Profitable Business Model and no one has really done it for financing so we set off with affirm to try and do that. What we did that and started with was pointofsale lending. When you go to the Department Store the person will say come apply for the instore credit card and you know it will be a painful process and you probably when i get approved and it is based on your fico score some magical scored no one understands and the fees will be bad and the Interest Rate horrible but it is a great boon to retailers. It increases sales and improves conversion. So they say what if we provided a great alternative. But affirm is for consumers to make purchases at pointofsale . Thats what it is today. Youre taking a one interest load, slightly high and then fairly low. Compared your credit card, if will pay 700 several hundred dollars. What would you charge me on an affirm loan . Somewhere between 60 and 17 and the average credit card, the millennial someone who is fresh of college with a psycho score probably 29. 95 is what youre looking at here in looking at. One of the things we do since we are a 21st Century Company we price every loan to the transaction to the person and these loans are not compounding interest so you know exactly what you are borrowing and what the payment will be each month. Good a want you to vet their credit when they buy so they . It takes less than half a second. How can you do that and look at me and my entire profile in less than half a second and decide the rate . That feels like a quick glance. So long as the rate i charge you is good for you we can access a bunch of databases and we have filled up good models that forecast your ability to repay and your propensity so a lot of the same math we did at paypal to figure out who is a good guy and a bad guy. Was a look for . Your algorithm sounds interesting. I dont think people will say theyre getting a fair shake from you because they dont know what youre looking at. How do they know it is useful . There are not required to take it to the can always call back with whatever form of payment they have available and make a comparison right there and then because we will disclose the Interest Rate and the charges. The way we figure out who they are and what they are is several interesting ways. The most important thing true of todays generation, the Social Security neighbor number has been replaced with their mobile number, it is a key index to databases. Anything from your social media to phone bill is a good way to figure out who you are and what income you have and what debt youre likely to take on an service and the debt to income ratio is one of the best financial metrics that we can use to figure out how likely you are. How much have you loaned out right now . Is actually growing off the charts so i am terrified to give you a number. We have been testing various forms of products and various versions of the loan and we settled on the simple installment loan with explicitly disclosed charges upfront. At this point the merchants forcing Something Like 30 to 40 on the parts site and they are promoting us aggressively. How much loan debt right now . That i cannot tell you but it is in the millions. Less than 10 million . It is less than 10 million. More than five . I will plead the fifth. Between one and 10. Thats really big. Looking ahead 12 months, do you hit 100 million . Yes. 100 million in 12 . I will hold you to that next year. What about people who dont pay you back . They have to not pass back lust roughly less than the combined Interest Rate charged because otherwise we would be unprofitable. We look at nonrepayment rates so people with super prime credit, people who choose us because of our transparency and quality of service is our prices give back 100 of the time. People that are already living in the session, go link delinquent delinquent and sometimes default in the Single Digits to doubledigit percentages and that is as it should be. Last question, what is the next affirm project . That i cant broadcast, we like to surprise. Thank you matt. [applause] what is up . Our next guest is special to me i grew up in dallas and i first learned about him and a mavericks game, he is so much more than the owner, these welcome mark cuban and our moderator. [applause] these are kind of comfy. Take up your shoes, yet comfortable. Welcome back. You are here in 2008 4 techcrunch 2008, for techcruch. You went on to tv fame and everything. Shocking. To us normal people your list of accomplishments reads like a bucket list. [laughter] i hope so. You built the company for millions, but a sports team and what a chevy chip, became a household name and you really dance with the stars. That was the best part. Now you are a privacy expert. I wouldnt call anybody a privacy expert it is important. Are you afraid that you are a public arson that your communication be hacked . The genesis was i had the fcc, after me and every message i sent they discovered it and turned it over when we went through discovery and they created their own context there was one part where i said i hate to lose talking about the mavericks and when we went to trial they brought that up and said he hates to lose and thats why he sold the stock and did not take a loss. It is crazy that anything you say can create context. From there thinking about it if you think of any email or message you send the minute you send it you lose ownership but not responsibility. We set over and again. With cyber dust when you hit send it goes to another user and never touches a hard drive and is never cashed anywhere and cannot be recovered or erased and recreated in any way. It cant be erased and recreated by the nsa or anybody. Where do you see cyber dust fitting . We are all looking for an email 3. 0. As we look forward, people are trying to find a better way to filter. You knows will involve so if you have to reference and the future and cyber dust will be there to replace a lot of your texting and emailing. When i send you a message, you look at it and 30 seconds after you are done reading it, it is gone. In my personal experiences and others, it is reduced my email productivity from 25 30 . A third application, a black feature where you got all of the words, i have 80,000 followers and like my twitter but the difference when i blast something, the only people who see it are the people who follow me. Because it is 10 lines everybody sees it. Twitter kind of default into a scenario where there are so many trolls that before we tweak anything, we have to be careful and consider how somebody might look at something for it is fun to be a troll unless you are being controlled. With cyber dust, there are no trolls. I blast Something Else and the it is a 11. I blasted out a motivational quote and i can respond to each of those personally. On twitter, i do not know anybody will see it because it is a timeline. Because there are so many people that are trolls looking for things that we say or looking for responses, people do not speak honestly and openly. You pull those things together and as a result, you shrink our digital footprints. As we go forward, cyber dust will look for ways to shrink and it will be more portend permanent there is so much out there we do not remember. And will be more important. Theres so much out there we do not remember. I have a daughter about to turn 11. I trust her. Shes more of an adult than ime a lot of times. She is going to send a very simple message to some idiot kid at some point Something Like you found my ipad and i sent a message that says i love you for that and that dumbass kid will show all of his buddies. And use it out of context. I will have her use the app and that message will be gone. It was not be something repurpose. If a kid tries to screenshot it, we know it and can deal with it. When we were prepared for this interview, you only talk to me and cyber dust which was kind of annoying because i had to remember what we had. Is not annoying. Some people are doing it wrong. You are doing it wrong. When you send a message and tap on it, it tends it and you will remember what you said. But for things that we have to remember, we use email. For stuff like well be here at this time on this day, it is ok. Whered you see it Going Forward from here . You see us do a lot of privacy commerce. Twitter announced they will do commerce and they did smart things with it. You do not want to be a position where trolls are saying you bought the this or that and why didnt you buy this . There will be a lot more privacy involved with commerce as we move forward. You will see as grow as a nice compliments for twitter. A publication, a promotion but cyber dust is for 1 1 personal communication and extended to email. Anything that another application that cause and that is called get expire. What i use it for when you post a tweet right now, theres no expiration time. Theres something about 20,000 30,000 tweets. I can tell you more about you from those tweets in your significant other can. Just because we say so much about ourselves and over the years, we leave it there. With get expired, you can set expiration time so it expires in an hour, a minute, a day. You can do the same with facebook posts and tumbler posts. Does anybody out here still have their myspace profile of . Do you want people looking . And you are still friends with what his name. The whole point is over time your digital profile is so big that it has a set we have not began to consider. We will craig tools and extending the cyber dust platform to shrink that footprint and let you gain more control of your privacy and protect you from who knows what. Mr. Cuban, switching years. I called . 50 5 0 50 cent, mr. Cent what tiger cyber dust is Company Number what for you . I do not know. 30 plus. What drives you to keep founding new companies . This is is the ultimate sport. Dylan with the mavericks, i will talk to our guys and talk about the 48 minutes of the nba game and practice in preparation. There is no sport as competitive as business. It is 24 by seven by 365 five forever. All of these young kids trying to kick your ass and i love to kick your ass. I am so competitive, i just want to win. That in a nutshell. You are not in the valid. Nobody smart is in the valley. There is a certain culture in the valley and a mini version in and a many minier version in new york. I do not have a problem attracting smart people. I can get people here. There are a lot of advantages. Theres an incredible arbitrage available. We talk about on shark tank. If you are from stanford and you have a tech degree or mba or law degree or design and you do not get an 8 million valuation on your startup, you are in idiot. Outside of these three areas that same startup may have a 1 million valuation. Theyre just as many smart people and great Business Opportunities in aggregate outside of the valley as inside. Investing outside and sell it inside to me is the best arbitrage available at has worked out very well for me. Silicon valley as got a approach whether vc or angel. Almost a fear of missing out where people throw money at everything because they want to find their unicorn. Hey, i invested in twitter and uber and facebook. What they do not tell you are the other 99 of their portfolio that has failed. That approach doesnt sit well for me. That is led to mistakes. Travis was here. I invested in one of his earlier companies. He probably brought it to me first or second over and we cannot agree on valuation and he found someone else. Thats probably the one investment i wish i could get back. I invested in a company off of an email. I got my money back and was thrilled to death. I have 20 other. If i were to approach you for investment, what is something i should know about the you . To get your money . To get my money . I am very transparent with all of my companys 30 should know the companies i invested in and why i invested in what value you can bring to me and your company will be great. A lot of people particularly in the valley they sell themselves which is fine and the idea which is ok. But then they figure getting funding is the end all, be all. I got in angel. These people agree with me so it must be a great idea. I hate that approach for your i want to know not what your exit is going to be bold why you will be a sucker a successful company. How youre going to be insanely cash positive because it makes it easier to continue. Such a great answer. Shark tank and these investments. What is something that will make your eyes glaze over instantly . That is instantly. When somebody says the market is asked billion and basically implies if i get 1 10 of 1 of that x billion, it will be huge, it means nothing. We can ill talk about pick an industry and say how big it is going to be it makes it seem so achievable if we get 1 . When in reality, it is no thought or intelligence. That is probably going to turn me off and have me say no. On the flip side, what is the best way to do it . Tell me what your core competency is and why you are great and why it is protectable and to scale. And thats it . Pretty much. Shark tank im how did you get involved . Mark burnett came to me when it was first comment on the air but thats when the fccs assuming so abc would not let me on the show. When the kids got dismissed they came to me and said, it looks like it will be behind you and we know it is fulls bullshit. I came on as a guess and did not think it will last. The show has blown up. I came on as a guest and do not think it would last. I have heard the response that the show is not the business but aspiration, inspiration, telling the whole country the American Dream is alive and well. People moved to the valley because they believe in the American Dream rim in Middle America and places where theres not a lot of money, they want to see a family from iowa who came up with a Screen Protector and is doing one million in sales. Or a number of different examples because they can project themselves. I have learned shark tank is the number one show watched by families together. Why do you think it is . If you have an eightyearold, 12 year old and they are sitting there at home on a friday night saying i like this idea or do not like this idea, i wouldnt pay as much of the evaluation, understand what equity is an approximate gross margin. Parents, you will be proud of your kid when their top by that instead of was number one on the charts and tell me about our rio grande latest hit Arianna Grandes latest hit. It is to them being an entrepreneur and being excited about business. You can call it a new age lemonade stand. And theres a theater for a number nor ship and we see that you were involved in the beginning with that, too. We affect Companies Grow up and blow up. We will wrap this up shortly. He recently talked about Companies Moving overseas to avoid u. S. Taxes. What is wrong with trying to make your company more profitable . Nothing is wrong with trying to make your company more profitable. Who owns your company . Shareholders. There is a misconception. You buy a stock and the ultimate goal is to have the stock go up. You want the company to increase your net worth right . They are not necessarily the same. If i am buying stock in a company and all of a sudden, they are moving overseas to avoid the taxes they otherwise would be paying. Would one company does this maybe not so much. When this becomes a trend and companies are buying startups in england or some other country we are losing tax revenue. Who makes up the difference . The marginal cost of our taxes goes up 1 , 2 , 3 . Because this company is trying to increase their bottom line, my net worth goes down because we have to compensate for that. On the flipside, lets work on changing the tax rate. Lets come up with solutions. The markets for improving profitability are very efficient. Accountants, cpas, and lawyers will find ways to work around things. Start off as what starts off as anecdotal, it turns into a flood. I like investing in companies. When a Company Moves overseas and takes that tax revenue with them, there is some impact on services. That negatively impacts customers. They might not have as much money available to them and that could have an impact on the business. We are in this together . We are in this together. As the owner of the mavericks, do you have any advice to the new owner of the clippers . I emailed steve. I told him he should not be so shy. He will have a lot of catching up to do to keep up with me. Like anybody else, you want to be yourself. Fans want to see an owner that eats, sleeps, and breathes the team. It is one thing to be at microsoft when you are the ceo. A whole other thing one of the big differences between running a company, there is no beat reporter who has to write about you every day. There are not 20 blogs having to come up with something every day. Everything he does will be reported. It will be easy to see how he is on the sidelines. I am hoping he is crazy. It will give me a little sidekick. I do not give a shit. It will be 15 years in january and you have not seen me mellow or slow down. Will the mavericks make it through the playoffs this year . We are undefeated and i am ready to go. Mark, thank you for your time. [applause] our next panel is really the main question of disrupt if you are an entrepreneur or investor what will we be funding . We have amazing investors that will join us. Omar from sequoia, cowboy danny, and our moderator. Clap. The mike will work eventually. I skipped over the disrupt vine thing. We are doing three competitions. How many people still use vine . It is like six of you. You have great shots that are you have really great shots at winning. Please disrupt the vine and tomorrow we will be doing another one around instagram and twitter. Lots of cool prizes. Does anyone have a question . Ok. Why is it so gold . Cold. A billion bodies are in here and if we did not make a cold, you guys would complain the other way. No. That is not true . I have been at a disrupt with a busted ac, and you guys were mad. I will spend my time negotiating and i will see what i can do for you and i will let you know where we are at with the ac. 75 sound good . 73 . 75, i think that will work. If you have a problem with that tweet to me. The ac is the most important thing, but lets focus on the investors. Do you want to hear their names again . Susan said yes. Omar from sequoia, cowboy ventures, james from greylock, danny from index ventures, and are coeditor danny. Matthew. All right. My microphone is live this time. Ok guys. Lets talk