This article first appeared in the Union Leader in August 2021
IN A PREVIOUS “Ask the Expert” column, Roy Wallen shared excellent advice on the complementary positions needed to set up a technology company for success.
Having diverse skill sets creates what I like to call the multiplier effect. Lack of redundancy means more can be done and, in the early stages of a company, this can be the difference between growth or failure.
But for startups, diversity should not be limited simply to skill sets. Incorporating diversity, whether that be gender, age, social or ethnic backgrounds, at the infancy of a company can have a dramatic impact on its success. Findings from a diversity report published by The McKinsey Company show that the more diverse a company is, the greater the chance it will experience financial returns higher than the industry median.
Here a few reasons why I believe that happens.
Culture add vs. culture fit
When I think about hiring, I think about a great blog by our friends at Mentor Spaces that talks about the difference between culture fit and culture add. When hiring someone new, it is important they fit into your current culture. Someone that doesn’t is like nails on a chalkboard. For a startup, that distraction can be crippling.
But while culture fit is important, it is equally important they add something to your culture.
Sharing a new perspective can change the lens from which we view the world. That can make a huge difference when you’re building a company. If you ensure you’re building a corporate culture that seeks out that value add and then you truly listen to those new voices, you will build a company that can have a real impact.
Creative problem solving
A startup is really just a fancy vehicle in which to solve problems. At an early stage company, that is what you spend most of your time doing. Solving problems is hard. Sometimes you need to get creative. I work with a great company called Pixaera that runs an immersive learning platform. A huge differentiator for them is that their entire team is not only remote but living in different countries around the world.
“We help people learn,” they say. “People learn in different ways. We understand that and have incorporated into the way we think about the product we’re building.”
Having a completely homogeneous workforce limits the experiences and perspectives you have to call upon to help solve those problems. Additionally, the fun of startups is the potential to create something revolutionary. If everyone is thinking the same way that feels more like a recipe for an echo chamber than challenging the status quo.
The network effect
I am a firm believer in the power of marketing and building an audience. But here’s a dirty secret: Startups are born off their employees’ network. The first five to 10 customers are usually identified and closed through that network. Having as wide a net as possible to cast increases your likelihood of catching something. While this is crucial in the very early days, it is important as you scale as well.
Finding talent is so pivotal to a startup’s success. Having as rich a talent pool to swim in will have a huge impact on your ability to keep moving forward. Prioritizing diversity early on also has a multiplier effect that will lead to more and more natural diversity as you grow, which, for all the reasons mentioned above, will have a hugely positive impact on your organization.
I always like to say that America is one of the most successful startups of all time. It has flourished and truly changed the world because it was a melting pot of people and ideas, which allowed it to think differently, innovate and solve problems in a previously unimagined way. I figure if that approach worked for our country, it’ll probably work for our early-stage companies as well.
Adam Coughlin is the co-founder and chief marketing officer of York IE, a vertically integrated strategic growth and investment firm.