Not really unexpectedly, the startup environment is not very diverse but rather homogeneous. Let the numbers speak: Let the numbers speak: 16 % of founders in Germany are women and roughly 75 % of VC money goes to male-only startup teams. Many companies, advisory boards, political parties have picked up these facts and want to contribute to change, for example by offering startup accelerator programs for (gender) diverse startup teams (Grow F, SpinLab Summer School), VCs that especially support female or mixed teams, quotas or scholarships. It has even become a trend in many industries.
This is due to the fact that there are several myths and misconceptions around gender diversity. Regardless of the many aspirations to change this situation, they prevent startups from be more successful, for instance in terms of performance and receiving VC money. In this blog article, we are showing you the most common myths and misconceptions that might stand in your way to grow as a startup team.
Disclaimer: This article focuses on gender diversity. While gender is not the only area of unequal distribution of power and opportunities, in the startup world the gender gap is especially large. In this article, when referred to women, cis, trans women and non-binary persons are adressed. The terms “men" and "women" are used a lot - these are of course averages or vast majorities and cannot be applied to every individual.
Let’s get started!
Myth 1: “For me as a founder, gender and other labels are not relevant. Having a strong team is more important than checking boxes.”
Telling ourselves and others that we don’t discriminate for example when choosing employees or co-founders sounds great, but it is scientifically proven that this intent alone is not realistic. All humans have unconscious biases, that helps us navigate through the world. On the downside, these naturally occurring biases lead to discrimination and decisions that might not be beneficial to us or our company. There is similarity bias that makes us choose persons as co-workers that are similar to us and simultaneously more likely to decline persons that might be different to us in various regards, which solidifies the gender gap. And even if we do hire for diversity, there is a big chance we expect from these persons to fit into the homogeneous structures and implicit rules we already have created. The solution is not to hire diverse persons but teach them to act in the same structures that we actually want to improve. Also, hiring for skills and cultural fit doesn’t have to undermine diversity.
The famous Howard vs. Heidi study finds that CVs handed in by women are being associated with lower likability than similar CVs handed in by men. Women and men have equal cognitive capacity and even in male or female connotated behaviors there are generally more similarities than differences. In fact, with this unconscious behavior promising co-workers and opportunities are missed. On top of that, diversely assembled startups are more likely to be successful and are more resilient. We’ll get to more on this in myth 3.
So if there is no gender difference in intelligence and men and women are on average equally skilled, why do significantly fewer women reach high job positions and are less likely to apply as co-founder? Boys and girls usually grow up with different (gendered) expectations. We teach boys to not be weak and have (career) aspirations while girls are taught, starting in early childhood, that looks are their most important asset, they are expected to “care” for others (than their own dreams for example) and tell them “It’s ok if you are not good at math (or other aspects of life), girls have other strengths”. Apparently the outward appearance of women also plays a role when receiving VC money, while it doesn’t for men. This way, the aspirations and efforts of girls are often invalidated from an early age. These different treatments cause different (self-)images and self-fulfilling prophecies that are carried on through generations, not only in individuals but across society.
Therefore, by saying “I don’t see gender” we overlook the different gender treatments by society and resulting disadvantages that are being faced by certain groups right from the start. And we are further promoting the currently existing inequalities.
So what’s the solution? Women and men generally have the same cognitive capacities and potentials, and we should keep that in mind when building our team (and beyond). We should be aware that we are naturally biased and should remain open to people that are “not like us”, even if it takes some more effort at the start. Consider using hiring tools or standardized job interviews to reduce biases, consider registering your company to Girls’ Day, visit workshops or events on these topics and educate yourself on how this topic is relevant for your startup and what you can do to improve your company’s work environment.
Myth 2: “Nobody wants to be the woman who got their position through the quota system!”
As described in myth 1, there are structural disadvantages in and towards professional life that women, among other groups are facing. When these groups receive a little push - that seems like a no-brainer. And just to clear this up from the start: Nope, quotas are not a perfect tool or the solution for inequalities. Political parties, corporations and advisory boards sometimes choose this tool because it delivers fast results, has a high visibility and the results are easy to quantify. Therefore, it is a very hands-on strategy and might in some ways be actually better than just saying “ok we try something that will hopefully have an effect in the distant future” (although structural problems of course also require long-term solutions).
So let's look at what impact quotas have besides the obvious changes: A study of DIW noted, that quotas in advisory boards can have secondary positive effects. Quotas in advisory boards have led to more support for women on other job levels in the same companies, since companies usually want to recruit the advisory board members from their own environment. This way, the quota led to an additional support provided to women to prepare them to enter advisory boards. This mechanism addresses and disproves the criticism towards quotas bringing “unqualified” persons to higher positions. It also shows that the right development and support is indeed possible to provide.
Another aspect that is worth mentioning is that in Germany, being a “Quotenfrau” (woman that entered a certain space through a quota) is especially negatively connotated, while the perception is totally different in the US for instance. Tech-Founder Aya Jaff stated in the de:hub Industry Talk in September 2021, that in the US, she did indeed encounter a welcoming atmosphere for instance at events that she originally entered through a quota and was given the chance to grow professionally and is now among the Forbes “30 under 30”. These examples show that it is worthwhile to once step away from the perspective that quotas are inherently bad and on the contrary can be very helpful in terms of providing opportunities to persons who grow to be very successful. For a small startup it sure doesn’t make any sense to introduce a fixed quota, but we should think about supporting employees that might have had other starting positions than us.
Myth 3: “gender diversity is not really critical to the performance of my company"
“It is too sad that women and other groups are disadvantaged, but it is not my fault. For me, things are working out perfectly the way they are and therefore, why should I invest thought and time in this issue?”
Next to the moral questionability of knowingly excluding people, I have some numbers for you: Several McKinsey studies have shown that gender-diverse companies are 21 % more likely to achieve above-average profitability than less gender-diverse ones. Even more so with diverse companies in terms of ethnicity and culture. Additional, stereotypes around women receiving VC money are proven wrong by performance data. If we keep avoiding including new perspectives (similarity bias) that could bring new solutions to problems, we keep missing skilled talent and in the end will have worse financial performance than we could have.
Plus, men are also negatively affected by gender inequality and paternalistic attitudes: Men also face stereotypes to live by and are often expected to stay strong, tough, stoic, dominant and be the main provider. Men, who conform to more of these stereotypes, are more likely to commit crimes and harm others and themselves. If we don’t care about gender diversity, these burdens and structures also won’t change.
Myth 4: “I have tried to find a female co-founder/employee, but they are just not applying!”
If you encounter this problem, please remember that on the one hand, the career path is not as perfectly paved for women as it is for men as described in myth 1. On the other hand you should ask yourself if the image and online presence of your company and employer value proposition is really welcoming to people that might see and experience the world a little differently than you do. Or to speak in startup terms: Is there a product-market-fit of the position you are offering (in this case: product) and the target group (in this case market) you try to address? Why should women or other groups apply for your company? This might need some checking and reviewing for blind spots. There are very practical guides to help you with that.
Concerning your online presence, ask yourself if your company appears attractive to people that are different from you: How is your team assembled and presented on the website? What kind of language do you use? Do you speak on current societal topics like gender equality on social media? Are you present at events and panel discussions on these topics? Are you present on job platforms for women or search on platforms for female speakers and experts?
Next, check your everyday work environment: Do you have a welcoming or competitive meeting environment? Is there a space for employees where problems and concerns are being taken seriously? Do you tend to label persons as too sensitive if they address some issues, even if it was just a “joke”? Do you comment on or talk about women’s looks more than you would about men’s looks? Are the 5 women on your team in similar hierarchical positions as the 5 men, or is there also a gap in how much they have to say (and how they are viewed)? Do you hold other men accountable for inappropriate jokes or behavior or do you just ignore it? Do you value the opinions of your female and male colleagues equally?
As already mentioned in myth 1, the solution is not to just make women think and act like men in the work environment. Sure, a bit more (real, not fake) self-esteem can be helpful to anyone, but we do not really gain anything if the so far underrepresented groups need to learn to behave like those who already have the say. The key is to include differences because according to the studies mentioned above, they are actually helpful for company success. If we only include women that adapt 100% to your rules, no positive and innovative change will happen.
This article provides you various links to information on this topic. Please also talk and actually listen to persons with different perspectives and life experiences to get a broader insight into understanding how the world works for different people, even though it might be surprising to you at first. We at SpinLab also experience a huge gap in applications from men-only and diverse teams. That is why we put to life an additional bootcamp for diverse startups: the SpinLab Summer School. If you have more thoughts, resources, ideas or events that should be included in this article, let us know in the comments!