IT Entrepreneurship 101: Microsoft, National Urban League Provide Minority Students Tools, Incentives to Develop a Web-based Business Idea

REDMOND, Wash., June 7, 2005 – Imani Scott started her first business when she was 8 years old. But the Philadelphia high school student had never heard of or used a Web cam until she enrolled in Making the Business: Youth IT Challenge, a program sponsored by Microsoft and the National Urban League that is intended to help minority high school students develop business plans that utilize the latest information technology.

Today, Scott and her teammates will compete against regional finalists from eight other U.S. cities at the historic Apollo Theater in New York. Each group will present plans for Web-based businesses that they developed during a 10-week training program that began last fall and winter. The proposals run the e-gamut, from an online restaurant and food review service to an Internet search engine that is customized to find scholarships, grants and loans for college-bound students, educators and organizations.

While only one of the teams will walk away with the first place honor and the US$15,000 in prizes that come with it, organizers hope all of the students gain the inspiration and experience to help extend the current surge in minority business owners and, just as importantly, increase the numbers who have long-term success as entrepreneurs.

The second annual Youth IT Challenge has become the cornerstone of Microsoft’s growing and maturing efforts to work with organizations such as the National Urban League to help people in minority communities realize their potential in their personal and professional lives.

“Just as the technology this company develops doesn’t recognize race, class or economic status, the entrepreneurial opportunities provided to students should be blind to color and other societal differences,” says Gayle Cruise, manager of Diversity Marketing and Communications at Microsoft. “The finalists in this year’s Youth IT Challenge are perfect examples of the great things what young people can do when given the tools, training and encouragement.”

The first-place-winning team from St. Paul, Minn. joins entertainer Sean “P. Diddy Combs” (fourth from right), with Microsoft’s Michael Robinson (far left) and National Urban League President Marc Morial (far right). New York, June 7, 2005.

Minority Entrepreneurs: New Growth, New Challenges

Recent studies paint a mixed picture of the current state of minority entrepreneurship. Over the past decade, minority- and women-owned businesses have experienced tremendous growth. The most recent data from the U.S. Census Bureau shows that from 1992 to 1997 the number of minority-owned firms increased at four times the rate of all U.S. businesses (30 percent, compared to 6 percent to 7 percent).

However, the number of businesses started by some minorities still lags far behind that of working Caucasian men, one in seven (14.2 percent) of whom work in their own business. This compares to about 1 in 18 African American men with jobs (5.6 percent) and 1 in 12 working Hispanic men (8.3 percent). Also, fledgling black-owned and Hispanic-owned businesses are less likely to survive and prosper than Caucasian-owned businesses, nearly half of which (48.7 percent) remain open for at least four years. Just over a third (34.7 percent) of black-owned firms survived that long, and 44.9 percent of Hispanic-owned businesses made it to four years, according to a 2002 study by Richard J. Boden and Brian Headd of businesses opened in 1992.

The Youth IT Challenge is designed to demonstrate how technology can be used to develop a business idea, and be incorporated into everyday business practices. National Urban League affiliates in nine cities – Dallas, Denver, Los Angeles, New York, Philadelphia, Pittsburgh, St. Paul, Seattle, and Washington, DC — recruited students for this year’s competition from inner city and surrounding schools. The students competed in a local competition. The winners advanced to today’s national final.

The students came into the program possessing a range of skills and interests. For students like Ashley Robertson, the competition introduced her to ideas as disconnected from her daily life as walking on the moon. Before she attended the 10 weeks of classes, she had no way of knowing if she wanted to start a business or even possessed the skills to do so. Now she does.

“I now realize making up business ideas is a really creative process, and that’s what I enjoy,” says Robertson, who along with her Washington, D.C. teammates, Jessica Artis and Kiera Laing, came up with District Couture, an online advertising site for small urban fashion vendors.

For Laing, the real eye-opener was how long it took to develop their business plan. With help from volunteer instructors from the Microsoft Mid-Atlantic District, the three teens created a 35-page plan that includes an online market analysis, eco-impact statement and first-year revenue and gross profits estimates ($5,000 and $2,500, respectively). Laing thought they’d be able to complete the plan in two weeks. It took them the full 10 weeks. “This is hard work,” she says.

Realizing the benefits of IT

Philadelphia team member Scott was already well versed in what it takes to start a business. She began her first when she was still in fourth grade — after she learned that the career her mother wanted her to pursue, ballet, didn’t pay well. “She said to me, `Mommy, I want to start my own business,’” her mother Sandra Sowell-Scott remembers.

Scott followed through. She began organizing fashion shows and house parties to sell costume jewelry and scarves that she’d select when visiting the wholesale district in New York with her mother. She has gone on to start other for-profit and non-profit ventures. Her goal is to some day own a hotel chain.

She took part in the Youth IT Challenge to develop an area of her entrepreneurial skills that was lacking: her IT skills and awareness. During the 10 weeks of sessions, she and her teammates, William Brownlee and Jessica Fulton, learned to identify business opportunities that utilize IT and how technology can help streamline operations and improve how they run their business.

IT knowledge such as this will prove vital if the three teens eventually try to launch the non-profit venture, a research study by the Urban Institute suggests. The study, commissioned by Microsoft, found that small businesses owned by minorities or women can increase productivity by almost 10 percent (from 41 percent to 49 percent) by simply increasing the use of computers within the business. This translates to an increase in potential output to the U.S. economy of between $100 billion and $200 billion per year, according to the study.

Scott says she now understands the importance of Web sites for running a business, as well as some of the do’s and don’ts when designing a business site. (Rule No. 1: Don’t try to cram too much onto one page.) Scott’s introduction to Web-cam technology played a vital role in the development of their business. Breakthru, an online peer resolution system, would provide feuding students a virtual teen court, online counseling, and conflict-resolution videos as an alternative to suspension. Students would be asked to go into separate rooms, each with a Web-enabled PC and camera, to resolve their differences without additional physical confrontation.

Sowell-Scott considers deficient IT skills and knowledge one of the biggest hurdles minority entrepreneurs face – and she should know. She is the former director of youth entrepreneurship at Temple University, and now serves as a consultant to inner-city schools.

While inner-city students gain some exposure to technology at school, many don’t have computers and other technology at home and don’t become proficient enough to transfer their skills to business opportunities after school, she says.

“Kids need to start learning these skills at an early age. It has to become a mindset,” Sowell-Scott says. “The Youth IT Challenge offers an excellent opportunity to focus on how technology can be used in business and education.”

Creating More Meaningful Partnerships

Microsoft’s Cruise considers the Youth IT Challenge a perfect example of how the company is beginning to forge deeper relationships with organizations that work to enhance opportunities for minorities and other under-represented groups. Initially, Microsoft primarily provided the National Urban League grants and the services of top executives, such as Tanya Clemons, vice president for People and Organizational Capability at Microsoft, who is a board member for the National Urban League.

Now, eight years into the partnership, the two organizations are working collaboratively on projects, such as the Youth IT Challenge, with broader goals and the potential to impact people nationwide. Another example is an online learning tool that Microsoft jointly developed with the Women’s Business Enterprise National Council (WBENC) and the U.S. Department of Commerce’s Minority Business Development Agency (MBDA) women and minority entrepreneurs nationwide. The tool will provide small business owners with IT-based solutions to increase efficiency and productivity in areas such as accounting and finance.

The Diversity Partnership Outreach initiative that Microsoft launched in 2001 has also helped spawn deeper relationships with the National Council of La Raza, the Human Rights Campaign, and the National Congress of American Indians.

Last month, Microsoft and MBDA announced plans to create an advisory group that will lead the development of seminars, research and other resources that demonstrate the benefits of technology products and services for women- and minority-owned businesses.

“Preparing youths to succeed and flourish in a technologically advanced future requires collaboration between the public and private sectors,” says Marc Morial, president and CEO of the National Urban League. “We are working together to help these youths realize their potential.”

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