Impact Hustlers - Entrepreneurs with Social Impact

9: Jay Richards of DivInc - From Crime to Empowering Diverse Founders

September 27, 2018 Maiko Schaffrath Episode 9
Impact Hustlers - Entrepreneurs with Social Impact
9: Jay Richards of DivInc - From Crime to Empowering Diverse Founders
Show Notes Transcript
Jay Richards, Founder & CEO of DivInc, talks about his personal experience with crime & how he found a solution in entrepreneurship. He now runs DivInc, where he helps people from disadvantaged backgrounds get into entrepreneurship and set up their companies for success.Support the show

[0:21] Maiko: In today's episode, I'm joined by Jay Richards, founder and CEO of DivINC and Jay grew up in East London and spent most of his youth actually stealing from people just as a means to survive. I have never introduced somebody like this, sorry for that. But we'll get to the point why I'm saying this. He made a radical change a few years ago and now helps young people from disadvantaged backgrounds start their own business, give them the support system to really get out of the world of crime and poverty. He believes that entrepreneurship can be a massive force for transforming lives positively; for those who struggle to find jobs and find it hard to survive in our society. Welcome to Impact Hustlers and it's great to have you,

[1:05] Jay: Thank you for having my friend, I'm glad to be here, it's exciting.

[1:08] Maiko: Thanks very much for coming. So, you said in an interview, I stalked you a little bit online, so you said, "when you need to put food on the table, and there are very few options, people will do anything". 

[01:24] Jay: I did anything? 

[01:26] Maiko: What did you do? And how did it happen to you? How did you slide into that?

[1:29] Jay: For me, I was, I'm number five out of six kids, so it's a big family. And so, my parents, they were probably lower middle class, so we weren't like flat broke, but you didn't always get what you needed. And it was kind of like, yeah, it was an interesting existence growing up. So, I got to about 14, 15 years old, and I was kind of just sick of where like, my brother's hand me down clothes and not having whatever it may be. And sometimes it's just a general struggle wasn't nice, so I actually started breaking into houses and breaking into petrol stations, actually stealing the lead off people's roofs, and to then sell to the market, and make money and then use that money to do what we needed to do. And so, I did that for a few years and actually, in my school, I used to get the younger kids in the years below me to actually steal computer parts for me, so they would steal like a mouse or keyboard or a screen. They'd bring it to me and I'd sell it to Mr. Patel in the market. So, that was some of the crazy things we did to make money when we were--

[2:29] Maiko: So, you build teams then?

[2:31] Jay: Yeah, it's actually bad, when I think about it now, like, it's funny to think like kids will just blindly follow me, "hey go steal these mouse" and they just steal them. And I'll be like, "I don't understand". But it worked, so yeah, we made some good money. So yeah, it was an interesting time, yeah.

[2:48] Maiko: And today, you're helping people like, you have been in the past, from disadvantaged backgrounds, start their own businesses and, you're working with 11 to 16-year-old people roughly and help them down companies and one statistic on your website, which I found really depressing, to be frank, is that those people are 87% less likely to start their own companies than any other average in society. So, how do you help them to actually do it?

[3:17] Jay: As you mentioned, where our focus is helping young people from underestimated backgrounds to founder and startups and gain investment. So, we do that by inspiring, equipping, and funding them. So, we inspire them with a relatable, inspirational talk that's delivered by a young founder from a low income and ethnic minority background, they deliver that talk directly into the school, we then provide an online platform, which is all about video. So, it's our incubator so we actually equip them in using this platform. And we're actually beginning to move that to an app, which means that young people get more access to it. So basically, they go over eight weeks, and they learn everything from profit and loss accounts, to business plans, to actually getting their startup off the ground. 

[03:55] Jay: At the end of those eight weeks, they then pitch to us via video and we choose the startups that we think are investable and scalable. And we take them to Google's Campus, London, and give them the opportunity to actually pitch to Angel Investors for funding. So, as I mentioned, it's inspiring, equipping, and funding the startups. And then the cool thing is, we've actually partnered with some cool partners that if startups stay profitable for two years, after leaving the process, they actually get the opportunity to pitch to venture capitalists’ funders, you can give them up to 500K worth of funding. So, we're taking them through that journey of being inspired, equipped and funded and actually giving them some real genuine funding, once they turn 18.

[4:33] Maiko: What are the biggest challenges that people that you work with actually face? Is it access to resources, is it education, is it just being aware of the options, what is it?

[04:43] Jay: So, when we initially started, we did some research, and we spoke to a lot of students. And the two key things that came up to them, as you just touched on, was lack of knowledge and lack of resource. And so, they didn't know how to just get it started, so many of the young people we meet said if you can, what would you start? And most of them say, I'll start a T-shirt business, which is just a go to, it's naturally I do a go to, product, and which is great, but I heard a statistic not long back then, saying that 65% of the jobs that young people going to be doing in the future don't exist at the moment. So, if they're so focused on product, and the world is moving towards technology, and we need to actually equip them for that. And so, the lack of knowledge and the lack of resource are two big things that we try and help them overcome. 

[05:26] Jay: So, we provide them the knowledge, and then we provide them the resource. So, it removes those two barriers for them. But, they are, we say, removes, but they are huge barriers, they're absolutely massive barriers. Because if you come from certain parts of the country, and not just the major cities as well, some of the coastal towns where they have lost tourism, they've lost the textile industry, there's not much happening in their towns. So, if they don't innovate, and they don't do something new, they're basically just going to end up having to join the welfare system and just jumping onto benefits just as generations before them had to. And these are barriers that they're facing day in and day out.

[5:59] Maiko: You mentioned that you're working with quite prominent partners, Google Campus, Bolotin, Capital One of the really most exciting funds here, why are they joining your missions, besides, you know, having a bit of a social angle, but why do they really care about what you're doing?

[6:15] Jay: The interesting thing is, some of our partners’ partner with us financially and some of them partner simply just with labels, whatever it may be. So, some of our partners like Madison will give us access to some of their software engineers from the company that they've invested in. So, during the program, they will actually have the opportunity, our students will have the opportunity to sit down with software engineers from some of the biggest companies in London and actually learn what it's like to code and all these different things. And I think a lot of companies are getting involved in what we're doing because it's generally, it's on their heart, but a lot of the time, so most of the companies we meet, they have a CSR angle, which is corporate social responsibility, they have that angle to what they do. But a lot of time I feel like, for them, it ends up with reusable cups. So, a kind of, oh, we've done our CSR because we've got, reusable cup, from Starbucks. 

[07:07] Jay: But a lot of the time, we're showing them that there's a whole city out there, there's a whole nation out there, that's actually dying. And these young people are, they're getting 16 and they're completely switched off from the future, because they just think, well, there's nothing for me there. So, when we explain to them and give them the understanding that we know you have the right heart, and we have the right service that can help you to make a match with your heart, to actually make the difference that you want to make. And so, I think a lot of the time, they just, they have the heart, they have the passion, they just didn't have the right way of actually outputting that

[7:37] Maiko: In your program, you're working with very talented people, and you bring them through the process and give them the skills and education that they need to run the company. And you do have the funding partners that you mentioned, that help them get funded if they hit certain milestones. And that's great, but still out there, if you look at most VCs that would be dominated by white old males, you know, surprise, surprise. And even some of them are starting to partner but the reality of the world is still that there is a disadvantage for people from disadvantaged backgrounds. So, do you feel that when people leave your program, they still tend to hit brick walls just because they come from certain backgrounds and are not understood by the people that are supposed to fund them?

[8:23] Jay: Yeah, definitely. Yeah, no, I definitely find that even for myself raising for ourselves has been tough but I feel like our focus at DivINC is not only to help the overlooked to solve problems that others are missing. But we also want to work with transferable skills like resilience, that will show them that you will get copious amounts of no’s simply because of your background and you have to learn to roll with the punches and you have to learn to fight through that. And somebody will say yes, and because when we first started DivINC, everyone was, "ah, companies aren't going to partner with you, like, who the hell are you?" And now it's actually working. So, it's showing them that if you build that momentum, you get off the ground, you can get started, that you will continue to get no’s, we don't lie to them and say, “you know after that, everything's going to be great and you're going to raise and don't worry, 21 years old, you're going to be a millionaire". We say to them, it's going to be a graft, and it's going to be more of a graft for you because you're from an underestimated background, then it will be for somebody from a more privileged background. So, we are telling them the honest truth, but we're also equipping them so that they are prepared for that truth so that when it does come to them getting those no’s, they can go, "okay, that's cool, all right, on to the next one, okay, that's cool, on to the next one". And I can keep it moving. 

[09:34] Jay: But the truth of the matter is, is that, so we inspire them, we equip then, we fund them, we then send them back, and these students, we then send them back into schools, if they've been profitable for a year, they can then inspire other young people. So, what we're trying to do is create an ecosystem of young entrepreneurs that are inspiring other young people, but then are also then Angel Investing to those young people. So, what I'm trying to do is create an ecosystem across the country of young people from underestimated backgrounds that are inspired, equipped, funded, who then inspire, equip, fund, and it just keeps going around and around and around. So, eventually, the overall goal is that we'll have our own fund, and we don't need to go to outside sources for this, because we will have everything in-house.

[10:13] Maiko: So, a long-term play, really that you're trying to do here, not just a short term program, but really building an ecosystem?

[10:20] Jay: Yeah, 100%, yeah, talking 30,40 years, like we're going to be building a nest, it's going to be amazing.

[10:25] Maiko: Well, I want to quote Daymond John, well, not actually caught him, but quote, a concept that he came up with, he wrote this book, Daymond John, the founder of FUBU, the fashion brand, he wrote the book, The Power of Broke, where he basically makes the argument that poverty and the realities of coming from disadvantaged backgrounds can really help create great entrepreneurs, or at least, yeah, just help people attain those skills that are needed and that persistence that's needed. Do you see that in the people that you're working with? Because I find that the most ridiculous part about you know, VCs, not funding diverse founders, and at the same time, there being, some evidence, actually, in those founders actually being better founders than those that had it all when they grow up.

[11:09] Jay: It's crazy, it's so funny. So, our, this is a really good point and our slogan is, "we help the overlooked to solve problems that others are missing". And the reason why we say that is because of they, a lot of the time people use the word disadvantage, but they're underestimated. And they've been overlooked, because they come from the wrong areas, or they have the too much melanin in their skin or whatever it may be, and they're often overlooked. But they're going to be solving problems that the masses are normally missing. And so, folks who come from certain backgrounds won't see the problems that we have seen growing up, so they can't solve the problems that we want to solve. But the problems that we want to solve, are problems for millions of people around the world, possibly even billions of people around the world. And one thing I found interesting, I was listening to a podcast the other day, and it was talking about the lady that, she was helping, she started a bank that was helping, serving the underbanked, her startup was helping to serve the underbanked. Because there are millions of people in America that don't have a bank account. So, she was helping to serve those people. 

[12:11] Jay: But for a white middle-class guy from Kentucky, he may not know that that even exists, because it's not a problem he's ever had to face. So, when she went to VC, they were like, this isn't a problem and she was like, no, it generally is a problem for millions of people. And a lot of the people that we're going to be bringing up, they're going to be solving problems the VCs generally don't know exists. And it's not because they're evil people, it's generally because they're ignorant to it, it's not their fault. And so, we're going to help these young people to solve those problems. And I think what's interesting is that, on the second part of your point, is that because we've grown up with less we know how to graft. Graft is built into our DNA, we know how to hustle with a lot less, and we know how to make a lot less work. So, if you come from a more privileged background, not that you won't have graft, but you won't know graft like we know graft. So, we can, if we're down to our last few pennies, we can make that work and we can run for a lot longer, then so and so who's got a lot more money and, and whatever it may be, yeah.

[13:04] Maiko: What methodology would you suggest to anybody that's in a position being faced with a VC that says, "ah, that's not a problem, I've never encountered it", like, what are they supposed to do to convince those VCs and, like, smack them in the face with--?

[13:21] Jay: Well, first advice, don't smack them in the face? Literally, yeah. But yeah, nice, it is generally a really good question. That's the thing, even for me, like, even with all of this, like, I'm not an expert in it but I feel like one thing that I've had to say, we do have to, being from underestimated, dysfunctional background, whatever it may be, you do have to, you have to work harder to prove it. And like, Tom can walk in with a piece of paper idea on a napkin, and it could be the next big thing and they'll give them 1.5 million funding because daddy plays golf with the VC's dad or whatever and that kind of rubbish, which is cool. So, we may not have access to that but one thing I found, that's worked, and I was sitting with a founder yesterday, she's the founder of a women's lingerie brand, they've got like, a massive exposure on social media, like over 100,000 followers and so on. And she was essentially struggling to raise and when I was sitting with her, she wants to move on to actually having an app that basically just helps women to choose their clothing better. And she was saying, I don't know how to pitch to investors, and they just seem to be saying no, because she's a Colombian founder or she's half Colombian, half Middle East, she's like, I'm struggling to explain to these guys like that it's a natural need. And, and I just said to her, just go out and prove that it is a need then. 

[14:34] Jay: And that's the main thing, we just need to prove there's a need, because if you prove it, then they can't deny it. But while it's all words, and you're just saying, because, the problem as founders, it's not a problem, but it's a good and bad thing that we're super passionate about our ideas. But then the problem is that they're not going to be, the VC is not going to be as passionate as you about your idea and they're going to hear a million ideas a day. So, you need to go into there and show them, hey, this is an actual problem that people in the world are facing. And when you show them this problem, and there's money to be made, which is the key, because I have so many people pitching to me. And I'm like, so how are you going to make money from this? And they're like, and I'm like, that's the problem. As long as you can show that there is an actual problem and that there's money to be made in it, they'll be interested. And if they're not interested, keep it moving. This is a saying I always say to my friends, "just keep it moving". If they say no, you take your problem and your money, and you go somewhere else and you find somebody else who's interested, and you keep going to keep going. And then those VCs that said no, or then regret it later.

[15:33] Maiko: Besides the challenges with funding, there's a lot of other challenges founders face every day. What do you think is the toughest challenges for people from underrepresented backgrounds? What are the brick walls that they face besides the funding challenges? And how do you think can this be solved? Besides with programs that you run, is it more focused on policy and politics and does politics need to play a role? Is it just more people running initiatives like you do or what is it that's going to break those walls? 

[16:06] Jay: Yeah, that's a really good question. I think one of the big issues I faced as a kid is, I never saw anybody like me crushing it. So, all the books I've ever read growing up, was, you know, Young Master, Branson, Steve Jobs and these are white guys. So, I grew up and I genuinely, the other day, other than Daymond John, I was generally sitting there the other day, and I was trying to think of one book, about a successful entrepreneur, there was a black guy, I generally, I was racking my brain, the kids were asking for it. And I was like, I can't think of one. I was like, that's so bad. I was sitting there for so long, every book I was coming out with, was a white guy. And that representation out there, is so key, because if, so that's the reason why with our inspiring, we're sending in relatable figures because we want these young people to see, these people look like you. So, say, for example, one of our speakers is a lady called, 16:59 [inaudible], too many S's 17:00 [inaudible] and she's a founder of Up Effect, and she goes into schools, but we will be predominantly sending her into schools, to a lot of Muslim girls because she's a Muslim lady who has a head wrap. 

[17:12] Jay: So, for those young girls to see a woman coming in, who is crushing it in her business, but is also from their background, that will resonate. So much more than this other black guy that I walk in with tattoos and they're just like, who the hell are you? Do you know what I mean? There is not a representation there. So, I think a massive issue is a fact that young people and even founders of my age, we don't, more, today we are seeing a little bit more, but we don't see that representation. So, that is a huge ceiling, because you think, well, the only people that make it are people from different backgrounds, and they're not from my background, so if we can provide that representation, then that would be key. And then the government side of things, I think a lot of the time, I was saying this to a friend earlier when I was at the office, and I was saying, a lot of the time the government does something and then they only realize 10 years down the line, that it actually sucked, and it was a bad idea. And I feel like there needs to be a lot more conversation with people that are currently in the midst of the struggle, and say, so what are you struggling with and how can we help solve that? 

[18:12] Jay: And I think that'd be really interesting if the government actually took interest in the startup community at the moment, but also the startup community that's coming up with the GenZ kids to see how we can help them to solve it. So, for example, some of our competitors, they've been doing amazing work by teaching entrepreneurship in school for years, but they haven't innovated. So, they're still teaching it in word and paper-based format. These kids are GenZ kids, my son's 11 years old and if I asked him to learn about something, he instantly goes into YouTube and watches it, he doesn't want to read about it. Do you know what I mean? So, it's kind of us realizing that we have to innovate to teach these kids, to make sure that they are ready for that future, and actually provide that relatable inspiration so that they can then go on and achieve and kill it.

[18:55] Maiko: Give us some examples, what are the kind of startups you see in your program and how does that differ from what people might otherwise know in startup accelerators and incubators?

[19:05] Jay: Yeah, great. So, one of the ones that was really interesting for us, and was probably my favorite from last year. So, we've actually only run it for one year, this will be our second year running it in the schools. But for our first year, one of the ones was a social media management company but for local businesses. So, basically, there was run by a 14-year-old or a 15-year-old and what they noticed was, was their local barbers and the local black hair shop and their local Jamaican shop, or whatever it may be, even the local Chinese shop, they didn't have a social media presence. So, unless you're walking down the high street, you didn't know they existed. So, you could live in, like, I live in Stratford, I can live in Stratford my whole life and I'm not going to know all of the shops in the local area. But if I'm on Instagram, and I happen to click on the Stratford hashtag, if someone's been on their job and making sure that the social media is out there, I can then discover a new shop. 

[19:52] Jay: And what these kids realized was they lived in Croydon and they realized that there were shops in Croydon that they didn't see on social media. So, they just went to the local shops and said, oh, hey, guys, like, do you have a social media presence? They were like, no, they are not. Awesome. You pay us this per month, and we'll run your social media for you. So, these local hair shops are like, yeah, awesome, like, let's do it, like how much is it? They sort of charge the 21 pounds a month or something like that, and then they just run their social media, then all they do is automated the posts, they took all the photos, automated the post, and they shot out the post over the month and, they were laughing. And that's the kind of ideas where these are, GenZ kids who are, they're all about content, they're all about video there, they know what their generation wants to look at. So, they're helping the older generations to actually do that. So, they saw that local businesses were being completely overlooked because most companies, if you're looking to do a startup marketing agency, you're going to go for all the main areas like Soho and Shoreditch, you're not going to Croydon, you're not going to go to the local black hair shop, but those shops also need social media. And that's what these kids notice, which was amazing.

 [20:52] Maiko: The last question I usually ask entrepreneurs is, what does the world look like in 10 years that you're trying to help create? You mentioned earlier, you actually have a 40 year--. Yeah, so here's a question for you because you seem to really, building a legacy here, and I can't wait to read your book about your story, I'm excited. But what's the big vision here? What's like the live, kind of, a huge objective of it?

[21:21] Jay: Well, that's a really good question, I've generally not been asked that before, everyone's like, what's your one-year plan? I love that, what’s my life goal? I think for us, it'd be amazing, I would love to be an old man and I'm looking back and I can see hundreds of thousands of young people who've found their own companies, and possibly even millions across the world, using our service, and, but they've got their stuff off the ground and they're going back in and they're angel investing and they've set up their own funds, and their VCs. And these are young people from backgrounds that never would have had the opportunity. And I would love to see us democratize funding to democratize entrepreneurship and I would love to see that, I'm 90 years old, and I'm looking back and saying, look how all these hundreds of thousands, millions of people that have been able to change their world but have also then been able to employ people from their communities. Because that for me is the key, is that we can completely revolutionize the way entrepreneurship is done, simply by the fact of providing people with the knowledge and the resource. And that for me would be, success and that for me, well I'd shed a tear and be happy.

[22:31] Maiko: That's an amazing journey to be on, I really wish you all the best with what you're doing and these ambitious plans that they will all work out. You've achieved a lot already so thank you very much for joining me today and thanks for what you're doing. 

[22:46] Jay: Thank you so much for having me Maiko, it's been awesome, man. Thank you, bro.

[22:48] Maiko: Thank you.