3 Ways (and 1 Huge Context) to Break the Investing Spiral that Works Against Diversity in Tech

Estimated reading time: 5 minute(s)

It was a sunny Saturday morning and five alumni of a program renowned nationwide for its progress in closing the technological gap were evaluating the scope of the organization’s future. We sat there staring, intensely trying to concentrate on the root of the issues we faced.

It wasn’t necessarily that we didn’t understand what needed to happen. We just wanted some sort of guidance. And that day, we got an idea on how to move forward: more word-of-mouth.

People of Color in tech has been a hot topic, recently. It’s gone from being discussed as a pipeline issue, as highlighted in a recent Venture Café St. Louis talk called “Pain Point in the Tech Pipeline” which was presented by WiserU founder Kathy Bernard, to the realization that it’s majorly been a racial and gender-based discrimination issue.

Opening slide of presentation on “Pain Points in the St. Louis Tech Pipeline: Solving the shortage, Getting talent hired, Making St. Louis a tech hub” hosted by WiserU creator, Kathy Bernard at Venture Café St. Louis on August 9, 2018. (Photo: LaShana Lewis)

Fast forward to future consumers. As equality and equity slowly grows in the economic sphere, more people who buy the things we need will look like an array of rainbowed humans. So, to design things for those folks, we need to focus in on the main point of production: no one is going to buy your material if it doesn’t work for them.

Society is Entering a New Historical Moment

For many years in the United States, most companies focused heavily on the white, male customer. Organizations spent millions trying to make sure that the products and services produced fit their needs. They employed thousands of white males to check and recheck the usage of their wares to ensure that the standard purchaser would be happy with the end result.

Now, companies need to focus on a new consumer base. However, their products and services are still largely maintained, created, and produced by the same initial employee base.

White men hire and refer other white men to perform higher tasks and duties within a company, and the landscape seems to only be marginally dotted with the occasional person of color, woman, or person with a disability. And oftentimes it seems to be only for the sake of public relations and ‘optics.’

There is a much more important scope that’s missing. As the buying populous changes, so should the producing entity’s structure.

Think of it as the phone. Although the old rotary dials were fun to use in my youth, the old school landline antiques are now being replaced with their mobile relatives. Today, most people don’t even bother to get a landline phone number when they move to a new home. And I haven’t seen a phone book delivered to my address in years.

Imagine what would happen if we still employed the same people, doing the same manufacturing processes to produce rotary phones. By now, the consumer base would have dropped off significantly. Who would be left to buy any of their products, let alone the services that matched them? Probably people who are still either emotionally, mentally, or physically stuck in the same place they’ve been in for years. The new, growing populous has moved on to something better, more convenient, and multifaceted in its use.

Technology Always Has to Adapt to Cultural Change Anyway

So, to keep in employ the same people who are stuck developing the same old technology as the world and regions progress doesn’t make common sense. The future – and the writing – is on the wall with such changes. However, one thing I can guarantee is that either those people are long retired, or they’ve retrained themselves to another industry.

With that in mind, we explore more about why industries stay stuck in this mindset, even though they clearly have seen the benefits of progressing toward new technology, pivoting, or simply shutting down their old systems in favor of innovative ways. One area that’s seeing a significant impact in blind spots is within the startup technology scene.

We’ve all seen the issues with facial recognition programs not acknowledging a darker-skinned person’s face in favor of a much lighter one. Or that female crash test dummies weren’t used regularly with the National Highway Traffic Safety Administration until 2011. Many forget that the Americans with Disabilities Act (ADA) didn’t exist in law until 1990, and to this day, there are still struggles to ensure that public spaces are accommodated.

BioRID (male-bodied) and EvaRID (female-bodied) crash test dummies. (Graphic: Fred Chang, Humanetics)

What each of these issues have in common is that they existed because there were no people on the creative side with a strong enough voice to make a difference.

A house is created with steps under the assumption that everyone can use them. Fun animated filters are added to social media platforms without the ability to identify dark-skinned facial features in mind. Cars are designed for the modern male, while protection of feminine bodies are left out of the equation.

Let’s Put the New Consumer Base at the Heart of Our Investing Strategies

So where does that put the latest designers and leaders of the technological revolution?

Unfortunately, at a crossroads. Pull up any shiny new startup’s team page and you tend to see a sea of fair-skinned, masculine faces with an awesome title underneath.

The founder is often pictured as a 20-something who has a slight, gruff five o’clock shadow and a past as an employee somewhere within a major Fortune 500 industry leader. The same goes for the C-Suite executives and top engineers on their team. Occasionally, a brown face makes it through as an advisor, ancillary board member, or non-technical role.

For many minorities, this signals that the company either didn’t search for or didn’t care to include them in its recruitment strategies. Many seemed to rely heavily on its team’s common connections with friends, associates, and people in its immediate circle.

However, if a company is to design for a larger-scale economy, what ensures that its product or service will make it out of the test phase?

Enter in the venture capitalists (VCs). People can’t run startups if they don’t have the funds to do so. And most of the people running the most popular way — next to family and friends — to raise money look just like the founders you see at local tech innovation fairs.

How do we break the cycle?

Here are three ideas to help stop the spiral:

1. Diversify Your Startup Team

From the get-go, make sure that whoever you’re collaborating with looks, acts, and thinks differently than you. A January 2018 article from TechCrunch highlighted that diverse teams are still good for business according to a follow-up to McKinsey & Co’s 2015 study titled “Why Diversity Matters.”

Consider going outside your realm and finding that developer, engineer, or systems analyst that didn’t go to the same school as you or come from your hometown.

2. Show How Your Product or Service Impacts Diverse Markets

There are many studies out there proclaiming to keep diverse audiences in mind. However, influencer marketing platform company Revfluence says in one article that appealing to both the African-American and LGBTQ+ markets, alone, can result in a huge shift in spending for these demographics. Both are known to be tight-knit communities, according to the post.

Revfluence also highlights that increased revenue and protection to brand reputation can also be benefits for these markets, ensuring that each is aimed differently and specifically.

3. Seek Out Investors Who Want a Diverse Portfolio

A new trend happening in the VC world is that companies are releasing funds specifically targeted toward minority-based founders or companies where more than 50 percent of their founders are minorities. These startups, referred to under the term of “underestimated” by some, are looking to make a dent in the innovation world.

They are hedging bets that their progress in this realm is going to outlast old, stagnant models that typical VCs invest in and lead to a steadier financial future for their stakeholders.

Remember that most startups are now competing worldwide, instead of regionally. Long gone are the days of the mom-and-pop that only had to rely on the fact that the nearest competitor was two towns away.

Now, that competitor could be on the other side of the globe, drop-shipping to a front door near you. Keeping your team more diverse and seeking out partners to help you think of your wider audience base can help your company excel and overcome the possibility of being phased out before it’s had time to really begin.

Don’t forget to show that your product or service targets a diverse market. People only buy what they see themselves in.