Techstars co-founder talks startups, impact in fireside chat

FORT COLLINS — Techstars co-founder and co-CEO David Brown spoke to Fort Collins Startup Week attendees in a fireside chat about startups, inclusivity and social good.

For Brown, startups are more a frame of mind than a strict definition.

“We say Techstars is a startup even with 250 people,” he said. “It depends on how you act. If you do casual Fridays and [have] 10 people, you’re not a startup. A startup is about the hustle and entrepreneurial spirit and going fast and thinking you could still fail. It’s hard to find the right criteria. I don’t think it’s about age or number of employees. I was on a plane with an early employee of Apple, and he said the company left its startup phase at around 5,000 people.”

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The definition of startups might be elastic, but one thing they can benefit from is diversity, something Techstars has taken to heart with the hiring of Jason Thompson, vice president of diversity and inclusion.

Brown said he sees a diverse workforce as the right thing to do, but even taking morality out of it, it makes sense from a pure business perspective to have a diverse employee base.

“You want lots of customers,” he said. “So as a business owner, do I want to limit myself to only men and then further limit myself to only white men and further limit myself to only old white men? Of course not. Any startup CEO would say they want lots of customers and that means your customers have to be represented by the employees you have. If you have a diverse organization, you will have customer viewpoints represented in your services and products.”

Becoming a diverse company can take time, however. Brown said he started measuring diversity not in terms of how much of his entire employee base is diverse, but by measuring new hire numbers.

“You can’t fire people and start fresh,” Brown said. “So if 50 percent of the new managing directors we hire are women, that means we are making progress.”

Brown added that events like Startup Week could help foster diversity in startups by promoting it not just in terms of its content but in how it is represented.

“You can start by having your panels be diverse,” he said. “It doesn’t have to be about diversity, but when people see diversity it seeps into the consciousness. Making an effort to have not all white male panels is valuable regardless of the topic.”

Doing what is best and what is right extends beyond who you hire, but how you treat them, Brown said. It’s fiscally responsible, for example, to offer uncommon benefits such as paternity leave.

“As a manager or organization or CEO, to say ‘this is an important time in your life, and I encourage you to spend time at home with your little one and significant other’ what you will get from that is gratitude and that translates into loyalty. I can’t think of anything more fiscally responsible than that.”

Brown said it goes beyond paternity leave to doing the right thing whenever possible. He had a colleague who went through a difficult divorce but had a manager who supported her, was there for her and checked in on her. The reaction was that she was so loyal to the manager, she would move mountains for her manager. Generating that loyalty by just treating employees well is not only right but makes sense from a business perspective.

Doing the right thing as a startup can also reap financial awards. Brown said Techstars has three verticals focused on impact and social good: an impact accelerator in Austin, the sustainability accelerator in Denver and the farm to fork accelerator in Minnesota. Those accelerators get about five times the interest of the company’s other accelerators. There is a growing recognition that the future of startups are those that do some good. In fact, Techstars is a registered B Corp.

“We’re trying to lead the way and to say it’s OK to do well when you’re doing good,” Brown said. “Those things are not mutually exclusive.”

More than ever, employees are looking for companies that have some social good. Brown said that if you’re not having that focus, you’re likely not going to attract the best and brightest and you won’t do well.

While the idea is that a company that has an impact won’t get investment, Brown said a review of his own organization found something different. After reviewing the 1,600 portfolio companies in Techstars and the 150 impact companies it has, an analysis found that the impact companies did a few points better at getting investment than the traditional companies.

“It’s counterintuitive, but we found people want to help and that made it a little easier to get investments, employees and customers because people want to do the right thing,” he said.