Wednesday, May 07, 2014

Dr. Diddy, Black Hackers, and Black Entrepreneurs

Last updated: Wednesday 5/12/14 @ 8:43 pm
Updating the comments by Sean Parker to Mark Zuckerberg in the Facebook movie, The Social Network, I just tweeted the following response to Diddy's request for help in writing his Howard University commencement address:
Forbes predicts you will soon be worth $1 billion. But $1 billion isn’t cool. You know what’s cool? $50 billion --
When Mr. Sean John Combs -- a/k/a "Diddy" "Puff Daddy" "P. Diddy" "King Combs" etc, etc, etc, and coming soon "Dr. Diddy" -- announced that he was "speechless" when he heard that Howard University (HU) would confer an honorary doctorate on him at its May 2014 commencement ceremonies, I was also speechless ... but not because my former employer of 41 years would bestow this honor. I was speechless ... and disappointed ... that Mr. Combs would accept a decoration that is so inappropriate for this point in his career.

Black Entrepreneurs
Although I was a serious devotee of Hip-Hop and Rap when I was still a youngster in my fifties, nowadays I rarely listen to this music or watch its videos; so I am not a fan of Mr. Combs the artist/producer. But his phenomenal success as an entrepreneur fills me with immense racial pride, as does the phenomenal success of the other four black entrepreneurs on the Forbes magazine's 2014 list of Hip-Hop's Five Wealthiest Artists.
Estimated Wealth
Sean "Diddy" Combs
"Revolt TV"

Andre "Dr. Dre" Young

Shawn "Jay Z" Carter
"Roc Nation"
 "Live Nation"

Bryan "Birdman" Williams
"Cash Money

Curtis "50 Cent" Jackson
"Vitamin Water"
 "SMS Audio"
 "SK Energy"

 * Estimated wealth and other data obtained from "The Forbes Five: Hip-Hop's Wealthiest Artists 2014" (Zack O'Malley Greenburg, Forbes Magazine 4/16/2014)

Reviewing the numbers in the last column of this table, it's clear that some of our guys are finally getting rich ... not E. Franklin Frazier's Black Bourgeoisie Negro fantasy rich ... but really rich ... white man rich. Unlike too many other black males, these fab five and the runners-up who didn't make the final cut were not derailed by overt racism or by stereotype threat, its shape-shifting, sinister cousin that lurks in the shadows.

Of course the millions and eventual billions that will pour into their pockets won't put a dime into the pockets of the millions of black men, women, and children who are not as genetically gifted nor as creative nor as courageous nor as lucky. So we need to remind these superstars, incessantly if necessary, of their obligation to lend a helping hand to those who trail too far behind. But how should they help?  ... and when?

Commencement Precedents
Some HU students expressed concerns that Combs had dropped out of Howard in his sophomore year; so how could he be asked to be a commencement speaker at their graduation? But as many others have noted, Howard's invitation has precedents. For example:
  • Harvard University invited entrepreneur Bill Gates to deliver a commencement address in 2007, despite the fact that he had dropped out of Harvard in his sophomore year.
  • Stanford University invited entrepreneur Steve Jobs to deliver a commencement address in 2005, despite the fact that he had dropped out of Reed College in his freshman year.
However we should note a couple of important differences presented by these  precedents:
  • End of their business careers
    Gates was ending his career as an entrepreneur in 2007. Worth well over $50 billion, he was redirecting his prodigious energies (and wealth) from Microsoft to the Bill and Melinda Gates Foundation.  In 2005 Jobs was already confronting severe challenges to his health that diminished his capacity to work and would ultimately lead to his passing in 2011.  By contrast, Combs' entrepreneurial career is still going strong.
  • Substantial prior contributions to higher education
    Gates and Jobs developed affordable computer technology and offered heavily discounted prices to educational institutions at all levels. Therefore each man probably had significantly greater positive impact on the educational opportunities provided to college students everywhere in the world than the vast majority of the faculty members at Harvard or Stanford. One could regard their honorary doctorates as formal recognition of these contributions. By contrast, Mr. Combs has not had substantial positive impact on any aspect of higher education ... yet.
Soooooo ... During his commencement address at Howard, should Dr. Diddy announce his decisions to (a) resign from Revolt TV, and (b) devote the rest of his life to full-time educational philanthropy? My answers are (a) Hell No!!!! and (b) Not yet. Indeed, if I myself attend Howard's commencement ceremonies (Saturday, 5/10/14), you will spot me waving a gigantic Howard blue and white banner that reads, "Go, Diddy, Go!!! Go for your first billion, then go all the way to $50 billion and beyond!!!" ... :-)

Doing Well By Doing Good
While I encourage Dr. Diddy and and his peers to continue their pursuit of great wealth, I also believe that these extraordinarily gifted entrepreneurs can and should make substantial contributions to black higher education along the way. That's why I would advise them to pursue strategies that could achieve both of these objectives at the same time. Readers should consider the rest of this memo as an open letter to Dr. Diddy and the other members of the Forbes Five.

A. Develop Internet-based computer applications.
Hip-Hop has a large and expanding fan base; but the Internet has become the primary driver of the world's biggest economies in what has been referred to as the "progressive digitization of e-v-e-r-y-t-h-i-n-g" ...  We're talking about a subset of the U.S. entertainment sector whose maximum potential value could be measured in billions of dollars vs. global sectors measured in trillions.You may not think you know enough about the Internet to become a player, but choice is an illusion. Sooner or later the Internet will absorb all sectors, including Hip Hop. Those who don't play will be cast aside.

That's the downside; here's the upside. Ya-Hoo, Google, and Facebook grew from start-ups with trivial initial capital requirements into global behemoths valued in the hundreds of billions in five to ten years. And before earning a penny profit, lesser fish have been quickly gobbled up by these whales for mind-boggling acquisition prices ... YouTube ($1.65 billion), Instagram ($1 billion), and WhatsApp ($19 billion). In other words, if you really want to become far richer than you already are, and become so in the fastest possible time, the Internet is the place you want to be.

B. Leverage your current success.
Your initial Internet applications should relate to the production and distribution of Hip-Hop because your name on the apps will attract substantial numbers of users from your current fan base. But as soon as possible, you should expand into the production & distribution of other goods and services that could utilize the skills of the creative software engineering, management, and marketing teams that you assemble.
C. Mobilize the Talented Tenth. 

"The Negro race, like all races, is going to be saved by its exceptional men."
W.E.B. DuBois, The Talented Tenth, September, 1903
Sixty years ago, if you wanted to harness the creative energies of the black elite, you would have recruited from HBCUs because 90 percent of the Talented Tenth were enrolled in, dropped out of, or graduated from HBCUs. But two things have changed:
  • First, only ten percent of today's black college students attend HBCUs; the other 90 percent attend non-HBCUs, a/k/a PWIs (predominantly white institutions).
  • And second, it's difficult for colleges of any kind to credibly claim that earning a college degree is the best way to acquire the programming and other computer-related skills that are necessary to develop the killer Internet apps that earn millions, and sometimes billions of dollars within a few years.
Creating the gears of the great global Internet machine requires "higher education" ==> technical skills beyond what most people learn in high school. It's useful to divide the hacker/entrepreneur segment of the Talented Tenth into three overlapping clusters ==> traditional students, non-traditional students, and practicing professionals.
  • Some traditional, college-age students will acquire the skills they need while taking on-campus courses that lead to college degrees; others will learn what they need to know, then drop out.
  • Non-traditional, older students are more likely to enroll in online courses that yield certificates that confirm their acquisition of these skills.
  • Practicing professionals are also more likely to keep their skills up-to-date via online courses that yield certificates that confirm their acquisition of new skills.
  • All three groups would benefit from the hands-on training and mentoring provided by incubators and accelerators where participants learn how to repackage their great ideas into marketable applications. 
In the last few years seething volcanos of intense ambition to become successful Internet developers and entrepreneurs have erupted within black America's Talented Tenth because all three of these groups have read the headlines about Facebook, Google, Instagram, etc, then looked themselves in the mirror and said, "I'm as smart and as creative and as determined as these guys. So I can learn how to do what they did!!!"

Unfortunately from your perspective as a potential large scale investor, there aren't enough black professionals who have developed enough marketable applications to provide you with enough opportunities to earn large Internet-scale returns on your investments at this time. Nor are there enough traditional and non-traditional black students in the pipelines. Nor are there enough pipelines that are accessible to this black elite, i.e., not enough relevant on-campus courses, not enough online courses accessible to off-campus students, and not enough incubators and accelerators. 

These shortfalls pose formidable challenges ... but they are also present you with the most golden opportunities of your lives. The funds required to close these gaps will surely be a small percentage of the returns that will flow from the brilliant applications that will developed by the brilliant black minds that will be empowered by your investments.

So my question to the Forbes Five is straight-forward ==> Do you think you're as smart, as creative, and as determined as Jobs, Gates, and Zuckerberg? 

I hope so.

P.S. When investing in the creation of on-campus courses and scholarships for talented on-campus black students, I would strongly advise the Forbes Five to focus on HBCUs. Underfunded and under-managed, HBCUs still produce a disproportionate share of the nation's black technical professionals. But despite the fact that the nation's most prestigious predominantly white institutions have (a) the greatest access to the Silicon Valley's pipeline and (b) currently enroll the lion's share of the nation's best prepared black college students, they have produced few (any?) big winners in the Internet sweepstakes. Indeed, when Soledad O'Brien produced her brilliant documentary  "Black in America, the New Promised Land: Silicon Valley" (CNN, October 2011, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6), she didn't find any successful black entrepreneurs in the Valley.

So focus your investments on HBCUs, not because you're black; but because HBCUs still do a better job in these regards. "The proof is in the productivity."

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