Diversity/inclusion is definitely the catchphrase of the day and having been in the industry since the Web 1.0 days, when we’d attend conferences and would never find a queue at the women’s loo ever, while at the men’s loo, the line would snake around corners. Not so much when Web 2.0 hit and cheers to that, despite the wait we then encountered: the industry was becoming more gender-inclusive at some levels and there’s a start, anyway, even though not all companies seemed to have gotten the memo, or the message, or didn’t quite understand that it’s not all about numbers alone: Black former employees sue Google for racial discrimination.

 

The pendulum does have a way of swinging from one extreme to the other before righting itself at the midway point, or so one would hope, and so it seems to be going  with diversity and inclusion, Hollywood/the movie industry being an extreme example (Are the Oscars Over?). Viewership of the Academy Awards has been way down in recent years, and despite the fact that many entertainers accepting their awards or presenting use the moment as a way to air their pollical views, the Academy has somehow decided that it’s all about diversity/inclusion, or the lack thereof.

With the Academy’s new guidelines that will take effect in 2024, “If a particular movie does not have enough people of color or disabled people or gays or lesbians working on the set—and what is “enough” will be determined by a knotty tangle of byzantine formularies—then that movie will no longer be eligible for an Oscar,” LA Magazine reported. “Not surprisingly, the plan is not being universally applauded in Hollywood. Critics say it’s invasive, anticreative, opens the door to privacy issues, and is spectacularly unfair to actors and crew members, who may want to keep their sexual orientation or health profiles to themselves, not to mention to producers and directors who have enough to worry about while shooting a movie than to be saddled with the thankless task of tallying up the identity markers of their creative partners.”

 

Being female and a non-spring chicken, we will note that ageism is rarely if ever even considered on the diversity list, in both the entertainment and tech industries, both of which are rife with ageism. It’s the elephant in the living room that everyone happily ignores.

 

Back to Tech

We work with startups all the time and have noticed lately that when founders – not all, but a good many of the very early-stagers – are giving us the broad strokes at the initial meeting – and we do request that they pitch us as if they were pitching to an investor – they will often tell us about their business briefly, then spend the next ten minutes or so delineating the complexion of the team, including ethnicity, sexual orientation, etc, clicking every box. While that’s wonderful, note to self: there isn’t an investor in the world who would write a check on that basis alone, especially since it is being presented as a major selling point. Team is important, but investors want to know about their applicable experience and their street cred. What are their backgrounds? What are their superpowers? Why were these particular people chose. The fact that you’re inclusive is laudable, but not to the exclusion of all else, including your business model/traction/differentiators? Checking every box on the diversity list isn’t especially high on investment criteria lists.  It may be there, but it doesn’t exactly top the list any more than do viewers use a check list to decide whether or not to see a film or program based on the diversity of the crew on either side of the camera. What determines their choice, be it in theaters or via a streaming service, is the story. The story always comes first with people, and investors are people, too. And like moviegoers, they want to get something out of the time they spend with you. If the story sucks, the moviegoer will not recommend it to a friend. So it goes with the pitch: the investor might not write the check or recommend you to another potential investor.

 

The exception being if the diversity of the team has a direct impact on the revenue stream/value proposition/stickiness and could well be a game-changer.

 

Back to Business

We mention this as Behind the Scenes, the IPO Playbook Is Changing and note: “Bankers are preparing for an eventual initial public offering market thaw by focusing on companies with profits and stability,” said the Wall Street Journal. The days of getting eyeballs alone is over, so it doesn’t matter what shape the eyeballs of the members of your team is, either. The question du jour is: can you monetize those user eyeballs? It might have been all well and good when the online industry was first getting established, but while the industry has matured and changed since those nascent days, the basic laws of finance are alive and well and haven’t changed. It is true that Venture Capital Firms Focus on Greater Diversity and Equity and it’s long overdue. But while VC funding is up, funding to women-led companies has dropped in terms of percentages. Just as a note that while having a female founder or co-founder may no doubt help to shape your company and your product, the bottom line is still the bottom line, no matter what the catchphrase of the day may be.

 

Considering all the attention that’s been placed on the importance of including more women and that at this year’s Academy Awards only 23% of the awards went to women, the worst showing in four years, let’s be honest: from what we’ve witness from industry catchphrases, they’re often amount to little more than lip service. Be diverse for a reason.

 

At the end of the day, your true focus needs to be on your potential customers and their needs – a basic business paradigm that again has not and will not change. Diversity is no doubt an important consideration, especially as you’re developing the finer points of your product and focus on the market at large, so don’t by any means discard your checklist, as long as you do keep in mind that investors are not very fond of red. So, no matter the complexion of your team, speaking of Hollywood and in the words of Wesley Snipes in Passenger 57, always bet on black. Onward and forward.