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18 Jun 2015

Breaking down the entrepreneur in Mark Cuban through his NBA ventures

The term entrepreneur is used a lot more these days than 10 or even five years ago, partly because the media loves successful people.

Think about how often you hear a negative associated with the term, for example “failed entrepreneur”? Hardly at all.

Because of this, we have glorified the term a bit, building it up to be something aspirational, when all it really means is a businessperson.

The Merriam-Webster dictionary, for example, defines entrepreneur as “one who organises, manages and assumes the risk of a business or enterprise”. Pretty mundane, after all!

But for our purposes we prefer to think of entrepreneurs in stronger terms, as those with some sort of vision, keen business acumen, the ability to inspire others and a flair for marketing and promotion.

People like Mark Cuban, who made about $US2 million (after tax) when he sold his first business, MicroSolutions, in 1990, and within the next decade had parlayed a venture he set up to webcast college basketball games into a $US5.7 billion stock deal with Yahoo!.

Some people now know him best as one of the ‘sharks’ on the US version of the TV show Shark Tank, but to many of us his big claim to fame is as owner of the NBA franchise the Dallas Mavericks.

In fact for a vast majority of NBA fans, he’s the only team owner they could name – sometimes overlooking the likes of Michael “His Airness” Jordan and Steve Ballmer!

The main reason for this is that Cuban is not a shrinking violet, in fact he’s renowned for being outspoken to the point of almost being a loose cannon.

Over the years since he acquired the Mavs (in January 2000) he has been hit with fines totalling over $US1.6 million by the NBA for numerous incidents of criticism of the league or its officials or verbal abuse of opposition players.

So what can we glean about Cuban the entrepreneur and, more generally, true entrepreneurship, from his persona as owner of the Mavericks?

Profiling

As mentioned, Cuban has a larger-than-anyone-else-in-the-space profile.

He isn’t afraid to engage publicly with other owners, general managers, coaches, players, fans and the media, in fact he relishes those interactions.

As a result, people see him as genuine and just as passionate as they are – and just being himself. There are plenty of things he says and does that the average fan probably couldn’t get away with, but we see that as one of the benefits of being successful and having money, and don’t begrudge that.

The fact that he does criticise the league and the referees paints him as a sort of hero to the average fan, sticking it to the authorities (as opposed to being part of that big machine).

Relationships

He either loves you or hates you, so you definitely want to be on his side!

When he took over the Mavs, he put a great deal of faith in coach Don Nelson, and young stars Dirk Nowitzki and Steve Nash.

He didn’t just empower management but personally asked the players what they needed, and then gave that to them.

Dating to 2015, Nowitzki is very likely to be a Maverick for life, and was willing to take a pay cut with seemingly the last significant contract in his career for the team to get more talent. And the long-term trust he has established to coach Rick Carlisle, through the good, the bad and the ugly, represents Cuban has a owner who treasures sustainable relationships with those who work with him.

He stood side-by-side with the team and became part of the culture change he knew was needed to turn around a losing (games and financially) franchise.

On the other hand he knows how to hold a grudge, feeling that one-time-stalwart Jason Kidd did the wrong thing by him and the team when he opted to head to New York and basically ending former Laker star Lamar Odom’s career mid-game!

Yes entrepreneurs do burn bridges in never-look-back fashion.

Either way, Cuban doesn’t do things by halves so you generally know where you stand with him!

Branding

After taking over an ailing franchise, Cuban was quick to figure out what he needed to do.

He decided that going to a Dallas Mavericks game should be a major entertainment experience – and good value for money for the average person.

He wanted to make the new American Airlines Center (the team moved there 18 months after he bought them) to be the place to be seen, well aware that Dallas is a city with plenty of socialites and celebrities.

He was smart enough to know that their presence would add a bit of glamour and make the ‘product’ somewhat aspirational, but at the same time he managed to establish a very strong brand identity for the team built on hard work, loyalty and a winning culture.

The fact that he is very visible courtside (even at away games) wearing team merchandise also factored into his branding, because if it was good enough for the owner, why wouldn’t everyone else want to wear their Mavs t-shirt?

An air of authority

The importance of knowing your business can sometimes be overlooked, but Cuban is one man who shows that he knows his business and his people.

He demonstrated that with his previous technology and media ventures and when he talks basketball, it’s clear that he isn’t just the Mavs’ chief cheerleader.

In 2012, after he took offence at the simplistic ‘analysis’ of Skip Bayless and Stephen A. Smith – tweeting that his then two-year-old son, Jake, knew more about basketball than Skip – they challenged him to appear with them on ESPN’s First Take.

They definitely regretted that!

The art of the deal

Cuban isn’t afraid to take a risk if he sees the potential for a big reward, but he also loves the wheeling and dealing because it gives him a chance to ‘win’ a negotiation.

When he made the move to get Boston’s championship-winning point guard Rajon Rondo to Dallas late last year, he was taking a calculated gamble.

In short, he basically broke a deal to obtain an All-Star calibre player for minimal assets.

There was no way to know whether Rondo would be the difference between falling out of contention for the fourth straight season or contending deep into the playoffs, but Cuban knew it was better than sitting on his hands.

He like things to look good on paper

Since Cuban took over 15 years ago, the Mavs rosters have always been jammed with players with an All-Star resume, regardless of their implications to the team.

Rondo was only the latest in a string of trades to bring big-name players to Dallas over the years, with the likes of Shawn Marion, Vince Carter, Amare Stoudemire and, of course, Odom, preceding him.

In some ways it’s in Cuban’s DNA just to ‘have a go’, so he won’t die wondering whether he should have taken an opportunity that he turned down, but in other ways it’s a failing that he values reputation over character and chemistry.

Having taken 11 years to reach the holy grail, with the Mavericks’ only NBA title in 2011, it will be interesting to see what sort of moves Cuban pulls in the future.

Maybe he’ll take a shot at LeBron James* after all?

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*Cuban was fined $US100,000 five years ago for talking about acquiring the Cleveland superstar

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