When you look at the world today and go beyond just the sensational headlines, it is hard to find anyone that believes that we are in the right place when it comes to social justice, race, diversity, and inclusion. The photo above from DivInc social media feed captures the frustration of so many.
If you use the analogy of physics, just as Newton’s first law of gravity says (in describing inertia), a body at rest stays at rest and a body in motion tends to stay in motion unless acted upon by a net external force.
That’s where we are today, figuring out in the United States, how to change our trajectory by applying external energy to push the direction we are heading into a better place. Knowing of course, that we are dealing with 400 years of inertia. For us to improve the trajectory of our nation, it will be a combination of the private sector and public sector working together.
There are, however, many indicators that the inertia is working against our best interests and we are clearly not moving in the right direction fast enough. The Case Foundation cites PitchBook research that shows that less than 10% of venture-backed companies have a female founder. They also cite from the CB Insights Report that only 1% of venture-backed companies have an African-American founder. And that is all in light of the fact that the Harvard Business Review has documented through extensive study, that companies with diverse leadership teams provide greater returns for investors.
Therefore, if we know that there is an economic incentive and we know that there is a social justice incentive, then why are we not moving faster? I believe the answer lies simply in that we haven’t got the right balance between private sector and public sector involvement. Just as the education reform documentary “Waiting for Superman” describes how too many people are waiting for a government led solution to fix our education woes, I feel it’s time to no longer wait solely for the government to make a change in social justice.
Instead, now is our chance to lean on organizations that are taking a step forward in the right direction to provide energy and force to push back on the inertia that has led us to today. In other words, it’s time to plot a new trajectory by fostering a culture of innovation among a new cohort of business leaders.
One such organization is DivInc led by founder Preston L. James II. In our conversation about entrepreneurship diversity inclusion, he keys in on several points worth sharing. Preston shares how DivInc breaks down the innovation process into a program that includes over 55 new companies over the last four years. And I believe that there are three reasons why entrepreneurship provides a better pathway towards real social justice in our country than even our government.
1- Entrepreneurs from diverse backgrounds can not only create jobs but they can create wealth in parts of the country that will lift whole communities. Successful entrepreneurs will not only provide new business models to deliver products and services to a market, but they will also mitigate the financial risk for new investors to join in on future business owners looking to expand.
2- Organizations like DivInc, the Case Foundation and universities purposely expose entrepreneurs to the networks, investors and language of start-ups to build their companies more attractive to larger institutional investors that an otherwise traditional small business.
3- Perhaps most importantly, a diverse cohort of entrepreneurs serve as role models for others thinking of starting and growing a business. People will be what they can see and companies led by people of color and/or women give inspiration to young people who otherwise might not have considered themselves entrepreneurs.
I encourage you to consider applying to the new DivInc Social Justice Innovation Program.
I hope you enjoy our video interview. Below is a full transcript. And as always, please let me know your thoughts. The photo credit for the above photo comes from the DIvInc Twitter account.
Joseph Kopser:
Welcome back. It is a what, June something or other. I’ve lost complete track Preston, in this era of COVID of where we’re sitting. But it’s a real honor to have you here on Catalyst TALKS to talk about innovation and the work you’re doing. So before we jump into that, how are you doing personally? How’s the family and how are you getting along?
Preston James:
Well, thanks. Thanks for having me on here. Great question. I’m doing wonderful. Family’s doing great, everybody’s healthy. We’re rocking and rolling, and of course with these unprecedented times, the last several weeks have been emotionally challenging. But at the same time, they’ve really, got me even more emboldened to do the work that we do. So I’m in a really good place, so thank you for asking.
Joseph Kopser:
Wonderful. Let’s jump right into that. The whole point of Catalyst TALKS is for me to interview innovators, thought leaders, strategists, who are trying to figure out the future of work. Where we go from here, all the different parts of society, and how they interact from a private sector and public sector standpoint. And there are a few examples I can think of, more than you and DivInc and the work that you’re doing.
We’ll get into your backstory in a minute, but just while we’ve got viewers, let’s jump right into DivInc. Your mission, what you’re trying to accomplish, and why you’re doing it. And I’ll pull up the website.
Preston James:
DivInc was started to address the major issues associated with the lack of diversity and inclusion in the startup ecosystem. And so, DivInc was started to basically, to build a more authentically inclusive ecosystem in any startup community that we address. And so that started with a elevated program specifically for underrepresented founders.
And here, what you see is one of our founders, Kim Roxie. And she used to found LAMIK, which was a organic plant based cosmetic products, specifically for women of color. And she’s still rocking and rolling, she’s doing her thing. She’s based out of Houston and she’s doing some amazing stuff with her product and her company.
Preston James:
We also had another gentleman that was highlighted. Yes, Roman Gonzalez. He’s the founder of Gardenio, which is a solution for folks to build their gardens successfully at their homes. And he’s addressing the challenge of, so many people try to start gardens and so many fail. And so, he is really increasing the opportunities for people to build successful gardens, eat better, eat healthier, and really do better by their communities, by creating sustainable communities in the process.
So, cool stuff that we’re doing. And we’ve got 55 others that we’ve helped launch over the last four years. So we’ve had some fun and we worked really hard to do that.
Joseph Kopser:
For purpose of background, for people that aren’t in the startup community, I mean, these will be my words and you expand on it however you want. But in my early experiences, going back nearly 10 years ago, all the events I went to, the conferences I went to, most of the CEOs, most of the founders, were principally white dudes. And they were young white dudes.
The money we were going after was basically venture firms and angels that were almost 80 to 90% white based. So, how much of this is just leveling the playing field and how much of this is just introducing more of the entrepreneurial ecosystem to the access to where the money is?
Preston James:
Oh, it’s all about that. In order to level that playing field, we’ve got to bring more people in. People of color, women, folks from different perspectives, different backgrounds, and create those opportunities. Essentially, our networks weren’t intertwined. And so now, by bringing folks together, we’re able to successfully broaden and build broader and more diverse and inclusive networks. And as a result, as you know Joe, diversity helps breed greater innovation.
Because I think overall, Austin’s startup ecosystem, or any ecosystem that embraces diversity and the equity of it, actually gets even better as a result of this engagement. So, yes.
Preston James:
And it’s not just founders, as you mentioned Joe. I mean, it is also bringing in investors and, of color, investors who are women, and also bringing more mentors in. You’ve got some large corporations here that have amazing talented executives, and how do we bring more of those into fold? More mentors, investors, founders, and really spurring this innovative mindset and growth within the community, across the board.
So, I’m really excited to see the transformation that’s happening in Austin, slowly but surely. And I expect even greater things to happen in the coming years.
Joseph Kopser:
Yeah. And I don’t want to put words into your mouth, but I think the key is, we’re talking about diversity and inclusion and the longterm value. What I’m hearing is, that if folks, especially investors, recognize the fact that if they have more people at the table, they’re better likely, more likely to get a return on investment long term when they have all different new ways of thinking about stuff, all new different problem sets they’re going after, all the new target audiences. And how much of that are you doing in your cohorts? Or is your cohorts of companies just trying to basically focus on the basics of fundamentals of tackling and blocking and just getting out there and getting their product up?
Preston James:
We don’t have a choice but to do a combination of both. And so, there is that early stage, getting out there, talking, testing, and learning it. But at the same time, understanding the longterm potential impacts. So we’re building that pipeline as we move forward. And also Joe, what I want to add to the points that you made, it is building that innovative economy, but also, when you look at it longterm as well, you’re talking about greater job creation and a broader more diverse job creation. Because women tend to hire more women, and people of color have a network to hire more people of color. Not to exclude white people at all, but it’s just more inclusive in terms of your hiring pool.
Preston James:
The other piece that a lot of people don’t don’t realize, is that as a result of this job creation, the socioeconomic benefits to the community as a result of that happening are tremendous. You have people making more money, you have jobs being created. And then, as they’re having success and they experience exits, “Wow, now we’re creating wealth.” And that wealth, again, has a tremendous impact. Not just on the founder and that founder’s immediate family, but it permeates through the community and you create this domino effect in terms of the mindset shift that, “Entrepreneurship, this innovative space, is for me.”
Preston James:
And so, as you see more people that look like you that are in this space, then you yourself want to participate in that as well. So, the long term impact is not just with the customers and the revenues, but it’s also on the community level, wealth gap level, job creation level, and then also a mindset shift as well.
Joseph Kopser:
Yeah. I’m going to check time. So, we’re at nine and a half minutes already. We’re going to put this first 10 minutes on LinkedIn- And now the rest of the interview is “bonus video” for those watch the full interview.
Joseph Kopser:
But I want to spend a few more minutes talk talking about a few different points. So if you’re watching this on LinkedIn, this is going to be the end of the first part of the interview, and feel free to go over to YouTube and or Facebook, Grayline Group, or my Joseph Kopser Facebook, and you can find the rest of this interview. So let’s pick up two points here Preston, which is very specifically, one is from the past and one is a new movie that came out we’ll highlight. So the one from the past is the story from Walter Isaacson’s book, The Innovators.
Joseph Kopser:
And in that book, they had this idea, the Palo Alto Research Labs at Xerox, to take the document that used to be paper on a desk, put it on an upright screen, give it a keyboard, and then basically they created the first desktop computer. And as the story goes, they brought this to the board meeting, which, mind you, at the time was all a bunch of old white dudes. And they put this computer in the middle of the room and said, “This is the future of the office.” And the guys, told by Walter Isaacson, the guy scratched his head and said, “Now why would I want that on my desk when I have a perfectly good secretary in the front office to do the typing for me?”
Preston James:
Right.
Joseph Kopser:
And that to me, is a glare example from history. And there’s another example from history, which is, anybody that’s got Apple TV+ can go and watch this movie called The Banker, which lays out so beautifully in the movie, Samuel L. Jackson executive produced, directed, and starred in the movie, about how when you deny, systemically deny for decades, access to wealth, access to capital, access to loans, even if you’re not even doing the terrible obvious stuff like the Jim Crowe laws and Redlining, but just simply denying them access to loans, that in and of itself prevents us from creating this ecosystem and this ability to create wealth. And this is part of what you’re doing at DivInc to try to overcome this, to build a bigger bench. Elaborate, if you would, on any part of those points or push back and tell me I’m crazy.
Preston James:
Yeah. I think, and I’ll start with the second one. What a lot of people do not know when they ask, “Why aren’t there more people of color, maybe blacks and maybe Hispanics in particular, in this startup space?” And the research has showed that one of the roadblocks is the fact that, high growth startups requires capital. Especially in the technology side, right?
Joseph Kopser:
Yep.
Preston James:
There’s capital that’s required. And so, if you’re having a difficult time getting access to capital, but yet you are an entrepreneur, you have to sort of venture automatically into, decide where it’s a less cost business. Which tends to be more lifestyle, small business type. And so, it’s not that black folks or Hispanics can’t do high growth, it’s the access to capital is a, sort of a restraining piece to going in. Now, the other side of that research also says, “Well, by being over here in this lifestyle side of the entrepreneurial spectrum, it’s also companies or industries that are generating this revenue.”
Joseph Kopser:
Yep.
Preston James:
And so, it’s sort of a dual. A double edge sword is like, “Damn, I can’t get into the high growth space because I can’t get access to capital. And then when I do go start up a space, it’s low revenue generating, low margin generating, so I’m sort of stuck.” Right?
Joseph Kopser:
Yeah, because the Angel and VCs want to see that 8 to 10x return.
Preston James:
Exactly.
Joseph Kopser:
And it’s hard to do with all businesses.
Preston James:
Exactly. And so, how do we remove those barriers? First of all, we got to understand that that’s happening. And secondly, how do we remove those barriers to open up the flood gates to allow those folks who have the potential to do high growth technology innovative startups, right? I wouldn’t say tech, I’m just going to say innovative startups. We’ve got to be able to open up the flood gates for them. And then the other piece that you talked about was, the innovative aspect.
Preston James:
Man, I’m telling you, I come across people all the time with some really amazing ideas. Something as simple like, “Hey, here’s this thing here that’s going to replace your secretary or your typewriter.” Let’s just say typewriter. Because I had a typewriter going into college, and so if you told me I was going to have a computer, I’m like, “I’m sticking with this, 40 words per second over here.”
Joseph Kopser:
IBM Selectric
Preston James:
And so, these innovative ideas can come from anywhere. It can come from anywhere. Any zip code, any person. The question is, “How do we really enable and empower that creativity and that innovation to come out of any mind and release the income.” And we want to be able to inspire that through DivInc all the way down to middle school and as far down as we can. We want to provide that inspiration as well as to, you know, adults who are out there like me.
I left Dell mid-career if you will, some would say, and went to go start something. If that inspiration hits people, we should be able to give them the tools and the resources to allow them to be successful. And let some other factor be a result of why it doesn’t happen, but not let the color of their skin and not their gender, don’t let that be the thing that holds them back.
Joseph Kopser:
Yeah. I’ve said for years, “People will be what they can see.” And if you have now the opportunity with DivInc to create a whole new cohort, a bench that not only they themselves will do great things with their companies, hopefully, but they will serve as a role model. They will serve as an inspiration for others that are either younger to them in the pipeline, or they might be in other companies and other sectors that look over and see what they’re doing. So for people that want to get involved with DivInc and what you’re doing in any capacity, how do they do it and where do they go?
Preston James:
Yeah. I mean, I touched on it the last part of my speech but you froze. But, I can use my own case. I mean, I’ve got four children, and my 16 year old daughter probably never thought about entrepreneurship until I started DivInc. And now, for her to come to me and say, “Dad, can I take over DivInc when you’re done?”
Joseph Kopser:
That’s awesome.
Preston James:
I said, “You can come take it over right now, baby.”
Joseph Kopser:
That’s awesome.
Preston James:
You know what I mean? That’s something that a lot of families are not able to get. And so for her to be inspired that way, and she’s saying she’s going to school to study business and entrepreneurship. We’ll see if she sticks with that, but I think that’s the inspiration that we want to provide. That’s the mindset that we want to provide. Is that, “You too can do this if you want to.” Right? If you want to. And that’s the whole thing. If you want to, you should be able to.
Joseph Kopser:
Yeah, absolutely. Well, I couldn’t have asked for a better guest today with all the things that are going on. I encourage people to follow you on LinkedIn. You’ve done a lot of great things recently, especially since the tragedy of George Floyd, to really point out the people, especially those who might have thought, “Well, this doesn’t have an impact on me.” Or, “Why would they want to go and do this?”
You’re doing a great job of curating material, probably more than we had to going here because we’re almost at 20 minutes already, that really helped open people’s eyes. And for me personally, I’ve recommended to friends that movie, The Banker, which I referred to. And then also, just recently, we watched Just Mercy, the story of Bryan Stevenson. I think it’s important for people to really be aware of the fact that even though they may not understand, they have an obligation to try to do a little homework to figure it out so maybe some of this outrage and this frustration can be better understood and better channeled.
Preston James:
Thank you for that, I really appreciate that. In real simple terms, I mean, I grew up in New York City, very diverse community, so I know it exists. And I know it can be done. And I feel like my role in this is to… just like others, is I need to be an educator as well as someone who’s learning. I need to understand what the other side is thinking, why they’re thinking the way they’re thinking, and help them understand that the pain, not just that myself and my friends and my family, but the history of my family, my father, my grandfather, what they’ve all, what we’ve been through as a people.
Joseph Kopser:
Yeah. It’s a great point.
Preston James:
And consider that in a way that’s not mean spirited.
Well, you know my dad said it best on Facebook the other day. I’m sorry to step on you there with the delay, but my dad said it very well on Facebook the other day that growing up in Lexington, Kentucky, he was unaware that Lexington was one of the cities that were a part of the Woolworth Boycott. In fact, it was my sixth grade teacher, Mrs. Audrey Grevious, who were at those lunch counters demanding to be served.
And the reason why dad didn’t know about all that going on, is that the owner of the newspaper at the time refused to print it. And there’s a whole part of education there. And you’re part of this latest generation. Making sure that the word gets out, doing it in a way that hopefully people respond to. And for that precedent, I am honored to have had you on today’s Catalyst TALKS. And I look forward to seeing you out and about when we’re able to get back out again.
Preston James:
Okay, thank you.
Joseph Kopser:
Thank you Preston, take care.
Preston James:
All right, take care.
