09/03/14 | Uncategorized

Building Meaningful Diversity in the Startup Ecosystem

How diversity in tech is more than a number’s game.

By Vanessa Mason (Contributing Writer, Women 2.0)

The eye catching headlines of Google, Facebook, Yahoo, and Pinterest announcing abysmal statistics on the diversity of their workforces sparked a firestorm about how to improve diversity in tech. While growing the talent pipeline through organizations such as CODE2040, Black Girls Code, The Hidden Genius Project, and #YesWeCode has offered unprecedented opportunities for African Americans and Latinos, the issue of diversity in tech is not just a pipeline problem. Underrepresented minorities often leave tech because of the daily toll of microaggressions, or minor insults and actions that reinforce negative stereotypes in addition to structural obstacles such as the lack of career advancement opportunities.

To make diversity truly meaningful, tech will need to look beyond data and algorithms toward how workplace culture affects retention. What does it mean to build a startup culture that supports underrepresented minorities beyond the job offer?

Diversity: More Than Headcount

Denitria Lewis, community manager at digitalundivided, a social enterprise that excelling at getting the urban community in the tech space, especially women, in the digital space, showed what the data really means. “Two percent is not a meaningful representation of any one group of people, especially in some of these companies, which employ thousands of people. By that estimation, out of 1,000 people – only 20 people of color were qualified? That doesn’t compute.” Although the term “diversity” has started to trend as much as the ice bucket challenge, the conversation has started to lose sight of the real value of diversity. More taking than attendance, diverse representation means underrepresented minorities have positions at all levels of seniority across every business unit.

Sylvia Flores, co-founder & COO of MANOS Accelerator, a mentorship-driven accelerator program that provides “hands-on” education, business resources, infrastructure, capital, and guidance for promising startup companies led by Latinos, shared her definition of what diversity really means.

Diversity means that there’s representation from various cultures from consumers to developers. There isn’t a one size fits all.  The more different perspectives you have, the stronger your product or service will be.”

According to CODE2040, the disparities in representation worsen when looking at seniority. While 9.4 percent of entry level employees identify as Latino, only 2.4 percent of senior level employees do the same.

The price of ignoring the value of diversity in workplace culture is steep. Monique Woodard, co-founder of Black Founders, an organization that aims to increase the number of successful black entrepreneurs in technology, described the mindset of underrepresented minorities. Rather than staying in workplace where they don’t feel welcome, employees are “choosing smaller teams with visible diversity in the team or eschewing it all together and becoming entrepreneurs who can build their own teams that are more reflective of their personal values.”

Startups not only lose out on invaluable talent, but also miss consumer experiences, innovative ideas and potential markets that have a significant impact on the bottom line.

  • According to Nielsen, 67% of Whites & 62% of Latinos feel African-Americans set the trends in today’s modern culture. That’s implying that socially, over 50% of the “general” market feels that urban culture sets trends.
  • Women-led tech companies achieve 35% higher return on investment, according to research done by the Kauffman Foundation.
  • Organizations that include women in top management achieve 35% higher return on equity versus their peers, according to research done by Illuminate Ventures.

Prioritizing Diversity

The ingredients for an inclusive workplace culture focus on both individuals as well as the systems in place. Lewis defined the formula for success: “The real change happens when there is diversity AND inclusion…no matter how confident they are in their abilities, the barriers that exist for others’ perception of them creates a culture of isolation and fear in the workplace.” The short list of guidelines below shares what startups can do to be truly disruptive in diversity and inclusion.

  1. Policies and accountability: Startups should have a clearly defined and communicated zero tolerance policy for racism and sexism in the workplace that is enforced from the top, not just entry-level or human resources. Employees should feel confident about identifying and reporting bias and microaggressions and supported by training to raise awareness of bias.
  2. Walk the talk: Visibility matters. It’s not enough to focus on diversity only for entry level roles or roles that function only behind the scenes. Employees often assume, often correctly, that career advancement is not possible when underserved minorities are not found in executive roles that are visible inside and outside the company.
  3. Mentorship and coaching: Many larger, more established startups offer more formal mentorship and coaching opportunities that can be helpful for building expertise and supportive networks.
  4. Shows of support: Sponsor and participate in cultural events both inside and outside of the company to demonstrate appreciation for diversity and expand social networks for future recruitment.

If a startup has few, or even none of these measures in place, employees will have to be proactive with professional development by taking on opportunities for visibility and experience. Informal social opportunities with senior leadership and other events outside the workplace will offer opportunities to build networks. Lastly, underrepresented minorities often have to be their own biggest advocates and share successes and ideas where possible.

How will we know if measures to build meaningful diversity are successful? Flores wants women and people of color to be highly visible in tech “so that they can inspire and motive the next generation of entrepreneurs,” adding that “You can’t be if you can see.”

Networks, Networks, Networks

Retention of underrepresented minorities in tech will continue being an uphill battle, especially within startups that don’t see the value of prioritizing its role in workplace culture. For underrepresented minorities who are looking for an exit strategy toward entrepreneurship, research and preparation is crucial. Lewis advised that prospective entrepreneurs “must also realize when their ideas have reached the limit of their own expertise. That is when the network of advisors, mentors, and other trusted colleagues become paramount.” Woodard echoed the need for networks.“Entrepreneurs from traditionally excluded communities need access to networks. And not that “oh, let me introduce you to this other black person or woman in tech that I know.”

While networks such as digitalundivided are expanding access to advisors and mentors through programs such as the FOCUS100 conference and the National Minority Angel Network and the Pipeline Fellowship aim to increase access to funding, entrepreneurs from marginalized communities will need to accept and learn from failure. Only 1 percent of seed- and Series A-backed tech companies have a black founder and less than 1 percent of venture-backed startups are founded by Latinos. Akin to Sheryl Sandberg’s advice “don’t leave before you leave,” prospective entrepreneurs need greater access to advisors, mentors, and capital to turn big ideas into reality.

Real disruption will require individuals and companies alike to understand their role and commit to making changes to support meaningful diversity.

How can you contribute to supporting diversity in tech?

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