There are noodles of benefits to having a diverse workforce, but, as inBeta founder James Nash points out, you can’t simply take your homogeneous workforce, add diversity, agitate, and hope for the best.
Often something subtle stands in the way of diversity in startups: companies depend on employee referrals in the beginning, but if the composition of a startup is not already diverse, referrals will not change that.
That’s for startups. In the world of venture capital, things are more pronounced: a warm introduction is the only way to reach investors at many venture capital funds. That’s great for people who are already addicted to the startup ecosystem, but you don’t have to look long to realize that this isn’t a very diverse group of people.
“We would love to hear from you. The best way to reach us is through someone we know mutually.” The website of a VC firm
For many companies, employee referrals are one of the most important ways to attract new talent. That’s all good until you consider who probably knows your newest addition best. You don’t have to walk many laps through that particular mill until you end up with a relatively homogeneous group of people with a similar education, socio-economic background and values.
If that’s what you’re optimizing for, great! Well done. If not, maybe it’s time to stop being lazy and wondering why hot intros are still common.
My question has long been: What are you optimizing for by relying on referrals? If you spent some time thinking about that, I bet you’d discover some uncomfortable unintended consequences.
Let’s talk about what we can do about it.
The situation in VC
If you read guides on startups or fundraising (including mine, although I also try to cover cold emails and cold intros), you’ll find that you need a “warm introduction” to meet with a VC. to get. Given the above parallel with hiring, that is a problem.