But Silicon Valley, like any other industry, has its share of truly dumb ideas. For every start-up that changes the world and makes its founders rich, a thousand die quick, anonymous deaths.
Some of tech’s clunkers never get off the ground, but others manage to get big, high-profile investments despite having no redeeming qualities whatsoever. (For example, what kind of genius decided to throw $1.2 million at NaturallyCurly, the “leading social network and community for people with wavy, curly and kinky hair?”)
Roose provides no actual evidence as to why NaturallyCurly is a bad investment. He doesn’t cite a thing – not their traffic numbers, no advertising sales, and no discussion of the exponential growth in the market they offer. But why should he? NaturallyCurly doesn’t fit the pattern – and Roose’s casual dismal underscores exactly why minorities, women of color in particular, have such a hard time breaking into the consciousness of the tech world.
In the comments, a few people went out of the way to correct Roose’s assumptions:
“What kind of genius decided to throw $1.2 million at NaturallyCurly, the ‘leading social network and community for people with wavy, curly and kinky hair?’” This kind: John Paul Dejoria, founder of John Paul Mitchell Systems (that’s a hair-care company) and Patron Tequila (you *may* have heard of it). Probably he saw a wildly underserved market being targeted by a company that grew steadily and organically thanks to the vision of the founding team. But why do research when you can just breezily make a call based on zero knowledge? This would be a great column if it were based on serious analysis. The casual throwaway diss on Naturally Curly is…not.
@RachelSklar – Agreed. Now I know there’s not a lot of overlap between NYMag and black girls (hi bananarama), but NaturallyCurly is tapping into a HUGE market. I mean, even ya’ll white folks saw “Good Hair” right?
And, unlike companies like Carol’s Daughter that are now trying to “pivot” to gain market share beyond those with African ancestry, NaturallyCurly started out with a pan-ethnic outlook. Pretty smart: they get to keep the majority-black readership yet face little risk of being accused of “selling out” as they grow.
And the CEO of TextureMedia, Crista Bailey, noted that the market is huge (60% of the world has textured hair and 80 million women in the US alone have textured hair), that their base is strong (two million unique visitors every month) and puts the spending power of the Naturally Curly community (close to a half billion each year). A million dollar investment is about 50 cents per user.
In addition, Roose wouldn’t have had to look far to see why natural and textured hair care is a booming market. In my comment, I noted how looking at the revenues of leading natural hair companies like Ouidad (estimated $10 Million annually) and Carol’s Daughter ($35 million annually) would show that considering the fairly small investment, it made total sense. That level of investment was less than what some companies pay for their advertising campaigns.
The viability of the natural hair care market isn’t something only discussed in publications geared toward minority markets. Inc. Magazine ran a case study on Mixed Chicks after discovering they faced a huge quandary: their product line was so successful that Sally Beauty Supply allegedly created a knock off called “Mixed Silk.” Mixed Chicks is a growing company with revenues of $5 Million a year – Sally’s is an established behemoth with more than $3 Billion a year at its disposal. While the lawsuit may ultimately endanger the business the two founders (both WOC) built, the existence of Mixed Silk proves that even huge brands are looking to jump into the natural hair care market.
And here we come to the problem.
Roose’s thoughtless (and factless) comments illuminate some of the problems in Silicon Valley, namely that the space is controlled by people who are fairly myopic. If this market isn’t something they understand or participate in, it doesn’t exist. And these kinds of perceptions create an environment in the marketplace that disadvantages minority/women fronted businesses seeking investment to create products for their communities.
There is an ignorance around the actual needs, size, and profitability of markets outside of the usual scope. This, on its own, is not a problem – CEOs and Founders can educate investors as to the opportunity and the potential. But these casual disses and incorrect assumptions poison the well – one would hope that investors aren’t influenced by bad reporting, but these perceptions create a climate where businesses aimed at markets that are not white males are automatically marginalized before they even step into the room. Worse still, most of these folks will never bother to check and see that their assumptions are wrong. And they will never fully understand why the atmosphere in Silicon Valley doesn’t change.
(Hat Tip Rachel)