Diversity: The Key to Startup Success

When we first envisioned the technology upon which Cipher Skin is based, we talked to established players in the industry. The entrenched, Fortune 500 types. Their executives asked us why a couple of guys in a garage expected to solve a problem that their teams of scientists had been trying and failing at.

And somehow, at the same time, they couldn’t really imagine a monitoring device that wasn’t a new iteration of an old thing: some amalgamation of a heart rate monitor and an accelerometer sewed together. Basically another answer to the question of “How many ways can we reinvent a Fitbit?”

This is known as institutional isomorphism: the tendency for products and practices within an industry to converge toward a state of self-similarity. Someone sees initial success in a new field, and everyone else jumps in with a “me too” product that does about the same thing, but in a slightly different form.

Harvard Business School professor Youngme Moon calls this “heterogeneous homogeneity” which is a complicated way of saying “different sameness.”

In her book, Different: Escaping the Competitive Herd, she lists the countless products and services that exist in nearly indistinguishable variety and that we’ve grown numb to choosing from — whether that’s toothpaste, soup or cars.

But here’s the thing: As the renowned military strategist [John Boyd] loved to say, “Closed systems collapse."

When an industry stagnates for too long, trying, again and again, to exploit more profit from the same basic technology, it eventually gets sideswiped by someone new coming in with an outside perspective.

Think of the automobile industry blithely changing the shape of the plastic on each year’s new car as a means of competitive innovation until Tesla came along.

The CEO of BMW, alongside just about everyone else in the industry, was initially dismissive of the entire concept. How could such a wildly different thing with no traction work when what they’d been doing had been effective for so long? That CEO resigned this year after acknowledging that he’d made a strategic blunder and his company had fallen behind the future of the industry.

As the author Kevin Carey wrote, “Organizations become so used to the way things are, they can’t conceive of another way until a new competitor springs up to take advantage of all those inefficiencies and drives the old business to extinction.”

For a new competitor to come up with something that an entire industry has failed to think of requires a leap in creative thinking. That upstart must start from first principles and connect concepts from diverse fields, through a wide range of perspectives, in order to create something new.

In Range: Why Generalists Triumph in a Specialized World, David Epstein explains, “Modern work demands knowledge transfer: the ability to apply knowledge to new situations and different domains. Our most fundamental thought processes have changed to accommodate increasing complexity and the need to derive new patterns rather than rely only on familiar ones. Our conceptual classification schemes provide scaffolding for connecting knowledge, making it accessible and flexible.”

This idea of mental scaffolding is echoed by Charlie Munger, one of the minds behind Berkshire Hathaway. Munger uses the concept of a latticework of mental models to describe the characteristics needed to successfully navigate a complex and highly competitive world.

It’s not sufficient to be an expert in just one thing. In fact, research suggests that isolated expertise can actually make you more prone to some types of bias and intellectual error.

As Munger says, “You’ve got to have multiple models because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does.”

A broad, diverse base of training creates a broad range of transfer. With a wider range of mental models, experience, and perspectives, you have an increasing ability to connect seemingly random dots and create an “aha” moment.

Our founders talked for years about how to create something that could monitor the behavior of an entire system at once – inside and out. It wasn’t until they made a connection between multiple fields that they found a solution.

Phillip, now our CEO, is a good example of a diverse range of experiences and education. A special operations Marine medic who has studied applied mathematics and physics as well as microbiology and business, Phillip was thinking about a study he had read about the electrical properties of earthworms in motion while his wife took a bottle of wine out of a grocery bag.

The wine bottle had a plastic mesh protector sleeve. The sleeve made Phillip realize that the same electrical principles that he had read about in the earthworm paper could work in a conductive polymer grid and the basis of Cipher Skin was born.

A diversity of mental models is not just a strength for an individual. It’s even more critical when assembling a team.

This is something that we have pursued since the first day we began bringing people into Cipher Skin. We don’t want a dozen people with the same backgrounds and educations. We want a wide range of worldviews, knowledge, and experience working together to build something that has never existed before.

Even with our small number of employees, you could walk through our offices and hear around half a dozen languages being spoken by men and women from five different countries. You’ll find MDs, PhDs, MBAs, and numerous technical master’s degrees mixed with backgrounds in the special operations community and French parliament.

Our broad range of skills and perspectives gives us not just the specialized expertise necessary to focus intensely on a technical problem, but also to step back as a team, look at the bigger picture and ensure that the problems we are solving are the problems that matter.

This ability, driven by the diversity found within and among our team, is one of the main ways we are able to effectively figure out solutions to difficult problems and – even more importantly – ask the right questions in the first place.