How can we support YouNoodle in eliminating bias in their assessment of programs that support diversity among entrepreneurs?
According to McKinsey & Co., ethnic and cultural diversity at the board level have a strong correlation to an increase of 43% in performance and profitability of companies. While diversity brings direct value to corporations, it has yet to be asserted in the venture-backed startup ecosystem. In 2020, startups raised over $310 billion in venture capital in the US alone; accounting for nearly half of the capital raised around the globe. Despite this immense amount of wealth-creation, only 2.6% was raised by founders of Black or Latin backgrounds and 2.3% raised by female founders.
This background information paints a vivid illustration of the underlying inequities that exist in the world of startup funding. Several forms of bias emerge in investment and transaction behaviors that minimize access and accelerate the disparities felt in the startup ecosystem. For this reason, platforms like YouNoodle are working to challenge the narrative of startup sourcing for foundations, universities, brands, and governments that generate impact through innovation and entrepreneurship. YouNoodle provides assessment criteria to help startup competitions evaluate the future success of a startup.
Given the assessment criteria, our task in the Equitable Design Lab program was to explore the question: “How might we restructure YouNoodle’s evaluation criteria to include diversity and inclusion?”. In order to answer this, our Equitable Design team deep-dove into the observation phase of our Design Thinking methodology to better understand how YouNoodle stakeholders work, how they understand diversity and inclusion, and to what extent they address these topics within their platform. They concluded that bias still existed even though applications were observed by many judges. Unconscious bias is inherently difficult to eliminate as the criteria in place were designed to reduce the work for judges.
To address this, our team worked to create a scoring system for the effectiveness of DEI (Diversity, Equity and Inclusion) impact competitions by providing transparency, incentive, and exposure for the applicants. Prior to the competition, program organizers worked to score their DEI impact in a series of categories. After the competition, applicants are given the opportunity to score their experience in the competition through a series of categories related to DEI. The average of the two rankings would generate an overall score: depending on their rank, participants would be offered a badge on YouNoodle indicating the emphasis on diversity and inclusion for different competitions.
Programs would choose whether or not to include the badge on their YouNoodle profile. The badges would incentivize participation of founders that prefer an experience where they feel included and considered regardless of their background. Ultimately, by reimagining access for founders, this system would work to increase the diversity of participation in startups and expose the biases in program performance. Thus, creating a more inclusive platform for YouNoodle’s customers.