Why Hiring Someone Like You Doesn’t Make Great Business for Start-Ups

Vikas Joshi
April 21, 2017

Often, we tend to consider diversity solely from a social justice or equality viewpoint. Even at the start-up stage, diversity is mostly seen as a company image issue, if at all. That is a very narrow view. The benefits of diversity extend far beyond good corporate citizenship. Diverse teams generate strategic advantage by positively impacting your offerings. They also help in your professional growth by creating a better corporate culture.

The Strategic Advantage of Diversity

To understand how diversity creates advantage, we need to look at diversity from a ‘design thinking’ perspective. The principle of design thinking is guided by empathy; it’s about putting yourself in the shoes of your audience and developing an understanding of their circumstances. You need to wear the anthropologist’s hat, in a manner of speaking.

Many firms can attribute their early success to a unique insight that the founder had about the market, often from personal experience. When founding teams can relate to the experiences of their customers, their products resonate better with users. Facebook is a great example. As a student, Zuckerberg could understand his peers’ need to keep in touch or communicate. Similarly, Zappos.com was a result of founder Nick Swinmurn’s frustrating attempt at finding a certain pair of shoes that he wanted, in a San Francisco mall.

When we extend this logic to a startup team or a multi-founder scenario, the implication is straightforward: The greater the diversity, greater the scope for expanding your firm’s understanding of the users. Diversity can be about any number of factors such as gender, race, social background, education, and so on. A firm with two founders, an American woman from the fashion industry and an Asian engineer with his early childhood in Hong Kong could together bring a varied ‘lived experience’ to the table. Contrast that with a start-up founded by three Japanese engineers who went to the same school, and are experts in embedded systems. Of course, the second start-up may have a better depth since the founders have professional background in one field, but the breadth of their experience is likely to be limited. It’s a trade-off.

Last October, the Harvard Business Review did a story titled ‘Why are Immigrants more Entrepreneurial?’ that talks about how cross-cultural experiences may increase individuals’ capabilities to identify promising business ideas. This makes absolute sense because innovation vitally depends on the confluence of diverse ideas – this is amply proved in both nature and business.

The Founder Growth Perspective on Diversity

Hiring only buddies or potential buddies can have a pretty insidious side to it as evidenced by a recent New York Times Story called ‘Jerks and the Start-ups they ruin.’ The story speaks about the problems associated with the tech industry’s ‘Bro-culture,’ especially with respect to recent developments at Uber.

Hiring clones of yourself just because they are easier to manage is a very short sighted approach. On one hand, you run the risk of robbing your business of some great growth opportunities. Even on a personal level, you are limiting your personal growth.

Diversity Has Some Inherent Challenges

Of course, while the idea of having a diverse team makes absolute sense in theory, it’s easier said than done. One practical issue is that, most of the time, our social circles tend to consist of people who are like us. So, going out of your way to find the right partner or team member, just to up the diversity quotient may not seem worth it.

Another challenge is that some of us are conditioned to be wary of ‘those other people.’ It’s not very easy to really identify with them or to like the idea of having them as coworkers. In a small company, it can seem like a huge challenge to work with someone who doesn’t ‘get’ you. The amount of effort required to create harmony can seem like an unnecessary overhead. It’s just easier when everyone gets along without the need to invest effort in understanding each other.


Although hiring within your circles it may seem like the more convenient thing to do, it’s also very shortsighted. When you make the effort to engage and work with people who might be very different from you, the pay-off is huge not just in terms of understanding your customers and the market, but also from the point of view of your own growth.