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Indiegogo Cofounder On Why Startups Need Diversity From The Start

This article is more than 9 years old.

Earlier this year, Google, Facebook, Yahoo and LinkedIn poured fuel on an already crackling discussion about diversity in the tech industry when they released reports showing their workforces to be overwhelmingly male and white, especially in leadership and technical jobs.

Among the smaller companies that responded by producing diversity reports of their own was Indiegogo. The crowdfunding platform revealed itself to be relatively well balanced between men and women, at least for a Silicon Valley company, though its employee base still skews heavily white and Asian.

Earlier this month, Danae Ringelmann, one of Indiegogo's three cofounders, talked about the importance of diversity and other topics at Y Combinator's Startup Day. Addressing an audience that was at least 90% male, Ringelmann talked about the need to stress difference from the get-go, versus setting it aside as something to deal with later, and her belief that doing so could accelerate growth. Afterward, I sat down with Ringelmann for a few minutes to talk more.

FORBES: Tell me a little about how Indiegogo thinks about diversity.

DANAE RINGELMANN: We’re a company that’s here to serve the entire world, so we want our employee base to reflect the world’s population as much as possible. For us to serve the world and create an equal-opportunity funding platform we need to be an equal-opportunity workplace and have a diversity of backgrounds and experiences. No, it’s not going to change overnight, but we started from a really good place and I think we’ll continue to improve on it.

Most of the big companies have publicly avowed pretty much what you just said, yet their diversity reports showed them farther away from attaining the ideal. Why is everyone not doing as well as you are?

I'm  interested in unpacking the root drivers of our diversity statistics. We’re still just 100 people, so it’s not statistically significant, but my hypothesis -- and a lot of this is from anecdotal evidence -- really there are three reasons we’ve done pretty well on the diversity front. The first is simply our mission. We exist to democratize access to capital. Equal opportunity is in our ethos. When you have a very bold mission like that, you attract all kinds of people that agree with that.

The second thing is related to that, but it’s really in the brand. Maybe that’s another way of saying the same thing. We’re an equal-opportunity funding platform, and we believe in open, we believe in inclusion. That’s who we are in terms of how we build our product. We ooze it. My cofounders and I believe it in our heart of hearts as people. That’s why we’re working at Indiegogo. And I think that message then is a very powerful message to people who are considering getting into technology or joining companies, especially top talent who can pick wherever they want to work.

And then the third reason is whenever you are looking at where you want to work, you can’t actually know how it’s going to be until you arrive there, but you look for signs of how it could be based on what you can see from the outside. I do know I’ve had a lot of female employees who came to me after they joined Indiegogo and said a reason they joined -- not the only reason, but a reason, a contributing factor -- was because we had a female founder.

We all have biases, we all have limited networks, and when you’re growing as a startup you rely on your networks to source leads for candidates, and the more diverse your networks are to start, the more diverse your outreach will be to attract candidates. I have a theory that the more diverse you are at the beginning, the easier it will be to remain diverse as you grow. Because you don’t have all the systems in place to broadcast your entire company to the entire world, you rely on your limited networks, so the key is to diversify the people who are there in the beginning so you have a diversity of limited networks to go to, if that makes sense.

And I do my part. Whenever I’m invited to speak at a women in technology conference, I try my best to do that, because I think it’s important to inspire more women to go into technology and entrepreneurship, so if I can be part of that decision making process, I want to be. Plus there’s a lot of potential customers there! And we’ve hired a lot of people out of those. I spoke at Lesbians Who Tech, and we hired a person from that. I spoke at Women 2.0 and we got applications from that. So there have been proactive efforts to make sure we’re reaching out to diverse populations with the resources that we had, and as we expand more we’ll be able to invest more into the sophistication of our talent-acquisition strategies.

Did you get a look at the audience here today? It seems like it was about 95% men, by my rough reckoning.

If it was 95% men out there, what I hope the message they take away from today is: Don’t get your best friend as your cofounder. Get someone you trust, but someone who thinks differently and has a different background. In a way, I didn’t know Slava very well. I only knew Eric and I knew him because he kept wanting to help me with the projects I was doing in school, which were all related to starting Indiegogo. [Slava Rubin and Eric Schell are Indiegogo's other cofounders.] There's a story I love to tell about how, at an all-hands we had two or three years ago, one of our customer-happiness agents turned to us and said, "What’s so great about the three of you guys is you’re a trifecta of opposites." Our personalities are different, our strengths are different, our weaknesses are different. And the reason it’s worked has been because we’re so different. I would say we got lucky a little bit. I wasn’t thinking that forwardly, that the key critical success factor is the diversity of our founding team, but in hindsight it’s been such a driver of our success. It’s been a driver of a lot of disagreement and debate, but you need that debate. You need that disagreement to make progress.

Some interesting research came out recently suggesting that crowdfunding campaigns led women have a higher rate of success in meeting their funding goals than those led by men. What do you make of that?

That was from our data. Of all the campaigns that run, 47% of the ones that reach their goal are led by women, versus something like 15% of the companies in the venture world. It’s a number that’s much more reflective of the population and it shows when you level the playing field, all people can rise to the top. And when we looked at our data, women tended to reach their goals more than men. We have to unpack that as to why, but funding campaigns led by women tend to reach their goals more often than campaigns led by men.

There are some interesting avenues for speculation there. 

The challenge of all of this is understanding correlation versus causation. I go back to the fact that if you just level the playing field and remove bias from the system, then women do just as well as men…Our hypothesis is that a lot of the bias in the financing system comes from the fact that everyone has limited networks and their own unconscious biases, so when funding decisions are being made by individual people, those decisions reflect those limited networks and biases. You could extrapolate and say certain populations of the world who aren’t connected to the classic decision makers of the world like venture capitalists are being locked out. You could probably make that argument. But on Indiegogo, everyone has equal opportunity to make a campaign, the requirements being access to the internet and having a computer and a bank account -- which are still hurdles, but not hurdles like knowing the right VC in the right city.

Are there other biases you're trying to correct for beyond race, gender and ethnicity?

One thing we’re very focused on is education. Using the internet to raise money is still a new experience for a lot of people. We’ve learned that when people see campaigns for a project or idea similar to a project or idea  they want to start, it’s inspiring to them and helps them get over that confidence hump to get going and give it a go. So we’re doing a lot of work around helping people find the campaigns similar to theirs so they get the confidence to give it a try, as well as using data science to unpack all the insights and correlations that map to success. We know for a fact that campaigns with a video raise 150% more on average than campaigns that don’t. Same things with campaigns with team members — they raise 80% or 90% more than campaigns by an individual person. So that’s how we use data science to educate people. Some people have started many many companies, and some people, this is the first time they’ve ever started something. We have to reach both populations.

Did Indiegogo go through Y Combinator?

We got rejected. [laughs]. Jessica [Livingston, Y Combinator co-founder] was saying we were one of their biggest regrets. That came out because I spoke to the Y Combinator class last summer. One of the participants asked, why didn’t you do Y Combinator? And I was like, well, we tried. So Jessica actually went and looked up our application. I was like, oh, don’t do that. It was one of the first semblances of a business plan we’d ever written. It really wasn’t a business plan. It was a one-pager. But one of the biggest lessons I learned was when you talk to customers, you want to tell them what you are today and how you can serve them today, but when you talk to investors, you need to tell them what you’re going to be tomorrow and how you’ll serve the world tomorrow. I didn’t know that as a first time entrepreneur.

That's  long way of saying we weren’t part of Y Combinator. We got rejected, and it was a good learning experience.