Ujamaa Deals Wants to be the Black Groupon and Decrease Wealth Gap
Loop 21 spotlights new tech start ups
Loop 21 takes a look at tech startups in light of CNN's upcoming "Black in America 4: The New Promise Land" installment which will focus on eight African-American entrepreneurs in Silicon Valley. Debuting Sunday, November 13th, a preview of the documentary recently led to a twitter fight between tech writer and professor Vivek Wadwha and TechCrunch founder Michael Arrington, who proclaimed that "there's zero race or sex bias in silicon valley." Over the next five days, Loop 21 will spotlight new tech ventures created by African Americans that you won't see on Black in America.
Since Groupon’s successful launch in 2008 as a daily deals site, hundreds of niche knock-offs have popped up. Among the myriad general deal sites from LivingSocial.com, Amazon.com, and KGB.com, there are daily deals that revolve around house improvement services, restaurants, high-end clothing, and even ethnicity -- Jewpon.com anyone? So where is the black daily deal site? According to entrepreneurs Tre Baker and Lawrence Watkins, it’s just around the corner.
Tre Barker and Lawrence Watkins are the founders of Ujamaa Deals, which plans to offer Daily deals from Black-Owned businesses across the country starting in December. Drawing from the meaning of Ujamaa, “cooperative economics,” Barker and Watkins want to use their startup to make it easy to buy black, support black job creation, and decrease the wealth gap.
Loop 21: How did two brothers from Louisville, KY get into technology let alone start their own tech business?
Tre Baker: We were mentored by Carl Brazley, President of Mo' Better Marketing. I graduated from Vanderbilt University with an engineering degree in 2006, where I started my other businesses, dN|Be Apparel. Since I had started a business during college, I was able to go straight from there to business school at Harvard without the usual 2 to 5 years of work experience in between. Lawrence received an engineering degree from the University of Louisville in 2006, and then went on to earn his MBA from Cornell in 2010, also where he started his first company, Great Black Speakers. So we both have a background in business and entrepreneurship and a passion for serving the Black community.
Loop 21: One of the most difficult things to do when creating a startup is finding a partner. How did you all decide to join together for Ujamaa Deals?
Lawrence Watkins: We have known each other for 10 years in Louisville, Kentucky. We have the same mentor, Carl Brazley. He was the individual who got us both interested in entrepreneurship. He would also always try to connect us since we weren’t actually close friends in Kentucky. We both went to different colleges. We both joined Alpha Phi Alpha. But we just kept in touch over the years. We were on the phone one day in March and we realized that we had been thinking about the same idea for a startup. I agreed to work on it with Tre. Two months later I packed up and moved to Atlanta from Syracuse to work on Ujammaa deals.
Loop 21: What is the philosophy behind Ujamaa Deals?
Tre Baker: The philosophy behind Ujamaa Deals is simple: No community that spends over 90% of its money with businesses that they don't own will EVER achieve political, social, cultural, or economic equality or independence! Period. It is a fact that Black-owned companies are more likely to hire Black employees. So if you want to tackle this 30% real unemployment rate in the Black community, you need to start there. Sure we can use all the help we can get, and if the government and major corporations can help that's fine too. But at the end of the day, we can't rely on anyone to be doing things for us that we could be doing for ourselves. We are perfectly capable of building our own sustainable companies and creating our own jobs. Ujamaa Deals was founded to help speed up this process by re-directing more consumer dollars (from anyone) to Black-owned businesses. Obama has his jobs plan for America...this is our jobs plan for Black America since a rising tide can only lift your boat if you have one!
So that was kind of the long answer in saying that if we want to see any real progress for the majority of the Black community (and not just athletes, entertainers, and the so-called Talented Tenth), then we need to start more Black businesses and support the ones that already exist.
Loop 21: How did you come up with the name "Ujamaa"?
Tre Baker: Well we first started with all the variations of "black" and "deals" we could think of, but none of those website names were available. Then after a little more thinking, we decided that maybe we didn't want "black" in the name at all based on past experiences with our other companies, which both blatantly target Black people in their names. So we wanted something that was a little more subtle, and being African-centered/conscious, I started thinking about African names, and it become obvious. Ujamaa can be translated to mean cooperative economics in Swahili, and people have heard that word before in association with Kwanzaa, so it was a perfect fit. We're trying to organize the collective buying power of the Black community in a spirit of cooperation and mutual benefit (the anti-crabs-in-a-barrel philosophy).
Loop 21: How will the deal site work?
Tre Baker: The deal site will be similar to other deal sites like Groupon and LivingSocial at first until we're able to add a few of our own unique features. Consumers will get regular emails with digital coupons from Black-owned companies. We will offer discounts from different black owned businesses like restaurants. If the restaurant offers $20 of food for $10, we will take about $3 from the purchased coupon. At first we're going with companies that can sell their products/services online, but within the next year we will start rolling out in cities with relatively large Black populations. We are also planning an ad network and rewards program for the site.
Loop 21: What has been the most challenging part of launching your business thus far?
Tre Baker: Getting merchants signed up and the back-end operations set up has been the most challenging thing so far. Groupon and the other majority-owned competitors have really messed up the market from the merchants perspective. A lot of merchants don't make money when they run deals with Groupon, and they don't really get much repeat business because Groupon attracts deal chasers and coupon clippers. So why would they return to a business when there's always a new discount for another business? Groupon's entire business is based off getting the largest discount possible from the merchant. There is no higher purpose. The merchant really has to exceed all expectations if they want to see a lot of repeat business from a Groupon user. Ujamaa on the other hand offers discounts as well, but really our customers are more concerned with buying Black and supporting Black-owned businesses, so we don't have to offer as large of a discount and we can expect to see more repeat customers going back and supporting those businesses.
Loop 21: How do you think the CNN special Black in America will impact African-Americans and tech entrepreneurship?
Tre Baker: I'm not sure how much impact those programs/documentaries have and I'm sure it's not going to be enough, but it is a good start. I think we lack the institutions and community focus on entrepreneurship in general. Our focus is more on getting an education and getting a "good" job. We look up to the NBA player, when we should really aspire to own an NBA team. Hopefully Black in America can help create more awareness about entrepreneurship and inspire some future entrepreneurs. But I think we have plenty of entrepreneurs and plenty of people with ideas for tech startups now, they just need mentoring, back-office/administrative help, and access to capital. It does no good to have entrepreneurs if they don't have the resources to get their companies off the ground. So the NewMe accelerator program that's featured in Black in America and 100urbanentrepreneurs.com are just what we need. In fact, we need a couple dozen more programs like them (except preferably with an African-centered focus instead of the Eurocentric mindset that got us in all this trouble in the first place).
You can give $100,000 to a non-profit that will need another $100,000 from you next year, or you can give me $100,000 one time for Ujamaa Deals right now and I'll grow a company that will create hundreds of jobs that will feed hundreds of families for generations to come. Teaching a man to fish vs. giving him one and all that. Now if Black in America inspires some wealthy Black people to fund some of these programs instead of wasting money on charity that makes them look good but keeps people dependent on charity, then it will definitely have a greater impact. Let's use this upcoming Black in America as a wake up call for Blacks in America that we need to start focusing on ownership and creating our own jobs rather than relying to others to give them to us.
Loop 21: When will you all launch your site?
Tre Baker: We're targeting the first week in December to launch so we can make it just in time for the holiday season, and then we'll probably do a big launch event during Kwanzaa on the day the represents Ujamaa (each day during the holiday is represented by one of the seven principles).
Loop 21: How will you determine which businesses to feature on the site during the startup months?
Lawrence Watkins: Currently the plan is to work with online businesses in the beginning. To determine which ones we will pick, we are looking for the storefronts of each businesses to make sure they are of quality. We also interview and talk to the owner because we have to make sure they can fulfill the demand. Our goal is to understand what their key objectives are in running the deal. We are also trying to find a diversity of companies that are out there that are not clothing, hair care or beauty products. Businesses can sign up at www.ujamaadeals.com or email us at email@example.com if they have questions.