Scaling Startups

I’ve been spending a lot of time helping foundational stage entrepreneurs and companies lately and thinking about things we can do better.

My focus has primarily been working with female and minority founders and thinking about ways to help talented folks with these backgrounds get their startups off the ground and beyond.

Last night Marc Andreessen highlighted some of the challenges in scaling the number of startups that brought some of these ideas to mind:

Leaving the last factor aside, which is really about sales and marketing execution, the others seem addressable, and two are aligned with the work many are doing around increasing diversity in business.

Talent, training and risk aversion are all things that can be changed over time and by working to increase diversity in foundational stage companies we can tackle all three of these things.

I believe there are far more talented people, especially among underrepresented groups, than there are entrepreneurs. Part of the challenge that folks face in professional development has to do with existing networks of influence and power. These structures often self-select for people who come from similar backgrounds and experiences to the establishment. While this does a fairly effective job at finding a certain set of talent; by defining “talent” narrowly along certain academic backgrounds and professional experiences, it excludes many folks who are talented but just happen to have navigated through the system differently often because of issues having to do with race or gender.

If we redefine what “talent” means, this can help with the on-boarding process into our business ecosystems and can start nurturing future generations of founders earlier.

Reimagining what startup talent means can also start at the stepping off point from professional careers to entrepreneurial endeavors.

There are millions of people who are extremely “talented” in their jobs but lack the networks to explore entrepreneurial ventures and face a venture capital community that is extremely homogeneous.

By explicitly focusing on diversity at the foundational stage, and by encouraging more diversity in the venture ecosystem on the investment side, I believe we can expand the pool of talent that is entering the on-ramp of startups. Diversity in investment thinking will also help with these issues — not every successful company is a tech company founded in Silicon Valley.

This can also be supplemented by supportive networks of advisors and with firms that take a more comprehensive approach to helping entrepreneurs build. Y-Combinator and other accelerators do just this as do firms like A16Z and First Round who provide extensive resources to companies. These networks and support systems serve to supplement existing talent and also can provide a resource for complementary “training” and team building.

These firms have demonstrated that a model exists for helping to find more entrepreneurs and to build differentiated platforms to supplement founders. The next step is to apply this thinking in the context of more diverse teams, tackling a more diverse set of problems.

A robust and transparent ecosystem for navigating through the foundational stage of building companies can also help address the “risk aversion” issue Marc raised above. Of course all startups are risky, but by demystifying the process, certain risks can be reduced. Demystification also makes the risk more tangible as opposed to simply undefined. Without knowing where to begin, no problem is solvable.

Again, Y-Combinator has taken the lead here with their library of resources on how to navigate through startups, but this is just the beginning.

Risk aversion can also be reduced through better storytelling of successes. As we celebrate and share the paths that people have taken steps off the corporate ladder into more unbeaten paths, people learn that the entrepreneurial way is a realistic alternative. They have more courage to take the leap.

While I believe we can collectively work to address the regulatory point mentioned above I’ll leave that for another post.

In short, I’m deeply optimistic that there will be more startups, more diverse talented teams and many more entrepreneurs over time. The future is transparent and the resources that exist to support the undiscovered talent out there increases everyday.

I can’t wait to celebrate more successes and to see what the future holds and when we look back and the past state of startups as a very nascent era in our Country’s own entrepreneurial journey.