Women, Hispanics and blacks have always been underrepresented in the ranks of the Valley’s tech companies. A new analysis by the Mercury News shows that from 2000 to 2008, the proportion of women tech workers in Silicon Valley dropped from 25.3% to 23.8%, and that the national numbers dropped from 30% to 27.4%. In 2008, blacks and Hispanics constituted only 1.5% and 4.7% respectively of the Valley’s tech population — well below national tech-population averages of 7.1% and 5.3%. It seems that the problem I highlighted in my last post on the dearth of tech women is actually getting worse, particularly in Silicon Valley. And it’s not just the women who are being left out, but also important minority groups.
Is the Valley deliberately keeping these groups out? I don’t think so. Silicon Valley is, without doubt, a meritocracy. In this land, only the fittest survive. That is exactly the way it should be. For the Valley’s innovation system to achieve peak performance, new technologies need to constantly obsolete the old, and the world’s best techies need to keep making the Valley’s top guns compete for their jobs. There is no room for government mandated affirmative action, and our tech companies shouldn’t have to apologize for hiring the people they need. But at the same time, without realizing it, the Valley may be excluding a significant part of the American population that could be making it even more competitive. False stereotypes may be getting in the way of greater innovation and prosperity.
Consider the data that I highlighted in my earlier post. It wasn’t always like this, but girls are now matching boys in mathematical achievement. In the U.S., 140 women enroll in higher education for every 100 men. Women earn more than 50% of all bachelor’s and master’s degrees, and nearly 50% of all doctorates. The companies they start are more capital-efficient, produce higher revenue, and have lower failure rates than those led by men. Yet women are still a rare commodity in the ranks of tech CEOs and CTOs.
How do we fix the “hidden biases” and discrimination? The experts I’ve spoken to have many great ideas. They suggest we create role models, provide mentorship and financing, and teach entrepreneurship. Foundry group’s Brad Feld says that simple acts of encouragement from parents, teachers, and peers would make a big difference. Cindy Padnos, of Illuminate Ventures suggested a solution that particularly resonated with me. She says that women should follow the trail mapped by Indian entrepreneurs (no, not the American natives, but my kind: the immigrants).
Thirty years ago, there were hardly any Silicon Valley firms with Indian-born founders. UC-Berkeley’s AnnaLee Saxenian documented that 7% of tech companies started in 1980–1998 had an Indian founder. A survey conducted by my research team at Duke University found that this proportion had increased to 15.5% from 1995 to 2005. My team also determined that in this period, Indians started 6.7% of the nation’s tech and engineering firms. These are pretty astonishing numbers considering that according to the U.S. census, in 2000 less than 0.7% of the U.S. population and only 6% of the Silicon Valley high-tech workforce was born in India.
I know from personal experience that Indian immigrants didn’t have it easy. They suffered from the same types of stereotypes as women, blacks, and Hispanics. Despite having co-founded a software company that we took from startup to $120m in revenue; profitability; and IPO in a record five years, I couldn’t get Research Triangle Park (RTP) VCs to even return my phone calls when I was ready to start my second venture. I later found out why: “my people” were great at mathematics and made great engineers, but didn’t make great CEOs — “we” didn’t have the necessary management skills, didn’t like diluting our equity ownership by raising venture capital, and couldn’t “fit” into the rough-and-tough American business-management culture. That’s what one RTP VC told me over lunch, to explain why his firm wasn’t inviting me to pitch my business plan. They were very busy and had to be selective in who they met.
So how did “my people” rise above ignorance and bigotry? When the first generation of Indians in Silicon Valley succeeded in shattering the glass ceiling, they decided to help others follow their path. They realized that they had all surmounted the same obstacles. And they could reduce the barriers to entry for others behind them by sharing their experiences and opening some doors.
In 1992, a number of highly successful Indian business executives formed a group called The Indus Entrepreneurs (which is now called TiE). Their mission was to give back to the community by fostering entrepreneurship. They would hold monthly events, teach entrepreneurship, and provide mentoring and support. And they would facilitate Indian-style matchmaking between entrepreneurs themselves and with investors and corporate partners. They created two categories of members: a charter member, who took the role of guru, and a regular member, who would be a disciple. The Guru had to donate time and money (minimum $1500/year) and was not allowed to gain any personal financial benefit. When disciples achieved success, they would be expected to pass it forward by becoming charter members and helping others behind them. (Note: TiE set a goal of helping all communities. Women are still underrepresented in its ranks, however).
One of my current research projects is to document and quantify the accomplishments of TiE. But I already know the impact TiE has made. After my lunch with the RTP VC, I cold-called TiE co-founder, Kanwal Rekhi. He told me that my experience was no different from what he and others in Silicon Valley had endured. Rekhi advised me to look outside the region and to recruit a white male as president of my company. TiE Charter Member Vinod Khosla advised me to contact VCs in Boston and gave me several introductions. After I followed Rehki’s and Khosla’s advice, it didn’t take long for me to get a term sheet from Greylock Partners (of Boston). When the word of this got out, the RTP VCs came begging that I take their money. (I didn’t take their money and after I achieved success, I became founding President of TiE-Carolinas and would usually spend five to seven hours weekly — even when I was really busy — mentoring fledgling entrepreneurs.)
Telle Whitney, President of the Anita Borg Institute for Women and Technology, says that TiE has done an amazing job and that its work is a great example of a mobilizing, formidable force in making change through networks. But all networks are not created equal. To achieve systemic change and have more women and minority-group members as entrepreneurs, we need to involve corporate leaders. They need to personally be mentoring, proselytizing, and demonstrating by example a different model of investing in women and minority-group entrepreneurs. There is nothing more powerful within an organization than having its own CTO talk about the importance of, for example, promoting women.
I agree with Telle. Neither Rekhi nor Khosla knew me from Adam, but both readily gave me invaluable advice. That is the type of mentoring that women, blacks and Hispanics need. In addition to establishing stronger networks for these groups, we need to have the CEOs and CTOs of all of our top companies volunteer their own time to help others follow in their footsteps. They need to do this because this is the best path to diversity and this diversity will enrich their organizations. And we need to have VCs mentor the women and minorities they typically ignore. They need to do this not only for social good, but also for their own survival.
Here are some links to women and minority networking groups which readers may find useful (If you know of others, please detail these in your comments).
Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa.