Written by Janis Bowdler, Global Philanthropy, JPMorgan Chase & Co.
Note: The following was originally posted by TechCrunch on September 15, 2016.
The success of high-tech accelerators has ignited the creation of similar models around the country hoping to replicate their accomplishments. But their achievements have not come without criticism.
The exclusivity of the high-tech sector in general is reflected in the lack of diverse entrepreneurs being supported by high-tech accelerators and, to a lesser degree, by high-tech incubators.
This lack of inclusion matters because women and minority entrepreneurs are significantly underrepresented in high-tech. Incubators and accelerators offer critical support to entrepreneurs — from business education to access to capital and expanded networks — and can be an effective tool for increasing the number of women and minority-owned businesses in the high-tech sector. Unfortunately, they are not making an impact because of the low participation rates of women and minority entrepreneurs in these organizations.
A recent report by the Initiative for a Competitive Inner City digs into the barriers preventing women and minority entrepreneurs from fully participating in high-tech incubators and accelerators.
The good news from this report is that many high-tech incubator and accelerator leaders already recognize that lack of diversity is a critical issue for their organization and many want to address this issue, but are unsure of how to effectively do so. The other good news is that some organizations, high-tech incubators in particular, have already implemented strategies and practices that are creating impressive diversity rates (often around 30-40 percent) and helping to change the high-tech status quo.
These success stories prove that high-tech incubators and accelerators can be more inclusive and serve as a promising tool toward creating a more inclusive high-tech sector.
Participation barriers and solutions
The report identifies four types of barriers facing women and minority entrepreneurs: recruitment, selection biases, program design and culture. Recruitment and selection biases may prevent diverse entrepreneurs from gaining access to high-tech incubators and accelerators, while programs that aren’t flexible and an exclusive, macho culture may make them not want to.
To create inclusive organizations, it takes deliberate actions on the part of incubator and accelerator managers to recruit women and minority entrepreneurs and to create programs that meet their needs.
Some high-tech incubators and accelerators simply don’t actively recruit any entrepreneurs. Unfortunately, women and minority entrepreneurs are less likely to find their way to these organizations than white men because they may not know about them, may not feel like they are a good fit or may not feel like they would be selected. Other incubators and accelerators struggle with limited pipeline networks and a lack of knowledge about how best to find diverse entrepreneurs.
Selection biases play out all along the incubator/accelerator system. Selection panels are often not diverse and people are more likely to identify with and select entrepreneurs who look and act like themselves. Ingrained cultural notions of what successful high-tech entrepreneurs look like also create biases. Private high-tech accelerators, whose reputations are built on ventures graduating with large infusions of venture capital, might find women and minority entrepreneurs less attractive because they attract less capital.
The program design of traditional high-tech accelerators, which often require intensive, in-person residency, may fit the lifestyle of the stereotypical young, white, male entrepreneur, but not others.
The macho, exclusive, hyper-competitive culture of some high-tech accelerators is the image marketed and shared by media, creating perhaps the biggest deterrent to women and minority entrepreneurs. High-tech incubators and accelerators can’t be both intentionally exclusive and hope to attract more diverse entrepreneurs.
Diversity should matter to the high-tech sector because it makes good business sense, not because it is politically correct. It is also in the economic interest of cities and states to ensure that all entrepreneurs have equal access to the support available to them to help their companies grow and create jobs.
The recommendations and strategies set forth in this report offer a playbook for creating more inclusive high-tech incubators and accelerators. Hopefully, the documented barriers that exist for women and minority entrepreneurs in the high-tech sector will provoke a greater urgency for change in these organizations.