Mark Cuban

John Battelle: So I was, I was doing really deep research on you. We were back at the bar? Yeah. No, I was just reading Wikipedia.

And the one, the one thing really jumped out at me, so I wanted to start with the beginning, one of the first things that you ever did. Apparently, you made $1,000 as a kid, on a chain letter. Yep. That was in college.

So you're that guy I'm that guy. Actually, who actually made money with one of those things. Mark Cuban: Yeah, it was my junior year in college, and I had to figure out a way to pay for school, so they had one of these chain letters going around.

And so I just said, "Okay, well, somebody's making money." So I would go around, and it was a deal where, you gave me $50 and send $50 to the person at the top of the list, took him off, and then put your name at the bottom. And what I did was I helped everybody, all my friends, sell their version, so they got all their money back, and then it.

You know, the power of networking, right? Back then, it just took off, and I spent the next few weeks just going to my mailbox every morning, collecting $50 checks and cashing them, and I paid for my junior year of college. John Battelle: That's quite a story.

It seems like that's been happening to you ever since. But I think there was more work involved, more recently. You're well known for having opinions.

Yep. And so I'm hoping to elicit a number of them from you. As a matter, you have so many hot button issues, I wasn't really sure which one to start with. But I.

We may as well start with, given I think it's been in the air all the the past two days, which is the economy. Mm-hmm. You've written on your, on your site, you've, you've posted a number of opinions about the economy, about bankers, in particular, and about modest proposals for how to fix it.

So what do you think is wrong, and and how do we how do we correct it? Just a simple question like that, right? Solve it for us.

Mark Cuban: Solve it for us. I think the primary problem that we're facing, I think, and everybody's ognizing this, is bipartisanship, right? Everybody is so partisan in their feelings, right?

Everybody is so philosophically driven that no one's addressing issues, and so I think we have to get out of politics and actually have action items. You know, we fail to recognize that at some point things change, and you have to let go of old dogmas and old philosophies and just deal what's in front of you like in business.

And so I. You know, it's just little simple things that we all know are obvious. We get, we get a budget from the, our government leaders. That's a 10-year budget.

Who does 10-year budgets? You know, how are you gonna fix something in 10 years? Even the communist countries have five-year budgets and five-year plans.

You know, and then there's, there's action items. One of the things I wrote was, you know, we have to fix the housing situation. We had a bubble.

It burst. We have significant problems. Values have gone down. And to me, the action item is all these homes that have been foreclosed on that Fannie Mae, et cetera, own, you bulldoze them, right?

You tear them down. You reduce the supply. That increases the, value of what's there.

You create work for people who are most difficult to employ. All they gotta do is, you know, knock things down. You know, that's an action item.

There's just so many things that you can come up to do, but we have to recognize that someone's gotta come in and propose actions. And then I think there's. You know, I've talked to.

A lot of people have asked me, about taxes. And you know, the headline going out was, "Cuban's willing to pay as much as he needs to in taxes," et cetera. I hate taxes. I hate taxes as much as the next guy.

John Battelle: Well, you said that paying taxes is the most patriotic thing you can do. Mark Cuban: But when you look at the economy the way it is, right, you can't just again, go back to philosophies or dogma. You have to recognize the circumstances and contribute.

And I've earned quite a bit from not just Yahoo, but you know, the fact that you can be entrepreneurial in this country. There's the infrastructure. There's people who have given their lives for, to create that opportunity for me. And for me, in the current state of things, you have to be able to give back.

And for any entrepreneur in here, going out there, busting your butt, being rewarded economically, the most patriotic thing you can do is pay taxes because, you know, ask not what your country can do for you but what you can do for your country.

And I think you can just go down a long list of action items, but until we start taking action instead of talking about things in general broad brushes, we're gonna have problems. John Battelle: So are. Would you say you're in the Buffett camp, so to speak, in terms of, you're not paying enough taxes? Mark Cuban: Yes. Now, do I like, you know.

Will I like writing a bigger check? No, because I think a big percentage of it is going to go to waste. I think we. There's a big difference between investing and spending, right?

Right now, we don't have somebody who's a chief investment officer. Look at Google. Google invests in things left and right, but it's an investment. Not all of them are going to work, but they create opportunity, and that's.

We don't have anybody in government who's looking at that. We can borrow money at, you know, essentially negative interest rates. We should be spending them in investments as opposed to spending them on expenses, and there's a big difference, and I don't think, you know, anybody in our government structure right now understands the difference.

John Battelle: You have said, to sort of switch to another part of one of your rants, has to do with the way that our current regulations are set up for patent Right. For example. Your, approach to patent law is Get rid of them. To your approach to houses that are on the Yeah, get rid of them.

Which is to bulldoze it. Can you elaborate a bit? Mark Cuban: Look, it's cra. I'll give you an example.

One of my companies. You're talking about things that inhibit, job growth, inhibit, corporate growth, inhibit entrepreneurships. I have a company, Magnolia, Home Video.

We distribute DVDs. We got, sued because someone has a patent for detecting scene changes in video that they were awarded in mid-2000s, 2004 or '05, right? We were doing scene detection of video back in the, you know, late 1990s, but back then we just didn't create patents for everything.

And you've got all these patents that are being awarded that are just out there just to try to siphon money from people, and that's, to me, that's killing commerce. That's hurting. I mean, I read something from the former CTO of Apple who said that when he left in 1989, Apple owned the grand sum of one patent. Boy, they've changed their ways now, haven't they?

And so to me, I recognize that people say, "You know what? Small guy has a great idea or a small woman has a great idea and wants to protect their idea, they need a patent." But for that one anecdotal scenario where you protect that one person, there are 99% other scenarios where you're holding back the economy, you're holding back big companies.

And so Google has to go out and buy Motorola for a patent trove, and it becomes a game of you know, you know, thermonuclear war. You know, who can create the greatest deterrent to keep someone from dropping the bomb? And that is not good for the economy.

That's not good for entrepreneurship. That's not good for the United States. John Battelle: Well, I mean, you brought up Google, so I wanna ask you a question because you've written, about the company quite a bit, and Not that much, but yeah.

And so I get to ask a question that our host has agreed I'm allowed to ask, or at least they said, "Okay, John, you can." What's your view of YouTube? What a horrible acquisition.

Care to unpack that? Mark Cuban: Yeah, And everybody get it out. You talk about horrible acquisitions.

Okay, Yahoo. Okay, that's out of the way. All right. But in reality, what has YouTube evolved to? It's a utility that in essence subsidized the bandwidth for video of the world.

John Battelle: Now, how can that be a bad thing? Mark Cuban: Well, it's not bad for us, right? But in reality, from a business perspective, what have they really.

You can do that any time. They didn't have to go out and buy YouTube. They had Google Video.

All they had to do was say, "Whatever video you have, you just post it and we'll pay for all the upload, the bandwidth, and everything, the servers, the storage." They didn't need to buy a company to do it. So they took all their baggage.

They're still fighting legally all their baggage. And I think if you said right now, are they in the best possible position they could be in the video world relative to everybody else, well, they've had a great social impact. Their content ID system is phenomenal.

We wouldn't have that if they didn't have all the lawyers to fight. So they've had a lot of great developments, but they could have started back then and going out and doing the things they're doing today and be 10 times further ahead. I don't think they accomplished anything by buying YouTube at all.

John Battelle: You mentioned earlier that, one of your pictures got you in trouble. You get in trouble a lot. How come? Mark Cuban: You know why?

'Cause I just don't give a shit, right? Look, somebody had to be the luckiest guy in the world. Like Mr. Chopra was saying, you know, all the endorphins, everything, mine are flashing all the time.

Boy, you know, I don't have to be looking at someone I'm in love. I'm just, I'm having fun. And so I've gotten to a position now I think where I don't need anything from y'all, right?

And so if it's. You know, let's just say what's on my mind, as long as I do the work, you can disagree with me, and I like when people disagree with me. I like when it gets public and it becomes a public argument because people have to bring their A game to disagree, and to me, that's, that's fun, right? I like challenging things.

I like being able to look at it. You know, my strength is not being out-teching somebody else. I'm not gonna understand all the personalized medicine elements, even though I think personalized medicine's the future.

I'm not gonna, you know, be able to write code like, you know, even though I used to. That's not me. I'm able to look at a business, drill down to it very quickly and understand what's going on, and challenge it, and I like to challenge it. You know, it's like day and date movies.

You know, the head of the MPAA said I was the devil because we wanted to release movies day and date with DVD and theatrical. So when he said it's horrible to do it the same day, I said, "I'll kick your ass even better." So we're gonna release our movies onto transactional VOD on cable and satellite, et cetera, systems a month before they're in theaters.

Now, our business, our Magnolia Home Distribution, makes money on every movie. That's unheard of in the movie industry. So where you can look at things and say, "This is the way they've always been done," I like to look at it and say, "Well, if everybody's doing it this way, that's not where the future is.

You have to look somewhere else." And you know, if that pisses people off, that's their problem. John Battelle: All right. Let's, let's pull back to the, to the theme of this session, which is innovations and the impact particularly of technology, on our future.

Yep. What do you think the most important technologies and/or trends are right now that are going to affect the near term, one to three Oh, one to of Mark Cuban: Well, I mean, look, there's. You can go in a different a million different areas there.

I don't think there's any one. I mean, long-term, big picture, personalized medicine is it. I mean, think about it.

The fact that you walk into a drugstore, you buy a bottle of aspirin, and you don't really read the fine print, but it says, "You just may be the unlucky MF that dies from this aspirin." It's crazy, right? So that's gonna change everything, and there's no question about that. Shorter term, you know, I think, again, if everybody's looking in the one place, then to me it's the wrong place.

And you know, we've been doing, since we started with YouTube, we've been doing, video online. We started doing, you know, Broadcast. Com in 1996. 15 years now, right?

It hasn't changed all that much. And you know, you go to YouTube, to pick on them some more, and believe it or not, 15 years into it, you watch YouTube and there's a little overlay with an X to click it off and there's a pre-roll. That's what we've come to?

That's advancements? And I think part of the reason is the internet isn't designed to be the future of reruns of Gilligan's Island, right? There are networks that are already designed to provide video, and I think that's what a lot of internet video bigots are missing, right? The future of television is television, and I think what's really changing going forward, particularly in communication, is that we're evolving to real-time communications.

People want things live. They want things real time. And when something big happens, you may get it from Twitter, you may get it from a Google+ stream, you may get it from a Facebook status update, but then when you want more, it's hard to get a lot of people to go to one spot except on television.

And I think what a lot of people misunderstand is that television is digital. This isn't 1985 anymore. And so 300 channels and nothing on, but for the most part, those 300 channels are digital, but they run on a network designed to 69 video distribution, so it's not gonna buffer.

You know it's always gonna work. They have access to the same VOD, hard drives that YouTube uses to serve up, you know, on-demand stuff. It's just a better designed network.

But now we're starting to get the opportunities to leverage that network. It's like at HDNet, it's all about interactivity, the high def and the net. And I think you're gonna see more things develop on the television side of things than on the internet video side.

I just think internet video, even though it's scaling, it's growing, is broken. John Battelle: Well, we're running over, and it's been an entertaining half an hour. Thank you very much.

Please join me in welcoming. Thanks, John.