New York Magazine Deems Naturally Curly A Bad Investment For No Reason

Kevin Roose, over at New York Magazine, decided to launch a column called “Dumb Money: Exposing Silicon Valley’s Stupidest Investments.” He writes:

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:

RACHELSKLAR
“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.

JOANIEPETERSON
@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)

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  • Anonymous

    Well, as somebody with wavy hair, I didn’t like the site. Cluttered and commercials all over, I couldn’t find any useful info. I wish it was made for “people with wavy, curly and kinky hair”, not for those trying to make an easy buck out of them.

    • Anonymous

      The fact that you “don’t like the site” hardly supports the idea that it was unworthy of a $1M investment. That is chump change relative to what some young founders, with frivolous and sometimes poorly executed plans, get. It happened in the first boom and it happens now. MySpace was a clunky, cluttered, mess of a site that was purchased for nearly $600M. 7 years later, it is a non-entity.
      The whole point is that silly ideas or money-losing ventures that are fronted by Whites or Asians are not dismissed as being garbage as readily as ideas led by or focused at minorities, especially minority women. They can be turned into billionaires with ideas that have no demonstrated revenue generating potential. None. And they will get money thrown at them again and again.
      And we can have the SAME ideas as those White and Asian males and not receive any money. A lot of people have convinced themselves that the dearth of Black and Latino founders is that we are not educated, don’t have ideas, and don’t attempt to enter the field. That’s not true either.
      As I mentioned before, I live and work in the Silicon Valley and these young founders have been getting money like it was nothing and live quite well and are given many bites at the VC apple and no one dismisses their ideas out of hand, even when they are pretty far-fetched. We hear the successes but not the failure. Either way though, they get a lot of money to work through, sometimes for years, and failing does not diminish their access to funding.
      So the issue is one of race, gender, and the unearned privilege that allows some to receive the bounties and others to be deemed worth nothing.
      If everyone was held to the same standards and expected to have robust and solid business plans, that would be one thing, but they are not.
      I’ll point out that you need developers to write the code to make a website more elegant and higher functioning. And you can’t get much of that for $1M.

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  • Anonymous

    After viewing the website, I think it makes pretty good sense, albeit ubiquitous. It’s was a good idea and very informative, if not interesting. Perhaps the writer of that NY Mag article was off-put by a black face with nappy hair?

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  • Anonymous

    I was in the valley during the tech boom and picking on “stupid internet ideas” is old hat. Pets.com, DrKoop.com, there were so many that failed that it seems like sport to do this, though actually, I do like NaturallyCurly.com and hope it succeeds, it’s valley culture to wonder why something that’s not a software product gets capital. 1.2 million isn’t really an over-the-top investment for a site like this, either.

  • Anonymous

    Gah. It’s like the Silicon Valley version of that crazy lady (“I’m not racist because my husband is black, but black studies is stupid”) from CHE.

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  • Anonymous

    I’m going to be charitable and say that he probably thinks that a website dedicated to hair in general isn’t a worthy investment, let alone one that specializes in curly hair. He also probably didn’t hang out in there long enough to know what it’s about although he probably wouldn’t get it even if he did. But on top of being racially insensitive (again being charitable) I wouldn’t be surprised if there’s a whiff of sexism in his opinion as well since it’s a website that is mostly frequented by women. I have a feeling that he’d have the same opinion if Ravelry, a website dedicated to the knitting and crochet arts got expansion money as well.

  • Anonymous

    I’m going to be charitable and say that he probably thinks that a website dedicated to hair in general isn’t a worthy investment, let alone one that specializes in curly hair. He also probably didn’t hang out in there long enough to know what it’s about although he probably wouldn’t get it even if he did. But on top of being racially insensitive (again being charitable) I wouldn’t be surprised if there’s a whiff of sexism in his opinion as well since it’s a website that is mostly frequented by women. I have a feeling that he’d have the same opinion if Ravelry, a website dedicated to the knitting and crochet arts got expansion money as well.

  • Shannon E. Wells

    It’s myopic because it’s dominated by White, middle-class male techies. Easy to understand why Silicon Valley wouldn’t get Naturally Curly. That’s changing a bit; now there is a chance they’ll get things that cater to middle-class male techies of any ethnicity as long as they’re Americanized enough, or even White middle-class female techies, because people of those groups are becoming more common here in the industry. But people will never check their assumptions, and if you expect that to change, you’ll be waiting a long time. The solution is to encourage under-represented groups such as Latinos, African-Americans and women to enter the high-tech industry more, and the vision of the industry will naturally expand.

    • Anonymous

      It’s a bit more than myopic because if you live and work in the Silicon Valley they you’ll encounter White and Asian males who have no problem securing funding for any myriad of “silly” ideas. These young white founders are sitting fairly pretty as they get their hustle on, and no one questions them and the merits of their ideas. People aren’t coming up with ideas that make life better, and many, many would be entrepreneurs are totally attempting to hit the jackpot with apps, games, etc.

      So I’d take this critique a lot more seriously and it would seem a lot less racist if people weren’t getting money for much more frivilous pursuits.

      When you have $1B paydays for companies that can’t generate revenue and are completely without any purpose but personal entertainment, I have trouble understanding why he is so troubled with this company getting $1M. Tell me why a game that involves throwing cartoon birds at rocks is a billion dollar idea but something that really buys into the overall social media trend is stupid?

      You can actually look up the amount of funding the founders are getting and the ideas are not things that improve our lives and contribute to society. And that is okay. But don’t treat the ideas and the founders like prodigies when they are White (or Asian) and male and act like our entertainment choices don’t merit attention or money. That is already a HUGE problem. I have NO desire to get into the start-up game but the same idea pitched by a black person is at a HUGE disadvantage out here. It’s that whole thing where a person just can’t hear you because you don’t look like them, and has trouble believing you are smart and worthy of their money and time. A lot of people will claim that there are no qualified black people with good ideas, but just remember how many college drop-outs have been made into billionaires out here the next time someone tries to throw that in your face. We attend top universities and get tech degrees and we will not have the same advantages even when we show up completing not just one but MULTIPLE degrees.

  • http://dirty-diana.dreamwidth.org/ *diana

    Yeah, wow. As someone who regularly or occasionally looks at half-a-dozen kinky hair care blogs on tumblr, blogger, youtube, I think a pretty cursory google would have answered his question.

  • http://coffeeandfingernails.com Coffeeandfingernails

    I agree with everything you’ve said here. I just want to add–I think the premise of this new feature, a weekly column about dumb tech ideas, is an incredibly arrogant one. The amazing thing about the web is its ability to take off in directions no one predicted. To look at an idea for a new site/app and think, “I can’t imagine how I would use that, therefore it’s just dumb” shows not just a lack of imagination, but a lack of awareness of your own limitations. Particularly without, as you say, an effort to research the target market or contact the founders and get their take on why this is a good idea. Arrogant, lazy and smug–that’s a Bad Journalism Hattrick. Maybe we should take bets on how long it will take for this column to call out an idea that turns out to be the next twitter…

  • http://coffeeandfingernails.com Coffeeandfingernails

    I agree with everything you’ve said here. I just want to add–I think the premise of this new feature, a weekly column about dumb tech ideas, is an incredibly arrogant one. The amazing thing about the web is its ability to take off in directions no one predicted. To look at an idea for a new site/app and think, “I can’t imagine how I would use that, therefore it’s just dumb” shows not just a lack of imagination, but a lack of awareness of your own limitations. Particularly without, as you say, an effort to research the target market or contact the founders and get their take on why this is a good idea. Arrogant, lazy and smug–that’s a Bad Journalism Hattrick. Maybe we should take bets on how long it will take for this column to call out an idea that turns out to be the next twitter…