Billionaire Mark Cuban Just Invested in a Game-Changing Startup

He’s betting that the future is local (and he’s 100% right)

Mark Cuban, the Texas billionaire, Shark Tank provocateur, and champion Dallas Mavericks owner, posted something very interesting on LinkedIn recently:

“Shopping with small businesses who manufacture locally generates at least 50% more economic activity for your local economy and community. These businesses spend more on local supply chains, can pay higher wages, and create more jobs which is good for everyone. Our awesome startup, @Cultivate, built a simple tool to help you shop with over 200 small businesses and 15,000 US brands. Check them out at https://www.wecultivate.us and support small businesses!”

I reached out to Mark to ask why someone of his stature would choose to invest in such a small startup.

“I think buying American is the right thing to do,” he said, stressing that local investment is the key to creating new jobs at home. As consumers start to buy more American-made goods again, “the number of products made here will only grow.”

Mark Cuban is betting on tomorrow, and he’s betting here.

Cultivate is a Chrome plug-in that helps users determine which products are made in America, even flagging up domestic products on sites like Amazon.com. “Cultivate’s app and browser extensions are an incredibly easy way to support American companies,” Cuban said. “It works a lot like Honey. It’s super easy to use.”

While Cultivate’s current business model itself isn’t very exciting —like Honey, their main source of revenue is affiliate commissions from retailers — Cuban’s investment signals something far bigger: that the future is going to be a lot more local.

Why the Future Is Local

There are a number of reasons why Cuban is right to think that the globe is trending locally. Here are six.

1. Local is more efficient

We live in a two-hour-delivery culture where speed is of the essence. The delivery window is still shrinking, and as companies figure out 3D printing and autonomous production, expect to see the travel times from order-to-delivery fall dramatically, simply by closing the physical distance.

2. Local is profit-friendly

The reality is that shipping items across the country and/or around the world isn’t going to get any cheaper in the long-run. When America-China manufacturing costs reach parity, why would we spend the extra money to ship a million pairs of sneakers when we can make them in Kentucky or Michigan?

The promise of globalization is that it will “level the global playing field” when it comes to wages and manufacturing costs. This is true — while wages in America have stagnated for decades, pay in China has risen so much that multinational corporations have sought new territories to conquer. It’s only a matter of time before these arbitrage opportunities dry up. When shirt makers in Bangladesh earn just as much as shirt makers in Brooklyn, it makes sense to cut out the shipping and manufacture locally in both places.

3. Local is planet-friendly

Right now, shoe companies like Nike have to truck footwear to a port, load them on a ship, freighter them across the ocean, then truck them from distribution center to regional warehouse to retail center.

In the future, expect a refurbished condo tower in New Jersey to robotically fulfill all of New York City’s sneaker needs, without the need for gas-guzzling vans, diesel-bellowing lorries, and ocean-polluting freight liners.

Localizing production could also drastically decrease the amount of packaging material needed to make ocean voyages and cross-country hauls.

4. Local strengthens communities

This is perhaps the most compelling reason to re-localize the global economy, especially in an age when multinational corporations withhold much-needed taxation from nations, states, and communities. Buying locally makes economic and ecological sense for a huge number of reasons.

5. Local is more accountable and trackable

Whether we like it or not, we are rapidly approaching the Blockchain Age, where — for good and evil — all goods, services, and payments will be tracked by the powers beyond our control. One of the few upsides to the new level of surveillance will be the consumer’s ability to trace the origin of every product in their shopping cart with a single click on their phone. (Try attempting that with a jar of peanut butter right now. It’s nearly impossible.)

The shorter the chain, the more trust consumers will place in products and brands, and accordingly, assign them more money-points in the checkout line.

6. There’s a growing anti-monopoly sentiment

Distrust of multinational corporations (like Nestle) is on the rise, and it’s easy to understand why — when a private foreign company can sue your home country, write new laws, lobby behind closed doors, install their own politicians, avoid taxation, flout international human rights, ignore safety standards, and in doing so, bankrupt community-level businesses, it doesn’t exactly endear intelligent customers to your company.

At the end of the day, multinationals are completely reliant on workers — not only for their labor but especially for their spending power. Efficiency isn’t actually efficient if it wipes out all jobs, and shoppers know it.

We can not only expect to see enlightened consumers continue to prioritize local purchasing over chain purchasing, but we will eventually see a rise in regional trade clubs that exist for the express purposes of protecting democracy and strengthening local economies, perhaps with the use of cryptocurrency. (IE: A network of 1,000 Austin businesses that all accept AustinCoin or 500 Montana companies that all accept RockyBucks.) We may also see a network of co-ops get together around a common currency and begin to inter-spend amongst themselves as a way to protect their own jobs and ring-fence against monopolies.

We’re at War

A global trade war — or, perhaps less apocalyptically — a highly-competitive global trade competition is underway, and Americans are waking up to the fact that they’re shipping $3.1 trillion in business overseas every single year.

That’s the equivalent of an extra $15,500 for every one of the nation’s ~200 million working-age citizens.

Not only is that revenue flowing elsewhere, but a lot of it is also enriching some very bad folks:

• The Chinese use enslaved Eighur labor to produce goods for Apple, Nike, BMW, Samsung, Sony, and Volkswagen.
• The Congolese use child labor to mine rare earth minerals for cell phones.
• Much of Russia’s exports are tied to the Putin mafia.

Politics matter, and despite the bitter domestic partisanship we’re enduring at present, there are more important fish to fry on a macro level. There comes a point where we need to stop talking about human rights and put our money where our mouth is. Consumers are waking up to the fact that it’s time to defund human rights abusers by re-allocating our spending to kinder producers.

“Where and how you spend your dollars matters more than your opinion!” — Mark Cuban

Opportunities Abound

WeCultivate.US is an objectively horrible web URL that doesn’t give it much credibility, but my hunch is that it’s only a matter of time before they re-brand as We.com and see major gains because of it.

But whether or not Mark Cuban’s startup is ultimately successful isn’t the point — my message is that Cuban has an uncanny ability to spot trends early and capitalize on them. He’s betting the future’s local, and we should too.

1. Niches

There’s a huge opportunity for hundreds of startups like Cultivate to take a chunk of Amazon and Walmart’s market share by going after specific categories with a local focus. (Consider Bookshop.org, which clawed back 2% of Amazon’s book business in its first year and raised almost $10,000,000 for local bookshops in the process.)

2. Manufacturing

There’s also an opportunity for localized white label manufacturers to explode. Imagine if someone in New Orleans orders a clutch on LouisVuitton.com and the system immediately pings an affiliated micro-workshop within a few miles of the buyer’s house. Imagine if someone in Las Vegas orders the new iPhone and it’s assembled by a medium-sized robotics warehouse in suburban Henderson and delivered to the door in an hour.

My hunch is that we’ll see an explosion of highly-autonomous, 3D-printed, and hand-made white-label workshops emerge in the years ahead. Some will work exclusively for international brands, some will be exclusively independent, and many will be hybrids.

Same for food delivery: expect platform-driven dark kitchens to explode in quantity and quality. Imagine getting a Michelin-level meal delivered to your home, but at a price that doesn’t require waitstaff or renting marquee real estate. Date night just got a whole lot tastier!

3. Hyper-Localization

Mark Cuban’s investment play is decidedly nationalist: “I’m a big believer in buy-American, invest in America,” Cuban told FOX Business. “Cultivate can be a big step forward.”

While Mark Cuban or another investor might eventually lock up the USA-made market with We.com or something similar, it’s not unrealistic to think savvy international startups won’t do the same thing in their home countries as a way to encourage localization there as well.

Why not Nous.com in France? Why not Nosotros.com in Mexico? How about Noi.com in Italy?

We can also expect to see the regional, state, or city-level startups do the same. (Think: Made in Texas. Crafted in the Appalachians. Built in Detroit.)

To be clear, there will always be international shipping: scotch is only made in Scotland, bourbon is only made in Kentucky, feta is only made in Greece, and halloumi is only made in Cyprus. But there’s no reason why much of our global production can’t be brought as close to its customers as possible.

The reality is that the future will be far more local. It’s inevitable — communally, environmentally, and economically. And that’s a very, very good thing for marketers, entrepreneurs, the planet, and the public.

Thanks for reading,

Jared A. Brock