How These Minority Founders Got Tech Execs to Put Their Money Where Their Mouths Are
Free Book Preview: Unstoppable
When it comes to diversity, tech companies talk a big game. Their spending, however, tells a different story.
Late last year, Melinda Gates and McKinsey & Company released a report on how tech firms spend their philanthropic dollars. What they discovered is that barely 5 percent of companies’ charitable donations went to groups that promote women and girls in tech. Stunningly, less than 0.1 percnet of their grants supported programs for women of color.
Tech executives happily pay lip service to diversity, but precious few financially support underprivileged groups. It isn’t fair -- and it certainly isn’t easy -- but minority entrepreneurs have to work harder than others for a spot on tech companies’ balance sheets. gWhat can minority founders do to earn tech companies’ trust? Four strategies stand out:
1. Put partnerships front and center.
Rightfully or not, we all look to our peers when we’re unsure about a decision. Tracey Grace, a woman of color who’s CEO of IBEX IT Business Experts, has turned that truth of human nature into a business strategy. Since signing Amazon.com in 2014, Grace has used it to attract attention from tech teams at NASA, Tenet Health and the U.S. Department of Defense.
Just how powerful is peer approval? Nielsen data shows that consumers worldwide consider it the single most credible form of advertising. When Grace developed a vendor management software system for UPMC and distributed a press release about it, it sparked buzz in the healthcare sector. Peers saw the value in the relationship and connected with IBEX to do business.
To leverage peer relationships with tech executives, invest in “big name” client relationships. Don’t just focus on the sale: Enterprises are often unwilling to be case studies for smaller firms unless the vendor delivers a standout experience.
2. Share investors’ stamp of approval.
Another way to tap into the power of peer recommendations? Attract -- and more importantly, advertise that you attracted -- venture investment. Barely 2 percent of venture capital dollars went to women founders in 2018. Tech executives know that, which is why they tend to take a second look at women founders who fight their way in.
One of those rarities is Laurel Taylor, female founder of FutureFuel.io., whose student debt repayment service recently raised $11.2 million in Series A funding. FutureFuel.io’s investor traction served as a point of proof to its partners, including Ultimate Software and Colonial Life, who serve employers representing several million workers.
3. Develop a disruptor image.
Disruption is the tech sector’s buzzword to end all buzzwords for a reason: It signals that a startup founder’s ideas are so groundbreaking that he or she is taking on industry giants. Founders like Lisnr’s Rodney Williams cultivate a disruptor image because they know what a golden ticket it is in the tech industry.
In 2014, 2016, 2018 and 2019, Lisnr ranked among CNBC’s Disruptor 50. Although Lisnr’s data-over-audio technology itself is certainly part of the reason, the remainder stems from Lisnr’s own content positioning it as a disruptor. The African American-owned company is currently working with Jaguar Land Rover to develop a next-generation connected vehicle and Ticketmaster to simplify ticket checks at live events.
4. Support tech nonprofits.
Although the industry as a whole could be more charitable, at least some tech executives appreciate companies that embrace the same causes they do. Gixo’s Selena Tobaccowala has made a name for herself not just as the founder of a group exercise app, but as one who supports groups like Girls Who Code. Gixo recently participated in a Pi Day walk/run to raise funds for the tech education group, and Tobaccowala herself works with Female Founder Office Hours.
Tobaccowala and Gixo’s efforts caught the eye of Bumble, a women-focused social network and dating platform with more than 50 million users. This year, the Austin-based company’s Bumble Fund made early-stage investments in Gixo, Translator, Alice and Promise. Greylock Partners, a half-century-old Silicon Valley venture company that made an early bet on Facebook, is also backing Gixo.
Almost everything in business is tougher for members of minority groups. When it comes to the tech industry, however, breaking through can seem impossible. Unfair as it is, the best -- and perhaps only -- way women and people of color can do so is by underscoring that they’re part of the tribe.