Is your startup diverse enough? A 5-step plan to get on track

“Start as you mean to go on.” It’s an adage long applied to life and work’s most critical habits. Whether sleep-training an infant, getting into shape, or keeping up with the breakneck pace of a tech startup, the tactic holds. Commit to doing it right from the start, because it’s hard, if not impossible, to change or add core habits later.

Unfortunately, despite sincere efforts and promises, tech startups are having a hard time holding to this adage when it comes to diversity and inclusion.

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The promise of diversity is borne out in study after study that shows increased success and profits when companies and teams are diverse. The big guns have signed on to the commitment: Microsoft, Facebook, Google, Dropbox, and Etsy now publish their diversity data and incorporate diversity and inclusion into their core strategies. But unconscious biases lurk beneath surface intentions, and cultures are notoriously hard to change once established.

Research shows that startups struggle with diversity culture as well – and the numbers are not improving. In the U.S., only 18 percent of startups have at least one female founder. Diversity data disclosed by prominent startups Slack, Airbnb, Dropbox, and Pinterest revealed that racial minorities are underrepresented; across the four companies, African Americans make up 1 to 4 percent of employees, and Hispanic and Latino employees represented 1 to 6 percent.

In my current role, I speak to hundreds of founders, and the challenge of diversity and inclusion comes up frequently. Startups, on the whole, truly want to be diverse both at the start and into the future. The question is how to “do” diversity when you’re running on low cash and no sleep, you urgently need to ship your beta product, and you’re on the receiving end of hundreds of “nos” from prospective investors. In this sprint for survival, diversity seems a luxury better deferred for later.

What harried founders don’t realize is that they may not be able to make the change later – diversity is encoded in a startup’s DNA in its very earliest stages. With each phase of growth, it gets harder, not easier to change that DNA, until, at scale – like the tech giants – it’s almost impossible to move the needle.

What early-stage startups need is a playbook for how to “do” diversity, from the start – to encode diversity in their cultural DNA for the long run.

So, if you’re an early-stage startup, here are the five places to focus now:

1. Review the Cap Table. Be honest and transparent about who holds the power and profit.

Who has the power to hire and fire? Who’ll make the money when the startup exits? The Cap Table holds the answer. It’s where owners are listed and their percentages of control and profit are spelled out clearly. It’s sensitive data, and for good reason — it’s by definition a zero-sum game. Given that, how do diversity and inclusion play in? A non-diverse Cap Table may be an early red flag that power is concentrated and diversity has been given only lip service. Take a close look at how diversity is represented in not just who has an ownership stake but who has the greater equity shares. And as the business develops, don’t forget to reexamine the Cap Table with an eye to rebalancing ownership diversity.

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2. Assess your “About Us” page. Calculate “visibility ratios.”

Ask a stranger or friend to glance at your website’s “About Us” page. This is the first place diverse candidates look, and it speaks volumes. Even when a team is just 5-10 people – or especially then – for underrepresented minorities, the ratios jump out. How many women and people of color do they see, especially in key technical roles? At such small numbers, these early ratios can seem inconsequential, as they can swing 10%-20% on a single personnel change. In fact, that’s the point. Too often that page is non-diverse, or perhaps one token minority is represented. Diverse candidates from the outside don’t want to be a token. Consider inclusion with your earliest hires; it’s easier to attract great candidates to make an impact early, but it gets more difficult with each passing day.

3. Remove blockers. Source broadly. Screen blind.

Inadvertently, a number of standard hiring practices block underrepresented candidates from breaking through. Pay attention to job descriptions that contain biased language. For example, the term “rock star developer” can turn off female candidates. Before posting, neutralize your job descriptions by running them through an algorithm-based tool such as Textio.

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Once descriptions are written, be intentional about where you’re posting them. Go beyond your friends and school, casting the net wider to groups that have access to diverse sources of talent, such as the African American Employee Network (AAEN) or the National Center for Women & Information Technology (NCWIT), where you can network and post job listings.

Finally, be aware that screening resumes is a highly biased process. Blind is best. Remove evidence of gender or race (including names) and run skill “auditions.” Services such as GapJumpers can help.

4. Look at team composition. Avoid clichés. Diversity matters within every function.

Top-level ratios may seem reasonable, but scratch beneath the surface. An all-male engineering team alongside a few women in community management and marketing is a well-worn cliché. Research shows that gender-balanced teams are more likely to experiment, be creative, share knowledge, and fulfill tasks. Your product will perform better when diverse hands across the business build it.

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5. Support your culture with the right events. Ask your team what they want, and make everyone welcome.

Employee events help define your company’s culture. Pulse-check them: are they limited to baseball and beer pong? You may be excluding a slice of people. Ask your employees what they’re into and design events around their interests. Also ask them to take turns organizing, instead of just relying on the most vocal volunteers to make plans. They may come up with great activities you’d have never thought of.

Workplaces don’t become inclusive unless companies invest in diversity — and that starts at the top, from the start. Every minute counts. Make a commitment to diversity and inclusion at your startup now. It will pay dividends down the road.

Tereza Nemessanyi is an Entrepreneur-in-Residence at Microsoft and a member of the National Center for Women & Information Technology (NCWIT) Entrepreneurial Alliance.

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