Last week, we launched OXC with a starting cohort of 301 BIPOC-owned businesses. These businesses span multiple cities, countries, and industries and each business’ story is unique and inspiring. The initial cohort was sourced from various websites and media outlets that have covered BIPOC-owned businesses, without regard for any particular business characteristic (i.e., we only chose businesses based on the race or ethnicity of their founders).
We wanted to learn more about the makeup of this cohort, so we did what any reasonable scientist would do: we crunched the numbers! After doing data analysis, here are the top five things we learned.
Beauty & Personal Care is the most popular category
15.28% of the 301 listings on OXC are classified as Beauty & Personal Care. Beauty & Personal Care businesses are classified as businesses that offer products or services related to skincare, haircare, makeup, soaps and shampoos, and the like. The second most popular category is Technology Platforms & Services, which is 13.28% of the 301 listings.
The majority of the BIPOC-owned businesses listed on OXC as of today are women-owned (see below), which could explain why Beauty & Personal Care is the most popular business category. Women are the top consumers of makeup, shampoos, and other beauty and personal care products, so it only makes sense that there are many women entrepreneurs who want to capitalize on this demand. However, women aren’t responsible for all the beauty/personal care-related businesses. Brands like Bevel (owned by Walker & Co. and Proctor and Gamble) and Cardon have created products specifically for men.
California and New York are havens for new businesses
About 64% of the 301 listings on OXC were founded or are currently based in either California or New York. This is not surprising. Over the past few decades, California has been known for being the epicenter of innovation and some of the most valuable companies in the country are located in the state. On the opposite coast, New York has been known as the center of business and commerce around the world. But don’t take our word for it.
Our data aligns with that of the U.S. Census. According to data from the U.S. Census, in 2017, California had the highest number of small businesses in the country at 808,213. New York was a distant second at 481,792.
This could all be changing, however. The COVID-19 pandemic has led some companies to move to different states like Florida and Texas, and some entrepreneurs are making the move to avoid the high taxes of California and New York. Let’s see if this migration changes things in the future.
Black-owned businesses dominate the collection and conversation
46.51% of the 301 listings are Black-owned businesses. It’s no secret that the Black population is one of the most vocal populations in the United States, and for good reason. The centuries of oppression and systemic racism has been the source of frustration, inequality, death, sadness, and anger for Black people in the U.S. The number of Black-owned businesses in the United States grew rapidly in the early 20th century, partly because of the movement spearheaded by Booker T. Washington and the National Negro Business League. However, some Black business communities like Tulsa, Oklahoma’s Greenwood District were burned to the ground by white extremists.
Today, we see a Black population that has increasingly taken pride in Black entrepreneurship. The Black population has realized that entrepreneurship is one of the keys to generational wealth. Plus, because of recent killings of Black people at the hands of law enforcement, corporate America has shown an increased interest in helping uplift Black-owned businesses. For example, Google released a commercial this year that highlighted Black-owned businesses. American Express created a program that awards grants to Black-owned small businesses.
All these events have led to more awareness and coverage of Black-owned businesses than ever before.
Most BIPOC-owned businesses are started by women
54.81% of the 301 BIPOC-owned businesses listed on OXC were founded or cofounded by BIPOC women. Historically, there’s been a misconception that women aren’t entrepreneurial but our data says otherwise. As we mentioned above, a good chunk of the businesses listed on OXC are classified as Beauty & Personal Care and the majority of those businesses were started by women. But they’ve also started other interesting businesses, such as Away, the popular luggage brand valued at over $1 billion and VC firms.
How does data from other sources stack up? According to UENI, in 2020, 45.02% of American businesses were owned by women. Also, women surpass men when it comes to running sole proprietorships, making up 52.34% of these business types.
Unicorns are few but they exist
Based on public data, 5% (just 17) of the businesses on OXC are valued at over $1 billion. This data is not surprising. Most small businesses in the United States will never reach unicorn status or go public partly because most small businesses aren’t growth companies looking for an exit (e.g, IPO or acquisition). We also have to consider the fact that BIPOC entrepreneurs experience more challenges getting funding and mentorship than their white counterparts. These challenges act as significant impediments to the exponential growth that we see startups from white founders experience.
But unicorn status isn’t all it’s cracked up to be, and most small business entrepreneurs aren’t looking to build billion-dollar companies or go public; they’re simply looking to support their families and pass down wealth to future generations.
As more businesses are added to OXC, we’re looking forward to seeing if these trends change. The entrepreneurship train is speeding up and more and more people are getting on board. What a time to be alive!
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