Saturday, December 31, 2022

9 Lessons to Learn From Being in the Entrepreneurial Trenches

Our biggest tips for entrepreneurs on what's worked and what hasn't in our first five years.

By Kyle Hermans


Once upon a time, my wife Jenna and I and our three kids under ten moved from San Francisco to Los Angeles, had another baby, and bought our first house together. This, we thought, is the perfect time to quit our jobs and start a business! [eyeroll]

The idea of our company, Be Courageous, was born during the facilitation of a client session when the team was at odds with each other while exploring the future of their business. This quote from George Prince was on the wall: "Another word for creativity is courage."

I realized many of us stay trapped in old thinking and actions when we lack the conditions to be creative and courageous.

A question emerged for me, "What would a world with an abundance of courage look like? How can I help create it?"

With my experience in marketing, strategy and facilitation, and Jenna's in psychology, human resources and operations, we founded our business consultancy, Be Courageous. Every year we've grown. Every year our impact has expanded. Every year we've learned.

Here are some of our biggest learnings for those of you on your entrepreneurial journey.

9 lessons from five years of learning

As any reader here knows, starting and running a business is a piece of cake. Ha!

For real, here is what we learned, having grown our U.S. business of two to a worldwide organization with dozens of clients and 35+ network partners while positively impacting nearly 1 million people in 82 countries.

1. Agility

One of our most in-demand programs with Fortune 500 companies this year has been our training on agile leadership. When you own your own business — the unexpected will happen. A successful entrepreneur adapts to new challenges and situations and creates lemonade from lemons.

We have created programs we never thought we would in response to what the world has needed from us.

Have a solid plan, but be flexible.

2. Purpose

We aim to activate courage in companies worldwide and align them with a planet-beneficial future. Yours might be to improve humanity's mental health or lessen people's stress by building an easier-to-use product. Whatever your purpose is, make sure you're deeply passionate about it and that it fuels your actions.

Use the strength of your purpose to courage through challenges.

3. Superpowers (and kryptonite)

We found more success when we identified and focused on our greatest strengths. We aligned our strengths with our values and the services we wanted to provide to our clients to solve a problem they faced.

For example, my superpower is guiding businesses to realize their potential and future. My kryptonite is getting tripped up in the micro-details of spreadsheets. That's where Jenna comes in. She leads operations with her superpower of keeping our company financially stable, growing and on the ground. I'm the visionary, and she makes it possible.

Align your superpowers with your business goals and values. Find people who have superpowers you lack.

4. Curiosity

In an exponentially-changing world, having an open mind is the key to running a successful business. Be curious about skills you don't have and new ways to solve problems. Challenges will arise, but if your curiosity remains peaked, you'll always get to the solution positively. Ask, "What is the courage needed in this situation?"

Curiosity may have killed the cat, but it feeds company growth. (We're a dog company, anyway, no offense to cats.)

5. Healthy company culture

Create a team that feels safe, strong, empowered and able to share and receive ideas. When you foster personal connections with your team and your clients (yes, business is personal), you will thrive beyond competitors who are only in it for the buck.

Develop a positive company culture to unlock the full potential of your team.

6. Operational foundation

While you don't want to get bogged down in systems and processes, your business won't thrive without a solid operational foundation. Get an understanding of legal, financial and team infrastructure.

Stay pragmatic and, as we like to say, "aggressively conservative." We make leaps, but only with a net.

Develop systems to streamline your business, so you can focus on serving your customers.

7. Integrity

Many people make empty promises, which erodes trust over time. It's far better to over-deliver on your word. Pay what you say you will, earlier than you say you will. We've established deep, trusting relationships with our clients. We foster community.

We get callbacks five years after doing one program with a client because we don't burn bridges; we build them.

Show up with your heart, don't be a jerk, and honor your word.

8. Optimism

Never doubt what you can achieve, yet don't be disillusioned. Approach everyone you can as a holistic human being, putting aside bias. Presume positive intent and look for positive solutions. Expect people to be their best until proven otherwise. And even then, be graceful about terminating any relationships.

Work and live from a place of abundance, not scarcity.

9. Mindful hiring

Be thoughtful about who you bring into your organization.

We hire a type of person — not only for the exact level of expertise we need. We hire people in love with our vision. A person who can be adaptive and learn with us. Who is willing to put in the work for a shared purpose.

Hire the right puzzle piece for your vision, not just how they look on paper.

Bottom line

Owning your own business isn't for the faint of heart. It's an ebb and flow of successes and learnings. But 20 years from now, if you look back, would you regret not doing something about your big and burning idea?

Fear will never go away, but when the desire to fulfill your purpose outweighs the fear of risks involved, that's when you know you're made to be an entrepreneur.

Thursday, December 22, 2022

Happy Holidays 2022

Sending our warmest thoughts and best wishes for a wonderful holiday season and a successful and glorious happy new year!

Soledad Tanner, MIB


Friday, December 9, 2022

Deciding What Kind of Business to Start? Here's a Simple Approach Every Entrepreneur Can Follow

Deciding what kind of business to start begins with defining success, and then considering the role of variance.


Photo: Getty Images

While there are countless ways to decide what kind of business to start, for the sake of argument let's imagine there are two basic approaches:

Low variance. Decide to do what other people have successfully done, and with hard work and perseverance you should reach the 80th percentile of success in that pursuit, if only because most people don't work nearly as hard, or as smart, as they like to think.

An example of the low variance path -- lower risk, but lower return -- is a person with solid carpentry skills who decides to go into the deck building business. Lots of customers need decks. Then again, plenty of construction small business owners build decks. Choose that route, and with time and effort you might not get rich... but the odds are good you can make a decent living.

High variance. Think of this as the outlier path. Choose to do what few people have successfully done, and you might -- just might -- become extraordinarily successful. (And rich, if that's your goal.)

Mark Zuckerberg is a good example of the high variance path. Instead of taking a low variance approach and, say, starting a web design business, he launched a new and unproven venture. The odds of success in that high variance approach were naturally extremely low, but in his case the upside turned out to be astronomically high.

Sounds great.

At least for the Zuckster.

Starting a Business With High Variance

The Facebook founder isn't just a high variance outlier. He's also a good example of survivor bias, focusing on people or things that "survived" while overlooking those that did not.

Take Ryan Gosling. He dropped out of high school when he was 17 and moved to L.A. to pursue acting. It worked spectacularly well for him, but what about the thousands of kids who drop out and move to southern California in hopes of making it? Do they all become movie stars?

Of course not.

But you never hear about them.

The same is true for Steve Jobs. Jobs dropped out of Reed College so he could "drop in" on classes that interested him. It worked for the Apple co-founder. (Maybe not so well for this forgotten Apple co-founder who arguably left $75 billion on the table.) But what about the countless people who don't finish college? Do they all become billionaires?

Of course not.

But you never hear about them.

That's why Michael Shermer, the author and publisher of Skeptic magazine, says advice on high variance success distorts perceptions by ignoring all the businesses and college dropouts who failed. And why university of Waterloo professor Larry Smith says, referring to Jobs:

And what about 'John Henry' and the 420,000 other people who tried ventures and failed? It's a classic case of survivor bias.

We make judgments about what we should do based on the people who survived, totally ignoring all the guidance from the people who failed.

The problem with survivor bias is that it doesn't really indicate whether a particular strategy, or technique, or plan will work -- and specially whether it will work for you.

Take the high variance approach by basing your plans -- or your expectations of success -- on a blueprint that worked for an outlier, and the potential outcome may be extraordinarily high. But so will your level of risk.

That's neither a bad nor good thing.

But it is definitely a factor you should consider.

Starting a Business With Low Variance

The flip side is choosing a route with low variance. As Nassim Taleb writes in Fooled by Randomness, "Wild success is attributable to variance. Mild success can be explained by skills and labor."

Keep in mind "mild success" can still be considerable. Say your interest lies in healthcare. The high variance approach would be to launch a startup based on a new wearable device: The odds are low it will capture the market, but if it does... yeah.

The low variance approach could be to go to med school. With time, study, and hard work, you could become a skilled physician. While the upside isn't unlimited, it's still pretty great, especially if you someday scratch your latent entrepreneurial itch and launch your own practice.

To evaluate the odds of success, Taleb advises considering "alternative histories." If you could relive a set of events 1,000 times, what would the range of outcomes be? In a high variance approach -- becoming Steve Jobs, Ryan Gosling, Joe Kudla, or Kirk Hammett -- the odds are (maybe) 1 in 1,000.

In a low variance approach -- say, starting a deck-building business -- the odds are likely considerably better than even. Assuming your level of effort and perseverance remain constant, you'll probably have about the same level of success, and make the same amount of money, 700 or 800 times out of 1,000.

Randomness -- or luck -- won't play much of a role.

And that's an important point, because luck always plays a role in extraordinary success. While if you out-work, out-think, out-skill, and outlast other people you are much more likely to be successful, research shows you also need to get lucky.

Right place, right time. Or right person, right time. Or right idea, right market, or right audience. As Mark Cuban says, "To make billions, you'll have to get lucky."

Bottom line? The lower the variance, the smaller the role luck is likely to play in your success.

Starting a Business Means First Defining "Success"

As you consider which business to start -- or which career path to take -- first decide what "success" means to you. If you want to make a decent living doing something you love, consider a low variance approach; choose a path where effort and skill tends to pay off directly.

If you want to get rich, you'll need to choose a path where effort and skill matter, but so does luck. While survivor bias -- and hindsight bias -- appears to explain success, no path, no plan, and no strategy is ever certain. Success in that case will only seem inevitable in hindsight. "Wild" success will always be at least somewhat random.

But keep in mind that where success is concerned, "mild" is relative. Start a deck building business with one or two employees, and your upside is largely constrained by the hours you work. Build that business by adding services, crews, and locations, and your "mild" success can become considerable.

Which leads to an even more important point. When you're deciding what kind of business to start, variance matters.

But the most important factor is whether you will get to do work you enjoy: Work that leaves you feeling fulfilled, and satisfied, and happy, and that allows you to control, as best possible, your own destiny.

The beauty of starting a business is that you are free to choose what kind business. Make sure you design and build your business not just on a potential outcome, but also on the process of achieving that outcome.

Then, no matter whether the outcome is mild or wild, you'll still be successful.

Because you will be doing what you love to do.

Wednesday, December 7, 2022

What's the Difference Between a Startup and a Small Business?


By Erica Dushey Sarway

December 1, 2022

While they sound similar, there are fundamental differences.

Opinions expressed by Entrepreneur contributors are their own.

People often confuse startup companies with small businesses. Sure they sound similar, but the two have fundamentally different meanings and cannot be used interchangeably. They can sound alike because startups are new companies. But while they may begin as tiny in size, their goals and intentions may end up separating them from actual small businesses.

What's a startup?

It is a new company looking to quickly expand into a much larger and much more profitable business. Many times, a startup is looking to build up rapidly in a very short span of time. They're in the beginning stages, experimenting with different models and finding what works best for them to grow while outlining their future. They're finding ways to raise money and enlist backers to help them move their company up to the next level. It's almost as if they're rushing through the stages of growth, from a small enterprise, with few employees, to a larger corporation in a matter of a few years.

Startups are businesses that believe their product or service is in high demand due to analytics and has a lot of potential for disrupting the market. These companies hope that their product is going to see rapid success and become a fixture. They often are looking for investors like venture capitalists or raising money by crowdfunding to invest in the idea and get the company off the ground as soon as possible. From the early stages, the mission, goals, strategy and research need to be defined to anticipate the quick changes the company will endure.

When people think of startups, many think of tech companies and Silicon Valley. While it's true many startups emerge from that area of California, any person with an idea can start a company in their home and grow it from there. Some of the biggest and most well-known companies began as startups and are now publicly traded, including Apple, Microsoft and, more recently, Instacart along with GoPuff.

However, a major downside to startups is the high risk of failure. Many of them crash and burn within a few years of starting due to some reasons like lack of organization, inability to market correctly or running out of investment capital. From the beginning, everything from business plans and models to goals to strategies all needs to be clearly sorted. Long-term goals, shares and equity all need to be defined, key employees must be hired and financial backing needs to be secured.

What's a small business?

It is exactly what the name suggests. They are privately held companies, partnerships or sole proprietorships. Being a small business is based on the amount of revenue brought in and the number of employees. While the government considers companies with up to 1,500 employees to be small businesses, most of them have fewer than twenty. The Small Business Association (SBA) clearly defines everything needed to qualify as a small business.

[It is also worth noting that a recent survey, conducted by SurePayroll, of over 2000 taxpaying Americans found that a whopping 70% of those polled claimed they would skip a nearby chain and trek an average of eight additional miles to support their favorite local and independent business.]

A key element to small businesses is that they are not looking to dominate their market. They are companies that are independently owned and operated, most times selling to the local town while trying to maintain a stable income. There is much less risk of failure with a small business, making them sustainable for the long run.

A startup is looking to expand quickly and become a much bigger company, while a small business is more focused on creating and maintaining a constant and stable revenue stream. They are not necessarily trying to scale up in any way. A startup can eventually go on to become a publicly traded company, raising money from selling shares and scaling up in any way they see fit. Whereas small businesses start and remain privately held with the goal of sustaining while generating profits for as long as possible. Many times small businesses are passed down through families and remain active for generations.

It is also worth noting that a recent survey conducted by SurePayroll of over 2000 taxpaying Americans found that a whopping 70% claimed they would skip a nearby chain and trek an average of eight additional miles to support their favorite local and independent business.

Both types of projects start with a person and an idea. Depending on how said individual decides to go about the goal will determine the type of company they are. If they are looking to take their idea, shake up the industry, become a leader and be willing to take a risk? They're going to be following the startup track. If they want to keep their business small and local but big enough that it's a good source of income while staying at the same level? Then a small business is the way to go.

Monday, December 5, 2022

9 Time Management Tips That Will Boost Your Productivity

By Athalia Monae

Here are nine tips for improving your productivity through effective time management.

Time is of the essence when starting and running a business. It doesn't matter what stage you're at. Making the most efficient use of your time would be very wise. Working smarter, not harder, should be the goal. That takes discipline, patience and planning. On my journey, there were times when I had the motivation but wasn't sure what my next move should be. I'm very organized and find that I function better when things are in place and when I know what I'm doing and where I'm going. The benefits of good time management include greater productivity, less stress and more opportunities to do the things that matter. Utilizing the following tips will help boost your productivity:

1. Set clear goals

When creating a plan for your business, setting a timeline and setting goals are two of the things you want to consider. Setting timelines keeps me on my toes. While setting a timeline gives you an idea of how long it'll take you, setting your goals allows you to focus your energy on the things you want to achieve. Also, think about your long-term and short-term goals.

2. Prioritize

One of the best ways to stay focused on accomplishing your goals is by prioritizing. Knowing how to prioritize work affects the time you spend on tasks and your overall success. Start by creating a to-do list of tasks that need to get done. Make sure to order tasks by effort and begin planning your time accordingly. Creating a list will help you visualize your goals and determine what is most relevant, as well as what is most urgent. You can't go wrong with a to-do list.
3. Create a routine

The more you stick to your routine, the easier it gets. Whether you work better in the morning or late at night, plan your tasks in a way that you know you will be most productive, and keep it the same. I work better at night. There have been many times I pulled an all-nighter and felt like I moved mountains in that time. Your body naturally responds to repetitive behavior.
4. Avoid distractions

Honor the time that you've dedicated to working on that project, and avoid distractions — no television, social media or text messaging during that time. If you're working in a public space, find a quiet area. Some people like to work in silence, while others might like soft music. Whatever the case may be, commit to that time.

5. Practice the four Ds

Do, Defer (Delay), Delegate and Delete

Placing a task or project into one of these categories helps you manage your limited time more effectively and stay focused on what matters most to you. For anyone who's never utilized this: After you do it for the first time, you might get hooked.
6. Don't multitask

I had a habit of multitasking, which was productive, but since I started multitasking much less, I see how much more productive I've been. Instead of dividing your attention into three different things, it's better to focus entirely on one thing at a time. To make it more effective, try timeboxing them. That means allocating a time frame for every task which, as a result, increases the likelihood of its successful completion.

7. Sleep

Studies have shown that when we have good sleeping habits, we are healthier, more productive and less stressed. Sleep is a detrimental factor that could affect many things both positively and negatively. When we get a good night's rest, not only do we feel fresh and rejuvenated, but it also contributes to a healthy lifestyle. On the contrary, when we don't get enough sleep, we may also be increasing health problems, such as diabetes, obstructive sleep apnea, obesity and more.

8. Don't feel bad about failing

A lot of people fear failure — it's human nature. But spending time stressing about failing is taking time from you being productive. Just try to jump in, and conquer those fears. In my personal experience, failing wasn't necessarily a bad thing. I learned from those failures. I built on those failures. I grew from those failures. Believe in what you're doing, and focus on why you're doing it.

9. Use an online calendar

I swear by online calendars. They are so useful and are a great fundamental tool to manage time. You can easily manage your schedule, mark important dates and events, set up reminders, create time blocks, etc. The best part is that online calendars can be integrated with third-party applications and can be accessed from multiple devices. There are plenty of options to choose from, such as Google Calendar, Outlook Calendar and Apple Calendar, but the project calendar in ProofHub simplifies the way you manage your schedule, plan your events and keep track of the important dates and deliverables in the project, so you always stay ahead of the deadlines.

In conclusion, if you try all or some of these time management tips, you will very likely start feeling more in control, with the confidence to choose how best to use your time. And by feeling happier, more relaxed and better able to think, you're in a great place to carry on with your business.

Tuesday, November 29, 2022

New GEM Report Recommends Action to Support Women Entrepreneurs

Written by: Thought & Action Staff

Women continue to make major strides in entrepreneurship but need more support from policymakers and program leaders, according to a new report from the Global Entrepreneurship Monitor (GEM).

The new GEM 2021/2022 Women’s Entrepreneurship Report—released November 18 and authored by Amanda Elam, research fellow at the Diana International Research Institute at Babson College—illustrates the state of women’s entrepreneurship two years after the onset of the COVID-19 pandemic. The report found that startup rates for women dropped by 15% from 2019 to 2020, but held constant in 2021.

The report also highlighted gender differences in entrepreneurial intentions. Women experienced sharper declines than men in their intentions to start a business within three years and overall startup rates in 2020, but not in upper middle-income countries.

“Women represent two out of every five early-stage entrepreneurs,” Elam said. “Entrepreneurship is a part of the economy where women are continuing to take an active role. It’s important for educators, leaders, and policymakers to understand the drivers of gender differences in this critical market activity.”

Focused on Solutions

GEM, a global consortium of academic researchers co-founded by Babson College in 1999, studies entrepreneurial motivation and activity around the world. Its latest report sheds light on the actions that policymakers and others should take to support women entrepreneurs.

The report highlights the gender composition of high-potential startup populations, pandemic impacts on male and female entrepreneurs, and structural and environmental inequalities that need to be addressed on a policy level.

“Entrepreneurship is a part of the economy where women are continuing to take an active role. It’s important for educators, leaders, and policymakers to understand the drivers of gender differences in this critical market activity.”
Amanda Elam, research fellow at the Diana International Research Institute at Babson College

“GEM is the only global research source that collects data on entrepreneurship directly from the source—entrepreneurs,” GEM Executive Director Aileen Ionescu-Somers said. “Applying a well-informed gender lens to the evidence points policymakers and program leaders toward more effective tailor-made solutions to address the barriers to business startup and growth for women entrepreneurs.”

The report provided guidance for policymakers and program leaders to help address the barriers to business startup and growth for women entrepreneurs:
  1. Because women entrepreneurs are underrepresented in traditionally male-dominated sectors, policymakers can provide support to women entrepreneurs equally in all sectors and countries, especially in male-dominated sectors where negative stereotypes are triggered.
  2. Because women represent one in three high-potential entrepreneurs, policy programming is needed to mobilize financing and other support toward the sectors where women are currently active.
  3. As academic research suggests that women are just as likely as men to succeed when starting similar businesses in comparable industry sectors, structural barriers can be more directly addressed to debunk negative stereotypes about women entrepreneurs.
  4. National experts taking part in the research agree that there is currently little cultural support for female entrepreneurs. It is important to celebrate and promote successful women founders as role models.
More Key Findings

According to the GEM report’s executive summary, women around the world “represent about one in three high-growth entrepreneurs and one in three innovation entrepreneurs focused on national and international markets.”

The report’s findings—based on a trend analysis of women’s entrepreneurship across 50 countries from GEM 2021–2022 data—also illustrated the importance of a strong environment to support entrepreneurial intentions among women. Women in upper middle-income countries represent some of the most innovative, high-growth entrepreneurs in the world, at parity with men for international market focus.

Countries with the highest expert ratings also saw the highest levels of entrepreneurial intentions. However, national experts generally rated the enabling environment for women entrepreneurs very poorly in most countries, which may explain why women have a slightly lower perception of entrepreneurship as a career choice compared to men.

Other key findings from the report include:

  • Business exit rates for women rose from 2.9% to 3.6% over the two-year pandemic period, in contrast to the higher rates for men (3.5% to 4.4%). Women in upper middle-income countries showed the largest pandemic impact on business exit with a 74% increase from 2019 to 2021, compared with 34% for men.
  • Almost half of women entrepreneurs worldwide are involved in the wholesale/retail sector and one in five women entrepreneurs in the government and social services sector (18.5% women vs. 10.1% men). However, only 2.7% of women compared with 4.7% of men are starting businesses in information, computers, and technology (ICT), the sector that draws the majority of venture capital dollars worldwide.
  • In every country surveyed, women were much less active in business than men and tended to make much smaller related investments. The most significant gender differences were found in lower-income countries, while women in upper middle-income countries were closest to gender parity.

Wednesday, November 23, 2022

Happy Thanksgiving Day 2022

A special greeting of Thanksgiving time to express to your our sincere appreciation for your confidence and loyalty. We are deeply thankful and extend to you our best wishes for a happy and healthy Thanksgiving Day.


Tuesday, November 22, 2022

The economic state of Latinos in the US: Determined to thrive

Written by: Ana Paula Calvo is a consultant in McKinsey's Miami office, where Carolina Mazuera is an associate partner; Jordan Morris is a consultant in the Chicago office, where Bernardo Sichel is a partner; and Lucy Pérez is a senior partner in the Boston office.

US Latinos account for the fastest-growing portion of US GDP. So much so, that if we considered US Latinos as their own country, it would be third only to the GDP growth rate of China and India in the past decade.1 At a time of economic uncertainty with concerns about a possible recession growing, consumers are looking for additional support. Our research estimates that the Latino consumer base has unmet needs of more than $100 billion currently, and this could grow six-fold to $660 billion if we address the parity gap between Latinos and non-Latino Whites based on share of population (see sidebar “The journey continues”).

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:

Latino consumers are driving growth while their needs go unmet

Over the past decade, Latinos have grown their household consumption to reach a cumulative $1 trillion market in 2021—a 6 percent annual growth rate over the last decade. Their household spend is higher compared to other groups at similar income levels, and yet marketing spend directed at Latinos most likely does not reflect this.2 Latinos are conscious of their impact, choosing brands that value the environment and their employees, all of which makes them more influential than their income levels would suggest.

The journey continues

However, Latino consumers are often highly dissatisfied with the products offered to them—especially compared to their non-Latino White counterparts. This dissatisfaction ranges across product categories, from food and beverages to financial products, which may point to unresolved needs that impact their daily life. If brands address the drivers of dissatisfaction in terms of access and value proposition, there is a collective $109 billion of revenue at stake, when considering current spending and future potential should improved products be offered.

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:

Latino voices remain underrepresented in the C-suites of corporate America where product offerings and capital allocation decisions are made, and this is particularly true of Latina women. As a result, Latino consumers are often overlooked by companies that do not recognize them as a priority demographic. Less than 5 percent of seats in Fortune 500 boards and in C-suites of corporate America are occupied by Latinos despite this community representing 19 percent of the US population.3 Latina women hold 1 percent of seats in Fortune 500 boards, the smallest percentage of board seats compared to any racial or ethnic demographic in the United States.4 Furthermore, Latina women may be further marginalized at work as described in our latest Women in the workplace report.5

Latinos have been more heavily impacted by COVID-19 and inflation than other populations.

At the same time, Latinos have also been more heavily impacted by COVID-19 and inflation than other populations, and this has exposed their vulnerabilities. Consequently, Latinos are expected to change their consumer spending and take aggressive action to switch to brands that better meet their needs. Companies that support Latino consumers by optimizing value propositions and tailoring their marketing and sales strategies have a singular opportunity to capture the potential this growing market represents.

Closing the Latino wealth gap would strengthen the existing consumer opportunity by more than 500 percent

In a scenario in which Latinos match their spend to their share of population, Latino consumers would spend around $554 billion more than today. Closing this gap would require addressing the underlying income and savings gaps between Latinos and non-Latino Whites. Employers and society at large have much to gain from providing Latinos with better jobs that also provide advancement and leadership opportunities.

In pursuing greater prosperity and fulfilment, Latinos increased their share of professional roles to 25 percent—a five percentage point gain over the past decade. However, Latinos still face barriers in the workplace, through discrimination, implicit biases, or a lack of opportunities for advancement in new roles. In fact, if Latinos were represented at job levels in line with their share of the population, and paid the same as non-Latino Whites, they would receive an additional $281 billion in annual income that could be further deployed to drive economic growth.6

Latino savers have only a fifth of the median wealth of their non-Latino White counterparts, and their savings have been depleted; today, almost half of Latinos have little or no retirement savings. Only 23 percent of Latinos are considered financially healthy in 2022 compared to 35 percent of non-Latino Whites. Nevertheless, Latinos’ net wealth is increasing at a faster rate (9 percent for Latinos, versus 4 percent for non-Latino Whites), narrowing—but not yet closing—the gap with non-Latino Whites. If the trend continues, Latino households could reach an average net worth of $47,000 this year.

While Latinos have about half as much debt as non-Latino White counterparts, this may be because they find it difficult to access appropriate financial products. Latinos are 1.7 times more likely than non-Latino Whites to be turned down for a loan, and 30 percent are unbanked or underbanked compared to 12 percent of their non-Latino White counterparts.7 For financial institutions, this is a significant opportunity to address an underserved consumer market.

Investing in Latino entrepreneurs is a key part of the answer

Latinos are the most entrepreneurial group in the US economy, but they face significant barriers in access to capital—including lower approval rates than non-Latino White-owned businesses for bank loans, private-equity funding, and factoring. Less than 5 percent of venture capital is directed toward Latino entrepreneurs.8 These obstacles, along with Latino businesses’ lower representation in fast-growing economic sectors, limit their expansion and their opportunity to contribute to a more diversified product offering that meets the needs of American consumers.

If Latino businesses’ access to capital were improved, and their representation in growing sectors increased, they would contribute an additional $2.3 trillion in revenue to the economy and create 750,000 new employer firms, resulting in more than six million jobs.9 Interventions to improve access to funding, both from financial institutions and procurement-led organizations, and investments in digital capabilities for Latino businesses can help realize this potential.

Latinos’ proven resilience through the pandemic indicates strong fundamentals for economic mobility

Latinos play a crucial and growing role in the US economy and have demonstrated resourcefulness, hard work, and creativity—despite being challenged by lower-paying jobs, less education, and widespread bias. Over the past year, it has become clear that Latinos are also uniquely vulnerable to income disruption. When COVID-19-associated lockdowns began to be implemented, Latinos found themselves in a precarious position: they were more concentrated in low-wage occupations than non-Latino Whites.10 As a result, almost 60 percent of Latinos—who are overrepresented in industries most impacted by COVID-19, such as hospitality—lost their jobs or had to take a pay cut, and they are now more vulnerable to high inflation than other groups.

The longer-term challenges Latinos face have been compounded recently by the triplicate effects of COVID-19, supply chain disruptions, and high inflation affecting Latino businesses’ operations. Altogether, 60 percent of Latino-owned businesses had to reduce or modify their operations during the pandemic—to such a degree that some could not survive without government assistance. Fortunately, 80 percent of Latino businesses had stabilized their sales back to 2019 levels by the second half of 2021.

Our latest findings point to other welcome signs of agility among economically active Latinos. Over the past year, they have increased their share in professional occupations, raised their net worth faster than their non-Latino White counterparts, and shown their mettle as the fastest-growing minority entrepreneurial group. As consumers, Latinos already represent a $1 trillion market, and their spending power is rising (6 percent compounded annual growth in the last decade, compared to 3 percent for the non-Latino White population).11

Latinos have been making significant strides over the past decade, and even more recently in the aftermath of the disruption presented by the COVID-19 pandemic. Nevertheless, deliberate intervention is necessary to close the gap and fuel a stronger US economy. If companies, investors, nonprofits and philanthropists, and policymakers act now, they can address the barriers that hinder full economic participation by Latinos.

The right combination of structural and immediate interventions can accelerate Latino economic advancement and prosperity. Action is needed in several key areas: improving Latino representation and inclusion in decision-making bodies; expanding product portfolios, optimizing value propositions and targeting marketing and sales strategies for Latino consumers; increasing access to capital for Latino entrepreneurs; improving access to education, reskilling opportunities, and better jobs for Latino workers; and removing bias and discrimination.

Winning the US Latino consumer, worker, saver, and entrepreneur is an outsize opportunity for organizations that act now and invest in the right people, processes, and systems to serve a market that has not been as visible as its numbers would foretell.

Wednesday, November 2, 2022

LinkedIn 1000 Followers celebration

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We are a firm that was created to unlock the full potential and to bring success to our clients. Your business, referrals and support inspire us to work harder and better every day. Looking forward to an even brighter future!

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Tuesday, October 11, 2022

Bilingual/Bicultural Hispanics and their Streaming Revolution

Writen by: Maria Twena, Chief Marketing Officer at AdsMovil

Today’s Hispanic market is not the market of the 70s and 80s. While it remains primarily of Mexican ancestry (62%), it’s growing in diversity every day. Additionally, most of the market is U.S. born (67%), a fact that’s overlooked by many. And if you dig a little further, 55% of the market is either a 1.5 or a 2.0 generation immigrant. We lovingly refer to them as the Bilingual/Bicultural Hispanics.

The 1.5 immigrant came to the U.S. at the age of 10 or younger, and the 2.0 is born here with at least one immigrant parent. Because the 1.5 is technically a first-generation immigrant, the data misrepresents the market repeatedly, making many believe that the market remains a Spanish-dominant only constituency.

In fact, today, the Spanish Dominant sector (the first generation) represents 28% of the market; the Bilingual/Bicultural cohort (the 1.5/2.0 generations) embodies 55% of the market; and the English Dominant (3.0+ generation) accounts for 17% of the market.

The Spanish Dominant sector (the first-generation) represents 28% of the market; the Bilingual/Bicultural cohort (the 1.5/2.0 generations) embodies 55% of the market.

Why does this matter?

Maria Twena Chief Marketing Officer at AdsMovil.

The growth of the Bilingual/Bicultural is astounding and will continue. They are important to marketers not just because of their size (34 million+), but because they tend to be influencers for their Spanish preferred relatives and friends– a role they assume at an early age and one which continues as they mature. They translate the language, decode the U.S. ethos of individualism, which is very distinct from Latin collectivism, inform brand and product purchases, and demystify services and technologies. Furthermore, as they mature, their sphere of influence eventually becomes culturally agnostic.

And yet, original content for this cohort has been absent or a ‘hit and miss’ often. And it’s this community that MOST needs content that’s culturally and linguistically relevant, and available to them at an early age. For years there’s been content available for the Spanish Dominant and the English Dominant, which is very important, but the Bilingual/Bicultural have needed content that authentically connects with them and represents them – empowering them to embrace their hybridity and accept their duality (ni de aquí, ni de allá) – for a long time.

Bicultural Hispanic consumers lead the marketplace in number of streaming platforms enjoyed, averaging 5.4. streaming platforms for movies and shows.

This group was an early web adopter, back in the day, interested in reading content, creating content, and connecting with others that were like them, because they weren’t seeing themselves in traditional media. And we’re seeing this same phenomenon with streaming services. According to Collage Group, Bicultural Hispanic consumers lead the marketplace in number of streaming platforms enjoyed, averaging 5.4. streaming platforms for movies and shows. This is greater than the other groups within the Hispanic market (unacculturated: 4.0; and, acculturated: 4.8). Additionally, it’s higher than all other groups, including Black (4.7), Asian (4.1), or White (3.9).

Nuestra.TV was created to better serve the holistic Hispanic market across acculturation levels, linguistic proficiency, device proclivity, and cultural origins. Our bilingual footprint facilitates code switching and communal viewing. And most importantly, we have bilingual/bicultural content created for our bilingual viewers by bilingual content creators.

Join Adsmovil on October 12th in their Nuestra.TV Town Hall and meet some of the esteemed creators making Nuestra.TV truly “nuestra.” Click here to register.

Source: Collage Group Media Survey, August 2021 (18-75 population, unweighted)

Written by: Maria Twena, Chief Marketing Officer at AdsMovil

*Cover image by pch.vector on Freepik

Tuesday, October 4, 2022

Testimonial Zoraida Montesdeoca, Star Building Services


Empowering economic growth in the Latino community

Domenika Lynch, head of the Aspen Institute’s Latinos and Society Program, and McKinsey’s Bernardo Sichel discuss the economic state of Latinos in America and ways to remove barriers to participation.

Latinos are projected to make up more than 30 percent of the US labor force by 2060. This episode of McKinsey’s Future of America podcast explores the economic experiences of Latinos in the United States and the prospects for their full participation in the US economy, based on lessons learned in a joint research project with the Aspen Institute. A summary of the results appears in the report The economic state of Latinos in America: The American dream deferred, published by McKinsey in partnership with The Aspen Institute Latinos and Society Program in December 2021.

To share what this report uncovers about the economic state of Latinos in America, Domenika Lynch, head of the Aspen Institute’s Latinos and Society Program, and McKinsey’s Bernardo Sichel recently met with McKinsey’s Kweilin Ellingrud. Lynch and Sichel also suggest ways to break down barriers to economic participation and build a more inclusive economy. The following transcript has been edited for clarity.

Audio interview:

Kweilin Ellingrud: Welcome to McKinsey’s Future of America podcast, where we explore how we can build a future that drives sustainable and inclusive growth. Join us in conversation with leaders who are accelerating progress to grow, broaden, and sustain prosperity for more Americans.

I’m your host for today, Kweilin. I’m the McKinsey Global Institute director and a senior partner based in Minneapolis. Today, I’m joined by Domenika Lynch of the Aspen Institute and Bernardo Sichel, a partner here at McKinsey. Domenika leads the Latinos and Society Program at the Aspen Institute, and Bernardo is based in Chicago, where he is a leader in McKinsey’s Consumer Packaged Goods Practice. Domenika and Bernardo, welcome, and thank you for being here today.

Bernardo Sichel: Thanks for having us.

Domenika Lynch: Thank you for having us.

Kweilin Ellingrud: Can you tell us a little bit more about your background? Domenika, let’s start with you.

Domenika Lynch: Sure, Kweilin. I am really excited that I am part of the Aspen Institute and the head of the Latinos and Society Program. It now feels like the pinnacle of my career and everything that I’ve been doing across the public and private sectors.

I want to start with a story that I think captures my “why” and my why at the Aspen Institute as the head of the Latinos and Society Program. As a first-generation college student at the University of Southern California [USC], I attended a gala where one of our top students was being honored at the Beverly Wilshire Hotel, the Pretty Woman hotel. Being a guest there and being inspired by meeting doctors and lawyers, policy makers, presidents of universities that were Latino—they looked like me and gave me hope that one day I could be that too.

When a young woman got up on stage who was a peer of mine and was celebrated for her GPA, celebrated for her dream of becoming a doctor, she asked her mother to stand, and she said, “This award belongs to my mother, who for the first time in 25 years tonight is not a maid at the hotel but is an honored guest.” In that moment, all the servers came down. They lined up, and they had flowers. And we were all moved to tears. The recognition that in America that was possible—from one generation to the next, you can go from being the maid in a hotel as beautiful as the Beverly Wilshire Hotel to having a daughter that was bound to go to medical school—I wanted to be part of that movement and part of that work.

Through my work at USC, at the Congressional Hispanic Caucus Institute, and now at the Aspen Latinos and Society Program, it is about that economic mobility. It is about the American dream and how it benefits us all. I was inspired then, and I’m still inspired when I tell that story. That is the why behind my work and a lot of what I do. We will talk more later about that.

Kweilin Ellingrud: Amazing. Thank you for sharing that incredibly touching story. Bernardo, I would love to hear a bit more about your background.

Bernardo Sichel: Thanks, Kweilin. I’m Bernardo Sichel. I’m a partner at McKinsey in our Consumer Packaged Goods Practice. I think more important than that, I’m a Latino myself as well. I migrated to the US 20 years ago with my wife to start a new life from our home country of Venezuela. We are proud parents of two first-generation boys that were born here in the US.

In my case, it was really during the pandemic that I decided to become much more involved with Latino topics. I raised my hand to be one of the coauthors of the study that we published last year along with the Aspen Institute. I am very happy to be here today, sharing the results of that study and sharing a little bit about my own story as well.

Addressing the opportunity gaps for Latino Americans

Kweilin Ellingrud: Bernardo, let’s begin at a high level. What’s the state of play for Latinos in America? And you were a coauthor on the report overall; I would love to understand the highlights.

Bernardo Sichel: Thanks, Kweilin. Let me first provide some context to the study itself. The study is the first major study that McKinsey has done on Latinos. We were trying to understand the enablers and barriers of Latino economic mobility and the impact that these enablers and barriers have not only on Latinos but on the overall economy.

To do that, we used secondary data, but we also used a survey of more than 4,000 respondents, trying to identify the gaps and potential solutions. The key message of the study—and I think it’s a critical one—is that while there’s evidence that Latinos are pursuing and achieving the American dream in terms of upward mobility, greater education, and middle-class stability, the economic parity of Latinos remains elusive for this group.

Let me provide some detail on the four different roles that we studied during this report, which are Latinos as workers, Latinos as business owners,

 Latinos as consumers, and finally Latinos as savers.

Everybody knows that Latinos are a fast-growing population, and they will represent one in four Americans by 2050. Everybody knows that Latinos are a rapidly growing labor force—they will make up more than one in five workers by 2030 and one in three by 2060.

What is less known is how dynamic this population is. Latinos have rates of intergenerational mobility comparable to Whites. At the lower segments, it’s much higher. For Latinos, if their parents are in the 25th percentile, there is a high chance that their children will be almost by the middle of the road in terms of wealth over time. However, Latino workers have a massive wage gap and underrepresentation in higher-paying jobs.

For example, Latinos receive only two-thirds of what their White counterparts are paid in the same occupations. Latinos that are born in the US represent 18 percent of the overall population. The size of this gap is like $300 billion. To put it in perspective, it is about half of the revenue of a company like Walmart.

If we look at Latinos as business owners, Latino business owners are growing at a huge rate, but they face huge challenges growing and scaling their businesses. Only 6 percent of all businesses in the US are owned by Latinos. Their revenues are only half of that of their White counterparts, and they have higher failure rates. Access to capital is a huge issue. Only one in three Latinos that go to get funding get approval. Three out of four Latinos have to use their personal funds to be able to start new businesses.

If we close this disparity, we’re talking about opening almost 800,000 new firms that will create more than seven million jobs. And that has the potential of creating $2.3 trillion in additional revenues to the US economy.

Finally, the role to highlight here is that Latinos are savers. They have only one-fifth of the wealth of White households, even though they’re growing at a 25 percent increase from one generation to the next. The issue here is low intergenerational transfer.

Only 6 percent of Latino households receive inheri­tances, versus 24 percent of White households. And when they do receive inheritances, it’s only a third of the size. This represents a gap that is more than $400 billion, which is comparable to a lot of the assets under management at many of the large investment firms.

Those are some very comprehensive things that we found in doing the study. And, again, the big picture to bring it back together again is one of growth for Latinos, but there is still a huge gap to fill, especially compared with Whites—and one that needs to be filled quickly if not only this group but also the US economy is going to achieve its goals in the decades to come.

The big picture is one of growth for Latinos, but there is still a huge gap to fill if not only this group but also the US economy is going to achieve its goals in the decades to come.Bernardo Sichel

Kweilin Ellingrud:
Thank you, Bernardo. Domenika, your program at Aspen states that it’s committed to diversity of thought and inclusive growth. Tell us a bit more about your work at Aspen.

Domenika Lynch: Our North Star is about wealth creation and wealth building. We understand that the Latino community is so diverse, and the needs are going to be unique depending on the geography of where Latinos live. Our approach is both bottom up and top down.

In 2021, on the heels of confronting the challenges on the ground with the pandemic, we launched the City Learning and Action Lab and focused on how we could help with the equitable recovery of our businesses and strengthen the local ecosystems. We are currently in six Latino-majority cities. Those cities are Miami, Chicago, El Paso, San Antonio, Phoenix, and San Bernardino. We were led to those cities by members of our board but also because there is a high population of Latinos there.

In partnership with the Drexel University team and Bruce Katz, a renowned urbanist, we came together to understand how we can organize local leaders so that we can develop a shared understanding of what the local landscape looks like and how can we maximize this moment of federal investments.

Because the community is so diverse, we knew that what would work in Miami would not work in El Paso or San Antonio or Phoenix. For us, it was important to source local expertise, to understand how to bridge the knowledge gaps through peer learning and community building and also coaching from national experts.

The Aspen Institute’s tremendous convening power also allows us to attract investments in areas that have been overlooked and to understand what policies are necessary to create change and combat some of the disparities we see at the local level. It’s been a work of collaboration, coordination, and action. We’re now a year or so into the program, and we have seen some tremendous changes at the local level.

Kweilin Ellingrud: Bernardo, what one or two facts from the report stood out to you most?

Bernardo Sichel: I would actually share three. The first one, which is not a fact but is the biggest finding that we found, is that Latino economic mobility is no longer a Latino issue, it’s an American one. If we really want, as a country, to achieve our goals in the decades to come, we need to improve in a significant way the Latino participation in our economy. That is the first thing that really stood out to me, because it completely changes the narrative and even the interventions we need to do.

In terms of the positive, the thing that stood out to me is the level of entrepreneurial participation of Latinos. The report states that one in 200 Latinos starts a new business on a monthly basis. Let me give you two more facts around that. The growth rate of Latino businesses is more than twice that of Whites in the US, and that’s just impressive.

But the flip side of that, which is a little bit negative, is that the size of the gaps are astronomical. It really stood out to me that, for example, Latino workers at parity are receiving only two-thirds of what their counterparts in other demographics, especially Whites, are receiving. If you add that up, you’re talking about, in the case of workers alone, more than $300 billion of opportunity.

I would summarize it in those three ways. One is the big takeaway of this study, which is that this is no longer an issue of one demographic, Latinos, but much more a national one. The second one is just how entrepreneurial Latinos are. And the third one is the size of the gaps are still massive and need to be addressed in a very structural way.

Latinos as entrepreneurs

Kweilin Ellingrud:
What can we do to better support Latino entrepreneurs?

Bernardo Sichel: If you go and look deeper into the Latino entrepreneurs, you will see things like Latinos are the most entrepreneurial yet still represent only 6 percent of total businesses. In the US, Latino-owned businesses are only 6 percent, whereas the total population is 18 percent, which is only a third of what it should be, if you see it from that perspective.

From a revenue perspective, Latino-owned businesses have only half the revenues of businesses owned by Whites in the US. From an access-to-capital perspective, Latino businesses, in 75 percent of the cases, use their own personal savings and networks to start businesses. Less than 50 percent of Latinos get funding from banks.

We need to change a few things to be able to fix this. Access to capital is absolutely essential. The second thing we need to do is to promote Latino businesses going into areas of the economy that have a higher survival rate and potential for growth.

Kweilin Ellingrud: Bernardo, can you tell me more about how Latinos are starting businesses at a higher rate but then the businesses themselves are growing at a slower rate compared to others?

Bernardo Sichel: Yeah, that is correct, Kweilin. The number of new businesses is growing at a higher rate than other demographics. That growth rate of new businesses is 12 percent for Latino-owned businesses, versus 5 percent for Whites. Once the business is up and running, the growth rate is not necessarily higher, and certainly the survival rate is lower, because they are in some sectors that have higher failure rates and because they lack the capa­bilities needed to scale up their businesses. You’re absolutely right: there is a difference between the number of businesses that are starting and how those are performing once they start.

Kweilin Ellingrud: Domenika, your program at the Aspen Institute states that it’s committed to diversity of thought and inclusive growth. Can you tell us a bit more about your work at the Aspen Institute?

Domenika Lynch: What we do at Latinos and Society is focus on building long-term economic growth and ensure that Latinos have an upward trajectory and that they can fully realize their potential and the American dream. We are great contributors to this economy. We are now quantifying how we contribute to our businesses. We are also more than ever educated and taking advantage of the opportunities in diverse sectors. What we find is that, at large, Latinos are not represented. We are not visible, so we are misunderstood.

The most exciting thing for me about the report that McKinsey did, as a Latina, is that I felt seen by such a big brand, and that had not happened before. I felt that it was great to be seen in an authentic way, where the report wasn’t just pandering to big numbers of Latinos.

Latinos have tremendous potential—$2.3 trillion worth of growth if our businesses grow, 6.6 million jobs created—yet it has stalled. And it could literally be out of reach if we’re not proactive about the interventions necessary.

Latinos have tremendous potential, yet it has stalled. And it could literally be out of reach if we’re not proactive about the interventions necessary.Domenika Lynch

That’s what the work we’re doing at Aspen is about. It is not just having this one report but really taking solutions that are cocreated from the community. That cocreation is what inspires young people to be owners of their destiny and not victims of circumstance.

That is why I’m so proud of Latinos in America: we live to our saying, Al mal tiempo, buena cara—in bad times, a good face. And even in the midst of the pandemic, when we were so hard hit—20 percent of Latinos, in terms of the unemployment rate, had to leave the workplace to take care of their children and their parents—we were still hopeful groups and positive and ventured out to start more businesses. Many of them are driven by young people that, in seeing their parents fall a little bit into despair, refuse to do so.

I think that is the story of America. I don’t see a difference between the Latino community and what the American narrative is and how it’s been for Italians and Irish and every other group.

The report captured it, but the report is also a tale of if we don’t do anything about it, if we don’t intervene to bring the resources to this community, it’s too large of a community to fail. It will bring the rest of the country down. That’s why it’s not a Latino issue, it’s an American issue.

Kweilin Ellingrud: So powerful, Domenika. Thank you for sharing that. Bernardo, what are your thoughts on mentorship for the Latino community?

Bernardo Sichel: Beyond mentorship, which is absolutely critical, the Latino business leaders have a huge responsibility. Think about how inspirational someone like [Walgreens Boots Alliance CEO] Roz Brewer is and the role she plays with women and with African American women in the community.

Many business leaders decide to put on hold getting involved until after they retire from whatever roles they have. I think that needs to change. A lot of it has to do with role modeling, and a lot of it has to do with inspiration. I think Latino leaders, myself included, need to get involved earlier. Beyond just formal mentorship, there’s a lot of role modeling and inspiration that we need to provide to our people.

Shrinking the Latino wealth gap

Kweilin Ellingrud: We talked about the dynamics within the Latino economy and the community’s economic outlook. Now let’s dive deeper into potential solutions. Latinos have a sizable wealth gap compared to their White peers, and median Latino wealth stands at about 20 percent of that of White households. Bernardo, can you help us drill down into this a little bit more? We know that US-born Latinos, for example, have greater wealth and income prospects compared to foreign-born Latinos. Why is this?

Bernardo Sichel: It’s in big part because of opportunity. You know, first-generation Latinos go through the educational process and have access to better jobs than maybe their parents did. It is about going through the whole journey and process that allows them to have better outcomes in terms of income. The income over time then generates the wealth that builds from one generation to the next.

Kweilin Ellingrud: Domenika, how can we ensure that foreign-born Latinos have access to sustainable and inclusive growth earlier in their immigration journey?

Domenika Lynch: When we think of new immigrants, it’s really important to think about how we create on-ramps to integrate them into mainstream living. When we don’t do that, they become a subset of the community, and then they’re not able to plug into the resources.

For Latino entrepreneurs, for example, the journey is always one that if the job opportunity doesn’t present itself, then you create it. You create it based on the talent and the skills you have. Whether it’s a good meal you can cook or a clean home you can have or a beautiful garden or landscape that you have, then that becomes sort of your first point of entry, and that helps you to start connecting with others. However, if you don’t have the education or a plug-in to the resources to grow your businesses, to understand financial systems, to be able to market yourself as a professional, then you’ve created just another job for yourself, and you will not have the opportunity for economic mobility or ability to scale your business.

For foreign-born Latinos who came for economic opportunity in the United States, it’s important to have Hispanic Chambers of Commerce. It’s important to have entrepreneurs serving organizations that are culturally competent and culturally relevant as they are welcoming new Latino immigrants.

Professional Latino immigrants—those that have degrees or are architects or dentists or lawyers in their own countries—also struggle because their degrees are not valued like they are in their home countries. They also have to connect to networks. Through those networks, they can understand how they can get certified once again or what kind of credentialing they need in this country. It’s a tragedy when you have a former dentist who is unable to get those new credentials and remains a taxi driver years later, after coming to the United States.

Onboarding professionals, especially if they don’t have family or community networks here, is extremely important. It’s access, but it’s also the infrastructure of opportunity that needs to be offered by that local community.

Kweilin Ellingrud:
Bernardo, I want to explore a bit more this median wealth gap. Latinos have about 20 percent of the household wealth of white households. Why is that? How should we think about it?

Bernardo Sichel: The majority of the difference between wealth that you see of Latinos and non-Latinos happens because of intergenerational transfers. We are talking about inheritances between one generation and the next.

The huge difference that happens there is that only 5 percent of Latinos get intergenerational transfers, compared with more than 20 percent of Whites. And when Latinos do receive an inheritance, it’s a third of the size of what Whites receive. So their starting position is very different, not only because of the income that they’re generating but because of, again, the starting point they have.

That also explains why, from one generation to the next, you see those differences happen. It’s because the next generations not only get higher income, but they have a little bit of a better starting point than what their parents had when they arrived at the US. That’s one of the most compelling explanations of why the difference persists, but it’s also one of the reasons why this is something that’s going to take generations rather than years to be solved.
Latinos as consumers

Kweilin Ellingrud: We’ve explored Latinos as workers and their economic mobility. We’ve explored them as ntrepreneurs, as well as in terms of their wealth gap. I’d like to shift now to Latinos as consumers. The report states that there’s about $160 billion yearly of unsatisfied demand for Latino consumers. What can we do to better address the needs of Latino consumers?

Bernardo Sichel: What is driving that is really three factors. One has to do with access. The second one has to do with income. And the third one has to do with satisfaction with the products and services that are out there.

Going one by one, one is about access—just making sure that Latinos where they live have access to all the different categories of products and services they would be able and would be willing to pay for if they were available. It is no surprise for us to talk about food deserts, but it’s a lot more than just food deserts. It’s across many different categories, including telecommunications, housing, and others—health, et cetera.

The second one has to do with income, which is an obvious one. As income goes up, Latinos will have higher access to products and services they could not pay for before. I think the recent COVID-19 pandemic was a great example of how vulnerable this particular part of the US population is, as they had the biggest drop in terms of employment, in terms of consumption, of any demographic group.

Then the final thing has to do with satisfaction, and that is really providing products and services that cater to the needs and preferences of this population. It’s interesting, because we came up with and we’re doing a study now that goes into much more detail, but in many cases, we’re talking about Latinos willing to pay 10 percent or higher premiums for products and services if they were catered to their specific needs. This is not only a matter of language, but also a matter of the products and services really fulfilling the desires and needs that this part of the population has.

Kweilin Ellingrud: Domenika, what would you like to see from business leaders, from policy makers, to address this Latino consumption gap?

Domenika Lynch: What I found interesting in how McKinsey framed the consumption gap—and I hadn’t thought of it this way before—is how Latino businesses are uniquely positioned to fill that gap because they understand the nostalgia for certain products from their home countries but also specific needs for the Latino community.

It got me thinking about the access to capital and the support to understand how to grow their businesses, but you have a group of people that intuitively know the market without having all the analysis. They know what’s missing because they’re missing it, and they put together business plans to satisfy as best they can. What we need are more innovations around financial products—quality financial products that can help Latino businesses scale their companies.

I am really excited to work with companies like Coca-Cola. Thirty percent of the Coca-Cola bottlers in the United States are Latinos. So they’re going to understand certain drinks that are reminiscent with certain foods in the Coca-Cola family, and Coca-Cola has bought some of these products.

Those are the things that need to happen more and more. It’s a cocreation. It’s a public–private partnership where we’re seeing our products made by Latinos for Latinos, so we’re creating wealth, we’re satisfying the demand. That’s what’s so unique about the McKinsey report: that it didn’t just offer up Latinos for consumption. It is not “Oh, they need more shoes; Nike, please make more shoes.” It’s more about “Well, maybe there is a Latino version of Nike—our own company that can compete for the market.”

If there was a more intentional effort to understand the potential of the Latino market going into businesses and satisfying the consumption needs, then that’s exciting. I’d like to profile more and more of those companies.

Progress toward greater economic opportunity

Kweilin Ellingrud: I’d love to shift to looking at where we are today but in a more historical perspective. Bernardo, let’s start with you and then shift over to you, Domenika. Where are you seeing progress in access to this Latino economic opportunity?

Bernardo Sichel: I think that the trends are very clear. Even if you take the four different roles that the study took, in each one of them, you see structural progress in the last few years, maybe with the retrenchment that we have seen during COVID-19.

The trend is very clear. It’s very clear in terms of intergenerational mobility. That’s maybe where you have the highest level. I’ll give you a number here that was really surprising when we did this study. For parents who were in the 25th percentile, their children have the chance of being in the 46th percentile. The growth in terms of mobility is absolutely fantastic and is happening all over the place.

To me, it’s much more about how can we accelerate this to achieve the entire potential of the demo­graphic. It’s going in a positive trend; it’s just not going fast enough. As we discussed in the beginning of our conversation, this is no longer an issue of Latinos alone. If this trend doesn’t accelerate, it’s going to have an impact on the overall economy.

Kweilin Ellingrud: Domenika, in your interactions with young Latino leaders, are you seeing progress—a change in culture or the optimism you were mentioning before?

The growth in terms of mobility is absolutely fantastic and is happening all over the place. It’s going in a positive trend; it’s just not going fast enough. Bernardo Sichel

Domenika Lynch: I am. I see young people that are socially and consciously aware, not only of their own progress but of the power of investing in their education, of being also connected to brands and businesses that do good for our community and that are inclusive of our own narrative.

I have a grown son, and he’s very intentional about how he shops. It’s really important for him that we support products and businesses that do good by the community—by Black, Latino, and Indigenous communities. We know that in general with Generation Z, the millennial generation; we already have seen that.

I’m optimistic. The one piece I worry about is a little bit of getting frustrated and discouraged. There are some hard challenges, from climate change to even as we tackle structural racism and discrimination. Change isn’t going to happen overnight. It’s going to take intentionality from all of us. And optimism is a requisite for change; there is no substitution for it. That’s what makes me both excited and a little nervous about when we all get too frustrated in our silos, because cynicism is really what we have to guard against. But overall, I’m very optimistic.

Creating a more sustainable, inclusive future

Kweilin Ellingrud: Thank you both for sharing your insights with us today. I love the examples of different Latino brands, the examples of the racial wealth gap, and also the state of entrepreneurship and more businesses starting in the Latino community, but there is a real gap in terms of financing and growth.

We’re wrapping up each of our Future of America episodes with a rapid-fire Q&A. Domenika, I’ll start with you. Is there a book or an article you’ve read recently that excites you about a more sustainable and inclusive future?

Domenika Lynch: Yes. Absolutely. A book that was written during the pandemic by a woman, and it’s called What We Owe Each Other: A New Social Contract for a Better Society. It’s written by Minouche Shafik; she is the director of the London School of Economics.

I was so inspired by it because one of the first stories that she opened up with was about being in Ecuador, which is my home country, and witnessing the birth of a little girl in the Amazon forest, and how her parents were going to name her after the author, Minouche. She wandered the trajectory of these two lives. In this moment of the pandemic for her, it’s really about all hands on deck and recognizing the interdependency that we have, all around the world. The pandemic brought us together—how what affects one of us affects all of us.

She also gives some solutions, and most importantly she made me very aware of, even in the United States, how many generations it’s going to take to go from low income to middle income in different countries. I was a little heartbroken to read that in the United States, she projected five generations, which is not my experience and isn’t the experience of that story I opened up with—that from one generation in this country, you can go from cleaning a fancy hotel to becoming a medical doctor.

I highly recommend it. It’s very inspirational and very timely. There is a lot of good wisdom there.

Kweilin Ellingrud:
What makes you optimistic that we can achieve sustainable and inclusive growth?

Domenika Lynch: Local and national leaders. The work of the Aspen Institute, convening thoughtful people that care so much about human progress—our collective, shared humanity and good life experience. It’s a short life. To bring people together, to roll our sleeves up and to say, “We can change this” is important. I think that as long as we can see it at the local level and then bridge that with national leaders, real change will happen. That’s what makes me optimistic, particularly in where I am, where I sit, at the Aspen Institute.

To bring people together, to roll our sleeves up and to say, ‘We can change this’ is important. As long as we can see it at the local level and then bridge that with national leaders, real change will happen. Domenika Lynch

Kweilin Ellingrud:
What is the one thing that listeners can do today to help promote sustainable and inclusive growth for Latinos in particular?

Domenika Lynch: Through this journey, if we’re talking about scaling and accelerating change, like Bernardo said, it is important to be mindful of your own company’s habits, where you work, and even companies that we own.

For example, at the Aspen Institute, I’m now sitting on the procurement committee. I really want to understand who our suppliers are. If there is an opportunity to create spaces for Black, Latino, and Indigenous businesses, so that we can walk our talk, especially at the Aspen Institute, we do that.

I’m really proud that my colleagues are very intentional. We’ve learned that in moments of crisis, change is very difficult. It’s necessary, but it’s also very difficult. When it comes to how we procure services and goods, efficiency will always trump equity. Always. So we have to be careful and mindful. I’m paying more attention where I work in terms of our procurement habits and making sure that that’s a door we can open and be intentional about.

Kweilin Ellingrud:
Thank you, Domenika. Bernardo, I’d love to shift to you. Is there a book or an article you’ve read recently that excites you about a more sustainable and inclusive future?

Bernardo Sichel: As part of the work that I do combining consumer and technology, I went back to an article in a presentation by a South African author named Busi Radebe at Harvard’s Growth Lab, at the Symposium on Inclusive Growth and Development. It’s called “Re-inventing the corner store.”1

The premise of what he came up with is how to give access to technology and how to build an ecosystem of corner stores so that the stores can not only have more access to financial services but also create some scale in procurement and generate jobs and well-being for the owners of those stores.

There’s certainly no reason why that’s something that needs to be confined to South Africa or Latin America or other emerging markets. It’s very much the reality of many Latinos in the US. When I saw that, I was inspired and thought about the impact it could have at home.

I really recommend it. The paper is dense, but the presentation at the Growth Lab at Harvard is very inspiring.

Kweilin Ellingrud: Wonderful. What makes you optimistic that we can achieve sustainable and inclusive growth?

Bernardo Sichel: I would say two things from my side. The first one is the resilience I have seen from Latinos during COVID-19. The other is awareness, despite the political rhetoric, that inclusivity is an absolute must to achieve our common goals in the future. I would say those two things give me hope that we are heading in the right direction.

Kweilin Ellingrud:
What’s one thing that listeners can do today to help promote sustainable and inclusive growth?

Bernardo Sichel: I think it’s critical not to leave this to policy makers. It’s about our daily decisions that make a difference at the end of the day. If you’re a business owner, I would say, provide equitable pay. Most likely, those frontline workers that you have are Latinos. Also, create job opportunities and internships, et cetera, for Latinos. That would be amazing.

For consumers, as Domenika touched upon, it’s about our daily choices on what we buy and what we consume. It is about the little things that each one of us does on a daily basis that make up the big impact over time.

Kweilin Ellingrud: Thank you, Domenika and Bernardo. That was Domenika Lynch, executive director of the Latinos and Society Program at the Aspen Institute, and Bernardo Sichel, a partner in McKinsey’s Chicago office. I’m Kweilin Ellingrud. You have been listening to McKinsey’s Future of America podcast series. Thank you for joining us.


Kweilin Ellingrud is a director of the McKinsey Global Institute and a senior partner in McKinsey’s Minneapolis office, and Bernardo Sichel is a partner in the Chicago office. Domenika Lynch is executive director of the Aspen Institute Latinos and Society Program (AILAS).

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.