $153 million. Spending up to that means you're overpaying a lot of people. If you keep them on short contracts, you'll get guys wanting to come just to get overpaid. You almost have to tank.
--:-- Erik Torenberg: I have a theory that there are these guys like Kuzma, RJ Barrett, Brandon Ingram, who are sort of built for losing — for getting a lot of money and a lot of points on a losing team.
--:-- Mark Cuban: They're freer on a losing team. They do it to get paid more money. Teams are smarter than that. But there are teams that need scoring. If you fall into that category, you're going to go after those guys if you have the space. What's happening now is we're seeing all the salaries revolving around the mid-level exception, which is $14 million give or take. If your guys now realize with the second apron things have changed — if you get paid more than a mid-level, you're a good player. If you get paid at the mid-level, you're a decent player. If you get paid below, you're a roster piece, unless you're young and on your way up.
--:-- Erik Torenberg: For advice for me as a future owner, what are the biggest ways an owner can influence winning?
--:-- Mark Cuban: Always looking for an edge. Personnel selection is hard. It's more art than science. I told Jalen Brunson when I did his podcast — he was just some chubby guy. We picked him 33rd. 32 chances to draft him, and they didn't. We liked his pedigree of winning at Villanova. But it's his effort. When he was with us, his go-to move was either a spin or a move to the left and he'd fall away doing a layup. He never got the foul because he was always falling away. Now his mid-range jumper is money. He worked on that. That's what you don't know when you draft somebody. What mental capacity do they have? You know their athletic ability. But will they work hard to improve their skills? Will they work hard to improve their basketball IQ? If the answer is yes and they have the athletic side, you've got a chance. You don't really know because no one comes in and works out and says, "Okay, I'm an idiot. I suck." They've all been trained on how to work out. They're in college maybe one year. If you're going to a college and they're getting paid now, it may be that they're just doing what the coach needs them to do there, which may not match what they need to do in the NBA.
--:-- Mark Cuban: The hardest part for players that aren't superstars coming in is you've got to learn how to fit in. Even with Luka, we didn't know he was going to be a superstar. We thought he was going to be really, really good. We thought he had superstar mentality. But I was terrified because I made a trade. I gave up a pick to Atlanta. I remember we played in China the first game of the preseason. I had Shawn Marion as an ambassador. I'm like, "Trix, what do you think? What do you think?" I'm terrified. But we know how that turned out.
--:-- Erik Torenberg: By the way, the basketball gods — the Lakers made all the wrong moves for so many years, and then Luka falls into their lap just to keep it interesting.
--:-- Mark Cuban: The Mavs got Coop. Don't trade him and you'll be good.
--:-- Erik Torenberg: Zooming out, how have you thought about how you want to spend time? You could have your own A16Z-sized venture firm doing all these investments with all this staff. You seem to run a lean operation. How have you thought about the efforts you want to get involved with and how thin to spread yourself?
--:-- Mark Cuban: I got out of Shark Tank. I got out of the Mavs so I could spend more time with my kids. That's number one. They're 16, 19, and about to turn 22. They're heading out on their own. I just want to spend that time I can with them. The difference for me versus everybody is my goal is not to make as much money as I can. I do investing, but honestly, people just email me. I saw a list of who has the most unicorns and I had like 11. All of them were just from email. Somebody emailed me saying, "Check this out." Synthesia — I was their first investor. Gave them a million dollars. Now I can get 20 to 25% of a company, sometimes more, and then help them grow. That's what I like. Taking long shot tries as opposed to raising a fund, getting a team together, putting in 10 to 25 million, and then doing follow-ups.
--:-- Mark Cuban: I like it better when Dude Wipes comes on Shark Tank. I give him 200 grand for 15%. Now they're worth a billion dollars easy. They're a primary brand and they never had to raise another cent. Helping a company never have to raise more money, making them profitable so they're insanely profitable. I had this company, Alyssa's Cookies. The guy Doug was living in his car with his family and he sent me these cookies. They were this big. They were the best cookies I've ever had — I always do the nutrition thing first. No added sugar, lots of fiber, low net carbs. But when I took it out of the plastic, it all fell apart. I said, "I'm going to give you money. I got like a third of the company. But I'm going to guide you through what it takes." We changed it. I told them to make them into bites instead of cookies, put them in a plastic container, go to stores, and we'll sell them. I'll do a tasting where I go to a grocery store one time and hand them out. No more money in.
--:-- Mark Cuban: We'll do $25 million this year. But that's not the important number. Because we don't spend money on advertising or anything.
--:-- Erik Torenberg: Right.
--:-- Mark Cuban: Makes $12 to $14 million a year. And we just added Whole Foods. We just added Costco. We're adding more and more outlets. He can get to $100 million and make $50 million a year.
--:-- Erik Torenberg: Wow. That stuff's fun.
--:-- Erik Torenberg: Right? So if you could clone yourself a few times, or when you look into the future, are there other businesses like Cost Plus Drugs that you want to start or incubate?
--:-- Mark Cuban: Yeah, education. If I can do what I want to do with healthcare, which I'm saying a lot, right?
--:-- Erik Torenberg: Yeah, totally. That's a big effort.
--:-- Mark Cuban: Yeah, but it would be education just because— Like AI first, K-12, or what kind of—
--:-- Erik Torenberg: Yeah, I mean, more secondary education, right? Simply because the cost structure is all fucked up, right? And it's all built on accreditation.
--:-- Erik Torenberg: And that's kind of a mafia.
--:-- Mark Cuban: And when I see a mafia like that, I just ignore the accreditation and just go do it anyways. And if you get the results or guarantee your results, you'll get plenty of...
--:-- Erik Torenberg: We talked about your healthcare platform. We talked about your messaging. Are there any other policies that if you could be in charge of the Democratic Party or running America that you would be most excited about in terms of being transformative?
--:-- Mark Cuban: Yeah, you know what I would say? I would say a focus on entrepreneurship.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: Right now, whoever the candidate is, particularly if it's for president, takes credit for everything.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: And that's ridiculous. They do less to impact the startups and the building of businesses than anybody. So I think what's missing, definitely missing with Biden, maybe less so with Obama, but definitely missing with Trump. When you hear Trump talk about tariffs, he never talks about small businesses. It's always, "Hey, I've got this company investing $500 billion, $600 billion," when you've got all these Shark Tank companies that are getting crushed. You increase from a 2.5% average tariff to a 15% tariff, that's the profit margin and it's gone.
--:-- So I would put a focus on recognizing, encouraging, and rewarding people starting businesses. And using AI as government as a service, where you simplify all the friction involved in starting a business. From the paperwork to get all the requirements, the incorporation, et cetera, to a bank account, all of it. Just simplify all of it so entrepreneurs can be entrepreneurs. Because I think that is what – Joe Biden told this to me of all people. During the Obama administration, they invited us from Shark Tank to go do a thing for entrepreneurship at the White House. He gave a little speech and what he said was, "I've traveled around the world and there's no Chinese dream, there's no French dream, there's no UK dream. There's only the American dream. And people come here to live it and experience it." That's what makes us unique.
--:-- Erik Torenberg: Yeah. And on that note, what advice in closing do you have for us in Silicon Valley or just tech more broadly, who are building with AI, on how to make it more popular so that we don't have this big backlash?
--:-- Mark Cuban: You have to get with either party and communicate to people the upside.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: Because they see the doubt. They see, "Hey, maybe my job is being taken away."
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: And going back to what I said earlier, there will be disintermediation, but I don't think the net number of jobs is going to decrease. I think everything gets reinvented because AI right now is not smart.
--:-- Erik Torenberg: Right.
--:-- Mark Cuban: It's statistical in a lot of respects. Robotics, on the other hand, is getting smart. If you clean my bedroom, it has to know to pick up the sheets and all this stuff. But I think the combination of the two will create unique opportunities for jobs.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: I think domain expertise is always going to be necessary to train models. But bigger picture, when we look at a house, everything is designed for the human form. And right now robotics is trying to emulate the human form because that's what we've always done with software.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: We just emulated what we already did and tried to optimize it. If you can create devices, robots that can look like anything and you want them to be domestic in some way, you don't build houses the way we do now. I think there's going to be a lot of jobs that go in different directions. And I think Silicon Valley has got to do a much better job demonstrating those jobs, hiring people for those jobs, supporting people that are concerned about their jobs.
--:-- Even teachers. Now when we look at AI tools, you can read papers faster. That's not going to change anything. You're just doing it the same way. But if a teacher can use AI to customize responses to kids to help them learn, like you said, AI tutors, but in a classroom, you're going to keep your job longer.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: We need more teachers, not fewer teachers.
--:-- Erik Torenberg: Right.
--:-- Mark Cuban: But AI doesn't – Silicon Valley doesn't communicate that at all.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: Because when you're raising money, it's about what you're going to change, not what you're going to sustain.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: But there are so many unique opportunities.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: I'm old enough. I would walk in selling PCs and I saw "you're out of work, you're out of work, you're out of work." But as it's all turned out, the economy just keeps on growing.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: And I think the same thing is going to happen here. The other side of it is going to be inner cities. I have this thing called the Mark Cuban AI Bootcamp. All we do is go into underprivileged schools and encourage kids to sign up for the bootcamp. It used to be just machine learning, where we taught you that. Now it's learning how to use AI with models and everything and agents for 15, 16, 17-year-old kids. And it's great, because they're going back and coming up with new ideas.
--:-- The Valley needs to go out there and engage more in middle America so people see where the upside is. You're getting this rejuvenation of San Francisco and all the spending is pointing there. How is anybody else going to understand that or see that? They don't at all.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: When in reality, if it's open to them – and that's why I did the boot camp – more things are going to happen. People don't realize, when the internet first hit, we used to think kids who could do HTML coding were geniuses.
--:-- Erik Torenberg: Right.
--:-- Mark Cuban: And when they moved up to JavaScript, they were even smarter, because they were building all these websites that were getting ready to go public. AI is kind of the same thing. It's not hard to build agents.
--:-- Erik Torenberg: Right.
--:-- Mark Cuban: And it's getting easier. But knowing an application that you can use to start something, improve something – everybody can do that. Every kid, every mom, every dad. But Silicon Valley is making it sound like this is the Jetsons and we have no chance.
--:-- Erik Torenberg: Yeah.
--:-- Mark Cuban: And I think that has to change.
--:-- Erik Torenberg: That's a great note of advice and optimism to end. Mark Cuban, thanks so much for coming to the podcast. It was a lot of fun.
--:-- Mark Cuban: Thank you. Appreciate it.
--:-- [Outro music begins]
--:-- Host: Thanks for listening to the a16z podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast.com slash a16z. We've got more great conversations coming your way. See you next time.
--:-- Announcer: As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any a16z fund. Please note that a16z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com forward slash disclosures.
