Earlier this month, I attended the SALT Conference in Las Vegas. SALT is a global thought leadership forum for hedge fund investors hosted by my friend Anthony Scaramucci, CEO of Skybridge Capital and former White House communications director for the Trump administration.
While there, I met up with two of the world’s most creative billionaire entrepreneurs: Mark Cuban, owner of the Dallas Mavericks and panelist on the hit show Shark Tank, and Steve Case, founder of AOL and current chairman of Revolution – an investment firm that funds startups.
Our discussion covered a variety of topics, but I wanted to share some key tidbits with everyone here at Liberty Through Wealth…
Follow the Green
With graduation season in full swing, graduates are continually being told to follow their dreams, live their passions. But Cuban is famous for recommending just the opposite: “Follow the green, not the dream.”
He feels that, for most people, following your passion after college is a pipe dream. It won’t pay the bills, and you’ll end up living with your parents in your 30s.
According to him, a liberal arts education is best for the long term because specific skills are useful only in the short term. You need to be flexible in today’s world of rapidly changing technology.
Entrepreneurship in America
According to recent data, the number of startups is at its lowest level in 30 years. But neither Cuban nor Case is feeling discouraged.
Cuban feels that entrepreneurship is alive and well in America. He rejects the notion that startups are declining in the U.S., stating, “There is no shortage of investments. America is still the land of opportunity.”
Case agrees, rejecting the secular stagnation (a long period of very little or no economic growth) thesis that is being touted by Larry Summers and Tyler Cowen, among others. He has written a new book about the future of technology, The Third Wave: An Entrepreneur’s Vision of the Future.
But Case also pointed out that some states are being left out of the startup game. The vast majority of venture capital (75%) goes to startups in California, New York and Massachusetts, leaving 47 states to fight for the remaining 25%.
Interestingly enough, he also pointed out that 90% of entrepreneurs in Silicon Valley come from outside of the state or from a foreign country. Entrepreneurs are migrating en masse to take advantage of Silicon Valley’s opportunities.
In contrast, Cuban thinks the best opportunities lie outside of Silicon Valley. Just take a look at his list of companies.
Sharks in the Water
I also spoke with Cuban about Shark Tank. According to him, he’s Shark Tank’s No. 1 investor and does more deals than anyone else. He appears on the show because he wants everyone in America to believe they can achieve success as an entrepreneur.
According to Cuban, 50,000 people apply to be on Shark Tank every year. “To say that entrepreneurship is dying and socialism is coming is self-defeating,” he told the SALT audience.
He believes in “democratic capitalism” – that all companies should encourage employees to have some form of ownership and that companies should hire minorities. “Capitalism must help all people. Growing inequality will cause social unrest due to disparity,” he warned.
Speaking of Shark Tank, Cuban and I also talked about the sharp tongue of Kevin O’Leary, also known as “Mr. Wonderful.” He told me that O’Leary really does believe that it’s only about the money.
Cuban was also excited about the debate I’ve organized as part of this year’s FreedomFest. “The Libertarian Duel in the Vegas Sun” will take place on July 18 between O’Leary and John Mackey, CEO of Whole Foods Market.
I call it “Conscious Capitalism vs. Pure Greed.” Mackey argues that business has a higher purpose – the good, the beautiful and the heroic. For O’Leary, the money is the focus. He says, “If you want a friend, buy a dog!”
For investors, my favorite way to profit from startups and new technology is the Ark Innovation ETF (NYSE: ARKK), an exchange-traded fund that specializes in disruptive technology such as 3D, the Internet of Things, self-driving cars, etc. It has outperformed the market indexes for several years.
I hope you’ve enjoyed reading about these ideas as much as I enjoyed speaking with Cuban and Case.
Good investing, AEIOU,