Series Thirteen, Episode Four – Ethnic Minority Enterprise and Investment

Julia: Hello. My name is Julia Streets, and welcome to DiverCity Podcast. Talking about diversity, equity, and inclusion in financial services. On the podcast, we seek to shine a light on positive progress, call out areas requiring further focus, and offer lots of ideas to help drive change. Before we get started today, I just want to take a moment to thank our friends at City A.M. for their continued support for DiverCity Podcast. They have a dedicated page on the website and they publish and promote both our episodes and our supporting blog series so their readers can stay on top of the very latest diversity and inclusion debate. Now, you may want to check out their own podcast called The City View for all the latest news and opinion from the City because we at DiverCity Podcast are huge fans.

Today I’m joined by two guests, Eric Collins and Ali Kazmi. Let me introduce them to you. Eric Collins is a serial entrepreneur, investor, technology executive, and host of the Channel 4 business show, The Moneymaker, which is based on the highly successful US show, The Profit, on CNBC. September, 2022 is an exciting year for him because it will see the publication of his debut book in which he argues that investing in black and underrepresented entrepreneurs is the surest, the fastest socioeconomic game changer there is.

He has spent much of his career building the value of digital companies through innovative strategies at public and private companies, notably AOL, Time Warner, Swift Key in its sale to Microsoft and Touch Surgery, and he sits on the board of companies in San Francisco and London, including Tech Nation. President Obama appointed him to the small business administration’s Council on Underserved Communities. And in 2018, the Financial Times named him among the UK’s top 100 BAME Leaders in Technology. Since 2019, Eric has been voted one of the most influential Black people in Britain on the Powerless. Eric, what a joy to have you on the show. Thank you for your time and being with us.

Eric: Thank you for inviting me, Julia. I’m looking forward to this, and I’m also looking forward to seeing how your past as a comic influences the kinds of questions, and the tone of conversation that we have.

Julia:  For  those of you who are listening in, you may, or may not be aware that in addition to being a female entrepreneur in the city, I’m also a recovering standup comedian. So, this is why actually the whole medium of podcasting is very interesting to me. And yes, I should do my very best Eric.

Eric:  Excellent.

Julia:  Wonderful. Now, joining Eric, I’m delighted to welcome Ali Kazmi, and he is the founder of Ethical Equity, an investment platform for ethically compliant startups and scale-ups. Ali regularly advises high net worth angel investors and shareholders, and indeed their families on venture capital tax relief. He also advises companies seeking to raise investment under these schemes and he’s ex big four, and most recently headed up the Bristol office of a boutique tax practice that specialises in advising startups and scale ups. He regularly advises companies seeking to raise investment, as well as thinking and in advising about pre and post-deal structuring. He’s a member of the Enterprise Investment Scheme Association, Green Shoots providing young professionals in the industry the chance to independently develop their own networks, interests, and awareness of the world of SMEs and venture capital. Ali, great you could join us. Welcome to the show.

Ali:  Thank you, Julia. I’m looking forward to being on the show and like Eric, I’m also looking forward to your one liners around diversity, if possible.

Julia:  I’ll try and cover with a joke about diversity and inclusion and venture capital. See if I can get that working through. I’m really intrigued to know what you are both focused on. This is a question I always ask all our guests when they join. Eric, let me come to you first of all. As you look ahead to 2022, what’s your particular focus?

Eric:  I’m actually going to talk a little bit about looking back at 2021 in terms of then predicting 2022. In 2021, we had a fantastic event in the UK. The UK is one of only three countries that has ever developed 100 unicorns, meaning that these are organisations that have a valuation of at least a billion US dollars, and it’s a fast growth company that has gotten to that. In the UK, there are two FinTech companies that were started by Black entrepreneurial teams that actually achieved that status in the third quarter of 2021. One, a company that’s called WorldRemit, which has rebranded itself. The other one is a company in which Impact X, my venture capital firm, invested called Marshmallow, which is an InsureTech company. So, it’s fascinating to think that in the third quarter of 2021, we had done something that had never been done before seeing two Black unicorns here in the UK.

Now, what that means for me is that I’m looking to see what 2022 will bring. Will that number two become four new unicorns? Will it become 10 new unicorns? This is a very important milestone because as you mentioned, the thing that will be happening in the third quarter of 2022 is that this book will be coming out. This book of mine called We Don’t Need Permission is all about how large scale businesses, not small businesses, but large scale businesses that are generally tech based businesses could actually change the course of human history for women, people of colour, and other underrepresented people, if indeed they were started by women and people of colour. Take, for instance, if indeed Amazon had been started by a Black woman from Bristol, what would be the situation in terms of the hiring practices, the promotion practices? What would be the issues that would be addressed with governments around the world and communities? Who would be empowered, who would be disempowered in that context?

That’s what I’m really looking forward to. The ways in which we can start to talk about we don’t need just business. We need large scale businesses and we don’t need businesses started by everyone. And hopefully things will trickle down. We need deliberate approaches that are actually enabling women and people of colour to start those businesses, grow those businesses to significant sizes like WorldRemit, like Marshmallow. Hire hundreds, thousands, tens of thousands, and even millions of employees, and make a very big difference in all the by-products that come from that. So for me, that’s what I’m looking forward to in 2022 and seeing evidence of that.

Julia:  I can’t wait to read the book. It has to be said, there’s so much of this we’re going to unpack in the show for sure because just imagine the potential. I’m just thinking about the wealth creation, the job creation, but also the cultural potential and possibility. And as we know that when we talk about DE&I, leadership, culture, and also the ability to innovate and outperform really, really matter. Wonderful. Eric, thank you very much. Exciting pathway ahead, for sure. Ali, it’s the same question to you. I mentioned you are an entrepreneur. You set up Ethical Equity, but also with your background as well. What is your focus for this year?

Ali:  Not as esteemed as Eric. I must say I’m very tiny. For me, it’s about building the ecosystems and partnerships within the regions. We find that they’re not fluid enough. There are obstacles and problems within that ethnic minority founders often face, and also going through the regions and advocating ethical startups as a framework. We currently know that the current model doesn’t really work. Otherwise, we wouldn’t be here talking about issues. The best way forward we think is ethical. Everybody’s aligned to very similar principles and everybody can relate regardless of their skin colour, their beliefs.

Just to touch on some of the points that Eric mentioned about keeping in theme with unicorns. To date, we haven’t seen a Sharia compliant unicorn, yet there’s about $3 trillion globally flying around. What is that money doing? Where is that money going? So, we’re here simply to advocate that business is good, there’s nothing wrong with making money, and how you do it is a very big factor. Keeping in tune with ethical principles and embedding them in the ecosystem is our priority. Also we don’t want the conversations around diversity to die off as they often do.

I often call it in my abrupt and blunt conversations with people that it’s a marketing decoy. Every two to three years, “oh yes, we must do something for ethnic minority people. We need to bring them to light.” All these core organisations make the noise, throw a lot of money at PR, and then 6-12 months down the line where’s that going? What’s the results? We never hear about the results. And I’m not saying companies don’t. Some do. Also a quick point on that when companies or big organisations talk about diversity, just a simple click, go onto their executive team and see who they are. And you’ll immediately know how serious they are about diversity and how serious they want to implement it in their own organisation. If the house is not in order, are they really going to sort their problems out? I’m not sure.

Julia:  There’s so much that I will definitely pick up on as we go through the conversation. I think particularly about actually moving away from the rhetoric into what’s real, but embedding this into corporate strategy, talent acquisition, but also the leadership to the top as well, and the representation at the highest levels. Whether it will drive growth, and as you say create the unicorns of tomorrow, which is really exciting. Let’s begin to unpick some of this then. Let me come to you first of all, Eric, and I do want to return to the opening remarks that I made, and also you picked up on in terms of investing in Black and underrepresented entrepreneurs is the surest socioeconomic game changer. Explain more. Keen to hear your insights, but also I’d love to hear your remarks about UK and US comparisons.

Eric:  If you were to look at the history of social change in the world, there have been any number of tools that have been used to affect long lasting and sustain change. There has  been marching, there have been lawsuits, there have been playing within the system, doing what is necessary, trying to be a change agent from within. All of those things, I believe Ali makes the most important point, just look at the evidence. We don’t need to look very far. In 2018, we could have looked at the Colour of Power in the UK. That report, which showed who’s sitting in which seats, whether you’re in an arts organisation, whether you’re in the government, whether you’re in the army, who is running the country at a local and at a national and a federal level? Those things are very, very important to change if you’d like to see them change, and how do you actually then affect that change? Again, you can sue, you can march, you can vote, you can work from the inside.

The thing which has never really existed for women and people of colour in the quantity, which is necessary is the capital to be able to support the systemic change that they wish to see. That capital as we know comes from various sources, but most capital is being built today. If you look at organisations with names like Microsoft, if you look at organisations with names like Facebook, if you look at organisations with the names like Zillow, these are organisations that have been started within the lifetime of all of us who are on this telephone. They did not exist beforehand. And yet they have been able to create such a dynamic of wealth generation and power. This is power, both soft and hard power around the world that you almost are creating these non-governmental organisations.

The thing that we’ve never had is we’ve never had a Black company in the UK that’s been in the FTSE100. We’ve never had a Fortune 500 company in the United States. So, the differences between the UK and the US are minuscule in terms of those types of things. Both have systemic issues, which have impeded the ability to participate effectively. When I say participate effectively, that is to create within a generation, the dynamics and the necessary elements in order to make sure that we have the tools to affect change. And I believe, and this is what my book will talk about “We Don’t Need Permission”. This is what we talk about at Impact X.

Without the capital, and having to go hat in hand every time you want something to be done. So, you have to say to a person, “Look, we don’t have the capital to support this issue. What we want you to do is for you to believe in what I believe in. You give me capital so that I can then be able to invest in changing the world in a particular fashion.” That sort of method has been fine, and you get allies who actually help. But those allies, as Ali said, they come and go. Sometimes there’s lip service. Sometimes they’re actual priorities, but sometimes those priorities change very quickly.

If you want to be able to run your own race and to fund your own movement and your own moment, you need to be able to build substantial amounts of capital. That is why building large scale companies is the fastest way. And again, if there’s a Black woman in, I’ll use Birmingham this time, who starts a company in Birmingham that challenges an organisation like say an “Uber” and creates that sort of an organisation with that sort of a scale. She’ll be a person who’s having conversations with governments about are these employees or are these gig economy workers she’ll be having conversations as to whether or not the takeover of one company or another is antitrust triggering. She will be the person who will be having a conversation about what should be the tax consequences and whether or not will hang enough taxes and jurisdictions. And I believe the consequences of those conversations will be very different than the ones we’ve seen. And quite frankly, I believe that we will stop retrofitting organisations.

Again, Ali is so brilliant in terms of all he said. He said, “Look, what we’re doing is we should get to a point where we’re not talking about D&I. Build some large scale companies started by people who are diverse and inclusive in general.” The DNA of those organisations will be very different, and will stop trying to retrofit organisations that are terribly broken at their base because of the systemic issues and the perceptions of supremacy of maleness, whiteness, that indeed we will end up in these different situations. That is what I’m talking about, and that’s what we invest for at Impact X, and that’s what this book is about. How do we actually do that systematically and create systemic and sustainable change?

Julia:  There’s a phrase that you used quite early in your remarks about within a generation, and it gives me enormous hope that actually within a generation, we could really see some change if all those factors come to be as well. Ali, well, let me bring you in here for your thoughts. I’d love to hear your reaction to that, but I wonder if I could also ask you to weave in some remarks. You talked about the three trillion that is flying around potential investment, but also when you are out into communities that are interested in Sharia compliant investments, is there an appetite to invest? Is there also a latent appetite to support the growth and invest the capital that Eric was just talking about?

Ali:  For example, somebody inherits £100,000 and they are immediately looking for opportunities to invest or do something useful with that capital. In the first instance, within particularly the Asian community, we often go to our parents or grandparents and we think we’re taking proper financial advice while actually in reality we’re just taking what they’ve experienced and what their understanding of investment actually means is far from what the reality actually is. The typical advice that I’ll often get, or an Asian member will get is well actually investing rental portfolio is safe. Whereas, actually that capital could go so much further within the community, within the ethnic minority, or any startup for that matter. They still need to generate wealth. They need to create their own wealth and do something useful with it. But again, where does that actually stem from?

Going back to the corner shop example, he will then take advice from his local accountant who isn’t really tax savvy, who isn’t startup savvy. He’ll just advise him, I need to save you X amount of money, and that is it. That’s all they have, whereas on the white counterpart, for example, if they inherited £100,000, the first thing that they’ll do is go to an IFA, independent financial advisor who will then lay out all the options for them. And then they can then cherry pick which ones are the best ones.

The three things for me are the education, the lack of it, the network, not having access to it, and the investment opportunities that come from it naturally. And the third one being involved in those communities because the opportunity’s not there. You naturally won’t get an invite to come around the table and discuss, and cherry pick some of the deals that are available.

One final thing I would just say is, as an ethnic minority, as an Asian, and I often, if I spoke to my father or to my grandfather. If I said to them, do you know why investing in a university spinout needs? I’ll just get blank clips. But if I ask them, do you know which rental portfolio, which property I could buy in which street and which area will give me the highest returns? They’ll open a spreadsheet and show me exactly the areas that I can invest in. It’s a whole different thing, and we’re so far behind is the conclusion.

Julia:  Eric, I feel like you’re keen to come in at this point, so please do.

Eric:  Because I think that Ali makes a very important point across the D&I spectrum. Whether we’re talking about Muslim families, whether we’re talking about Black families, whether we’re talking about white women and anyone else. What we often do find is that the possibility set, the option set that we’re looking at is relatively limited, and we are looking at what is available as information within our community. That community might recommend that for women, which is the fastest growing set of entrepreneurs in the world, women are good at businesses that involve beauty. They’re good in businesses that involve childcare. They’re good in businesses that involve food.

Now, those are fine businesses. And quite frankly, even an investment portfolio in real estate, that’s fine. Those things are very good. The thing that Ali and I are both pointing out is that it does not build for a community. It builds for a family. It builds for an individual, but it’s not necessarily the basis that an entire community can build on because it does not have sufficient capital that is then allocated in various ways. It doesn’t build a huge number of jobs for other people. It doesn’t build then returns for other people that are outside. When I talk to people and I say, “So we put 100,000 into Marshmallow.” Marshmallow, an insurtech company, which I spoke about before. 18 months after we put in 100,000, we have a 28 times return on that. That doesn’t happen in real estate, but it is a risk that people have to understand, because it might go down to zero. And sometimes we find that our risk aversion causes us not to be able to look at opportunity because it feels too risky.

We might end up losing and that’s instead of we might end up with opportunity and winning, we think a little bit more about how might I lose and what’s going to happen if I lose? And that then is a problem of very few safety nets in our community. We cannot rely beyond our family. We can’t get to the bank. The banks won’t invest in us. Other people won’t invest in us to help us out of a hole. And if we fail once it’s unforgivable for many people. You don’t get a second chance. So there are ways in which we have to really think about that.

When Ali and I are talking to people, we’ve got to talk realistically. We understand that there are risks. We understand there’s not a safety net that’s as broad. However, if we continue to focus on just the downside and not the upside, and you should always look at the downside risks, but you always look at the upside potential. We’re making our calculus incorrect and our calculus will end up continuing to get us to be in the same roles, doing the same portfolio on construction and getting the same results. Therefore, a generation from now, Julia, you and I will be sitting here having the same conversation about why hasn’t it? Because we will get the same results.

Julia:  Ali, can I return to this question or the remark you made earlier about the three dynamics, education, network, and getting involved, and this point about education. I’d love to just refer back to your work with Green Shoots and how do we keep the pipeline of interested potential entrepreneurs, startup entrepreneurs, people getting involved in the growth journey of entrepreneurship and also investment, which has very clearly come through in the conversation today. How do we tap into underrepresented talent and really nurture it and how important are networks, but also mentors?

Ali:  Very important. I would say education is right at the top. Again, you could really drill down into what is education, and I don’t mean education, simply somebody coming and throwing a few words on a spreadsheet or on a presentation and calling that education. That’s not education. That’s somebody simply telling you the information and then walking away. Education is where you’ve got something and you then can implement that in real life and then change your life with it. For me, that’s, I think the real definition of what is education. I think something that what we’re doing is going into untapped communities and talking to them, trying to get them around the table and discuss and make them more inclusive. I think that’s where the real is.

I think the word actually isn’t education, I think is empowerment, empowerment of communities. For them genuinely see that there are opportunities out there for them and mentors and everything else. Again, coming back to a bit of what Eric was saying. You could get this 100,000, but if you don’t have the right mentor, the education, how are you going to actually going to spend that money to make a return for your shareholders? I often see with incubators and I personally have gone through this is that it’s all great talking about diversity and trying to get them through the door of your incubator and giving them some of the resources. But what they don’t understand is the ethnic minority community comes with a whole lot of baggage. We haven’t been educated in the normal way as our White counterparts. We haven’t been exposed to building successful businesses within our communities or our father or mother or whoever it is.

When you come into this incubator expecting that you’re going to build a successful business, but actually first thing you need to work out is what does that ethnic minority person entrepreneur actually want, and what do they actually need? Those questions are really hard to get down into. My example I always give, what I thought what I needed, and what I wanted are two different things. What I thought was a great way of building a business probably wasn’t the great way of doing it. Again, because I didn’t have the background, I wasn’t molded in a particular way.

There’s a lot more that these institutions need to do. I mean, we’re not saying give preferential treatment. It’s more about, yes, open these doors for them, but don’t stop there. You’re creating another problem if you’re doing that. You just need to hold their hand for a little while, get them embedded into the ecosystem, and then yes. Then they could graduate and do whatever they want. I think that’s the thing is empowerment, mentorship, and real education, not regurgitated information being thrown about meaningless to entrepreneurs.

Julia:  That’s really important. I mean, we’re very proud to be mentors of a number of incubator labs. I think there tend to be models of governance, support, and mentorship that come in a slightly cookie cutter form. It’s a very important piece of advice, which is to be mindful of the journey of the entrepreneurs as they come in. And also, as you say, not only do they want, but particularly what they need as well. Eric, can I bring you in at this point as well, and thinking about as you see young talents coming through to create these businesses that are going to scale, as you’ve suggested within a generation, which is my hope and my dream, what advice do you give of young people thinking about either getting involved in startups, be they in financial services or elsewhere, and/or indeed becoming investors?

Eric:  Good question. I spend a lot of time with individuals who are coming to me saying, “I have an idea, Eric. I have a great idea, and this is going to change and revolutionise the world. It is going to disrupt anything which has been done before.” And my first question is, “Okay, let me see it.” And sometimes people say, “I don’t have the money to do it yet, but if you give me your money, then I can do something.” I’m not going to say, “Okay, that’s an interesting approach. Where’s your money? Have you put your money into this? I get that you put in your sweat and your equity, but have you done some of the things that you’d expect to see? Have you maxed out? Have you begged and borrowed?”

Julia:  No stealing!

Eric:  Yes, no stealing! But what have you actually done? Because I want to see how tenacious you are as an entrepreneur. What real belief do you have and conviction have you got about this. And the organisation I’m much more likely to give a real listen to and we receive hundreds. Let me be clear, we receive hundreds of inbound queries for capital on a monthly basis. We have only invested in 25 companies over two years. Hundreds we get on a monthly basis. We have only invested in 25 in a two year period. That means that there is a lot of competition out there for the money. If you think that what you want to do is to actually start a company, whether it be a FinTech company, whether it be a health and lifestyle company, whether it be a meet and entertainment company.

The question is, how is it that you are going to get someone confident that you are the right person? Not that it’s the right idea, because that’s one piece. But the second piece is, are you the right person for the idea. Why are you so particularly well suited? And what have you shown us that helps to show that you have grit, tenacity, and stick-to-it-ness, that allows us to know that if I put my money behind you, a year and a half from now when you’re not getting to go on holiday, when you’re not getting to have a Christmas break. Where you just put your pens down and you don’t listen to anything. When you have a reversal of fortune, how you’re going to behave. And at that particular point, and are you lone wolf because, yes, you can do things very quickly on your own, but can you actually bring in other people to work with you? Are you actually a team builder and therefore a leader? Those are very, very different sorts of skill sets coming up with a good idea versus being able to start a company and execute against the plan are very different skill sets. And so, that’s what we’re actually trying to measure.

When someone comes to me and says, “I want to start a business.” I have to go through not just an analysis of the idea and everyone can pass that because the ideas are dime a dozen. The more important piece is can you actually be someone that I can work with over a period of time and are you going to be there during the rough places because I’m still going to be here, and my hard hearted investors who put money behind me are still going to say, “Well, Eric, we want our money back 10 times what we put into you. So, where is that money?” Someone had a rough day, someone had a situation that made it difficult. That’s not what anyone wants to hear. That’s what I would say.

Julia:  I think this is one of the interesting dynamics of tech companies in particular, because the person who started with a cracking idea either came out of business school or university or simply just woke up one day going, “I think I’ve got an amazing idea.” Has maybe got an MVP, minimal viral product, and brought it to market, but may not necessarily be the ideal leader. So, this other whole ability to scale, and this is all about the kind of roots to scale and to growth as well. I’d love to stay with the conversation about technology and think about the role of tech in helping businesses to start up. I mentioned, Ali, you’ve got a platform. You are an investment platform. Perhaps, I could come to you first, and then Eric, love to hear your thoughts afterwards about the role of technology helping to not only start up but scale up.

Ali:  Definitely. I think technology is for good, and it could also be used for bad as well. But I think it generally is a good thing. I think for me, it’s not about the technology as such. I think entrepreneurs will always come up with great stuff. But for me, it’s about the resources that come around or wrap around the technology piece in order to make it work. I’ve seen many founders that have built great MVPs, but there’s no execution within them, the resources, the access to taking it to market, then raising investment. I think that’s an art within itself, and not many entrepreneurs have that. Being able to be pulled in front of someone, and where there’s an hour long page or three hour long pitch, they eventually… You can see them crumbling within the first few sentences. Do they give confidence to the investor or whoever’s putting money into them to then take that to the next stage? I’m not quite sure. But I think tech is there. I think tech will always be there. It’ll be good. But for me, as I say, it’s about the wraparound services that come around and the resources around the tech itself for the founder are more vital than the tech itself.

Julia:  Well, let’s bring in Eric here for your thoughts about when you look at organisations. You’ve got your investors who are looking for 10X returns on the money that they put in. Do you look at the tech, and what tech do you see that it’s particularly expanding that? Or do you rely more, as the earlier remark suggested, about the ability of the individual?

Eric:  We are in a world that technology is the great accelerator and it’s the great enabler. There is no company, whether you are selling ice cream cones on the side of the street, or you are trying to figure out, like Klarna, how do you make sure that people buy now, pay later, all of those organisations are at least tech-enabled, because the person paying for that ice cream probably doesn’t have a lot of cash in their pocket, right? There is some technology, there’s some something, some sort of solution that point of sale solution to make sure that your money goes from one account to another, and that therefore there’s a reconciliation. And there’s probably also something which is helping to order to make sure, well, these ice cream cones are going faster than these, so next time I order, I’m going to order these ice cream cones as opposed to these. There’s always some technologies involved.

Tech-enabled businesses, every organisation, so I would say 100% of businesses, maybe 99.9% of businesses, are tech-enabled. And technology is part of what they need in order to be able to function. Then there are technology businesses, those businesses, which are based on the technology themselves, the bits and bites, the code, the algorithms are absolutely central to what it is that they do. That would be through a digital service or delivery model, some SaaS based business model, all the things that you hear being talked about are all about crypto and digital and blockchain. All of these are tech organisations. Some of them are very deep tech. Some of them are health tech in terms of things like Babylon Health. How do you actually then stop visiting the doctor, but instead work through an app and through conversation in order to be diagnosed, in order to be prescribing advice as to what to do about things? Those things are tech companies.

What are the most valuable companies in the world? The most valuable company in the world today is a company called Apple, right, which is now worth three trillion. It is a tech company. They work in music. They work in film. They work in devices called cell phones and others and computers and laptops and tablets, but they’re a tech company. And if you look at the United States as an example, as opposed to the UK, the top 10 companies in the United States are all tech companies. And they’re not tech companies like a medical tech company. They’re pure tech companies, Facebook. They are Amazon. Tesla’s up there now, so it actually is a physical product, but it’s a tech-enabled physical product. I would say the technology is here to stay. If anyone does not believe that, I wonder where they’re living and what sort of environment they’re looking at where they don’t believe that the technology is the thing which either makes them able to reach their customers, able to serve their customers, or able to collect from their customers. Everyone needs those types of things, and technology is part of that.

I would say that technology is here to stay. Technology is something that should be leveraged. As Ali said, education is important and technical education is consequential. If you don’t understand what an algorithm is, if you don’t understand why blockchain might be a very efficient way of being able to track things, if you don’t understand those types of things, like not understanding Chinese when you’re going to China, you will be at a disadvantage. Trying to start a company and saying, “I have a great idea, and I don’t understand anything about tech, but I’ll partner with someone who knows tech and therefore I’ll be safe,” puts you in a position of probably having a little bit of an execution challenge, which is what I said I’m looking for to say no to you because I feel as though there’s going to be an execution risk. In my opinion, there are lots and lots of types of education. And one type of education is to be sophisticated about what you need to do in order to, from an investor perspective, like we at Impact X, need to hear in order to make sure that you make sense for us.

Julia:  Wonderful. Great. Thank you very much indeed for your thoughts on that. I think that’s a great moment to bring in Cynthia Akinsanya for some research to support today’s discussion.

Cynthia: The 2020 Alone, Together report prepared by the British Business Bank and Oliver Wyman looks at entrepreneurship and diversity in the UK. The report examines the profound effects and challenges ethnic and economic background, gender, and place can have on entrepreneurial opportunities and outcomes, such as only half of Black entrepreneurs meet their non-financial aims compared to nearly 70% of White entrepreneurs. Asian and ethnic minority entrepreneurs have better outcomes than Black entrepreneurs. However, they have a lower success rate for starting a business and see less success overall compared to White entrepreneurs. More than a third, 37% of Black female business owners and 36% of female business owners from Asian and other ethnic minority backgrounds report making no profit in 2019 compared to 16% of White male business owners. Female business owners of all ethnicities experience significantly lower median turnover than male entrepreneurs, 15,000 versus 45,000 per annum, and fewer say they meet their financial aims.

Julia:  Let’s take a moment to remind everybody how we find the research and also to direct you to our website, divercitypodcast.com. Don’t forget that’s DiverCity with a C, not with an S, and that’s where you can find all of our episodes and sign up for early notifications of future recordings, and also our newsletter, DE&I That Caught Our Eye. It’s basically a collection of some of the most contemporary articles and news stories so you can stay right on top of what’s going on right now. Do please follow us on Twitter, Instagram, Facebook, LinkedIn, and DiverCity Podcast is available on BrightTALK and all good podcast channels. And by the way, we’d love a rating, because it does all help to promote the show.

Earlier in the show, we were talking about ethical investments and we were talking about Sharia compliant frameworks. Ali, in the mix between education, networks, and getting involved, I’d love to hear your thoughts about now, where does this sit in the mix and what are you particularly focused on?

Ali:  We start this by saying there’s a serious lack of awareness of what Sharia actually means, and by that, all ethical Islamic. It is simply a framework that is based on Abrahamic beliefs, ethical beliefs, and has been encompassed all together as an ethical framework. By that, I mean the different types of frameworks that you have now are SRI, which is socially responsible investing, ESG, which has come at the back of that, which is environmental social governance. Now you have the B Corp, that US concept has come in and taken off in the UK as well, which has been based on the ESG model. When you have those conversations, what people don’t understand is there’s another ethical framework, the Sharia framework, or the ethical Islamic framework, which encompasses all of the frameworks, from the SRI, ESG, and the B Corp, are one element of the ethical Islamic framework.

Julia:  It’s really important too, to bear that in mind, particularly, we have so many conversations about ESG and everything you’ve talked about there, but I’ve never really thought about it in that higher level, if you like. It’s important to keep that in mind. There’s so much of this conversation that I wish we could keep talking to, maybe how the time passes. I just wondered if I could ask you to answer my final question, the question I ask all our guests, because it is incredibly important. As we look at the year and we look at the complexities of the road ahead, these are going to be arguably quite challenging times. I’m concerned that diversity, equity, and inclusion could fall down the corporate agenda. I would love to hear your compelling reasons for why it must remain high. Ali, can I come to you first?

Ali:  I think it will fall off the agenda, but I think at the point where society says enough is enough, I think till we reach that mass point, not a lot is going to be happening. I don’t mean going out on the streets and burning cars down and shops down. I just think strategically making valid points and keeping at the forefront of everyone is key. I think people need to understand, especially within the ethnic minority people, that there is an equal playing field available to them. When we get there, I’m not sure. Will we get there? Again, I seriously doubt. I’m not sure, especially in my lifetime, I’m not sure

Julia:  We will keep the conversation going for sure. This is our mission at DiverCity Podcast. Eric, same question to you. Why must it remain high on corporates’ board agendas?

Eric:  I am married to a historian. When I look back and then I look forward, I say that we have never in the course of human history seen the opportunities and challenges in front of us that we have seen, ever before. In order to address those, in order to be able to get the creative solutions, the disruptive solutions, diversity is what delivers disruption. It is not doing things the same way. It is not the same people doing things the same way and having decision making capabilities over others. It is diversity which allows disruption to happen and allows us to be able to address the impacts of change that’s going to be happening in front of us. From that disruption then, also fuels returns. Diversity delivers disruption, and disruption fuels returns. As an investor, that’s what I’m looking for. In my opinion, diversity is the basis of higher returns on investment.

Julia:  It has been the most fantastic conversation. I can’t tell you how grateful I am that you’ve both given your time to be with us today. You asked for a joke at the end, but I couldn’t possibly. I can’t take the edge off the conversation. However, what I will do is just recognise my favourite word of 2022 already, stick-with-it-ness. That is now a hashtag!

Eric:  There you go.

Julia:  Eric, I give you full credit for that. I loved it. Listen, Eric, thank you so much for being with us.

Eric:  Thank you very much for having me, Julia. It’s been great to be here with you and Ali. Ali, I love what you’re talking about and what you’re doing.

Julia:  Well, Ali, that’s a great moment to thank you.

Ali: Thank you. Great. Happy to be here too.

Julia:  As always to all our listeners at DiverCity Podcast, thank you for listening. I’ve been Julia Streets, and we look forward to bring you another exciting episode very soon.

Kieron: This episode of DiverCity Podcast was produced by me, Kieron Yates on behalf of Julia Streets Productions. Thanks to Cynthia Akinsanya for her insights. You can find out more about the guests on this week’s show on our website, divercitypodcast.com, and that’s DiverCity with a C, not an S. Whilst you are there, you can also sign up to our newsletter for all our latest updates. All our episodes are available in Apple Podcasts, Spotify, or your favourite podcast app. If you enjoy DiverCity Podcasts, remember to share on social media and give us a rating or review. It really helps promote the show to a wider audience. Finally, our Twitter handle is @divercitypod. Thanks for listening.