Friday, June 30, 2017

Silicon Valley in the Mirror (a Trump Silver Lining)

It's safe to say that Silicon Valley's reputation hasn't been having a good year.  Uber has reached the point where the number of pages that claim to be "the definitive list of Uber scandals" runs off the first page of Google results, with widespread sexual harassment and discrimination resulting in the termination of over 20 employees and the resignation of co-founder and CEO Travis Kalanick.

Personally, I'm partial to The Guardian's list: https://www.theguardian.com/technology/2017/jun/18/uber-travis-kalanick-scandal-pr-disaster-timeline

Meanwhile, this week saw a bright light shined on a number of male venture capitalists' propensity to sexually harass female entrepreneurs and colleagues, starting with an Information story about Justin Caldbeck, formerly of Binary, sexually harassing female entrepreneurs:
https://techcrunch.com/2017/06/23/female-founders-accuse-vc-justin-caldbeck-of-making-unwanted-advances/

The week concluded with a bombshell story in the New York Times that revealed that prominent VCs Chris Sacca and Dave McClure had admitted to inappropriate behavior (though not to the level of Caldbeck's alleged actions, which included explicit text messages, sexual propositions, and grabbing a woman's thigh): https://www.nytimes.com/2017/06/30/technology/women-entrepreneurs-speak-out-sexual-harassment.html

(Full disclosure: I have previously pitched Justin Caldbeck during his days at Bain Capital.  I've known and liked Dave McClure for many years.  I never witnessed either of them behaving inappropriately towards women, and am relying on the published journalism rather than any personal knowledge.)

Many people feel rightly disgusted by these revelations, which make for an ugly contrast with Silicon Valley's self-image as a progressive industry, that is changing the world for the better.  One of the things that has often irked me is the tendency by people in Silicon Valley to look down on other industries, such as Wall Street or Madison Avenue for being knuckle-dragging Neanderthals, confident in being oh so much more evolved.

But while the temptation might be to wait for these scandals to die down, and to go back to business as usual, these revelations are in fact a good thing for Silicon Valley.  We are being forced to look in the mirror and confront issues, that, frankly, we've ignored for too long.

It was only two years ago that Kleiner Perkins defeated Ellen Pao's long-running sex discrimination lawsuit in a decidedly pyrrhic victory.  Even though Kleiner technically won, the testimony included descriptions of numerous instances of sexual harrassment perpetrated by former Kleiner partners against female staff.  Yet perhaps because Kleiner "won" the case, it didn't seem like much changed in Silicon Valley.  Nobody at Kleiner lost their job, or were punished.

So what changed?  Ironically, I think it's possible that we can thank Donald Trump for convincing women to step forward and testify.

During his campaign (and after his election), Trump repeatedly demonstrated his misogyny by denigrating women's appearance (Alicia Machado, Carly Fiorina, Heidi Cruz, and Mika Brzezinski were only the most famous recipients of this abuse; full disclosure, Heidi Cruz was an HBS classmate and friend), admitting to sexually harassing women ("grab 'em by the [vagina]"), and using insults and name-calling to attack his opponent, Hillary Clinton.  By the way, I found this website, which claims to track all of Trump's offensive sexist comments; I suspect it's incomplete:
http://www.telegraph.co.uk/women/politics/donald-trump-sexism-tracker-every-offensive-comment-in-one-place/

The result was the Women's March on Washington, the largest single-day protest in US history, and what seems like an increased resolution to call out sexism and sexual harassment.  The behavior I outlined at Uber and on the part of certain venture capitalists date back years.  Heck, it's not even "he said, she said," since in nearly all of these cases, there was written evidence of the bad behavior!  We just simply ignored it until now!

One of the worries that people--including me--had about Trump's election is that it would normalize bad behavior.  This may still occur, but it seems clear that it has also sensitized people to that same behavior.  It's as if Trump were an infection that produced antibodies to the kind of sexism that comes so naturally and instinctively to him.

This is the opportunity before us.  Thanks to the bravery of the various women who are coming forward, we can work to root out and punish this kind of bad behavior.  In the case of Uber and the VCs, there have already been real consequences.  Kalanick was forced to resign by his investors.  Binary lost both its most recent $175 million fund, and the additional $75 million that it was scheduled to close, just days after the Information story came out.  At a standard 2.5% management fee over 10 years, that's a $60 million loss even before considering the lost potential carried interest.  McClure has turned the running of his firm, 500 Startups, over to new CEO Christine Tsai (his female co-founder) and is undergoing counseling.

Men also need to play a role.  For example, look at my co-author Reid Hoffman, who wrote a widely-read post condemning Caldbeck's actions and calling for the VC industry to take a "Decency Pledge" and to stop doing business with any VCs who engage in such behavior: https://www.linkedin.com/pulse/human-rights-women-entrepreneurs-reid-hoffman

His willingness to step forward and condemn this behavior in no uncertain terms seems to have encouraged other male VCs to step forward, and to encourage other people who have been harassed to speak out.  By lowering the perceived risk of speaking out, we can help more people to come forward and tell their stories.

It is important to note that we have to avoid getting swept up in what Donald Trump would surely call a "witch hunt."  This is not the time for vigilante justice, or accepting claims without evidence.  There is no such need--as the Caldbeck story shows, there is plenty of evidence of wrongdoing, and there are immediate punishments available, such as LPs invoking morality clauses and pulling out their funds, and those who have been wronged seeking civil judgments.

There's an old saying about cockroaches; there's never only one.  Sure enough, Caldbeck's story has already uncovered others, and I suspect that more are soon to come.  One prominent investor estimated that around 5-10% of men are sociopathic enough to commit these kinds of acts...IF THEY THINK THEY'RE GOING TO GET AWAY WITH THEM.  Think about it--people like Caldbeck sent explicit texts and emails.  That's hard evidence.  The only reason you would do such a thing is if you thought you would get away with it, regardless of the existence of a smoking gun.

Fortunately, this belief has been proved wrong.  Unfortunately, this belief was apparently right for many years, and it is disgrace that it took so long, and the election of a harasser-in-chief in the White House to get us to actually hold these bad actors accountable.

We can't change the past.  But we can change the future.  Don't let these antibodies go to waste.  Call out bad behavior when you see it.  Make it safe for those with less power to present their evidence against powerful evildoers.  In other words, make America great again.