Making New Opportunities in Old Industries

• Why funding and scale are critical to creating opportunities for diverse businesses and employees.
• Diverse entrants are bringing fresh perspectives to previously homogenous industries.
• How to turn your cultural differences into competitive advantages in a mature industry.

Ryan Wilson didn’t set out to disrupt the old, stodgy private-club industry. Studying law at Georgetown University, his path was redirected in 2012 when he received a group email in the wake of the killing of Trayvon Martin.

“I got an email from some friends asking, ‘What are we going to do?’” says Wilson. “I responded with the idea of a new type of private club that we could use to tackle that issue.”

In 2016, The Gathering Spot opened in Atlanta in a low-rise office complex near the Georgia Tech campus. At first glance, Wilson and his partners’ twist on the traditional concept of a private dining club doesn’t detour from what such clubs have always provided: a space where the business class pays for membership ($300 initiation fee plus $2,100 per year) to eat, drink, network and attend special events with peers. The club now has 5,000 members, hosted Joe Biden and Kamala Harris for campaign events and has opened a second location in Washington, D.C., with a Los Angeles location planned for fall 2021.

While many private clubs and co-working spaces are by definition agnostic on social issues, Wilson credits a very specific point of view for making the club a focal point for a very diverse set of entrepreneurs and professionals.

“Our club is centered on the Black experience,” Wilson says. “Black people in particular are used to being tolerated in spaces and not celebrated in them. And while the club is open to everyone, the baseline is different.”

Wilson’s story shows that when women entrepreneurs or entrepreneurs of color enter industries that had long been mostly occupied by white professionals, they often become disruptors in the same way that tech companies upend mature businesses. New entrants can bring a different cultural lens to old business models, helping them to lure both customers and employees who felt ignored by businesses they’d previously had no other option but to patronize.

“We have really forced clubs that may not be majority-minority to reexamine their overall interest and engagement with the folks who have traditionally been a minority in their communities,” Wilson says. “When you are celebrated in a space, that’s a different experience; you can tell very quickly if you were just being tolerated in any other space.”

That is what Courtney Scott believes sets her business apart from others. Scott, a Black woman who used to buy and flip houses in Atlanta, saw that she really enjoyed pre-sale design work, so she started her own firm in 2016. She quickly recognized that her firm did not look like others.

“I was just at a furniture market in June,” Scott says. “It’s like one of the biggest show markets in the world. But, literally, you could count on one hand the number of persons of color you would see. Just visiting a lot of different showrooms that I have gone to, I’ve made direct eye contact with the salesperson, and I get nothing—but somebody else walks in and it is, you know, the biggest, warmest hello and hug.”

But there are bright spots. Scott says her business is growing, and she has noticed that some clients are supportive of the fact that her identity as a Black woman makes her a rarity in her industry. 

“More people are being intentional about reaching out to people who look like them or who may be underserved, wanting to support their business, their projects,” she says.  

Melanie Miller, an Atlanta diversity strategist, says that Wilson and Scott are examples of a cadre of entrepreneurs motivated by the opportunity to bring their identity, as well as products and services to the marketplace. 

“What's happened is a lot of folks have not felt included. They’re not working in cultures where they feel like they belong,” says Miller, who has advised companies including UPS, T. Rowe Price and AT&T.

That’s a common experience for entrepreneurs of all stripes, Miller says. But as it applies to diversity, people who have been underrepresented in certain industries can have an outsized impact when they become entrepreneurs because they are essentially opening new markets for capital, labor and customers.

“We often think of some industries as mature or stale, but if that market has never had, for example, women as leaders or customers, it’s the same as opening up an entirely new space,” Miller says. “It’s the same thing that happens when you take a company that’s been there for years, go overseas and find out there’s a whole new set of people to do business with.”

But opening new markets isn’t without hurdles. Wilson cautions that any discussion of being an industry disruptor must address a lack of access to capital, which has often plagued diverse entrepreneurs. “Underfunding leads to very few Black-owned businesses being able to achieve scale,” he says. “No scale means no competition—and open season for everyone else to hire the talent.”

The funding and scale conundrum is acute. Only 3% of investment funding is received by female founders, a statistic that has not changed in a decade, according to a study from Crunchbase. Black and Latinx founders received only 2.4% of all U.S. venture capital raised since 2015. And a Deloitte study revealed that 65% of investment firms reported having no Black partners as recently as 2020.

Some companies have stepped up to address that issue. In May, Synchrony committed $15 million to venture capital funds headed by women, Latinx and Black partners. In addition to this commitment, Synchrony Foundation awarded a $2 million grant to Local Initiatives Support Corp., a nonprofit group, to provide emergency relief to small businesses hit hard by the pandemic, especially minority- and women-owned businesses.

"For too long, Black, Latinx, and female founders have been underrepresented in venture capital funding," says Trish Mosconi, EVP, Chief Strategy Officer and Corporate Development at Synchrony. "Together we must take collective action to help close the venture funding gap and provide equal access to capital for diverse entrepreneurs and underserved communities.”

The commitment is significant, but there’s still a long way to go toward eliminating the old attitudes that limit opportunities in the first place. Janine K. Brown, founder and Managing Partner of Everyday Lead, an Atlanta firm that assists companies with their diversity and inclusion strategies, says that even in a large, diverse city like Atlanta, diverse entrepreneurs can face an uphill climb. 

“You look at a marketplace like Atlanta, especially Metro Atlanta, and it appears to be very liberal,” Brown says. “People say things like, ‘We’re post-racial,’ and, ‘We’re just doing business with the best people.’ But if the best people look the same, are you really doing the business in the best way?”

Learn More:
• How to Shake Up Your Industry (LegalZoom)
• Reinventing Your Company (Harvard Business Review)
• Startups Shaking Up the Competition (Bloomberg)

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