Month: June 2020

The Importance of Diversity in Entrepreneurship

people sitting around a table having a meeting

It’s 2020, and the world is going to look very different in the coming decades. As of this writing, we are at the end of this phase of COVID-19 and countries throughout Europe as well as states across America are slowly beginning to reopen. The pandemic may have thrown the world for a loop, but the crisis did accelerate several trends already underway, particularly here in the United States. While entrepreneurship has become mainstream the faces of those leading the business world have been changing (not fast enough according to some people), and now with Zoom and other digital tools at our disposal, communication gaps have been closed. When looking towards the next few decades in business, we will see leaders from a variety of nationalities and genders building the next generation of businesses.

We still have a way to go as the number of entrepreneurs who are female, African American, or of Hispanic American descent is not where it should be. However, there are encouraging trends, as this resource indicates that “40% of US businesses are women-owned” and that “64% of new women-owned businesses were started by women of color last year.” Increasing the number of entrepreneurs from these backgrounds is important for several reasons we will explore below. Particularly when it comes to education, the great modern equalizer, we can all do our part in order to bring up and work with entrepreneurs from a variety of different backgrounds. It’s not a political statement or a good PR campaign to double down on diversity when looking at the entrepreneurship space, it’s simply good for business.     

 

It’s where your customers are

When you look at the changing demographics, they present a country that is more gender neutral and racially diverse. Yet glancing at the faces of the leaders of the major technology companies, it’s clear they do not reflect this emerging reality. Silicon Valley is lagging places like Wall St., and there needs to be a lot more done to bring in people from other backgrounds so that they get a seat at the table.

Often you hear women entrepreneurs in the consumer space mention that while Amazon was started by a white Ivy League educated man, most of the purchasing decisions are made by women in your average American household. As this Merrill Lynch study documents, women make “55% of primary financial decision-maker for their household” and that “75% gained more financial-decision making power over the last 20 years.” This goes for all financial decisions, including purchasing items. Customers want to look at the founders of a company and feel that they can relate to them.

When polled, millennials place a major premium on buying from companies that have a  significant social impact aspect to their business model and that includes diversity: in its 2015 Global Corporate Sustainability report, Nielsen noted that 66 percent of respondents had said they were willing to pay extra for more sustainable brands, while fully 73 percent of millennial respondents said the same. In addition, 81 percent of millennials expected their preferred companies to make public declarations of corporate citizenship.” A double bottom line: a good product which does good has become an important factor in today’s marketplace.

Entrepreneurship can be the great equalizer

It’s worth recalling that the people who built this country were immigrants often excluded from the “old boys club”. As many of them were ambitious, they were often forced to create their own opportunities. An example is how a disproportionate number of Jews went into the entertainment industry, which, at that time, was not considered prestigious. Every generation of immigrants must work its way up the societal ladder, but there are actions we can take to help them by offering them a seat at the table.

Entrepreneurs who built this country were pioneers in every sense of the word, before the term carried the weight it does today. They didn’t think about appearing cool on Instagram or playing “businessperson”; rather, they were focused on making money and putting food on the table. The ambitious ones were the entrepreneurs who helped build some of the most iconic brands today. When all the doors were shut, they had to go through the window, and that is what entrepreneurship can be today. Regardless of your race, sex, or education level, the tools are out there if you put the work in to build a business. If anything, because of technology and the access to free education there is nothing stopping many people from learning the skills to become entrepreneurs right now. 

Having different voices around the table

When you look at the postmortem of things that went wrong throughout history, decisions made by kings and monarchies, you find a uniform of similar opinions. Many times, it is a feedback loop of the same people not looking to upset a key decision maker (the term “yes man”), or simply people who think alike. It’s not a phenomenon exclusive to business; we witness it when combing through history, and even these days we are not immune from poor and single-minded decision making.

From a leadership perspective this report indicates that: “a board needs to draw upon a range of experiences in understanding opportunities, anticipating challenges and assessing risks. Rarely does a right or wrong answer exist for the many issues a board faces—particularly in an environment where silos defining industries are breaking down, constituencies are globalizing, the effects of technology are accelerating, and risk presents itself in new ways. With these lines blurring, having multiple views on the possible outcomes of an action results in a more thoughtful decision-making process.”

The reality is that groupthink is real and can severely limit your organization’s ability to make clear and long-term decisions. Different people have different experiences and outlooks on life, and how one views the world can significantly vary from person to person. As noted above, as so many businesses being created these days are user experience focused, it is important to have empathy and understand the product that you are creating for those users.

Creating a generation of heroes

This is something you see not just in the United States, but in other cultures that do not embrace risk or have strong heroes who are entrepreneurs. In the US, if you grew up in the right neighborhood, went to the right school, and knew the right people, you’d have friends who are entrepreneurs. You saw what was possible, and many times you thought you could do what those people do, and even improve on it! Many in underserved areas don’t see successful entrepreneurship as something to which they can aspire, which is why developing a generation of entrepreneurs/leaders in those communities is so important.

To be an entrepreneur, and a successful one at that, you must be able to sell people on the idea that you’re creating. A lot of times this idea could be bucking common wisdom and potentially violating social norms at the time (such as Airbnb, Uber, and the sharing economy). If you haven’t grown up in an environment where it’s permissible to take those kinds of risks, then you’re most likely not going to feel comfortable doing something like that. This Fast Company article sums it up well: “role modeling is crucial not only in terms of overcoming that initial barrier to access—quite simply, the belief is that entrepreneurship is a viable option. It also helps to remove the stigma of failure.”

 

Get this right before the next inequality

To play devil’s advocate, all this may be irrelevant as the next wave of technological disruption will create a divide between those who are tech-literate and those who do not know how to use emerging technologies. This will most likely skew between young people who are digital natives and early adopters and people who could be slightly older. The question is how old are those people going to be? At what age, or point in life do people throw up their hands and stop wanting to learn about the latest technological trend?

This is a topic not being addressed and is something that could be fixed, but ultimately it comes down to mindset. Digital natives have the advantage of being born to only knowing what a smartphone is and did not have to go through the recent tech and mobile revolution. We don’t want to get to a place where we are dealing with even more inequality. We have never been so connected but divided, and yet we are not taking steps to bridge that divide. 

It’s not about marketing or PR these days, and about the optics of how things look in a business meeting or on the front page of a magazine. Diversity is extremely important in how we build the next generation of American companies and get ourselves out of this black swan event. This will also open the door for the next crop, the Zoomers, who are building their companies for the next generation. 

How to Learn Anything During COVID-19

If you’re reading this, you’re most likely stuck at home, or may have just been released for a limited time out into the world. The COVID-19 crisis is not over for the time being, even as the number of those infected with the virus decreases; there is too much uncertainty as we are still learning about this novel coronavirus. We are all aware of the perils of economic doom as our politicians and news channels like to remind us 24/7. This is of general concern, especially for those whose entire livelihoods depend on working for others.

Whether or not you want to be an entrepreneur, you may not have a choice in the coming months, as there are several trades where jobs may not be returning. Examples are the restaurant and travel industries, at least as far as we know them. However, there is no need to panic; while we are careful about being generally overly optimistic the idea that “life happens for you, not to you” is a powerful statement and puts control of our destiny back in our hands. Entrepreneurship is a combination of skills as much as a mindset so we’ll cover below how to learn any skill so that you can control your destiny. While most things are out of our control, we can take active steps every single day to acquire the skills to thrive in this brave new world.

 

Break it down to the smallest parts

There is an abundance of fables about this, and whole civilizations have been built on this concept (ex. “Rome wasn’t built in a day”.) Most famous is the quote from Lao Tzu that states “the journey of a thousand miles begins with one step.” The reason most people don’t learn a new skill is two-fold: firstly, the idea of learning (and excelling) at a new skill such as public speaking seems so overwhelming, they don’t even start. The second reason is that it sounds boring, as though you’re not making progress when you’re consistently taking small steps. Take public speaking; even if you’re practicing 5 minutes every day in front of a mirror, you’re doing something, moving the ball forward. Better 5 minutes than nothing, because eventually those 5 minutes a day add up!

When legendary investor Warren Buffet was asked by Amazon CEO Jeff Bezos why most people don’t utilize his simple 2% growth rule for every day, his answer was “because nobody wants to get rich slow. The reality is that the time will pass either way, and you’ll wonder where it went. Best to take small measures every single day, even if they’re baby steps on days you feel uninspired, as they will compound. The author James Clear blogs and writes about this concept prolifically, so if you want to learn more about one of the fundamentals of learning anything, you should check out his work as an addition to this article.

Create a plan

What doesn’t get scheduled doesn’t happen. It’s nice to think about learning a new skill, and even visualizing the act. But if you want to do it consistently, it needs to be scheduled in your calendar. The hardest part of learning any new skill or doing anything challenging in general is getting yourself in a chair. Once you master that and get started the task tends to happen on its own as you enter a state of flow.

We are big believers in getting up early and tackling said task first thing in the AM, especially if it’s something that is generally hard for most of us to do, like writing. A way to make your psychology work for you is to gamify this idea or create a system. Jerry Seinfeld, one of the most successful comedians of our time has a system in which he marks an X on a calendar for every day he writes. As he notes on the ‘Seinfeld Strategy’ “after a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job next is to not break the chain.”

 

Jump into the pool – but not too deep

Learn by doing. The best way to do something, and part of the entrepreneur’s ethos, is that you learn by diving right in. This is literally the story of every first-time young startup founder who was flush with venture capital money and had to build and scale their enterprise rapidly. We suggest you set expectations with this concept so you don’t take on a task at which you may initially fail, discouraging you from trying again. While failure is part of success, we’re focused on skill acquisition here with a slow and meaningful process.

An example would be if you want to learn a skill like copywriting as a part of the suite of services you offer as a content writer. You could go online to a site like Fiverr or Upwork and bid on smaller and lower compensating offers to start building your skill set with lower expectations. True, you could jump off a cliff and learn to fly on the way down, but you could crash as well. It’s important to understand yourself and know how you deal with failure. Failure is part of life, and a topic we will cover in the future, and it’s important you understand how to deal with it if you want to be very successful. But when you’re just getting started and building your confidence with any skill, winning small victories consistently builds confidence.  

Work with a mentor or a coach

A mentor and a coach both play different roles, but each could be helpful and effective in helping you cut the learning time when it comes to acquiring new skills. No matter what, you’re going to make mistakes at the beginning, and even feel stupid at times when you first start out. That’s a normal part of the process, so don’t get discouraged.

What a mentor can do is to help guide you down a path they’ve already been on. For argument’s sake, let’s use writing sales copy as the skill you want to develop. This is a highly sought-after skill that compensates well. A mentor could be a seasoned copywriter, and built a successful career doing this. Finding a mentor can be difficult and is a topic we’ll explore in a future post, but for now if you’re a student we would suggest you start researching and reaching out to alumni for a short phone call.

Coaches are legendary in places like Silicon Valley, as this Business Insider article covers “this is the power of coaching in general: The ability to offer a different perspective, one unaffected by being “in the game.”  A good coach can be a game changer, and while many times you will have to pay one, working with a coach seriously cuts months off your learning curve. Coaches are easy to find, but the challenge is finding the right match. There are operation coaches, and ones who focus on mindset. There are also new categories such as entrepreneurship coaches and mindfulness coaches. A coach can have a powerful influence as they have access to your mind, but we have found them to be a net positive. But like all things, it’s just about speaking with several of them on the phone or in person and getting a sense of who you gel with and is in line with helping you reach your goals.

Start an accountability group

Not enough people do this, and for some people this simple act can be life changing when it comes to learning a new skill. All you need to do is find some like-minded friends who are focused on bettering themselves and set up a group, whether it’s a weekly call or chat group, and just hold each other accountable to your goals. It’s important to find people who are encouraging as part of this group and will do the work. As this article states, “on the power of peer accountability if you have a specific accountability appointment with a person you’ve committed, you will increase your chance of success by up to 95%.” You may feel this tactic won’t work, but once you try it, you’ll realize how much the opinions of your accountability group matter, to your benefit!

The hardest part of doing anything is getting started, but as we’ve outlined above, it’s all achievable. We never said it was easy, but if you want to be successful it takes time to put in the work. However, if you practice and refine your skill day in, day out, you’ll get there much quicker than you would have believed. The most important thing is just to focus on the target in front of you and not concern yourself with anything else but completing that task.