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Startups: Diversify your Diversity for Success

By February 29, 2016Article

“Diversity” is a hot topic these days in high-tech, both for the VC industry and the startup world. And with cause: the number of women in partner roles in VCs has actually gone down in the past few years — from a whopping eight percent to an embarrassing six percent. You walk into most startups, especially in their early stages, and you’ll see a healthy ethnic diversity (the early coders are usually an interesting stew of Asian, Indian, Ukrainian and good old American Caucasian nerds), but you’d be hard-pressed to find a single female face. Or a single black face. 

A quick disclaimer:  The authors of this article are strong advocates of diversity, especially in the field of gender. Carol is a business professional/owner; and Tom’s mother, wife and daughters would beat him up if he didn’t identify himself as a feminist. 

As consultants to startups over the past decade (we’ve launched 42 so far), we (and our founders) have faced this conundrum: Should our clients, to borrow from Spike Lee, “do the right thing,” or is their primary (if not sole) obligation to keep the doors open, the lights on and their backers happy, particularly in the make-or-break formative days of life? 

Luckily, that “dilemma” is no longer a dilemma: recent survey data shows that a diversified work force makes better decisions and leads to improved profitability. And a recent study of coding quality and efficiency shows that women coders are equal to — and at times superior to — their male counterparts. In addition, a number of black colleges have started coding programs and incubators on campus, bringing a new generation of black coders into a business world starved for talent, regardless of its sex or race. So the news, at least on the social front, is encouraging. Baby steps to be sure, but encouraging. 

When we counsel our startup clients about building their teams, we emphasize that diversity isn’t just a responsible social decision — it’s the right business decision. 

We also then explain that, in addition to the gender and racial diversity that is so topical, they should take a broader definition of “diversity” and apply it to different stages of their company. 

Psychological diversity: Founders, find a yin to your yang 

As one of our founders remarked, “How can you tell if an engineer is an extrovert? He’s the one who looks at your shoes, rather than his own, when he talks to you.” God love them, most founders are nerds; so, when they start looking for a co-founder, they gravitate to other nerds. Wrong. Even if they’re both nerds, a strong founding team should contain an outward-facing person (generally in the CEO role) and an inward-facing person (usually the CTO or product architect). Making this fundamental introvert/extrovert diversity a reality will pay off in all of the steps to company creation that follow, especially in getting funded and working with press and analysts when the company launches.   

Ideological diversity: Hire the odd duck 

A company’s early product team — the one that’s going to build the make-or-break technology — is not the place or time to practice social engineering. Finding the right talent and passion in a new-hire trumps every other criterion in the early days. If that UI designer candidate that you are desperately chasing, for example, also happens to be a woman or Native American, ding-ding, you’ve hit the jackpot. But talent comes first. 

Instead of focusing on ethnic or gender diversity, startup founders should look for “ideological diversity.” Look for “disruptive” thinkers that can create truly unique products. Not only are they a strong ingredient in your startup stew, but they probably won’t be as attracted to the offers from Google, Apple and Facebook that make hiring engineering talent so difficult these days. 

Resume diversity: Mix in newbies and big-company folks 

The raw enthusiasm and 18-hour workdays of startup rookies is commendable and a necessary component to most startups. But newbies often lack two things: 1) a life and 2) perspective. Bringing in more mature employees – not just those with more startup experience but those who come from larger, established companies (and bring their best practices with them) – will help you scale, especially in your managerial ranks. Any team with startup-only experience will probably be too insular or homogenous. 

Geographical diversity: It’s a big world 

Geographical diversity is not just about letting the quirky developer in South Dakota work from home (it can involve a satellite office near a university town where you pull from a talent pool other than the Bay Area or even a development center in Ukraine or India). But make sure that if you go this route, you build in collaboration, communications and cultural best practices to keep the team in synch, regardless of their area code. 

Now, if not already, is the time for gender, racial and ethnic diversity 

Year two — when a company evolves from infancy to adolescence — is when the hiring focus shifts from “individual contributor” to “manager.” Now is the time to focus on instituting gender, ethnic and racial diversity. To support that goal, mandate that every short list of finalists for a position that manages a team includes female candidates and candidates of color, aka The Rooney Rule. Be like Slack and make it an HR policy. 

Celebrate every kind of diversity at every step   

Once your company is sufficiently diverse, celebrate it. Let your remote workers lead a company town-hall meeting. Have the quirky developer do the demo for the board. And, of course, unless your developers are British, feature their cuisine on a rotating basis.  

The result of all this diversity? Hopefully not only business success but increased corporate harmony, easier hiring and greater retention rates. 

Carol Broadbent is a partner at Crowded Oceanthe startup marketing agency. She has worked as VP of corporate marketing at Bay Networks, Aspect Communications and numerous startups. Previously, she was a director of marketing at Sun Microsystems. Find out more about Crowded Ocean at @crowdedocean or subscribe to the Crowded Ocean blog.

Tom Hogan is a partner at Crowded Oceanthe one-stop marketing firm for technology startups. Established in 2008, Crowded Ocean specializes in positioning, virtually staffing and launching startups, then guiding them through their initial sales cycle. The firm has launched over 40 startups, including Sumo Logic, Snowflake Computing, Trifacta, Kentik and Palo Alto Networks. Tom can be reached at Follow Crowded Ocean at @crowdedocean or at the Crowded Ocean blog.









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