Black Web 2.0: Creating a new generation of technology entrepreneurs Part 2: Consumption vs. Creation
navarrowwright
· 3 months ago
Ok Wm_tucker It's obvious that you just want to debate me, which is all good. First, All my posts in regards to being an entrepreneur are focused on creating web or technology based business ( mostly web) so I'm not sure what you meant by your first point. My whole point for writing these posts is to encourage people to try their hand at being entrepreneur and to understand that the barriers are lower than they may think. The kind of "man it's just not realistic for us" mindset your showing is one of the reasons why we don't have more African American technology entrepreneurs today. There are numerous businesses out here today that have been created and are thriving by using the "bootstrapping" principle of taking no or limited outside funds. There are numerous scenarios in a companies life cycle where accessing outside capitol makes sense. The point of these posts is to point out that lacking capitol in the beginning is not a game ending obstacle. IF you are going to preach that getting capitol is the end all to be then you need to explain all sides of that path. For example let people know that the earlier in the process you take outside funding, more than likely you are giving away a larger piece of their company and in some cases company control to do so. Explain company valuation and everything that goes into it. If you have raised money from the venture community and gone through that process then should know those insights are key.Otherwise your just giving misdirection and i think there is enough of that in out culture today. My goal in stating my "Challenge" was to allow the readers to see examples through our dialogue that could illustrate a possible direction to them. But instead of that you issue a challenge to me in efforts to i guess " call me out" that's just silly and unproductive but again I'll bite. I'm in the process of creating two separate ventures by bootstrapping 1) because i wanted to illustrate the process through future posts 2)Because i believe the ideas have some legs. I've also raise significant funds from some of top firms in the country but honestly it's not really about what I've done. It's about me wanting more Black people to do and do it better to me. I know there are people out there who can if they are encouraged to take the first step.
Wm_Tucker
· 3 months ago
No, bruh… this isn’t about you; this isn’t personal. I’m not ‘calling you out’. We’re not debating as much as we’re discussing how best to get from point ‘A’ to point ‘B’, so to speak. I’d like to believe we both want to see more Af-Ams become tech entrepreneurs -- which I interpreted from your first post to be a person who either starts or presides over a company involved with technology, e.g.; manufacturing or scientific research. As I wrote in my last entry, bloggers and e-tailers don’t really fit this description. While I also believe you’ve conflated technical knowledge with the skills necessary to start/run such an enterprise, I understand and agree with the larger goal of expanding the numbers of Af-Am leaders of software & hardware manufacturers, ‘green’ energy manufacturers, biotech R&D firms, etc..
With that said, any discussion on Af-Am headed firms producing smartphone apps, netbooks, biofuels, etc., has to be centered on how the economy writ large works in that practical methodologies for its navigation can be created. Originally, you characterized capital and credit as non-issues for starting a business today. Nothing could be further from the truth. In actuality, poor access to capital and credit not only remains the #1 obstacle facing aspiring entrepreneurs, it’s the #1 reason why >75% of all businesses fail inside of 3 years -- facts that can be corroborated by any reliable source on business or economics.
You now write of ‘bootstrapping’ -- using one’s own resources to start/run a business -- as if it doesn’t require one to have boots up front in order to bootstrap. I’m sure you know most Americans, particularly Af-Ams, typically lack the individual wherewithal to start an enterprise of the type you allude to in your essay. For example, a smartphone app can cost $10k - $150k to develop. Presuming our hypothetical tech entrepreneur decides to finance his project with a SBA loan, they’re can realistically expect the lender to require $2K - $30K in cash or equity before approving the loan. Contrary to your opinion, bootstrapping is the avenue of last resort. And while it’s noble (in concept), it’s an inefficient use of the entrepreneur’s resources. That’s a lesson taught in both Business 101 and the School of Hard Knocks.
Ron
· 3 months ago
Simply put, we need schools that teach this stuff from a very early age. Not just focused on development, but an entire broad approach on how we approach subjects. Most of the things I learned in elementary school -- like writing research papers, how to read the stock market pages, public speaking -- were the foundation of skills that served me throughout my academic career and life. But it has to start early and there has to be a commitment from people across the board to make this happen. It takes money, it takes will and unfortunately there are too many barriers to entry that crop up these days to make this sort of thing work as well as they did even a generation ago.
It doesn't mean we shouldn't or can't, though.
Andre Holmes
· 3 months ago
Hey this technology is evolving so fast as we speak before the book and coarse could be implemented half of the information would be obsolete. But yes we must teach the babies and build Zion!
Gina
· 3 months ago
Great post. I think I am going to give this a try just so see if it is possible. . But yes, we have to stop being the consummate consumers. All the infrastructure in the world won't close any "divide" if we aren't empowered to do more than hand over our money to other groups who are innovating.
navarrowwright
· 3 months ago
Great Gina! Let me know ho w it turns out for you. Good luck
Herb Pinder Jr.
· 3 months ago
A very timely article, Navarrow. I've been preaching for AAs to be technology producers vs. consumers for awhile (10+ years at least). I've built out technology platforms since GeoCities (latest: BlackBottom.com, BlackMeme.com, etc.) and have found that unless we begin producing, we remain limited to: consuming and over-indexing on other services (without the benefits and _very_ valuable learning experiences) and being completely outside/ignorant of the financial dynamics involved. One thing to the folks just starting in development: don't wait. Global competition isn't waiting for our community to get "up-to-speed" or caught up - do your due diligence and get started. Great article.
navarrowwright
· 3 months ago
Thanks Herb I also believe we have to widen or net in terms of the business ideas we focus on. We can be minority entrepreneurs but have global expectations.
Wm_Tucker
· 3 months ago
It needs to be said that technical skill sets are often separate from entrepreneurial skill sets, and that each has its somewhat unique mix of aptitudes, talent, cognitive & social skills, etc.. Af-Ams should understand we can continue diversifying our production as financiers, technocrats, executives, and merchants.
I'd like to also correct the suggestion that money/access to capital isn't a barrier to entry for a tech entrepreneur. There is an emerging class of Af-Ams with the technical skill to create say, proprietary software, and perhaps use that software as the basis for an enterprise, but whom lack the social and/or financial means and know-how for translating resources into a business. One habit more of us should value and employ is organization; the process of arranging work, time, capital, and authority in such a way that's conducive to running a business.
Gina
· 3 months ago
Wm_ Tucker you make an OUTSTANDING point.
"One habit more of us should value and employ is organization; the process of arranging work, time, capital, and authority in such a way that's conducive to running a business." - Love that quote right there. I've labeled it "interpersonal infrastructure". Its my focus for the year 2010
While the barrier's to entry into digital media content creation are relatively low. Once you pass the initial barrier of creating content. Black innovators run into the same brick wall previous generations and industries have encountered which is access to capital.
You also made a great point about the skill set distinctions between entrepreneurs and those with technical skills. They aren't one in the same. I work with bloggers mainly and I fear that many of them feel that Google Adsense is going to drag them into some type of economic promised land.
Some of the smartest and most gifted people in the world can't run a business nor or they necessarily willing to take the risks inherent in working for yourself. Nor can they speak the language of potential sources of financing or other resources.
Though I think having some rudimentary skills it a great asset for an entrepreneur to have because it provides a greater understanding about how things work, its not necessary.
So then the question becomes how do people with these two distinct skill sets collaborate. Do we try to turn innovators into entrepreneurs? Would someone who builds things enjoy the hassles of entrepreneurship? Or is there some structure that you impose which makes this work.
navarrowwright
· 3 months ago
Wm_tucker I agree that you can entrepreneurial skill sets that are not necessarily technical and I would also say that African Americans have a lot of those skills even if they are not applied in the right way. What i have to disagree with is the money and access to capitol is a barrier. Give me any situation and I can lay out a plan as to how that person can start their technology business and put it in a position to scale as long as a) it's a good product to begin with B) they are willing to flexible in their approach. Both may seem simple but present challenges to some people. Thanks
Wm_Tucker
· 3 months ago
With all due respect Navarro, laying out a plan is easy. Raising capital for implementing that plan is something else altogether. And while accessing capital is easier today than it's ever been -- thanks in part to technology -- it's still a formidable challenge for entrepreneurs in general, and Af-Am entrepreneurs in particular. When I wrote earlier of cash & credit remaining a "barrier to entry" for aspiring businesspersons, I didn't mean to suggest they're insurmountable or impenetrable.
My point being it's irresponsible for anyone to suggest to persons aspiring to start a business that access to capital & credit is a fait accompli once armed with a well-written marketing plan and (supposedly) viable product/service. There is a conspicuous lack of interest amongst Af-Ams for angel financing and capital formation of the type required by Af-Am tech entrepreneurs which IMO, explains in part why we're not seeing many tech start-ups (excluding 'consulting firms'') launched by said group.
navarrowwright
· 3 months ago
My point is that you don't need capitol to start a web business. The real reason you would need any real capitol at all is if you need to hire or partner with someone to create the product when the person does not have those skills themselves. Even then if you find the right partner, who becomes excited about the product then they will work for equity. If you create a product you should focus on it making a product that provides a service that's good enough that people will pay for it. Again i challenge anyone to present me with a web based business and I can help devise a plan to get it launched with little to no capitol. People may not want to do what it takes to do it but it's possible and the people who don't have it in them to do what it takes and have a problem convincing a VC to invest in their business.
Wm_Tucker
· 3 months ago
So... now we're talking about what's required to launch a 'web-based' business? That's a considerable retreat from the standard implied in your original premise.
Regardless, every business requires capital to start -- some more than others. But that's not to mean entrepreneurs are required to finance their projects out of pocket. To the contrary, 'OPM' (in its many forms) is not only tried and true, it's an efficient use of time, labor, and money.
This notion of yours that all one has to do is create the idea for a novel product or service to begin cashing checks is a fantasy. History is replete with stories about some Rube Goldberg-ian thingamabob that never got off the ground because its inventor/author lacked proper capital. But, rather than bicker with you I'll challenge you to present @ BlackWeb 2.0 an example of a business you've started w/o capital. (And by 'started', I mean the business is generating income.)
glendoncameron
· 3 months ago
I read this and I am laughing. I wrote a ebook ( sweat equity) bought a domain name and web hosting. $117.00 out of pocket and the last three months I have made $4800.00 on my blog just selling the ebook. Am I setting the world on fire, nope, not yet.
But for the investment there is nothing but upside. There have been several web based business that were started with nothing. Go to www.plentyoffish,com Marcus built the site himself has no employees and pulls down $3-5 million a year from advertising. Total start up cost $250.00 or the cost of a very good night on the town.
We as black folks have got to stop following and lead!
Sure the tried and true way is to come up with and ideal and raise capital, but guess what capital is in short supply, they are even defaulting on loans n Dubai, where money literally was flowing on the streets a few years ago. You are only as limited as your imagination.
For the record I had a B&M business that did well after I sunk over $250,000 in it which is chump change for a furniture store. It was a great experience but the metrics cannot compare to a web based or technology based business.
Wm_Tucker
· 3 months ago
With all due respect to you and your effort, Glendon, e-books, dating services, and many other 'dot-coms' aren't technology companies. They neither manufacture/produce software or hardware, nor do they do scientific research. While I wouldn't argue Markus Frind isn't a 'technology entrepreneur', he's no Linus Torvalds, either.
The essential point I'm making in response to Navarrow is access to capital & credit remains the biggest challenge to an entrepreneur, especially in a cost-intensive industry like technology. I suppose it's nice if an aspiring video game developer, biotech researcher, broadband provider, or 'green' energy manufacture can fund the development and operations of their company out-of-pocket, but it doesn't happen often. It's naive or irresponsible to suggest money's not an issue in light of the facts of modern business.
Facebook Developer
· 3 months ago
Hey this technology is evolving so fast as we speak before the book and coarse could be implemented half of the information would be obsolete.
navarrowwright
· 3 months ago
Facebook developer yeah thats true but Computer books are spun out as fast as they change . Some companies like the pragmatic bookshelf ( which i swear by their books) offers pdf versions of their books and even beta versions as they write them. (http://pragprog.com/) So classes can be and stay current.
navarrowwright
· 3 months ago
Hey Ron I just don't agree. While i understand there are some obstacles other people are doing it everyday. Even with the education system the way it is there are still young people who show great promise and the barrier to entry is lower today than it's ever been. it's just not on the radar of enough people.
Indo
· 3 months ago
Excellent comments Wm_Tucker. Raising capital for tech ventures remains a Pandora's Box for many African Americans.
Gina
· 3 months ago
@Wm_tucker Don't people have to start somewhere? So what if he started with an e-book, the skills and experience that comes from running a micro enterprise could lead to bigger things. For example, he might have learned how to manage contractors or some other important skill. He could have made a contact or discovered new business opportunities.
Not everyone goes to business school works for a huge company and then walks right into a multi-billion dollar business. Some people have to start out with selling t-shirts.
I see the distinction you are making however, when it comes to BIG money, that ofter requires larger capital expenditures, but sometimes you have to meet people where they are at.
I THINK navarrows point or at least I hope it was, was that we have to change people's mindsets about entrepreneurship. Many people think that owning their own business is outside of their gasp. I think his point was that technology makes it possible for you to start a digital-based microenterprise is an internet connection, a desire to learn, and the willingness to take the risk.
But I would LOVE to hear more about the steps you think need to be taken to become a broadband provider because I know I want to get in on the infrastructure side.
All Comments
It's obvious that you just want to debate me, which is all good. First, All my posts in regards to being an entrepreneur are focused on creating web or technology based business ( mostly web) so I'm not sure what you meant by your first point. My whole point for writing these posts is to encourage people to try their hand at being entrepreneur and to understand that the barriers are lower than they may think. The kind of "man it's just not realistic for us" mindset your showing is one of the reasons why we don't have more African American technology entrepreneurs today. There are numerous businesses out here today that have been created and are thriving by using the "bootstrapping" principle of taking no or limited outside funds. There are numerous scenarios in a companies life cycle where accessing outside capitol makes sense. The point of these posts is to point out that lacking capitol in the beginning is not a game ending obstacle. IF you are going to preach that getting capitol is the end all to be then you need to explain all sides of that path. For example let people know that the earlier in the process you take outside funding, more than likely you are giving away a larger piece of their company and in some cases company control to do so. Explain company valuation and everything that goes into it. If you have raised money from the venture community and gone through that process then should know those insights are key.Otherwise your just giving misdirection and i think there is enough of that in out culture today. My goal in stating my "Challenge" was to allow the readers to see examples through our dialogue that could illustrate a possible direction to them. But instead of that you issue a challenge to me in efforts to i guess " call me out" that's just silly and unproductive but again I'll bite. I'm in the process of creating two separate ventures by bootstrapping 1) because i wanted to illustrate the process through future posts 2)Because i believe the ideas have some legs. I've also raise significant funds from some of top firms in the country but honestly it's not really about what I've done. It's about me wanting more Black people to do and do it better to me. I know there are people out there who can if they are encouraged to take the first step.
With that said, any discussion on Af-Am headed firms producing smartphone apps, netbooks, biofuels, etc., has to be centered on how the economy writ large works in that practical methodologies for its navigation can be created. Originally, you characterized capital and credit as non-issues for starting a business today. Nothing could be further from the truth. In actuality, poor access to capital and credit not only remains the #1 obstacle facing aspiring entrepreneurs, it’s the #1 reason why >75% of all businesses fail inside of 3 years -- facts that can be corroborated by any reliable source on business or economics.
You now write of ‘bootstrapping’ -- using one’s own resources to start/run a business -- as if it doesn’t require one to have boots up front in order to bootstrap. I’m sure you know most Americans, particularly Af-Ams, typically lack the individual wherewithal to start an enterprise of the type you allude to in your essay. For example, a smartphone app can cost $10k - $150k to develop. Presuming our hypothetical tech entrepreneur decides to finance his project with a SBA loan, they’re can realistically expect the lender to require $2K - $30K in cash or equity before approving the loan. Contrary to your opinion, bootstrapping is the avenue of last resort. And while it’s noble (in concept), it’s an inefficient use of the entrepreneur’s resources. That’s a lesson taught in both Business 101 and the School of Hard Knocks.
It doesn't mean we shouldn't or can't, though.
and build Zion!
Let me know ho w it turns out for you. Good luck
I also believe we have to widen or net in terms of the business ideas we focus on. We can be minority entrepreneurs but have global expectations.
I'd like to also correct the suggestion that money/access to capital isn't a barrier to entry for a tech entrepreneur. There is an emerging class of Af-Ams with the technical skill to create say, proprietary software, and perhaps use that software as the basis for an enterprise, but whom lack the social and/or financial means and know-how for translating resources into a business. One habit more of us should value and employ is organization; the process of arranging work, time, capital, and authority in such a way that's conducive to running a business.
"One habit more of us should value and employ is organization; the process of arranging work, time, capital, and authority in such a way that's conducive to running a business." - Love that quote right there. I've labeled it "interpersonal infrastructure". Its my focus for the year 2010
While the barrier's to entry into digital media content creation are relatively low. Once you pass the initial barrier of creating content. Black innovators run into the same brick wall previous generations and industries have encountered which is access to capital.
You also made a great point about the skill set distinctions between entrepreneurs and those with technical skills. They aren't one in the same. I work with bloggers mainly and I fear that many of them feel that Google Adsense is going to drag them into some type of economic promised land.
Some of the smartest and most gifted people in the world can't run a business nor or they necessarily willing to take the risks inherent in working for yourself. Nor can they speak the language of potential sources of financing or other resources.
Though I think having some rudimentary skills it a great asset for an entrepreneur to have because it provides a greater understanding about how things work, its not necessary.
So then the question becomes how do people with these two distinct skill sets collaborate. Do we try to turn innovators into entrepreneurs? Would someone who builds things enjoy the hassles of entrepreneurship? Or is there some structure that you impose which makes this work.
I agree that you can entrepreneurial skill sets that are not necessarily technical and I would also say that African Americans have a lot of those skills even if they are not applied in the right way. What i have to disagree with is the money and access to capitol is a barrier. Give me any situation and I can lay out a plan as to how that person can start their technology business and put it in a position to scale as long as a) it's a good product to begin with B) they are willing to flexible in their approach. Both may seem simple but present challenges to some people.
Thanks
My point being it's irresponsible for anyone to suggest to persons aspiring to start a business that access to capital & credit is a fait accompli once armed with a well-written marketing plan and (supposedly) viable product/service. There is a conspicuous lack of interest amongst Af-Ams for angel financing and capital formation of the type required by Af-Am tech entrepreneurs which IMO, explains in part why we're not seeing many tech start-ups (excluding 'consulting firms'') launched by said group.
Regardless, every business requires capital to start -- some more than others. But that's not to mean entrepreneurs are required to finance their projects out of pocket. To the contrary, 'OPM' (in its many forms) is not only tried and true, it's an efficient use of time, labor, and money.
This notion of yours that all one has to do is create the idea for a novel product or service to begin cashing checks is a fantasy. History is replete with stories about some Rube Goldberg-ian thingamabob that never got off the ground because its inventor/author lacked proper capital. But, rather than bicker with you I'll challenge you to present @ BlackWeb 2.0 an example of a business you've started w/o capital. (And by 'started', I mean the business is generating income.)
But for the investment there is nothing but upside. There have been several web based business that were started with nothing. Go to www.plentyoffish,com Marcus built the site himself has no employees and pulls down $3-5 million a year from advertising. Total start up cost $250.00 or the cost of a very good night on the town.
We as black folks have got to stop following and lead!
Sure the tried and true way is to come up with and ideal and raise capital, but guess what capital is in short supply, they are even defaulting on loans n Dubai, where money literally was flowing on the streets a few years ago. You are only as limited as your imagination.
For the record I had a B&M business that did well after I sunk over $250,000 in it which is chump change for a furniture store. It was a great experience but the metrics cannot compare to a web based or technology based business.
The essential point I'm making in response to Navarrow is access to capital & credit remains the biggest challenge to an entrepreneur, especially in a cost-intensive industry like technology. I suppose it's nice if an aspiring video game developer, biotech researcher, broadband provider, or 'green' energy manufacture can fund the development and operations of their company out-of-pocket, but it doesn't happen often. It's naive or irresponsible to suggest money's not an issue in light of the facts of modern business.
yeah thats true but Computer books are spun out as fast as they change . Some companies like the pragmatic bookshelf ( which i swear by their books) offers pdf versions of their books and even beta versions as they write them. (http://pragprog.com/) So classes can be and stay current.
I just don't agree. While i understand there are some obstacles other people are doing it everyday. Even with the education system the way it is there are still young people who show great promise and the barrier to entry is lower today than it's ever been. it's just not on the radar of enough people.
Not everyone goes to business school works for a huge company and then walks right into a multi-billion dollar business. Some people have to start out with selling t-shirts.
I see the distinction you are making however, when it comes to BIG money, that ofter requires larger capital expenditures, but sometimes you have to meet people where they are at.
I THINK navarrows point or at least I hope it was, was that we have to change people's mindsets about entrepreneurship. Many people think that owning their own business is outside of their gasp. I think his point was that technology makes it possible for you to start a digital-based microenterprise is an internet connection, a desire to learn, and the willingness to take the risk.
But I would LOVE to hear more about the steps you think need to be taken to become a broadband provider because I know I want to get in on the infrastructure side.