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

Those who like to believe that tech is a utopian-like meritocracy need to wake up to reality.

Silicon Valley is indeed a meritocracy for those to whom these criteria are not hurdles. But others—the blacks, women, and Hispanics whom it overlooks—find it an elite private club from which they are excluded. — Vivek Wadhwa (see the entire article series here)

According to Mitch Kapor, who founded Lotus and (for those of you who are too young to remember) sold it to IBM in 1995 for $3.5 billion, the idea that all it takes is hard work and a god product to be a success in the Valley is pure fantasy.

“There’s an admirable belief about the virtues of meritocracy – that the best ideas prove the best results. It’s a wrong and misguided belief by well-intentioned people.”

The idea that merit matters goes further down the drain when you see comments, such as the most recent one from Paul Graham of Y Combinator fame.

One quality that’s a really bad indication is a CEO with a strong foreign accent. I’m not sure why. It could be that there are a bunch of subtle things entrepreneurs have to communicate and can’t if you have a strong accent. Or, it could be that anyone with half a brain would realize you’re going to be more successful if you speak idiomatic English, so they must just be clueless if they haven’t gotten rid of their strong accent. I just know it’s a strong pattern we’ve seen.

Or this comment.

I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you’re not allowed to ask prospective employees if they plan to have kids soon…Whereas when you’re starting a company, you can discriminate on any basis you want about who you start it with.

Kapor now runs Kapor Capital, a for-profit venture firm focused on funding minorities whose ideas are focused on improving opportunities for the poor through education, sees the world very differently.

“We have a responsibility to give people opportunities to do what they can do. It’s a fundamental tenet of democratic society. Libertarians who believe in a completely minimalist state, and don’t feel we have that responsibility, are harming humanity.”

Choosing a role model is a private decision. 

Who will you channel? Mitch Kapor or Paul Graham?

Image credit: HikingArtist

How much has really changed for entrepreneurial women in the last 50 years?

Not as much as you might think or as much as meritocracy hype might lead you to believe.

In the actual world of advertising in 1966, when the current season [of Mad Men] began, the most talked-about figure on Madison Avenue was the trim and determined Mary Wells, who hopscotched over the era’s endemic prejudices to develop Wells Rich Greene, the iconic agency she would run for more than two decades.

One reason stories like Mary Wells are so startling is that there are so few of them.

Yet even these successful women entrepreneurs are disappointing when you consider that most are in fashion, cosmetics/beauty products, advertising, retail, media, etc.

Although funding a tech company is almost as difficult for women as it always has been they are having more luck getting web startups funded—but  it’s still an uphill battle.

Would you expect anything different when high profile experts in the entrepreneurial community are still making stupid comments more suited to the 1950s.

One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. [emphasis added] But you’re not allowed to ask prospective employees if they plan to have kids soon…Whereas when you’re starting a company, you can discriminate on any basis you want about who you start it with. –Paul Graham, prominent investor and co-founder of Y Combinator

Sex is a long way from being out of the picture as Candace Fleming, founder or Crimson Hexagon, learned.

Another potential backer invited her for a weekend yachting excursion by showing her a picture of himself on the boat — without clothes.

(And I doubt that he looked like a Chippendale.:)

The point of all this is that women aren’t going to slink back to the kitchen anytime soon.

They will keep overcoming obstacles to have babies.

Some of which will grow up to be IPOs, while others will be entrepreneurs.

(If you are hung up regarding women entrepreneurs next week’s post will show you why your attitude is sure to hang you out to dry.)

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FYI

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Participants completing this survey will receive a free copy of the preliminary results, which will be sent to you once all responses are collected and analyzed. Privacy is important to us; your responses will be combined with others, and your personal information will remain confidential.

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

“The startups that really get hosed are going to be the ones that have easy money built into the structure of their company: the ones that raise a lot on easy terms, and are then led thereby to spend a lot, and to pay little attention to profitability. That kind of startup gets destroyed when markets tighten up. So don’t be that startup. If you’ve raised a lot, don’t spend it; not merely for the obvious reason that you’ll run out faster, but because it will turn you into the wrong sort of company to thrive in bad times.” — Paul Graham, co-founder, Y Combinator

Graham’s comment is from an email he sent to his portfolio companies in response to the Facebook IPO fiasco.

While everything he says is true, the spending standards he recommends were just as important before Facebook’s IPO as they are now.

One of the great attractions of startups has always been the lack of bureaucracy.

However, when founders jettison financial controls in the name of eliminating bureaucracy the only thing they accomplish is to show off their own ignorance.

Would you even consider designing a product from start to finish without detailed specification? Or  design reviews? Or market feedback? Or testing?

No?

Then why would you consider running your company without viable fiscal controls?

Flickr image credit: HikingArtist