UPDATED 12:15 EDT / FEBRUARY 21 2020

img_8419 NEWS

Amid a diversity gap in the VC world, Operator Collective creates a new model

Diversity in the workplace provides benefits that aren’t usually seen in a group of like-minded people, including increased innovation and creativity, higher employee engagement and lower turnover. Unfortunately, diversity in gender, race, age and other demographics still isn’t a feature of today’s venture capital world.

One female VC founder and partner recently took a hard look at why diversity was lacking within the VC arena, and what she found was eye-opening. She discovered an underlying desire for diversity but a lack of overlapping networks.

“I looked around and said, ‘Well, where are the operators, the people who build and grow and scale up these companies?'” said Mallun Yen (pictured), founder and partner of Operator Collective Management LLC. “As I started to dig in more and talk to people, what I realized was that the VCs and founders actually wanted to bring in the operators, they wanted to bring in the people with different backgrounds, but the networks didn’t naturally overlap.”

To solve this problem, she created Operator Collective Management in 2018, which aims to “channel the collective experience of the world’s most respected operators to advance the next generation of leaders.” The company’s mission is to bring together tech operators, investors, and founders from diverse backgrounds to invest in and accelerate the next generation of B2B tech.

Yen spoke with Sonia Tagare, host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the CloudNOW Top Women in Cloud Awards event in Menlo Park, California. They discussed Operator Collective’s unique approach to the venture world. 

Diverse company cultures help keep things fresh and innovative

Operator Collective is 90% female and 40% people of color, and it is all about connecting startup technology companies with the expertise of seasoned operators, VCs and leaders. The reason for such obvious diversity is that Yen — who has built up four companies — noticed a pattern that many companies have of building up a mostly homogeneous group of people who are all similar. She doesn’t agree with the idea of hiring for cultural fit.

“That’s not optimizing for a successful company, because … there are studies that show that diverse teams outperform, out innovate homogeneous teams,” Yen explained. “When you have people who are just like you and everyone agrees with each other, then you don’t realize that maybe there’s another way of looking at something. And so cultural fit is a warning sign … to say that, ‘OK, well, they’re just like me. I’m very comfortable.’ Sometimes being uncomfortable is good.”

With a background as an intellectual property lawyer, Yen was not the typical stereotype for a traditional startup candidate.

“By not checking all the boxes, I was able to build a model,” Yen said. “People [were] saying, ‘Look, she doesn’t check any of our typical boxes, but we can like this idea because it’s so different than everyone else’s.'”

As the keynote speaker at this year’s CloudNOW awards event, Yen pointed out the impact of both CloudNow and the recognition the organization gives to women in tech each year. “The recognition is something that is very important because we need to tell the stories and recognize these people who are not maybe the usual suspects,” she stated.

VC has a long way to go in creating a diverse playing field, but Yen said progress is being made.

“There’s more awareness now of the fact that if you hire for cultural fit, you’ll end up with 65 people who are exactly like you,” she said. “And that’s not optimizing for a successful company.”

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the recent CloudNOW Awards:

Photo: SiliconANGLE

Since you’re here …

Show your support for our mission with our one-click subscription to our YouTube channel (below). The more subscribers we have, the more YouTube will suggest relevant enterprise and emerging technology content to you. Thanks!

Support our mission:    >>>>>>  SUBSCRIBE NOW >>>>>>  to our YouTube channel.

… We’d also like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.

If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.