Yes, I’m glad that corporate diversity and inclusion is a hot topic. But recently, research has shown that while more than 70% of companies believe they are advanced in this area, only 11% truly understand the depth of the problem.
But instead of getting stuck into the issues with unconscious bias training (we are more aware, so what?), I thought in light of International Women’s Day I’d share some personal stories of how these biases have affected me as a startup founder, and in particular, focus on one of the most common cognitive biases.
Did you know an average adult makes about 35,000 remotely conscious decisions each day? In order to handle this sheer volume of decisions, our brains are hard-wired for shortcuts.
As a female founder and chief executive officer, wife and parent, who like all human beings is perfectly imperfect, I understand I am also subject to cognitive biases — these being the systematic errors in thinking that affects the decisions and judgments that people make.
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The brain is hard-wired to make all kinds of mental mistakes that can impact our ability to make rational judgments.
I’ll share just three examples of how I handled (or didn’t handle) confirmation bias, one of the most common cognitive biases.
What is confirmation bias?
Confirmation bias is the often unconscious tendency to “like data that confirms our existing hypothesis or beliefs and discard those which challenge them. This is an evolutionary safety net that has been programmed into us, to protect our brains from the threat of opposing information which challenges our identity (we evolved as tribes with shared beliefs).”
Scenario one: Confirmation bias in early-stage investing
Early-stage investors invest based on their personal belief about a team, business model and market. This often means that once an investor becomes sceptical, there is no data that can really correct course.
For example, most of the early-stage investors I have met look for founders that have ‘hustler’, ‘hipster’ and ‘hacker’ skills. I have thankfully found investors who have consciously overlooked the fact I have so far not found a technical co-founder, and that my B2B enterprise product, commercial experience and tenacity to solve the problem of skills mismatch in the Fourth Industrial Revolution will be more than enough.
Here’s what I have learnt.
When I first joined the Heads Over Heels women networking group, I was advised to own the fact I was a single founder. For me, the difference between a technical co-founder and a chief technology officer is not the title, but the mindset. The key criterion for assembling your core team is whether they share your passion for solving the problem you’re trying to solve. Is your purpose the same?
Scenario two: Confirmation bias in finding a solution-market fit
I myself haven’t been immune to confirmation bias. I was sure having anchor enterprise accounts and pilots would grow quickly to other enterprise accounts and across the new customer organisation, and did not adequately consider the buyer in the customer organisation may not have the right KPIs to motivate them beyond the initial pilot.
Here’s what I have learnt.
It’s so important to write down assumptions and actively disprove them (or prove them). Mindfully listen to customers and treat them as experts. Even if you think you have experienced your customers’ pain points, try to have a beginner’s mind and be curious about their experience. Ask your teammates to challenge your assumptions (and try not to be defensive).
Scenario three: Confirmation bias in finding talent for your team or your investment pipeline
In a wide-ranging survey of US startup founders polled by venture-capital firm First Round Capital, 37% said age is the strongest investor bias against founders (most likely from a belief that younger founders are more in tune with technology, or mass market).
It’s a shame, given research repeatedly suggests age diversity promotes productivity and performance, that older workers take fewer sick days, have better problem-solving skills, and are more likely than younger workers to be highly satisfied in their work.
In fact, according to 2018 Harvard Business Review research, the average age of a successful startup founder is 45. (Fun fact: I am 45.)
I have had (male) investors ask me how I manage my travel with my kids (our HQ is in Singapore). But somehow, I managed to convince them travel is not an issue, nor is our remote team which is spread across Sydney and Singapore (and now Vietnam), and I got a term sheet anyway.
Here’s what I have learnt.
I am also not immune to my own bias when I interview for talent to join my team. I have asked candidates if their spouses are really supportive of their startup career choice, but I also ask all candidates what they do to achieve work-life balance and manage their stress, and consciously focus on understanding what they are passionate about.
As for investors, I’ve learnt that communicating my passion to the problem I’m trying to solve, showing I’m coachable and will be data-led to make decisions (not just blindly listen to their well-meaning advice) is enough for them to trust me.
You can learn more about ‘promotion orientation’ questions (in other words, investors quizzing you on your hopes, achievements, advancement and ideals) and the impact this has on fundraising here.