There was so much great content at the Upfront Summit but I think one that held a special place in minds of most people I talked to was our panel on diversity led by my partner Hamet Watt (<– what? you’re not following him?).
The message of the panel was very clear – “We don’t need your help. We want to partner with you to make money.” And I’ll elaborate on this but I wanted to start first with an important quote from Magic, said with a very positive tone and at the end of a session in which he emphasized,
“You have to look like America looks, because right now the tech sector doesn’t look like America.”
– Earvin Magic Johnson
And of course he’s right. And we shouldn’t deny it. We should do more to fix it, even if it takes time and hard work. From left to right above is Tristan Walker (founder of Walker & Co), Magic Johnson (successful NBA basketball player and successful business man – his two life goals), Beatriz Acevedo (founder of Mitu, the largest Latino digital media company) and Troy Carter (founder of Atom Factory and Cross Culture Ventures).
The video is simply amazing and is a must watch for any investor but I think will be enjoyed by all entrepreneurs, too. But it highlighted the misperceptions many people have had about serving urban markets. Magic spoke about how when he left basketball he wanted to bring businesses to African American communities that were lacking in basic services. So he put up half the money to bring movie theaters to inner-city Los Angeles and showed that he could deliver profitable chains. He sold for a huge gain.
Magic also talked about bringing Starbucks to inner-city African American neighborhoods where he also put up half the money and convinced Howard Schultz to put up the other half. Said Magic, “Latino and Black folks, we like coffee, too!” But he tweaked the menus because apparently African Americans don’t eat scones so they added sweet potato pie and Sock It To Me Cake. Magic’s stores turned out to make more money than suburban stores so they build 125 of them and sold them back to Starbucks.
But Magic spoke about how hard it was to raise money in the early days after leaving basketball because many investors weren’t used to investing in urban neighborhoods so he had to prove that not only did he know how to make money investing but also that urban markets could be very profitable.
The story was nearly universal. Tristan Walker spoke of his journey from the projects to Wall Street to Stanford to entrepreneur. And he spoke about pitching investors who couldn’t understand when he pitched why 9/10 black people would want to buy his razors due to skin problems in the black community and being under-served by traditional razor companies. [Note: Upfront is an investor]
And then quite honestly Beatriz Acevedo, Founder & President of Mitu [Note: Upfront is an investor] sort of stole the show with her comment
“We really don’t need the charity of anybody in this country. This country needs the insights of our cultures to make money, to be successful.”
Too right. And this theme came out again and again. 50% of all children born in California, Texas and New York are Latino and 25% of all millennial’s nationwide. Tristan emphasized that black culture drives music, sports, apparel and so much more in our country and its influence is extending beyond this basic reach. “The demographic shift is real and it’s valuable,” he said.
And of course African Americas and Latinos over-index in spend and consumption in many categories including many health & beauty products, movie theater attendance, mobile phone usage and even social media. So Tristan wondered, “Why would the greatest consumer demographic not be the greatest producer demographic in the country?”
Troy Carter spoke of the need for investors to fund entrepreneurs who authentically serve their markets and given global demographics believes that his firm will have a built in advantage by understanding inner-city cultures, “We’ll probably see most of the deals other investors will see but I think they’re likely to only see 50% of the deals we see.”
Troy started his life in a poor neighborhood in West Philadelphia. He didn’t finish high school but had a strong knack for helping promote young hip hop artists and worked with P Diddy, Biggie Smalls, Will Smith and others. [Next week I’ll publish a 1-1 interview I did with Troy on Day 1 of the Upfront Summit.]
But Troy has become a very successful tech investor in his own right having invested early in Uber, Lyft, Dropbox, Warby Parker and others. But Troy’s message for Silicon Valley was clear, “You need to stop looking beyond the typical Mark Zuckerberg stereotype if you want to fund the big companies of tomorrow.”
And if we want to encourage more people of color and more women to become entrepreneurs we need to start by changing ourselves. If the money comes from more representative sources the entrepreneurs will follow. Have a listen to the video yourself. I think you’ll find it to be very positive, uplifting and motivating. And you’ll find that if you want to figure out how to make money you’ll need to better understand how to serve more diverse markets.
I was inspired by each of the panelists. Tristan and Beatriz, both of whom I work with, just watching them succeed is an inspiration. And I could listen to Magic tell stories all day about how he conquered misperceptions investors have had about serving urban communities and people of color. And of course Troy who has proven that there isn’t one narrative that says you need to come from Harvard or Stanford to be a huge financial success.
And a huge shout out to my partner Hamet Watt for taking on the topic of diversity in such a smart way but bringing together a world-class panel and emphasizing those that are figuring out how to build diversity into profitable businesses that should inspire us all.
(Cross-posted @ Both Sides of the Table)