In the past few years, the lack of diversity in the technology startup ecosystem has become a well-known point of rightful criticism. The collective voices of women, people of color and LGBTQ founders and VCs has given this issue national attention, as well as exciting solutions.
From Backstage Capital to SoGal Ventures and many other firms, investors and organizations, diversity in tech is not only becoming more common but also finally recognized as a necessary part of a proper business model.
However, beyond business – what about the technology itself?
There has been much discussion of diversity in tech in general, and of course, having people from varied backgrounds/experiences – especially those who are committed to equality – in all companies and organizations is important.
Perhaps now is the time to begin discussing where having a variety of experiences could have the most impact – not only for building better technologies and businesses, but also for building better societies as a whole.
We have already seen examples of how AI led and built by predominantly white, male teams can cause financially expensive and socially dangerous results. As such, many investors (and even governments) are recognizing that diversity is key in these influential technologies.
On top of this, AI is very likely to have the most impact in our daily lives, and therefore generate enormous revenue for its creators. It’s important to consider that diversity investing with a focus on emerging technologies will lead to faster growth among the number of diverse founders who exit and invest in diverse companies themselves.
“Pattern recognition is ‘I’m going to invest in what looks like me and I’m going invest in what is successful,’ which is problematic because currently, our most well-known success stories are men,” comments Dr. Silvia Mah, Executive Director at Stella Labs and Co-founder at Ad Astra Ventures.
“So that’s why this perpetual system of white males investing in white male founders exists – they see their younger self or they see a young Mark Zuckerberg, but they don’t equate success to a woman.”
A 2017 study from Harvard Business Review found that investors use promotion oriented questions (“how big is your market?”) when meeting with male founders and prevention oriented questions when talking to women founders (“how are you going to mitigate risk in your business?”).
Dr. Mah recently organized the Women’s Venture Summit in San Diego to connect female founders and investors, as well as educate angel investors on the existence of bias.
During the investor education segment of the summit, Dr. Mah and the Stella Labs team spoke to this issue of promotion versus prevention. “Most of the investors at the event were women and even women ourselves have bias.”
“After the first simulation with female entrepreneurs, we introduced our framework of nine ways to combat that unconscious bias as an investor. The investors then heard a new set of entrepreneurs and both sides (entrepreneur and investor) said they actually asked different questions after recognizing their own bias.”
Dr. Mah is an AI investor herself, one example investment being female-founded Vivid Genomics.
“I had a huge interest in Vivid Genomics because there is a robustness of an AI platform. The CEO is not a technologist but she has a deep understanding of AI – that is a trend I am seeing.”
At the Women’s Venture Summit, Mah’s AdAstra Co-founder, Vidya Dinamani, spoke to the specific value diverse founders bring to the emerging technology startup ecosystem.
“In order to be able to identify what the problem is, you need empathy. There are so many untapped opportunities because we have not had the kind of diverse founders who represent the ability to solve unmet needs – the ability to interpret the world and it’s data to best approach a problem.”
Diversity in a founder’s team is also something Dinamani and her partners look for in a strong company.
“We encourage CEOs to surround themselves with people that do not look or think like them. Now, you have to deliberately go find those people because it is harder, but it’s important to find people who have the same passion and a different perspective.”
Dinamani continues, “This way you can go into an investment meeting and say, ‘I’m building a diverse team because this is the team that’s going to build the right product.’ – that’s the team that’s going to take off.”
From an investor standpoint, no matter the makeup of your team, if you are an AI company what counts first and foremost is how the technology is applied to solve a problem.
As Stacey Feinberg of 33 Capital explains, “Start with the problem first. Ask ‘how can I solve this problem?’ Because if you start with ‘how am I going to build an AI company?’ – that just won’t work.”
That being said, investors have observed biases from their peers when it comes to diverse founders, especially if they are building a high-tech company. “If it’s a woman or a person of color, the investor is more likely to ask, ‘how could you possibly know anything about machine learning?’ There’s a lot of skepticism about the intelligence of non-white or Asian males,” says Terri Hanson Mead, angel investor and author of Piloting Your Life.
But perhaps the best argument to quell this biased thinking is that diverse teams actually improve the competitive advantage of the technology itself.
“I think your background has a very clear impact on what you build,” says Brennt Baltimore, Senior Associate at Greycroft Ventures.
“When it comes to AI, efficacy and accuracy are probably the most important factors. If you’re not seeing minority faces, from a data perspective, you’re lessening the quality of the dataset.”
Baltimore adds, “At the end of the day, this is about building huge companies that disrupt and add value to the industry. The difference in accuracy between 90 and 95% is a big difference in AI – and more diverse backgrounds on the team could be what sets your technology apart.”
Baltimore is optimistic that we’ll see more businesses built by diverse teams that will, in turn, improve the accuracy of existing algorithms.
While there is still much discussion to be had and action to be taken – women, LGBTQ and PoC founders and technologists in AI are not without their advocates.
As this article represents, there are a growing number of startup investors who are not only excited by the transformations that AI can achieve, but also recognize the competitive advantage of AI built by diverse teams.
read more at http://www.forbes.com/entrepreneurs/ by Annie Brown, Contributor