(Reposted from BY
America is full of black entrepreneurs, just not rich ones. In 2012, the census estimated that there were about 2.6 million black-owned businesses in the United States, comprising about 10 percent of the nation’s total. But these firms accounted for only $150 billion in annual sales, less than 0.5 percent of all domestic business activity. The figures in the tech sector are similarly skewed. An oft-cited 2010 study by CB Insights found that less than 1 percent of venture-capital-backed startups have black founders, and black founders who do get funding tend to land smaller investments than their counterparts of other races. A separate study found that the funding for startups by black women was even more minuscule.
This is not a new problem for black entrepreneurs, who have often found themselves unable to access the funds needed to leverage emerging technologies for their own gain. “In a preindustrial economy, blacks could do without factories and technology and so forth,” says Juliet E.K. Walker, director of the Center of Black Business, History, Entrepreneurship, and Technology at the University of Texas. Some slaves were able to use skills such as blacksmithing, carpentry, or catering to generate money for themselves and their owners, in some cases establishing enterprises that allowed them to buy freedom for themselves and their brethren. But the Industrial Revolution, which allowed for businesses of unprecedented scale, created capital requirements that were out of reach for black people. “Black business was moved literally to the periphery of American business, where for the most part it has remained,” Walker says.
Today, a tech entrepreneur doesn’t need a factory to get his business off the ground, but he does need money to compete with the five major tech giants that now control our digital lives as well as with the well-funded unicorns that emerged in the last startup boom. Founders deal with a pernicious chicken-and-egg scenario, where they need users to attract funding but they need funding to build a product that would appeal to users. Investors, always on the lookout for the next Google or Facebook, often favor the winning strategies that have worked in the past. “They tend to invest based on patterns,” says Angela Benton, founder of NewME, a startup accelerator that works with entrepreneurs of color. “Their business model is based on pattern matching. … If the pattern is a 20-something white male that is a dropout of an Ivy League school, they are going to look for more of those.”
That leaves a perception gap that can be hard for black founders to surmount unless they get organic buy-in within their own communities to prove the viability of their products. But it’s harder to convey a company’s values or transmit a specific cultural experience online compared with in a physical space, where décor, conversation, and clientele can affect how a business is perceived. “Most people, from a technology perspective, they just kind of want to know, does this work, or can this help me do what I’m trying to do, or is this fun to use?” Benton says. “I think most people, regardless of race, think of technology in that term.”
Still, black founders stand to benefit from a rise in conscious consumerism in tech — think Uber riders deleting the app to protest the company’s corporate practices or the proliferation of feminist-adjacent startups — and the demographic increases in people of color. “There are the folks that do support and are die-hard about it, that will buy our brand because they’re like, ‘You know that’s a brother right there, and I want to support,’” says Tristan Walker (no relation to UT’s Juliet E.K. Walker). His startup, Walker & Company, sells shaving supplies targeting people of color primarily through online subscriptions.
Walker does not make specific appeals that his customers “buy black,” but rather tries to demonstrate his company’s ideals about diversity through corporate practice. The company’s leadership team is overwhelmingly filled with people of color. Nas, who made his own track about supporting black-owned businesses last year, was an early investor. Walker & Company’s signature brand, a collection of high-end male shaving products called Bevel, addresses an issue (subpar grooming products for men with coarse hair) that Walker dealt with as a young adult. “I think the thing that matters is that [a company] has a product that people like using, that gives them unique efficacy, and the story is authentic,” he says. “We’re smart enough to know that we deserve good products just like everyone else. It’s an added benefit if it’s black owned.”
Tidal, which is probably the most visible black-owned tech startup on the market, has relied on a similar strategy. The platform has landed massive exclusives from artists popular among black listeners, donated to the Black Lives Matter movement, and dabbled in original programming targeting black audiences. But Jay-Z’s constant entreaties that Tidal is an inherently noble enterprise because it is artist owned (and thus largely black owned) have failed to translate to a huge user base. And his grousing that black folks don’t adequately support his enterprises can seem hollow when he inadvertently reveals that the staff of Tidal, founded in Norway, is overwhelmingly white.
But even if Tidal itself does not seem destined to become the first black tech giant, it has changed how we view Jay-Z, and seemingly how he views himself. Owning a streaming service was the final step in his decades-long quest to control the full supply chain of his music. 4:44 was first available exclusively on Jay-Z’s streaming service (owned by S. Carter Enterprises LLC) and marketed and distributed by Roc Nation. As both a piece of art and a business asset, the album is preoccupied with the idea of creating “generational wealth” that can extend beyond Jay-Z’s discography. It’s an aim that can sound aspirational or aloof depending on how the listener values Jay’s commercial conquests. The lifestyle tips he’s divulging — invest in art, get off that pesky Instagram — sometimes drift into kids-these-days paternalism or a fundamental lack of awareness of how the 99 percent lives these days. (Shawn Carter Bluth once asserted that a bottle of water costs $6.) But generational wealth is also a new concept to see codified in mainstream hip-hop, which has been trading in gaudy materialism or nocturnal nihilism for most of the decade.
Startup executives are endorsing Jay’s rhetoric. “It’s an important message that deserves to be shared,” says Walker. “Think about what generational wealth opens: Our ability to access some of these things that we’re uniquely passionate about without fear of having to do things like find a job as a philosophy teacher and have to deal with all these tradeoffs.”
Yet it’s not exactly clear who Jay is trying to inspire, outside of himself. This is a man who has set up an educational trust fund for the children of a black man slain by New York police but also tried to shill Occupy All Streets T-shirts without financially supporting the Occupy movement. His intentions remain unknowable, even if his recent private conflicts are now more public than ever. “My presence is charity,” Jay said during the dark times of Magna Carta Holy Grail, comparing himself to Barack Obama. 4:44 largely reinforces this view, turning Jay-Z’s personal quest for generational wealth into a self-help guide that his followers can parse, for $9.99 per month. A younger Jay-Z, skeptical of authority and focused on surviving and buying clothes, might not heed his older self’s advice.
But as hip-hop’s elder statesman and a generation’s symbol for black entrepreneurial success, there’s no denying that the words Jay-Z utters on 4:44 will have influence that extends beyond the borders of Tidal’s app.
frotech,” the word that Jay used to sum up the challenges faced by black startups, is already in use. In November the first Afrotech conference was held in San Francisco, hosted by the black-millennial-focused media company Blavity (it settled on the name in part because “tech diversity conference” is incredibly boring). Attendees included not only aspiring entrepreneurs but also successful young black CEOs like Jessica Matthews (of the renewable energy company Uncharted Play) and Silicon Valley veterans like Y Combinator partner Michael Seibel and Pinterest CEO Ben Silbermann.
The event was created partially in response to Blavity’s founders feeling like they were viewed as anomalies at traditional tech conferences, having to navigate racial discourse when they came to talk about business or engineering. “You go in the room, and they’re like, ‘What does it feel like to be black?’ as opposed to, ‘What does it feel like to build a business?’” says Jonathan Jackson, Blavity’s cofounder and head of corporate brand. “Afrotech is this idea of, why don’t we just have our own space where it’s understood who we are and we’re talking about the future. All the things that go into building, scaling, designing, and owning [a business] are things our community should be talking about, and it should be easier to get those resources earlier.”
After Jay-Z used Afrotech on “Legacy,” web searches for the term spiked dramatically. The event, which Jackson hopes will increase from 700 attendees last fall to 1,800 this year, is awash in new attention. “It got people searching us on Google,” Jackson says. “It’s cool that the name association got people thinking about the thing that we had done last year because we’re about to start doing it this year.”
Blavity, itself started by a black woman in 2014, is using its growing clout to encourage people to support black businesses. Every Saturday the company highlights five black-owned companies to its more than 190,000 Instagram followers (the firms pay $250 for the placement, a small fraction of Blavity’s typical social media ad fee). Jackson encourages people to provide small firms (including Blavity) constructive feedback about their products and services, even if it’s not always positive. “To me the worst thing isn’t someone saying that the thing sucked,” he says. “It’s letting it suck so bad that it goes out of business when your feedback could have saved them.”
More often than not, though, Blavity is focused on positive reinforcement. The Afrotech conference is not only a chance to learn and network but also to demonstrate that black success stories do exist in the business world, even in Silicon Valley. Jay-Z’s 4:44, at its most generous reading, espouses the same message.
“Jay talked about black excellence. The celebratory stuff is something that I think is really impactful because joy at scale influences how we think about ourselves. When you see somebody really, really winning [who] grows a big business, has a big exit, or gets a big job, that has a ripple effect because there’s not that many of us in the space,” says Jackson. “So we need to stack wins.”