The Startup Diversity Paradox: When Pushing Boundaries Falls Short

Ever since the term became popular in the 1900s, startups have been seen as the epitome of disruption, as well as being known for shaking up entire industries and changing the way we think about innovation. Over the past decades, startup culture has developed around the idea of pushing boundaries, taking risks, and challenging the status quo. Unfortunately, there is one area in which startups have failed to disrupt as effectively: diversity. 

Data has proven that diversity has the potential to be more than a buzzword, it is a key factor that will affect any organization’s chances of success. Research has shown that companies with diverse teams perform better financially and are more innovative. A report by Boston Consulting Group found that companies with above-average diversity scores performed 19% better when it came to innovation. Similarly, McKinsey & Company found that diverse companies were 25%-36% more likely to outperform less diverse companies in terms of profitability.

Startups that prioritize diversity in their hiring practices are also more likely to attract a diverse pool of customers and investors, which helps them scale and grow their business faster. As Shabnam Safarzadeh would say “Diversity brings perspective”, which is why a diverse team can also help startups seeking to better understand their customers’ needs and preferences, leading to more successful products and services.

The link between greater representation and the likelihood of outperformance is clear, which is why the idea of startups not prioritizing diversity is so perplexing. Startups should prioritize diversity from the very beginning, not just as an afterthought. This was the topic of discussion of the “A New Push for Diversity in Funding Tech Startups” panel, which took place during this year’s edition of Grit Daily House on SXSW.

The panel saw Anne Wolfe-Andersen, Co-Founder & Chief Mindset Officer at The Bravery Strategy; Shay Safazadeh, Co-Founder & Co-CEO at Advanced eClinical; Shabnam Safarzadeh, Co-Founder & Co-CEO at Advanced eClinical; and Kori Hale, CEO at CultureBanx have a frank and insightful discussion on the topic of diversity in the startup world. From personal experiences leading with inequality to tips on how to deal with it in an increasingly competitive startup ecosystem, the panel was a masterclass on a topic often ignored.

Having been an executive coach and consultant for more than 7 years, Anne co-founded The Bravery Strategy earlier this year with one purpose in mind: helping entrepreneurs and leaders become the best version of themselves. Anne’s team has helped hundreds of clients to expand the way they work and live, helping them disrupt their own realities and not only their respective industries.

Shabnam and Shay Safazadeh founded eClinical Training back in 2020 to help health science undergraduate and post-baccalaureate students obtain nationally accredited certifications. Their interest in the healthcare industry came from their own experiences after having completed a Bachelor’s degree in Nursing Science and Biomedical Sciences respectively, which gave them unique insight into the challenges these students face.

Kori Hale is not only the CEO & Co-Founder of CultureBanx, a media company specifically for black professionals, but also a founding member of the Black Innovation Alliance Group. She is also the first black woman to anchor live from the New York Stock Exchange floor and one of the most influential activists in the startup space.

If you want to learn more about the challenges underrepresented groups face when it comes to founding startups, raising funding, and getting recognized, as well as what having a diverse team can do for a startup or business, be sure to watch the recording of the panel discussion on YouTube.