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When we talk about growing diversity in the technology sector, the biggest hurdle is the fixed mindset of today's technology leaders.
A homogeneous group – mostly composed of white men – founded and funded the technology industry. From this starting point, they created an environment in which people who looked like them were much more likely to succeed. Empirically, it has been shown that the prejudices of male investors prevent them from investing in women founders, and the processes and prejudices also prevent white men from investing outside of their demographic situation.
This is a persistent problem: last year, research found that in the United States, the vast majority of venture capital continues to go to white men (only 9% of funding went to founding women and less than 3% to black or Latinx founders) and that 90% of venture capitalists are white men. Many are simply not able to see themselves in a world where others are included.
At the same time, statistics show how less technology funds are being spent on women and people from underrepresented racial and ethnic groups. According to a study conducted in 2018 by the Boston Consulting Group (BCG), women founders receive less than half of the funding of their male counterparts. Diane's report, a Digital Undivided project, reveals that black founders receive only $ 42,000 on average, compared with an overall average of $ 1.1 million. Digital Undivided also calculated that Latin American women received only 0.3% of total venture capital funds in the last decade.
Recent studies highlight both the problems posed by this approach and the many benefits of diversity. For example, a 2015 report by McKinsey found that companies with a diversity of race, ethnicity and gender showed significantly better performance.
The above-mentioned BCG study found that start-ups with a female founder had better financial returns, generating 10% more revenue over five years ($ 730,000 versus $ 662,000) and twice the revenue per dollar financing (USD 0.78 vs. USD 0.31).
In 2012, I sued my venture capital firm Kleiner Perkins for bad discrimination and retaliation against me as an employee. The company said its decisions were based on performance. I lost the lawsuit in 2015, but that changed the way people talked about technology and, in some cases, their perception of the field of technology. Hundreds of people have shared their stories of discrimination since then, and these stories change perspectives and behaviors.
Many other companies, for example, have added female partners to their ranks. This has taught me that change is possible, but that it must come from the top. Even though a company has many women at the lower and middle levels, if people who control hiring, firing and pay are biased men, homogeneity will continue to dominate venture capital and entrepreneurship .
How can we change technology for the better?
For technology to be more diverse and inclusive, the leaders of tomorrow must start by creating their own businesses and start-ups, taking into account three values for everything they do.
The first is inclusion. It is important to consider intersectionality; A term invented in 1987 by Kimberle Crenshaw to define the reciprocal relations of identities such as bad and race. Moreover, when identities cross, prejudices provoke even greater social inequalities and discrimination. See, for example, how the financing hurdles faced by the black and Latin American foundresses described above are more important than for women in general.
The second is the globality. Symbolic efforts and appointments are doomed to failure – leaders should instead bring diversity and inclusion to all aspects of work, at all levels and for all groups.
The third is the responsibility. Unless metrics are used to measure and manage progress and gaps, it is unclear whether real progress has been made – and this does not really sound like an operational priority.
Measure what you want to manage
Any diversity and inclusion-oriented CEO needs to adopt demographics and key performance indicators for the entire company, as in all other areas of the business.
The first step is to use demographics and survey satisfaction levels to indicate potential problems, and to use these results to define benchmarks and find opportunities.
This process can provide useful insights. For example, when my colleagues from Project Include and I interviewed more than 2,000 technology start-up employees, we found that over 13% identified themselves as LGBQIA and nearly 5% identified themselves as LGBQIAs. identifying as non-binary, transgender, gender or other non-binary identity. We also found that badual orientation was the issue that employees were most likely to choose not to answer, likely because of fear of discrimination or desire to maintain privacy.
We have refined our list of recommendations for inclusive workplaces and cultures and will launch them with a broader set of recommendations this spring. We include the first steps, such as the creation of a bathroom wholly dedicated to men and women, to more effective measures, such as health insurance and social insurance benefits for transgender people in transition.
Leading from the top
The hiring of more diverse staff in management and consulting positions makes all the difference.
The first thing many candidates do when looking for a potential employer is to consult the website. First to see the diversity, then to seize the opportunities available to them. They consult with executives, general managers and board members to determine who has power and how far underrepresented groups can grow.
For many CEOs, board seats are contracted to their investors. The lack of diversity in venture capital firms then becomes a barrier to diversity on their boards – and thus to the performance of their business.
So, for investors, examine your own teams, examine your own biases, measure and set your own goals. Removing prejudices is easier when you bring diversity to the top.
Ellen Pao is an investor and technology advocate, former CEO of Reddit, and co-founder of the Diversity and Inclusion non-profit project.
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