In many ways, the tech culture is startup culture, and launching your own startup can be particularly difficult when you’re from a group that’s been historically underrepresented in the sector.
Kathryn Finney is the founder and CEO of Genius Guild, which builds and invests in companies led by Black founders. She’s also the author of a book that comes out this week, “Build the Damn Thing: How to Start a Successful Business If You’re Not a Rich White Guy.”
Marketplace’s Kimberly Adams spoke with Finney about her experiences and why the term “startup” is synonymous with tech. Below is an edited transcript of their conversation.
Kathryn Finney: It really comes from this sense of, technology allows you to build things faster, quicker and cheaper. For those of us who can remember the early 2000s, you couldn’t build a website unless you knew how to code. You had to work with a website builder, right? A web developer. Now you have what we call no-code or low-code solutions, where you can just go and the coding is already done for you. All you have to do is have great pitches of whatever product you’re selling, and you could be online running an online store within minutes. So those barriers are just not there anymore, and technology removed that.
Kimberly Adams: In your book, you lay out the differences between a typical small business and a startup. And one of them is that they have different long-term goals. Can you explain that?
Finney: A traditional startup is really looking to get a “positive event,” which is usually an exit, and “exit” meaning either it sells [itself] to a larger company or another company or it lists itself as an IPO, as an initial public offering on the stock exchange. Because you have people like myself — investors — who want to get our capital back. When you are a traditional small business, you may not want to sell your company at some point, you may want to create a legacy for your family members. You may not want to be pressured for growth. When you’re a startup, you want to grow, and you want to grow fast and quick.
Adams: Can you talk about your own experience entering the world of tech entrepreneurship?
Finney: I was a Yale-trained epidemiologist, was traveling around the world, had a fabulous closet and a fabulous amount of debt, and started a blog to talk about budget shopping because I was forced to budget shop. And this blog became a thing, it became a company and it became a media company. And it was while doing the Budget Fashionista that I wanted to do a sort of consumer product company. Black women purchase approximately over 40% of all hair care products in the United States. So this was a market that was just ripe for disruption. And I entered into one of the early incubator programs in New York City.
Finney: In this incubator program of about 45 folks, four were women and I was the only person of any sort of skin color in this incubator program. And I got up and I pitched my idea. And the mentors gave me incredible feedback, such positive feedback. But when the questions turned to the audience, it was a completely different tone. One person said to me, he didn’t believe that I could relate to other Black women. He was a white guy. And of course, I said, do tell. You know, maybe he had some different insight. And he said, because you have an accountant. And I took that experience with me. And I later built an organization called Digitalundivided that really works to empower Black and Latinx women to own their work. And all of that kind of led to the book and everything that I’ve learned and put in this book. It’s the mentor I wish I had.
Adams: In your experience in the world of startups, what are some of the key things that you’ve seen limiting diversity in the tech industry?
Finney: One is this concept of networks. Most investors, most of my colleagues are actually a little bit lazy and tend to look to their own networks for investment. And so that limits the opportunities, the companies that you get to see. And that limits who you invest in, and as a result, your portfolio has become concentrated with a certain group of people. I think also, for a long time, it used to be that people did not think you could build any company unless you were in San Francisco. And that, of course, has changed, but for a long time [there] was a lot of pressure that you had to live there. And that made it really difficult for not just people of color and women, but anyone who didn’t have a lot of money because it’s so expensive to live there, to be able to move and to be able to be taken seriously in this space.
Related links: More insight from Kimberly Adams
You can get a preview of Finney’s insights in this excerpt from her new book.
There are efforts to improve diversity in the venture capital sector. According to a 2020 survey from Deloitte and the National Venture Capital Association, slightly more venture firms have “diversity strategies” compared to a survey conducted in 2016.
It also found that women were still significantly underrepresented.
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