- Billionaire investor Mark Cuban said that he invested in legal service Paladin because it’s an example of tying business success to societal benefits.
- Cuban said that today’s consumer wants to support companies with a greater purpose and that employees want to work for the same.
- He said he’s seen it through investments he’s made on “Shark Tank,” as well as how a scandal shook his professional basketball organisation.
- This article is part of Business Insider’s ongoing series on Better Capitalism.
Cuban isn’t swearing off Rand, but like many other influential investors and executives, he’s determined during the decade since the 2008 financial crisis that there’s a better alternative to embracing the ruthless approach often associated with Rand.
“Capitalism is a little bit under attack right now. And people have an expectation and a perspective on what traditional capitalism is, and it was focused on making money first, second, third, and last,” Cuban told Business Insider’s global editor in chief, Nicholas Carlson, at our 2018 IGNITION conference.
“And I think it’s a responsibility of any CEO, any entrepreneur, to recognise that having a social conscience is good business.”
Cuban appeared onstage with Paladin cofounders Felicity Conrad and Kristen Sonday, who explained how their company offers a service for law firms and corporations that pairs lawyers with clients that will allow them to fulfil their pro-bono work obligations. Cuban was part of a $US1.1 million investment round into Paladin earlier this year, and he said it fulfils his current view of what constitutes a successful business.
“It’s scalable. It’s something every single law firm needs. It has a social impact so that people feel good about buying it,” he said. Sonday told Carlson that when a company uses Paladin, it can be used as a recruitment tool for today’s law school graduates, who are part of the generation that came of age during the Great Recession and appreciates companies that are looking to do more than maximise shareholder value in the short term, at the expense of everyone else.
Cuban agreed. “And so knowing that a company uses Paladin and is able to define exactly what they’re doing in pro bono work and what their goals are makes them a destination.”
He told Carlson that he’s seen how companies that have appeared on the show “Shark Tank,” where he and other business celebrities invest in startups, have been performing better when their purpose includes a holistic view of how they treat their communities and employees.
And he saw it with the NBA team he owns, the Dallas Mavericks. In February, Sports Illustrated published a report that included accusations the organisation fostered a misogynistic culture, including allegations of sexual harassment from a former team president and of both harassment and assault from a staff writer for its website. Cuban publicly apologised and fired both the writer and the head of human resources, vowing to shake up the organisation.
“I was blind to some things that happened with the Mavs, and we made some mistakes, and I had to learn from them,” Cuban said onstage. “And I had to work quickly to correct them, and we’ll be a better organisation as a result. Sometimes it doesn’t come easy, and sometimes it hits you across the head and it’s painful, but I think every CEO has to take that responsibility because that’s the way capitalism is going.”
Conrad said the companies that recognise this from the start – which she hopes will include her own – will be the ones that have the potential to scale. “Everything’s kind of moving in the direction of coupling business with positive impact in the world, and I think a lot of the big companies that are yet to be built are ones that really tackle these big markets that have been historically ignored,” she said.
Cuban’s interview begins below around 3:01:33.
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