Diversity in startups

Skill, Personality and Culture

Television programs and papers are bombarded by political and social debates on diversity. While I think they are all important, I am personally significantly more intrigued by the role that diversity can play in business both at the time of the initial formation of the entrepreneurial idea, and later, at the time of the company building process.

The most successful entrepreneurs I have met, they have all started with building a strong diverse founding team. For clarity I am using the definition of founding team in a loose way by referring to the initial 3 to 5 employees, independently if they have or not founders statuses.

I have learned that diversity of a founding team can be analysed in at least three dimensions: (1) skill diversity; (2) personality diversity; (3) cultural diversity.

Although this might seem obvious, during the years I have met many founding teams that score pretty low on diversity in all these three dimensions. I remember once in Germany I met a team of four co-founders all with same background, knowledge and experience. All of them from the same university WHU (I actually quite like this university). To my question about luck of diversity their answer was very direct: “other people are not as entrepreneurial as us!!” No clue what happened to them.

Usually, however, skill diversity is better understood, but very limited attention/value is given to personality diversity and even less to cultural diversity.

In the startup phase personality diversity usually brings conflicts and since is typical human behaviour to avoid conflict, we can often observe co-founders groups that have got a similar type of personality. While in the short term this might seem a great solution because helps to generate a friendly non-conflictual environment. In the medium term is clear that personality diversity does help because generates some level of heathy tension.

Cultural diversity is an even deeper dimension to analyse. Usually a good mix of cultural diversity for a funding team is a great benefit to ensure that the diversity of the target user base is somehow understood.

If we believe that diversity is a key ingredient to help to build successful startups then we need to conclude that Europe is the perfect environment to allow such diversity to emerge. Europe is diverse by definition and we all should work hard to further support this new generation of European Nomad Founders.