1.2.23 Bias and Meritocracy in Entrepreneurship

Welcome to our discussion on Bias and Meritocracy in Entrepreneurship. This is an interesting discussion point and is something that I examine often in my own research. It is centered on the assumption that many people have about entrepreneurship as a meritocratic endeavor. What does it mean to be meritocratic? A meritocracy is when progress is based on ability and talent rather than other external factors. We’d like to hope that entrepreneurship is based on things like the quality of an idea or the size of a market. Yet I find in much of my research that entrepreneurship is not always meritocratic. We’re all familiar with the term glass ceiling effect and we know that it is particularly salient for the tech world. For example, we hear a lot about gender disadvantages and gender gaps in the sciences, technology, engineering and medicine. But research suggests that entrepreneurship is also seen as a male typed endeavor. And the gender differences exist in entrepreneurship as well. We know that this is a problem that’s why we often make sure that there’s a token female and a token minority in marketing materials and in pictures. But it isn’t just about gender and race or ethnicity. As we’ll get into later, we’ll also talk about other forms of bias that might exist in entrepreneurship. The reason why this is particularly salient for entrepreneurship however. Is because people often pursue entrepreneurship as an alternative when they feel thwarted. What happens is individuals experience bias, or even just suspect bias, and feel that their career prospects, in traditional organizations are limited. Entrepreneurship becomes an alternate route for individuals.
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And specifically these individuals believe that pursuit of entrepreneurial opportunities will help them circumvent the biases that they may have experienced. In other words, these individuals choose to start new ventures as an adaptive mechanism.
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Yet one thing to keep in mind is this. If entrepreneurs are to grow their organizations beyond small operations, allowing them to realize their aspirations for executive responsibilities, they often need access to investment funding. And the unfortunate truth of the matter is that in entrepreneurship these same individuals may find that the experience blocked opportunities and the same sorts of non-meritocratic treatment that they previously received, but this time directed at receiving the capital that they need. In some of my research, I found that this was particularly the case for women entrepreneurs. Even though business viability data considered an objective factor was regarded as the main criteria for investment decisions, my research found other critical criteria that investors also use to make these decisions. Specifically, my colleagues and I found that investors preferred pitches presented by male entrepreneurs even when the content of the pitch is the same.
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To examine this, we conducted an experiment where we presented investors with identical pitches, except for the gender of the entrepreneur. And saw that it was indeed the gender of the entrepreneur driving the effect.
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However, gender was not the only non-meritocratic cue that was influencing investors decision. We also found that the attractiveness of the entrepreneur mattered. Particularly that attractive males, were found to be particularly persuasive. Whereas physical attractiveness did not matter amongst female entrepreneurs.
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In some of my other research, I looked an individual’s accent and an individual’s race and other non-meritocratic factors. What we found is that people know that they cannot openly discriminate based on things like accent and race. So what we discovered is that instead, there were differences in how people were rated on things like political skill and interpersonal influence. Which are factors that people can agree are important.
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And interestingly, people with an accent or a specific race were those who were attributed with the lowest scores on things like political skill and interpersonal influence. It was not a direct bias but things like interpersonal influence was used as a meritocratic cover for race and other biases.
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We test this in multiple settings both technology pitch competitions as well as in hiring for executive positions in technology roles and observer the same effect. So, what this research shows us is that bias isn’t as simple as we may think. Meritocracy and bias may operate through other factors, which are widely believed to be and possibly are important in entrepreneurship. But many of these factors are also highly ambiguous. Providing a convenient and ostensibly meritocratic justification for bias recommendation.
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The good news is that there are actions that an individual can take to address these things and expand their opportunities. The first thing to understand is that bias and meritocracy is really about unequal allocation of time, advice, and money. These are things that entrepreneurs need. In order to grapple with how to receive time, advice and money when you may face a disadvantage, is to focus on two broad themes. First it’s helpful to acknowledge that we are all pretty bad at asking for this things. Women especially are notoriously bad at asking others for help.
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Second, it’s helpful to acknowledge that entrepreneurship is not meritocratic. As much as we try convince ourselves that it is, again, based on things like the quality of the idea or the size of the market, entrepreneurship is not meritocratic. Once we acknowledge this, we can start to take action. Your pitch is critical. This is one arena where you can face huge biases or it is an arena where you can gain back your advantage. Pitching is an art. You don’t want to be taking advice on how to pitch from those who don’t face biases themselves. No pitch should be the same and your pitch should be an opportunity for you to take the biases that others may have against you and use them to your advantage. I’ll talk in much greater detail about this on the lecture on pitching. So please check that out. Both during your pitch and otherwise, you should be focusing on what your unfair advantage is. What this means is, what is it about you that makes you the most qualified person for this startup venture. For example, maybe it is your international experience and, hence, that helps you turn your accent into an asset.
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You should also remember that people make assessments of other based on homophily, similarity and the extent to which they can identify with another person. So seek out connections and commonalities, make those apparent so that others don’t focus on differences instead. Another thing that can help is to communicate broadly and openly. Don’t feel like you need to be in selling mood all the time.
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Tell people about yourself, tell them stories and narratives and let them find connections and commonalities that you can build on. Another thing that can help. If you want advice, ask for money. If you want money, ask for advice. This is obviously very over simplified but it’s about changing your cognitive positioning and the way you think about entrepreneurship. Think about all the things that are implicitly taken into account. And how you have the power to mange impressions as well. So, I leave you with these three things, and a final suggestion to continue to pivot in your approach. Just as you pivot in your business model. If you continue to pivot, and iterate on these things that affect your chances of success and minimizing disadvantages, as entrepreneurs do and should do, you won’t let yourself make excuses and you’ll learn how to be artistic in getting that time, advice, or money that you need and overcome those biases. As we’ve seen, bias exists in entrepreneurship just like everywhere else. What’s important is to get focused on what you need and how to position your business. Know what you do better than everyone else. And get ready to pivot in your approach until you find more works. Thanks for joining this lecture.