Kathryn Finney Wants to Help You Build That Damn Thing (Especially if You’re Not a Rich White Guy)

By Scott S. Smith | Friday, 19 August 2022 | Feature, Business, Interviews

Kathryn Finney was one of the first Black women to have a seven-figure Internet startup exit when she sold The Budget Fashionista in 2009. She now heads Genius Guild, a venture studio focused on helping more diverse entrepreneurs from historically underrepresented communities than usual get the attention of investors.

Kathryn Finney Is Challenging Misconceptions About Who Can Be a Successful Entrepreneur

Kathryn Finney has built several damn things and lived to tell about it in her new bestselling book, “Build the Damn Thing: How to Start a Successful Business if You're Not a Rich White Guy” (she has a podcast of the same name).

Venture capital legend Guy Kawasaki writes in the foreword that "Kathryn is kicking ass and denting the universe, the startup whisperer for the rest of us." 

Her book packs in a lot of real-world lessons that Silicon Valley leaders may have missed about the future of entrepreneurship, offering a tried-and-true blueprint for success in the process.

Finney is hilariously outspoken, blunt, and irreverently relevant, never mincing words when speaking truth to power about the shortcomings of the existing VC approach to funding.

"According to a recent TechCrunch study, only 2.4% of venture capital is allocated to Black and Latinx founders," Finney told Startup Savant. "Although there has been a lot of positive talk about backing more multicultural-founded companies, there hasn't been an actual sizable shift, and this impacts all Americans. According to a Citigroup study, the US economy lost $16 trillion over the past two decades because of discrimination." 

Finney isn't simply a critic of a fossilized industry; she does everything in her power to catalyze change and inspire others to participate in a more inclusive entrepreneurial economy. She is the managing general partner and founder of Genius Guild, a $20 million venture studio whose Greenhouse Fund invests in Black founders. 

She also created digitalundivided, a tech startup incubator and accelerator that helps Black and Latinx female entrepreneurs launch their brands. Finney also started The Doonie Fund, named after her grandmother, in 2020 on her birthday, committed to providing microgrants to companies started by Black female founders. Now in its second year, it has helped thousands of women-owned businesses.

Becoming an Entrepreneur

Finney grew up in Milwaukee with parents who were great role models for getting an education and working hard. When her father, a Vietnam veteran who worked at a brewery, was laid off in 1982, he took classes in computer programming. By 1993 he was a senior engineer at Microsoft in Minneapolis, where they had moved.

"My parents never told me what I could or shouldn't do," she recalled. She earned a BA in political science and women's studies in 1998 from Rutgers University and a master's in epidemiology (the science of public health and the spread of disease) from Yale in 2000. 

She initially worked as an international epidemiologist but quit to return home to care for her terminally ill father, who died in 2002. Despite being in mourning, she, her brother, and her mom decided to start a dry-cleaning business, thinking that just knowing the neighborhood would be enough to succeed. Though it wound up losing seven figures, Finney says all failures provide valuable lessons if you pay attention.

Finney was living in Philadelphia, lacking local friends, still grieving, and burdened with $90,000 in student debt; she soothed her feelings by trying to find nice clothes at an affordable price at the mall. Her partner suggested she turn this newfound expertise into a blog.

But this was at a time when there were only 2 million blogs, with few easy-to-use tools to create them or hosting platforms (according to WebsiteSetup.com, there were over 600 million bloggers in 2021). Finney, who had no previous coding experience, taught herself and believes anyone can learn. “The Budget Fashionista” became an enormous hit, eventually drawing over 1 million unique visitors a week.

But in 2009, she ran into an unexpected wall in her entrepreneurial dreams. She had a new idea and decided to pitch it to a New York City incubator. She thought that having one of the most popular lifestyle blogs, clients like Nordstrom and T.J. Maxx, and a book out from a major publisher would give her plenty of credibility. She dreamed of forming a beauty subscription company targeting Black women, a potentially $500 billion market.

"I brought this group of mostly white tech dudes into the wonderful world of ethnic hair care in less than three minutes but was met with total silence," Finney said. "Then these really smart people started asking me dumb questions, and I realized that entitled individuals who graduated from elite institutions have a very sheltered worldview. The seed was planted that would eventually lead to my second book to empower those who don't have all those privileges to succeed, whom I call the Builders."

She went back to focusing on TBF, never accepted any outside investment, so retained 100% ownership until selling it in 2012. Now she funds Black-led startups, including those serving ethnic beauty markets.

The Six Tools of Success

Finney points out that a small business and a startup are usually different. The former is typically locally focused, has a slow-growth business plan, hopes to be around for a long time, and has high fixed costs, which are often financed by personal funds, loans, or friends and family. Technology is deployed mainly in support of business operations and marketing.

Startups, on the other hand, are usually designed to expand as quickly as possible. They are powered almost entirely by technology and depend on support from outside investors, with a profitable exit for the founders, often in a few years, as the primary goal.

There are six tools to be a successful Builder, she says, starting with having the right mindset. "The tendency is to define success as something outside ourselves, but the path to success is really internal. Self-awareness — knowing who you are and acknowledging your strengths and weaknesses — is an extremely important part of being a great leader. Getting your mind right is critical to getting your company right."

Whether it's yoga, meditation, breathing exercises, or a spiritual path, Finney strongly recommends finding a "mindfulness" practice that will help you deal with the tremendous stress that comes with any startup. 

The second tool is to have firm core values to stay centered and not be compromised into going down the wrong path. Finney lists hers as integrity (moral leadership), empathy (acknowledging that others may be fighting unseen battles), clarity (clear intentions, goals, and dreams), and fearlessness (do the right thing even when it's hard).

Third, know thyself. "A few years back, I asked a well-known investor in the tech space why she hadn't invested in my organization, even though we fit directly into her mission," she wrote. "She asked me, 'Who are you?' in a way that meant, 'What do you stand for?' I realized I was so focused on the killer elevator pitch about the enterprise I couldn't answer who I really was. Now I tell people I'm a Builder."

Fourth, know your strengths, weaknesses, opportunities, and threats, aka "SWOT" analysis, a decision-making tool popular with many consulting firms. "Some of us are very aware of our strengths but tend to overlook our weaknesses. Others see threats everywhere but miss opportunities."

Fifth, create a personal advisory board (PAB). "These are people who want to see you win, not just your company, those you can turn to when you need advice and feel open enough to be honest with you," she said. "It's easy to delude yourself. Some may help motivate you, others will listen carefully when you need to vent, or maybe they can just make you laugh and put things in perspective."

Finally, find your exit number. "Unless you are an Entitled or someone else can support you, you are not likely to be able to leave your nine to five job to build your business. You need to know the amount of money your business needs to make each month before you can leave your day gig, your basic necessities plus some quality-of-life extras, without dipping into savings or retirement accounts, probably for at least a year."

Make Sure You Solve a Problem the Market Wants

Most startups never really get started, and those that do rarely succeed because few wannabe entrepreneurs understand what they are getting into. 

Finney highlights a few questions entrepreneurs should be asking to transition from ideation to a successful endeavor: does your idea address a real point of pain for customers, is it scalable, can you sell it, and can you get repeat customers? There are lots of ways to figure out answers, which she details. 

If the demand for your product or service exists, will your imagined solution be able to be turned into a money-making business? Finney explains how what is known as the Build-Measure-Loop can yield an answer, starting with creating a quick test known as the minimal viable product (MVP). 

After Finney sold TBF, she worked for the startup BlogHer to increase traffic for its women bloggers, which would attract more ads to pay them. But attending business conferences, she realized how few women and Blacks were active. That glaring lack of support for underrepresented tech entrepreneurs inspired the creation of digitalundivided.com.

One important lesson from these events came in 2014 when Finney realized that no comprehensive database on women-led startup founders existed, let alone one detailing minority-led endeavors. Finney sought to address this by creating ProjectDiane, named after a civil rights activist, in 2016. Funded by a successful Kickstarter campaign, it helped spark a national conversation that has since led to a twofold increase in the number of startups founded by Black women.

Next is building a business model: deciding what partners are needed, what activities would be involved to create the product/service, what the different segments of customers would be, and how marketing would reach them. Who would be vital for the initial team? What would be the cost structure, the anticipated revenue, and the funding sources?

And what if you find out that your business model isn't really viable? Pivot — changing the original planned product or service is common.

Finney lists some common traits of leaders who can build a strong team and not burn out:

• Stay healthy. Eat nutritional foods, exercise, get enough sleep, stay hydrated, and take care of your mental health. 
• Live up to your core values.
• Always be learning.
• Take joy in your work so you are a joy to be around.

She also strongly advises drawing on family and friend networks to test out the MVP and for early hires. You may need co-founders to make up for skills you lack, and she provides guidelines on how to weigh the pros and cons (they can also help bring in funding, but co-founder conflict is a major factor in 65% of startup failures).

Like personal core values, a company's value system is vital for it to thrive. Her Genius Guild's values include trusting the good in others, believing in a world where everyone can win, manifesting your strengths each day, having the courage to take risks, practicing active listening, being agile in achieving goals, honoring your word, and committing to your own growth and that of others.

Finney recommends that startups early in the process prioritize hiring a lawyer who has experience in your industry, an accountant, and an executive coach (to help work through the most difficult decisions). 

The last section of her book may be the most valuable for new entrepreneurs: financing. This includes a very detailed consideration of all types of funding, from credit cards and angel investors to government business grants and bank loans (including how to write and when to send crowdfunding emails and the essentials for a VC pitch).

"When it comes to taking outside money, my personal rule is that you should only take equity-based funding in order to scale your company and/or product," she wrote. "Take money to make money in the not-too-distant future."

Her final advice: stay humble, stay human, and build the damn thing!

About the Author

Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.