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Language: en
the person who controls the algorithm
controls the world right and if you are
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Affiliated platforms then whoever
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you the following is a conversation with
Mark cubin 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 of Dei wokeism gender and
identity politics with the likes of Elon
Musk and Jordan Peterson this is Alex
Freedman podcast to support it please
check out our sponsors in the
description and now dear friends here's
Mark
cubin you've 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 somebody who's curious they
want to keep on learning because
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 in
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 going to succeed but
it's also a skill thing how do you sell
what do you mean by selling 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 them from the time I was 12
years old selling garbage bags door too
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 them to your house and drop them
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 trust in an industry that's
highly lacking in trust exactly okay so
what's what's the trick to selling
garbage bags let's go back there 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 oh you can definitely develop
it yeah I mean because selling garbage
bags door to door was easy right because
like 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 them off for you you know
once a week whenever you need them you
just call and I'll bring him down sure
so that was easy but I'm sure you've
been rejected oh yeah of course not
everybody says yes what's your what was
your percentage I don't remember but
it's pretty close to 100% oh okay never
so that's why you don't remember yeah
right because who's going to say no to a
12-year-old kid who's going to save them
time and money but you know typically my
career where I've started companies it's
to do something that other people aren't
doing whether it was connecting PCS and
to local area networks and at micro
Solutions 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 and that's the hardest part I'm
sure there's a skill thing to it too in
like how you solve the puzz
of communicating with a person and
convincing them 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 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
correct and you can just do that with
anything pretty much yeah and you think
you're born with that 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 going to be
able to keep up and no matter what your
sales skills or ability are they're
going to be useless what did you learn
about life from your dad you mentioned
your dad my dad did upholstery on cars
you know got up went to work every
morning at 7:00 came back 5 or 6 7:00
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 you never
went neither one of my parents had gone
to college um you've got to 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 backbreaking 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 from my brothers and I was for us
to never have to work like that to go to
college to figure it out 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 absolutely
yeah yeah because I was more of a yeller
I was you know I no
really 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 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 we'll stop and drop
you off at the next station but let's go
where you go did you have trouble with
the higher fast Fire fast part of
running a business yeah always cuz I
hated firing people because it meant one
it was an admission of a mistake in the
hiring and two the salesperson of 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 so I always delegated
that well this a tricky thing when you
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 and in that grayer
area is probably where you have to fire
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 mean 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 and then they wouldn't and then you
know people at the company be like Mark
you suck at this you know and so I I
always delegated to hiring yeah I mean
I'm the same I see the potential of
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
is a different thing it's different and
you got to know what you're good at what
you're bad at right I I was good at you
know I was a ready fire aim guy and I
always partnered with people who were
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 they would do the due
diligence I supp or just yeah the detail
work to dot the eyes and the cross the
tees uh what does it take to take that
First Leap into starting a business
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 I couldn't go any
lower so there was no downside yeah
there was no downside for me starting a
business and it was just like you know I
was 25 when we started micro Solutions
and you know I just gotten fired and it
was like look I'm I'm a lousy employee
um I'm going to just start going to some
of my prospects that I had in my my job
and asked 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 but like by way of
advice would you say I mean it's a
terrifying thing yeah I mean you've got
to be in a position where you're
confident you know I get emails and 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 or family what do you think and
then almost always 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
had gone out of business trying the same
thing 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 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 got to save money you can't
just walk you know I mean they've got to
eat and they've got to have shelter but
on the other side of the coin if you've
got nothing it's the perfect time to
start a business yeah desperation is a
good Catalyst for starting a business
but in many cases the decision as you're
talking about you're going to have to
make is to leave a job that's providing
some degree of comfort already so and I
suppose when you're sleeping on the
floor and there's six guys it's a little
bit easier it's really easy right
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 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 gono I'm leaving off the
edge of a cliff and I'm starting a
business that's tough but sometimes
that's like the way you do it though
there's always examples of any situation
or scenario right right but I mean
anecdotal evidence for everything yeah
but if you're if you're going into a new
business you're going to have
competition unless you're really really
really really really lucky and that
competition is not going to just say
okay let Lex or Mark just kick her ass
yeah and so you've got to be prepared to
how you're going to deal with that
competition 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 you
know I think
we've just got a culture of consumption
and more 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 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
they won't
hopefully that's still the case Yeah
well yeah there's always uh yeah USS
other countries you're 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 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 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 Al aler stories we see um
examples of the Jeff Bezos of the world
the Steve Jobs in the world and those
are the types of people we we want to
copy yeah want to be really careful and
try to really figure out what that is
because we don't want to lose that for
sure we want to protect that 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 ofu yeah
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 breath and depth to them um
and then social media comes along and
everybody gets to play in their own sand
boox and share opinions with people who
think just like them and that 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
going to 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 yeah we're trying to figure
out how we deal with the with the mobs
of people and the virality of it all and
um I I think we'll find our footing and
start celebrating greatness again well
that I mean that's the whole reason I do
shark tank that's true that's that show
celebrates the entrepreneur 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 debuk Iowa or Ketchum Idaho
you know that sends a message to every
kid who's watching Seven 8 nine 10 12
year-old kid that if they can do it from
catch 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
five or 10 and I started a business
because I learned about it from Shark
Tank and so you know I think you know
we're being C 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 yeah I love
even when the business idea is obviously
horrible just just just the guts to step
up to be there to believe in yourself to
really reach I mean that's what matters
I mean cuz like some of the best
business ideas are
probably uh maybe even you and Shark
Tank will laugh at oh for sure you know
without question the good ones we're not
going to recognize every good one and
then sometimes we'll just motivate
people to work even harder to get it
done because 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 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 there's no best
one right they're all different um
they're all best in their own way I
guess they're stupid ones and you
know we haven't had any you know World
Earth world changing Earth shattering
ones right because
those aren't going to apply to Shark
Tank they don't need us right 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 spike ball do you know what spike
ball is so it's just 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 so if you go to
beaches in New York or La you'll see
kids playing it all the time and it was
a fun game um that I wish I had done a
deal with there's and there's been
others and you passed and I passed they
they were getting some traction and they
wanted to create leagues spikeball
leagues and they wanted me to be the
commissioner and I don't want to be a
commissioner of a new spikeball league
so you have to kind of have this gut
feeling of will this scale will this
click with people 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 um or is it
just a good um solid business that's
going to pay a return to the the founder
and may not be enough of a business to
return to um an investor yeah and I
guess the question you're trying to see
will this scale This Promise will the
promise materialize into a big thing we
see I don't even care if it's going to
be a big thing right it because it's all
relative to the entrepreneur we had a
19-year-old from Pittsburgh Laney who
came on with the simple sugar scrub and
there was nothing outrageously special
about it I didn't see it becoming a
hundred million doll business I thought
it could be come a two three5 million
business that paid the bills for her and
that that was good enough and you know 6
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
going to do I'm like enjoy it put aside
money for your taxes and go back to work
you know and so it doesn't have to be a
huge business it's just got to be one
that makes the entrepreneur happy but
then there's the valuation piece I mean
right do do a lot of the entrepreneurs
overvalue of course business 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
that's in 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 cat's tongues right nice
bizarre most one of the most bizarre
pitch ever I love it um you know and
they had this insane valuation and it
was on because it was corny and fun TV
not because it was a good business oh
really okay you didn't see the potential
none yeah none there's a lot of cats in
the wmart yes there are and they'll go
do very well without me so how do you
determine the value of a business
whether it's on Shark Tank or just in
general 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 got to be able to
generate a $100,000 in after tax cash
flow that they're able to
distribute can they do it or can they
not right and if it's $2 million Valu
whatever 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 not I don't want to say important but
isn't going to guide the valuation and
how do you know if a company's going to
be uh acquired so it's the technology
like the patents but also the team is it
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
going to take off and how do you know if
they can generate the money what's
what's the you made it sound easy you
know 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 so
you're looking at the person yeah for
sure yeah that where Barbara corin'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
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
or exaggerating what they're thinking to
do all that kind of stuff can you see
through that y for sure just by asking
questions you know so if if they are um
delusional at some level or misleading
at another level I'm going to I'm going
to call them 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 GNA bounce I'm gonna pound on them
right see I still love that I still love
the trying just you know give them
credit right because they know all of
America is going to see it and they're
deluded themselves to believe this story
so strongly I mean there's a delusional
aspect to entrepreneurship right like
you just I I 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 a
billion dollars right um yeah at some
level because 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
want to get to and that's my mission or
this is my driving principle but you
still got to execute on the business
plan and that that's where most people
fail yeah you have to be kind of 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 the thing how much it's
going to cause all that yeah I mean
because if you can't do the basics
you're not going to be able to do the
bigger things and at the same time
you've got to be 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 situation that's
never going to change right and there's
always somebody I call them Leap Frog
businesses there's whoever's competing
against you you know if you do a or C
they're going to 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
sometimes an unlimited number of
entrepreneurs that you don't even know
exist who are trying to kick your ass
and the tricky part of all this too is
you might need to frequently pivot
especially in the beginning hopefully
not so you think like in the beginning
the product you have should be the thing
that carries you a long time 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 going to be able to sell it
now if you didn't do your homework and
you go out there and you sell whatever
it is then and you've raised money or
whatever just to Pivot 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 well also mean
like the the micro pivots which is like
iterative development of a thing oh yeah
that's not yeah just iterations yeah you
know entrepreneurship being having any
business is just continuous interation
continuous your product your sales pits
your advertising you know introducing
new technology how do you use AI or not
use AI where do you use it what person
is 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 but especially in
software it feels like business model
can evolve really quickly too like how
you going to make money on this with
software for sure because you know
anything digital because it can change
in a millisecond speaking of which how
did you make your first billion so my
partner Todd Wagner and I um 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 because that
that's where we went to school and he
was like look when we would listen to
games we would have somebody in
Bloomington Indiana have a speaker phone
next to a radio and then we would have a
speaker phone in Dallas and you know
sixpack or 12 pack of beer and we sit
around listening to the game because
there was no other way to listen to it
so I was like okay okay my first company
micr Solutions you know I'd written
software done Network integration and so
I was comfortable digging into it and so
I 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 going to make this work but we
were able to make it work we started
going to radio stations and TV stations
and you know music labels and everything
and um evolved aet.com which is 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 on in July
of 1998 it had the largest first day
jump in the history of the stock market
at the time 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 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 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 a
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 the server and do a progressive
download so that the audio you can
listen to the audio while it was
downloading onto your PC yeah was it
super choppy so you trying to figure out
yeah for sure for sure it would buffer
it was yeah was it it wasn't good but it
was a start but it was good enough cuz
it's the first kind of yeah because
there was no other competition right
there was nobody else doing it 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 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 aet.com then I would go on yunet
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 it'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 aet.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 and host
them and just let people listen to
whatever music and we went from you know
10 users a day to 100 to a thousand to
hundreds of thousands to a million over
those next four years how did you find
the users is it Word of Mouth Word of
Mouth mou didn't spend a penny on
Advertising so the thing you were
focusing on is getting the radio
stations and all or radio and TV
anything any content at all you pick up
the phone what did you how you I would I
wherever I could 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 is before the the DM
the digital minim Copyright Act of 90
whenever it kicked in so literally
anything that was audio we would put
online so people could listen to it and
if you think about somebody at work they
didn't have a 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
what just exploded because whoever was
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 end up with
thousands of servers you know there was
no cloud back then and 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 it's 1996
9798 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 under 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 Ed the consumer side to
do a proof of concept for Network um and
then we would take that knowledge and go
to corporations and that's how we made
our revenue and there's some selling
there with the corporations yeah a lot
of selling there but we were saving them
so much money and they were technology
companies they wanted to be perceived as
being Leading Edge and so it was winwin
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 Innova
I did all the technology and then we
hired engineer after engineer after
engineer to implement it and so wow yeah
um from putting together a multicast
network to um software to just all these
different things was this like a scary
thing like it's terrifying right because
as we were growing trying to keep up the
scale and literally we're buying
off-the-shelf PCS and then you know cars
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 they released the audio
of um their interviews of him or
something like that right and we
literally we I knew at that point time
when that was released everybody at work
was going to want to listen to it right
so we had to take down servers that were
doing Chicago Cubs baseball right you
know and just make all these on the-fly
decisions because there was no we didn't
have the tools to analyze or predict be
predictive but yeah it was it was all
technology driven and
marketing um the acquisition by Yahoo
can you tell the story of that but also
in the broader context of this internet
bubble this is a fascinating part of
human history yeah so so on the
acquisition side we were the largest
media site on the internet it wasn't
close 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 2000s
when it
closed and uh can you explain to me the
trickiness of what you did after that oh
the um the collar yeah okay so when we
sold to yah we sold for $5.7 billion in
stock not cash and so I looked at I you
know after micro Solutions 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 because I
wanted to protect it um but then he
started asking me all kinds of questions
about all these technologies that I
understood like networks I had installed
we had become one of the top 20 let's
say um systems integrators in the
country at one point in time we're the
largest IBM token ring um installer in
the country it was crazy right Bon name
blast from the past I mean so anyway so
these Wall Street Bankers um or analysts
rather um that were the big analysts of
the time would call me up because they
would ask my broker what does he know
about this product this and I knew them
all what was working and not working
right and so the ones that work you know
I say it's working i' see the stock they
say something the stock would go up 20
bucks right so I'm like like well and my
broker was 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 it was
great right but the point being as it
goes forward so when um we sold to Yahoo
I already had a lot experiened trading
stocks and I had seen different bubbles
come and go a bubble for PC
manufacturers a bubble for networking
manufacturers they went up up up up up
and then they came straight down after
the hype or somebody just um Lea frogged
and so when we sold to Yahoo um I was
like I've got a be next to my name
that's all I need or all I want I don't
want to be greedy and I'd seen this
story before where stocks get really
frothy and go straight down and and I
knew that because all 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 anyone's of the Yahoo stock and so um
I took pretty much 20 some million
dollars everything I had at the time and
I sorted the index this is fascinating
by the way cuz it's based on your
estimation that this is a bubble or just
mind not want be to be greedy sure so
you're the foundation of this kind of
thinging is uh you don't want to be
greedy yeah I mean how much money do I
need right you know where other people
were saying oh I think can go up higher
higher higher I was like I went on CNBC
and um I told them what I had done and
they were like in Yahoo stock had gone
up significantly from the time I had had
collared and one of the guy Joe and was
on there don't you feel stupid now that
yaho stock has gotten up um you know x%
more I'm like yeah I feel real stupid
sitting on my
jet but so you I mean there is some
fundamental way in which bubbles are
based on this greed greed and I'd seen
it before right like I just said and so
what I did was we put together a caller
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 Etc but um it protected me 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 Vic the vix
right the volatility index and there
there wasn't right and so one of the the
people that 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 it's not trivial
to understand it's a bubble I mean
you're kind of lessening your insight
into all this by saying you just didn't
want to be greedy but you still have to
see that it's a bubble yeah I mean yeah
obviously if I thought it was going to
keep on going up and it was there was
intrinsic value there I would have
stayed in it but it it wasn't so much
Yahoo it was just the entire industry
you would back then you know like we're
looking at the the magic 7 or whatever
it is stock now and people are asking is
it in a bubble and when I would get into
cabs and people just start talking about
internet stocks there were people
creating companies with just a website
and going public you know 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 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 do you think it's possible we're
in a bit of an AI bubble right now 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 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 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 yeah we're flirting with it
yeah uh you said that becoming a
billionaire requires luck yeah can you
explain 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 CU 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 hope so um but a
billion just something good has got to
happen you know um timing 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 couldn't predict that
now's the time that they were going to
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 as6 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 so
think luck being essential to becoming 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 you know we mentioned Jeff Bezos
it seems
like he did a lot of really interesting
powerful decisions for many years with
Amazon to make it successful 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
we were in an environment where it was
possible to raise possible to raise that
money I mean what about somebody you get
sometimes uh feisty with on the internet
Elon but we couldn't even look at Zuck
and Bill Gates and Warren Buffett look
Zuck was just trying to get laid right
and it took off and you wrote some good
stuffff AR we all is some level
Foundation of human civilization right
but um yeah so more power to them right
you can't take anything away from them
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
computer had fallen enough and kids in
school all needed computers or laptops
if he had tried to do something like
that you know 5 years earlier I mean it
was too young but you know five years
earlier or five years later you know
frster might have been the ultimate or
Myspace frster remember frster or
Myspace I had a MySpace account and that
was before Facebook yeah the timing is
important but there's like the details
of how the product is built the
fundamentals of the product like what
well so but that's what gets you when
the opportunity is there
right that's what allows you to take
advantage of that opportunity and and
the Kismet of it all right you've got to
be because it wasn't like any of the
people I mentioned there weren't others
trying the same thing yeah right you had
to be able to see it you had to be able
to visualize it and put together 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 shitload
of money it wasn't bootstrapping it that
got them there and raising money is not
just about sales it's about the the
general feeling of the people with money
at that time in
proximity if duck 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 I believe in the power of
individuals to find
their to realiz their potential no
matter where they come from but I agree
I agree 100% with that right but luck is
required yeah I mean scale is the only
Delta is scale yeah right we you know
we're not all blessed with the access to
the tools that you need to to hit that
grand slam but then also billion is not
the only measure of success right
absolutely not right there's a everybody
defines the success in their own way how
do you define success Mark Kean 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 kind
of money does it make you happy and and
my answer always is it if you were happy
when you were broke you're going to be
really really really happy when you're
rich but you got to work on being happy
when you're broke I guess well you're
just being happy right if you were
miserable you know in in your job before
there's a good chance you're still going
to be miserable if that's just who you
are that's a pretty good definition of
success by the way thank you how do you
reach that success by way of advice to
people you you know we talked about my
dad U my
parents 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 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 smiling on your face every day
some people can do it and some people
can't it's not always about the smile or
the smile on the outside it could be a
smile on the inside yeah whatever it is
right whatever makes you feel good yeah
the the struggle 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 kid
exactly right right because that's that
that was my dad's grand slam right
seeing three kids go to college be
successful you know spend be able to
spend time with him 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
beautifully said you have made some
mistakes in your life yeah a lot of them
one of the bigger ones on the financial
side uh we could say is uh Uber yeah we
call that not doing something yeah it
wasn't a mistake it was just I mean it
was a
mistake but I like how you tried to you
I always try to look at mistakes at
things you did that didn't turn out as
opposed to things you did to you know um
the negative but but what can you tell
the story of that and maybe it's just
interesting because it is illustrative
like how to know when a thing is going
to be big and not and what are the
fundamentals of it and how to take the
risk or not and all this kind of stuff
right so the backstory of that is Bill
Gurley came to