The New Face of Entrepreneurship?
WHY YOU SHOULD CARE
Because a new world is opening up.
By Nick Dall and Joshua Eferighe
Black entrepreneurs have always needed an extra level of determination, given historic hurdles to their success, such as racism, lack of mentorship and unequal access to financing, to name a few. But something is happening in the wake of the COVID-19 pandemic and racial justice protests: New fields are emerging worldwide, and pre-existing ones are creating surprising new opportunities — from Silicon Valley to Ghana to Tokyo. How are today’s Black founders building generational wealth, and what are the new paths to the top? Today’s Sunday Magazine has the scoop.
on the rise
Cannabis. Black people involved in the business of marijuana have long paid the price with disproportionate incarceration rates. But as U.S. states move increasingly toward legalization and a new Democratic president and Congress raise hopes of easing weed laws, the burgeoning industry offers hope to would-be Black entrepreneurs. While the industry was 81 percent white as of 2017, people of color are increasingly playing a bigger role. In March, retired Pro Bowl running back Marshawn Lynch, for example, is launching Dodi Blunts — a “premium, crafted cannabis brand-platform” with 24-karat diamond-infused blunts. And Jay-Z has rapped about his new gig. “I’m sellin’ weed in the open and bringin’ folks back from the feds,” he rhymes in his new song “What It Feels Like.” The 51-year-old rap legend launched the Monogram cannabis line and set up a $10 million fund to help minority-owned cannabis businesses break into the legal marijuana industry.
The Cincinnati Model. This southern Ohio city boasts the highest percentage of minority-owned businesses making more than $500,000 annually. Their secret? A task force the local chamber of commerce created in 2002 dedicated to building scalable companies of color called the Minority Business Accelerator (MBA). It pairs minority-owned supply companies with top research and science companies, such as Johnson & Johnson or Procter & Gamble. Large organizations, even those with diversity plans, often struggle to find minority firms to invest in — a major factor hindering Black startups. MBA also syncs healthy companies that are looking for buyers with minority entrepreneurs, quickly creating large minority-owned firms. Now Cincinnati’s model is being adopted in 20 other U.S. cities, and there’s a new push to take it to the federal level. Read more on OZY.
Banking Black. There are only 20 Black-owned banks in the U.S. — out of some 5,000 total — in addition to 21 not-for-profit credit unions. But the pandemic has put a new focus on the dozens of Black-run Community Development Financial Institutions (CDFIs), which are dedicated to serving disadvantaged communities by backing small businesses, affordable housing, nonprofits and more. The December COVID-19 relief law included $12 billion for CDFIs, as big banks such as Wells Fargo have chipped in, too. A new round of federal stimulus and a potential infrastructure plan are likely to back CDFIs — as President Joe Biden has tapped these overlooked institutions as key to closing the racial wealth gap.
tough challenges, creative solutions
Becoming Founders. Research from Hallo, a networking platform, found that out of the 1,537 American startups that raised capital in the fourth quarter of 2020, only 40 had Black founders. Hallo co-founder and CEO Vern Howard tells OZY that these stark figures are due in large part to a lack of connections: “I can come in here with an idea on paper, but I’m cool with you or I knew your dad or knew your name from Facebook or Google, and I’m a VC, I’m going to believe you should have built this.” The solution, Howard says, is for Black founders to help build social capital within Black communities and share tips for success with the next generation. Gig Wage CEO and founder Craig J. Lewis, who has raised $13.2 million so far for his fintech company, advises staying authentic rather than worrying about fitting into the largely white VC world in order to win in the end. “Be you-nique,” he says, spelling out y-o-u. “You’re already not going to fit the box; don’t even try.”
Help During COVID-19. Eight out of ten Black-owned businesses fail within the first 18 months, in large part due to lack of capital, so when the pandemic hit, it came as no surprise that these businesses were hit hardest. An estimated 41 percent shuttered in the early months of the pandemic, struggling to get loans and other assistance as federal COVID-19 relief favored the existing racially skewed big bank infrastructure. But solutions popped up across the country, from JPMorgan Chase’s Advancing Black Entrepreneurs initiative — which coaches businesses on expenses, vendor relationships and more — to the Oregon Cares Fund, which has helped steer $62 million in federal aid toward the African American community there. Discover chipped in with $5 million for Black-owned restaurateurs doing right by their community, such as Kevin Muccular of That’s My Dog in Houston, which went the extra mile to feed the hungry after Hurricane Harvey and during the pandemic. Watch Kevin’s Story on ‘The Carlos Watson Show’
Reset America. In the wake of last summer’s racial justice protests, allies have been making a more concerted effort to buy Black. According to a survey by the Black Chamber of Commerce, an estimated 75 percent of small businesses it represents experienced booms in the two months following George Floyd’s death; Google searches for “Black-owned businesses near me” hit a new record between May 31 and June 10; apps like I Am Black Business caught fire; and several companies made promises, like Amazon’s Black Employee Network and Apple’s Racial Equity and Justice Initiative, to fix structural problems. In some cases, the #SupportBlackBusinesses movement was overwhelming. Liberian-American fashion designer Telfar Clemens had to put in place a preorder system following a surge in demand. But as many of these businesses see revenue sink back to the pre-Floyd norm — and with the pandemic still raging — the harder work on systemic solutions continues.
Pulse Check. Black techpreneurs are using mobile technology to overhaul Africa’s creaking health care infrastructure. Armed with little more than a laptop and a team on scooters, 24-year-old Melissa Bime created Cameroon’s first online blood bank. In a country where patients routinely die because their families can’t locate blood quickly enough, her company, Infiuss, has cut the average time it takes for a patient to receive a transfusion from about a week to one hour, according to Yaoundé-based Dr. Iddi Faisal. Another company using simple solutions to save lives is the Democratic Republic of Congo’s WapiMED, a geolocated medical directory that helps people find hospitals, clinics and doctors (if this sounds simple, you’ve never tried to make your way through Kinshasa). To add to the appeal, you can even pay for a loved one’s appointment remotely if you live in the diaspora. Read more about Bime on OZY.
Big in Japan. Originally from Paterson, New Jersey, twin brothers Arthell and Darnell Isom are the co-founders of Japan’s only Black-owned anime studio. Inspired by the 1995 film Ghost in the Shell, Arthell resolved to move to Japan after graduating from the Academy of Arts University in San Francisco. Once there, the young illustrator knocked on the door of the film’s art director, Hiromasa Ogura, and landed a job at his production company, Ogura Koubou Atelier. When the Isoms decided to set up their own studio, Ogura supported them. Since its founding in 2016, D’ART Shtajio has produced the “Snowchild” music video for The Weeknd, worked on the Netflix original Sound and Fury and collaborated on several Japanese anime titles. While only around 5 percent of the anime industry is non-Japanese, and there are very few Black artists, Arthell told SyFyWire: “The great thing is with us being here, Black creators seek us out. It’s a great opportunity to work with them.”
Trash to Cash. Nomuntu Ndhlovu and Siyabonga Tshabalala have brought cash to hundreds of impoverished South Africans who sell waste to their recycling company, SiyaBuddy. They’ve also helped to clean up their corner of Mpumalanga, a region where recycling is virtually unheard of due to the great distances people must travel to reach a buyback center. When OZY profiled Ndhlovu in 2018, she dreamed of expanding operations across the province, installing a waste-to-energy plant and manufacturing building bricks from black refuse bags. While the pandemic has put the waste-to-energy plans on ice, SiyaBuddy has purchased three more trucks, increased the number of jobs it provides from eight to 12 and grown from having just one site to four. The recycled building bricks, meanwhile, are currently being certified as safe for use in construction.
Idea Factories. Any entrepreneur can use an occasional helping hand, shoulder to cry on or nudge in the right direction. MEST (the Meltwater Entrepreneurial School of Technology) in Accra does all of the above. Since its launch in 2008, hundreds of would-be millionaires have been put through the incubator’s fully funded one-year entrepreneurship program, which gives them a full deep dive on tech, business and communications. At the end, the nonprofit — an arm of the large Oslo-based media monitoring company Meltwater — will back these founders’ dreams with seed capital with the intent of scaling their ideas internationally. MEST has helped launch more than 60 startups, including meQasa.com, which is now the largest online real estate marketplace in Ghana.
Compete to Win. A little bit of healthy competition never hurt anyone. And when it comes to African startups, there’s no hotter competition than Seedstars, which stages pitch competitions across the world leading up to a global summit where finalists pitch a panel of judges. Since 2014, the contest has crowned winners from South Africa and Ghana. The latter was 2018 winner AgroCenta, which supplies smallholder farmers with the two things they need most: access to a market and capital. While most venture capital investment in Africa has traditionally come from Europe and North America, this has changed in recent years, with three Japanese VC firms investing millions of dollars in close to 100 African startups. Read more on OZY.
fat of the land
Big Opportunity: Home to 8 of the 10 fastest-growing economies in the world, Africa has enormous potential. But in sub-Saharan Africa, where more than 60 percent of the population are smallholder farmers, and only 23 percent of GDP comes from agriculture, improving food security remains a major concern. The “elephant in the room,” writes Mandla Nkomo, managing director for Solidaridad, a civil service society focused on sustainability, “will be the fact that Africa has not yet been able to demonstrate a model of how agriculture moves people out of poverty.” Investors spy an opportunity, with 420 major land deals comprising 24 million acres struck across the continent between 2000 and 2016, but few of the acquisitions have been implemented on the ground.
Factory Farms. Ghanaian Desmond Koney’s company, Complete Farmer, was born out of his desire to “run farms like factories,” and combines what the 29-year-old describes as an “Airbnb land model” with a “crowdfarming” approach to capital investment, delivering made-to-order produce to clients worldwide. Complete Farmer has successfully completed 12 projects and currently has plantings of an additional 3,500 acres of everything from chili peppers to sweet potatoes destined for India, China, Qatar, the United Arab Emirates, Germany and the Netherlands. So far, 2,800 small-scale farmers have been employed for various projects, bringing higher yields for corn (22 percent above the national average) and soybeans (18 percent). While the company’s footprint is currently restricted to Ghana, Koney’s dream is to expand internationally. “What Alibaba did for manufacturing in China,” he says, “we want to do for agriculture in Africa.” Read more on OZY
Putting the Cow in Crowd. In his autobiography, Nelson Mandela wrote about the “almost mystical attachment that the Xhosa have for cattle, not only as a source of food and wealth, but as a blessing from God and a source of happiness.” With urbanization on the rise, South African agripreneur Ntuthuko Shezi aims to keep that connection. His company, Livestock Wealth, helps anyone with a smartphone invest in a free-range ox or pregnant cow and enjoy annual growth of up to 14 percent. So far, 2,800 people have invested more than $4.7 million in the firm, which has recently added macadamia nut trees to its list of tangible opportunities. Other companies in South Africa are applying the same logic to blueberries and honeybees.
Reality Check. Despite the optimism, the World Bank predicts that sub-Saharan Africa will likely be home to 90 percent of the world’s extreme poor (people living on $1.90 per day or less) by 2030. And that was before COVID-19 worsened global inequality. This sobering op-ed by Anthony Kalulu, a Ugandan farmer who has spent most of his life in extreme poverty, points out that the problem is even more localized: 70 percent of the extreme poor in sub-Saharan Africa live in only 10 countries. The remedy lies in the poor seizing control of their own destiny, something the largely white global development sector, Kalulu argues, is hell-bent on preventing. “From the very remote, poor village of Namisita, where I live, and where I am seated now, aided by a solar panel, an ageing laptop, and a mobile internet connection,” he is working to bring an end to extreme poverty through his nonprofit, Uganda Community Farm.
billionaires giving back
Building a Legacy. With an estimated net worth of $10.9 billion, Aliko Dangote is the richest Black person in the world. Since 1977, when he started importing rice and sugar to his home state of Kano, Nigeria, and selling them at a lucrative markup, his business empire has expanded across industries and borders. He’s now involved in commodities, oil and gas, but Dangote Cement, which operates in 10 countries and churns out 46 million metric tons of cement each year, is the undisputed cash cow. Since 1994, Dangote’s also worked to give back through his charitable Aliko Dangote Foundation. Focused on health, education and “economic empowerment,” it’s the largest private foundation in sub-Saharan Africa. In 2013, the ADF teamed up with the Bill and Melinda Gates Foundation on a mission to eradicate polio, and last year all of sub-Saharan Africa was declared free of wild poliovirus.
Striving to Do Better. Another high-profile do-gooder is Strive Masiyiwa, Zimbabwe’s richest person, with a $1.3 billion net worth. Ever since he navigated “murky politics and a legal jungle” to win a mobile phone network license in his native country in 1998, his company, Econet, has managed to amass more than 100 million subscribers across 29 African and European countries. And Masiyiwa has turned philanthropist, providing scholarships to more than a quarter of a million Africans in the past 20 years and supporting more than 40,000 orphans. His mentoring of African entrepreneurs on Facebook created the most engaged following of any business leader on the platform, according to the social monitoring company Crowdtangle. No wonder then that Netflix has pinpointed him as the man to help it conquer the African market, making him the first African to sit on the company’s board.