Silicon Valley–and Alley–present themselves as the ultimate meritocracy. Anyone can succeed in tech, regardless of their gender, race, or choice of footwear, as long as they’ve got the smarts. Right? In theory, the answer is yes. But take a look at the makeup of most major companies, and you’ll find a wealth of white, male employees.

As Etsy CTO Kellan Elliott-McCrea pointed out in a lecture recently posted on First Round Capital’s blog, the lack of diversity in the tech industry isn’t always for want of trying. Faced with problems created by an all-male engineering team, Elliott-McCrea set out to increase the number of female engineers at Etsy in 2010. After a year of miserable results (they actually lost 35% of their women engineers), he tried a new approach that has since transformed the gender makeup of Etsy’s team. Brett Berson explains:

Mark Hedlund, Etsy’s VP of Engineering, launched “Etsy Hacker Grants” to provide needs-based scholarships to talented women engineers enrolling in Hacker School (a three-month hands-on course designed to teach people how to become better engineers). A number of studies, like one from CMU, have shown that people perform better in math and sciences if fifty percent of the participants are women, so gender distribution was a key metric in future Hacker School classes.

Etsy ran this program in the Summer and Fall of 2012 and watched the number of applications skyrocket each time. And in the summer of 2012, women ended up making up over half of the Hacker School class! For Etsy, the process was objectively worth the investment. If you figure that there’s normally a $20,000 placement fee, Etsy was able to hire eight candidates. You do the math.

So increasing their female team count wasn’t a simple matter of finding qualified female engineers–it was a matter of investing in them. Because women engineers tend to not have enough hands-on experience, they might not always get the job. But running a camp that gives them those experiences, and lets Etsy get to know the candidates, solves problems on both sides of the table.

Etsy’s approach offers a model for any growing company angling to build a diverse team. As BetaBeat’s Nitasha Tiku pointed out a few weeks back, discrimination isn’t usually the result of a single lone actor. “Often it’s a confluence of factors that inspire people to see you as enough of an ‘other’ to underestimate you, ignore you, deny you access, or simply not want to help,” she noted. Etsy’s Hacker Grants, along with the similar Silicon Valley Boot Camp, offer a systematic solution to a systematic problem.

Read more here.