Systems, not individuals
News from the Funding Innovation Lab: July 17, 2024, Edition 5
Welcome to LabCentral’s Funding Innovation Lab newsletter! Each Wednesday, we’ll be sharing a quick note from Beth McKeon, as well as timely articles to spark ideas and conversations about how the Funding Innovation Lab can identify critical challenges in the biotech funding model, rapidly test potential interventions, and share results with our community.
Real change won’t come at the individual level. We can’t ask individual founders or investors to show up differently and create the kind of change we seek at a systems level.
It’s one reason I give the “job description” example every time I talk about the Funding Innovation Lab.
It is well-known that women often decline to apply for jobs unless they meet all the requirements in the job description. Men, on the other hand, will apply if they meet as few as 60% of the requirements. From the outside, it might be easy for companies to wring their hands and just say there aren’t any women candidates, because they don’t see many women apply for their jobs. And it could be easy to blame women or just encourage them to be braver and apply for jobs that intimidate them.
The equivalent “solutions” are already quite common within the funding space where it is common to claim that there just aren’t enough diverse founders or that diverse founders just aren’t as good at asking for what they need.
But then someone figured out that if the job description includes one single sentence encouraging applicants to apply even if they don’t meet all the requirements, more women apply for the job.
I love this example because it doesn’t ask individual women to be “better” at applying for jobs. They don’t need to show up differently at all. And the companies don’t need to change their criteria or lower their standards to attract women candidates. A tiny design change to job descriptions creates conditions that are better for women job seekers and for the companies that want to have the best applicant pool possible.
The more we understand how people are operating at a systems level, the more we can design best practices that create the conditions we want to see. That’s what we’re doing here at the Funding Innovation Lab.
Join our Kickoff Event - July 25th
Want to get more involved in the Funding Innovation Lab?
We are hosting a virtual Kickoff event next Thursday - July 25th.
This event is free and open to all eligible community members, including: investors (all stages and industry sectors), founders in the life sciences, and ecosystem partners that support investors/founders in the funding process (incubators, accelerators, service providers, industry partners etc).
If you’ve been reading these weekly posts and keep asking yourself “but how will these tiny, fast experiments actually get us real results” this event is for you!
Please reach out to Beth if you’d like more information! [bmckeon@labcentral.org]
What we’re reading
The Funding Innovation Lab relies on a large body of scholarship and research-backed approaches. Each week, we’ll share snippets from the books we’re reading that provide inspiration for the kinds of experiments we may run in the future.
Who Gets What - and Why, by Alvin E. Roth (Amazon)
If we’re going to talk about systems in the funding process, it’s useful to study how the systems of marketplaces work. Who accesses venture funding and how funding is allocated is largely a marketplace that organically developed over time. Just as I’ve described the opportunity to think about behavior design to find nudges and tiny design changes that get a big impact, in this book Roth argues that we can be market designers who look to create more simplicity, efficiency, and equity in the system.
“Markets are like languages. Both are ancient human inventions. Both are tools we use to organize ourselves, to cooperate and coordinate and compete with one another, and ultimately to figure out who gets what…
When we learn to listen and speak, as well as to read and write, we learn rules of courtesy, grammar rules, and shared vocabularies that have evolved even though no one planned them. In much the same way, markets and marketplaces, whether consciously designed (such as Amazon or kidney exchange) or developed incrementally by accident and happenstance, have rules that help them work well - or badly…
As we start to understand better how markets and marketplaces work, we realize that we can intervene in them, redesign them, fix them when they’re broken, and start new ones where they will be useful.”
What is the Funding Innovation Lab?
The Funding Innovation Lab is a non-profit program, founded by LabCentral and led by Beth McKeon, with a mission to increase funding equity for women and BIPOC founders in the life sciences.
The Funding Innovation Lab convenes and supports innovators from across VC, universities, and entrepreneurial support organizations, as they run rapid design sprints to solve the persistent systemic barriers and bias in the fundraising and capital deployment process. The Funding Innovation Lab has an open-source policy, sharing the wins and fails from these experiments here on Substack and with its community of practitioners with the goal to see widespread adoption and replication of emerging best practices in this field.