Mark Cuban’s Case for Diversity in Business: ‘I Like to Invest Where People Aren’t Looking’

Almost every company includes diversity in its value or mission statements. After all, embracing diversity is the right thing to do (or, if I’m cynical, at least the right thing to do for a company). He appears to value).

But, just in case you need one, there is an ultimate reason to value diversity, both in the people you hire and in a broader sense in the investments you make.

Let’s start investing in startups. while appearing on The problem with Jon Stewart Cuban Podcast said:

I’ve invested over $50 million in funds and companies of people of color, men and women, because I think there’s a unique opportunity out there. I like investing where people are not looking.

Hopefully some of these deals will turn out to be something significant and someone will come up and say, “You white guys missed the boat. Now the people of color are in a position of power because you didn’t look when the country changed… (while) you were trying to mine what was already there.”

Statistics confirm Cuban’s position. According to a paper published by National Bureau of Economic ResearchAlthough immigrants make up only 15 percent of the US population, they make up 25 percent of business founders. Additionally, 30 percent of all American innovation since 1974 has come from immigrants.

Then there’s the following: Another study showed that more than 50 percent of all “immigrant inventors” (people who move to another country and then invent something) reside in the United States.

All of this means that the number of immigrant inventors and small business founders should only increase over time.

As the researchers wrote, “The results indicate that immigrants appear to be ‘creating jobs’ (expanding labor demand) more than they ‘taking jobs’ (expanding labor supply) in the US economy.”

Cobain then moves on to discuss the strength of a diverse workforce:

I’m not going to lie and say I’ve always had a very diverse workforce. This is just not the case.

But I try to be very disruptive in the business I enter, and to be disturbing you have to be aware of what’s going on in the world and look for where those opportunities are.

It took me a while to realize that if I hired people from the Indian community in Dallas, which is the sixth largest Indian community in the country, I would sell a lot more to that community because they know the community. (Same is true) If you hire veterans, people of color, women of color, people who represent the LGBTQ community… that makes business sense now.

In short, embracing and expanding diversity isn’t just the right thing to do — or, as Cubans call it, a “virtue signal.”

It’s also, as the country’s demographics continue to change, it’s a smart business decision. A diverse workforce – with a range of perspectives and life experiences to draw from – to solve problems faster, make better decisions, and build superior products.

Diversity helps team members challenge each other’s assumptions (in a good way) rather than creating an echo chamber of similar ideas.

And again, if you need a final reason—the clue lies in the candy numbers: ethnically diverse companies are 35 percent more likely to outperform industry averages in financial terms.

And a lot of searching.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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