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Posted On November 1st, 2017 by Crowded Ocean

The path to diversity at a startup requires 3 phases

Congratulations to the rocket ship startup Slack for joining giants like Salesforce, Facebook, Apple, and Amazon in taking a public stance on diversity hiring practices. Like the giants, unicorn Slack has published the breakdown of their “diversity numbers” to illustrate their goal and progress towards building inclusion and diversity in their company.

Survey data show better decisions come from well-informed, diverse teams. Diverse teams make better decisions because different backgrounds and ways of thinking lead to better outcomes. And, bringing people together who have different ways of thinking and problem-solving skills can foster an environment where new ideas can prevail.

Building diversity at technology companies in Silicon Valley is a hot topic. But in our world of early-stage startups, we think a broader definition of diversity and a different approach (and some cold pragmatism) is needed to get there.

If your startup is funded at the seed-round or Series A stage (or even bootstrapped like an early Atlassian), we believe the goal of building a diverse team is really a shiny object on the horizon–like profitability–that founders need to see as a longer-term goal. And, startup founders should adopt a multi-phase plan to get there.

Phase one: seek out misfits and oddballs in the early days. It’s a given that your startup will struggle in the talent wars against companies like Google, Apple, and Facebook that can offer richer compensation packages. So in the beginning, early-stage startups should think about seeking out candidates who “think outside the box” (and are risk takers on compensation) to bring a diversity of thinking to the team, regardless of their gender or ethnicity.

One of the nouveau practices among corporate HR policies today is the idea of blind hiring. The effort to diminish the influence of a job applicant’s resume and to focus instead on their talents is in vogue to try to rule out bias and to foster more diversity in hiring. We would go a step further and recommend that startups seek out candidates with non-traditional career tracks who attended non-elite schools as well as job applicants with quirky personalities. To advance your disruptive solutions, a few disruptive-thinking employees (especially in the beginning stages) might just help you retain the new and creative thinking you need to achieve your goals. The ethnicity and gender of those misfits is a completely secondary consideration in the early days of every startup (where the mortality rate of startups is about 75 percent.)

Phase two: institute “the Rooney Rule” after the second year of life. Once you have (1) hired your founding team; (2) put your product in the hands of early customers, and (3) focused your team on customer development, re-think who you want at a manager level in your company. Now is the time to focus on building gender and ethnic diversity, not before. We recommend mandating that every short list of candidates for a position that manages a team include female candidates and candidates of color, aka The Rooney Rule. Be like Slack and make it an HR policy.

  • Part of phase two includes seeking out an equal blend of experienced employees and newbies. The only way to ensure you have a team that knows how to build and manage an operation at scale is to hire employees that can bring first-hand experience of best practices and processes at a large company. In our view, this is an aspect of diversity. In other words, startup experience is great, but if that’s the only experience a candidate brings, pass.

 

  • Stick to the no-assholes rule. You can call them jerks or idiots, but the label “asshole” seems to need no interpretation among a team of startup founders who are striving to build a company. We proclaim “no assholes” as a universal guideline for all emerging companies to follow. We would go so far as to state it as HR policy, right along side the Rooney Rule (see #3 above.) Especially in the early days, there can be no assholes on your team. Because assholes will often hire their own kind and your team just can’t afford that.

 

  • Decide up front who gets to be work remotely and who must be on site. To state the obvious, making your “virtual” policy explicitly in the beginning will help your team vet the right people for the right roles (which is part of building a successful and diverse team.)

Phase three: celebrate diverse cultures to make “going global” an early reality. Startups like Snowflake Computing (Sutter Hill, Redpoint) and Sumo Logic (Greylock, Sutter Hill) were founded by immigrants who, from day one, embraced their own ethnicities and cultures. The founders and their early hires reinforced diversity by sharing their own cultures and histories at internal company celebrations, office décor and even in company blogs.

 

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