Chances are you have never heard of Robert F. Smith or his company.
Minus a distinguishing middle initial, the name, Robert Smith, is quite common. Far less so is Vista Equity Partners, the company founded by former Goldman Sachs vice president Robert F. Smith in 2000, and of which Smith currently serves as chairman and CEO, among other titles. That should change soon. In September, Vista Equity won a bid to purchase TIBCO Software Inc., a Silicon Valley company, for $4.3 billion in one of the largest ever buyouts in the technology industry. An October brief in “DealBook,” the financial news service produced by The New York Times, said TIBCO was under pressure to sell after declining profits. Vista would pay $24 a share, 23 percent above TIBCO’s closing price of $19.51 at that time.
Would that the rest of the Black business world be prospering like Vista and Smith, who worked at Goldman Sachs Investment banking division from 1994 to 2000 as a vice president and co-head of Enterprise Systems and Storage.
To some degree, Judy Smith, not related to Robert, is keeping pace with him as an author, television producer and CEO of the crisis management firm Smith & Co. Many viewers of “Scandal” perhaps know she is the real-life Olivia Pope portrayed by Kerry Washington. Inside the Washington Beltway she has held a number of important positions, including deputy press secretary to former President George W. Bush. With Shonda Rhimes, who has developed several popular television dramas, Smith has served as a co-executive producer of “Scandal,” which draws its inspiration from Smith’s skills in crisis management.
Soaring Black consumerism
The two Smiths clearly are the good news when it comes to successful African-American executives and business owners. They are the pacesetters, and possibly beneficiaries, in a year that a leading website has dubbed “The Year of the Black Consumer.” The website arrives at this conclusion citing 10 salient points, which we compress here: African-Americans represent a growth market; Black households are spending more and control $131 billion in discretionary income; they are college educated; manager or professional are among the most common professions; Black married couples are on the increase; fewer households include children; and they live in the suburbs, own technology, and generally believe their lives are getting better.
That’s all well and good from the consumer viewpoint, but what about the Black producer and manufacturer — Black-owned companies capable of delivering the goods to these eager consumers? A scan of Black Enterprise’s top 100 Black businesses for 2014 reveals that neither of the Smiths —Vista, apparently, is not Black-owned — is listed and that most of the businessmen and women either own construction companies or are automotive parts suppliers.
Very few of them, except for one or two, are involved in industries immediately sought by consumers — food, clothing, household goods, cars, real estate, etc. Media proprietor, talk show host, actress and producer Oprah Winfrey is among the most prominent names, clocking in at $164 million in annual revenue for the year.
One of the obstacles that keeps Blacks from the realm of ownership in manufacturing is an age-old bugaboo in which they face discrimination by banks and victimization by the mortgage market. In New York, a reliable option around this barrier is the Division of Minority and Women’s Business Development, whose mission is to promote equality of economic opportunities and eliminate barriers to participation in state contracts. Such a division should operate on the city level, as well as in states across the country, in order to expand business ownership by Blacks and women.
Prospective African-American entrepreneurs would be wise to study the changing demographics in major cities where gentrification is gradually revamping the economic wherewithal of communities.
In New York City’s Harlem community and in Detroit, a number of four-star restaurants are popping up to serve an upscale clientele. The best example of this new development is The Hotel Cecil in Harlem, which Esquire magazine recently deemed the best restaurant in the country. The restaurant, which is owned by Richard Parsons, a former chairman of Citigroup and Time Warner, features two top chefs — Alexander Smalls and Joseph “JJ” Johnson — and offers an Afro-Asian cuisine with explorations in the African diaspora. It has also received four-star ratings from several local food critics, including one at The Daily News.
Having the restaurant connected next door to the renovated Minton’s jazz club, where such greats as Charlie Parker and Dizzy Gillespie were the fountainheads of bebop, doesn’t hurt the thriving business, despite its rather steep prices. Clearly, patrons are willing to fork over the dough when the food is right and the music is top-notch.
We are not sure where Parsons buys his meat products, but he might want to check out All American Meats Inc. based in Omaha, Nebraska, one of the nation’s largest Black-owned businesses and where Shawn Buchanan is the president and CEO. Buchanan, who played baseball with the Chicago White Sox, began organizing the company after his career on the diamond came to an end. Within five years of launching his company, after a brief stint as a business manager at Nebraska Beef, a beef processing company, he won Black Enterprise’s Small Business Award in 2000. There was also a salute from the U.S. Department of Agriculture.