The Myth of the Entrepreneur

Entrepreneurship is the bedrock of our country’s economy. In the US, fast-growing, innovation-driven startups represent only two to three percent of all businesses, but they create almost all of the revenue growth in our economy. According to the Bureau of Labor Statistics, over a recent three-year period 34 percent of all private sector jobs were created by 80,000 high-growth businesses. Beyond the creation of jobs and wealth, entrepreneurship serves perhaps an even more essential function to Americans—it embodies our shared belief in limitless individual opportunity. Our Chairman, Steve Case, often reminds us that America itself represents one of the greatest startup ventures ever. Deeply ingrained in America’s startup business proposition was the belief that any individual—no matter their race, religion, gender, sexual orientation, economic background or geographic location—could bring their entrepreneurial talents to building the kinds of strong and diverse businesses and communities we need to keep our nation prosperous.

Yet today the American dream that any individual has the power to change his or her own trajectory, and in doing so be a part of driving our nation’s entrepreneurship and innovation legacy forward, is fading. The vast majority of today’s celebrated startups continue to be founded and funded by white, well-educated, well-networked males. Women are at the helm of 30 percent of all businesses in the US, and these businesses are leading the way in terms of hiring and growth. However, startups with women CEOs still receive only three percent of venture capital funding. Minority-owned businesses are growing at a faster clip than non-minority owned businesses, but are receiving an even smaller fraction of investments.

Why is that? It’s not that high-potential, high-performance companies founded by women and entrepreneurs of color don’t exist—check out the amazing talent featured at the first ever White House Demo Day this summer. It’s not that performance data isn’t on their side—women-founded ventures are outperforming their male counterparts and companies with diverse executive teams (gender and race) are more likely to have higher financial returns. It might be that unconscious bias permeates—bosses tend to hire people that look like they do, think like they do and come from similar experiences that they do. Investors tend to do the same. Sadly, it might be that men are perceived as “more persuasive” pitchers. Whatever the reasons, it can’t be that leaving half the team on the sidelines is a winning game plan.

In an effort to level the playing field and leverage the maximum potential of America’s entrepreneurial talent, earlier this year the Case Foundation launched a new effort to catalyze a movement around Inclusive Entrepreneurship. We have been inspired by the data that suggest diversifying our entrepreneurial ecosystem is good for business and good for the world. We have been inspired by early pioneers like Forward Cities, PowerMoves and JumpStart, Inc., who have been leading the way in engaging, networking and financing diverse entrepreneurs in their communities. And we have been exceedingly curious about the extent to which the American culture and mythology surrounding entrepreneurship, perpetuated by the media, may be impeding the success of women and entrepreneurs of color.

Unbundling The Myth of the Entrepreneur

Today, when you look at the most highly celebrated entrepreneurs—or look at how entrepreneurs are depicted in pop culture—it’s not exactly a picture of diversity. And typically the story of the entrepreneur casts main characters that appear to be singularly heroic, toiling away in garages and labs until, suddenly, a Eureka Moment! Culture begets behavior, and behavior creates outcomes. So if we want to change outcomes by expanding access to entrepreneurship, we must start with what informs our culture of entrepreneurship: We must very intentionally examine, and change, the stories we tell.

In conjunction with National Entrepreneurship Month and Global Entrepreneurship Week, we are doing our small part to start changing the narrative by launching a new blog series called The Myth of the Entrepreneur. Through this series we will take a critical look at the common stories told in startup culture. We want to distinguish between what stories should be embraced and what stories are holding us back. And to suggest it’s time to reboot and re-focus the narrative on entrepreneurship, and create a message of inspiration and aspiration grounded in inclusivity. The next era of entrepreneurship is about leveling the playing field, expanding participation and scaling the networks of social, financial and inspirational capital that provide the foundation for successful startups and scalable business. The new paradigm of entrepreneurship will replace the myth of isolated geniuses with teams of diverse problem-solvers working hard and collectively to build and scale businesses that make life better for all, not just more convenient for an elite few.

If we can debunk these long-standing and highly influential myths, perhaps we can, together, put a new “face” on today’s entrepreneur. We hope you will join us on this journey—offer up your thoughts, inspiration and new era entrepreneurs you admire on twitter using the hashtag #Ent4All. Check back here next week to learn the truth about one of the most infamous myths of entrepreneurship today—The Myth of Isolation.

Celebrating Inclusive Entrepreneurship at White House Demo Day

American innovation has long been the envy of the world. Throughout our country’s history, thanks to our free enterprise system, people from all walks of life have brought forth innovations that benefited society broadly—in all sectors such as energy, transportation, health care and more. These innovations often came about from those who “lived the problem” and dreamed great solutions that could benefit the masses. These were entrepreneurs who built young enterprises to bring their products and services to market and who often changed the world in the process.

Today, we need to ensure that American innovation isn’t simply about providing more convenience for the privileged—such as easier hotel bookings, more and comfortable ways to get from point A to point B or same-day delivery of groceries from an upscale market. To build solutions for the future, we need to move beyond the “app culture” and engage a new class of entrepreneurs—many who have lived real problems and are building real solutions to the challenges in our communities, and around the globe. But in recent years, this segment of entrepreneurs has often been left on the sidelines of innovations, with no steady flow of capital, mentorship or celebration focused on them.

It is well known that the vast majority of today’s celebrated startups continue to be founded by white, well-educated, well-networked males. And while we celebrate all startups and new innovations—we are underleveraged as a nation if those in more marginalized communities are left on the sidelines. There is, for instance, immense potential for women, people of color and those who don’t live on the coasts or graduate from our nation’s most elite schools. Women are leading 36 percent of all businesses in the U.S., but only receive 10 percent of venture capital funding. Minority-owned businesses are growing at a faster clip than non-minority owned businesses, but are receiving an even smaller fraction of investments. Seventy five percent of venture capital today goes to three states—California, New York and Massachusetts. There is a growing realization that this has to change, including at the highest levels in our nation and among those who are driving this change.

For example, today in New Orleans, PowerMoves, a minority-focused incubator, is backing young enterprises that reach across socio-economic barriers to bring opportunities to those often the last to benefit from innovation. In the first year of operation, PowerMoves worked with 87 companies to create 350 jobs in New Orleans and Detroit. Because of PowerMoves’ work, these companies were able to secure $14M in additional capital commitments to high growth, high tech startups led by entrepreneurs of color. Crystal McDonald, a PowerMoves entrepreneur, developed GoToInterview, a service to connect hourly workers with companies that have demand for them, and won the Rise of the Rest pitch competition in New Orleans.

And there are many more examples of entrepreneurs from underrepresented populations that are seeking solutions to problems that benefit all, like Pashon Murray, a dynamic entrepreneur of color in Detroit. Inspired at an early age by her father’s waste hauling company, Pashon turned family knowledge into a scalable business that takes food waste from companies, including General Motors and the Detroit Zoo, and transforms it into rich soil for local farmers to enhance crop productivity and create jobs. For Pashon, it’s not just about the hauling of waste—she is also a fellow at the MIT Media Lab studying the science of composting and waste reduction. She is combining science, engineering, the needs of a community and her entrepreneurial spirit to create a viable, scalable business in Detroit.

The opportunity to tap into the potential of these entrepreneurs is top of mind for us at the Case Foundation, and why we are delighted that today, the White House will host its first ever Demo Day, with a focus on inclusive entrepreneurship—bringing together entrepreneurs from all walks of life and from all across the country. We look forward to joining President Obama today in a commitment to see “more startup hotbeds emerge in every corner of America, and that those underrepresented in entrepreneurship are being tapped to fully contribute their entrepreneurial talents.”

In fact, here at the Case Foundation, we’ve long believed in the potential for unleashing entrepreneurs—and entrepreneurial approaches—as a clear path for making the world a better place. Over the past 18 years, we’ve developed and supported a range of initiatives—many of them in partnership with the White House, with Presidents of both parties—that put entrepreneurs in the middle of solving big problems, from the West Bank to Detroit, from DC to Nairobi. These initiatives include the U.S.-Palestinian Partnership, an effort to bring entrepreneurship opportunities to the West Bank that I was asked to co-chair in 2007 by President George W. Bush, and the Startup America Partnership, focused on celebrating and accelerating entrepreneurs here in the U.S., which we launched in partnership with the Kauffman Foundation and the Obama administration in 2011. More recently, our focus has shifted to an effort to unleash new capital for entrepreneurs building businesses that seek to address significant social challenges, through our work to catalyze the burgeoning impact investing movement.

Our efforts to support entrepreneurs and the role they play in driving innovation and job growth in the U.S. and around the world have certainly been rewarding. But in the past year, we began to ask ourselves, what role can entrepreneurship play in bringing new opportunities to those left on the sideline? How can we level the playing field for underrepresented communities—including women and people of color—to become entrepreneurs and grow thriving businesses? And how can we facilitate the creation of more businesses that address the challenges that marginalized populations are facing? To help us answer these questions, we began an exploration at the beginning of the year into potential opportunities for inclusive entrepreneurship, and funded two organizations doing important work in this space—Forward Cities and Opportunity Nation. We also joined the most recent Rise of the Rest tour, supplementing the visits to Richmond, Raleigh-Durham, Charleston, Atlanta and New Orleans with conversations focused on how to expand entrepreneurship as an opportunity for all. And we just returned last week from exploring these topics on a global scale during a trip to Africa, focused on exploring burgeoning entrepreneurial ecosystems in Kenya, Ghana and Nigeria.

We are committed to expanding our support for inclusive entrepreneurship, and in the coming months you will hear more from us on our efforts to build upon the momentum from national conversations around diversity, reduce common barriers to entrepreneurship faced by diverse entrepreneurs and scale local pilots into national programs serving women and entrepreneurs of color.

We have a tremendous opportunity today to tap into the uniquely American legacy of leveraging entrepreneurs to grow our economy, strengthen communities and solve intractable problems. But we’ll never recognize our full potential if we don’t focus on ensuring that we give all people—no matter their gender, ethnicity or economic background—the opportunity to be a part of growing entrepreneurial ecosystems, and tap their unique experiences to solve significant challenges. Imagine what is possible when we have a full team and all fields in play!