The Exchanges

Q Well, now I've done many, many shows, as you know, uh, and we always start with the story in the context, but this is just too exciting. And, you know, we, we, we've done the context before, so I want to dive right in. You recently announced cost plus drugs. And so for those that maybe don't know what is cost plus and why are you doing it, Mark?

A Well, the first question, what is cost plus? If you go to cost plus drugs.com. The goal for us is to take generic drugs and be very transparent in what our costs and operation costs are and sell everything at a 15% markup. And from there, we add a three dollar handling fee and a five dollar shipping fee. Um, and that's your price. And just the way the industry is set up, that price, not always, but 99% of the time ends up being lower than what you're probably already paying. And most likely, It's lower than your insurance copay. And to answer your second question, why? Because I could, you know, and it was the right thing to do.

AI assessment note: “And to answer your second question, why? Because I could”

Q Not at all, but I would love to start today with a little on you. So for those that don't know, quick summary, how did you make your way into the world of tech, and what was that starting point for you, Mark?

A Oh my goodness, my starting point in tech was I got a job working for a software company in Dallas selling PC software, Where I didn't really know anything about the software at all, but the guy just needed somebody desperately. And he goes, well, what do you do if you have a problem you don't have an answer to? I'm like, I'll read the manual and I'll figure it out. And he goes, hired. And that got me into the PC software business. And from there I started teaching myself Lotus one, two, three macros, and then D base two programming, then basic programming, and then little C programming. And then just went from there to low query networks. And then I got fired. And then I started my own company called Micro Solutions, which, I mean, I was all in on tech at that point, and then I sold Micro Solutions to H&R Block, and then a couple years after that, we started the streaming industry with a company called Audionet that turned into Broadcast.com.

AI assessment note: “my starting point in tech was I got a job working for a software company”

Q Question that I wasn't sure whether to ask, but I hope it's okay. I hear you met Travis and Uber at Seed. What were the takeaways from that, and maybe not doing that, and how did that impact your mentality when you think back to it?

A I met Travis through Red Swoosh. I actually funded that, and so I kept him alive when he was about to die with his previous company, and to his credit, he busted his ass and got it sold, and we made money off of it, so I knew he was a good entrepreneur of I also knew that he was the type that if you put a wall in front of him, Travis would run through it, even if you wanted to keep that wall built, you know, and so I was a little hesitant initially that Travis would just be the bull in the China shop when it came with dealing with municipalities and taxi cab commissions and the like, and that that would create problems for him. And so I, I negotiated on valuation because I, I, I knew it was a great idea. I just didn't realize how big it would be going back to some of the earlier questions. You asked me, and so I said, here's what I would do, and he never came back to me, which pissed me off, but he did come back to me in the future for advice all the time, but never considered offering me any equity. So on one hand, those qualities for Travis are what built Uber. On the other hand, those qualities for Travis are what got him kicked out of Uber.

AI assessment note: “those qualities for Travis are what built Uber. On the other hand”

Q Not at all, but I would love to start today with a little on you. So for those that don't know, quick summary, how did you make your way into the world of tech, and what was that starting point for you, Mark?

A Oh my goodness, my starting point in tech was I got a job working for a software company in Dallas selling PC software, Where I didn't really know anything about the software at all, but the guy just needed somebody desperately. And he goes, well, what do you do if you have a problem you don't have an answer to? I'm like, I'll read the manual and I'll figure it out. And he goes, hired. And that got me into the PC software business. And from there I started teaching myself Lotus one, two, three macros, and then D base two programming, then basic programming, and then little C programming. And then just went from there to low query networks. And then I got fired. And then I started my own company called Micro Solutions, which, I mean, I was all in on tech at that point, and then I sold Micro Solutions to H&R Block, and then a couple years after that, we started the streaming industry with a company called Audionet that turned into Broadcast.com.

AI assessment note: “my starting point in tech was I got a job working for a software company”

Q Can I ask a bit of a weird one? For me, when I looked at it, I was like, why has no one done this before? If they're generic drugs, why has no one done it before?

A You know, they've done it in a variety of ways, um, or tried, but the challenge is, I get to, you know, I didn't bring on any investors, um, I'm financing it all myself, and when you bring on investors, or you run it to maximize or optimize your profits, you're gonna run it differently, and that's just not what we're trying to do. We're, you know, we have a very specific purpose, and that's to be the lowest cost provider of generic drugs, period, end of story. Which means we're not going to have all the bells and whistles that somebody like GoodRx is going to have. You're not going to have, you know, you know, famous doctors writing blog posts to tell you about your IBS, and those things are all great. I'm not, you know, diminishing them at all, but there are just certain people that don't need the bells and whistles, their backs against the wall, and they need their medication as inexpensively as they possibly can get it, and that's what we're trying to solve.

AI assessment note: “when you bring on investors, or you run it to maximize or optimize your profits”

Q Can I ask, what was the most challenging element of starting Cost Plus? When you look back now over those four years to getting to where we are, what was the most challenging?

A Getting people to believe that we would actually do it and follow through. Because they get a lot of calls because it's an obvious opportunity for entrepreneurs. You know, price too damn high, sell cheaper. But there's a lot of complexity and regulation involved that takes a lot of money, um, just to get through. And to, to build the infrastructure and the foundation for doing it. And, you know, I'm fortunate, um, that I could afford it, and people knew who I was, because it's Shark Tank, etc. And so when they heard my name was behind it, and that's one of the reasons I put my name on it, um, then they realized it was for real, and there was money behind it, and that allowed us to, to do deals with manufacturers.

AI assessment note: “Getting people to believe that we would actually do it and follow through.”

Q I, I, I totally get that. Can I ask, just to place some structure around it, in terms of the current ecosystem and how it's structured and why, like, why are these drugs so expensive? What's the structure that makes them that way?

A Because there's so many rules and regulations, which are a good thing. I'm not trying to say the rules and regulations are a bad thing. That, like any business, people, you know, are the system, right? They, they look at where they can find the weaknesses, and where they can find the opportunities, and they leverage those. Just, you know, that's, you can't blame them for doing that. And so, Because you're trying to optimize your profits while at the same time look like you're minimizing the cost of patients, you get these things called pharmacy benefit managers that are in between patients and manufacturers and pharmacies and add a whole layer of complexity that that's very difficult to fight through. And if you're an organization that wants to maximize your revenues and earnings, you have to deal with them. And if you want to deal with insurance companies, That's another layer of complexity and administration costs, and we just avoided all those. I mean, you know, you can't pay using insurance on costplusdrugs.com. You have to, you know, put in your credit card and pay that way.

AI assessment note: “you get these things called pharmacy benefit managers that are in between patients and manufacturers”

Q I love that. What, what worries you most today, Mark? You know, we're seeing stock market crash. What worries you most?

A Yeah, climate change more than anything. My kids are 12, 15, and 18, and I want, you know, the world they live in and the world their kids live in, um, to, to be here. Um, and I'm not, I don't try to get into the argument of, you know, what exactly is happening with climate change. I look at it more as a, an issue of probability. You know, they're, they're climate change deniers, and what I say to them is, do you believe that there's more than a one percent chance that you could be wrong? That climate change is a thing. And, you know, almost all of them will say yes. And then I say, are you willing to bet your, you know, bet your kids' future and their, your grandkids' future and their grandkids' future Um, on something none of us truly know for certain. Um, I'm not right. If it's greater than zero, that's too much. And, and so, you know, we all take risks in our lives, but never that type of existential risk, you know, about the, you know, what happens on the planet. And, and so, yeah, that's, that's probably what scares me the most.

AI assessment note: “Yeah, climate change more than anything. My kids are 12, 15, and 18”

Q Got you totally. That makes sense. How do you expect big pharma companies to respond to the massive price cuts? I mean, it's incredible when you go to the site and see some of the savings that you can make. How do you expect?

A Well, don't match. A lot of them will match. Some of them will ignore us. It depends on how big we get. You know, if, if we have ten million customers, they'll pay attention to us. If we have a million customers, maybe not. You know, and there'll be times when there'll be PR and, you know, somebody would be talking about our pricing and then they'll match, you know, and that's what we expect them to do. But again, I'm financing this all out of my own pocket. And so if it takes a little longer, if, you know, our revenues go up and down, that's not a problem. Whereas for a company that's, you know, built through venture capital or a bunch of investors or as a public company, that's a real problem.

AI assessment note: “A lot of them will match. Some of them will ignore us.”

Q Can I ask, when did you first have the desire to do this? And I'd just love to understand, what does it take to set up a, a new age pharmacy as you have done it? What, what does it actually take? When did you have the idea?

A I started working on, yeah, I started working on healthcare issues probably four years ago. I really started diving in just, you know, back when they, um, the administration at the time was looking to get rid of the, um, Affordable Care Act. And I was like, okay, what would it look like if there was a replacement that was needed? And, you know, I, I went through a bunch of things and got to understand the industry. I've paid for a bunch of studies that, you know, does things like compare, you know, why is it that, what, what's the difference between the operating costs of a hospital in Toronto versus the operating costs of a hospital in New York? Just trying to understand why there's such a big price discrepancy, because in Toronto, you know, the, Um, Province of Ontario covers a lot of the cost, but they still have to write a check to the hospitals to get the services done, and the hospitals charge them far lower than you're gonna get the same service for New York. And it's just, you know, there's, there's some subtle differences in how the system operates between the two countries, and that led me, um, to look into other issues, and then I got an email from a Dr. Oshmyski, Alex, who's my partner, who's a rock star, and he had a compound pharmacy in Denver, and this was three, four years ago, and he was like, look, I, you know, I think there's some opportunities there, and the…

AI assessment note: “I started working on healthcare issues probably four years ago.”

Q Can I ask, what was the most challenging element of starting Cost Plus? When you look back now over those four years to getting to where we are, what was the most challenging?

A Getting people to believe that we would actually do it and follow through. Because they get a lot of calls because it's an obvious opportunity for entrepreneurs. You know, price too damn high, sell cheaper. But there's a lot of complexity and regulation involved that takes a lot of money, um, just to get through. And to, to build the infrastructure and the foundation for doing it. And, you know, I'm fortunate, um, that I could afford it, and people knew who I was, because it's Shark Tank, etc. And so when they heard my name was behind it, and that's one of the reasons I put my name on it, um, then they realized it was for real, and there was money behind it, and that allowed us to, to do deals with manufacturers.

AI assessment note: “Getting people to believe that we would actually do it and follow through.”

Q That's kind of capital allocation. How do you think about time allocation? You know, you have so many different activities. How do you think about time allocation?

A Like I always do. I try to work with great people. I've learned my lesson over the years, you know, That when you shortcut the quality of people, you end up hurting yourself. And now, you know, with Alex, with Ryan Klein, and others that are working with David Chen, and others that are at Cost Plus, it's just been insane how effective, how smart they are. I mean, I can't, I can't overstate just how much of a rock star my partner Alex is. He is, you know, Dr. Oshomyski is just incredibly brilliant, And gets this stuff done. And so it's not like I have to worry about the day to day details of the pharmaceutical industry. I can worry about, you know, marketing and connecting and getting in front of people and understanding some of the, you know, the nuances of running this business while he focuses on the hard stuff.

AI assessment note: “it's not like I have to worry about the day to day details”

Q What have been, what have been some big lessons for you in terms of what it takes to hire really well and effectively?

A You know, the, the best line I've heard is hire slow, fire fast. Um, where you've really got to take the time to dig in to understand, because for me, I'm a salesperson at heart, you know, and when somebody walks in the door and they start selling me, I start selling myself on why they're the right person, because I don't like to go through the process of hiring, and so I just want to get it over with, and that off, you know, in the past stuck me with, you know, not as quality of people. Um, there are times when you can't avoid it, but what I've tried to do is, you know, I try to promote from within and find the people within the organization who are really good at, um, hiring people and understanding what's real and what's not, and let them take, I, I have no problem delegating to people who are smarter than me or better at me at something, and I think that's really where I've gotten to in terms of hiring.

AI assessment note: “the best line I've heard is hire slow, fire fast.”

Q Oh, that's very funny. Tell me, how would you approach the reopening of society in this COVID world?

A Gradually. I think we have to learn. There's so much that we're not learning or that we don't know. I don't want to diminish it, but it's almost like technology in the early days of the PC where every day there was a new product or a new service. And something different came out and you had to be incredibly agile and learning because you were learning something new every day that impacted your business. And again, it's not a great analogy, but it's somewhat similar here with COVID because every day we're learning something new about the disease, at least the scientists are, and they're conveying that to us. And as a business person, as a country, as a world, we've got to keep on investigating obviously in vaccines and therapies and as business people be incredibly agile. Because we've never been through this before, and we can't just look back at history and say, well, this is what happened in 1917, and 18. That gives us some guidelines, but, you know, this is a unique set of circumstances. So I'd say the number one trait is agility. The number one A trait is paying attention and learning, consuming information so we can try to make good judgments, and then go from there. I think any dogmatic solutions, I'm a capitalist, I'm a libertarian, I'm a socialist, those are all out the window, and we've just got to approach this with fresh eyes.

AI assessment note: “Gradually. I think we have to learn.”

Q I, I, I totally get that. Can I ask, just to place some structure around it, in terms of the current ecosystem and how it's structured and why, like, why are these drugs so expensive? What's the structure that makes them that way?

A Because there's so many rules and regulations, which are a good thing. I'm not trying to say the rules and regulations are a bad thing. That, like any business, people, you know, are the system, right? They, they look at where they can find the weaknesses, and where they can find the opportunities, and they leverage those. Just, you know, that's, you can't blame them for doing that. And so, Because you're trying to optimize your profits while at the same time look like you're minimizing the cost of patients, you get these things called pharmacy benefit managers that are in between patients and manufacturers and pharmacies and add a whole layer of complexity that that's very difficult to fight through. And if you're an organization that wants to maximize your revenues and earnings, you have to deal with them. And if you want to deal with insurance companies, That's another layer of complexity and administration costs, and we just avoided all those. I mean, you know, you can't pay using insurance on costplusdrugs.com. You have to, you know, put in your credit card and pay that way.

AI assessment note: “Because there's so many rules and regulations”

Q Got you totally. That makes sense. How do you expect big pharma companies to respond to the massive price cuts? I mean, it's incredible when you go to the site and see some of the savings that you can make. How do you expect?

A Well, don't match. A lot of them will match. Some of them will ignore us. It depends on how big we get. You know, if, if we have ten million customers, they'll pay attention to us. If we have a million customers, maybe not. You know, and there'll be times when there'll be PR and, you know, somebody would be talking about our pricing and then they'll match, you know, and that's what we expect them to do. But again, I'm financing this all out of my own pocket. And so if it takes a little longer, if, you know, our revenues go up and down, that's not a problem. Whereas for a company that's, you know, built through venture capital or a bunch of investors or as a public company, that's a real problem.

AI assessment note: “A lot of them will match. Some of them will ignore us.”

Q When people don't hit your expectations, the challenge that I have today is it's such a fluid job market. I worry that if you come down on them hard, then they're going to leave. Um, how do you think about effective communication and feedback when they don't perform?

A Well, context matters. Like you said, it's a different job market. So there's going to be times when you've got to bite your tongue because there's somebody that's in a position that you really, really need. And that, you know, honestly, that's, 90% of the time that's come back to, to bite me. Right. But you know, an order needs to get out the door. Something needs to get done, but as quickly as I possibly can, I try to be brutally honest and just say, okay, here's the problem. Here's the solution. Can you do it? Yes or no. And let's be honest, because if you can't do it, you're going to lose your job. If you can do it, let me know what you need for me to get the job done. And the more honest I am and you know, because look, when somebody is not doing the job, 75% of the time, they know it, right? And, and, you know, the other 25%, those are the people who just love to create stress anyways, and then they try to tell you they're solving the stress, right? And so, I, I really divide people into stress creators and stress removers. And the stress removers, you do everything you can to keep them. The stress creators think they're stress removers, right? They create this big whirlwind and think they're the only one to solve it, and those are the people I try to get rid of as quickly as possible.

AI assessment note: “I try to be brutally honest and just say, okay, here's the problem.”

Q When people don't hit your expectations, the challenge that I have today is it's such a fluid job market. I worry that if you come down on them hard, then they're going to leave. Um, how do you think about effective communication and feedback when they don't perform?

A Well, context matters. Like you said, it's a different job market. So there's going to be times when you've got to bite your tongue because there's somebody that's in a position that you really, really need. And that, you know, honestly, that's, 90% of the time that's come back to, to bite me. Right. But you know, an order needs to get out the door. Something needs to get done, but as quickly as I possibly can, I try to be brutally honest and just say, okay, here's the problem. Here's the solution. Can you do it? Yes or no. And let's be honest, because if you can't do it, you're going to lose your job. If you can do it, let me know what you need for me to get the job done. And the more honest I am and you know, because look, when somebody is not doing the job, 75% of the time, they know it, right? And, and, you know, the other 25%, those are the people who just love to create stress anyways, and then they try to tell you they're solving the stress, right? And so, I, I really divide people into stress creators and stress removers. And the stress removers, you do everything you can to keep them. The stress creators think they're stress removers, right? They create this big whirlwind and think they're the only one to solve it, and those are the people I try to get rid of as quickly as possible.

AI assessment note: “I try to be brutally honest and just say, okay, here's the problem.”

Q I love it. No, I'm totally with you in that respect. How would you describe your style of parenting, Mark? It's interesting. I have more and more, I'm becoming like a parenting expert. Yeah.

A I don't think anybody's ever a parenting expert, but, um, you know, I've changed over the years as my kids have gotten older, obviously. Um, I tried to treat them like adults and I try to be a little bit silly at the same time. And I just try to, you know, be as available as I can. And, you know, in our family, my, my wife is the child whisperer. They'll tell her more secrets and I'm the, you know, the logic whisperer when it comes to things that are driven by logic, they'll come to me more. Not that my wife isn't logical. It's just, I think that's how they look at me more. And so that kind of pisses me off. I want to be like the secrets, you know, parent, but my wife's kind of rolled into that role. So, You know, I try to be available, I try to be loving, try to be caring, um, try to, you know, whatever they need me for, be there for.

AI assessment note: “I tried to treat them like adults and I try to be a little bit silly”

Q What have been, what have been some big lessons for you in terms of what it takes to hire really well and effectively?

A You know, the, the best line I've heard is hire slow, fire fast. Um, where you've really got to take the time to dig in to understand, because for me, I'm a salesperson at heart, you know, and when somebody walks in the door and they start selling me, I start selling myself on why they're the right person, because I don't like to go through the process of hiring, and so I just want to get it over with, and that off, you know, in the past stuck me with, you know, not as quality of people. Um, there are times when you can't avoid it, but what I've tried to do is, you know, I try to promote from within and find the people within the organization who are really good at, um, hiring people and understanding what's real and what's not, and let them take, I, I have no problem delegating to people who are smarter than me or better at me at something, and I think that's really where I've gotten to in terms of hiring.

AI assessment note: “the best line I've heard is hire slow, fire fast”

Q That's kind of capital allocation. How do you think about time allocation? You know, you have so many different activities. How do you think about time allocation?

A Like I always do. I try to work with great people. I've learned my lesson over the years, you know, That when you shortcut the quality of people, you end up hurting yourself. And now, you know, with Alex, with Ryan Klein, and others that are working with David Chen, and others that are at Cost Plus, it's just been insane how effective, how smart they are. I mean, I can't, I can't overstate just how much of a rock star my partner Alex is. He is, you know, Dr. Oshomyski is just incredibly brilliant, And gets this stuff done. And so it's not like I have to worry about the day to day details of the pharmaceutical industry. I can worry about, you know, marketing and connecting and getting in front of people and understanding some of the, you know, the nuances of running this business while he focuses on the hard stuff.

AI assessment note: “I can worry about, you know, marketing and connecting and getting in front of people”

Q I totally get you. Can I ask, does that not limit our Upside maximization, though, when you think about it, if you're focused more on cash flow generative businesses or ones that can fund the investment through cash flow, and then you look at, say, Stripe, which even one or two percent would now be worth 3.6 billion. How do you think about that? Does it limit?

A Look, when they happen, they happen. So if I see something that I think just has an incredible opportunity, so if I said, you know what, wow, why didn't I think of that? Usually what ends up happening is you start up only two, five, 10% of the company, and then you get diluted because it grows bigger and bigger and bigger. Um, and they try to raise, stay with the growth. So I don't mind when that happens, right? Cause I have the option of continuing to invest and retain my ownership or being diluted for whatever reason. So when you get a company, that's just a huge grand slam like that, then that's great. It's still going to keep on growing, but typically it started off really small. The type of investments I won't do or don't do is ones where companies buy sales. So this is going to be a company that has to raise five hundred million to do one hundred million in sales because they want to own market share. And then they can get an exit because they own such big market share or have a widely distributed customer base. Then no, you're not going to see me invest in that at all. So there's just issues there that don't sit well with me.

AI assessment note: “Look, when they happen, they happen.”

Q I totally get you. Can I ask, does that not limit our Upside maximization, though, when you think about it, if you're focused more on cash flow generative businesses or ones that can fund the investment through cash flow, and then you look at, say, Stripe, which even one or two percent would now be worth 3.6 billion. How do you think about that? Does it limit?

A Look, when they happen, they happen. So if I see something that I think just has an incredible opportunity, so if I said, you know what, wow, why didn't I think of that? Usually what ends up happening is you start up only two, five, 10% of the company, and then you get diluted because it grows bigger and bigger and bigger. Um, and they try to raise, stay with the growth. So I don't mind when that happens, right? Cause I have the option of continuing to invest and retain my ownership or being diluted for whatever reason. So when you get a company, that's just a huge grand slam like that, then that's great. It's still going to keep on growing, but typically it started off really small. The type of investments I won't do or don't do is ones where companies buy sales. So this is going to be a company that has to raise five hundred million to do one hundred million in sales because they want to own market share. And then they can get an exit because they own such big market share or have a widely distributed customer base. Then no, you're not going to see me invest in that at all. So there's just issues there that don't sit well with me.

AI assessment note: “So when you get a company, that's just a huge grand slam like that”

Q Can I ask, when did you first have the desire to do this? And I'd just love to understand, what does it take to set up a, a new age pharmacy as you have done it? What, what does it actually take? When did you have the idea?

A I started working on, yeah, I started working on healthcare issues probably four years ago. I really started diving in just, you know, back when they, um, the administration at the time was looking to get rid of the, um, Affordable Care Act. And I was like, okay, what would it look like if there was a replacement that was needed? And, you know, I, I went through a bunch of things and got to understand the industry. I've paid for a bunch of studies that, you know, does things like compare, you know, why is it that, what, what's the difference between the operating costs of a hospital in Toronto versus the operating costs of a hospital in New York? Just trying to understand why there's such a big price discrepancy, because in Toronto, you know, the, Um, Province of Ontario covers a lot of the cost, but they still have to write a check to the hospitals to get the services done, and the hospitals charge them far lower than you're gonna get the same service for New York. And it's just, you know, there's, there's some subtle differences in how the system operates between the two countries, and that led me, um, to look into other issues, and then I got an email from a Dr. Oshmyski, Alex, who's my partner, who's a rock star, and he had a compound pharmacy in Denver, and this was three, four years ago, and he was like, look, I, you know, I think there's some opportunities there, and the…

AI assessment note: “I started working on healthcare issues probably four years ago.”

Q I totally agree with you in terms of stress removers being the halos. In terms of like, you know, when you think about goal setting, you know, with every business, there's goal setting as OKRs. How do you think about setting objectives that are really ambitious and stretches, but also not too much of a stretch that they're unachievable? How do you fit the balance?

A Well, you know, I'm not I'm not big on business plans that say, okay, this year we're going to do X number of dollars. I'm really, um, big on trying to be as efficient and as optimal as possible. And, um, and so what I, I really try to do is say, okay, what can we be really, really good at and what does that accomplish for us and how can we do more of it and how much of it can we do? And so, you know, with cost plus drugs, the KPI isn't just sales. It's okay. How much stress are we reducing for people? You know? And so again, we're not trying to optimize revenues. We're not trying to optimize profits. We're trying to optimize how many customers that we have, how many, how many customers repeat customers can we get where they just give us their prescriptions because they trust us to lower our pricing every chance we get. And so if we're able to keep on lowering our pricing and expand our customer base, that's what I care about because I know, you know, because everybody in the organization knows we're focused on being the low cost producer that, you know, it's not like, Hey, you know, let's go spend, you know, This amount of money in sales and marketing because they already know the answer is no. You know, they, they recognize that we've got to be guerrilla marketers where our customers are our best advocates. And if we keep our customers happy and more importantly, you know, le…

AI assessment note: “I'm not big on business plans that say, okay, this year we're going”

Q I totally see that. Can I ask, you know, if this, this could be an insertion point, there are many different aspects that are broken in the healthcare industry, insurance being one of them as well in many ways. Do you see this as kind of the insertion point, and how, do you plan to expand into ancillary businesses?

A We got to win the first battle we're in. You know, it's not like, okay, we can do X number of, of, um, prescriptions, uh, a day or week or month, and let's go into insurance. Because, you know, there's, Unfortunately, an unlimited number of patients, and that number grows every day. And so, um, we've got to win that battle first. You know, in terms of the insurance industry, the, the payer industry, and the provider industry, the hospitals, et cetera, their, their interests are not aligned with patients from a pricing perspective. You know, the insurance industry, there's this thing called medical loss ratio when you deal with Medicare, where you're supposed to spend 85% of your premiums on the care that is provided by providers. So an insurance company, if they bring in a hundred dollars in premium from Medicare, they've got to spend 85 dollars of it through hospitals and drugs and whatever it may be. Well, if you think about it, that means they have 15% for themselves, and 15% of a bigger number Is more profits for the insurance company, right? And so, the, the providers, the hospitals in particular, You know, their alignment is higher revenues, and the insurance company, their alignment is higher revenues, which is at the expense of the, either the insurance customers, or the patients themselves direct pay. And that's why if you go to a hospital website, and you look at the …

AI assessment note: “We got to win the first battle we're in.”

Q I totally agree with you in terms of stress removers being the halos. In terms of like, you know, when you think about goal setting, you know, with every business, there's goal setting as OKRs. How do you think about setting objectives that are really ambitious and stretches, but also not too much of a stretch that they're unachievable? How do you fit the balance?

A Well, you know, I'm not I'm not big on business plans that say, okay, this year we're going to do X number of dollars. I'm really, um, big on trying to be as efficient and as optimal as possible. And, um, and so what I, I really try to do is say, okay, what can we be really, really good at and what does that accomplish for us and how can we do more of it and how much of it can we do? And so, you know, with cost plus drugs, the KPI isn't just sales. It's okay. How much stress are we reducing for people? You know? And so again, we're not trying to optimize revenues. We're not trying to optimize profits. We're trying to optimize how many customers that we have, how many, how many customers repeat customers can we get where they just give us their prescriptions because they trust us to lower our pricing every chance we get. And so if we're able to keep on lowering our pricing and expand our customer base, that's what I care about because I know, you know, because everybody in the organization knows we're focused on being the low cost producer that, you know, it's not like, Hey, you know, let's go spend, you know, This amount of money in sales and marketing because they already know the answer is no. You know, they, they recognize that we've got to be guerrilla marketers where our customers are our best advocates. And if we keep our customers happy and more importantly, you know, le…

AI assessment note: “I'm not big on business plans that say, okay, this year we're going to”

Q When you look forward, say five years, why do you want Cost Plus to be then?

A I don't look forward five years. I look forward a month. You know, I look forward two years, maybe in terms of what drugs are available or coming off a patent, um, or that we can add, but I'm, I'm not like, okay, five years. Here's the big picture. Where are we going? You know, when, when you're a new technology, like when we started the streaming business back in 95, it was like, okay, let me visualize, you know, we, we were the first to do streaming and you know, people were like, that's moronic. I can just watch television. You know, I can listen to the radio. Why do I need to go through the, the hassle of setting up a PC and a modem and all that shit? And I was like, no, you don't understand. When I started the, um, the first all high definition TV network, HD net, like in 2001, people are like, no, it's going to buy an HD TV. That thing you're putting on the wall is 25,000 dollars. I'm like, no, you don't understand the price is going to go down. And yet, you know, so there's certain technology driven things like with crypto now. How is the Dow going to change how businesses are run? How, you know, what is proof of stake going to impact in terms of the insurance industry, right? If you have validators looking at, um, claims rather than a centralized, um, insurance company looking at claims, you know, with an optimistic role of not to get too technical, right? You can have,…

AI assessment note: “I don't look forward five years. I look forward a month.”