MeWe360 in the Sunday Times
Just in case you missed the Sunday Times article on MeWe published at the end of last month – here it is!
End the start-up whitewash and blue-chips will follow
The Sunday Times
27 August 2017
A project to encourage more ethnic minority entrepreneurs is having an impact.
Kevin Osborne has an eye for talent. In 1999, he set up Tribal Tree, a support programme for disadvantaged youngsters with an interest in music. It helped launch the careers of some of the biggest names in British urban music, including Plan B, Rudimental and N-Dubz.
Tribal Tree came to an end in 2007, but not before Osborne — himself a musician and producer — saw countless examples of the challenges facing young people from minority backgrounds who want a career in the arts.
He now uses his talent-spotting abilities to help entrepreneurs of black, Asian and minority ethnic (BAME) origin to start businesses. Osborne focuses mainly on creative industries, but the lack of diversity in start-up companies exists across all sectors.
Last year a government survey of small and medium-sized enterprises (SMEs) in England and Wales with at least one employee revealed just 5% are owned or controlled by a person from a minority ethnic group. The figure drops to 4% for one-person businesses. Despite efforts by government and charities, there was no improvement from the previous year.
“If you come from a particular background, you just don’t have the network you need to succeed,” said Osborne, 50.
Four years ago, he founded MeWe360 to help budding business owners from BAME backgrounds. The project, which is based in an office in London’s Soho owned by Sir Paul McCartney, provides workspace, mentoring and introductions to potential investors. It has recently received just over £1m in funding from the Arts Impact Fund, supported by the charity Nesta and the Arts Council England, among others. That’s enough to survive for five years. From then on, MeWe360 will begin investing in some of the companies and rely on those returns.
There is no single reason for the lack of BAME entrepreneurs. A report by the Economic and Social Research Council suggested some ethnic minority groups found it more difficult to obtain credit to start a business, while a perception of discrimination discouraged others from applying for bank loans.
Politicians continue to grapple with the problem. Margot James, the minister for small business, has toured the country talking to company owners about the importance of diversity to the government’s industrial strategy. Yet progress has been disappointing.
“There’s a real will to change things, but the programmes that have been run haven’t quite done it,” said Osborne. “The numbers speak for themselves.”
Britain’s biggest businesses set a poor example. Just 5% of top executives at FTSE 100 companies are from ethnic minority backgrounds, according to the headhunting firm Green Park, and nearly 60% of boardrooms entirely white. The Parker Review, backed by the government, has set targets for board diversity — but with little urgency. It recommends at least oneBAME director in all FTSE 250 businesses by 2024, for example.
Could SMEs lead the way? “Small organisations might be at an advantage because they can start with a blank sheet of paper,” said Marjorie Strachan, head of inclusion at NatWest bank.
The benefits would be enormous. Another government-backed review, led by Baroness McGregor-Smith, said the economy could benefit from a boost of £24bn a year if BAME workers were promoted at the same rate as white staff.
There is cause for hope. For years there was a chasm between the number of men and women starting businesses. It still exists, but the so-called enterprise gap has narrowed after a surge in female-led start-ups. In the three years to 2016, the proportion of women starting businesses was 45% higher than a decade earlier, according to new research from Aston University.
There are signs of progress on ethnic diversity as well, especially in Britain’s biggest cities. In London, for example, the number of BAME small business owners is 16%, government figures show.
Programmes such as MeWe360 are starting to have an impact. Amman Ahmed left university seven years ago with £1,000 left from his student loan. He was determined to start a business, but his first attempt did not work out and he was forced to work as a recruitment consultant to pay the bills.
Ahmed had a side project called Music for Pets, which produced soothing sounds for restless cats and dogs. Through MeWe360, he found a business coach and was encouraged to keep going with the idea. Music for Pets now attracts 10m hits a month through Spotify, YouTube and Apple Music, and has been profitable for four years, according to its founder. The ad revenue was enough for him to give up recruitment.
“After the failure of my first business, I was in a lonely place,” said Ahmed, 30, who is based in Manchester. “MeWe360 introduced me to people who had built their own teams and been a success.”