Homogenized hubs
Incubators, accelerators far behind on attracting women, minorities
Diversity requires more than just lip service. That’s one of the main findings of a new report on high-tech incubators and accelerators, published by the not-for-profit Initiative for a Competitive Inner City and by JP Morgan Chase. The study looks at a range of incubators and accelerators, with the goal of understanding why these startup hubs are overwhelmingly white and male, and what can be done about it. It offers four strategies for creating inclusive incubators, but all of them require proactive change on the part of directors and management.
The study argues that specialized incubators — those especially for women or people of color — aren’t the answer, on the grounds that these targeted incubators and accelerators don’t provide the same opportunities for entrepreneurs to network within their industries.
Unfortunately, there isn’t solid data on exactly how many women or people of color have enrolled at incubators or accelerators. The report notes that the International Business Innovation Association, a trade organization for incubators and accelerators, is working on it. Instead, the report characterizes the proportion of women and people of color in incubators and accelerators as “relatively low, especially in the hightech sector.”
It also says that incubators that receive public funding tend to do better in the diversity department, with rates of participation by women and minorities “as high as 25 percent on average, by some estimates.” Not great, to say the least.
The report lists a number of reasons why incubators and accelerators may not be attractive to women or people of color and what can be done to rectify that:
Recruitment
Many incubators and accelerators simply don’t recruit. They receive a flood of applications each cycle, so if those applications don’t contain a diverse group, the selections committee figures there just aren’t that many exceptional diverse entrepreneurs out there. Some incubators that do recruit do so through the networks of managers, and if the manager is white and male, chances are that his network will be, too.
University-based incubators can face special challenges, because often the students in the school’s tech-transfer and entrepreneurship programs aren’t diverse, either.
The report recommends expanding recruitment networks. Diverse management teams attract more diverse entrepreneurs, the report says, “in part because the managers have diverse networks, but also because they are successful role models.”
Bias in selection
Selection committees are seldom diverse, according to the study, which leads to what Susan Marlow, a professor at Nottingham University Business School, calls the “People Like Us” theory — that people are drawn to those who look like themselves. Investors have been shown to prefer pitches by men over those by women, even when, word-for-word, the pitches are the same.
That’s an issue with incubators and accelerators, whose credibility is based on graduates’ ability to raise money.
Fewer women get through the door in the first place, and “then once women are in the accelerators, they’re not getting funded ... partly because funders have particular views of who is a hightech entrepreneur,” says Sarah Kaplan, a professor at the University of Toronto’s Rotman School of Management, in the report.
Program design
Simple things like scheduling can make a program unappealing to women. If an incubator hosts networking hours from 5 p.m. to 8 p.m., that may blow a mom’s chance to see her kids that day. Why not have an event at breakfast or lunch? The requirement to be onsite is problematic for women, who can’t always spend three months far from home. It’s also a hurdle for anyone with a lower income, which disproportionately affects minorities.
It’s ironic that so many women go into entrepreneurship in part to have control of their schedules, and then an incubator or accelerator requires them to put in face time for several weeks. Some accelerators are experimenting with a combination of virtual and inperson programs, or asking entrepreneurs to be on-site for a handful of days per month.
Culture
A macho, exclusive culture doesn’t make women and people of color want to join. TechTown in Detroit was inspired to make an effort to be more inclusive by the simple fact that 80 percent of the city’s population is African-American. “We know there are a large number of entrepreneurs, or potential entrepreneurs, that we could do a better job of engaging and attracting,” said Paul Riser, TechTown’s managing director.
If your incubator or accelerator has a reputation for a “bro” culture, you shouldn’t find it surprising that women don’t want to join. Bragging about how few hours you and your founders sleep each night isn’t attractive, either.
Organizations should also make sure that they talk about the business case for diversity, rather than simply stating it’s the right thing to do. That can make diverse entrepreneurs feel they’re tokens or valued for something other than their business acumen.