The first panel I attended at this year’s San Diego Startup Week was titled, “Building an Ecosystem for All.” It centered around challenges and action steps towards fostering a diverse and inclusive entrepreneurial ecosystem.
Lisa Rosenfelt of Girls in Tech moderated the panel consisting of Felena Hanson, founder of Hera Hub, a spa-inspired shared workspace and business accelerator for female entrepreneurs; H. Puentes, Director of CONNECT ALL at CONNECT, the oldest business accelerator in San Diego bringing entrepreneurial resources to traditionally underserved communities of San Diego and host of the Tech Minority Report podcast which interviewed keynote speaker Arlan Hamilton this week; and Alex Waters, Program Manager – Collaboratory for Downtown Innovation at Downtown San Diego Partnership, working to connect local startups to resources.
What does an ecosystem for all mean to you?
Felena said an ecosystem for all includes entrepreneurs who aren’t trying to be the next Airbnb. Hera Herb serves businesses that sometimes get called “lifestyle businesses” and 80% of businesses in San Diego fall under this category. These businesses are not seeking venture capital or angel investment. So VC and angel investing ecosystem tools aren’t the right tools for their type/size/stage of business. She said there are a lot of free resources in the San Diego ecosystem, such as a new Women’s Center in progress in South Bay.
Felena said that the ecosystem should involve the universities in order to keep talent here after graduation instead of letting graduates leave for the Bay Area. Recent graduates provide great talent at a reasonable rate, such as Hera Hub’s first full-time employee who would have moved home to the SF area if Felena had not hired her, but who now has her own business here and co-leads TEDx SD.
H. told a story about how a teacher informed him that America was so great because it underpins important things as a society, so how can we underpin what it takes for an ecosystem to be successful? We need to understand what we have and don’t have to understand if the ecosystem has an imbalance. At CONNECT, they visited different areas to see what the leadership needs to bring their community into the innovation economy, places in San Diego where residents don’t know what SCORE and Startup Week are. CONNECT received a grant for a Southeast San Diego accelerator.
Alex said an ecosystem for all meant there were resources available for every individual person, and while startups are generally thought of as looking for the next unicorn ($1B valuation companies), that is not the kind of business everyone wants to build. Community support is especially important at the early stages of business development. Other cities like SF and NYC are better at this type of support, the knowledge transfer and collaboration to help other businesses succeed.
What are we getting right and where is the ecosystem deficient?
H. listed some of the great resources in the ecosystem, including Alex’s free 6-8 week founder workshop for ideation stage businesses, SDBC or SCORE for businesses further along in development, then accelerators such as CONNECT, EVO NEXUS, and Hera Hub for businesses further along. The gap in the ecosystem is capital, the Bay area has 1000 times the capital pumped into it. “It’s easier to raise 20 million in venture capital than $20,000 in MVP in San Diego,” he said. How can we get the rich people in Del Mar to understand investing in businesses?
Alex said the community is lacking a “front door,” a one-stop-shop where you can go to find resources. Lots of places online and off have parts of the resource picture but it’s not aggregated or easy to understand. San Diego currently has a transactional nature to what we’re doing as entrepreneurs, a mindset of “what can I get out of this” when we attend events. We need to be better at giving, and not thinking about what you can get out of every interaction in the startup community. He gave a great example of a kid tying a shoe, even though he learned 30 minutes ago he’s like, “Here, let me show you how to do this.”
Felena said that San Diego is an incredibly friendly, approachable city, a unique culture with events like Startup Week creating connections. Kansas City’s ecosystem is the best she’s seen. An issue is who is maintaining the resources list/sites and how often, because resources are in flux. The best one right now is San Diego Tech Scene.
Lisa mentioned that there are hundreds of tech meetup groups in all topics and categories.
Diversity and inclusion are buzzwords now, but how can we make the conversations lead to actions?
Alex said to put the onus on companies to make sure they are welcoming and make people feel comfortable, and call out those companies who don’t. If you don’t feel welcome somewhere, even if you’re invited, you don’t come back.
Rebecca in the audience mentioned that we hire for diversity then expect everyone to behave like young white men, so make sure companies are setting internal values and expectations for diversity and inclusion. H. said this is a multigenerational issue that won’t be solved in a year but we as a society expect a quick turnaround on everything. One panel won’t solve it, but each panel or conversation is important. A student of his mentioned how people at the beginning of rights movements die for the cause, it’s a bit of a war. H. said we need people ready for war.
Alex said he hears, “Oh, I hired certain people because I want to get diversity,” but that is backward. First, you should create an environment to promote inclusivity and make people feel welcome, instead of just checking off the box for diversity and not changing behavior in an organization. Company culture change is hard and takes a long time. Felena said we’re often afraid of what we don’t understand and encourages us to learn about different cultures. Share your experiences and ask others to share their experiences to understand them. Lisa says representation is important, seeing different types of people in panels and in boardrooms, so diverse people lower in their careers can envision themselves up there.
H. said diversity is not a normative argument meaning it’s not just “a good thing to do.” There is data to support the fact that diverse groups and women CEOs create more revenue for businesses. Diverse teams can enter different markets faster with a greater understanding of different people. All boards care about is the bottom line, so use the data to your advantage.
What do you say to people who say they’d like to hire diverse talent but can’t find them?
H. asked are you looking at the right channels and wells for talent? To find diverse talent you can’t go to the same places where you have always looked for talent. Alex said it’s a short-sighted argument like how in manufacturing they can’t find people who can do the advanced positions because they didn’t educate and train people in the lower positions first, developing the talent pipeline. Companies need to invest in schools and training programs in order to invest in cultivating diverse talent. A lot of companies don’t want to do any additional work in the HR process.
What can we do to join H’s army and take action?
Felena said to move in circles you don’t normally go to, both geographically and industry. Get out of your neighborhood and out of your comfort zone. H. said don’t be a bystander, stand up against racist bosses. Also keep yourself in check by educating yourself with books, mediation, going to the gym … don’t make accusations unless you are educated. Alex said to write down one thing you can do after this panel and do it right away. Even if it’s just sending an email.
How do you promote diversity in companies with only 2-3 people?
H. said if Facebook had started thinking of diversity at that stage it wouldn’t have so many problems with culture and diversity now. Once you get to 10,000 workers it’s hard to change a culture and “add” diversity. Lisa said for every one Zuckerberg there are 1000s of companies that fail, so it’s OK for women- or minority-owned businesses to fail, the more that fail the greater the chance the next one will rise.
An audience member gave a stat about only 2% of VCs funding women yet women own 38% of businesses in the country, gave thanks for opening Hera Hub in Carlsbad, she wants to see more things like Startup Week and Creative Mornings in the north, not just downtown.
Felena said 18% of angel investing goes to women, but 89% of women-owned businesses have ZERO full-time employees, and VC money is usually for later-stage businesses that have employees. We need to encourage female founders to go big, to build businesses that can scale and hire employees so they have a chance at funding.
Kudos to SDSW for booking one large venue for all panels this year, the San Diego Civic Center, a great improvement over running all over downtown in between panels to make it to the next one on time! Though I liked seeing the variety of business spaces last year, the stress of getting from place to place on time offset the benefits, in my opinion.
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