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The Art of Sourcing: Facilities From Afar

The Art of Sourcing: Facilities From Afar With Ana Duarte, Global Category Manager at Dell ConnXus is publishing a new series that highlights the unique challenges procurement professionals face in the sourcing and supplier management industry. For our first blog, we feature Ana Duarte from our client Dell. Based in Panama, Ana is the global […]

Rod Robinson, Founder, President and CEO of ConnXus

#FacesofFounders Diversifying the Entrepreneurial Supply Chain

Rod Robinson, Founder, President and CEO of ConnXus

By: The Case Foundation

Diversifying the Entrepreneurial Supply Chain

Rod Robinson, founder of supply chain software company ConnXus, hopes his entrepreneurial success will help attract more diverse entrepreneurs to start their own businesses.

Five years ago, Rod Robinson put $80,000 of his personal savings into a new software startup he was building. At the time, he had four kids at home and a wife, reliant on his income.

“In hindsight, this was quite risky. Thank God things have worked out,” he admits.

Since then, he’s raised $10 million for this company. As of 2017, the startup is profitable and providing services to notable brands such as Procter and Gamble and McDonald’s. For this African-American entrepreneur, tech is the new equalizer. “I am a firm believer in tech entrepreneurship as a solution to the economic divide in this country,” Robinson says. “Regardless of color, race, gender or creed, you can take an idea from a concept on a napkin to a business in a matter of months with very little capital.”

Cincinnati-based Robinson has done just that: multiplied his investment of $80,000 with 100 percent year-on-year growth. He spent the bulk of his career in supply chain management, working with global consulting firms like AT Kearney and Accenture. In 2002, he became the Chief Procurement Officer for a billion dollar telecommunications company, Cincinnati Bell. And that’s when his frustrations began: incomplete databases, fragmented resources, and manual processes, he says, pushed him to rethink his work and the industry as a whole.

After decades in procurement and supply chain services, Robinson decided to venture out on his own. In 2010, he launched ConnXus, a software company that helps Fortune 2000 corporations connect with small business suppliers run by minorities, women, veterans and members of the LGBT community. These buyers pay an average annual subscription, which can range from $25,000 to $250,000 depending on the number of solutions. For suppliers, there is no subscription fee to register and create a profile on the platform, but Platinum Supplier Development Programs range from $99 to $199 per year.

“The vision is to become the JD Power of small business,” he says. “ConnXus will enable enterprise buyers to build sustainable supplier networks optimized for performance, cost, economic, social and environmental impact.”

His focus on minority entrepreneurs is not merely for feel good value. Studies argue that working with diverse suppliers can increase profitability, even as high as 133%, Robinson says: “While many business leaders now view diversity as a positive influence on corporate thinking, not enough have realized that inclusion can actually result in better business decisions and results.”

There’s also a massive need for it, given market trends and gaps. Between 2000 and 2010, minority-owned businesses grew at double the rate of all US firms. Women and minority-owned businesses make up 50 percent of all US businesses. However, they only get about 7.3 percent of business transactions. Furthermore, a study by the Minority Business Development Agency (MBDA) says that by 2045, 46 percent of the US population will be made up of minorities. Hence, it makes sense for businesses to embrace the future now.

When he first launched the company, Robinson had no competition; no other platform was focused on inclusivity and diversity like him. “So I set out to create a more complete, convenient and cost-effective solution to meet the needs of both buyers and suppliers,” he says.

Smaller players, such as Ohio-based True Choice Packaging, an African-American owned and operated packaging business, garnered a contract valued in excess of $1 million through Robinson’s software.

Robinson’s aim is not only to drive business to minorities but to shed light on Midwest entrepreneurs. “I am proud to be a part of what is happening here locally in Cincinnati, proving that you don’t have to be in Silicon Valley to succeed.”

Cincinnati has numerous resources for startups: The Brander, an accelerator, the Cintrifuse, a fund, and CincyTech, a seed fund— to name a few, Robinson says. “These organizations are all heavily supported by the City of Cincinnati and Ohio Governor John Kasich, plus we have the benefit of a large number of Fortune 500 companies here like Kroger, Macy’s and AK Steel.”

Even with the support, Robinson admits that some aspects of running a startup are always challenging, namely fundraising. “It is exhausting because it takes away time from the company and in my case, geographic location and background did factor into the process,” he admits.

To counteract the fact that he was based in Cincinnati, and was an African-American tech entrepreneur over the age of 40, Robinson focused on getting a few prominent early angel investors such as Chris Downie, Founder and CEO of Spark people and John Pepper, former CEO of Procter & Gamble, on board early in the game.

“This helped to attract other angels,” he says, referring to Bob Castellini, owner of the Cincinnati Reds who invested in ConnXus. And it snowballed from there: Castellini’s intrest helped Robinson secure $1.7 million funding from CincyTech Ventures, which was followed by NYC-based Serious Change, LP, an impact investment fund. “The momentum continued and the dominos continued to fall,” he says.

He raised over $4 million in the first year and to date, has hit $10 million. Now, Robinson himself sits on the advisory board of Techstars Foundation, an offshoot of Techstars Ventures, which led the ConnXus’ Series A round. Robinson focuses on helping other entrepreneurs of color get the funding and resources they need. But it boils down to success, he says.

“Success breeds success. As we start seeing more diverse entrepreneurs succeeding via successful exits, we will attract more talented entrepreneurs to start businesses here. We will then have more successful, cashed out entrepreneurs in the ecosystem to serve as mentors and reinvest cash in the next crop.”

So the solution to solving the geographic and racial gap in entrepreneurship? Keep working and building more success stories, he concludes.

This article is part of a special series curated by the Case Foundation and written by journalist Esha Chhabra, who has written for such publications asForbes, the Guardian and the New York Times. The series spotlights innovative entrepreneurs who are changing the image of who is and can be an entrepreneur. Tell us about a founder who inspires you via social media using #FacesofFounders.