I did something scary after leaving Facebook. I wrote about the diversity issues, sense of otherness, and discrimination I experienced. When I hit publish I remember my hands were shaking. What ensued surprised me. The internet roared back. Women at Facebook came forward with their stories and the internet sent me personal stories. Strangers, acquaintances, former coworkers confided in me their stories all-too-common to my own. Men from non-technical backgrounds also shared with me the biases they faced cracking into product management. It only takes one story for others to follow suit; stories compound to change.
This is how change happens.
Movement Action Plan by Bill Moher shows the different phases of social and political movements
Diversity is a huge problem in the tech industry. I'm tired of seeing companies and the media use "diversity" to attract candidates, enhance their branding, and serve as clickbait. What's missing from the recent focus on diversity is seeing diversity as a mandate for success. We ALL benefit from diversity. It's not just a "nice to have." The successful future entrepreneurs, founders, and venture capitalists must be invested in building diverse companies. This is a requirement to survive and stay relevant, not an option. Fall in line or get left behind!
Diversity is not an amorphous problem, in fact, it's very concrete. Diversity is the sort of problem that we're great at solving with a product approach. Let's break it down: recruiting, hiring, and retention.
The lack of diverse candidates converting to employees is akin to a funnel problem when onboarding new users. Even when big tech companies are dedicating more and more resources to recruiting (FB recently gamified tech recruiting with a points system), pouring more diverse candidates down a leaky bucket simply doesn't work. You can't acquire more users if you can't retain them. Diversity not only has an onboarding problem, but also a retention issue. It's not enough to hire women and underrepresented minorities if they are not treated fairly or given the same opportunities. Women in tech feel pressures for years, which leads them to leave by the time they’re in their 40s (MIT Study).
When a product launch doesn't go well or when a product doesn't grow, I like to analyze the root causes. What are the immediate and adjacent variables responsible for this failure?
Founders who want to win must make diversity a part of their go-to-market strategy
I want to challenge the idea that diverse candidates are “lesser.” The cultural zeitgeist when it comes to hiring in big tech companies and startups is diverse candidates are second tier talent or they will dilute the talent pool. A recent HBS article showed that diverse teams perform better together although it felt uncomfortable. Diversity creates an environment where people get out of their comfort zone. Through friction, people achieve better results.
"Diverse teams produces better outcomes precisely because it’s harder." -- HBS article
There is a common notion that you only start thinking about diversity once you've “made it” as an organization. This sentiment is consistent with the finding that “only 13% of VC investors would rate “having diversity in management ranks” to be a bigger concern than “hiring the right people."
If we trace root causes and look at what founders are accountable for, it starts with the what venture capitalists are incentivizing and reinforcing to their portfolio companies.
3 out of 4 investors said that their firms are not supporting any initiatives to increase diversity among founders in their portfolio.
Only 15% of female founders agree that that “the venture capital community is making meaningful progress toward investing in more diverse founders.”
It's not enough to keep talking about diversity from a marketing perspective when venture capitalists do not value investing in women and underrepresented minorities. The notable exceptions are 500Startups, Hello Angels, Backstage Capital, BBGVentures, Indie.VC, Female Founder Fund, and Kapor Capital.
We need to fix the sourcing problem
Right now, most venture capitalists are investing based on pedigree, connections, and where you have worked in the past (Google, Facebook, Apple etc.). This becomes a self-perpetuating problem where the same people who got into X school and Y company secure funding, whereas the founders with a nontraditional background are overlooked. An entire market of founders and entrepreneurs are being neglected and denied funding.
Some tactical strategies from a sourcing perspective include:
Hire staff from different backgrounds instead of the typical CS/big company pedigree and give them the support to make investment decisions and feel heard. The people you hire will signal to the world that you welcome underrepresented founders. People are the magnet.
Cast a wider net with sourcing deals, not just relying on go-to personal networks. Try proactive outreaches that will help you leverage untapped networks like reach out out to someone after reading their article, attend conferences, ask people who are different from you who you would have never thought to source from.
Ask founders about failures instead of success. It's easy to have led a charmed life until that one hardship happens. Resilience is a marker of success. Invest in people who have fallen down but gotten up every time.
Ask about the company's second bottom line. Growth and monetization should not be the only thing founders care about. Does company X build a product that betters the world? If so, how do you quantify that social impact?
When is comes to recruiting for your portfolio companies: always refer a diverse set of candidates when helping founders with a key hire-- spend the extra time to find many qualified people, not just the first one who comes to mind. Go through a projects like techies.com that showcase exceptionally talented and diverse candidates who are making a dent in this field.
Be aware of your own biases when hiring and sourcing. Easier said than done.
Etsy has done a great job hiring engineers directly out of Hacker School. They put in a $210,000 grant to help the program which focuses on training engineers from diverse backgrounds. Etsy has hired Hacker School alums across almost every engineering team ranging from all levels. In one year, they hired 20 women out of their 110 engineering team which increased women in engineering by 18%. I can see VCs operating on a similar model where they recruit from a different funnel of associates, principals, and partners to diversify their hiring just like the way they diversify their portfolio.
Diversity is the way to winning and staying relevant.
VCs, I want to see more funds value investing in founders and hiring staff who don't always fit the mold but have the track record to show. Stop investing in potential instead of what someone has built. It's easy to obfuscate success with the brand on someone's resume instead of what they have actually created. Women, minorities, and nontraditional founders are consistently overlooked. Let's start making changing by investing in the right people, literally.
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