As printed in ISNA’s Islamic Horizons May/June 2014
It was April 2013 in southern California, and no one wanted to leave the secret venue which gathered entrepreneurs, investors, and other business people who would serve as mentors. The air was charged with mutual admiration as over $200,000 was secured by some people who had presented their business plans for a mere 6 minutes. Afterward, networking gave critical connections, solutions, and encouragement to several attendees who traveled from all over the nation. This was a solution to resolve an economy in a tailspin–a breakthrough to mend something long broken.
Income inequality in the U.S. was minimal in the 1970s, as Harvard economist Larry Katz described, “Americans grew together.” Since then a world-wide growing disparity has shifted, fueled by globalization, to affect U.S. wealth distribution, whereby in 2011 Michael Norton and Dan Ariely of Harvard Business School noted that the top 20 percent own 84 percent of total wealth.
Following the 2008 financial crisis, The Great Recession saw 9 million American jobs eliminated and cited an income recovery reported for 2009-2010 of 2.3 percent; however, economist Emmanuel Saez corrected that perception by revealing that for 99 percent of Americans, there really was no recovery at all. In fact, most people’s incomes only rose a scant 0.2 percent, while the upper crust–the 1 percent–experienced a recovery of 11.6 percent, as discussed in Chrystia Freeland’s Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (Penguin, 2013).
Freeland writes about Rep. Paul Ryan (R-Wis.) who in his address, “The American Idea,” at the Heritage Foundation in 2011 said, “[the] true sources of inequality in our country [are] corporate welfare that enriches the powerful and empty promises that betray the powerless.” He disparages “a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society.”
The 2008-09 recession left an estimated 24 million Americans unemployed or underemployed, and a lethargy economy threatening a global scale collapse, which can only theoretically be avoided if our mindset is refocused toward entrepreneurship, new business. Gone are the days when one could aspire to a protected job with benefits and comfortable pension. Education–initially conceived to prepare disciplined Prussian soldiers and then corporate workers–has broadened its scope to embrace innovators, creative designers, and problem solvers across a range of integrated disciplines capable of working collaboratively and willing to pursue lifelong knowledge and skills acquisition. It is the new reality, as massive challenges such as global warming, fresh water shortages, nuclear waste, and world hunger call upon us to offer solutions in order to survive. A crippled economy greatly contracts conventional practices, and ambitious initiatives are required.
Luigi Zingales, author of A Capitalism for the People: Recapturing the Last Genius of American Prosperity (2012), wrote, “When the pilgrims planned their trip, they did not ask the government for money; they asked private investors. When Abraham Lincoln’s family left Kentucky in search of new pastures in Illinois, they did not ask the government for money. When more than 300,000 people rushed to California in search of gold, they were not subsidized by the government.” The reality is that we can only rely on Allah’s guidance and need to step up, take responsibility, and help each other toward prosperity and protection for the common good.
An entrepreneurial dynamism is rising and adaptability is the order. John Dearie and Courtney Geduldig, authors of Where the Jobs Are: Entrepreneurship and the Soul of the American Economy (2013), met over 200 of America’s entrepreneurs one summer on a cross country road trip, and they found that, although not always stable, new businesses could expand employment rapidly; their policy needs are different from established, larger corporations; and that they need help, which policies could provide as nurturance to start-ups. This spirit is fueling a trend which holds much promise for economic recovery, hopefully of a sustainable sort.
Known to many fans as Baba Ali from Ummahfilms.com, Ali Ardekani loved watching Shark Tank on television, and he had gone to family and friends to fund his idea to create a boxed game product for Muslims. It was successful on a small scale, and he enjoyed meeting new people and making connections. Ultimately, he decided that he could leverage his growing popularity to help other budding entrepreneurs. And so, the California meeting was promoted through a YouTube video by Ardekani using his style of video production and ebullient personality.
On the operational side of Ardekani’s celebrated gathering was Victoria Caldwell, an international online marketing consultant and founder of Barakah Biz Network, who promoted, organized, and supported this event (http://youtu.be/MXhtogWhsX0), and who continues to do so around the country in order to help people make resourceful connections that can take their businesses to the next level. Both Ardekani and Caldwell explain that often times once businesses have a successful start, they run short of resources, both financial and experiential. It becomes imperative to have guidance and to access connectors who have the capacity to make their businesses grow in an ever changing global landscape.
What Ardekani and Caldwell cultivate comes down to a climate of trust. By providing the opportunity for people who are seriously seeking mentors, connections, and investment, they help fuel the growth of an economic shift to self-sufficiency, the type that brings true wealth building and greater employment.
Ardekani says that many people don’t know how to brand their businesses and need advice on legal aspects. They also need help with online marketing and use of media. When asked about what types of businesses usually receive funding, he explained, “Whatever makes money; ideas that are novel are not as likely.” Successful models which are already functional that need growth revenue are mostly selected for investment.
Terms of funding are not overseen by the organizers of these events, as they are privately arranged between parties, but they could provide an opportunity for Islamic financial instruments to be a guide for the design of those terms. Rather than eroding the foundations of equity through charging interest (riba), a prospect of shared ownership with shared risk can be created to cement investor support to those businesses seeking funding and mentorship.
On a larger scale, another system proposed for economic robustness is evolving from LaunchPosse. Known for his founding success at Zabihah.com, Shahed Amanullah and his Georgetown colleague, Richard Ambrose, are partnering to create a model that can leverage social networks to provide resources for knowledge, money, and even moral support. It is the reality of necessity that propelled its inception.
Amanullah explained, “From this point on, there will never be enough jobs for people. How do we as a society address this issue? Either we accept the new reality of a permanent underclass, or we try to get people to start their own businesses, to employ themselves.” He refined his vision, “From those thoughts came the initial concept of LaunchPosse, which will be a platform where ordinary people can take an idea and leverage their social network to turn it into a functioning business or social enterprise.”
Meeting the global perspective of investors and entrepreneurs of the day, Amanullah is thinking big. When asked about if there were a relative age category or demographic he is seeking to work with, he stated, “We’re hoping to launch our new venture globally—we see no distinction between new businesses here or in places like Egypt, Honduras, Uganda, or Bangladesh. We are designing LaunchPosse to appeal to any age, class, or educational background. We are tired of seeing the benefits of technology roll solely to the digital elites.”
Regarding mentors in his system, he has met quite a few through his entrepreneurial and international work with the State Department. “We’ve found the ones that really motivate you, keep you on track, make you believe in yourself are the most important stakeholders in your success. The number one thing most budding entrepreneurs lack is confidence.”
A believer that aspirations can become reality, Amanullah expounds energy and a convincing argument, “We wanted to build a platform that every day, ordinary people could use to make their dreams come true. Entrepreneurship is a right that all people should enjoy, and we intend to make a successful business catering to the 99 percent of those who are not being pursued by VC’s and incubators.”
Many people are familiar with Robert Kiyosaki’s bestseller Rich Dad, Poor Dad which references a quadrant model that suggests the way to get out of the “rat race” and achieve financial independence is through business ownership or investment. Given the current economics, these networking models may be effective strategies to maintain a decent standard of living. If we continue to slide toward increasing unemployment, we will have to adapt to preserve stability and hope to thrive. Never before have common people had such access to the world; the question is how quickly can we prepare and serve it?