I know how challenging it is to be a Black tech entrepreneur. The racial wealth gap makes finding funding nearly impossible, and it feels like the deck is stacked against you. Thankfully, these hardships are offset slightly with free and low-cost small business digital tools that help entrepreneurs start their businesses and find success. However, in their short-sighted war on America’s leading technology companies, Congress may inadvertently make it harder for minority-led startups to succeed.
I was bitten by the entrepreneurial bug in 2002. I launched a social RSVP site that helped event organizers use analytics to promote their events better. I moved the company to Atlanta for its networking and larger African-American business community. With the help of the community and some breaks, we grew to more than 80,000 users. We advertised thousands of events for Fortune 500 companies and during special events like NBA All-Star Weekend, Super Bowl Weekend and Essence Music Festival.
I was lucky. I had a vision and was in the right place at the right time to take my first company to a high level of success. I wanted to pay it forward. In 2014, I started a tech nonprofit that mentors the next generation of promising diverse founders and social entrepreneurs and facilitates relationships with influencers, large companies and investors. Our goal is to equalize socioeconomic disparities in communities around the world. Every successful founder is a budding investor that can help the next generation.
One common thread across all the startups we help is how important digital tools are to their growth and success. Startups are consistently understaffed and underfunded. With a small amount of capital, free and affordable digital tools empower startups to find customers, promote their business and scale quickly. From the mobile workout app platform that lets users track their workouts to the chef hosting virtual cooking classes, digital tools have been transformational.
For example, before affordable cloud computing was available from Amazon and Google, the barrier to entry for a digital startup was incredibly high. Servers were expensive; they required dedicated staff, space and maintenance, all on top of the servers and software themselves. Cloud services drastically reduce those costs and lower the barrier to entry for new digital businesses.
Once up and running, digital advertising is a game-changer. Powered by massive amounts of data, ad services from Google and social media advertising on Facebook and Instagram enable startups to reach customers in ways that were unheard of just 20 years ago. Powerful algorithms enable startups to target potential customers cheaply and efficiently, drastically reducing costs and giving small businesses a chance to compete against larger, more sophisticated companies with billion-dollar ad budgets.
The system works because Amazon, Google and Facebook are large, integrated across different business lines, and constantly competing for small business dollars. Yet Congress is hell-bent on changing how these companies operate or breaking them apart. What is going to happen to minority startups — short on cash, but big on dreams — when Google has to spin out its ad division and Google Workspace from its search business? Or Amazon has to ditch its cloud business? It will likely lead to higher costs and less effective digital advertising.
Also, acquisitions are always on the horizon for startups. Blocking the sale of a company simply because of a large buyer is un-American and will put downward pressure on the sales price of startups. Unless the sale causes significant consumer harm, entrepreneurs should always have the option of selling and cashing in on years of hard work.
Starting a small business is hard. It also can be incredibly rewarding and has the potential to level the racial wealth disparity in America. We need our government to support minority entrepreneurs and make it easier for them to succeed, not introduce short-sighted regulations that will drive up costs and eat away at already narrow profit margins.
Joey Womack is the founder and CEO of Atlanta-based tech nonprofit Goodie Nation and a member of the Connected Commerce Council.
