Business Lessons From Successful Black Entrepreneurs (Part 1): Meeting A Need
CEO at Novae, helping business owners establish business credit scores then leveraging the scores to access cash and credit.
I’ve learned a lot from the Black entrepreneurs of the past. So many of them succeeded despite overwhelming odds. Today, I want to share some of these lessons with you.
I was an entrepreneur starting out with no inherited wealth in an environment that was not built for me to succeed. Still, I’ve been able to start a series of million-dollar businesses, become a published author and work on multiple projects with the goal of reducing economic inequality.
This is due in no small part to the lessons of the past, which anyone can learn from today, whether you’re a Fortune 500 CEO or a startup entrepreneur.
1. Recognize The Need
When Madame C.J. Walker was born in Louisiana in 1867, slavery had just ended. Women had few property rights and weren’t allowed to attend most colleges or universities. Jim Crow meant that Black business owners could be lynched if they were too successful. Yet Madame Walker wanted more for her children. And she soon saw a way to get it.
Walker had an unmet need in her own life: the harsh chemicals she was forced to work with as a laundress left her hair and skin dry and brittle. And products made for white women often didn’t work for her.
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Walker soon discovered that another Black woman entrepreneur, Annie Malone, was meeting this need with a line of hair and skin products developed specifically for Black women. After starting out in sales for Ms. Malone, Madame Walker saw ways to improve the products, the business strategy and her own life. Soon she was in business for herself, and not long after that, she became America’s first female self-made millionaire.
Madame Walker saw a problem in her life that she would have paid good money to solve. She capitalized on it. She found a solution, figured out how to sell it and applied strategy to optimize her business.
My story is similar (without the added challenge of being a woman in the 19th century). Growing up, I saw people around me falling into financial distress. Often, the causes involved high-interest loans, which were aggressively marketed in my neighborhood, and the poor credit scores that resulted from struggling to pay these loans back. We used to wonder how the rich people we saw on TV got ahead.
I found that this was the same in disadvantaged communities around America. Predatory lenders were happy to loan people money at high interest rates, never explaining that there were long-term strategies for building wealth that definitely didn’t include paying 30% interest on a short-term loan. That’s why I began to offer financial education and credit-building services. This was a massive unmet need, and I understood it intimately.
What problems in your life would you pay to solve? Is there a way you could solve this problem for millions of other people?
2. Strategy And Data, Data And Strategy
Madame Walker didn’t become the 19th century equivalent of a billionaire without a strategy. To obtain success, she would have had to have been ruthless in her optimization. What was most profitable? What was least profitable? How could she invest more in her highest-profit offerings? Could she cut the least profitable altogether?
This is where many entrepreneurs fail. It’s tempting to see past successes as “proof” that you know the best way forward. Yet growth in finance requires growth in your business model and your skills. Most of all, it requires hard data.
Do you know what your most and least profitable products are? How about your most and least profitable marketing campaigns? If you don’t have the hard numbers to show what’s holding you back and what is yielding gains, you can’t improve your gains.
I had one advantage as someone who wasn’t born into wealth: I never had the luxury of not being ruthless with my data and strategy. Entering the business world was never comfortable for me, and success never seemed assured. Like Madame Walker, I knew I had to provide more for my family. And the only way I was going to do that was to gather lots of data and optimize endlessly. This attitude has been key to my success.
What don’t you know about your business? What aren’t you tracking and analyzing? Do you know which clients are your most lucrative? Do you know what your conversion rates are in marketing? You can’t optimize what you don’t know. Invest in learning your numbers and acting on them to make a change. You won’t regret it.
3. Technical Expertise Is Key
Many people claim that they can’t start a business because they don’t have the necessary resources. What constitutes “the necessary resources” depends on who you ask. Some cite a lack of tens of thousands of dollars in the bank. Others say they don’t have an MBA or any C-suite experience.
I’m here to tell you that none of that matters. Great businesses, like Madame C.J. Walkers’, aren’t always built on backbones of wealth or university education. Those things sure don’t hurt, but as the collapses of countless huge businesses have shown, they don’t always ensure success either.
What does ensure success? An unmet need. A strategy built on hard data about how to meet that need profitably. The technical knowledge to meet that need spectacularly. That’s really it.
What’s your technical knowledge? What are you better at than anybody else? What are you kind of obsessed with? You can answer these questions whether you’re a Fortune 500 business puzzling over how to move forward in a changing market or an individual who’s convinced you don’t have what it takes to start a business. The questions you must ask and the skills you must cultivate are the same.
Many of today’s top-ranking companies started in somebody’s garage with nothing but extraordinary technical expertise and a few hundred dollars in supplies. Yours can, too.