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Lesson From Uber: The People Who Fund Inequality Need To Be Held Accountable

Lesson From Uber: The People Who Fund Inequality Need To Be Held Accountable

To be fair, there is outrage about this in Silicon Valley. And there are many technology companies that are, in this regard, exemplary, including Salesforce, Microsoft, and Facebook.

They are going to extremes to correct problems that they found to exist in their ranks. I know from discussions with Microsoft CEO Satya Nadella how hard he has been working towards diversity.

The downfall of Kalanick presents valuable lessons for global entrepreneurs, not just those in Silicon Valley. With the help of Arianna Huffington, Uber is working on reforming itself. And if Uber can do it, so can the U.S.

To begin with, the people who fund the offenders need to be held accountable and the boards need to be made diverse.

The Diana Project at Babson College documented that as of 2014, 85 percent of all U.S. venture capital–funded businesses had no women on the executive team, and only 2.7 percent had a woman CEO. The number of women partners in U.S. venture-capital firms had also declined to 6 percent from 10 percent in 1999.

And then there is the problem of age discrimination.

In most industries in the U.S., discriminating on the basis of gender, race, or age would be considered illegal. Yet in the tech industry, VCs brag about their “pattern recognition” capabilities.

They say they can recognize a successful entrepreneur when they see one. The pattern always resembles Mark Zuckerberg, Bill Gates, Jeff Bezos, or them: a white nerdy male. Women, blacks, and Latinos need not apply. VCs openly admit that they only fund young entrepreneurs; they claim that older people can’t innovate.

Women, blacks, and Latinos need not apply. VCs openly admit that they only fund young entrepreneurs; they claim that older people can’t innovate.

The money that VCs invest is not their own. It is raised from pension funds, universities, and state governments. VC firms must be required to provide public disclosures about the diversity of the companies they invest in — including the gender and age of the executives. They must have a diverse set of investment partners, without sugarcoating the numbers using inflated titles for junior associates.

All tech companies must take heed of the report that was put together by former Attorney General Eric Holder for Uber. There are obvious procedures to employ in making diversity a priority: such things as blinded résumé reviews, interviewing at least one woman and one minority candidate for each open position, limiting alcohol at work events and in the office, and banning employee–manager relationships.

This article was published with the permission of Vivek Wadhwa. This is a version of an article that appeared in India’s Economic Times.