In a 2005 Web posting, a group of Cantabrigians announced something new called the Summer Founders Program — an alternative to the traditional summer job for college students. For those with ideas for a business, it would offer a small amount of seed funding, a weekly group dinner, and as much advice and input as the students wanted from the four program founders.
“We are looking for winners,” the founders wrote. And they got ’em. Participants in that initial summer program, which was the first of hundreds of entrepreneurial “accelerators” that now operate around the world, included the founders of Reddit, a well-trafficked online discussion site, and Twitch.tv, a gaming community that was acquired by Amazon.com for $970 million.
But the would-be entrepreneurs who showed up for the first summer of what is now known as Y Combinator were all male — either white or Asian. As other accelerator programs were created in its wake, many of them encountered the same issue. Promoted on tech blogs and buzzed about in computer science courses on college campuses, they attracted the same Zuckerbergian demographic: driven white males with a sufficient family safety net to give a startup a whirl for a couple years, without worrying about making rent.
A report issued last month by the Initiative for a Competitive Inner City, a Boston nonprofit, highlighted the dearth of women and minority entrepreneurs in accelerator and incubator programs, and suggested some contributing factors. (Accelerator programs and incubators are closely related, but accelerators usually offer more intensive entrepreneurial training over a three- or six-month period, often culminating with pitches in front of a group of investors.)
Three of the big factors highlighted by the report: selection committees that are themselves not very diverse; an expectation that minority entrepreneurs and women will magically gravitate to accelerator programs without the need for different approaches to marketing and recruiting; and the fact “that most of these organizations are still located in higher-income, less diverse communities.”
“We happen to think that the incubator and accelerator model is offering the type of resources that all entrepreneurs need,” says Kim Zeuli, a senior vice president at the Initiative for a Competitive Inner City and the report’s lead author. “And there are some early studies out there that women and minorities are the most helped by these programs — they really benefit from broadening their networks.” Zeuli says that while the lack of diversity is a widely recognized problem in the world of incubators and accelerators, many of the people she interviewed for the report “were candid in saying, ‘We don’t know how to change it.’”
I was surprised, though, that a report from ICIC, based in Roxbury’s Dudley Square neighborhood, somehow overlooked the existence of two very good accelerator programs that are located steps from its headquarters, Accelerate Boston and Smarter in the City, that focus on finding and cultivating minority-founded companies. Another program, EforAll, operates English and Spanish language programs in Lowell, Lawrence, Lynn, Fall River, and New Bedford, but it also wasn’t included in the report. (Asked about that, Zeuli says, “We wanted to be national in focus, and we didn’t say we were able to interview everyone.”)
These programs are hustling to broaden their applicant base in a way that should be a model for others. EforAll has shown up in barbershops in New Bedford and Fall River to spread the word about its existence, and this past spring partnered with the Cambodian Mutual Assistance Association to run a panel discussion and pitch contest within Lowell’s Cambodian community.
Gilad Rosenzweig, founder of Smarter in the City, says that it’s also important to get ink in the right publications — like the Bay State Banner, a newspaper and website focused on Boston’s African-American community — and not just in blogs like TechCrunch.
The four sets of entrepreneurs who have participated in Accelerate Boston, run by the nonprofit Future Boston Alliance, have been majority minority, according to executive director Malia Lazu — 77 percent people of color. The program has attracted entrepreneurs whose businesses might not be viewed as high potential by many accelerator programs, which are hunting for the next hit app or blockbuster medicine.
“We’ve done a lot of brick-and-mortar businesses,” Lazu says, mentioning Fresh Food Generation, a catering and food truck business, and Trillfit, a hip-hop workout studio featuring a live DJ. “We are building the cool restaurants and boutiques that are going to be the reason that the next Google will stay in Boston,” Lazu says.
Other programs have been acknowledging the issue. Y Combinator, now based in Silicon Valley, runs a high-profile conference for female founders, and last year announced a series of “office hours” sessions specifically for minority entrepreneurs interested in applying. “I believe there are large and significant problems in the country and the world that aren’t being addressed by Silicon Valley, because we aren’t attracting the founders who understand these problems first-hand — problems like poverty, failing schools, government waste, access to financial products, retirement, job training, etc.,” writes Michael Seibel via e-mail. Seibel is the relatively new partner at Y Combinator who started the office hours initiative, and who is African-American.
MassChallenge, an accelerator based in Boston’s Seaport neighborhood, is already regularly publishing diversity data. “Forty-four percent of last year’s teams were founded by women, 9.8 percent had at least one African-American founder, and 12.5 percent had at least one Latino founder,” says managing director Scott Bailey. “We’ve recognized this as something important that we need to take ownership of. It’s difficult. It’s not an easy thing to change.” Bailey says MassChallenge is working to diversify its roster of both judges and mentors.
But it can still be frustrating for some women or minority entrepreneurs who apply to established accelerator programs that have predominantly white screening committees. “You do see the unconscious race bias when our companies apply to other accelerator programs,” Lazu says. “The judges say, ‘Is there really a market for black haircare products?’ That’s like asking if sneakers are a market.”
I agree with Lazu, who says we not only need existing accelerator programs and incubators to recruit more well-qualified women and minorities for their selection and judging committees, and partner with broader range of organizations to promote what they do, but we need more minority-founded operations. Just as Y Combinator had a vision of what constituted a “winner” back in 2005 —young people with a tech-oriented idea, and the ability to build it on their own — other programs will have their own different visions. Some may not involve quitting your day job to participate.
“What I say is yes to both,” Lazu says. “Yes to more awareness of diversity in the white-run programs, and more new programs with their own focus on women, blacks, and other minorities.”
Entrepreneurship is about trying lots of different approaches, often targeting different customer bases or seeking out different partners or locations, to figure out what “will scale,” in the current argot of the startup scene. There’s no reason accelerators and incubators shouldn’t do the same.