White House Philadelphia Urban Entrepreneurship Forum
August 8, 2011
As Delivered
Thank you for that kind introduction.
It is always a joy to be in Philadelphia, the home of many of my family members and friends, the home of my Alma mater, University of Pennsylvania, and of course the home of the Philadelphia Eagles.
I don’t know about you, but I can’t wait for football season to start – and I think the Eagles will have something to say this season. I want to thank all the organizations who helped make this White House Urban Entrepreneurship Forum possible – and I want to give a special shout out to Fox School of Business here at Temple University and PECO/Excelon Corp., who graciously agreed to sponsor this luncheon. Thank you!
I want to recognize my friend Natalia Olsen, Member of the United States Innovation Advisory Board for her great work in pulling this Forum together. Natalia please stand. Also, my good friend Michael Blake who is the architect of the White House Urban Entrepreneurial Forum. Similar forums are occurring all across the United States and it’s because of Michael’s vision that these Forums are even available. Michael please stand.
I want to recognize Congressmen Fattah, Brady and Schwartz for their great leadership on behalf of all Americans. Certainly, I want to recognize Mayor Nutter, one of this nation’s most respected mayors. And Chip Flowers, the outstanding Treasurer from the State of Delaware.
This morning you heard from a tremendous group of financiers, non-profit and government specialists. This afternoon, you will hear from more John Hope of Operation HOPE one of our nation’s true visionaries. Magnus Greaves – an outstanding entrepreneur and head of 100 Urban Entrepreneurs. You will hear from other key members of the Obama Administration who are here -- Ari Matusiak, who is head of the White House Business Council, Doug Rand, policy advisor to the White House office of Science and Technology Policy, Joe Hurd from the International Trade Administration, and Jackie Hill who runs the Philadelphia Business Center for my agency, the Minority Business Development Agency. Jackie, please stand and wave so that everyone can see you. Before you leave, please get Jackie’s card because she is a key source of support as you grow your business.
And you will hear from many other leaders from Fox, Wharton, private sector companies and federal and state government agencies that are here to help you buy, build, start, or globalize a business. But, most of all, I want to recognize all of you for coming to this forum because by virtue of your presence here today, you heeded the President’s call when he asked every American to take the steps to Out-Innovate, Out-Educate, and Out-build our global competitors. And is it you who will build the companies that will create new jobs for our economy both today and tomorrow.
But the environment in which you will buy your business, start your business, build your business or globalize your business will be in one of the most challenging environments this nation has ever seen. For the first time in the history of America, U.S. government securities have been down graded from AAA to AA+. Despite the fact that we have experienced eight successive quarters of economic growth, our economy is still anemic. And despite the fact that we are creating more jobs than economists project – over 2 million new jobs since the start of the Obama Administration, we still have over 12 million Americans unemployed, with one in seven U.S. families on food stamps – many of them from the communities which you and I come from.
They are our family members, they are our friends, they are our neighbors and as Americans we should be concerned about them. So is it hard out here for Urban Entrepreneurs to start or build a business? Yes it is! But that is not the right question. The right question is when has it ever been “easy” for Urban Entrepreneurs? As it was 60 years ago, Urban Entrepreneurs still have a challenge in accessing capital. Today, minority-owned firms are three times more likely to be denied financing by banks than non-minority-owned firms.
Among firms with gross receipts under $500,000, loan denial rates for minority firms are a staggering 42 percent, compared to a 16 percent loan denial rate for non-minority-owned firms. When minority-owned firms do obtain financing, they are more likely to get a smaller amount of capital than their non-minority counterparts, and the loans often cost more. On average, early stage minority owned businesses pay 7.8 percent for a loan when a comparable non-minority owned firm pays about 6.4 percent for a loan or 140 basis points less.
Urban Entrepreneurs of all sizes and backgrounds struggle to gain access to the global supply chains of the nation’s largest corporations and it has been extremely difficult for urban entrepreneurs to consistently win government contracts whether federal, state, or local.
Yes, we are in a challenging time but the Obama Administration is here as your partner to make your job of buying, building, starting, or globalizing your business much easier. Our Administration has cut taxes an unprecedented 17 times for small businesses. We are aggressively promoting start-ups, entrepreneurship, and innovation through our Start-up America Partnership – something discussed in a session this morning. And we are increasing access to capital through expanded SBA loan guarantees and the launching of two – $1 billion initiatives for impact investing and early-stage seed financing.
We have launched technology-based mentorship programs through the Department of Energy. For those who are veterans, the Department of Veterans Affairs has launched two business accelerators to help Veterans start businesses. We have put in place a fast track mechanism so you can accelerate your patent application through US-PTO, and we are expanding export financing and creating greater access to economic opportunities outside the United States. By the end of the year, my agency, MBDA will launch the first-ever Business Center for Government Procurement which is designed as a single location where all minority-owned businesses can come to gain the information, relationships and support to compete for and win more government contracts.
Last year, we helped minority-owned business gain access to nearly $4 billion of contracts and capital through our national network of business centers including a substantial business center located here in Philadelphia. And I would encourage all of you to attend our national conference call MED Week, which is September 27-30 in Washington DC. You can go to www.mbda.gov to learn more about the benefits of attending MED Week.
The Obama Administration is your partner in helping you buy, build or globalize your business so that you can create jobs for our fellow Americans who are desperately in need of an opportunity to work. I would like to conclude by sharing some of my experiences with you. Prior to joining the Administration, I started and ran a business in the financial services industry for nearly seven years. I was an urban entrepreneur! And from this and other experiences, I learned many key lessons that are critical to the success of any entrepreneur.
I would like to take a moment and share three of these lessons with you.
First, if you are going to be successful, you must have a mindset of perseverance. Success is about your mindset, not about your skill set, your relationships, capital or the current economy. You must have a singular focus on turning over every stone, taking every step, investing every dollar, committing every minute and pull out every stop to making your business successful. Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration. Let others make excuses for their failures, but you must have a mindset of perseverance if you want to succeed.
The second thing you must do is not go it alone! Today, too many entrepreneurs have a silo mentality and think that they must make it on their own. Whether you are thinking domestically or globally you need to consider working with others, specifically you need to consider joint ventures and strategic partnering as two key vehicles for success. It is truly a recipe for failure if you try to go it alone. In this room today, there are many people from many different backgrounds. All of you have a unique life story, but you ALL have one thing in common – a desire to change the world through private business ownership. Work together, learn about each other, understand each other’s business, and develop the relationships that will allow you to build. Look at the person next to you, look at them. Feel free to stare. That person might be your next business partner, your next investor or the person that gives you an idea you never thought about. Get to know each other and work together. Don’t feel like you have to go it alone!
Finally, to be successful you have to think bigger. You must dream a GOD-sized dream. However big you think right now, take it up a level and do what it takes to achieve that level. That may require you to go global when originally you were thinking about staying in a domestic market. Ninety-five percent of consumers live outside the United States and many economies are growing faster than the U.S. economy. Thinking bigger may require you to obtain a skill set that you currently don’t have! Or thinking bigger may require you to move to another area, enter a new industry, take on a partner, or tear-up your business plan and start again. Thinking bigger is critical if you want to achieve the full benefit of your skills and opportunities and take your rightful place as a powerful voice in the U.S. business community.
I want to thank you for allowing me to speak with you this afternoon. I look forward to working with you and seeing all of your business grow and prosper. Remember the Obama Administration is a key partner in helping you buy, build, start or globalize your business.
Thank you!
