Black-owned brands eye ‘unicorn’ success with McKinsey’s Next 1B

In the business world, unicorns are real. But these startups with valuations of a billion dollars or more are rare, and Black-founded unicorns are exceedingly so. In the last 10 years, for example, less than 2 percent of the 400 US unicorn startups had Black founders—with less than five Black brands reaching this milestone in consumer and retail. At the same time, McKinsey research shows that consumers want to be inclusive in their purchasing. Forty five percent—likely representing well over a hundred million shoppers—believe retailers should actively support Black-owned businesses and brands.

Tabitha Strobel
Tabitha Strobel
Tabitha Strobel

“We looked at this data and said, ‘What role can McKinsey play in jump-starting growth for Black-owned businesses?’” says Tabitha Strobel, engagement manager at McKinsey.

The answer is Next 1B, a business acceleration program for founders of Black-owned consumer and retail brands in the US that provides essential tools and resources for growth. Next 1B launched in 2022 with two offerings for founders at different stages of growth.

Next 1B: Founders is a 10-week cohort-based program designed to deliver practical tools, McKinsey expertise and insights, and leadership coaching to help founders and brands grow. The program targets brands with below $15 million in annual revenue and is building a large, supportive community of Black entrepreneurs in consumer and retail.

Next 1B: Scalers provides dedicated McKinsey support for a small subset of Black-owned brands typically with over $15 million in annual revenue who receive a growth diagnostic, execution blueprint, and follow-on targeted support to unlock the next phase of growth. Scalers launched in the summer of 2022 and is currently expanding through end of year and beyond.

Next 1B grew out of the firm’s 10 actions toward racial equity, including investing $200 million in pro bono efforts aimed at economic empowerment.

“We spoke to over 30 Black founders while designing Next 1B and we heard common themes around lack of access—to capital, to networks and insider knowledge, and channels,” says Tabitha, who worked to build the program along with colleagues Tyler Harris, Liz Pharis, Pamela Brown, Sara Prince, and Tiffany Burns. “So, we designed Founders to address these challenges, to share knowledge, build networks, introduce capital partners, and share retailer support and expectations as brands scale.”

Tyler, an associate partner at McKinsey, says that Black founders face particular challenges in brand perception among a range of stakeholders, including partners and investors.

“Some founders are restricted in that their brands were perceived as being only for Black consumers despite having a wider reach,” she says. “Others were less sure how much of their identity they wanted at the forefront of their brand.” The founder identity, she says, is the foundation of Next 1B: Founders, and the program gives space for discussions around identity, aspirations, and roadblocks to build community.

Myles Powell is the founder of 8 Myles, a brand of gourmet comfort foods. Myles wanted to provide a home-cooked-meal experience to consumers, inspired by the comfort foods he ate growing up. As a member of the Founders program, Myles has found the opportunity to network particularly impactful.

“It can be very, very lonely as an entrepreneur. When you can be with people who understand where you are operationally and mentally—it’s the community and camaraderie that makes this special,” Myles says.

Next 1B: Founders brings in industry experts in retail, social media, and venture capital to share lessons learned and open their networks to participants. And the community camaraderie building is designed to be a support system that can lift business owners up in ways that expertise and networks can’t. For instance, during a breakout session, a participant practiced a pitch for a major retailer and got feedback and support from fellow founders, later winning the business deal.

Danielle Tubbs, a member of the Founders program who sells vegan cookies through her brand Tubby’s Taste, reflected on the power of community, saying she’s never stepped into a business room with people that looked like her. “Being able to share challenges and wins as Black entrepreneurs has been one of the most powerful experiences in my eight years as an entrepreneur,” she says.

“It’s been our aspiration to build the biggest community of Black business founders in consumer and retail, and seeing it take shape has been one of the gems of this program,” Tabitha says.

As much as McKinsey aims to build skills, resources, community and networks, Tabitha stressed that many of the business owners in the program have dedicated years to building impressive brands and amassed considerable expertise with the resources available to them. She says the program took shape as a partnership rather than a traditional learning atmosphere, with all parties sharing knowledge and experience.

“I'm so inspired by the people in the room,” she says. “They've already accomplished so much. We want McKinsey to be a part of their incredible story and their incredible growth.”

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