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Entrepreneurs: Does Investor Homogeny Reduce Success?

Thursday, July 3rd, 2014

https://www.flickr.com/photos/voght/2440993795

Spending time with entrepreneurs is always enlightening.

I was at lunch with a group of them when talk turned to the current “media bashing,” as one person called it, tech was getting over the lack of diversity.

“Jason” said focus was critical in a startup and it was achieved best when the founders hired their friends and friends of friends.

He went on to say that while he understood the importance of diversity in a large company, focus was rarely a byproduct of diversity.

I asked if he considered focus to be as important for investors.

He said of course and went on (and on) explaining why it was even more important with investors, since they usually comprise the startup’s board.

Most hung on his words, since Jason was the big name that day (personally, I found him arrogant and patronizing).

I asked Jason if he would be surprised that research showed the greater the similarities between investors the less likely the success of their portfolio companies—success being an IPO.

They found that the probability of success decreased by 17 percent if two co-investors had previously worked at the same company—even if they hadn’t worked there at the same time. In cases where investors had attended the same undergraduate school, the success rate dropped by 19 percent. And, overall, investors who were members of the same ethnic minority were 20 percent less successful than investors with different ethnic backgrounds.

Conversation more or less died after I shared the URL with them.

They were too busy reading and then we were out of time.

Flickr image credit: Steve Voght

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It’s the Culture, Stupid

Wednesday, July 2nd, 2014

https://www.flickr.com/photos/91262622@N02/12677057645

There is a great deal of handwringing from business leaders, tech moguls, politicians and various pundits on the lack of women programmers and the dire consequences as a result.

As a result, along with their own atrocious diversity showing, Google just announced they will offer vouchers to women and minorities who want to learn to code.

Gregg Pollack, CEO of the Code School, Google is paying for three free months for any women and minorities interested in tech to expand their skills.

But knowing how doesn’t translate into wanting to do something.

And there are hundreds, if not thousands, of techie women, whether from startups, large enterprise or corporate IT, who have changed careers.

Why?

Simple. People get tired of going where they aren’t wanted.

There’s been a great deal of media ink recently documenting just how uninviting the tech culture is to women.

But if you aren’t up on the subject read the story of why the female co-founder of Tinder is suing for extreme sexual harassment (with plenty of proof).

At one point, at a company party, Mateen [Wolfe’s boss, hired after her] allegedly called Wolfe [Tinder co-founder] a “gold digger,” a “disease” and “disgusting”—in front of other people, including Sean Rad [Tinder CEO]. When Wolfe headed for the exit, a guest of Rad’s went after her and spit in her face. (…)

Mateen stripped Wolfe of her co-founder status, arguing that “Facebook and Snapchat don’t have girl founders, it just makes it look like Tinder was some accident.” The company had already been absenting Wolfe from the co-founder team when they spoke with traditional business publications like Forbes.

Read the article and the next time you hear “girls don’t like math/computers” mention that they may not like the atmosphere in which they would be forced to work.

And, cynical as it may sound, it’s not going to change any time soon.

After all, the worst examples are being inflicted by (supposedly) more enlightened Millennials as opposed to their big brothers.

Although the big brothers are nothing to write home about, as witnessed by 45 year-old Dov Charney’s actions that got him fired.

While it wasn’t his reprehensible actions, which have been ongoing for years, but rather that American Apparel’s financial performance is down.

If performance wasn’t down Charney would probably still be CEO and those same actions would be considered “eccentric,” instead of inexcusable.

Flickr image credit: jseliger2

 

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Entrepreneurs: Are Investors Watering Down Innovation?

Thursday, June 19th, 2014

https://www.flickr.com/photos/hikingartist/3514537597/Innovation isn’t nearly as mind-boggling today when compared to what startups were doing in the late Seventies/early Eighties when I started working with them.

That’s not surprising when you consider who gets funded these days.

A recent Reuters report found that the majority of Silicon Valley startup founders that receive Series A funding come from the same pedigreed cohort: either they previously worked at a large, well-known tech firm, a well-connected smaller tech company, they previously created a successful startup, or they come from one of three universities—Stanford, Harvard, or MIT.

Not surprising when you consider the attitude of Valley stalwarts like Paul Graham of Y Combinator, who publically stated that he would be unlikely to fund someone with a strong accent or a woman.

It’s been 15 years since I first wrote about the proclivity of managers to hire people like themselves and more over the years showing it leads to homophily and the negative impact that has on a company.

It seems it’s no different for investors.

They are funding people like themselves who were raised, educated and worked along paths similar to their own who they either know or are introduced to them by a friend.

“Like a lot of the investments [Instacart] that have come our way, a friend of a friend talked to us about it, and told us about it, and encouraged the founder and the CEO to come and chat with us. One thing led to another.” –Sequoia partner Mike Moritz

When you fund from a homogenous group, no matter where they are, creativity and innovation are watered down, because those groups tend to be insular and badly interbred talking mostly to each other.

If you’re fishing from a pond of rich white guys, you’re only going to get ideas that address the needs of rich white guys.

AKA, people like themselves.

Flickr image credit: HikingArtist

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If the Shoe Fits: Women on Your Board

Friday, June 6th, 2014

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mDo you have or are you planning to put a woman on your board as you grow?

If you are like most of tech and many other companies you aren’t/won’t.

What if it wasn’t about diversity, but about money?

What if having a woman would actually increase your ROI and valuation?

Most boards—public or private, tech or not—fit perfectly into the description offered by one governance expert: “male, pale and stale.”

The last thing most tech people consider themselves is stale, but when it comes to what women want in a product/service or how to engage them they usually come up short.

Doctors and pharmaceutical companies learned the hard way that drugs act differently in men and women.

The automobile and many other industries have traveled a slow and painful road to understanding how and why women buy their product, as well as what they want.

But can just one female board member make that much difference?

One recent report from Credit Suisse analyzed 2,360 companies around the world over the six years ended in December 2011. It found that companies with one or more women on their boards generated higher average share prices and better returns on equity during that period than companies with no women as directors.

As a startup your board is small and usually made up of investors, but that doesn’t stop you from having women on your advisory board, executive team and in senior positions.

Just please don’t use the tired old excuse of “no qualified women available.”

It isn’t true, but it certainly drives home your “stale” mindset.

Image credit: HikingArtist

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Will It Ever Change?

Monday, June 2nd, 2014

http://www.fastcoexist.com/3031253/visualized/visualizing-googles-workforce-diversity-with-a-google-doodle#4Google is the first tech company to publically share its gender/ethnic breakdown and it’s as bad as expected.

BI, Google and the rest of the tech industry love to blame the lack of gender/ethnic diversity on the lack of available candidates.

Although there is a noticeable rise in “bro culture” when it comes to the tech industry, some of the blame lands on who is actually applying for the jobs. Around 30,000 students took the AP computer science exam, and only around 20% were female, according to the analysis, 3% were black, and just 8% were Hispanic, for example.

On the surface, the dearth qualified black candidates is a plausible explanation, until you consider that nearly double the number of black CS/engineering graduates are unemployed.

In fact, the center’s study found that even black students who majored in high-demand fields such as engineering fare only slightly better than those who spent their college years earning liberal arts degrees. Between 2010 and 2012, 10 percent of black college graduates with engineering degrees and 11 percent of those with math and computer-related degrees were unemployed, compared with 6 percent of all engineering graduates and 7 percent of all those who focused their studies on math and computers.

As for the lack of women programmers, girls are intimidated out of STEM classes and the horror stories of women in tech are enough to discourage many women from wanting to work in the industry—especially in startups and younger companies with their frat boy cultures.

We’ve been harassed on mailing lists and called “wh***/c***’ without any action being taken against aggressors. We get asked about our relationships at interviews, and we each have tales of being groped at public events. We’ve been put in the uncomfortable situation of having men attempt to turn business meetings into dates.

Over the years the pundits claimed that attitudes would change as older generations aged out and bosses were replaced by younger ones that grew up in a more diverse, tolerant and inclusive world.

I started hearing that 50 years ago and am still waiting.

But I’m not holding my breath; there is a quantum difference between political correctness and authenticity.

~~~~~~~~~~~~~~~~~~~~~~~

The June Leadership Development Carnival is hosted by Tanmay Vora of QAspire. I hope you enjoy the very excellent posts included there.

Image credit: Fast Company

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If the Shoe Fits: NIMBY Mindset Kills Meritocracy

Friday, May 23rd, 2014

5726760809_bf0bf0f558_mIf you don’t believe that there is a gender gap in the startup world’s so-called meritocracy entrepreneur Roger Huang begs to differ.

The internet is being shaped by males to be comfortable for other males. For those of us fighting for an open, and inclusive Web, this is something that should change, and it’ll certainly take more than a new application.

Huang’s post is worth reading because it is well annotated with links to the research and articles for the stats he cites.

I’ve written about it, too, and have come to the conclusion after years of listening to bosses that there is an unacknowledged underlying problem.

Most tech people recognize the problem, but don’t see the NIMBY side of it.

NIMBY means ‘not in my backyard’, meaning fix the problem without affecting me, e.g., create low income housing, but don’t put the housing in my neighborhood.

Backyards can refer to company and mindset.

That makes it pretty simple; if all bosses cleaned up their own backyard there wouldn’t be a problem.

So while problems in other people’s yards and on the wider stage loom large, a NIMBY mindset shows their own backyard as weed-free and thriving.

Flickr image credit: Jason White

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Ducks in a Row: When Will It Change?

Tuesday, May 20th, 2014

https://www.flickr.com/photos/geordieenigma/2725675007/

The recent conversation I had with a group of managers was both eye-opening and depressing.

The managers were from a variety of companies, from startups to enterprise, most at mid-to-senior level.

They ranged from late twenties through fifties and, although not intentional, all were white.

The subject was diversity/inclusiveness.

Without exception, they claimed that their organization really was a meritocracy and that the media stories of gender/racial prejudice, especially in tech, were overblown or untrue.

Several commented that there was no real research that proved bias.

I pointed out a recent rigorous study that showed that the prejudice started long before careers.

Our analyses, which we reported recently in a second paper, revealed that the response rates did indeed depend on students’ race and gender identity.

I almost laughed when several held the tech startup world up as an example of how meritocracy worked, since nothing could be further from the truth.

The sad part is that they are good managers whose organizations are meritorious—at least in comparison to most.

I’m not sure if it’s naiveté, ignorance, wishful thinking or secret agreement, but when the people doing it right assume everyone else is, too, nothing will change.

Flickr image credit: Geordie Hagan

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Ducks in a Row: EMANIO is Hiring the Right Stuff

Tuesday, April 22nd, 2014

https://www.flickr.com/photos/atoach/2313158742/The results of a new survey of 500 business leaders drives the home the importance of personality, which makes perfect sense, since it is “personality traits” that underlay “cultural fit.”

78% cited “personality” as the most desirable quality in employees, followed in importance by “cultural alignment,” and then finally “skill-set.”

“Skill-set” as a distant number three makes perfect sense considering the speed of change, especially when technology is involved.

Skills can be learned.

For a prime example, consider Declara CEO Ramona Pierson.

In 1984, at age 22, Pierson was hit by a drunk driver. The car tore her body apart, slicing open her throat, gouging her chest, leaving her heart and lungs fully exposed.

Pierson was in a coma for 18 months. She was totally blind for 11 years, though she has regained partial sight in her left eye thanks to a corneal transplant. It was the process of having to learn just about everything from scratch (including how to breath and walk) that made her realize how important it was to be a lifelong learner.

Which shaped her approach to hiring.

“We don’t hire people for a job. We look for very smart people and look for roles that let them continue along their path.”

KG Charles-Harris has a similar attitude and since I’m helping him with staffing I thought I’d share his Hiring Manifesto with you today.

It’s one I hope more managers/companies adopt.

EMANIO HIRING MANIFESTO

EMANIO has used AI technologies (natural language processing & machine learning) to create the technology that enables natural language querying and analytics of structured and semi-structured data sources.  We believe this will change the analytics and enterprise software markets.   

We are seeking programmers to join our team who are willing to work for options until we are funded.  We expect funding to be in the coming 3-4 months.

Our compensation plan is completely transparent and we are happy to share it once we establish mutual interest.

WHAT WE WANT

Most companies, especially startups, look for “stars” with extensive experience in specific skills sets.

EMANIO has a different approach.

We seek people willing to work hard, constantly learn new stuff and who are diligent and dependable. People who perform at their peak because they care and constantly strive to improve. Our current team is truly world class and we plan on maintaining that standard as we grow.

We are a company of experience; our current team members are all over 40 with extensive and varied backgrounds. While their knowledge is deep they love learning; they know multiple languages and operating systems, are familiar with many others and have learned new ones as needed for our product.

WHAT WE NEED IMMEDIATELY

Programmers with

  • Ruby or related knowledge
  • Ruby on Rails
  • HTML 5 & CSS3 & JavaScript

OR

  • willingness to learn them coupled with a viable technical base on which to build.

WE DO CARE ABOUT

WE DO NOT CARE

  • If your experience comes from a formal background, working/OJT experience, self-taught at home or different tech background, but strong desire to learn and branch out;
  • where you live (current team includes Seattle); or
  • what you are.

One or another of our current team has faced and overcome every prejudice that is/was active in the workplace.

First and foremost, we care about getting the work done, so by hiring your mind and attitude as opposed to your body and proximity we have the luxury of finding talent that many companies miss. For example,

  • wounded warriors and others with disabilities;
  • minorities, including extraterrestrials;
  • mothers re-entering the work force;
  • “old” people;
  • women;
  • people with no interest in relocating to Berkeley.

In spite of the current prefunded status I honestly believe that EMANIO offers a unique and real opportunity or I wouldn’t post it here.

Yes, along with the right attitude you need to be willing to take the risk—but everything is a risk these days. And you owe it to yourself to take the time to evaluate this one.

I also hope you will share this post with your friends and network wherever they may be.

Please write miki@rampupsolutions.com or call me at 360.335.8054 for more information to discuss the opportunities.

Flickr image credit: Tim Green

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News, but No Surprise

Monday, April 21st, 2014

https://www.flickr.com/photos/aryaziai/8740433362/I get it. I get what’s going on in terms of women in the workplace is news.

I get it that it is important to remind people that for all the progress that’s been made some things haven’t changed.

It’s still assumed that it’s OK to ask professional women, such as lawyers and marketing execs, to do stuff that would never be asked of the men in the organization.

“…plan parties, order food, take notes in meetings and join thankless committees…bring cupcakes for a colleague’s birthday, order sandwiches for office lunches and answer phones”

By the same token, it’s news that board diversity is moving at glacial speed, primarily because boards only want people with experience and to have experience they need to serve on a board.

“Recruiting women and minorities to boards is being slowed because of boards’ unwillingness to look at candidates who have not yet served on boards,” said Ron Lumbra, co-leader of the CEO and board services practice for Russell Reynolds. “There’s a premium on experience.’’

So while I have no problem with these subjects being presented over and over in the news, there is one thing I don’t understand.

Why are so many people surprised by the information?

Is the general population so naïve that they actually believe women are no longer asked to do tasks that are closer to house work than business work?

Do they really believe that the lack of board diversity is a function of the lack of experience as opposed a desire to spend time with people like themselves who are well within their comfort zones?

The sad part is that while it’s still news, it’s certainly not a surprise.

Flickr image credit: Arya Ziai

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Does Your Staffing Reflect Your Audience?

Monday, March 10th, 2014

How many men claim to understand women?

How often do you hear a man say about his mom/spouse/girlfriend/plain friend/other female ‘I know exactly what she wants?’

Rarely? Never?

Then why do they assume they know what women want when it comes to user experience in technology?

No, this isn’t about hiring more female programmers; it’s about hiring women from backgrounds not typically associated with technology.

People such as Genevieve Bell, an anthropologist hired as director of user experience at Intel Labs, the company’s research arm.

She runs a skunk works of some 100 social scientists and designers who travel the globe, observing how people use technology in their homes and in public.

Social scientists (of both sexes) look at the world differently than your typical tech employee, whether in development or marketing.

It’s even more important when it comes to social media, where many companies are/were started and/or run by guys.

Guys who are often younger and being younger know more (if not all) about creating great user experiences—and when they do want help they tend to ask guys who are a lot like them.

Guys who tend to think of their audience as people similar to them in gender and age.

Not intentionally, but the unconscious bias is still there.

The problem for these guys is that women are a giant presence in social media, consuming more, interacting more, and in more ways, than guys; not only that, but average users are in their 30s.

social media review

It’s pretty much a given that women and men are different.

And that one of the benefits of age is experience and experience changes how people think, react and interact.

Knowing all this you may find it beneficial to hire a more diverse workforce, including people who have lived long enough to understand a variety of people from a variety of perspectives.

 
Image credit: Designed by http://reviews.financesonline.com | Author: David Adelman | Our Youtube

 

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About Miki View Miki Saxon's profile on LinkedIn

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