Successful Black Entrepreneurs E-Book

Steven S. Rogers

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 234

Veröffentlichungsjahr: 2022

Beschreibung

Learn about the successes of Black entrepreneurs through a collection of unique case studies Successful Black Entrepreneurs is an insightful collection of Harvard Business School case studies about Black entrepreneurs succeeding in a variety of industries and through different routes, including start-ups, franchising, and acquisitions. The book also recognizes and celebrates Black entrepreneurial excellence, as it takes the reader through the stages of entrepreneurship, including ideation, raising capital, growing the company, and taking it public. In addition to identifying the positive aspects of Black entrepreneurship, the book also uses data, research, and anecdotes to highlight the challenges faced by Black entrepreneurs, including: * An inability to access capital from traditional financial institutions like banks and private equity firms * The requirement to practice "racial concealment" in the company of White customers in order to achieve success Perfect for students, aspiring entrepreneurs, and established business leaders, Successful Black Entrepreneurs provides practical perspectives from Black entrepreneurs about what it takes to succeed in business.

Leseprobe

Table of Contents

Cover

Title Page

Copyright

Preface

Note

Introduction

1 History of Black Entrepreneurship

Introduction to the Case Study

John Rogers Case Study Assignment Questions

Notes

2 Importance of Black Entrepreneurs

Notes

3 Black Start-Up Entrepreneurs

Fundamentals of a Start-Up

Black Business Models

Introduction of the Case Study

Mented Cosmetics Case Study Assignment Questions

Notes

4 Entrepreneurship Through Acquisitions

Pros and Cons

The Acquisition Process

Reginald F. Lewis

Introduction of the Case Study

Earl Gordon Case Study Assignment Questions

Notes

5 Entrepreneurship Through Franchising

How Franchising Works

Black Franchisees

Black Franchisor

Introduction to the Case Study

Valerie Daniels-Carter Case Study Assignment Questions

Notes

6 Access to Capital for Black Entrepreneurs

Introduction to the Case Study: Sources of Capital for Black Entrepreneurs

Fairview Capital Note Assignment Questions

Notes

7 Black Turnaround Entrepreneurs

Black Corporate Turnaround Specialists

Black Entrepreneurs

Cathy Hughes

Introduction to the Case Study

Rev. Morgan-Thomas Case Study Assignment Questions

Notes

8 Entrepreneurial Exits: Selling the Company

Reasons Why an Entrepreneur May Want to “Exit” a Business

Special Purpose Acquisition Companies

SPACs and Black Entrepreneurs and Investors

Initial Public Offerings

Public Companies in the U.S.

Black-Owned Public Companies

Robert and Sheila Johnson

Introduction to the Case Studies

Corey Thomas Case Study Assignment Questions

United Housing—Otis Gates Case Study Assignment Questions

Notes

9 Black Intrapreneurs

Intrapreneur vs. Entrepreneur

Intrapreneur Categories

Benefits and Risks of Intrapreneurship

Intrapreneurship Models

Introduction to the Case Study

Dr. William Carson Case Study Assignment Questions

Notes

Epilogue

Note

APPENDIX: Course Description

Syllabus

Course Reading Materials

Sample Course Schedule

Acknowledgments

About the Author

Index

End User License Agreement

List of Tables

Chapter 5

Table 5.1 Franchise Industry 2019 (estimates)

Chapter 8

Table 8.1 Partial Listing of Black-Owned Firms That Have Gone Public from 1993 ...

Chapter 9

Table 9.1 Comparison of Entrepreneur and Intrapreneur

Guide

Cover Page

Table of Contents

Title Page

Copyright

Preface

Introduction

Begin Reading

Epilogue

Appendix: Course Description

Acknowledgments

About the Author

Index

End User License Agreement

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SUCCESSFULBLACKENTREPRENEURS

HIDDEN HISTORIES, INSPIRATIONAL STORIES, AND EXTRAORDINARY BUSINESS ACHIEVEMENTS

CASE STUDIES BY HARVARD BUSINESS SCHOOL

STEVEN S. ROGERS

HARVARD BUSINESS SCHOOL, RETIRED

Copyright © 2022 by Steven Rogers. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

Case studies reprinted with the permission of Harvard Business Publishing. © President and Fellows of Harvard College.

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Library of Congress Cataloging-in-Publication Data is Available:

ISBN 9781119806738 (Hardcover)ISBN 9781119806813 (ePDF)ISBN 9781119806806 (ePub)

Cover Design: Wiley

Preface

ALL OF THE case studies included in this book were taught as part of my course at Harvard Business School. This course, “Black Business Leaders and Entrepreneurship,” was historic as it represented the first course, in any business school, devoted singularly to the challenges, efforts, and accomplishments of Black entrepreneurs. The course description and syllabus is included in the Appendix.

The primary objective of the course was the same as one of the objectives of this book—to identify, recognize, and celebrate the brilliance of Black men and women who achieved success as entrepreneurs. Of particular note, these people were and are not athletes or entertainers.

Rarely will you see the inclusion of athletes or entertainers on any list identifying successful entrepreneurs. The exception that nearly makes the rule is when such a list identifies Black entrepreneurs. This is problematic for the Black community because it implies that non-Blacks can achieve entrepreneurial success through their intellect and vision, but Blacks rely on their athletic accomplishments or entertainment skills to achieve similar success. It is unfair because it ignores the fact that these Black entertainers typically pursued entrepreneurial endeavors AFTER they had successfully established a brand. Establishing a brand allowed them to then use their names, financial resources, and hired management teams to extend the range of their impact to areas of new products or services. There is absolutely nothing wrong with this business model when it is applied to the universe of entrepreneurial recognition. But achieving entrepreneurial success through branding alone is only applied to Blacks generally. Therefore, it sends a message to the Black community that if a person aspires to be a successful entrepreneur, then the pathway requires becoming a successful athlete or entertainer first.

Therefore, the mission of this book and all of the case studies that I published is to fight the stereotypic conviction that there is a narrow Black entrepreneurial archetype. My fervent belief is that it is imperative for Blacks to embrace something broader, to know that their entrepreneurial role models should be and are other Black men and women who have used their intellect, problem-solving skills, and business acumen to become successful entrepreneurs.

The case studies in this book also differ from the typical Harvard Business School case studies with the inclusion of Black history. Every case reviewed has a section devoted to teaching the reader something historical about the Black community. All of the supplemental information covered was tangentially related to the protagonist covered. For example, the case study on Otis Gates included a section about the Pullman porters, after it was mentioned that Gates's father held that occupation. A similar historical vignette about Tuskegee Airmen was included in the case study on John Rogers because his father was one of those distinguished military pilots.

Finally, I am most proud of the fact that a distinguishing aspect of every case is that the Black entrepreneurs are shown to be more than just symbols of monetary success. These men and women made tangible, public contributions to the Black community. To illustrate my point, you may note that Valerie Daniels-Carter created a community center in the heart of the Black community in Milwaukee, while Otis Gates not only increased housing opportunities but funded after-school programs, adult education, and job coaching in community centers in Boston's Black community.

The inclusion of the community contributions of these Black entrepreneurs was intentional. My intent was to define Black entrepreneurial success as being more than an individual with the ability to make a lot of money. There is a legacy that our Black entrepreneur ancestors have left us that is highlighted throughout this book that the true measure of a successful Black entrepreneur requires a positive answer to the question, “In addition to your financial success, what have you done to help the Black community?”

One couple who had financial success and helped the Black community was Willa and Charles Bruce, mentioned in Chapter 3. Their successful beach resort was closed after the city government took their land. This was done because they were Black and their customers were Black. On April 6, 2021, the Manhattan Beach City Council voted to begin the process of righting the wrong inflicted on the Bruce family. Their objective is to return the land ownership to the descendants of Willa and Charles. This effort to transfer the land was accompanied by the following statement from a government official, “The Bruces had their California dream stolen from them… . And this was an injustice inflicted not just upon Willa and Charles Bruce but generations of their descendants who almost certainly would have been millionaires if they had been able to keep this property and their successful business.”1 I strongly believe the right thing to do is for the county to return this property to the Bruce family.

Hopefully the publicity about this injustice will also teach people about Willa and Charles, two successful Black entrepreneurs who were not athletes or entertainers, but great business people! While I am making you aware of the crimes against these two entrepreneurs, this book also recognizes and celebrates their brilliance, as well as the effulgence of other Black entrepreneurs.

Note

1

   John Antczak, “Plan Would Return California Beachfront Taken from Black family in '20s.” ABC10. April 9, 2021.

https://www.abc10.com/article/news/nation-world/los-angeles-county-beachfront-property-black-family-return/507-a1e2a4d6-5e1d-4cc3-a09b-47e44b0b8316

Introduction

AS STATED IN the Preface, a few years ago, while serving as a professor at Harvard Business School (HBS), I created a new course titled “Black Business Leaders and Entrepreneurship.” After hearing about the new course, a White professor asked, “Why do we need this course? What is the difference between Black and White entrepreneurs?” In response, I identified the following:

Black entrepreneurs do not have the same access to capital from traditional financial institutions, including banks and private equity firms.

Many Black entrepreneurs who want to sell to White customers must practice “racial concealment” to be successful.

Successful Black entrepreneurs who are not athletes or entertainers are virtually invisible in the minds of the mainstream public.

All of these forces have a negative impact on Black entrepreneurship, which, in turn, hurts the Black community and the entire country. For centuries, Black entrepreneurs have contributed to the growth of the American economy. That is the reason why all of America should care about the success of Black entrepreneurs. Therefore, this book is not only for Black readers but for every person interested in learning about great entrepreneurs who have made the U.S. a better country.

This book leverages the rich data learnings from HBS coursework and case studies (included in almost every chapter) and applies them to the current social justice and political movements in the world at large. My belief is that the world needs more Black leaders in business generally, and more Black entrepreneurs in particular.

Successful Black entrepreneurs create jobs for Black, White, and other racial groups. They have created companies that provide products and services that have benefited society at large. To emphasize that point, the following list includes Black entrepreneurs who invented or made major improvements to everyday products that remain in common use:

Sarah Boone – the ironing board

Lydia Newman – the hairbrush

Thomas Stewart – the string mop

George Sampson – the automatic clothes dryer

John Burr – the lawn mower

Richard Spikes – the automatic gear shift

Garrett Morgan – the traffic light

John Standard – the refrigerator

As significant as these products may be in your life, the real question is, how many of these people had you heard of? More than likely, the answer is “none,” even if you are Black. Most of you, of course, will have heard of Steve Jobs, Bill Gates, Thomas Edison, Henry Ford, Sam Walton, and Charles Schwab, I will wager. Why such a disparity in our awareness, and appreciation?

The largely, heretofore, hidden history of Black entrepreneurship motivated the creation of my course at HBS. Initially, I combined lesser-known facts and stories, along with an HBS case study that I wrote about a Black entrepreneur. I only wrote about successful Black entrepreneurs. My definition of success includes their monetary accomplishments as well as their contributions back to the Black community. These contributions were comprised of jobs for Blacks and/or philanthropic donations to the Black community. I published 24 case studies before retiring from HBS in 2019, which comprises the most case studies with Black protagonists written by a single author in this country, and some of them will be included in this unique book.

HBS has an inventory of over 10,000 case studies that generate over $100 million in annual revenue for the university. Over 80% of all case studies used by business schools throughout the world are from this HBS inventory. I have written over 50% of all HBS case studies that have a Black protagonist. This book will bring many of them together in a collection for the first time. While such a large collection of case studies regarding Black entrepreneurs makes this book distinctively different, the addition of content about the history of Black entrepreneurship, with related issues and materials, will make it substantially more than a simple collection of case studies.

Every chapter will end with one of my case studies, preceded by a brief description of the case and at least two questions that can help you structure your analysis and determine your answers. The case study topic will be directly related to the title of the chapter. Each case was taught at Harvard Business School to MBA students. You will now get the exact same opportunity to read the case, analyze it, identify the problems, and recommend solutions.

The objectives of this book are multifold, including the following:

Provide you with history that you are not likely to have ever heard before.

Kill stereotypes that only athletes and entertainers are successful Black entrepreneurs.

Raise the profile of Black entrepreneurs so that, hopefully, it improves their access to capital.

Help all entrepreneurs see themselves solving problems currently addressed only by Black entrepreneurs.

Inform you that more Black entrepreneurs are needed.

Inspire Black people through entrepreneur role models who look like them.

Promote the idea that entrepreneurship is a skill that can be learned and is not a quality that is defined by race.

By the way, the White professor mentioned earlier is Jeff Bussgang. After learning about the realities of Black entrepreneurship, he decided to be part of the solution. He partnered with a Black woman, Donna Levin—a former entrepreneur who took her company, Care.com, public—to co-teach his popular course “Launching Technology Ventures.” He also added my case study, “Mented Cosmetics,” to his course. Finally, he has partnered with two Black HBS professors to create and co-teach a new course titled “Scaling Minority Businesses” that has a focus on Black-owned companies. Jeff's initials are J.B. One of his course co-creators mentioned above, Henry McGee, stated with pride that J.B. stands for “John Brown,” the famous White abolitionist.

This book is for Whites, Blacks, and every other race and ethnicity. The facts, stories, and importance of Black entrepreneurs are topics that should be known to all Americans and people throughout the world. I know that you will learn something new and enjoy reading this book!

1History of Black Entrepreneurship

IN A SINGLE word, entrepreneurship has meant freedom to the Black community. Freedom to command their own destinies, to serve their own communities, to live out their own dreams through entrepreneurship, and the freedom to free enslaved people. However, to be clear, Black entrepreneurship did not begin in 2019 when Kim and Jim Lewis, founders of CurlMix Inc., pitched their company on Shark Tank and rejected a $400,000 offer.1 It also did not begin in 1991 when Bob Johnson, the founder of Black Entertainment Television (BET), took the company public, raising $72 million and becoming the first Black-owned company on the New York Stock Exchange (NYSE).2 Nor did it begin in 1969, when Parks Sausage Company became the first Black-owned company to complete an initial public offering.3 It did not begin in 1942 when John H. Johnson started the Negro Digest, which later became Ebony magazine, to, in his words, “tell the swell story about the Negro.”4 Nor did it begin in 1910 when Sarah Breedlove Walker, who we all know as Madam C. J. Walker, built a hair care manufacturing plant with over 3,000 employees in Indianapolis and became the country's first Black millionaire.5 It did not begin in 1905 when Robert Abbott began the Chicago Defender newspaper, a major publication of the Black press, which grew to be one of the most influential national newspapers of the time.6 Finally, it did not begin in 1903 when Maggie Walker became the country's first female bank president with the establishment of the St. Luke Penny Savings Bank in Richmond, Virginia.7 Black entrepreneurship began in 1651 when Anthony Johnson, formerly enslaved, purchased 250 acres of land in Virginia, and experienced enormous success as a tobacco farmer.8

Before the Emancipation Proclamation, free Blacks in the South and North had an insatiable appetite for business ownership, such that on the eve of the Civil War, their collective wealth was conservatively estimated to be over $50 million.9 Assuming an interest rate of 4% over 150 years, the present value of that $50 million would be approximately $15 billion! Among those Black entrepreneurs was James Forten, who, in the late 1700s, owned a manufacturing company in Philadelphia that made sails for ships.10 He employed more than 40 Black and White workers.

A recurring theme of Black entrepreneurship in the nineteenth century was job creation. In 1838, free Black women created jobs for themselves and others through their domination of the dress-making and wig-making industries. In 1840, free Blacks in New York also created jobs through their ownership of a clothes cleaner, a hairdressing salon, a confectionary, a fruit store, two coal yards, two dry goods stores, two restaurants, three tailor shops, and six boarding houses.

Surprisingly, Black entrepreneurship was not limited to free Blacks. While enslaved in the early 1800s, Frank McWorter started a company that produced saltpeter, the main ingredient in gun powder. With the company's profits, he purchased his freedom and the freedom of 16 family members. John Berry Meachum, among his several accomplishments, owned a carpentry business.11 With the earnings from his carpentry, he purchased his own freedom and that of his family and 20 friends. In 1794, Robert Renfro started a restaurant in Nashville, Tennessee, where he served food as well as liquor.12 He purchased his freedom and that of his friend in 1801.

Yes, my friends, Blacks have always been entrepreneurs. I applaud and celebrate those brave Black men and women who used entrepreneurship, literally, as a tool for freedom. As recounted earlier, a recurring theme of Black entrepreneurs is their use of their business earnings to purchase their own and the freedom of family and friends. However, as laudatory as these Black entrepreneurs were in their use of the profits from their businesses, there were members of the American community who were not so enamored of Black entrepreneurship.

In fact, one of the worst incidents of violence ever visited upon Blacks was directly related to successful Black entrepreneurship. In Tulsa, Oklahoma, on June 1, 1921, a terrorist event occurred that some have referred to as the “Black Holocaust in America.”13 In the early twentieth century, the most affluent Black community in America was not found in New York or Chicago, but in Tulsa, Oklahoma, a community well known as the “Black Wall Street.” With 15,000 Blacks residing in the city, occupying a 36 square block area, they owned and operated over 600 businesses.14 Among those many businesses, they owned 30 grocery stores, 31 restaurants, 8 doctor's offices, 6 private airplanes, 4 drug stores, 2 movie theaters, 1 hospital, 1 bank, and a bus system. One way to appreciate the vitality of this community is to note that the dollar of a Black person would circulate 36 to 1,000 times, taking up to a year to leave the Black community.

The main thoroughfare of these 36 square block areas was Greenwood Avenue, intersected by Archer and Pine streets. The first letter in each of those street names is a G, A, and P, which spells GAP, and that is where the GAP band, who jammed with “Burn Rubber on Me,” got its name.15

Don't these acts just warm you with pride and admiration? Well, the pride and admiration that you, I, and those 15,000 Black people had was equaled by the jealously and disdain of a group of Whites. Overnight, on May 31 and June 1, 1921, in a period of fewer than 12 hours, Black Wall Street was gone.16 A horde of Whites, angry, envious, and/or resentful of this Black success, burned down all of the Black businesses, 1,100 homes, and a dozen churches, and killed over 300 Black Americans living in Tulsa.

Eldoris McCondichie vividly recalled being awakened by her mother on that June morning. Eldoris, who was nine years old, remembers her mother's exact words as she said, “Eldoris, wake up! We have to go! The white people are killing the colored folks!”17 This massacre, which represented a clear act of domestic terrorism against Blacks included the ingenious evil of dropping Molotov cocktail bombs from airplanes, carried out by Whites who were former World War I pilots. This constituted the first aerial attack on Americans on American soil, 20 years before the Japanese bombing of Pearl Harbor on December 7, 1941, or the attacks against the Twin Towers of the World Trade Center on September 11, 2001. It is not surprising, but unfortunate, that Tulsa's Black community has never recovered from this little-known major tragedy.

Today, only one block houses Black-owned businesses. Most of the Greenwood Avenue area, once bustling with Black-owned businesses, has very few, and almost every piece of real estate is White owned. The headlines of The Washington Post call this “The ‘whitewashing’ of Black Wall Street.”18

The story of Black entrepreneurship is the story of American history. It spans every memorable period of our country's existence including slavery, Jim Crow, the Civil Rights Era, and the pre/post Black Lives Matter Era.