Tag Archives: Texas

Inside Mark Cuban’s Plan to “F— Up the Drug Industry”

“I could make a fortune from this,” Cuban said. “But I won’t. I’ve got enough money. I’d rather f— up the drug industry in every way possible.”

Mark Cuban, Texas Monthly

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When you deliver something people need for less money than if they schlepped to the store, you win. See: Amazon.

That’s what Mark Cuban of Shark Tank fame is doing with his new startup. Cost Plus Drugs, which just launched two weeks ago, sells a wide variety of generic medications for less than anyone else.

Let’s see how much cheaper Cost Plus Drugs is for some common meds:

Albuterol (Proair) inhaler for asthma: $30 on Cost Plus vs. $86 on GoodRx (for pharmacies near me)

Prednisone (Deltasone) for asthma: about the same on Cost Plus vs. GoodRx

Norgestimate / Ethinyl Estradiol (Ortho Tri-Cyclen (28)) for birth control: $7 on Cost Plus vs. $13 on GoodRx

Atorvastatin (Lipitor) for high cholesterol: $4 on Cost Plus vs. $8 on GoodRx

Imatinib (Gleevec) for leukemia: $17 on Cost Plus vs $120 on GoodRx. Wow.

You don’t need me to tell you that medical care in the United States is ridiculous. Massive bills and no transparency make even me, an unusually fortunate person, hesitant to go to the doctor.

Cost Plus Drugs changes that. You know exactly what you’re paying, every time.

Even better, you know where that money is going. The website clearly breaks down the costs for manufacturing, shipping and labor.

Cost Plus also builds in a 15% profit margin. This may seem greedy, but it’s a lot less than competitors, and they have to make some margin to stay in business and expand.

You can’t disrupt the medical system if you go bankrupt!

Cost Plus has another big advantage: strong word of mouth. From Mark Cuban:

“When people save a lot of money on their medications, they often will tell others they know that have the same challenges. That word of mouth impacts our growth the most.”

This is critical for a consumer company. Consumer companies have to acquire tons of customers that may not spend very much each.

So, the cost of customer acquisition can make or break a company. Cost Plus has a great strategy here to grow organically at zero cost.

Cost Plus plans to begin manufacturing its own drugs and building distribution centers across the country. They’re going to control the whole stack, which is the best way to control prices.

As a startup investor, I’m itching to get in. A huge problem, a brilliant entrepeneur, an innovative solution….what’s not to like?

And as a consumer, you can bet I’ll be getting any meds I need from Cost Plus from now on!

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More on tech:

3D Printing a Human Ear

Why I Just Invested in Deft, the Best Way to Shop Online

Male Contraception With an Ultrasound Device?

Photo: “Mark Cuban” by Gage Skidmore is licensed under CC BY-SA 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

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More on Fundrise in this post.

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Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.

Every fruit and vegetable is super fresh and packed with flavor.

I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!

I wrote a detailed review of Misfits here.

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Why Austin is #1 in Attracting Tech Workers

Austin, already a significant tech center, is the biggest beneficiary of tech workers being able to live anywhere and work remotely:

Austin is the top beneficiary of tech-related migration in the past 12 months, according to data from Microsoft Corp.’s LinkedIn profiles. Nashville and Charlotte also saw noteworthy migration rates.

Why is Austin #1? Tech workers are finally able to live where they want, and it turns out they have similar preferences to other Americans. The southwest has seen a huge influx of people in recent years, regardless of their occupation. Sun, warmth and cheap housing are powerful draws.

The typical house in San Francisco is nearly 3 times the price of the average Austin house. If you moved to SF for a job and the job no longer requires that you be there, you may leave and pocket the difference.

But there are lots of cheap sunbelt cities. Austin wins due in large part to the presence of a major university. This is something all major tech centers have, whether it’s San Francisco, Boston, New York, or Beijing. Companies often grow out of these universities, and college towns tend to have amenities that attract educated workers. Miami lacks a first rate university, hampering its prospects of competing with the likes of Austin.

Even before COVID, I noticed a strong trend to remote work in the tech sector. I worked in medical software for nearly 15 years. At the beginning, working from home was never allowed. By the end, I was remote 75% of the time.

The tech sector has reconfigured itself during COVID to operate remotely and is unlikely to go back. As an investor in startups today, I’ve seen venture capital firms start to hire anyone regardless of where they live. Will they fire these employees or force them to move once COVID is over? Not likely. Also, investors are finding they can meet with a lot more companies over Zoom than if they had to travel between offices. These efficiency improvements aren’t going away.

What venture firms do affects the whole tech sector. Many often required startups they invested in to move to SF. But that’s a thing of the past.

I’ve actually never been to Austin, but I hope to soon! I took a class at UT-Austin online this spring, and it was superb. Austin has clearly invested in education, and now it’s reaping the rewards.

Dig into these posts for more on tech and startups:

Photo: “Austin Texas” by adactio is licensed under CC BY 2.0

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Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

Texas Failed to Prepare Its Energy System for a Deep Freeze

As many in Texas enter a fifth day without power in freezing temperatures, I searched for information on how such a disaster could’ve happened.

I came upon some excellent perspective from Professor Daniel Cohan at Rice University:

See the entire Twitter thread here. Very much worth reading.

Not preparing the full energy system, from natural gas wells to the electrical grid, for a deep freeze seems to be the culprit.

This makes sense to me as someone who has lived his entire life in the frozen North…northern Maine, Wisconsin, and New Jersey. We’ve had storms and cold even worse than what Texas is experiencing on a regular basis, but I don’t recall the power ever going out. And I’m very grateful for that as I type this in my warm living room.

To me, this calls into serious question the Texas regulatory model, where ERCOT regulates a Texas-only grid that’s exempt from Federal oversight. If they can’t plan for extreme events, why do they exist?

In the mean time, as families resort to making little fires in their homes to stay warm, perhaps Governor Abbott can help. If the Governor’s Mansion has power, why not invite people to come there and warm up? Even a small gesture like that could bring warmth to a few people.

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Photo: “Caricature: Texas Governor Greg Abbott” by DonkeyHotey is licensed under CC BY-SA 2.0