How entrepreneur Stacey Abrams turns losses into wins
STACEY ABRAMS A a gift for turning failures into success. After conceding in a tight race for governor in Georgia in 2018, the 47-year-old entrepreneur, lawyer, writer and former lawmaker focused on fighting the state’s restrictive voting laws – and ended up helping his party win the presidency and the Senate. two years later. As an entrepreneur, Abrams and his serial co-founder, Lara Hodgson, started and closed two businesses before landing on the fast-growing fintech company called Now, which they’ve been building since 2010.
Now solves one of the biggest problems Abrams and Hodgson have experienced in their own entrepreneurial journeys – one that will ring true for any cash-strapped startup founder who has had to make the impossible choice between paying his bills to time and keep operations humming. Having grown largely through word of mouth during its first decade, Now recently landed a $ 9.5 million Series A investment to make the platform national. It’s too early for Abrams to declare success, but failure is not even on the table.
How did you decide to become a startup founder?
I was a reluctant entrepreneur. I have a wide range of interests and love to learn new things. But I also like the mechanics of business management. What has kept me in entrepreneurship is that it allows me to multitask as a job.
What skills have you developed in your political career that have helped you in your entrepreneurship?
I became an entrepreneur and a political leader at the same time, so I would say they are mutually reinforcing. Whether you are trying to pass a bill, win an election, or start a business, clarity is extremely important. Taking the time to write down the steps to take to get there and understanding the obstacles and opportunities are skills that I have had to develop and hone in both spaces.
In your experience, what are the advantages and disadvantages of having a co-founder, compared to doing it alone?
I appreciate the independence of starting a business on your own, but I advise people to start with a partner. You’re always going to have blind spots, and having a business partner makes it easier for you to identify your blind spots before others see them. It’s a great way to learn new skills. I didn’t go to business school but Lara and I are teasing each other, I know we have a fake MBA and she has a fake law degree. The downside of having a co-founder is that you have to balance your ego with your ambition – but in the end, I’ve always found that I’m better at what I do when I have smart, thoughtful people who do it. do with me.
You had to fold your first startup, Nourish, a line of baby bottles pre-filled with purified water, not for lack of orders, but because you didn’t have the funding to fill those orders. How did you think about moving forward after that?
We have been taught that failure is that negative word we must back down against. But the question is not whether you succeed or fail. When Nourish failed, we failed because we grew up to death. So we didn’t let that moment define our ability to succeed, and we didn’t let it dictate what we were going to do next. Instead of rehashing what we could have done differently if we were born millionaires, or if we had seized this or that opportunity, we said to ourselves, âOkay, what did we learn from this? We just learned that our business model was not working.
A large business can bear $ 150,000 in unpaid invoices. For a small business, that’s drowning.
In your TED 2018 talk, you said, “Finances are often a reason we don’t get fooled.” How did you allow yourself to dream during your time of financial hardship?
Lots of practice. You know, when you grow up in economic poverty, you have many opportunities to understand that although money is a real obstacle, it is not always insurmountable. I watched my family overcome it. And so one thing we did with Nourish is that Lara and I never quit our other jobs. We maintained our other company, Insomnia Consulting, while we were building Nourish, and for me that was essential. I was solely responsible for my economic success, and that meant I had to have these other sources of income until Nourish became profitable.
How did you finally see the opportunity to start Now, which offers a service to pay small business bills for a fee of 2.5%?
We realized that there was a problem for small businesses selling to each other that was not addressed by the financial markets and was not addressed in the conversations we heard about business. We looked at what was failing for us and decided to fix what we saw that was broken.
How does Now tackle the kind of institutionalized prejudices against minorities that have been demonstrated time and time again in established banking and credit systems?
Traditional capital solutions often overlook the structural challenges of minority-owned businesses. Loans require banking relationships, but black and brown communities are most likely not to have local access to banks. Businesses need capital to grow, but accessing capital doesn’t necessarily mean giving up equity or accepting abusive lending terms. Now based on actual business performance and does not use personal credit to determine eligibility. We use a business score that can be established quickly. If a business does not yet have a score, we advise them on how to score. If their score falls below our threshold, we advise them on how to fix it. Now solves the loan / equity conundrum as ours is a payments acceleration system that allows a business to get paid immediately in a way that feels like accepting a credit card payment . This is much more accessible to marginalized founders than loans and funding.
Now is based in Atlanta, not Silicon Valley. How did this help or hinder the business?
Atlanta is essential, in part because the fintech hub is actually Georgia, not Silicon Valley. The third person who helped found the business with us, John Hayes, was our banker when we were going through a factoring process that almost worked and then fell apart. He came over to us and said, ‘Look, this is what happened with you’, and we all brainstormed together and created the concept of Now. It happened because we were in Georgia surrounded by people and companies trying to innovate around this problem. It is extremely important to me that I can say that we are building a FinTech business here at home.
What does success look like for this business?
Right now, the financial system is not designed for small businesses to be successful. We are seen as miniature versions of big business. And that’s not how small businesses operate. A large business can carry overdue invoices worth $ 150,000 because they can access all the credit they want. For a small business, that’s drowning. Our goal is to close that gap because right now the capital markets expect you to borrow the money you need or sell part of your business to get the money you need. If Now is successful, we change the way small businesses are treated by a system that sees them as beggars at the table, not income generators who deserve their own system of capital.
Extract from the October 2021 issue of Inc. Magazine