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provide ubiquitous data, unlimited connectivity, and massive processing power. Savvy companies are
converting all this capacity into digital offerings: information-enriched solutions wrapped in seamless,
personalized customer experiences.
Successful digital offerings are created at the intersection of what technologies can deliver and what
customers want and will pay for. That point of intersection, however, has proved to be elusive. To find it,
companies must experiment repeatedly, cocreate with customers, and assemble cross-functional devel-
opment teams — and the insights gleaned along the way must be shared internally. This article explores
how several of the nearly 200 companies the authors studied have built and exercised these capabilities.
REPRINT 61103How Algorithms Can Diversify the Startup Pool
Morela Hernandez, Roshni Raveendhran, Elizabeth Weingarten, and Michaela Barnett pp. 71-78Some venture capital (VC) firms are starting to realize how much gender
bias can skew their decisions about which startups to fund — and the
negative impact that can have on their portfolios and investments. They
are embracing algorithms, artificial intelligence, predictive analytics, and
other quantitative, data-driven approaches in an attempt to making
smarter, fairer funding decisions. But so far, the effectiveness of these
tools remains an open question.
So the authors have set out to examine the extent to which such tools
and technologies really do help level the VC playing field for female entre-
preneurs. On the basis of their emerging findings, they are cautiously
optimistic. In this article, they explain how biases tend to creep into VC
decision-making when investors size up their prospects according to fac-
tors like fit and likability, why investors rely so heavily on gut instinct, and their tendency to passively
wish for a more diverse pool of candidates. The authors then describe some of the data-driven
approaches firms are using to tease out those biases, explore the opportunities and challenges of
algorithmic decision-making, and offer concrete recommendations that VC firms can use to mitigate
bias in the profiling of entrepreneurs who seek capital for startups. The goal: to help VC firms make
less biased, more quantitative investment decisions that serve both the firms themselves and the
entrepreneurs who need their funding.
REPRINT 61104