While not quite a bubble (usually, we don’t recognize it until after it has popped) we are seeing quite a boon of startup activity in some portions of the technology sector. Specifically social media, and/or mobile apps. All of this activity, even for we black folks, who historically have not been extremely visible represents a sizable opportunity for us to participate in, and benefit from black sourced/founded entrepreneurial activity.
I am sure I am stating the obvious that while there are probably many, the two primary reasons for the current environment include 1) The proliferation of relatively powerful, low cost hand held communication devices (smart/feature phones,tablets), and 2) the relatively low capital outlay required for developing software to run on these devices. How low you ask?
Let’s walk through a simple scenario. Two folks decide to design and implement a mobile app, they need someplace to live/work, let’s say that’s 2k/month (bay area rents, but that doesn’t have to be), two laptops 3000 bucks , internet connection $600.00/year for a year, food 5K/year on food, other incidentals. All that adds up to south of $40k, and just to be generous, lets bump that up to 50K for a year of the time and space to enable a couple of people to develop a production quality application. That’s not a lot of money, and from where I come from in hardware development that’s easily an order of magnitude less than that what is required.
For some folks, self funding is an option, but a lot of people seem to believe the next step is to go out and get funding. That’s all well and good, but we are now hearing and seeing that doing so is not quite as cut and dry here in the valley if you are black. Some of that is for sure, due to our relatively short tenure here in the valley. That notwithstanding, let’s not diminish the importance of the fact that funding here in the valley is a network intensive process and at least for the short-termed future, that network is not populated with a lot of US.
I am not saying that ALL currently available funding opportunities are closed to us, the Kapors, and some others have shown a willingness to help out. However it seems that in the main, our own communities’ capital appears often times to be beyond our reach, or at least, we don’t turn to our own community first before looking outside. Why is that ?
Well, it’s NOT entirely due to a lack of money. Various reports indicate the black community spends between 500 and 900 billion dollars annually. So what the hell are we doing with all that money ? Better yet, what aren’t we doing with all that loot ?
I suspect that some of the problem is due to the difficulties we manufacture when working with one another.That we lose sight of the long term objectives due to short term chatter and static. My fear is that if we don’t take on the challenge of working with one another successfully for sustained of periods time; As black folks in the states, we will continue to bring up the rear. And let’s be honest, the elephant in the room on this one is how strange we all get with one another when it comes to money and supporting each other’s ventures financially.
As I somewhat glibly described above, it is relatively cheap to get a venture going. This is an unprecedented time in the valley,it is so much so that in ten or 15 years, the valley may NOT be the only center of the universe for tech and/or non-tech entrepreneurship. If that is the case, imagine the other black communities across the country that could potentially benefit from early models of collaborative work both in starting businesses AND in our own sources of funding those very same businesses.
Let’s start to explore low individual cost crowd sourced seed and pre-seed fund development. How hard is it to really raise 50K ?, 100K ?, 200K ? For too long, what has stopped a lot of great ideas in our community is a lack of money. Maybe, instead of waiting for the torrent of pennies from heaven, the arrival of a super man (or woman),we should grow some wings and become our own angels…