Black Entrepreneurs: Invisible And Loving It

They're finding that the Internet's anonymity removes racial obstacles

Often, the slights seem incidental: Customers approach the white store clerk, assuming he's the owner. At other times, the comments Betty A. Ford hears at Mailbox Haven, her suburban Seattle package-delivery business, feel more racially pointed. She recalls one white customer who warned, "I'm going to watch you wrap my package," and another who asked, "Is this business black-owned?" Well, yes, Ford thought. But why did it matter? Such patrons "assume I'm not in control because I'm black," she says.

Mailbox Haven thrives, but Ford wants to sell the operation. She's seeking her fortune now on the Internet, having launched City Boxers, an online retailer of hand-tailored boxer shorts. The product is a natural, filling an attractive niche geared toward the Net's large male audience. Just as important, in the Web's virtual reality, Ford has found some workplace solace. Shoppers "make their decision on what the boxer shorts look like, not on who's selling them," she says.

As President Clinton and his Race Initiative Advisory Board wrestle vainly with racial bias--what W.E.B. DuBois proclaimed the problem of the 20th century--the Net is providing some relief for the 21st. Hundreds of black and other minority entrepreneurs are setting up shop in cyberspace, many with impressive results. Though exact numbers are impossible to nail down, "there's a group of black folk that recognizes the potential to shatter the barriers that physical commerce creates," says Julianne Malveaux, an economist and author of Sex, Lies and Stereotypes: Perspectives of a Mad Economist.

COLOR-BLIND. It's an intriguing outcome of the Cyber Age. The Internet has been reviled for isolating Americans via their PCs, encouraging "virtual" communities at the expense of real ones. Cyberspace, moreover, has provided unchecked time and space for race-based hate diatribes. Yet in commerce, the Net's cool anonymity proves an advantage to minority business owners, allowing them to bypass real-life tensions by masking their racial identity. Just as important, Web-based businesses typically require far less capital than comparable physical operations, removing another historical hurdle for minority entrepreneurs.

That's no answer to racism per se, of course. But the Internet's color blindness does allow entrepreneurs to succeed, or not, on their own merits. Roosevelt Gist Jr., a 51-year-old former car salesman, remembers white customers at a large Virginia dealership asking if they could speak to another salesman, clear evidence that his race was a turnoff. On the Net, the question is moot. Gist's four-year-old online service, a forum for buying, selling, and researching cars, gets 40,000 visitors a month--none of whom has a clue that he's black--and collects about $200,000 a year in advertising revenue.

While racial anonymity provides psychic advantages, though, the Net's crumbling of financial barriers is the bigger boon. Carolyn Louper-Morris, a former political science professor, first tried to launch Cyberstudy101 the traditional way, producing study aids on diskettes and shipping them to colleges. But that operation would have required $2.2 million in investment to send 217,000 boxes to 58 universities a year.

GLOBAL REACH. Instead, Louper-Morris took Cyberstudy101 online, where its operating expenses are dramatically lower. Customers download materials directly from the Web site, so shipping costs have disappeared. The company's operating costs, limited mostly to marketing and Web site management, are expected to be $65,000 the first year. "That's what made me move the product from land to line," says Louper-Morris, who says revenues should reach $4 million. Many Web-based businesses are even cheaper to run, costing as little as $100 a month and "allowing build a small business out of passion and interest, whereas before, the barriers were too high," says Barry Parr, director of E-commerce strategies for researcher International Data Corp.

Entrepreneurs can leverage such small investments by reaching instantly across global markets. Gigi Roane created on retirement savings of $5,000, offering access to black-oriented books that most mainstream bookstores don't carry. The online business quickly reached customers in Kansas, Oregon, and overseas, grossing $170,000 in 1997 and persuading her to set up a small physical shop for local customers in her Washington home last year.

For a segment of ethnocentric black businesses, indeed, the Internet's vast reach is more compelling than its anonymity. Operations such as Roane's are explicitly race-based: They thrive by serving the Net's growing minority population. Some 5 million black Americans surf the Web, according to a recent study by researchers at Vanderbilt University. And black consumers are just as likely as whites to make purchases online.

More important, black entrepreneurs are moving past small consumer-oriented sites to discover business-to-business applications, which account for two-thirds of all online transactions. One key project:, an electronic mall set to be launched in mid-October by Nexgen Solutions Inc., a Silver Spring (Md.) Web-consulting firm, with support from the Commerce Dept.'s Minority Business Development Agency and the National Urban League. initially will link 75 small, minority-owned businesses with major companies, including giants such as IBM. By yearend, Nexgen hopes to have 500 minority companies exchanging goods and services with the behemoths--allowing a black-owned software consultant in the Midwest, say, to strike a local consulting deal with IBM.

Ultimately, of course, black entrepreneurs on the Internet still need the same skills and products required to succeed in the physical marketplace. Yet the online world can help: It doesn't eliminate racism--but for some entrepreneurs, it does level the playing field.

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