For some startups, tech’s lack of diversity is a goldmine

As criticisms of Silicon Valley’s largely white male ranks came to a boil last spring, Nicole Sanchez was in the midst of launching a company of her own — a consultancy to help companies’ diversity.

The timing couldn’t have been better. The month Vaya Consulting opened, Google released its lackluster employee diversity data to the public. At Vaya, the calls came pouring in. One company’s public relations nightmare, it turns out, is another woman’s startup.

Vaya is one of a host of upstarts seeking to turn Silicon Valley’s diversity problem into profit — helping tech companies find, recruit and retain a diverse workforce, usually for a hefty fee. Still other companies have recently added diversity services to those already offered.

In tech, diversity is now for sale.

Sanchez and her team helps clients like Pinterest with tasks such as restructuring recruitment and organizing bias training. The goal is to “build diversity from the ground up.”

Sanchez, a former partner at the tech diversity group Kapor Center for Social Impact, prefers to work with companies that have fewer than 1,000 employees.

“There is still a chance to influence the culture dramatically at that stage,” she said. “Once you get to companies the size of Intel, you really do need $300 million to move the needle.”

At Pinterest, a scrapbooking social network that has a majority of female users, the numbers are a bit better than elsewhere in tech. Overall, 92 percent of its staff is either white or Asian, but 40 percent of the more than 300 employees are women. With 21 percent of its technical positions staffed by women, Pinterest trumps all other companies that have released data. At Google, women hold 17 percent of technical posts, while at Facebook and Yahoo they hold 15 percent.

Becoming a destination

But Pinterest suspected that lurking in its hiring and recruiting strategies might be practices that made it harder for female, black, Latino and Native American candidates to make the cut. The company signed deals last week with Vaya, and another startup, Paradigm, to revamp the way it phrases job postings and interview questions. Pinterest is starting in the department most often affected by bias: engineering.

“Our end goal is to be a destination for minorities and women, to create an environment where anybody can be successful,” said Kate Fiedelman, Pinterest’s recently appointed director of diversity. “In the short term, we want to start with making everyone aware of biases.”

Software helps

Gap Jumpers, another diversity startup, sells software that helps tech companies evaluate job candidates based on talent alone. The company offers different skills tests to vet people applying for jobs — a blind audition conducted via computer. Blind testing, much research has proven, often results in the hiring of more women and minorities because it eliminates the opportunities for bias to influence who makes the cut.

Sound company Dolby Labs, one of Gap Jumpers’ clients, said it recently hired an engineering intern who probably would have otherwise been passed over due to a lack of experience and academic pedigree.

“We are now looking at these very low-experience students through the lens of abilities and aptitude, versus what school they came from,” said Jeremiah Reyes, Dolby’s recruiting manager. “That’s such a cool thing to see.”

Drawing clients

Gap Jumpers was started in June, and already has eight paying clients and six more testing its product. Its customers pay an annual fee of $2,000 for each hiring manager using the software.

Textio is a new company whose software detects patterns in job postings that might turn off candidates who aren’t white and male. It functions a little like a spell-checker that catches language perhaps better suited for the frat house. Textio, for example, would likely flag the phrase “beer o’clock” — common tech industry jargon advertising company-sponsored happy hours. Such language, Textio found, often dissuades female job applicants.

Entelo, a recruiting software company, added a feature in May that allows hiring managers to run searches for diverse job candidates with specific skills, such as a female software developer with expertise in JavaScript. Annual subscriptions start at $10,000.

Piazza, which makes software that college students use to communicate with professors, introduced a product last fall that lets technology companies find women taking computer science classes. The cost of that service starts at $100,000 a year.

“We realized people are willing to pay a whole lot of money to find good tech talent, especially diverse talent,” said Jessica Gilmartin, the company’s chief business officer.

She said Piazza is “constantly turning down companies” that “don’t have the right culture.”

Likewise, Sanchez, of Vaya Consulting, said she has been turning business away — too many companies seem to think hiring her will be a quick solution to a complicated problem.

“I am constantly telling companies that amenities do not make a culture,” she said. “A pingpong table does not make a culture.”