Entrepreneurship is the New American Dream, and millennials are hearing its call loud and clear. The corporate world has ceased to appeal to many of us. Between bureaucracy and rigidity, the track is not as glamorous as it was for our parents back in the day. The good news is that there is an alternate route.
For our generation, the way forward is entrepreneurship, building something of our own that forces us to innovate and make use of our full intellectual repertoire.
We are getting better, and more of us are entering the entrepreneurial arena than ever before. However, as we explore, we all need to be conscious to not leave behind our minority groups. As it stands now, 60 percent of all American entrepreneurs are white males. There are multitudes of reasons why this disparity exists, but rather than focusing on what is missing, we need to look toward the solution: early education.
Where Are All The Black Entrepreneurs?
In my experience as a black entrepreneur, I saw the majority of my family take the government job route, while I always had the itch to pursue a self-made career. I was privileged to attend MIT, a university that fosters a culture of various entrepreneurial endeavors from a variety of categories. Classes and accelerators hosted by the school gave me the base knowledge to run a business and properly pursue a venture. It was a fantastic learning opportunity and had a major impact on helping me launch the startup I run now. However, I always found that I was a minority in the entrepreneurial circles I was a part of.
I’ve found that accelerators are especially important in providing a more intensive education, especially when run by experienced entrepreneurs. The Global Founders’ Skills Accelerator (GFSA) program director is Bill Aulet, famed educator, author and entrepreneur; the HAX accelerator is managed by Duncan Turner, entrepreneur and former IDEO designer.
However, in both cohorts, there were very few minorities. In GFSA, there were four blacks out of about 50 founders; in HAX there weren’t any represented among the 15 companies. This happened despite the worldwide diversity efforts that have been put in place by both organizations for general minority and state-specific populations.
The stats seem to back up my anecdotal evidence. Although most accelerator programs do not track the ethnicity or gender of participants, 500 Startups does. A voluntary poll of participants revealed that out of 250 startups and 500 founders, 80 were Asian, 60 were female, 15 were Hispanic and only nine were black.
It is time that we take action and begin to focus on those in our communities that need the extra help to get a foot on the entrepreneurial ladder.
Despite these stark statistics, there are positive movements among accelerators that are trying their best to diversify their portfolios. And, at the same time, the general feeling among the black community is one of bucking the corporate trend.
Seventy-two percent of these millennials want to quit their jobs and become entirely independent, and 35 percent have already started a business on the side, according to an oDesk and Millennial Branding study.
So, What’s The Problem?
The evidence shows that having an entrepreneur for a parent increases by 60 percent the probability that a child will become an entrepreneur. This is arguably because entrepreneurial parents can better understand and support their children’s decision to follow in their footsteps. They also are more able to advise and potentially offer financial support.
Most importantly, they can introduce their children to the right networks — and, of course, in the entrepreneurial world, who you know matters more than almost anything. Unfortunately, if we’re only seeing few young black entrepreneurs today, even fewer of their parents have taken that route, so you can see how there’s a negative loop in play.
The fact is, for the increasing number of first-generation black graduates, it’s a tough call: go into a corporate world and climb a ladder where currently only 1 percent of Fortune 500 companies have black CEOs, or take an eye-watering risk and seek out enough capital to turn your innovative ideas into reality — and have a 90 percent chance of failure, according to Forbes.
It comes down to education, financial aid and expertise.
For non-entrepreneurial families of first- or even second-generation graduates, the question is all about risk, regardless of color or nationality. Investing in a college fund is a big commitment, and entering the entrepreneurial sphere rather than the job market seems ridiculous when you have student loans, a lucrative job lined up after college and that looming 90 percent knockout rate.
Finding the investments, support and partnerships to do this is the biggest challenge for entrepreneurs. It is getting easier to start your own business — and this time, as we see more entrepreneurs step into the arena, it is important that we don’t leave behind our minority groups that are typically left behind.
What Can Be Done?
Early Grassroots Education: I am a graduate of the Baltimore City Public Schools system; in particular, a program called Ingenuity Project at Poly that aims to develop the city’s young technical talent. In addition, I went to MIT for college, one of the world’s best universities. I have been given everything in my academic career, but still can barely manage being the CEO of a growing company. The educational and social structures around kids need to do a better job of spurring outreach in the field. One way is making classes in the field as ubiquitous as social studies or foreign language classes.
Financial Support In Higher Education: Money in the bank and cash flow are the things entrepreneurs care about. Ivy League schools are switching to free and highly reduced fees for household family incomes below $125,000 in some cases, which is a great step that should continue to expand. Reducing personal expenses is key for young entrepreneurs, and institutions that offer these packages are directly supporting the entrepreneurial spirit of their student body. If you are a student and have to worry about where or when you will get your next meal, thinking of starting a company five years down the line is one of your lowest priorities.
Competitions: When a young person takes part in a competition like MIT 100K, they are motivated, they learn more than they ever thought possible and they have real feedback on their ideas. Competitions also help set young people on the road to startup success. Developing these further, particularly in collaboration with schools in less economically developed areas, would go a long way to encouraging kids in the black community to take a chance on themselves in the real world.
Accelerators: Accelerator programs can provide the push that first-generation entrepreneurs need to get going, and this is key to bringing young black entrepreneurs into the mix. In my experience, and for many others, accelerators not only give young entrepreneurs the financial backing, but also the all-important network they need to branch out, meet investors and make a real impact in the market and in their communities.
In all, entrepreneurship needs to become a viable option for people from less stable economic backgrounds. If not, we risk ever-increasing disparity among classes, and further violence and unrest as a result. Entrepreneurship is becoming the only way someone can cross the bridge into financial freedom. It is time that we take action and begin to focus on those in our communities that need the extra help to get a foot on the entrepreneurial ladder.
In schools, community centers and colleges, we already have the infrastructure. It comes down to education, financial aid and expertise. Millennials, and especially black millennials, cannot depend on corporations to give them jobs to help them achieve their dreams, as their parents once did. The only way up in today’s American Dream is to put in the work on your own account to become exceptional, or be left behind.