Having watch the Blue Ocean Video and read the article about Mark Cuban, give 2 observations on how Mark Cuban decision to be Me only? the article is at the bottom of page and video is
Q1 What differentiation is he using to disrupt pharma?
q2. What attributes from Pyramid of Success does he demonstrate to be a successful entrepreneur?
q3. What is your prediction on whether or not he is successful? Why?
q4 Any lived experience on when you worked on a Blue Ocean assignment? Go BIG or GO Home?
q5 How did you feel about the experience?
PLEASE USE THE ARTICLE BELOW
Drug companies face a whole other kind of trial, thanks to a dose of this entrepreneurial legend.
MARK CUBAN GRINS. Im the luckiest guy in the world, he says. Its mid-March and hes on a stage in front of a thousand fans at SXSW with tech founder Falon Fatemi of the new audio-video entertainment platform Fireside talking about, well, just about everything: why everyone should get a crypto wallet, how the metaverse will change media, what TikTok means for pro sports. And, little surprise to anyone whos watched him on Shark Tank or run into him on Twitter, Cuban has well-developed thoughts on each.
Ever since he sold his startup Broadcast.com to Yahoo for $5.7 billion in 1999 to became an instant billionaire, Cuban has followed his curiosity into a wild array of fields, from health care to fintech to media, consumer products, and, of course, sports. Where others might have settled into a comfy life as an NBA owner/playboy, he became a kind of super-entrepreneur, not only investing in a diversified portfolio of startups, but getting deeply involved in some as well, even co-founding a few.
Cuban describes his process as ready, fire, aim. He plays up the whole just-a-lucky-kid-from-Pittsburgh thing. But to anyone who works closely with Cuban, hes more like a determined kid from Pittsburgh who still identifies with his blue-collar roots. Associates marvel at how hard he works, how deeply he likes to research and understand complicated systems. People dont realize how technical he is, says Fatemi, whose new app for creators Cuban co-founded with her, after having invested in her last company, an A.I. startup called Node.
But while his collaborators admire what Fatemi calls a bias toward action, hes hardly firing blindly. Its still being really smart about what actions you are taking and what money you are spending and where you are firing, she says. A prime example was right onstage with Cuban at SXSW, in orange block letters on the front of his blue T-shirt: MARK CUBAN COST PLUS DRUG COMPANY. Thats the name of the startup that represents perhaps the biggest entrepreneurial swing he has taken since Broadcast.com. Once upon a time, Cuban was prescient in recognizing that streaming would upend live entertainment, but its been a couple of decades since hes had a similarly transformative take. And it didnt happen overnight. Some three years ago, Cuban got an email from a 33-year-old radiologist named Alex Oshmyansky, with the subject line Cold pitch. It was one of many he gets daily. (Cuban is famous for answering cold emails; see How to Get Mark Cubans Attention, page 54.) Oshmyansky wanted Cuban to invest in a pharmacy he was starting to custom-make generic drugs and skip the layer of middle man wholesalers and so-called pharmacy benefit managers, which are typically responsible for heavy markups.
Mark saw a huge societal problem with a pretty direct solution: Just make and sell medicines for less, Oshmyansky recalls today from his home base in Dallas. Cubans instinct was to see if Oshmyanskys idea could be bigger. He responded to the email and began peppering Oshmyansky with questions. What could he do if money were no object? Rather than custom-make drugs for individual patients, what would it take to buy or make lots of drugs at scale? What kinds of professional resources would be important? What kinds of relationships? On what timeline? Sometimes, he actually directly came up with ideas to do much more, such as building a manufacturing plant in Dallas, says Oshmyansky.
This all happened back in early 2019and by the following year Cuban had not only invested in Oshmyanskys idea but also signed on as a co-founder of a now much more ambitious company. No longer was thisas Oshmyansky had once envisioneda noble nonprofit. Now it was a for-profit enterprise bent on buying or manufacturing as many different drugs as possible, distributing them at the widest scale possible, and offering the lowest prices possible and total price transparency. Three years of relationship-building and research later, the company started selling medicine early this year.
By the time Cuban sat onstage at SXSW in mid-March, Cost Plus Drug had 110 drugs available for purchase, direct-to-consumer on its website, for a fraction of prices elsewherewith ambitions to offer thousands. The prices are based on nothing more than a 15 percent markup over the drugs costplus a flat pharmacy labor fee of $3. The savings can be remarkable. Consider imatinib, an oral chemotherapy drug sold under the brand name Gleevec: Thirty 400-milligram tablets cost $120 to $150 at mainstream retail pharmacies, including Costco and Walmartand nearly $800 at CVS and $2,400 at Walgreens, according to GoodRx. At Cost Plus, the same amount of the drug goes for less than $50. The company has similar deals on many more common medications, such as the generics for Celebrex, Cipro, Flomax, Lipitor, Tamiflu, Wellbutrin, and Zoloft. Pretty much the drugs that we have, if we have yours, cost less than your co-pay, he told the audience in Austin, to a round of applause and hoots.
Cost Plus offers a head-slappingly simple solution to a problem thats given politicians and pundits fits for years. It doesnt yet accept insuranceCuban has high hopes that it willand it might not solve the problem of runaway health care costs at their root. But it solves an immediate and large part of the problem for many people, and in so doing might end up muscling the industry toward a more fundamental solution. What might one day be Cubans biggest financial success might also make his biggest impact on the world.
With his Mavericks steaming toward the playoffs and Cost Plus Drug causing a stir, Cuban was busier than usual this spring, but he took time to discuss the new companys approach to unlocking valueand opportunityby dismantling an industrys convoluted cost chain.
Lets start with the market youre entering with Cost Plus Drug. Why are drugs otherwise so expensive? Can you give us a brutally honest assessment?
Im still learning the details. But what I have found fascinating is that the manufacturers are not the bad guys they are made out to be. And that includes some of the insulin manufacturers.
There are companies called pharmacy benefit managers that are the gatekeepers to all the prescriptions paid for by insurance companies. If the drug manufacturers want their drugs prescribed, they have to play the game the way the pharmacy benefit managers want it played. Which means setting artificially high retail prices, paying rebates back to the PBMs, and more, to stay approved. As a result, the PBMs have the most power in the industry. Not the manufacturers. To make things worse, the PBMs are already vertically integrated into insurance companies and the largest pharmacy chains. So they are able to leverage their economic power
at the expense of patients.
Can you explain, in a nutshell, how Mark Cuban Cost Plus Drug Company does it differently?
Our goal is to be the low-cost provider for all drugs that we are able to sell. We sell at our cost plus 15 percent. And we are currently building our own manufacturing plant in Dallas with the goal of getting our costs lower and expanding our inventory to thousands of drugs.?
Why has this not been done before?
Its not typical for a company to start off by saying, We are not raising money, and we are not trying to maximize profitsparticularly given the amount of capital required to start a business like this and the three-plus years with no revenue it has taken us to develop the required relationships.
If we wanted to maximize profits as most companies do, wed have to work with insurance companies and the largest pharmacy benefit managers. Their rules and economics would allow us to get far bigger and more profitable, but would require us to sell at higher prices. We chose not to work with them and to proceed independently.
As a wealthy person, you probably dont experience the same frustrations with the cost of health care that many Americans do, so Im curious how this issue hits home for you. I have not had recent experience. But I have had to pass up medical care in the past because I didnt have insurance and couldnt afford the required care. Ive had to go to dental clinics that were used to train students to get root canals. And if you see my hands, my pinkies face the wrong directions because I couldnt afford medical care for rugby and basketball injuries.
But this isnt driven by personal experiences. We all know people who have had to ration their prescriptions or choose between food or shelter and their drugs. That should never, ever happen. We hope to change it.
Is there a way this model changes the wider pharma marketnongenerics, for instance?
Well grow from our current inventory to thousands of generic and branded drugs. Will it cause others to change how they do business? I think so.
When will the Dallas manufacturing facility youre building start operating?
We hope to be open before years end. And we will make as many drugs as we can. The good news is that we have room to expand if need be.
Will Cost Plus ultimately be able to work with insurance?
Yes, we hope to. We have created a PBM that will be rebate-free and lowcost. That allows us to work with insurance companies if they want to work with us. This also allows us to work with self-insuring companies and other organizations, like unions.
What are the biggest obstacles that have arisen since you started on this path?
The time it takes to build trust that we are real, well-financed, and will do what we say we will do. We have been doing this for about four years, but didnt launch until January 19 of this year.
What are the regulatory hurdles and your strategy for clearing them?
There are licensing and regulatory requirements we have to follow. We follow the same rules that everyone does. This is not a startup that is trying to avoid regulations or licensing requirements. Just the opposite. We make sure we dot every i and cross every t.
After Oshmyansky emailed you, what did you want to know about the idea, and him, before you got involved?
I wanted to know if we could disrupt the industry and be the low-cost provider at scale. As he went through the requirements and the costs and the timeline, I got more interested. Part of the process was co-founding Cost Plus Drug. With my funding and guidance, it allowed Alex to go out and make the deals and commitments that built trust. Plus, Alex is incredibly smart and detailoriented. He has the exact right skill set and background to work on this. He is the exact right partner for this company.
From an entrepreneurial perspective, the story of Cost Plus is inspiring, because its tackling a seemingly intractable problem. Talk about the process of seeing entrepreneurial solutions to those kinds of problems. Most times, these efforts dont work.
You push up against the incumbents and at some point you realize either you have hit an insurmountable roadblock or you have to be able to raise hundreds of millions, or billions, of dollarsand that kills the company. The beauty is we had the capital and patience and willingness to start small and push for impact more than profits. Most companies dont have that luxury.
Are there other seemingly intractable problems that you think are ripe for that kind of patient-capital approach?
I think this approach can extend into hospitals. Besides there being waste, the economic goals are not in sync with the goals of keeping patients healthy. There is zero transparency on costs and even pricing. The misalignment of hospitals and insurance companies to optimize for profits rather than health is ripe for disruption. [A hospital company] wont be able to scale as quickly as Cost Plus Drug has, because of the brick-and-mortar requirements. But it is time for it to happen.
How much of your time and energy is going to Cost Plus today?
Quite a bit. But the better news is Alex and [trusted Cuban deputy] Ryan Kline have put together an amazing team. They do all the day-to-day work. I work on strategy and financial elements.
Cost Plus seems like a kind of legacy project for you. How much are you willing to put into it?
As much as is required.
TOM FOSTER is an Inc. editor-at-large.
How to Get Mark Cubans Attention
Or the attention of other mega investors and mentors
Stories of cold emails to Mark Cuban are oft-repeated startup legendAlex Oshmyanskys being the latest, and arguably most ambitious, example of one that paid off handsomely. Big Data company FiscalNote got its seed funding back in 2013 when co-founder Tim Hwang co-emailed Cuban. The Zebra founder Adam Lyons got his start in 2012 when he sent a similar email. Dhruv Ghulati of A.I. firm Factmata also started with a cold email, and so did Greg Maselli of food-freshnesspack- maker SAVRpak. The list goes on.
Cuban doesnt shower money and advice on startups just because he loves founders, though. Hes a shrewd investor and proven entrepreneur who respects the hustle and values good, hard informationand an informed debate. Like any investor, he gets excited about big opportunitiesfinancial ones, naturally, as well as those that could leave the world a better place.
Of course, chances are slim that any single entrepreneur not only gets Cubans attention but also scores an investmentbut the following strategies should help grab the attention of other big backers, too.
1. GET TO THE POINT
Dont waste words on flattery and warmup. With an NBA team to lead, a reality TV show to make, a portfolio of hundreds of companies, and an active role in a revolutionary pharma, Cuban is a little on the busy side. Say why youre getting in touch and what youd like from him. And make it clear why its worth his time. Be direct and to the point, says Oshmyansky. And dont try to sugarcoat things. He has an amazing BS detector, and theres no point trying to hide obvious truths.
2. FIGURE OUT HIS PASSIONS
Cuban talks publicly a lot, so if you do your homework, you can identify what subjects are trending for him. Early in the pandemic, for example, he was reading book after book about A.I. and teaching himself to design deep-learning modelsbecause, as he told Inc., Ive been through the PC revolution, the networking revolution, mobile-computing, cloud-computingand A.I. blows them all away. Whoever dominates A.I. will dominate the world over the next 25 years.
3. SHOW HIM YOURE SERIOUS
Although he appreciates brevity, Cuban is also a voracious reader and responds to detailed information. If youve engaged him, then keep him informedbut dont bore him. When Jenny Goldfarb, founder of Unreal Deli, a maker of plant-based lunchmeats, scored her investment from Cuban, his team asked that she send him weekly emails about her companys progress during the due-diligence part of the deal. Thats standard practice for Cuban. Most founders stop or slow down those messages after the deal closes, but Goldfarb kept sending them every Fridayfour or five paragraphs, including updates on big sales wins, new product initiatives, big hires, and looming challenges. I think it created a little buzz in his ear, so he really knew how we were doing, she says.
In response, Goldfarb gets weekly feedback from one of her entrepreneurial heroes. Typically, its a handful of words, maybe a full sentence, but its very exacting. Hes not messing around. Her companys new menu of vegan subs for ghost kitchens is a direct result of one of Cubans responses.
4. APPEAL TO HIS SENSE OF FAIRNESS
Institutionalized inequities, nonsensical legacy systems, middleman bloat. These are the things that get Cuban fired up to make change. In general, the ideas that Mark tends to get most enthusiastic about are those that directly improve lives, says Oshmyansky. Whats more, he is willing to invest capital for the long term without looking to maximize absolute ROI in the raw financial sense. That is hard to find.
Its not that Cuban values slow returns more, but that he simply has the means now to pursue them. Its the potential for change that matters to him, not the speed of a return. Fatemi of Fireside adds that Cuban tends to attack inefficiencies by removing entrenched systems that drive up cost or limit accessPBMs, for instance.
5. AND FOR HEAVENS SAKE, DROP THE JARGON
Cuban doesnt surround himself with corporate machinery. Theres no giant PR firm deflecting requests for his timejust him, responding in plain language, with unambiguous intent. When Fatemi, Googles youngest employee before she became an entrepreneur, relapses into tech-business jargon, Cuban is the first to call her out. Stop being so Silicon Valley, hell say.
She recalls an early presentation in which she called Fireside a platform as a service. Cuban stopped her and told her nobody would know what that meant. He then zeroed in on what the platform offeredparticipatory entertainmentand suggested she reframe the presentation around that, emphasizing the use rather than the business context. Its that same instinct, Fatemi says, that makes Cuban probably the best salesperson I know. He uses straightforward language thats transparent and everyone can understand. Thats also what he responds to.
Theres no one way that Cuban pairs up with the founders in his portfolio of startups. Here are the approaches from three of Cubans highest profile partners.
WHAT IT DOES: Digital banking app that offers small cash advances and does away with overdraft fees
CUBANS ROLE: Investor
APPROACH: Wilk scored a $300,000 investment in 2011 for his content-syndication company, AllScreen, after cold-emailing Cuban. Six years of collaboration and trust-building later, Cuban invested $3 million in Dave.
WHAT IT DOES: Offers a platform for entertainers to host shows with audience participation
CUBANS ROLE: Co-founder
APPROACH: The two met at a party over a decade ago and Fatemi made it a point to stay in contact and run ideas past him. Cuban ultimately invested in her first company, a B2B A.I. service called Node, before partnering on Fireside.
COMPANY: Unreal Deli
WHAT IT DOES: Makes vegan, plant-based lunchmeats
CUBANS ROLE: Investor
APPROACH: On Shark Tank in 2019, Goldfarb sought $100,000 for 10 percent of her firm. When Cuban offered $250,000 for 20 percent, she grabbed it. Now, hell make appearances on sales calls when hes asked and troubleshoot when crises arise.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more