The systemic lack of diversity in the venture capital and tech ecosystem is well known. Mayank Shah, Founder & CEO of Minority Supplier Development UK (MSDUK) says we must embrace and support the entrepreneurial talent of minority founders to nurture tomorrow’s unicorns.
Any aspiring young entrepreneur could be described as determined, ambitious and driven to succeed. But the difference for those setting out to found an Ethnic Minority Business (EMB) is their entrepreneurial success will more heavily rely on resilience, calling upon personal experience as a resource to build a business robust enough to overcome the prevailing political and economic odds against them.
The MSDUK Minority Report revealed that eight of the UK’s 23 tech unicorns were co-founded by minority entrepreneurs. But what isn’t so well discussed are the barriers they’ve had to navigate in growing their company into successful, internationally recognised brands like Deliveroo and the fintech giant Oaknorth.
Every minority unicorn founder had to overcome common obstacles, including direct and indirect discrimination, and disconnection from critical financial, business and political networks - compounded by disproportionate levels of self-doubt. Equally, one common characteristic between them is persistence - they didn’t take no for an answer - making them more formidable than many peers who faced less hardship on the road to success.
The UK’s EMB unicorns have shown us ways to succeed. Yet much more can be done to unlock the full potential of would-be minority founders.
“Every minority unicorn founder had to overcome common obstacles, including direct and indirect discrimination, and disconnection from critical financial, business and political networks - compounded by disproportionate levels of self-doubt.”
In the UK, minority businesses contribute at least £74 billion a year to the economy. They will undoubtedly play a significant role in the government’s ‘levelling up’ agenda - spreading economic prosperity beyond London - make no doubt about it and the untapped potential of would-be minority entrepreneurs who’ve been impacted by social and economic exclusion. With the right help, minority businesses could make an even more significant difference for their communities, uplift other ethnic minorities and boost economic growth for the whole country.
Critical to fostering entrepreneurial talent and supporting them in their journey to building a sustainable business is tackling discrimination, disconnection and that little voice of self-doubt every minority entrepreneur grows up hearing. Specific financial support post-covid that EMBs would also greatly benefit from being continued include lower business rates, more effective export-credit measures, and greater incentives for investment in training and research and development (R&D).
“With the right help, minority businesses could make an even more significant difference for their communities, uplift other ethnic minorities and boost economic growth.”
The UK has come a long way since the first wave of post-war minority businesses, often corner shops and curry houses. Yet even today, more than a third of the 33,000 independent convenience stores in England are run by Asian entrepreneurs. At the same time, there may also be as many as 12,000 Indian restaurants.
We need to shine a spotlight on minority-owned businesses to inspire the next generation. The most remarkable retail success story is that of Mohsin and Zuber Issa, founders of international petrol station chain EG Group which had a turnover of £17.6 billion in 2019, making it Britain’s second-biggest minority-owned business, to take one example.
It’s the entrepreneur’s belief in reasons to be confident, their ability to provide high-quality products and services and their drive and passion that have been crucial to every EMB success story. This fire enabled the previous generation of minority founders to tackle the many obstacles they encountered and aspiring young businesspeople can do the same, improve upon the progress made so far and break the mould in newer and high-growth sectors of the economy today.
“Aspiring young businesspeople can do the same [as the previous generation,] improve upon the progress made so far and break the mould in newer and high-growth sectors of the economy today.”
Tapping into investment
MSDUK has a wealth of advice and support for minority founders to tap into, from connecting with policymakers to securing working capital lifelines for startups. We also believe it’s essential that large companies are transparent in publishing their spending on procurement from ethnic minority businesses to creating supplier diversity programmes, fully supported by policies to address discrimination and enable opportunities for EMBs to get on board.
Here are my four quick tips to help ethnic business founders to grow their businesses:
1. Step outside the comfort zone
Many minority entrepreneurs start niche events and lifestyle businesses, which can mean missing out on mainstream opportunities. Rid yourself of fear of the unknown and step out of your comfort zone.
2. Watch what’s happening
Think about gaps in the market and keep abreast of the news. Think about political agendas and how you can add value, for example, if there’s an opportunity in the ‘levelling up’ agenda that could be tapped to create opportunity in your community and bring socio/economic benefit.
3. Network with ‘the club’
Make sure you are part of the ‘the club’ and join mainstream organisations that could benefit your business, such as the Confederation of British Industry (CBI), the Institute of Directors (IoD) and the Federation of Small Businesses (FSB) and, of course, MSDUK. Network with businesses you aspire your business to be. Find a mentor who believes in you and your business, has experience in the sector and valuable network of contacts to help you upscale your business.
4. Choose your investors
Seeking external investors who will provide you with the equity to grow your business is always a wise move - chosen carefully. For example, the British Business Bank, the UK’s public investment bank, will invest in promising new businesses depending on the strength of the business plan - beyond mere returns.
“MSDUK has a wealth of advice and support for minority founders to tap into, from connecting with policymakers to securing securing working capital lifelines for startups.”
Mayank Shah, Founder & CEO of MSDUK
Mayank Shah is the Founder & CEO of Minority Supplier Development UK (MSDUK). Before moving to the UK from India in 2000, Mayank ran a successful business for 16 years procuring steel and hardware for some of the largest OEMs and infrastructure projects in India. In 2006, Mayank founded MSDUK which has since become a globally recognised supplier diversity advocacy network, making a positive difference and promoting inclusive economic growth.