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Why Building Your Start-Up Team With People You Know Could Be Your Biggest Mistake


by Rania H. Anderson, author of “WE: Men, Women, and the Decisive Formula for Winning at Work 

Entrepreneurs tend to build their start-up teams with people they know.  This isn’t surprising. Launching a business is risky, and going into it with team members you’ve worked with before can make it seem less so.

But the operative word in this case is “seem.”  The truth is, you may actually be increasing your risk by going this route.  When you build your start-up team from a pool of people you already know, chances are you’ll be creating a pretty homogenous group.  Your co-founders and teammates are likely to be similar to you in age, race, background, experience, education, gender.

However, research, data and findings irrefutably show that diverse teams are better at solving problems, more broadly understanding customer needs, making decisions and that diverse leadership teams are more profitable.

While reporting is inconsistent, according to the Bureau of Labor Statistics around 50% of U.S. small businesses fail in the first four years and the top causes of small business failure are imbalanced experience or lack of managerial experience – in other words, not the right team.

Entrepreneurs who want to improve their odds of success know that they must build a diverse team right from the start. They understand that it’s harder to change culture and attract diverse candidates after a homogenous culture is entrenched.

To improve the odds of your success here are the four steps to take as you form your business startup team.

1. Make a Commitment.

Set a goal that you will bring together a diverse team. Just as you set product, service, revenue, growth goals, if you make a diversity one of your business goals, you can plan, execute and measure your performance.

2. Broaden Your Network.

Evaluate who you interact with. Do you limit your participation in events, conferences, and professional gatherings to people like you? Who do you follow and engage with on social media? Who do you talk to about business ideas and issues?

Identify and attend specific events that will expose you to different types of people. Set a goal to reach out, connect and talk to people whose gender, age, background, experience, race, etc. is different from your own.  Ask people who are different from you where they network and ask them if they would introduce you to talented people they know.

3. Change How You Recruit.

Have people who are not like you look at the way you’ve worded and positioned job ads. Eliminate words and images that might discourage diverse candidates. There are several tools available to help you make your job descriptions more inclusive.

Don’t only ask your friends and people who are similar to you for referrals.

4. Build a Culturally Inclusive Environment.

Carefully evaluate your office set up, work-environment, meet-ups and team-building activities. Ensure that that the norms and practices that you are putting in place are inclusive and ones that everyone would feel comfortable operating in.

I have coached and invested in a number of start-ups over the years, and I have seen first-hand how much more effective diverse teams can be.  So as you launch your new venture, be sure that broadening the diversity of your team is a key part of your business plan.


Rania H. Anderson is the author of “WE: Men, Women, and the Decisive Formula for Winning at Work“. She strengthens and transforms the way men and women work together to improve their collective success. Sought after for her unique insights and expertise, she speaks at corporations, coaches business leaders and is an angel investor.

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