5 Strategies for Overcoming Unconscious Bias in the Tech Industry

Bias is a reality many organizations face despite their efforts to overcome workplace stereotypes.

According to a survey cited in Forbes, employees who report experiencing bias are 33 percent more likely to feel alienated, 34 percent more likely to withhold ideas and solutions, and 80 percent less likely to refer others to their employers.

If you want to help your company avoid those negative effects, here’s a breakdown of what unconscious bias is, how it affects tech startups, and five strategies to surmount it.

What Is Unconscious Bias?

Unconscious bias is a prejudice you don’t consciously hold or recognize. It can impact business decisions related to:

• Hiring and recruitment
• Investments
• Promotions

“Biases about class, race, gender, age, appearance, and other factors can impact how entrepreneurs are perceived and treated by investors, customers, and partners all over the world,” says Harvard Business School Senior Lecturer Jeffery Bussgang in the online course Launching Tech Ventures.

Unconscious bias impacts both established businesses and startups.

“While startupland is, in some ways, open, accessible, disruptive, and innovative, it’s still made up of humans,” Bussgang says. “So biases can and do come into play.”

How Unconscious Bias Affects Tech Startups

Raising capital is one of the startup processes most affected by unconscious bias.

In many ways, venture capitalist (VC) firms have the power to level the playing field for founders seeking investment. They can hire diverse team members to ensure decisions involve multiple perspectives and create funds and networking opportunities for underrepresented entrepreneurs.

“Some advice that I'd give to underrepresented founders is to realize that we know there are disadvantages that come with being underrepresented,” says Songe LaRon, co-founder of barbershop booking app Squire, in Launching Tech Ventures. “That's just the world we live in, unfortunately. And I advise them to not focus so much on that because it's out of their control, and to really focus on the things that are in their control.”

To further delve into unconscious bias’s impact on the tech industry, here are the types that commonly affect founders.

Unconscious Biases That Affect Tech Startups

Gender

Gender bias is prevalent in business. According to the online startup community BuiltIn, 42 percent of women report experiencing gender discrimination at work—and those in tech are no exception.

Bias can take the form of passed-up promotions, lower salaries, and—in extreme situations—sexual harassment. It can also impact startup funding.

“Unconscious and unchecked gender biases in the startup ecosystem can have a detrimental impact on a female founder’s ability to raise capital,” Bussgang says in Launching Tech Ventures.

Bussgang’s research shows that, since 2011, female-founded organizations have received just two to three percent of all VC funds, while those with both female and male founders have received about 15 percent.

Bussgang also found that male founders typically receive questions from VCs pertaining to future achievements, but those posed to female entrepreneurs often focus on risk and responsibility.

“This difference in questioning leads to a drastic difference in funding,” Bussgang says.

Race

Despite organizations’ diversity, inclusion, and equity efforts, racial bias is a challenge in business. A Gallup poll shows that one in four people of color report experiencing some form of discrimination at work.

The issue extends to funding. According to Launching Tech Ventures, fewer than two percent of all venture capital dollars go to Black or Latinx founders in the United States.

“I think that, as Black founders, we have a sense that when we walk into the room, we're already walking in with a deficit in terms of the assumption of what we bring to the table,” LaRon says in the course.

In a Harvard Business Review article, serial entrepreneur James Norman—who’s also featured in Launching Tech Ventures—outlines the obstacles entrepreneurs of color can face when securing startup funding, such as:

• Market problems and solutions: If an investor is unfamiliar with an idea’s potential or a market’s pain points, they likely won’t provide funding.
• Access to resources: Funding from family and friends often isn’t possible for entrepreneurs of color because of historical disadvantages, forcing them to search for other ways to grow their companies and raise capital.
• Communication styles: Different communication styles can create missed nuances and gaps in understanding when founders of color pitch business ideas to investors.

If VCs don’t consider these issues and understand founders of color and their ideas, unconscious biases can drive their investment decisions.

Class

Economic background is also susceptible to unconscious bias. According to Launching Tech Ventures, professionals from lower economic classes are more likely to be treated differently in the workplace if they’re perceived to speak or behave differently.

According to the Harvard Business Review, U.S. professionals from lower economic classes are 32 percent less likely to become managers than those from higher social-class origins.

And this issue spans the world. For instance, several studies have attempted to capture the extent of economic discrimination in India. While gender, race, and religion play roles, research shows that caste-based discrimination significantly influences everyday life.

Keep examples like this in mind if you plan to enter global markets or pursue international funding sources.

Related: 5 Common Challenges of International Business You Should Consider

5 Strategies for Overcoming Unconscious Bias in Startups

1. Become Aware of the Bias

Becoming aware of unconscious bias and how it affects your decision-making is vital to combating it.

“Mitigating bias in the current startup system starts with being conscious and spending mental cycles thinking through the conversation you’re having with someone who might be different from the person you usually speak with,” Norman says in Launching Tech Ventures. “You might find nuance in what that person is saying or where you can dive in on a piece of the conversation that that person wasn't presenting.”

2. Improve Cultural Competency

Unconscious bias often stems from perceived differences between people. This is evident in gender and racial biases that affect the startup funding process.

The best way to bridge the gap is by improving your cultural competency—your ability to respond respectfully to people of all cultures, classes, races, ethnicities, sexual orientations, and faiths or religions.

You can achieve that by:

• Actively listening to those from different backgrounds
• Seeking cultural knowledge through conversations and research
• Participating in diverse groups

In addition to inclusivity and diversity, cultural competency fosters creative problem-solving and innovation.

3. Create Safe Spaces for Learning

Creating a safe space for your team is crucial to overcoming unconscious bias in the tech space.

According to Norman in Launching Tech Ventures, the space doesn’t have to be a specific location but an environment that makes everyone feel comfortable sharing resources, knowledge, and introductions.

One way to gauge what your team needs is by collecting feedback. In addition to showing that you care, it promotes accountability. By leading with empathy and active listening, you can engage your employees and overcome bias.

Related: How to Create a Culture of Ethics & Accountability in the Workplace

4. Take the Implicit Association Test (IAT)

Another useful tool is bias testing.

For example, the Implicit Association Test (IAT)—developed by professors from Harvard University, the University of Washington, and the University of Virginia—detects subconscious associations in memory. Much like unconscious bias, implicit bias occurs automatically and unintentionally—impacting judgments, decisions, and behaviors.

The test determines your underlying beliefs—some of which you may be unwilling or unable to admit, like ageism or sexism. Tests like this can bring you closer to identifying your biases and figuring out how they manifest mentally. Once that’s clear, you can approach situations with more self-awareness.

5. Turn a Negative Into a Positive

Unconscious bias is unavoidable in business; it can be hard to break the habit of leaning on conventional perceptions and points of view. However, keeping a positive attitude and reframing uncomfortable situations can help.

Consider an investor harping on your current revenue projections. They might ask, “What if you only make half that?” Instead of taking offense, use the question to highlight your business model’s best components and build confidence for your pitch.

“If you receive what you feel is a biased question from a VC, I think the first thing to realize is sometimes that's not intentional,” says Anna Palmer, co-founder of XFactor Ventures, in Launching Tech Ventures. “VC is a pattern-matching game. A lot of times, there's not nefarious intent behind that. Really think of it as your opportunity to turn that negative question into a positive.”

Related: How to Effectively Pitch a Business Idea

Combating Unconscious Bias in the Tech Industry

Starting a business can be challenging. As an entrepreneur, setting a stable foundation and ensuring your employees feel valued is vital.

“To be an effective founder in this ecosystem, we need to acknowledge these biases and understand how to build systems and tactics to combat them,” Bussgang says in Launching Tech Ventures.

While the strategies above are effective starting points for overcoming unconscious bias, taking an online course, such as Launching Tech Ventures, can help you better understand the startup landscape.

In the course, you learn from industry experts and engage in real-world case studies to get a full picture of what to expect when starting your business.

Do you want to further explore the startup ecosystem’s unconscious and systemic biases? Enroll in Launching Tech Ventures—one of our entrepreneurship and innovation courses—and download our free entrepreneurship e-book.