As the pandemic has led to a surge in entrepreneurship, Black entrepreneurs have led the way. New businesses last year were disproportionately concentrated in predominantly Black neighborhoods, according to a report from the National Bureau of Economic Research.
However, Black businesses seeking to scale can face barriers in doing so. According to the Brookings Institute, 96% of Black-owned businesses are sole proprietorships, or only have one employee. The average revenue of these businesses is just over $20,000.
One St. Louis startup is looking to promote Black-owned businesses and help them generate more revenue. Bold Xchange is an e-commerce platform selling products made by Black-owned businesses. The site sees 1,000 visitors a day seeking to purchase products like coffee, tea and candles.
Missouri Business Alert spoke with Bold Xchange’s co-CEO, Doug Spencer, to learn more about the company’s mission of promoting Black-owned consumer goods businesses.
This interview has been edited for length and clarity.
Missouri Business Alert: Tell me about why you wanted to open the Bold Xchange retail shop.
Doug Spencer: Originally, we started as a blog, and that was because I had just graduated from from college. And in my mind, the next step was go to law school. So I had already accepted an offer to attend Columbia Law School, worked at a law firm. It wasn’t the best experience for me, enough so that I decided I no longer wanted to go to law school. To have such a great opportunity like that, and to walk away from it, I had a lot of people asking me questions about it. A friend who had a blog asked if I would write on that blog about the experience. That just led to so many people contacting me, not about law school in particular, but about how to make difficult decisions.
Danielle, my co-founder of Bold Xchange — she’s actually a journalist who worked at major magazines in New York — and I said, “Hey, if my story can resonate with people like this, and knowing that you’re a much better writer than I am, if we can find some of those stories, and use them to inspire people, I think we can have something on our hands.” So, it started as that blog, and the people who were most interested in the blog were Black-owned companies (and) Black-owned business makers about our age. And so we really shifted our focus from then, seeing how the traction with the blog worked, to form Bold Xchange, which was much more focused on consumers and linking them with business owners so that they can meet in the middle and both needs are served.
Hear more: Bold Xchange co-founder Doug Spencer on the Speaking Startup podcast
MBA: Your company, Bold Xchange, helps distribute products and goods from Black-owned businesses. Recent research shows that 96% of Black-owned businesses only have one employee and bring in a little over $20,000 in revenue a year. How can that limited revenue and workforce harm the growth of some of these businesses?
DS: When we’re talking about $20,000 in revenue, that’s not considering your expenses. You’re not paying yourself, which means you’re not paying staff. You’re trying to wear so many hats at once. (Since we’re) an amplifier and a supporter of those businesses, we’re able to alleviate some of those challenges. If we can partner with you, we have our own brand and our own network, we can then help your products get in front of those individuals and ultimately scale your revenue. You start to think about, “OK, I’m an entrepreneur regardless, but I can be a full-time entrepreneur if I want. I can create jobs if my company is scaling to that level.”
MBA: These companies are growing by gaining support for their businesses by selling their products. How do you think growing media attention and support for the Black Lives Matter movement has helped garner support for Black-owned businesses?
DS: Black Lives Matter and other issues specifically focused on the Black community have definitely helped our effort in putting a spotlight on Black-owned businesses specifically. I think as we continue forward, and we think about what the trajectory looks like — for Black-owned companies in general, and for Bold Xchange — our job is to make sure that the experience people have is a memorable one, but also that this isn’t a fad or just a moment in time, where there’s extra support for companies that really have looked and needed support. But we want this to be lasting, not a trend, but more so something that will be here a decade from now. So that’s what we commit to every day is making sure that if a company or consumer says that this is something they really care about, we’re going to present the opportunity for them to really care and continue to care.
MBA: Along with the events of last summer, we also saw a rise in e-commerce due to the pandemic. Since Bold Xchange is an e-commerce platform, how was your website impacted by this increase in online shopping?
The current Bold Xchange platform actually launched a couple weeks before the onset of COVID. So almost the entire existence of our business has been during the pandemic. I think definitely we saw a surge — to go from nothing to to a surge. But even if we had started, even further ahead of the pandemic, I think the pandemic itself would have caused us to see more growth. In terms of e-commerce, if you think about the pace of it, we probably accelerated e-commerce by several years just because of the pandemic, which is, of course, a negative event in itself.
MBA: Bold Xchange not only offers products directly to consumers, but also works with companies like Home Depot and Spotify to provide Black-owned products. Why might some of these companies seek out help to find those goods?
DS: Many large organizations and corporations have created plans around their diversity, equity, inclusion. In those plans, many of them want to have certain benchmarks for diverse companies that they work with. And so when you think about, “How do I hit that number? What are the businesses that I should work with?” many of them are still figuring out who to call and who to have help them with that process. And Bold Xchange is one of those partners.
Most of those efforts, so far, have been around employee recognition. Or maybe this company has an event or an award ceremony, and they’re thinking, “We would love to show appreciation to the people in our network, but do so through Black-owned companies.” Just like the consumer has issues finding Black-owned businesses, so do larger corporations.
MBA: To end off here, what’s the biggest piece of advice you would give to Black entrepreneurs?
DS: The biggest piece of advice I would give Black entrepreneurs trying to start their business is to just treat your customers well. I think we’ve seen so much success — we have not raised financing yet. A lot of our support has come from people who have paid their hard-earned money to support us. And I think, regardless of whether you’re a startup or a small business that’s not seeking financing, the best kind of revenue for you to get is revenue from customers. So that one customer that you write that note for, that you show some extra attention, they might be someone who orders 10 times. Our best customers have ordered 25 times. So, it’s like, all it took was us enjoying them as much as they enjoy us. So I would say start there — do right by your customers every single time. The rest will come.