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Mixed Signals: The State of Black Entrepreneurship

The gap in businesses ownership rates between whites and blacks is widely regarded as evidence of inequality. How bad is it really, and what can be done?

When he started his company, Donald Coleman had nothing but his personal savings and a few faithful friends to fund it. Twenty years later, GlobalHue, Coleman’s marketing communications agency that focuses on minority consumers, closed 2008 with $825 million in billings. Numbers like that earn Coleman membership in an all-too-exclusive club: He is a successful black entrepreneur. And he has an idea why there aren’t more people like him.

“I think it’s quite evident that the lack of access to capital is the reason why there aren’t more minority entrepreneurs,” he says.

Coleman’s experience resonates with studies like Race and Entrepreneurial Success, published last year by University of California, Santa Cruz economics professor Rob Fairlie and research associate Alicia Robb. They analyzed confidential data from the U.S. Census Bureau to paint a comprehensive picture of minority business ownership, and the results, at least for black entrepreneurship, are bleak. Overall, the number of black business owners is far lower than the national average, and their businesses also “tend to have lower sales, fewer employees and smaller payrolls, lower profits, and higher closure rates.” ….more at Mixed Signals: The Progress of Black Entrepreneurship – Business Ownership – Entrepreneur.com, published 9 March 2009.

Photo credit: Royalty-Free/Corbis

By ArcherTC|2012-01-05T06:48:39+01:00March 16, 2009|Blog, Diversity|0 Comments

Solving a social problem, without going the nonprofit route

It used to be that people who wanted to solve a social problem — like lack of access to clean water or inadequate housing for the poor — created a charity. Today, many start a company instead.

D.light, a company cofounded by Sam Goldman, who spent four years in the Peace Corps in Benin before earning a master’s degree in business from Stanford University, is an example. Mr. Goldman started D.light with the mission of replacing millions of kerosene lamps now used in poor, rural parts of the world with solar-powered lamps.

Having used kerosene lamps himself while living in Benin, Mr. Goldman learned firsthand of kerosene’s problems — it is expensive, it provides poor light and it is extremely dangerous. When the son of his West African neighbor nearly died after suffering severe burns from spilled kerosene, Mr. Goldman said he realized he wanted to create a venture to solve both the social and economic problems caused by these lamps. His time in Benin also convinced him, he said, that only as a business could a project become large enough to reach the great number of people who use these lamps as their primary source of light.

“We could have done it as a nonprofit over a hundred years, but if we wanted to do it in five or 10 years, then we believed it needed to be fueled by profit,” he said. “That’s the way to grow.” …read more on this at Solving a Social Problem, Without Going the Nonprofit Route – NYTimes.com, published 4 March 2009.

Flickr photo credit: jurvetson

By ArcherTC|2012-01-05T07:14:16+01:00March 9, 2009|Blog, Nonprofits|0 Comments

Startups in a Downturn

Entrepreneurs who helped build their startups into tech stalwarts—companies like Cisco, Oracle, and Google—share lessons on how to thrive during tough times

December 1987 was no time to be raising money for a startup. Computer engineer Len Bosack was trying to attract funding for a young enterprise called Cisco Systems (CSCO). But the stock market had just crashed and the Dow Jones industrial average had plummeted 40% since October. Gun-shy venture capitalists either didn’t get the newfangled technology or deemed it too risky.

Making matters worse, Bosack was running low on the savings he had used to bootstrap the business, and competition was gaining steam. It wasn’t until this 75th meeting that he found a receptive audience. The willing financier was Donald Valentine of Sequoia Capital, a venture capital firm in Silicon Valley. On Dec. 14, two months after Black Monday, Sequoia invested $2.5 million in Cisco. “Valentine’s reasoning was pretty simple,” recalls Bosack, now CEO of telecom gear-maker XKL. “It doesn’t matter what they are. They are selling stuff in a bad market. With a little bit of capital and more experienced help they should be able to do better.”

Better is just what Cisco did. By the time of its initial share sale three years later, in February 1990—during a recession—the maker of telecom networking equipment was worth $224 million. Within a decade, Cisco Systems had become one of the world’s most valuable companies. …more at Startups in a Dowturn | Business Week, published 23 February 2009.

Flickr photo credit: Powru

By ArcherTC|2012-01-05T06:49:34+01:00February 25, 2009|Blog, Entrepreneurship|0 Comments