Hi, I'm Kara Swisher, the editor-at-large of ReCo, you may know me as someone who thinks there should be a TV show about child adventures trying to get funded by venture capitalists called Baby Shark Tank, but in my spare time I talk tech and you're listening to ReCo decode from the Vox Media Podcast Network. Today we're going to play two live interviews I recently conducted in Las Vegas. First you'll hear my interview with investors Mark Cuban and Steve Case about a wide range of topics including finding talent that is not in Silicon Valley. And later in the show we'll play my interview with Scooter Braun, a well-known manager and talent agent who represents celebrities like Ariana Grande, Kanye West and Demi Lovato.
These interviews were recorded in front of a live audience at the Skybridge Alternative's conference in Las Vegas, also known as Salt. So let's go there now to hear these interviews starting with Mark Cuban and Steve Case. So we're going to bring another chair out and we're going to bring out two people that I have met when they didn't have any money which was a nicer time. They were much nicer but they are nice guys and we're going to talk a little bit about where we're also going in innovation.
Anyway, so coming out right now, Mark Cuban who wants to be known as an entrepreneur who fucks up a lot of the time and Steve Case, come on out. Hi guys. Hi. Good to see you again.
Good. How you doing? I'm great. I'm going to headline here is technology entrepreneurship as a force for social progress.
You guys met, how long ago? We all met 20 years ago. Over 20 years. So Steve backstage was telling me a story when you were trying to buy his company, right?
We were just trying to sell his company. We didn't consider buying it. He ended up selling it to Yahoo for $6 billion and we thought that was a little high of course. We were not one of them.
It was a bargain. Yeah. I think at the time we were at, I don't know, maybe $100 billion or so. I know I'm not one to talk but thought it was a little pricey.
But he was smart. He had the idea and kind of collage of stock and made a bunch of money and bought a team and then became Mr. Shark Tank. So it's a great entrepreneur run and now he's celebrating entrepreneurs for all the country.
Let's talk about that. So one of the you guys started off with your businesses as they were in early internet. That's where you made a lot of your money. You all made the money but then you shifted quite a bit in your careers.
One of the things Steve you've done is moved on to the idea. I know you did this with me three years ago. We started talking about this idea about the next internet has to be made up of social entrepreneurship. It has to be regulated.
They have to be thinking about bigger social issues and we have to find talent elsewhere because we're on a downward spiral of innovation. Talk about what you've been doing and where you are right now. There's two themes that drive what I'm doing now. One is, we call it week, which is what you're saying, the third wave of the internet.
We all were part of the first wave getting everybody online. We started out in 1985, only 3% of people were online and they were online one hour a week. It was early days and that whole first 20 years which is getting everybody connected. The on-ramps and servers and everything.
That's at the stage for the second wave which has been mostly about software and apps writing on top of the internet, mostly on top of smart phones, Facebook, Google, etc. The third wave is really integrating the internet in much more seamless ways for our lives, changing how we think about healthcare and food and agriculture and smart cities. It does require a different mindset, I believe. Partnerships are way more important.
Policy regulatory issues are way more important. These are regulated sectors. The second idea is this rise of the rest idea. How do we make sure entrepreneurship is happening everywhere in the country and entrepreneurs everywhere are getting back.
The market goes a lot of this as well. Last year for the investors out there, I guess all of you, 75% of venture capital in this country went to just three states, California, New York and Massachusetts. So Ohio less than 1%. Virginia less than 1%.
Michigan less than 1%. Last week I was in Florida, largest state 1.3%. Texas, everything is bigger in Texas, a little bit bigger, less than 2%. The reality is most of the money is back in the entrepreneurs and places like Silicon Valley, not in many parts of the country.
Since the start-ups are great, most of the jobs, that's the problem. It's also a great, I think, investment arbitrage because most of the capital is in one place, not surprisingly supply-demand. You know, the dynamics, the value-ways, tend to be higher. In most parts of the country, they tend to be lower.
It's a big opportunity. The third wave and the rise of the rest, I think, will convert. That's the dream is to find these big companies, but they do tend to coalesce, Mark. But you weren't.
You were unusual. You were one of the few, if I recall, that was anywhere else. I didn't have to travel very far. I remember Mark in recent, wouldn't leave the Hobies in Palo Alto.
I think that's, he went maybe between his house and Hobies. But they didn't want to go anywhere and they wanted to stay within the Stanford corridor, essentially. So talk a little bit about this because it's always been the idea that this was going to happen, that there was going to be Silicon-Holler and Silicon-Holland-Sitt. It does not happen.
But Scooter said it best when you were talking to him last, if you're on a mission and you're driven, it doesn't matter where you are. And effectively, tech has become the industry in Silicon Valley like the movie industry in Los Angeles. And that creates its own set of problems. I didn't have to deal with the politics.
I didn't have to deal with looking over somebody's shoulder for the next big deal, hiring somebody to be an administrator who said, I'm only there until I get my startup funded. People came to Dallas. People come to work. And we get the job done.
And so it really didn't matter. And the whole promise of the internet back in the mid 90s was you connect everybody anywhere. And so it never even dawned on me that I should be in Silicon Valley or to move. And in fact, it was so much more friction-free being in Dallas.
It made a lot easier. Well, also, history lesson, Ms. Swisher. The first wave of the internet was super distributed.
Mark was in Texas. Sprint was in Kansas City. Hayes, the big modem company, was Atlanta. Compressed with the online service was in Columbus, Ohio.
Prodigy was White Plains, New York. IBM's PC operations were in Boca Raton. We were outside of Washington, DC. Microsoft actually started in Albuquerque and moved to Seattle.
I could get a dozen other examples. And if you go before that, even, remember, there was Wang and Digit David. Which was quarter 128. The 128 outside of Boston, right?
And so all you had in Silicon Valley back in the early days of PCs and networking was HP. You know, in Apple. It still is. If you see 50% of the venture level money goes there, how do you shift that?
I mean, it didn't happen that way. Coal less in one place. Oh, it didn't do you. Oh, it didn't do you.
In a second wave, when it became about software, Silicon Valley, Rose de Promence, are dominant. When I point you, the first wave, that was not the case. The third wave, I do not believe it will be the case. The reason for that is a lot of the domain expertise that's going to be critical in the third wave, the partnerships that are going to be critical in the third wave, are in the middle country.
Healthcare, for example, sure, Stanford does some awesome things. But in the Anderson and Texas, Cleveland Clinic in Ohio, Mayo, Minnesota, Johns Hopkins, and Maryland, Baltimore, those are the standards of excellent. The big healthcare plans are United Health in Minnesota, a bunch of companies in Nashville, and farming, AgTech. The big companies are Monsanto, Head Cord, St.
Louis, Louisville, Lincoln, Nebraska. That's where the expertise is. So there's an opportunity because that domain expertise is going to matter more. Partnerships are going to matter more to build up these sectors in these cities.
But it's not going to happen if all the money is somewhere else. As a result, we've seen in the last several decades. I'm sure it's true with people here, family members. We've been a massive brain drain.
People have grew up in a lot of these places left because the money was there. The opportunity was there. It's a lot different now. So in terms of capital invested, the percentages are absolutely correct.
In terms of number of businesses started, it's shifting dramatically. Because over the last 10 years, you need a laptop and a broadband connection which is more prevalent and a cloud account, but it's AWS or whatever. And now with AI, it's even more so. When you're in those concentrated areas, you're competing for resources, whereas AI isn't based in Silicon Valley.
The best technologists are coming out of Montreal, Boston, Pittsburgh, Austin. Silicon Valley can be their own little world. It's an open opportunity for us. I'll give you three examples from last week because we did a RISE REST tour in Florida.
Orlando, amazing things happening around Interactment and obviously Disney is there, but also Electronic Arts has 1,000 people there. The university created a program around interactive entertainment, booming. Space Coast, 50 years ago, it inspired us all with Apollo 11. There's a ton of space tech startups in that space coast area.
And finally, in Miami, Chewy was a e-commerce company acquired for $3 billion, 10,000 employees outside of Miami. Magic Leap, one of the most interesting technology companies out there. They raised over $2 billion. I have 70 employees.
Chewy is still out on that one. Chewy is still out on that one. Chewy is still out on that one. When you started covering up, you got a sign that nobody else in the ocean wanted to cover.
Nobody believed in the internet. Stuff happened. I drove out to the end of Virginia and nobody else did. That was the rise of the rest.
Thank you for supporting us. My point about Magic Leap is 1,700 people, mostly in plantation Florida, 45 minutes north of Miami. Hundreds of top quality engineers have been recruited to the left Silicon Valley to go there because they believe that was the opportunity and they got well funded. We just on last year, do a security, you got acquired in Ann Arbor for $3 billion.
Salt Lake City got acquired for $8 billion. There are examples of this happening, but people are not paying attention. Investors are missing out on this. I think it is one of the great arbitrage.
Two questions. Why are investors not paying attention to this? Two, one of those statistics I saw is startups are at its lowest point in 30 years now. Is that correct?
Two different questions. I think investors are investing more locally because you can't miss it. Every Decent-Sci city has a variety of universities and there's a variety of opportunities there. It's cheap.
For a tech startup, even healthcare startup costs nothing. I don't think they have to go out and make the rounds for VCs. In terms of startups, up until the mid-90s, you had barbershops with a startup. You had different types of labor.
Those types of startups have diminished dramatically because people aren't coming out of school, learning trades and just rolling out and starting a company. If you pull that out, I haven't seen any shortage of startups. I haven't seen any shortage of people wanting to start companies. We have thousands of 50,000 plus people try out for start-tank every year.
I think if you look at different categories of startups, maybe you'll see some categories really fall in bat, particularly trades driven ones. I think technology. Where are they then? Let's start first.
How do you get, you have 50,000 flying? You think there's no shortage of startups anywhere in the country? What about you? Well, startups are down.
That is the data. But there's also an ethos that leads more people, particularly younger people who want to start companies. They often feel like they have to leave where they are to go to someplace else. And the answer to your earlier question about why the investors focus on that, it's not insane.
They're basically investors like that in recognition. They do more in the future of what's worked in the past. In the last 10 years, the best performing venture fund in Silicon Valley have mostly invested in Silicon Valley. So let's do more of it.
That doesn't mean it's going to change, but people are just doing more of the same. Venture Capitalists, it's convenient. They have to get on playing to go to some other places. Rather getting their cars, some would rather bike to the company.
VCs aren't the greatest source of capital. The recent VCs chase growing companies, they want to put the last money in. They want to be in Lyft and Uber right before they go public because they can create puts and play all kinds of games and stay there in unicorns. The reality is, the companies I get that I've invested in, 5,000, 10,000, 500,000, whatever it is, they're everywhere but Silicon Valley and they're my best companies.
To me, if somebody comes to me from Silicon Valley, their opportunity is minimal because to me it tells me that they're not recognized. The rights are higher, the employees are higher, they're not in it for the right reason. If they be anywhere else, if they were, I've seen no shortage of opportunities, no shortage of investments. The returns are great.
VCs just play it completely different. P.E. plays it completely different. Angel and Seed.
I don't see anything. The other piece of it, and Jim Breyer, who's I know here, is one of the investors on the rise, we have 40 individuals, Jaydaleo, Rubenstein, John Doar, people like that. Great group of folks. Jim Breyer told us, we were talking about this, because of his success back in Facebook and Excel in our bar capital, he kind of was everybody in Silicon Valley and because of what he has done in China, he kind of knows a lot of things in China.
He doesn't really have a network in most parts of the country. They're still and then create the support mechanism around these companies. That's another reason why they don't do it but just because they don't do it, doesn't mean they will do it. The future, I think, is more and more people will pay attention to this.
It's more and more we'll see there's outside investment opportunities. When these companies go public, nobody says oh, it's in Columbus, Ohio, there should be a discount but that venture stage is absolutely a discount because of the supply, demand, and balance. That will close over the next 20 years, we're just trying to figure out ways to accelerate. How many accelerators are there now?
There's no, you don't hear stories about accelerators closing every other minute, right? popping up everywhere for every group, for every vertical. I mean, they're just nonstop. And that tells you, right?
The accelerators aren't based in Silicon Valley. Everywhere else. Nashville, to Tyler, Texas, to Dubuque, Iowa. They all have accelerators.
And there's business competitions everywhere. Every college has got an entrepreneurship group right now. And so there's kids coming out of every community college. There's no shortage.
I think we're measuring wrong when we say that there's fewer companies being started, that there's no capital going outside of Silicon Valley. The biggest deals by far, no question. But I just all just talk about, yeah, the kind of entrepreneurship. Bullshit, right?
Bullshit. I mean, it's not even close. It's so cheap you can start anything anywhere, anytime. There is a problem, though.
Several problems. Just to be. I want to talk about what are the challenges. I'm pretty bullish on this.
Challenge 1 to 1 to 1 is the capital, which leaves me believe. Challenge 2 is this talent issue, where there has the best people in the Silicon Valley. Just doing it, speaking of the TechCrunch Conference, maybe 2000 people in the room. As for a show of hands, how many people were from the greater San Francisco Bay Area?
Less than 10%. Sensing everybody in Silicon Valley is something from someplace else. As a result, because they left, they're less likely to start companies there. And as a company succeed, they don't necessarily have the talent to help scale it.
You've got to address the capital issue, then you have to address the talent. And you also need to create more of a fearlessness in some of these communities. There are a lot of parts of the country. There are little causes.
There's a lot of risk. There's one great thing about Silicon Valley. Is this anything as possible? Change the world.
Kind of a. Which is not great thing. Sometimes it's too extreme. But you're having a little more of that kind of.
You have to deal with scale. Right? So if you run a fund, you have to hit numbers, right? And you guys do amazing things.
I think you're smarter than 99% of them out there, because you're going places where other people aren't. But the reality of technology right now is AI is changing everything. And so what does it take to learn AI? So I said that I do my machine learning tutorials.
I do my neural network tutorials. And so I understand it. And there's a lot of bullshit. More bullshit coming from Silicon Valley.
But any kid can take that, make that effort, and learn how to create a neural network, get on to AWS, get $100,000 credit, go through their school, and get them. There is no shortage of opportunity. It takes brains. It takes effort.
It's like Scooter said, you've got to break through barriers and just do what it takes. But there's no barriers anymore at all. I think he's correct in the amount of talent around you. And I think you don't think that.
No, not for any time generator. No, not at all. Because you need in an AI world where you're building, you need domain expertise. And domain expertise comes from everywhere.
So if I'm building a machine learning tool, and probably half the people here have dealt with machine learning or neural networks, they need people who understand the vertical that they're approaching. That's not the type of expertise that Silicon Valley has. You don't have people who are experts in real estate just moving to Silicon Valley to be an expert in real estate. They're all around the world.
If you want medical expertise, you go to UPMC in Pittsburgh, right? Where there's just oil and gas, you get it out of Texas. And all these vertical applications, just like back in the day, we wrote software for different verticals and applied it. Then we put it on a network.
Then we put it on the network. If you have vertical expertise and you're willing to sit down and scrub through AI, learn how to use data, and how data is becoming so much more valuable, Silicon Valley certainly doesn't have any type of monopoly on data. Now, we can talk Facebook and all those other things, but it's a startup. The talent issue that does get more difficult as these companies do scale.
You're going from 10 people to 50 people, 100 people to the OK. You're going to 1,000 people or 2,000 people. It isn't an issue, which is why you have to slow the brain drain and create this boomerang of talent. What Marcus sang around is domain expertise and builds on my third wave comments.
He's incredibly important. Again, this is where Silicon Valley might get trapped in its own dogma. The belief is, as you know, in Silicon Valley is essentially ignorance is a competitive advantage. I have a tape, it's a competitive advantage.
And there are examples like PayPal. It's famously said, the reason they were successful is they knew nothing about the credit card industry, therefore brought fresh insights that led to PayPal. That is true. I granted that.
But knowing nothing about health care is not going to give you the partnerships you need. Not going to give you the ability to deal with some of the regulatory issues. You actually do need to know something about health care. You actually do need to know something about health care.
I had a Silicon Valley person tell me a couple of years ago that building cars was trivial. I hit them. But the concept of it, I was like, this is not trivial. No, it's easy.
Everything else is hard. No, actually manufacturing is something. Sorry. It was a discussion about where autonomous cars are going.
This was not Elon Musk. He does not think it's trivial. Obviously. He definitely doesn't think it now.
Absolutely. We're going to take a quick break now. We'll be back to my interview with Mark Cuban and Steve Case after this. This week on Network In Shell, I'm joined by Tanks and Atra, the meme king with over 15 million followers across Tanks Good News, influencers in the wild, and his personal account.
Tank is breaking down what the meme economy really is, how much a single sponsored post pays, why major brands are throwing serious money at jokes and how meme culture think preparation age, starter packs, and a perfectly timed screenshot is actually reshaping how we think about money and value. Yet ready for a conversation that'll change the way you scroll, make you rethink what's going viral is really worth, and prove that sometimes the most serious money moves are wrapped in the silliest of jokes. Listen, wherever you get your podcasts or watch on YouTube.com slash your rich BFF. So when you think about what you need, then, throughout our country to create, I want to get to social progress by the end, but to create great entrepreneurs.
Now you do it on your show and it's a lot show busy kind of thing with a, so like that. But I want to talk about what the essential elements of entrepreneurship now need to be and what we need in this country to have to create that through the education system. But what do you think the key parts going forward to the next era are for 100? Because they, they change over time.
I mean, I think we need to start educating our, the reason I do Shark Tank is just since the message that if someone walking on the stage can do it, you can be anywhere and do the same thing. You know, being an entrepreneur is just taking a step, you know, having that idea, having that willingness and just taking the next step and just doing it. And, you know, I think it's just a matter of encouraging it. It's not like it's some special God given talent that entrepreneurs have.
They sell it like that. There's an ethos around it that there's special in some fashion. Yeah, maybe once you get there, some people like to brag them and talk that way. But look, we all that have kids, when our, when my nine year old comes back and sells, you know, a little bracelet that he made or my daughter puts something together and sells it where something that has 11-8 stand.
Yes, right? What special talent is that? You know, it's just apparent encouraging and letting people know. Now, when we say entrepreneurship is dying, socialism is coming.
Yeah, yeah, yeah. I mean, that's self-defeating. Shark Tank, I think, has been terrific in educating people about what startup start-up start-up start-up start-up where I was growing up. I mean, it was, it was not common concept.
You want to graduate in college. It wasn't like a startup because it was much venture capital. So we're not backing 21 year olds. So, you know, just creating that sense of possibility is super important.
But going back to your question around how we kind of train them. And this K- K12 is obviously broken. And one of the areas we need to focus on is the skills for the future, for the jobs of the future. And some of that, coding is important for people who have that aptitude, but not everybody should be a coder.
The other one, the other C's, I think, will define this third wave, creativity, collaboration, communication skills, those things are super important and they're going to be the difference between making a break. In an AI world, you have to be knowledgeable about something. Right? Because I'm so specific thing.
Right? You have to have something to acknowledge because the whole idea of building the neural network is identifying what's going to feed what, right? And what's the outcome that you want? And knowing what is right, what is wrong, and where biases aren't being able to test for it.
It's not the programmers because AI is going to, you know, 20 years from now, if you're a coder, you might be out of a job. Right? Because it's just math. And so whatever you were defining the AI to do, someone's got to know the topic.
If you're doing an AI to emulate Shakespeare, somebody better know Shakespeare. And that is a key component. So I think a liberal arts major is just as important in the future as a coding major. Now, the coding major who graduates this year probably has better short-term opportunity than the liberal arts major that's a Shakespeare expert.
But long-term, it could be, it's like people who learned Coball or Fortran and thought that was the future and they were going to be covered forever. The value is going to diminish over time. So how do you bring that into the educational system? Because a lot of it's been focused on code.
That's code. And I've always thought that's going to be a play. Eventually, it's going to mark Cuban AI.org. Literally, we did for some disadvantaged schools in Dallas, Microsoft and I and a couple other groups.
We got together and started teaching kids using spreadsheets how to do machine learning and how easy it is. So here's a set of data. And this is, you know, if flowers all have these certain identifiable aspects, what's the next one, the probability of what the next type of flower is going to be? And it's easy to learn.
Right? Someone's just got to do it. And we're not alone. I mean, where I grew up in Pittsburgh, there's Monttour High School that is doing the same type of things.
And because it's like when we were getting started, PCs were so hard. Getting on the network, you had to have a TCP I client, a modem, right? It was so hard. AI is going to be second nature going forward.
But if you make it comfortable for people now, that's where the innovation and the entrepreneurs come from. Because they see things that are difficult to other people. And they think it's second nature. Just like apps.
Apps used to be a big deal. Not knowing even things about it. Is there enough push by the government to push these things so the government was a partner in this for many years, this idea? Or maybe they weren't.
How do you? No, I think there have been a number of things that President Obama asked me to chair some called Star of America eight or nine years ago. And President Trump, we talked about earlier today. I was a big fan and still am of opportunity zones that create incentives to get more capital and more people in more places.
So there is a role at the federal government. Obviously there's a role at the state and local government to set the table, set the state. But ultimately it comes down to entrepreneurs. It comes down to entrepreneurs with ideas.
We just collectively need to make sure we're lifting up entrepreneurs everywhere, funding entrepreneurs everywhere, and helping to scale these companies. But the biggest issue for entrepreneurs, for capitalists, for those of us who are successful, is if someone's only going to be paid by the hour, they're only going to be paid by the hour, and they're always going to fall behind. And income distribution is disparities going to get wider and wider. We as entrepreneurs have got to make a point to give stock to everybody that works for us, period, end of story, no exceptions, because that's the only way people are going to get any type of equity appreciation.
Otherwise, part two to that is our responsibility. Capitalism isn't bad. It's when capitalists don't pay attention. It's like running a business.
Our country is a lot like running a business. Some people might like to say that, but you can't just look at the short term in the immediate aspect. You've got to look at the long term. And if we don't start recognizing that the more disadvantaged people become, the greater the disparity, where risk is social unrest.
Because when social unrest, you get a Ferguson, ask what happened to the businesses in Ferguson? They get torched. And the greater the disparity, the more people rebel. And so it's our responsibility.
And what I try to do with my Shark Tank companies is in terms of diversity. Here's why it makes sense. Here's why you hire people of color. They do things that understand, have a perspective.
You don't have. Here's why you want all your employees to have stock. Why is that so difficult? In terms of share, I mean, look, Uber is going public.
The drivers are striking. Uber and Lyft today, because they don't have pieces. But now I know it's complex. I've heard the speeches from both CEOs on why they can't.
Not complex. Not the AOL we have, the employee heads. We have to have a couple of them. For example, the drivers in summer part time, summer part time, summer.
It's a trickier with a workforce like that. Would that be something you would say, like drivers who contributed to Uber and Lyft? I mean, it was my company for sure. Scooter said the same thing earlier.
I'm just fucking lutely. If it was up to me, if all your employees didn't have stock, all your capital gains from your stocks would be taxed as regular income. If all your employees had that, thank you, my one person. But especially this crowd.
But you know. We want to keep all the money. Are we going to carry interest? I'm like rebellion.
Exactly. I do agree. I was saying something that I should either start paying everyone and getting people more equal in pay, or you can pay to arm or plate your Tesla's. That's exactly right.
Or pay everybody in cash and let them buy stock if that's what they want to do, right? Because then the disparity would decline as well. But there's another piece that is that we're on the topic. Some other data points just to make sure everybody knows it.
I mentioned the 75% of venture capital going to three states. Last year, in this country, over 90% of venture capital went to men. Last year, less than 1% went to African American. So it's a great entree nation.
I'm proud of it. I think it's still the most innovative entree in the world. I'm proud of that. But the data does say it does matter where you live.
It does matter where you look like. It doesn't matter who you know, whether if you have an idea, you have a shot. And that is not fair. But it's also stupid for us as investors.
There are a lot of great entrepreneurs, a lot of great ideas that didn't necessarily go to school. We went to Disney, they worked for the company. We worked for how do you open up your aperture and find them in different places. And that's why I think going to be the greatest time of the biggest investment return over the next 10, 20 years.
So with the risk of being extraordinary ironic, two tall white men, can you explain to me how we're going to get diversity? I mean, I could just put my money where my mouth is. I invested in a woman, Arlen Hamilton, and gave her to start a million dollars. And I said, don't spend more than 100k in any one place, because I want you to hit as many companies as possible.
And that just got started. I invested in one Rodney who has a company wear your voice. If you go to that deals with women, people of color, disadvantaged communities, and just as a voice for them. If you go to markcubin.com, you'll see I have women owned companies or women run companies listed.
That's probably half of still. Why does it? It's still because most venture capitalists are looking to review mirror investing. And the people like the past.
And we've got three funds at Revolution, Revolution growth, the Labor stage, Revolution Ventures, and this Rise of the Rest Seed Fund. The Rise of the Rest Seed Fund, I think now almost 40% of the investment invested over 100 companies. There's strategy is to make initial seed investments, and then kind of double down on winners, as you'd expect. 40% are women of people of color.
Last week on our Rise of the Rest Store, I mentioned some of the cities we're in. We had five pitch competitions. 540 companies applied. 40 were selected at 8 per city.
We invested one in each city. Four of the five were women. So they're obviously out there. You just have to make an effort to reach out and go to places where most people don't go to and reach out to communities, even in those places that aren't always brought to the table.
And again, I think it's the right thing to do. It's a fair thing to do. It's also a great investment. If nobody else is backing them, you have an unusual investment edge, and I think it'll become clearer that fact over the coming years.
It's a demographic exchange in the country. Right. I learned a hard lesson with the Mavericks. We went through a lot of issues that I missed.
And I brought in some smart people that taught me a lot. Right. And I had white guys trying to sell to Latino moms, Mavericks tickets. That's just dumb as fuck.
Right. But I learned to bring in the population that I want to use them, that I want to sell to. But they taught me more than that. Right.
Things that I never considered that they were aware of that were opportunities. And so it took that for me to learn. And as I'm able to demonstrate, by going to places that other people aren't, like you're saying, in terms of operational opportunities and sales, then it becomes obvious. Hopefully I lift those people up.
They branch off and start on their own. And then it takes off on its own. It's stubborn though. It hasn't changed.
The numbers in Silicon Valley still, for example, in Silicon Valley is not the real world. I know that. But it just doesn't change anywhere. The money is going.
No one cares about Silicon Valley anymore. Good. You're going to have to move. I have to.
I have to. Anybody here care about Silicon Valley? Hell no. They like some of the IPOs that are coming.
No, I want to be quite critical sometimes in Silicon Valley. It's awesome. It will continue to be the most innovative ecosystem in the country. They're really, no, I'm serious about it.
They will continue to be great investment opportunities there. But it's insane. They essentially all venture capital is backing entrepreneurs just there. What are you wearing?
Are you aware of just in terms of numbers for angel seats? It's much better. Much more to it. I think that's where it comes.
Getting down, let's get to finish with social progress, a few minutes. Silicon Valley has gotten its head handed to it recently because of some of these issues around social progress around stuff that they've been doing, around the bubble, and everything else. How is that going to impact things? How do you look at that now?
Because it could be a force for change. We need to move this out of this group of 17 people who seem to have messed up a few things here and there. How do you look at that? How does that happen?
Does it have to be a giant Facebook company somewhere else? Does it have to be a lot of companies? I had someone come up to me when I was talking about more women being invest more women. So a venture capital came up to me in Silicon Valley and said, you know what?
There needs to be a marsh that Zuckerberg. I was very angry when he said that. But the idea was, does that have to happen? Like the idea that there's something else or just have to be just happening.
We just don't tell these stories. There's a company in Wisconsin called Epic. There's 10,000 employees started and essentially owned by one woman, Judy Faulkner. It's arguably the most important health IT company in the country.
Basically doing electronic medical records for almost every hospital. That's outside of Madison, Wisconsin. It's almost harder for it to get going as a result. You had to bootstrap it as a result.
You owned 100% of the company and it's a multi-billionaire. How you get more of those stories, it's kind of like the hidden figures thing. How you get more women and people of color on the stage so they actually have a shot and collectively back them. Again, this is not making a fundamental moral case.
I'm making economic case. There are going to be more and more examples. I'm talking about storytelling as well. When I say ignore Silicon Valley, yes.
Because to Steve's point with Epic and others, they're out there. But we get so caught up in telling their story as opposed to the rest of the country's story. Now part of that should be the administration. They need to be celebrating entrepreneurship.
They need to be out there telling those stories so that kids hear them, they get inspired. Girls hear them. I tell my two girls. We're not 12 and 15.
Girls who are in STEM and math and science and business, rule the world. I mean, every opportunity is there for them. But we have to start telling those stories. We really truly live in a storytelling country now.
Everything is driven by stories. And if we don't tell them, then people don't have something to connect to. Alright, let's finish up by talking about what you think the most interesting areas are. Especially around.
Because a lot of this stuff that's coming does have social progress elements. Transportation changing. Could change. Climate change.
Technology. Investments in healthcare. Investments in food. All kinds of, there's all kinds of stuff coming down the pike.
Robotics, automation. They're all big social questions. Every one of them. It seems like every major trend coming up has, it's not a dating happening anymore.
I think that's exciting. Exhilarating in a lot of ways. But also a little bit scary. The way I look at this is all those different technology, iRobotics, rivals trucks, etc.
There's a lot of risk of job loss. I would say there's a certainty of job loss. Some things we can't envision will create lots of jobs that we presently can't even imagine. But there will be some job loss.
But this is not a new idea. Two hundred years ago over 90% of us worked on farms. It's less than 2%. Why?
Because technology made it easier to grow more food with fewer people. That's a good thing. Thankfully we followed that agriculture revolution with an industrial revolution. We trained people from working on farms and working in factories.
We now need to- This is happening much faster. There was enormous social unrest. It's been amplified today. Every major company, if you look at employment, obviously employment is much lower.
Every major company has fewer employees yesterday than they do today and they have fewer tomorrow. They have to take responsibility for minimizing this disruption. If you're a major corporation, you're just going to people to the street. Sound employment rates logo find something.
You're going to create more problems for yourself. They're going to be new mind-numbing jobs for AI. They're going to be labelers. Robotics will replace the mind-numbing of an Amazon warehouse.
But somebody will have to label all that data. Data is the key to anything you're doing with AI. That will be the new mind-numbing jobs. But there's other jobs.
All that domain expertise. Within the government labeling things. Because as we get to government as a service. There's fewer employees in government.
More people have to be responsible for maintaining and auditing algorithms. Name what you think the big pick one, any of them that you think is the one that you find most interesting. It's hard to pick one because I think there's a lot of things. Health care, one sixth economy is still not very convenient.
It's still not affordable. Not even very accurate. And MD Anderson says that when people come there for second opinions, 25% of the time they reverse the first opinion. That's a data problem.
That's an analysis problem. That's a diagnosis problem. I do think some of the use of AI, we talk about how we eliminate jobs. We back through Rise, Rest, a company in Baltimore called Catalyt using AI to identify people who have an aptitude for coding but never knew it.
Like a UPS truck driver. Suddenly they take this and go through this thing. They get put in this coding program and they get a job that's paying two or three times more. That's a use of AI to actually get people more opportunity.
There are things like that that will be byproduct of the other piece. This was news to me, 19 years ago, I started working on some of these things in DC. You look at job creation in this country. All the net jobs come from startups, young high growth companies.
Which is surprising people. Small business accounts for tons of jobs but as a sector doesn't create new jobs. Restaurant mainstream goes out of business, they replace another one and same number of jobs. Big companies, Fortune 500.
Some are growing like Amazon, some are declining like GE. If you add the whole sector up, it's not creating jobs. You've got to be backing startups. If you're only backing startups in a few places on the coast and not in the middle country, we shouldn't be surprised.
A lot of people are ticked off. Not that they feel behind it, kind of are being left behind. The best way to create a more inclusive innovation economy is to back more entrepreneurs doing more interesting things in places all across the country. And where do you think?
Data freedom. Data freedom. Data freedom. For instance, healthcare insurance companies style their data.
You get people who go and get a second opinion and it's different than the first. You've got Facebook and we talk about Facebook and all their data. If the data was opened, we don't want to limit just the Facebook. We don't want to regulate them to the position where they're the only ones that have access to it.
That becomes open. That becomes its own ecosystem. Anything is possible. As the performance of processors increase and availability of processing power is more available if there's more openness of data.
If we force Facebook not to wall themselves off but to open them. Even if it's on a one millisecond delay or one hour delay or one day whatever it may be, kitty bar the door. Then you're sitting at home and somebody who can put together algorithms and do whatever, anything is possible. That's the advantage the Chinese have over us.
They take all data and they have control of all of it. You take data faster. That would be clear. There's surveillance economy.
Go ahead. I'm not talking about closing it. What a lot of people are talking about regulating Amazon and Facebook. When Elizabeth Warren talks about breaking them up, you're talking about the most advanced AI technologists that we have.
They're talking about diminishing them. When you're talking about regulating Facebook and Amazon, you're talking about closing down their data, walling their data to just that company. That's horrific. We have to be talking about opening it up.
What would you do? What would be your proposal? Open it up. Open it up.
You've got to put this into the big pot of data. If it's a government project where we're taking all this data and opening it up and making it available to everybody, now all of a sudden anything is possible. When you regulate them and wall it and they have access to it, we lose. It's over.
And this is not a new idea. The growth of the internet, most people don't pay attention to was what happened with the phone companies, with Judge Green breaking them up and then it's essentially requiring open access. Companies like AOL could be part of the network. That hadn't happened.
The internet wouldn't be what it is today. This idea of open data makes a ton of sense. I just like the final point, just for the investors. I want to make sure you're at least thinking about this.
Personally, I think I made two great trades in my life and I think rise the rest of the third. The first, like Mark was believing in the idea of the internet when nobody did. The second was merging AOL and Time Warner, which turned out to be the big one from the market cap of $70 million when we went public in 1992, $260 billion seven years later, and it turned out to be a good time to do it. I know it didn't work out.
Obviously I'm super mad about how it worked out, but it was the right thing to do for us. Rise the rest. I know there's some skepticism. I'm sure people are rolling your eyes.
Silicon Valley is awesome. That's where all the great entrepreneurs are. That's where all the great returns are going to be able to continue that way. I'm quite confident that over the coming years this rise of the rest will take off.
I would just urge you to pay attention because I'm not going to pay attention because I think it's going to create some of the great investment opportunities around, and most people are not. Most people are just looking in the rear view mirror and are doing more of what they've done in the past, and this time it will be different. I'll tell you, there's a great entrepreneur in your neighborhood. I would find a great entrepreneur that hopefully doesn't look like you, and give him a chance because it doesn't cost a lot anymore.
With your mentorship or help, that's where the great things happen. That's where great things happen. Not you almost sound like a socialist. Anyway, Mark, you in the end.
Thank you. Thanks again to Mark and Steve for joining me on stage. We're going to take another break now. We'll be back after this with Talon Agent Scooter Braun.
We're going to do, this is the tech portion of the afternoon. We're going to do two back-to-back interviews. I'm thrilled to talk to Scooter. He and I have known each other a long time.
We met right when Hollywood started getting involved in digital issues. Let's talk about where we are right now with that. Many years ago, you were starting to invest in things you're starting to do with things like Lady Gaga and some other people. Talk about where we are right now with entertainment and culture.
Look, I think that when you can move culture, you can be a force and moving the needle. When it comes to investing in certain things, I think it's whether those things actually need the needle moved. There are certain companies where you're lucky enough to be an investor because of your reputation and what you're willing to add. They don't need you.
Find a great entrepreneur. They're going to get there one way or another. Just whether you can get them there faster. For us, it's how we can be more than just money.
There are some people that need attention and marketing. Musicians especially play a huge role in the world of social media on making something louder. It doesn't mean it's great. We joke around in the office that you can call it manure, but it's still shit.
We try to find great things. We try to find great entrepreneurs. What's been the impact? There's been so many new companies formerly since Spotify has gotten large Apple Music.
Entertainment companies have shifted dramatically. Internet companies have gotten into the entertainment business in a big way. Netflix is larger than ever. Apple is moving into the film and other drama areas.
How do you look at this as someone who's been entertainment? How do you look at the landscape when you're thinking of your artist? You have Justin Bieber. You have Ariana Grande.
How do you think about that when you're thinking about your artist that you're working with? There's a bunch of things I think about. One, I think touring is a grind. It's an amazing thing to be able to go on stage in front of anywhere from 20,000 to 80,000 people.
But to do it night and night out, I personally, the beginning of my career, lived on the road with Justin for the first three years. I slept in my own bed one year for five days out of the whole year. I never want to do that again. I want to find opportunities.