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Fireside Chat with Mark Cuban at the 2019 Tech Summit

Feb 27, 2020
Let's start with his book that he published in November 2011. Most of these types of books are not very good. Yours is actually a very good book. It's quick to read. You can read it in less than two hours. 150 some odd pages, not even all. True, there are actually some really good nuggets out there, so I wanted to focus on a couple, so when you first moved to Dallas after Indiana University, you made a list of all the jobs you'd love to do at some point in your life. your life. So if you can remember this list, can you share with us what some of those jobs were and how they are involved in terms of new additions or maybe subtractions over the years?
fireside chat with mark cuban at the 2019 tech summit
When I left school, I had no idea what I wanted. What to do I graduated from Indiana and one of my friends went to Dallas and they told me: you have to go down, you have to go down and I didn't know if I wanted to go to New York, Chicago, Los Angeles. I had an old 77 Fiat x19 with a hole in the floor and Dallas was the only real city I can get to, so they say, look, the economy is great, the weather is great, the women are beautiful. I didn't listen the first time. two things, but I heard that women are beautiful, so I was there and when I got there I thought, well, what hot industries, and at that time it was cable television, computers went through RadioShack, I mean being a waiter and You know, consistent stuff like that and I ended up getting my first job bartending at night, but then I was able to get a job selling software during the day, so speaking of cool jobs, you wanted your first jobs that you talked about in your book, since you were selling powdered milk, which sounds interesting, it was horrible, so maybe you can elaborate on that and tell us how it ultimately developed.
fireside chat with mark cuban at the 2019 tech summit

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fireside chat with mark cuban at the 2019 tech summit...

I have been an entrepreneur my entire life for as long as I can remember. I sold baseball cards to my friends. He bought and sold stamps. and stamp collections, I mean, I was that kid in the neighborhood who was always trying to sell you something. I was selling garbage bags door to door, but then after I graduated from college, I thought, what can I do? I want to start my own business. I don't want to get a regular job, so someone approached me and had the great idea that I should give it a try. They seem so expensive that if we sell powdered milk we can sell it for less and I thought that was a great idea so I started looking for these powdered milk formulas and the problem was it didn't taste that good but I thought well people don't You need good, tasty milk if you save a little money. a lot of money, so the business lasted about two weeks, but I learned that you learn from your failures.
fireside chat with mark cuban at the 2019 tech summit
I mean, like I always tell people, it doesn't matter how many times you fail, you only have to be right once and everyone can do it. call yourself an overnight success, that's fine, so when you were at IU you started a pub called Motley's pub, yeah, and this was when you were tied, you would even be of legal drinking age at that time, now they are 20 or 20 years, yeah, so alcohol has generally been a relatively heavily regulated business yeah, how did you do that? I don't know if it exists so again I was that hustlin kid so I used to throw parties to help pay for school my dad would send me $20 every two weeks and I had to figure out how to pay the rest and so I got loans and then it was sorted the rest and one of the things I did was throw these parties in our dorm or even go to the National Guard Armory I remember we would throw parties and then we would rent these bars on their quiet nights and throw sorority and fraternity parties and I wasn't old enough.
fireside chat with mark cuban at the 2019 tech summit
Enough back then, but we were making some money and then the bar owner came to me and said you're better than me, why don't you take over? And I was like, "Okay," so we didn't know that I involved a lawyer or anything like that. We just said it was okay. I'll take over and that's what we did, so there was no paperwork and it was great, literally, we were the hotbar on campus. Now a lot of that had to do with the fact that I wasn't 21 years old. I directed all my friends and it worked really well, it really worked, we really had lines.
I can show you pictures with lines around the block. I mean, I had the Eagles go in there and da-da-da-da-da, I was cool until they decided to attack us and they figured it out. that three quarters of the people there were 17, 18, 19 years old, so again, one more failure, that's great. You have a chapter in the book called What Will You Remember When You're 90?, which I think is great. great title, it's kind of a carpe diem thing so to speak, I'd like to know if you could give us a couple of examples of your recent life experiences that you've added to that list, so I'm one of the other tidbits.
I also learned it from my dad. You know, when you're older and you look back on your life, what would be the things that you'll remember and think about when you say yes or no to doing something that's really weird. interesting and that's why I've tried to take that attitude whether you bought the mavs or doing Dancing with the Stars or you really want to see me embarrass myself and look, I have no problem being embarrassed it's because all my friends will say it. you, but if it's something different and it's something strange and interesting, I'll do it.
If you turn to TNT tonight, there's a show called Drop the Mic and you'll see me rap and I'm the worst rapper in the world, but that's how it was. It's so funny, you know, when I'm 90 years old and I look back and say, Should I have dropped the mic and rapped and looked like an idiot? Hi, yeah right, yeah right, because I had this unique experience where this professional rapper taught me. how to rap and they gave me all this stuff and I got to battle Rusev, this guy who wrestles for WWE who's like 5 foot 8 and 400 pounds of muscle and you know who threatened to kick my ass in our little battle, so It was funny, you come back to a phrase several times in your book when you say you only have to be right once, yeah, and it seems like you've been right more than most.
You also talk about just essentially working on your competition. I'm curious. If you've ever had a deal or a result where you think you really lost because you were out of work, not because I was out of work, you never and never know what happens, no matter what you're doing, if you're trying to be a bartender and learning drinks whether you are a sales representative whether you are a programmer whether you know you are consulting whatever the information is now available to everyone and you know the common phrase knowledge is power and acquiring that knowledge is just effort going out and connecting with people and learning is just effort and the only thing I have all these stupid sayings you know but the only thing in life you can control is your effort and that's 99% of the time that's the difference between having successful and not successful who worked a little harder when you walk into a room to sell something or to be sold to or to try to understand something or to deal with it you know a problem with your kids or whatever education who worked harder Usually, whoever worked the hardest to learn, will usually be the person who has the advantage in the situation because we have all encountered situations where we were not as prepared as we would have liked or we thought we were and someone knew more, That's the king, the only thing in life that each and every person in this room can control from now on is your effort.
I like to

mark

Mark Cuban undefeated and working everyone, that's pretty good, undefeated, but I got my ass kicked. many times, but no, there's a quote that you referenced in your book by George Gilder and instead, to the effect that unlimited choice is the holy grail of television, this whole book, yeah, yeah, so This, he knows, was in 2011 when he published and mentioned in his book that he does not agree with that concept. It would be fascinating to get your updated perspective on that because obviously we're not. Some people argue that we are in this era of peak content type.
Is there more content we can do? really consume so how do you think, how do you think about that? No, I mean, in terms of content, there is never too much content, it's just because what we want, who we are, and how we consume content changes every day through our experiences, the challenge of content is not: can you achieve it? or the content challenge is too big, whether it's business content, the pitches you make, what you put on your website, how you connect with people, it's, can you tell a good story, you know that and now storytelling. it has evolved.
It used to be that we all gathered around the TV and there were 250 channels, but you know it was the best alternative to boredom. You come home, you're exhausted, you sit there, one hand goes into your pants, the other hand goes into the beer and Now you watch TV, all the content comes to us, no matter where we are, there is a source of content, who we are, how old we are and our experiences, that defines what we like, I'm just going to shrink like I'm nine years old. eldest son who plays fortnight all day every day if we let him well and now he will see ninja.
Ninja is a I don't know if everyone knows who he is. He's like a big guy on Twitch who streams fortnight games and wine. one day to the Mavs practice facility because we became friends just through random sources, he was a bigger star than when Tom Hanks came to visit, I mean, and this is a guy on Twitch, now Twitch has Unlimited gaming and other related content options. things and they're expanding YouTube, obviously, just unlimited content and it's not like YouTube is struggling, the bottom line of all this is that there are so many options for content, like business people, they have to figure out how to connect with people that they have to meet. audience and you have to know how to tell a story and honestly, that's not my strong suit, literally and I forget the name of the book.
I would have to look at my phone. I'm reading a book about storytelling because that's how people connect us. You have so many options if you can't absorb us with something that engages us in a story and simplify it into a story that we want to connect with, the next person will be the one who comes in, the next person will come in and take your business, so you mentioned that in the book and you know that maybe it has changed, but you read on average three hours a day at least. Wow, you said your wife hates it, she really hates the things I do, it's what we get along with, so I'm Funny, you mentioned you have three kids, do you ask them to maintain a similar reading regiment?
Yes, I mean, with my children, it's yes, in my house they can bribe me if you read a book, dad, how much do I get or what can I get if I read a book? read this book in this book in this book my middle daughter Alisa my 12 year old daughter wants a love bag and that's why I gave her a book about entrepreneurial girls that she has to read my son wants an Oculus Rift headset so he has three books to reading I'm not above bribing my kids, I mean it works, but yes, reading to me is important.
I have two dollars, 12 and 15, and you know they are not big readers, but I hope I can get them to adopt and adapt because you know that information will always be important and there are different sources of podcasts and listening and even discovering on Snap

chat

. You know it's a source, but it's just about getting them excited about learning because you know that's one of the greatest skills we'll all have. our lives are, you know, a thirst for learning and knowing how to learn, not everyone knows how to learn, that's why I'm trying to educate them early, you know that life is a constant change and that you will always have to learn.
Did you give us your favorite book you've read in the last year? I don't know if there are any that stand out. I forget the name of the one about narration. I'm reading now it's good. I mean, I read a book. called mr. Putin, that was really cool, you know, I was just curious about Vladimir Putin, I didn't know he was a lawyer, I didn't know he was an assistant to the mayor and Leningrad. I mean, I read a book called The Master Algorithm of a Guy. My name was Domingo because I wanted to learn more.
I'm working my way through machine learning for idiots. You know, I just try to grab as much as I can, so let's get back to the topic of media. You probably know a friend of ours, Thomas Tull. Thomas I, that's how I've been making independent films for the last ten years, so we're probably shooting our next film in May and I'm curious, since you publish Magnolia Pictures, I'm curious about your kind of State of the Union. in the independent film business, especially as it relates to Netflix and Amazon and some of the big

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companies that are probably entering the space, independent filmmaking is difficult, it's really very difficult if some of you have aspirations of making a lot money and then get Stop at the movies right now.
I will tell you a little known fact. I've been nominated as an executive producer for seven Academy Awards and I've still won, but I'll tell you a quick story about how hard it is. I got an email from a guy. His name is Alex Gibney, if you've seen this movie I'm talking about, youcalled The Inventor. I think of Elizabeth Holmes, who had bad blood. Yeah, she made that movie, so she sent me a cold email in 2003 and she told me. I have all this Enron footage and I email them back and ask, is this exclusive to you?
Do you have the rights to these emails? Yes, email him again. How much to make this documentary? Email me right away. $770,000. back, let's do it twelve minutes. I greenlit that movie, that movie became a documentary called Enron, the Smartest Guys in the Room which at the time was in the top 10 of all time. The highest-grossing documentary was nominated for an Academy Award less than three months later, my partner Todd Wagner, who I do almost everything with, he's incredible, comes to me and says we have this deal with George Clooney and the partisan participating films and it's a film that It's going to be in black and white about the newsrooms of yesteryear and it will be eight million dollars, we paid half of it, but it will be the beginning of your journey.
I wonder if we get to hang out with George Clooney like, okay, Regice got hold of that, it was really good, so We make this movie, good night and good luck, the second greenlit movie took minutes, it's nominated for six Academy Awards and I get to have an Academy Awards night party at Dan Tana's in Los Angeles. I think it's okay, I'm literally killing it on my first one. two films, seven Academy Award nominations, that was in 2005, does anyone know other films I made. It's hard, so we got out of the original production business because it's that hard and with Magnolia we're just sticking to distribution and, you know, we just made an RBG movie that was nominated for an Academy Award, but the We distribute rather than make it, so the reason it's so difficult is because there are so many options, now people will still go to the movies.
You know, we just sold flagship venues, but I had a great year, you know, so people go and it's a great way to get out of the house. It's great to do something. Films had a great year last year, but if you're producing particularly independent films, it's difficult, there's no formula, there's no way. You can guarantee that you are going to make money and if you don't tell a good story you know that you are going to lose all your money. Very, very true, so if you're still on the media topic last November you sold your movie theater chain Land

mark

Theaters, okay, sorry.
I think there's a perspective that if you're buying from Mark, the Cuban brand may know more about the business than you do. So should we interpret that sale as a market top? Know one strategic change or another. I was just tired of it, yeah, you know. Okay, why am I spending all this time on this and I don't even spend that much time? It was like it was time to move on. That was it in a nutshell. The guy who bought it would be great. I'll probably do a better job. than we did, okay, let's switch gears completely, let's cover something beyond the media, some kind of currently popular investment topics, so yeah, I've been on the record regarding cryptocurrencies in Bitcoin, yeah, so I heard something to the effect that you prefer to be an owner. a pet stone than a Bitcoin.
I did not say that. What I said was that they are more like baseball cards or gold coins. Cryptocurrencies are worth what someone else will pay for them and that too if you want to get fancy people. I'll call it a store of value, right, it's a way of getting a reserve value, which is kind of like gold. People go to religion, for a lot of people, that's it, if everything goes to hell in a basket and everything falls apart. The gold will be there and you wear gold, who the hell is going to wear gold bars?
Hey, I have a gold bar here on my back, you're dead, it just doesn't make any sense and a little bit of cryptocurrency, at least there is

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nological value behind cryptocurrencies. In terms of managing a distributed database in terms of having authentication for information smart contracts, there are a lot of arguments that can be made why there is value particularly with the blockchain, but in terms of granting rights to Bitcoin, I bought some and I sold some. a game of dice, it's just worth it, it's like buying a baseball card or buying a comic book, you know once you look at the baseball card and say Oh, Mickey Mantle, now's a good time to sell it, what's the point?
Will anyone buy? So be careful if you don't. I have something exact, don't buy it, wait for it to go up, there have already been many people who have lost money. I'm not saying it won't go up, I'm not saying it won't go down, but just realize that it's about supply and demand and not intrinsic value driving what it's worth, so another sector, so to speak, that receives a lot of advertising right now is cannabis, huh, and you have a phrase that I love, there is a sequence of copycat inventors and then idiots, where are we in the sequence of those three eyes?
So I stole a line from Warren Buffett that says first come the innovators, then the imitators, then the idiots, think about it and when you're looking to get into a business that ten thousand people are already in why do you want to be ten thousand one? So, cannabis you know. I guess you have to be careful when trying your own product, but I'm not against the cannabis business per se, but it's just like any other. other businesses now you know the emails I get and the people that approach me about cannabis you know it's the future and so it's no different than any other business there's no real advantage except that it's regulated and if it's regulated to a large extent. companies are going to get into this and if the big companies do it they will use regulation to their advantage so be careful I mean unless it's just for recreational use then call Jack good stuff.
There's a video on YouTube of you doing an interview at a Goldman Sachs event about a year ago and there was a big part about you telling the guy how you essentially called Netscape's demise in advance, so I'd be curious given that I think We could probably argue that we are not in the early innings of the technology cycle, not now, would there be a similar company or at least a sector that you think will potentially take a similar route to the dodo that Netscape did? It's really different now, there's probably something out there. what is changing everything, I know you will reach the future is artificial intelligence, artificial intelligence is changing everything and you know, I have been through many technological revolutions.
I was there when PCs started. I was there when local area networks started. I was there when the Internet started. I was there when HT started. I made money and in each of those sectors because I can stay a little ahead, but if you think about all of them when I started selling PCs, which is my job I got it after being a waiter in Dallas. I came in and people said we don't need a PC. I'm right in my hand. I have this ledger. I have this person here who types it up. typewriter and then I said, well this is what a spreadsheet does, yeah man, it was $500 back then, but you can use it to play F and learn, and it had an impact, it improved productivity, Then we started connecting them and I would say that one does. you connect these PCs together.
The offices can communicate with each other. People can share data. I don't need to do that. I just take this five and a quarter inch floppy disk from this PC to that PC and everyone shares it and then people now we can. We don't live with low-query networks, so the Internet changed everything and now we can communicate with everyone, but now that we have seen those advances with artificial intelligence, what would happen if to the thousandth degree at this moment the challenges we have as entrepreneurs and people of business be us? We use our experience and based on our experience we put ourselves out there and say, here are some different options that I want to explore because I've done these things thousands of times before or I have an idea of ​​this business where I have a spec that I have.
I have the ability to tell a story or sell this product or understand this product, but we are limited by our time or the people we have around us or access to information. What AI does, whether it's machine learning neural networks, whatever, but in general, it's able to take an unlimited amount of data, go through it, and get insights that even the most experienced person couldn't imagine and why it's so important. Well, why is it important for larger companies to have more data and more processing. Power can go through more options, more variables and start competing in different ways, so that's how Amazon knows that if you have a stomach ache, they're going to send you five other options when you go to Amazon because you bought medicine for yourself. your stomachache or something for your stomachache that's why Netflix knows that if you watch this and it says if you watch this you might like, well, what are we as small businesses going to do?
That's the challenge right now, that's where you as a small business owner or working or running a small business as a CEO, you have to put in the effort to start understanding how it really works. Now what did I do? I literally went to Amazon AWS and took their tutorial, their introduction to machine learning. You know, he took me. some time to work my way up you didn't have to learn statistics you didn't have to be a programmer but it educated me on how to use it i mentioned it before if the idiots guide machine learning for those of you who are old enough to remember getting on the internet for the first time time and having had difficulties and waiting for someone to teach them about it and connecting to the mobile device and what is this application that is happening.
This is the same thing multiplied by one hundred that you will need. know how to integrate it into your companies because you will need how to do more than just what if from your own personal experiences you will need to know what all the data that comes from your customers of your products is for. you can get data from what it actually tells you because as Jeff Bezos says, your margin is my opportunity and so if you don't do it even in the smallest business, if you don't understand the relationship between capturing data that represents your business and your customers. and other parts of your business and explore it with machine learning and then have the machine learning spit out recommendations or options that you probably hadn't considered, you would be at a disadvantage to the 23 year old kid coming out of school.
Right now I'm taking a class on Coursera, introduction to AI. I mean, it's boring, but you know, we take accounting classes, we take finance classes, we take any class you took in marketing, sales, those are skills that you need to be successful. at some level in business, this is the new thing you need to be successful, so in terms of knowing who's going to jump the shark, what the problems are, it's a problem for small businesses that we have to address and it's not about just from I'm going to hire a kid who just graduated in computer science because you have to have an understanding right now.
We as individuals capture so much data that our brains are the best computer there is and we process it and are able to understand what is happening. our business and that's good, but now you have to start looking at that data and how to make it captureable in spreadsheets to start databases, whatever that is for your company, but you have to do it now and you will thank me in 2 3. 4 years because it won't slow down, it will just get more advanced, so to continue with the topic of AI, just to advance my notes a little, so that our mutual friend Elon Musk claims that AI is another new nuclear weapon dangerous, how can it be?
I feel that, I mean, you can tell the story that that's true. I don't know when, but yes, so put on the Terminator hat and processor speeds and performance will be like this. That's really why AI has become so big. The last few years is because companies like Nvidia and other Taiwan Semiconductor, their prot Intel, the speeds of their processors have just sped up in ways that we didn't expect or where I didn't expect and now you can process all this data. think about Arnold and you know he's coming back and the chip that sees everything in front of them and processes the data, that chip is already there.
The two things that are missing are Arnold's manual dexterity to be able to grab things and ride a motorcycle and you know, swing a gun and put on clothes that are 30 years away and power sources that are small enough to fit in a steel Arnold and lasts 24 hours. I don't know how far away it is, it could be three years. It could be a hundred years, I don't know, but when those two things come together, it's going to be crazy, and it's not. I don't think it's probably worse than a nuclear war simply because you can't.
When we come back from that, I think it will be more like biological warfare, where there is always the fear that some idiot will put something in the water stream and it will affect a lot of people, but you know, we make agreements all over the world. ways toavoid it I think we'll be able to come up with ways to detect serial numbers and track serial numbers of chips and batteries that are so powerful and then the robots that do those things, so I'm not as worried as Elon is. but it's something our kids are going to have to pay attention to, so if we continue on the subject of Elon, you came to his defense a couple of days ago regarding a dispute he's been having with the SEC, and you have your own history with the SEC, yes, I would be curious if I appointed you Commissioner of the SEC, what you would do to fix that organization.
I'm glad you asked so anyone can run a public company or have to deal with the SEC, okay just a few. Friends, if you ever have to deal with SEC related issues and are curious if this is okay or that, or if this is a problem, can I do this? Can I tweet about my company? Can? Do you know? And they went to the SEC. I did that and I went to the SEC and said I have a question. I want to talk. I am potentially investing in a company and want to speak to the CEO before investing.
I want to know what I can and what I can do. Don't ask him and what he can and can't tell me because I don't want to get in trouble with the SEC. I fought them for eight years. They're sleazy as hell and I kick their asses, but I don't want to. deal with it again so I called him and talked to him twice on the phone and you know what they told me they sent me if you have any questions they sent me to a web page on the SCC government website which was a photo from a fax the details in 1980, say any questions you have, fax eight copies to this number and we will try to get back to you, that's our SCC, that's who we look to protect our market, so what would you do?
I think that's what we need. they are clear regulations what the SE does SEC they do something called litigation through, I mean regulation through litigation, they will sue someone to set a precedent to have a new law that they can sue other people for and just like Elon Musk with Twitter, you know Ilana made a mistake, she was wrong in what she did, but at the same time she should have been able to, there should have been clear guidelines to say you can and can't do this, they should have. I don't have to sue him to let everyone know that this is wrong, so what I would do is just make the regulations clear.
I would put up a list of things that says here are the things we've learned from all the lawsuits. we introduce and you may or may not do this and if you're not sure here's a number to call that's all so with that one of mine no one will have any excuses if you see if they're there and you have the ability to just Google them and have them show up and you still rape them go to jail, don't pass, you're screwed, but there shouldn't be a situation where you weren't safe and you didn't know and you had to pay. a lawyer $900 an hour to tell him what we're also not sure because the SEC doesn't tell us that's wrong so I told him he knows the SEC the head of the SEC is on chain several times but they haven't received any . better when it comes to regulation, great, so if we stay on the regulatory topic, there has been a lot of backlash towards big tech recently, yes, Elizabeth Warren calls for breakup of big tech, yes, LAC essentially kicks out Amazon from New York, what's your opinion on all that?
Do you think the pendulum is going to swing back at some point or do you think it's not going to continue? No, it will continue. First of all, Lizabeth Warren is wrong when she talks about breaking up with Big Tech because she has nothing to do with whether I like it or not. Like Elizabeth Warren, she just heard me talk about AI over and over again. Right now we are our federal government and our states are just starting to make policies around AI and trying to figure out what the investments will be for AI. Do you know who is the biggest or who was making the biggest investments in AI that allow us to compete with China and Russia?
Vladimir Putin said that whoever dominates AI dominates the world, you know who is investing the most: the big technology companies, so if you divide them you are minimizing probably the most important issue and the most important problem that we face. I just talked about terminators, you can laugh, you can think I'm an idiot or think I'm right, but we're not fighting that battle the way we are. What we need for our defense is defense, different three letter agencies, they go to those big companies trying to get their help, those are the companies that are hiring top talent everywhere, paying million dollar salaries and, If you split those companies up, immediately do each of the I think she wanted if a company had over 25 billion in sales.
I forget your exact criteria but you immediately diminish our capabilities within artificial intelligence. That doesn't mean there shouldn't be problems that we address to all large companies. I'm Amazon, it's my largest stock holding, it's grown and grown tremendously and Netflix is ​​my second largest company, but I think Amazon makes a mistake when they make their own versions or a.m. or white label stuff that they see they are selling, I think if they don't change it they will face federal antitrust litigation, which doesn't mean that all these companies are right and everything they do, and it doesn't mean that we shouldn't change some things and it's the same with Facebook look, Facebook is not a utility, it's not, you don't have to use Facebook, you can still text pictures to grandma, you can still text and do whatever you want, but Facebook around the world has reached a completely different level of matter, so I think maybe regulation is not the right word, but being able to have a closer relationship and try to add different regulations and I will give you the perfect example of elections in the upcoming elections and we have a lot of people here. that are involved in politics, people are going to run ads and now every election there is ad after ad after ad and the way to run the best ads to get the best results is on Facebook, why does Facebook have so much information?
All that AI that we talk about, so much information and so much influence on tens of millions, hundreds of millions of people in this country and what political advertisers are doing is using that information and really getting to things that are important to us now, That's fine, but when they do that, they don't just serve one ad, but hundreds of thousands of ads looking for the things that catch your attention. You're a pet lover who thinks it's horrible that pets need to be spayed yada yada, you'll find it. and run an ad saying my candidate thinks it's horrible to treat sterilized pets just to get you to vote.
Now I agree with that too, but what I think needs to happen is that there needs to be a record of every ad so that we know that everyone is in a race, every American, you know, everyone in this country knows what ads are being run. , what criteria do they use for those ads, only you know that you love sterilized pets or you don't like sterilized pets, and that is in a record that is public on dot-gov website and available to everyone, so we know what is going on, so at least we have the information right now, we don't do that, that's the first part, the second thing I would do applies to AI algorithms, we talk about neural machine learning. the networks are a little different machine learning does not think for itself it does not do what is called generalize neural networks these processors become faster it begins to think that it is not the right word but it begins to generalize and think of new things it reacts to the knowledge that it has already created for itself, you can call it learning, maybe maybe not, but that creates those algorithms, what is behind it, they come in a black box, we don't know what they are doing, Facebook, Google, I don't know. what are their algorithms, are they the most advanced algorithms, nor should I say they are the most advanced neural networks that are making those black boxes, those algorithms must be in a vault somewhere in case the fan hits and something goes wrong, and that kind of I think regulation is justified, but only Elizabeth Warren says that breaking up companies, you know, you should always be aware of the law and address the unattended consequences and I think that would be counterproductive, so if you stay on topic regulatory you've been A critic of the ACA and I were listening to your interview you had with the people at Goldman.
You had a really innovative point. I think you called it point ten. Yeah, we changed the name, but yeah, that's what it was, so maybe you could just give us. a few quick notes on the cliff because I know you're working on this politically, you're doing the rounds talking to people so it's great to get the gist of it, so we called it the temporary plan originally, effectively the only safety net. If you don't have Medicare, Medicaid, or employer-provided insurance, the only safety net you have is the ACA or finance me. I mean, think about this and if you need the government to guarantee a student loan, you're going to want to go to the University of Arizona.
You can get that guarantee if you need it if you are a small business and get a small business loan through your bank. you can get the government to guarantee that someone will lend you money for your small business if you qualify if you are about to die and you need a heart transplant and you don't have insurance what do we tell you to make your best choice your friends tell you to go to GoFundMe we're not lending money to anyone we're not helping someone who's about to die so I looked at it and said okay as a business owner how would you solve this problem? and I looked at my own businesses and my own businesses, we self-insure, we don't use an insurance company.
I looked at the top at companies that have 5,000 employees or more employees 95 96 percent of them don't use insurance companies to get insurance, so I said, do you know what something would be like if we self-insured? We originally called it plan 10, but I effectively put together a plan that I've been climbing the ladder that says instead of giving money under the ACA to insurance companies because what does an insurance company do? They create their own networks, they complicate things, they confuse the data, but if you give money to an insurance company to subsidize an insurance premium, that person who has the insurance has to fight to recover it and get it out of the ACA of the 47 million people who are eligible in that market like 12 million people don't have insurance, that leaves 35 million people whose best option is GoFundMe or credit cards, so I put together this thing called plan ten and we changed it to the security plan that effectively It says instead of giving that money to the insurance companies, let's give it to the providers to pay the hospitals, to the healthcare providers to pay when someone needs help, but before we pay for that, we'll look at their profits and the income of the person who needs help if they work for $10 an hour and work in home health care and know whatever. you make $10 an hour 40 hours a week you make $20,000 a year you're going to pay a $25 copay that's it instead of giving that money to the insurance company that money will come to help you if you make $100,000 a year you're going to pay 10 per percent of your income, you're going to pay what you can afford to pay effectively, it's means tested and if you know you sprained your ankle and it cost you $1,000 and you can just write a cool check because you didn't.
You won't have to pay insurance premiums if you lose the lottery of life and it costs you more, okay, we'll lend you that money now we're going to deduct it from your payroll and we're going to take you between, you know, a three to a ten percent. hundred. depending on how much you make, but you'll be the first person to pay it back if it's just horrible and you have a chronic illness, okay, you'll still pay your percentage, it might be nothing if you make twenty thousand. it will be ten percent if you make 100k but after 15 years we will waive the balance so you will have to pay it and what you can't pay the government will pay but unlike some things single payer or medicare for all We are not going to have to raise taxes because all that money has already been allocated for Obamacare it is already there now how do I know the calculations work?
I went to the most far-left economist I could find and I went to the people who helped start the ACA and told them to help me design this model and you know what they came back with, making plan 10 now called the safety plan just like it was. I explained, you pay what you can afford and on top of that, no more than 10 percent of your income, the government helps with the rest, say, forty-five billion dollars a year for patients, forty billion dollars. a year for the government, for the federal government, just letting people pay what they can pay, but most importantly, eliminating the insurance companies, why?
Were insurance companies so expensive because think about their insurance programs right now, every year there's a different network every year, differentDoctors now, when that happens, they have to negotiate those agreements with the hospitals and all the care providers, which means that the hospital has 31 percent of its costs are through administrative costs, then there is the 15 percent that they get the insurance companies and they take the so called medical loss ratio from above when you give all that money back instead of giving it to the insurance companies it actually pays for the medical care and the numbers work so what am I doing to deal with that?
I mentioned it to the governor. I went to the secretary of HHS, random, and to the head of CMS from SEMA Bern, and there is actually a waiver, a 1332 waiver, and I'm working together to put together the waivers and I'll be going to different states, hopefully including Arizona, including Arizona, so instead of Obamacare you will have the safety net and instead of paying insurance premiums, if you are healthy, you will never pay an insurance premium again, you will keep that money. in your pocket, you can put it in an HSA health savings account and pay it when you need it and use it when you need it, so I'm going through that process now that it works.
I think it has a big advantage, that's what I want to be my legacy, that's what I've been working on for two years. I can tell you more about healthcare and healthcare costs. I can tell you that you know that 27 million insurance claims are denied a year under Medicare, that changed with this I can tell you that insurance companies keep all their data in silos so that artificial intelligence cannot be used to find better cures and better outcomes that will change, so I don't want to go too far because I'm already working everything out. We talked about this, but there you have the last question on a more serious note.
You've been involved in the Fallen Patriot fun. It's very special for you. I want to let you know. That vision is going to make a donation, I'm personally going to match, you're welcome. I wanted you to tell us how you got involved, I mean, what it means to you, well, the fall papers are actually scarier, so it was Now I'm part of the Mark Cuban foundation, but when Operation Iraqi Freedom happened in 2003 , I just said that anyone, any family of soldiers who are serving our country and putting their lives in danger and who needed financial help, I would provide it and that's why I didn't go out and ask for donations even though we have some, so you know , I think I've now spent $5.8 million.
I forget whatever, it's okay if someone needs a bill paid and was part of the Operation. Iraqi Freedom so I pay the bill if someone needs a procedure done, I pay for it, you know, before every game I say a little prayer that says I'm not here doing what I do unless those people who serve our country do what they do. they do, I never want to take them for granted and so, you know, whether it's up to you with the fallen patriot fund or other things or investing in the military or family service companies, you know, I never want to take them for granted and I always want to help in any way I can, so thank you.
Well, remember that this has been a lot of fun. We want to be respectful of your time. Thank you for making the trip to Phoenix here today and again. Well, we really appreciate it and thanks again. Thank you all. It was fun

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