Unpacking our Differences: The Contrasting Effects of Surface-Level versus Deep-Level Diversity in New Venture Teams

Abstract

Drawing upon research on team diversity, we propose that assembling a team with deep-level diversity (e.g., goal diversity, personality differences) undermines initial venture viability more than surface-level diversity (e.g., ethnicity, gender, age). Further, we propose that whereas the effects of surface-level diversity are contingent on knowledge diversity, the effects of deep-level diversity are contingent upon team familiarity. We test our theory utilizing data from an incubator program and find that deep-level diversity is more negatively related to initial venture viability than surface-level diversity. We also find that the effects of deep-level diversity become more pronounced in highly familiar teams, whereas the effects of surface-level diversity become more pronounced in teams with a high degree of knowledge diversity. Our study contributes to our understanding of new venture teams by highlighting the unique effects of surface-level versus deep-level diversity as well as the distinct conditions under which each form of diversity are most problematic.