New research from scholars at Duke University in North Carolina and the University of Utah has found Black entrepreneurs are less likely to share their ideas within their personal network and are more likely to seek advice from a stranger who is a business expert.
The research was conducted by analyzing data from a previous Duke University survey that asked over 50,000 people about their potential to generate business ideas and their confidence in carrying out their ideas. The results found that Black people were more likely than White people to consider a business idea, and there was no significant difference in confidence between the two groups. However, Black people were still less likely to eventually open their own businesses.
To examine the possible causes of this disparity, the research team broke down the entrepreneurial journey into four stages: socializing the business idea within the entrepreneur’s personal network, creating a business plan, seeking market feedback, and seeking financial and professional advice. To their surprise, the researchers found no significant difference between White and Black entrepreneurs’ experiences in the final stages of the entrepreneurial process. The main difference between White and Black entrepreneurs was in the initial socialization stage. The authors found Black people were less likely than White people to share their business ideas with friends. For those that did share their ideas with friends, they were less likely to eventually start a business.
The study authors believe these results can influence policymakers to create better avenues for potential Black business owners, such as community-based mentoring programs that connect entrepreneurs with local business experts.
