Much of the commentary surrounding the importance of or "Diversity and Inclusion" (D&I) in startups has been reserved for the largest, most established players. The infamous Techstars report of 2016 found that few founders of large tech companies believed diversity was important to financial performance, and high-profile investors and CEOs have been implicated (and ousted) in the wake of the #MeToo movement.
But Nnena Ukuku, an attorney and partner at Venture Gained Legal, and a co-founder of Black Founders, an organization that exists to increase the number of successful black entrepreneurs in technology, believes early-stage founders should learn from what's happened at larger tech companies and address issues of diversity within their businesses at the outset.
She recently sat down with Project Entrepreneur to discuss the things entrepreneurs should address while they're in the early stages of their startups, including self-awareness, corporate structure, and D&I.
Project Entrepreneur: What's one thing entrepreneurs should learn more about before launching their startup?
Nnena Ukuku: Entrepreneurs should learn more about themselves. Each founder should take the time to understand what motivates them, what causes them to get stuck, and what their areas of weakness are.
What do you need to keep in front of you when things become hard and you want to give up? Once you understand that, then you need to keep that front of you at all times. What causes you to get stuck? Figure out what yours is and create procedures that will allow you to get past your issues. And what is your weakness? Learn what this is quickly, then find people that can fill that gap--you need to focus on your strengths and let other people help you from a place of their strengths.
What is the most common legal challenge for early stage startups? How can entrepreneurs address this challenge ahead of time?
The most common (legal) challenge of startups is not setting expectations at the beginning. Too many founders do not discuss equity ownership and create the paperwork necessary to give different team members equity in the company. You cannot leave the discussion of equity, what happens if the company dissolves, or what happens if a founder leaves the company for later.
Fortunately, the legal community has made this easy for you. Your basic organizational documents will answer all these questions; all you have to do is take the small step to hire a lawyer to help you create these documents.
Why is it important for entrepreneurs at the startup stage to address issues of diversity within their businesses?
All your good hires will come from internal referrals. If your internal referrals are all from the same people group you will have a hard time later on making your company culture more diverse. If your company is not diverse, you will have a hard time capturing all of the market because you don't actually understand the needs of all the markets. You are leaving money on the table.
What specific needs or resources are currently unmet for black entrepreneurs and how can the startup community address these needs?
Black entrepreneurs need the startup community to trust that black entrepreneurs know the needs of the black community, that black entrepreneurs have solutions for the needs of the black community, and that the market need is large. Addressing this need plays out in trusting your black CEO or CTO when they suggest a feature in a product. This trust plays out in investing in companies that address the needs of the black community. This plays out in investors trusting that the black founder guiding the company understands her market and can speak for her market.