The Deficit Framing Of Black Entrepreneurship In Foundations, Corporations And Media

Felecia Hatcher
Written by Felecia Hatcher
deficit framing
Felecia Hatcher, co-founder of Code Fever and BlackTech Week. Photo: Anita Sanikop

On a daily basis we are bombarded with negative news and alarming statistics about Black individuals and communities. The negative representation of Black people is well documented and reverberates through the representation of Black entrepreneurs.

Too often, governments and leading organizations concerned about Black entrepreneurship and startup ecosystems tend to frame Black entrepreneurs from a deficit perspective. For example, the Kauffman Foundation (2016) has presented Black entrepreneurs as mostly struggling individuals plagued with less capital, fewer sales, and higher failure rates. In particular, According to the Kauffman Foundation Report on Race and Entrepreneurship, “Startup activity is on the rise, but entrepreneurs of color remain underrepresented and have disparate experiences.

“For example, businesses started by people of color perform differently than white-owned businesses. White-owned firms had double ($2.38 million) the average sales of Asian ($1.19 million), Hispanic ($1.12 million), and black-owned ($0.91 million) businesses. In addition, Black- and Hispanic-owned businesses have higher failure rates than do white- and Asian-owned firms. Reasons include industry differences, with black-owned businesses being overrepresented in less-successful industries (for example, in the personal services industry), as well as entrepreneurs of color starting their businesses with less capital than their white counterparts.”

Terms like “high failure rates” and “overrepresented in less successful industries” are beyond troubling when these reports are used by institutions to make decisions on how they will or will not support wealth generating entrepreneurial activity in black communities.

With over 2.6 million Black entrepreneurs in the U.S., nothing in the publication speaks to the areas of growth and opportunity, or how to increase activity as seen in reports about Whites, Asians and Women.

Similarly, the Association for Enterprise Opportunity (2017, pp. 24–28) has analyzed Black business ownership around the well-known struggles of “lower starting wealth” and “limited access to capital” that Black entrepreneurs endure when starting and managing their business. Such deficit-based discussions, although well-intended, can be harmful to the success of Black entrepreneurism because they overlook the talents and assets of Black entrepreneurs while also not offering material opportunities. Instead of relying on such deficit-based narratives, a more positive approach is needed to appreciate how Black entrepreneurs have and can continue to contribute to the innovation economy.

In the spirit of framing Black entrepreneurialism from an asset framing perspective, within this paper I analyze both historical and contemporary discussions about Black entrepreneurism to prove that what propels Black entrepreneurship is not the struggles and deficits of Black people, but rather an ever-present recognition that Black individuals and communities have strived to generate wealth for themselves and communities. In the following sections, I address discussions about the growth of Black entrepreneurship since colonial America to contemporary United States. While this paper does not cover every leading thinker and discussion that took place across this period, I do show that assets, not deficits, is the defining feature of Black entrepreneurism. 

A strong starting for framing Black entrepreneurs to create positive narratives is asset framing. Coined by Trabian Shorters, who founded the BMe Community organization, asset framing “is the shift to narratives that define a people by their aspirations and assets” rather than their struggles and deficits (2017, pp. 24–28). With an asset framing perspective, one can frame Black individuals and communities, including Black entrepreneurs, in a manner that creates empowering narratives. An asset-framing approach to understanding Black entrepreneurs challenges one to view Black entrepreneurs based on their talents rather than their struggles. 

Of course, Black entrepreneurs just like all entrepreneurs have struggles such as access to financial and social resources. As mentioned in my recent article “Creating an Inclusive Innovation Economy” (Hatcher, 2019), multiple issues and problems threaten the success of Black entrepreneurs. However, financial and social barriers alone have not stopped Black people from becoming entrepreneurs (Bates, Bradford, & Seamans, 2018). Instead, among those historically underrepresented, “[stronger] interest in becoming entrepreneurs, in combination with gains in higher education, illustrate how declining barriers have translated into wider business ownership among minorities” (Bates et al., 2018). In other words, narratives about Black entrepreneurs should not merely be about the struggles they face, but the talents that allow them to persevere toward creating asset-based narratives, more emphasis needs to be placed on the qualities that empower Black entrepreneurs and those invested in their success (Valdez, 2011, p. 24).

Otherwise, one may continue to describe Black entrepreneurs from a perspective of lack, struggle, and overall weakness rather than tact, success, and strength. With an asset-based perspective, what it means to be a Black entrepreneur looks and feels different. 

To demonstrate the practicality and benefit of an asset-based framing of Black entrepreneurs, in this paper I analyze both historical and contemporary examples of Black entrepreneurs to prove that what propels Black entrepreneurship is not the struggles and deficits of Black people, but rather a core belief in using talent to create wealth. In the following sections, I highlight Black entrepreneurship starting in colonial America up to contemporary times. I then provide examples of recent corporate and government reports that reflect an asset-based perspective of Black entrepreneurs that are in line with the historical and contemporary examples of Black entrepreneurship. 

A Short History about Black Entrepreneurs

Since Jean-Baptiste Say created the term entrepreneur around 1800, the term has been helpful to understand the economic activity of individuals that use their talents to create wealth (“Entrepreneurship,” 2009). With this same purpose, Black entrepreneurs have been around for as long as any other type of entrepreneur in the United States. Since colonial American, Black entrepreneurs have used their skills and knowledge to earn money for themselves and their communities. As such, the idea of Black entrepreneurs is as old as the nation itself, and this history should be a constant reminder about how Black people are a creative asset to the US economy. 

Since colonial America there were Black entrepreneurs. Highlighting the presence of Black entrepreneurs within colonial America, Juliet Walker stated:

While African-Americans did participate in the nation’s business community at the time, they did so only on the fringes of enterprises in which wealth was created. Still, in the face of the virtually insurmountable obstacles of slavery and institutional racism, a tradition of African-American business activity was established in colonial America that has persisted for almost 400 years. (Walker, 1998, p. 51)

During this era, Black people owned property, worked as craftsmen, and offered services to earn income. Even though this economic activity was not as ubiquitous or as successful as White entrepreneurialism due to racism. Still, some Black Americans were known as entrepreneurs striving to create value within their communities. 

Thus, it should not be a surprise that, in the early 1900s, Black entrepreneurs used their talents to solve problems, create products, and offer services within their community to establish what became known as Black Wall Street. Highlighting the economic activity during Black Wall Street, Victor Luckerson stated:

Before its burning, Greenwood Avenue [Black Wall Street] had been lined with hotels, restaurants, furriers, and even an early taxi service using a Ford Model T. Nearly 200 businesses populated the 35-square-block district in all, as did some homes as stately as the ones owned by upper-class whites in the city. (Luckerson, 2018)

In the face of racism and other social, economic disparities, Black entrepreneurs created value within their communities. It is this fundamental economic belief, to create value, that enabled entrepreneurial lessons to be taught to newer generations of Black individuals. These lessons were so impactful that even after a racist mob destroyed the town, Black entrepreneurs were able to rebuild part of the community in the following years despite repeated attempts to sabotage Black entrepreneurial activity. 

What Black Wall Street helped to reveal within the American identity was that Black entrepreneurs could create wealth. Amid segregation and other racist policies and laws, Black individuals were forced to rely on themselves and their communities to ensure that they had access to products and services, including luxuries, to live a decent life. This economic reality forced Black people to spend and buy in their community at an increased rate (Fain, 2011). Accordingly, Black Wall Street reaffirms the potential power of an asset-based narrative about how Black individuals use their talents to create wealth. 

Contrary to the idea that Black entrepreneurs were or are merely victims of racist, capitalist elites where “the goal of the Black entrepreneur is to make profits, period,” as Manning Marble (2015, p. 172) argued, historically, being a Black entrepreneur is about individuals using their talents to create a better life despite daily struggles that they experience. Yes, there were Black entrepreneurs within Black Wall Street that sought profits through controversial services, such as gambling. And some racist, capitalist elites have weaponized the success of Black Wall Street to overlook the nation’s historical racism against Black people. But in Black communities, as within Black Wall Street, many Black entrepreneurs used their talents to create a better life for people, and that reality should not be overlooked when it comes to understanding what it means to be a Black entrepreneur.

In the words of Carter G. Woodson regarding the economic success of Black folks in capitalism, Black entrepreneurs have to “do the so-called ‘impossible” (Woodson, 2008, p. 90). What Woodson was referring to was the idea that despite deep-seated racism in the United States, Black people must create wealth within their communities. Whether offering products or services, the prosperity of Black communities was in part possible through the talents of Black individuals as demonstrated within Black Wall Street. 

The success of Black entrepreneurs has economically and morally been tied to the success of Black communities. This economic reality reflects Booker T. Washington insight that “the Negro race must learn to make the most of its peculiar qualities, learn to turn the every obstacles and difficulties of its position to advantage” (Washington, 1970, p. 17). While the challenge to overcome obstacles such as racism does not excuse racial injustice or forgive past oppressions, many Black individuals and communities have historically embraced the idea of entrepreneurship to live a better life. 

When considering contemporary Black entrepreneurs, being mindful of the success stories of past Black entrepreneurs without downplaying the effects of racism is crucial. There is a long history of Black individuals struggling to overcome obstacles such as racism that has led to a lack of entrepreneurial support in Black communities (Green & Pryde, 1990, p. 137). Still, Black entrepreneurs had and continue to have the potential to create wealth even though there is a history of a lack of opportunities, resources, and networks to foster Black talent. By overcoming these obstacles, Black entrepreneurs have and will continue to make progress. As Du Bois also wrote, “the emancipation of [humans] is the emancipation of labor and the emancipation of labor is the freeing of that basic majority of workers who are yellow, brown and black” (Du Bois, 2013, p. 13).

Contemporary Black Entrepreneurism

Knowing the history of Black entrepreneurs, narratives about contemporary Black entrepreneurs can easily reflect an asset-based perspective. For example, amid a growing nation that calls for products and services to meet diverse needs and desires, more Black people are appearing and being recognized for their work as entrepreneurs. Cheryl Smith (2005) shares the stories of how Black women entrepreneurs have and continue to use their knowledge and skills to create wealth in an empowering and socially-conscious manner. In addition, Alexa Harris (2014) highlighted the work of Black Millennial Women Digital Entrepreneurs (BMW DoErs) who are active within digital markets. The growing recognition of Black entrepreneurs such as these Black women is a testament to Black individuals and communities who choose to embrace the same values, ideas, and actions that have historically made Black entrepreneurship possible.

While the recognition of contemporary Black entrepreneurs may help corporations and governments to view Black individuals and communities as economic partners, these stories also help aspiring Black entrepreneurs to join the innovation economy. Recognition helps to create content about what it takes to be a Black entrepreneur, especially for those considering a career change (Moore, 2000). With such positive narratives for aspiring Black entrepreneurs, Black individuals are in a stronger position to use their talents to offer products and services to create wealth for themselves and their communities. 

With increased recognition and social capital, Black entrepreneurs are also in a stronger position to supply products and services to an increasingly diverse range of clients and consumers without downplaying their Blackness. As the nation becomes more racially and ethnically diverse, Black entrepreneurs have been and can continue to use their identity to capitalize on new economic opportunities for themselves and their communities. Especially in large-scale firms, more black entrepreneurs are working with clients and consumers who come from diverse racial and ethnic backgrounds (Bates, 1997, p. 151). While segregation provided Black entrepreneurs a specific market to succeed, i.e., Black communities that Whites did not want to serve, the gradual elimination of racial policies and laws that inhibited Black entrepreneurs from expanding their products and services has in part led Black entrepreneurs to serve a broader consumer base. 

An example of Black entrepreneurs who are leading with their identity while marketing to a diverse consumer base are culturally unapologetic black-owned businesses. Highlighting how the history of Black-owned business has historically changed after segregation to contemporary times, Ytasha Womack stated: 

Traditionally, black business owners were pegged in one of two extremes: either you had a black-owned business in a black neighborhood that had a black audience or, more recently, you owned a company targeting the general market in which cultural identity was not relevant to the product or service…the hip-hop impresario allowed the possibility for both. Entrepreneurs could take a product or service and read a multicultural audience while retaining aspects of African American culture in their product and marketing. (Womack, 2010, p. 134)

With growing consumption and recognition of contemporary Black entrepreneurs along with more Black entrepreneurs leading with their identities to offer products and services to a diverse range of clients and consumers, it is essential to recognize the multiple ways that Black individuals and communities can engage the innovation economy. As Leona Achtenhagen and Friederike Welter (2011, p. 765) write, entrepreneurs are involved in an “everydayness” where all types of positive entrepreneurial activity are present. It is this everydayness of Black entrepreneurs that corporations and governments need to start or continue to capture in their framing of Black entrepreneurs. Through this effort, narratives about the assets of Black entrepreneurs can help to replace deficit-based narratives that harm Black individuals and communities. 

That said, does the use of asset-based narratives mean that Black-owned business face no struggles? No. There are still “large racial disparities [that] exists in business ownership and business outcomes in the United States” and these disparities include Black-owned business being at a higher risk of failing and often earning fewer profits compared to other racial/ethnic-owned businesses (R. W. Fairlie & Robb, 2008). Multiple factors, indeed, are harming Black individuals and communities and their ability to take part in the innovation economy where entrepreneurialism is a core characteristic of economic success. However, one must not frame this economic struggle as the defining features of Black entrepreneurs who otherwise would be more successful. 

With these asset-based narratives of Black entrepreneurs, the representation of Black entrepreneurs within current corporations and government ought to be asset-based. Unfortunately, the representation of Black entrepreneurs within these reports may often offer a negative view despite historical and contemporary examples of how Black entrepreneurs have been successful within the US economy. Subsequently, more work needs to be done to highlight Black entrepreneurs from an asset-based perspective in corporations and government reports about Black economic activity. At stake is the framing of Black entrepreneurs as contributors to the innovation economy. 

Framing Reports: Asset-Based Narratives of Black Entrepreneurs

For those interested in a deficit framing of Black entrepreneurship, there are multiple examples from research analysts and journalists. Whether their intentions are good or bad, these deficit perspectives arrange facts to support a narrative that is ultimately negative. For example, Scott Shane (2008) offered a list of facts and reasons about why there are less Black businesses than White-owned businesses, and why Black businesses struggle more. At the root of these struggles, he argued, is that Black families have less money than White families, and this lack of money, which includes not having access to credit, hinders Black entrepreneurship. While Shane’s analysis may be well-intended, to frame Black entrepreneurship with this perspective misses the point about what it takes to support Black entrepreneurs. Being a Black entrepreneur is more than struggling to secure capital.

Despite the multiple problems that Black entrepreneurs endure, even those that tend to view Black entrepreneurs from a deficit perspective know that there are positive stories about Black entrepreneurs that should be leading discussions. For instance, in a 2019 report, the Kauffman Foundation released data that showed the number of new Black entrepreneurs is rising. In 1996, 8.4% of new entrepreneurs were Black. The percentage increased in 2017 to 11.8%. While “the African American share increased slightly,” the increase in new entrepreneurs nonetheless reveals that Black individuals remain committed to entrepreneurship (R. Fairlie, Desai, & Herrmann, 2019, p. 11). Instead of framing Black entrepreneurs as a series of myths or challenges, there are factual points to build from towards developing a more asset-based perspective. 

A good example of an asset-based approach is digitalundivided’s (2018) ProjectDiane. In the report, the authors discuss the current state of Black women entrepreneurs from a position of strength without overlooking challenging economic realities. Some of the key findings in the ProjectDiane database is that the number of startups created by Black women increased from 84 to 227 and funding raised by Black women entrepreneurs increased by 500% from $50 million (in 2016) to $250 million (in 2017). On the other hand, during this same period, few Black women took part and succeed in leading accelerator programs (less than 10%) and most struggled to raise funding despite the success of a few Black women. Nonetheless, the narrative about Black entrepreneurs within the ProjectDaine report discusses Black entrepreneurs as empowering without overlooking areas for improvement. The report allows readers to appreciate Black entrepreneurs, particularly Black women, as contributors to the economy. 

The Federal Reserve Bank of Kansas City’s report titled “Black Women Business Startups,” written by Dell Gines, also includes data about Black women entrepreneurs from an asset-based perspective. The report includes insights from 34 Black women business owners who participated in focus groups about the growth of Black women-owned businesses and their impact on local economies. During the focus groups, the topics addressed included the motivations, challenges, and supports, Black women experienced when creating their business. Based on these themes, Gines revealed that “negative workplace treatment,” “passion for industry,” and “businesses opportunity” were motivations for many Black women to start businesses. When it came to the support Black women received while starting a business, responses included that “family and friends” and “mentors and key individuals” were all crucial for success (Gines, 2018, p. 14). The report also mentioned problems Black women experienced, such as struggling to secure credit. However, these challenges are framed with Black women’s aspirations and talents in mind.

An additional example of a report that reflects an asset-based approach is Harlem Capital Partners’ “Power 200: Black & Latinx Venture Capitalists You Should Know” report about Black individuals’ involvement in the innovation economy as investors. In the report, the authors share how Black and Latinx involvement in venture capital activity. Based on their data that included input from 200 Black and Latinx venture capitalist, Black and Latinx venture capitalist raised more than $50 billion in VC funds with half of the investors acting as partners within their firm (Harlem Capital Partners, 2019). By sharing these figures, the authors of the report represent Black investors, who work with leading firms such as Intel Capital, GE Ventures, and Google Ventures, as an asset for the US economy. 

With asset-based reports about Black entrepreneurs such as those shared by digitalundivided, the Federal Reserve Bank of Kansas City, and Black Tech Mecca’s 2017 “Unleashing Chicago’s Black Tech Ecosystem” report, more productive narratives about Black entrepreneurs are possible. Asset-based narratives made possible through such reports can help to empower corporations and governments, in addition to Black entrepreneurs themselves, with identifying “cultural shifts” in the innovation economy that otherwise may go unnoticed if no one highlights the talents and insights of Black entrepreneurs. Cross Culture Ventures (CCV), which heavily invests in cultural shifts, defines cultural shifts as “cultural trends that…[influence] global popular culture…these shifts represent areas that…hold great opportunities for growth, innovation, and of course, investments in the coming year” (Cross Culture VC, 2017, p. 3). With more asset-based narratives may come greater opportunities to work with Black entrepreneurs who can create, reveal, and tap into cultural shifts that firms like Cross Culture Ventures can support through investments. 

Conclusion

Black entrepreneurship has and continues to be a positive force within the U.S. economy despite a series of discriminatory laws that have undermined and tried to eliminate Black entrepreneurs. By embracing an asset-based perspective that reflects the historical and contemporary examples of successful Black entrepreneurs, governments and corporations can help to combat negative narratives in hopes of supporting the growth of Black entrepreneurship. Reports from governments and corporations such as the Federal Reserve Bank of Kansas City and Harlem Capital Partners are powerful examples of how institutions and organizations can discuss Black entrepreneurs in a manner that is empowering without overlooking or downplaying the challenges that Black entrepreneurs face.

By framing Black entrepreneurs through an asset-based perspective, Black individuals and communities have a greater chance to find space where they can continue to use their talents to join, contribute to, and change the innovation economy. Black communities are more than a space for consumerism. While Leonard Burnett and Andrea Hoffman (2010) rightly point out that Black communities, particularly affluent Black communities, have a lot of consumer potential that corporations and governments must respect in pursuit of profit, Black communities are also spaces for creating Black entrepreneurs. To support Black communities as more than spaces for consumerism, corporations and governments must strive to highlight the economic activity of Black entrepreneurs from an asset-based perspective.

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This paper was published on LinkedIn. It is reposted here with permission of the author, Felecia Hatcher. Read the original.