In today’s episode, Steli and Hiten talk about the benefits and importance of diversity in startups. For Steli and Hiten, having a diverse team can widen your understanding and empathy for others. This can only serve as an advantage for your business, especially in your day-to-day interactions with your customers. Tune in to find out how diversity is not about filling a quota, the benefits of being challenged by people who are different than you, and why Steli and Hiten specifically seek it out.

Time Stamped Show Notes:

  • 00:05 – Today’s episode is about diversity in startups
  • 00:40 – Diversity is a loaded topic in tech startups
  • 01:01 – In Uber, they have gender, ethnicity and race diversity issues
  • 01:27 – This episode is NOT about judging companies, but is a discussion about the benefits and importance of diversity
  • 02:18 – recently had a company retreat and they are the most diverse team Steli has ever been a part of
  • 03:02 – Steli’s favorite thing was that wherever they went, people were wondering why they were all together
  • 04:27 – A company has a diverse set of customers and if your team does reflect that sort of diversity, it can be harder to have empathy for your customers
    • 05:11 – More empathy for customers leads to better results
  • 05:23 – It is now easier to look for staff in different countries
  • 05:45 – Google is stringent about diversity because they are trying to be the most diverse company; they even have a count system
  • 06:37 – Hiten says diversity is not about filling a quota
  • 06:51 – Steli says he takes cues from nature and through this he sees that diversity is how everything good happens
  • 07:39 – Steli says diversity is a practical framework from which to create – not just financially, but wealth in ideas, experiences, knowledge, perspectives and solutions
  • 08:20 – Personally, Steli is attracted to people who are different from him but are still aligned with their work ethic—this leads to diversity on his team
  • 09:04 – Steli shares they were not strict in creating diversity for the team, but it organically happened
  • 09:21 – They are a more creative team and have less blind spots because of their diversity and Steli’s life has become more interesting because of them
  • 10:34 – Hiten says you have to first believe that diversity is good for your business
  • 10:58 – When you’re evaluating a potential team member, ask the question, “When they get on the team, are they going to challenge us in the way that we want?”
  • 11:38 – Teams should be able to say that they have enough diversity in thinking and in experience; if not, they need to decide if they are okay with that
  • 12:50 – Older people add a different perspective to the business
  • 13:10 – Hiten wants diversity so he seeks it out
  • 13:34 – Steli says you give more energy to get to know people who are different from you as opposed to those who are similar to you and that you instantly like
  • 14:31 – Steli says it might take a bit longer to understand and know people who are different from you; but once you get to know each other, it is a more fulfilling and stimulating relationship
  • 14:55 – Do you seek comfort or do you seek people who can help you think differently?
  • 15:27 – Be willing to make an investment to create a richer network of humans in your life and team
  • 15:41 – End of today’s episode

3 Key Points:

  1. A diverse team has the advantage of being more empathetic to a diverse set of customers.
  2. Diversity is not about filling a quota, it’s about the belief that diversity will challenge and enhance the dynamics of your business.
  3. Be open—it may take more energy to get to know someone that is different from you; but, making that effort can result in a fulfilling and stimulating relationship.

Steli: Hey everybody, this is Steli Efti.


Hiten: And this is Hiten Shah. Today on the Startup Chat we’re going to talk about diversity-


Steli: In startups.


Hiten: In startups, yeah. Of course. In startups, in business. I think in life we’re going to leave that one alone.


Steli: In life.


Hiten: Yeah. Well, we can. So Steli, I know this is a topic we’ve had for a few weeks. You mentioned it for a couple of weeks now and we haven’t just got to it. Now we’ve got to it. Diversity’s pretty loaded, especially in tech startups, with a lot of the controversies going on, whether it’s, currently at least, and these are continuous across all of time, this just happens to be the companies that are sort of caught up in it today. Happened to be like Uber and Tesla and a number of other companies are dealing with certain types of diversity issues. In Uber’s case, it’s a compounding. They have gender diversity, they have things around ethnicity and color, race diversity issues, and so yeah, where do you want to go? I know those are the issues and I’m sure we should talk about the positives, which are like, “Why do you want diversity,” and things like that, but I just had to start there because this is a topic on a lot of people’s minds, I’m sure, or something they keep reading about. This is mostly our take on it, not to judge or rag on any of those companies or any of that. This is more about like, “Why do you want it? Why do you need it? What is it?”


Steli: Yeah, I think it’s about-


Hiten: What does it do for you?


Steli: Yeah, I do think that is a large topic and we’re not going to be able to cover all of it, so we might do more episodes over time on the podcast about this, but I think we’re not going to focus so much on like the bad stuff that’s happening out there, but we’re going to focus on why diversity is important and how it is useful and powerful and talk a little bit about how you can encourage that. One of the reasons, and I don’t even know … Like I don’t have … We’re not coming into this conversation with like an agenda of like here’s the five talking points that we need to get off our chests, but I know that we both have a lot of diversity in our lives and we seek diversity in people and in our environment and I just, I don’t know why, but like … I do know why. We recently had a company retreat and this company, like our current team at, we’re 25 people and we all flew all in one place and this is definitely the most diverse team I’ve ever worked in. We’re talking from age group to hobbies and personal preferences, colors, we have all the colors represented. We have a person … Now for the first time, I’m working very closely with somebody that has a disability, somebody that cannot walk, that is part of the team. Just like from the hipster, workout bro over to the 55 geeky, nice uncle to anything in between, just a very diverse group of people and one of my favorite things about this past retreat was that almost anywhere we walked in, it didn’t matter if it was a restaurant or a bar, you could read on people’s faces and reactions that they could not figure out why the hell we are together. “What is this group of people doing together?” You could literally tell that people would look at us and try to figure it out and they just couldn’t. They just like …


Hiten: That’s great.


Steli: They were literally like shaking their heads at us going, “What are these people …” Because just visually, we are a funky group. It’s does not fit. Nothing fits. It’s not a very cohesive group of humanity and to me, that was my favorite thing. Like everywhere we walked in, we confused the fuck out of people and people … And I myself were looking at times at us would be like, “How is this group of people getting along so well,” and I was enjoying it and I take some pride in it, but that was kind of a big thing that brought the diversity topic back at the top of our list of things to talk about because it was just something I experienced a lot just a few weeks ago and I do believe in the power of diversity. Maybe let’s talk about first why is diversity in a team important, why is it something that I think we both value, and then how to create a diverse team as far as we know, as far as we’ve experienced. We’ll keep it positive and practical.


Hiten: Love it. Yeah, I mean, I think I’ll start in terms of diversity and to me, it has everything to do with sort of like in a company you usually have customers and you have a diverse set of customers and if your team doesn’t have that sort of diversity, whatever that means, whether it’s gender, race, or even like just opinions, hobbies, like you were saying, as simple as that, I think it could be harder to have that empathy for your customer, your constituency if you want to call it that or whatever. The people you … And it’s not just customers. The people that read your blog or people that are fans of the company, but they might not be customers or users. I feel like it just creates more empathy and it creates an environment where you have, not just diversity in the people and the humans and the hobbies and things like that, but you actually have diversity in ideas. That leads to a healthier company. That leads to more empathy for the customer. That leads to better results basically and the reason is like we’re also doing business globally in most of our companies. I mean, it’s just so easy to put up a website and get somebody from, I don’t know, Sweden to sign up for it even if you’re in the US or vice versa. To me, that’s really the crux of like why I get excited about this topic and there’s other things that are related to this like as a company gets really large, and I’m going to call out Google for this, they actually get really stringent about diversity. Stringent because they’re trying to be like the most diverse company or they’re trying to do all that. I’m not talking about that. It almost makes me like sad in a way that a company has to count. What if culturally you’re just diverse and you set up a system without having to be so like have a rubric around it. Obviously I don’t understand the full problems in context of a, I don’t know, really large company like that and why they would do that, but what I’ve heard about them, it’s like it’s very rules based and it’s very calculated and certain types of people they won’t even bring on anymore or consider or they get less points in the interview process just because of their race, ethnicity, and stuff like that. Maybe I’m calling them out, maybe they don’t do this, but this is what I’ve heard. I don’t mean that. I don’t mean that like, “Oh, we need to be diverse. Let’s go get more females.” That also is another thing that makes me cringe a lot because most people are doing it to fill a quota instead of thinking of it as a benefit to their team beyond the quota.


Steli: Yeah, I couldn’t agree more with you. To me, honestly, I’m taking learnings here from nature. Diversity is how everything good happens. The most saneness, the most sickness, it’s just not healthy. In nature, as in everything else in life, when you have too many similar things penetrating each other and being too closely around each other, it just becomes … It creates a kind of incest-like environment for ideas, work, patterns of thought, and so to me it gets sicker and sicker and poorer and poorer and the way towards abundance and richness and creativity and beauty is to bring very different types of people together and let new things happen that way. To me, diversity’s just like a practical framework to create wealth and wealth is not financial. It’s just wealth in ideas, wealth in experiences, wealth in world views, wealth in perspectives, wealth in knowledge, wealth in solutions. To me, any team and any group of humans I’m around, I’m always looking for diversity and I’m not looking, as you said, as in like counting. “Hey, we need this type of a person to be on the team.” It doesn’t happen very organically, but it happens organically because I’m attracted to people that are different from me, but that are still aligned with me in their work ethic, in their honesty. The alignment I’m seeking in my life is much more fundamental and not as superficial as I used to when I was younger and when I was trying to find my tribe, it was much more superficial. It needed to be another immigrant kid that was a white boy … I was just looking much more superficially at finding your tribe and today the people I’m attracted to are people that are different from me, but aligned in their core philosophies in some ways. We’ve never talked about diversity in hiring. We’ve never had a single conversation on, “We need to hire more women or we need to hire somebody that has a disability or we need to hire people of color or we need to hire …” We never talked about it that way, but we always laugh and joke that we are a eclectic collection of humanity and that we … Even if the founders, like my two co-founders and I are very different people. Just very different upbringing, very different types of personalities, and we’re just attracted to that, so it just organically happens and we have benefited greatly from it because we are, I think, a more creative team, I think we have less blind spots that are created because there’s always somebody on the team that will look at things differently from the rest of the team and have a different perspective, a fresh perspective. Will see how this will be not as good for certain people, how to communicate this more effectively for that target market, and it just makes life more interesting. Just even selfishly … Even if it made zero difference to my business, I would still want a really diverse team because it just makes my personal life more interesting. I’m surrounded by interesting people that have experiences that I didn’t have and they can tell me about things that I don’t know about and I’m just like selfishly curious and want to be surrounded by people that I can learn from and that are different and interesting in insightful ways. I think there’s a ton of benefits towards it. Now let’s talk about how do you build diverse teams and we know, and you brought this up already, I agree with you. I don’t think it’s a good idea to be like, “We’re going to be diverse. Let’s hire three people of color, two women …” That sounds like a terrible idea. You can’t do it that way, but how do you do it if you don’t do it that way? What I just described in terms of how we got there doesn’t seem that though, does it?


Hiten: I mean, it has a lot to do with what you believe. Do you believe that diversity creates a better business? I mean, if you do, then like you’ll just look at the people that are applying with a different lens and I’m not saying that you’re trying to fit … It’s not about filling a quota, but it’s about looking at those people and when you evaluate them, you can basically evaluate them in a very simple way and say, “Are they … When they come on the team, are they going to challenge us in ways that we like or ways that we want?” That really, I think, is the kind of questions and that type of line of thinking that I would go after if you think that you need more diversity. I mean, there’s so many teams that I walk into that are really small, let’s say like under 20 people or around 10 to 20 people, and it’s just not that diverse and I can challenge them easily on their thinking and say, “Hey, have you thought about the opposite of that or have you thought about not doing that or have you thought about it this way,” and they’re like, “Oh, we never thought about it this way.” There’s a bunch of signs like that where it’s like you can look at your own team and say, “Do we have enough diversity of thinking? Do we have enough diversity of experience or are we okay with the way things are? Is our business going to be fine if we stay the way we are?” I would look at it more like are you solving a problem for yourself and your business that you recognize. I think it goes back to culture and attitude and how you think about this stuff and less to do with diversity for diversity’s sake or like all of a sudden waking up and saying, “We need to be more diverse.” I think it’s more about imagining and thinking through what would that do for your business and is this something you want. It has everything to do with the thinking in the business and what someone new coming in that’s more diverse or different, but “different” is an interesting word too, that’s different. Has different experience that’s maybe more … The common one is more mature. Older. Maturity and age don’t go together, but I just want to say that a lot of times it does. Just like you said, you have a 55 year old person, correct?


Steli: Correct. I don’t know how old, but yeah probably.


Hiten: Yeah, the person is older than you by a decade at least and that’s a fact. I’m not judging that. Some of my … Some of the people I love the most in business are a lot older than me and they are great and they add such a different perspective to the business a lot of times. They remind me of things that I barely remember. I’m like, “Oh yeah, we’re doing it just like Lotus 123 back in the day,” which I barely remember . Things like that and it’s like really cool and I want that. That’s why I seek it and I think that’s the simple way to think about it is, “Do you want that? Do you know what it’s going to do for you?” Then go get it. Go get that diversity if you know what it’s going to do for you and how it’s going to impact your business.


Steli: I love it. I think my tip … I’ll take this as your tip for the end of the episode. I think my tip is that what I’ve noticed is that when you trying to get to know somebody that is very different from you in their cultural background or whatever it is, it takes more energy to actually get to know them to some degree where you start really liking them. People that are very similar to you, because of the amount of similarity, you might meet somebody and in three minutes you go, “I love this person. We’re having such a good time and we’re laughing,” we feel instantly comfortable with each other. People that are different from you, you’re not going to be feeling instantly comfortable with them. You’re not going to instantly be like cracking jokes that they totally get and they’re cracking jokes you totally get. Maybe, sometimes, but not always. It takes … I’ve found that if I only seek social comfort, then I will never have a diverse group of people in my life, but when I go over that initial internal hurdle or penetrate my internal pattern recognition and going, “Oh, this person is this and this way and I don’t understand that or I don’t like that as much.” If I just push a little further to really genuinely try to get to know them and try to appreciate them and am just open-minded and curious, it takes a bit longer, but once I get that person, it’s a much more fulfilling and stimulating relationship than people that I feel comfortable with. Another way of thinking about it is when I’m thinking about the people I want to have in my network and in my life, do I seek comfort when I meet new people or do I seek stimulation, growth … Diversity, I don’t want to say that, but do I seek to meet people that can help me become more and be more and think more and think differently or do I just seek people that understand me and I understand them so quickly that we’re instantly comfortable with each other. Not to say that comfort is a bad thing, but if you don’t get turned off by the effort it take, you need to put a little bit more effort and be ready to invest a bit more effort in making diverse relationships work and that’s kind of my, I think, more than a tip. This is more of a like you need to be willing to make that investment to have a richer life and a richer network of humans in your life and in your team at the end of the day.


Hiten: Couldn’t agree more. Be open.


Steli: Be open. All right, that’s it from us.


Hiten: All right.


Steli: Bye bye.


Hiten: Until next time.