Video Of The Week: Mark Cuban At Upfront Summit
I posted the discussion my partner Andy and I did at the Upfront Summit last week.
There were other great conversations at the Upfront Summit.
This discussion with Mark Cuban was great. I totally agree with Mark that we need more tech companies to go public and have been saying that publicly for several years.
At 3:54 Mark talks about companies getting bought as opposed to going public. While there are definitely reasons why I can see a company CEO not wanting to go public and having to deal with wall street (not saying I agree…not that I know other than what I read) I can see a great deal more reasons why you wouldn’t want to end up working for a subsidiary of a larger company. Or even in an important position at that company. One reason for sure is that you end up being that person that you probably didn’t want to be in the first place. Which is to work for someone else. The other is that it removes and takes away the fun and adventure of being an entrepreneur. One reason though that I can think of someone (who is an entrepreneur) doing this (selling to a larger company rather than go public) is to be able to have an easy way to move onto their next venture while not impacting (if they left their public company because they had taken that route) their personal financial health.
I am going to disagree. If you have FU money then you can go work at a big company and have a really fun time.We all have masters. Bosses Investors, Co-Workers, or the Market.You know me. I think rules should be simple. Don’t use the internet at work for something you could not show anybody’s mother, Give a tax credit for employees that are paid a livable wage.For public companies just say something like any compensation above a number like $250k a year is forfeit if there is a restatement.But what you have now is a CEO’s nightmare and Accountants and Lawyers dreams.
If you have FU money then you can go work at a big company and have a really fun time.Well in a way I might agree with you from my own limited experience. I remember in the early 90’s after I had sold the company that I started out of college I managed to get a job working for a company in Silicon Valley (and then another one because of that experience). I was on the road and flying here and driving there and collecting a paycheck. With an expense account. I remember at the time and to this day thinking ‘wow I can’t believe I am getting paid for this’. It was actually fun, non stressful and almost to easy compared to running your own business and worrying. Of course that was a sales job and the company was loose enough to really not get to involved in anything that I did. But you know when you are spending your own money you think about things like the cost of parking at Javits or what you are going to buy at Staples. When working for someone else simply not the same it’s ‘usual and customary’. We all have masters. Bosses Investors, Co-Workers, or the Market.Well my saying might be ‘we all eat shit we just sit at different tables’.That said there is a difference. When working for someone else the rules are more imo arbitrary and there are personalities involved, right? I look at people that rise to the top in large corporations (say Rex Tillerson) and think ‘they must be good but they must also be really lucky in so many non obvious ways’. So screwy though. Never question money spent for some things (no questions asked for computers, supplies and what not). But get a movie at the hotel for $4 ‘we don’t pay for that’. Very loose controls.
and have a really fun timeBut it’s a different kind of fun which is (noting my other reply) partly my point. Things that are hard in a certain way and where you can control the results are very often much more enjoyable and rewarding.
Don’t get me wrong I long for the days when I used to go to Alex Brown in Baltimore and listen to presentations from companies that were getting close to $20mm in sales and getting ready to go public. Those days so sadly are over. I’d like to see them come back. But you’d have to change a ton of regulations.
What Mark didn’t talk about is if IB are banging on the doors of startups offering to take them public? What the inside story here? Could it be the loss of credibility of VCs and IB that still lingers from the musical chairs of last 12 months of the internet bubble?
Very funny ‘this shit’s easy’ with reference to Mark’s early success with film production (with Enron (great movie)) at 14:39. After the first two successes Mark says ‘and you haven’t heard of anything we’ve done since’.  One reason is certainly that Mark is not full time only film. He is film plus a 100 other things. While the film business is certainly not easy it works in many ways similar to VC or angel investing or investing in general. Spread the risks and recognize talent. As such had Mark been able to put 90% of his time into the film business no doubt we would be hearing about other films that he has made and he might have produced more financially successful films. You can’t expect to be half into a business and compete with really smart people who are 100% in that same business. Not true. Magnolia did “Client 9 – The Rise and Fall of Elliot Spitzer” (GREAT MOVIE)All Good Things (about Robert Durst), Casino Jack and the United States of Money, and a bunch of other movies that I have really liked. In fact when I am on Netflix and see “Magnolia Pictures” I am usually much more likely to like the film and rate it a 4 or 5.
Is eating young companies more than just not having to spend on R&D perhaps. Is it more than just a smaller company not having to worrying about competing with a bigger Goliath? Maybe a defensive strategy of bigger companies eliminating their competition before a market share or relevancy problem presents itself-why let David grow up and realize he can build an effective slingshot. After all – Cronos ate his own kids to protect his throne. Great points made for public exit strategy resurgence. My question – do the younger entrepreneurs have an ingrained culture of not trusting or feeling the need for bank owned Wall Street anymore? Kahneman questions and path at this point probably and what experienced boards are in place for. Great discussion, great video.
coincidentally i watched this last night. yes, content is hard.I saw you in that other Upfront interview. You’re looking ready to retire.
I agree with Mark. We can unlock huge value when a tech co goes public. We get more diversity and a better community. And importantly, we democratise public power through this distribution ie. not just a few powerful co’s but more than a few. As to the entrepreneur who doesn’t want to be accountable to Wall Street and shareholders – get over it. That’s your job. If you haven’t done it before & you don’t want to learn , get a mentor or find some one who you can work alongside who can handle it .
Capable, articulate, self-aware. Future President?
Mark’s approach ffor blocking replys in Twitter is short sighted. I like the approach of periscope better. Let the community as a group decide. Secondly the group think amoungst VC seems to be getting worse. I remember when Mark Cuban was the brash, outspoken contrarian. Where are the contrarians?