In the modern age, diversity is a crucial societal component. Without it, people risk marginalization and missing out on opportunities purely based on natural circumstances. Startups, as leading innovators, have a duty to show as much inclusivity as possible. But how can diversity itself help support venture growth?
Reflecting a Changing Society
Startups that strive for and maintain a diverse makeup stand to represent a society that is no longer purely ‘white male’. Crunchbase advises that ventures bucked significant trends between 2009 and 2019. In that decade alone, the number of female company founders doubled. This number is still relatively low – at 20% - but the journey thus far reflects society’s changing attitudes.
Innovators need not only show that they are at the cutting edge of technology or insight. They also need to show they are willing to go beyond traditional business makeup. This way, marginalized voices can benefit from end products with varied understanding.
Inclusivity Improves Performance
Intriguingly, statistics appear to show that inclusive, diverse companies tend to convert better on revenue. These companies, according to research, tend to exceed their revenue targets by double.
Some suggest that diversity goals are the key to success. By establishing goals within a business to ensure marginalized voices are heard, monetary bonuses can boost productivity. The same, theoretically, could apply to product quality.
Accountability is Inspiring
Accountability for issues such as inclusivity in venture hires and hierarchies are likely to be inspiring. The perception that most companies operate under a white male over the age of 40 is widespread. Therefore, a refreshing change of pace, in the minds of mainstream investors and buyers, may ensure wider take-up in future.
Statistics linked to research mentioned above show that, time and again, diverse companies experience strong sales. A diverse company will need to hire openly based on neither prejudice nor positive discrimination. Buyers may also feel that accountability for diversity is honest and, therefore, worthy of investment.
Different Perspectives = Well-Rounded Innovations
There is much to be said for inclusivity based on experience. Diversity does not just affect gender, race or orientation. It also accounts for age and background. Therefore, generational insights, as well as life experience, may help to enhance service delivery or product design.
This, of course, will vary with specific cases. However, it is arguable that one of the best ways to gain insight into particular demographics is to work with them actively. Corporate assumptions can lead to embarrassing and sometimes reputationally damaging moments.
Startups and Diversity: The Future
Ultimately, our society is only likely to continue getting more diverse and more complex. Therefore, all companies, and investors, need to be open to change. Failure to adapt or to be open to change could put innovators far behind their goals.
Diverse startups and society-challenging companies may be easy to find through databases such as Fundz. Investors looking for firms focusing on inclusivity should not have far to look in 2021.
Sources
https://thestartupchat.com/ep219/
https://diversityq.com/a-practical-guide-to-diversity-and-inclusion-in-startups-1510036/
https://www.weforum.org/agenda/2020/08/diversity-gap-startups-gender-ethnicity/
Topic: Startups
