On 500 Startups, Google, diversity and tech culture

Published on the 16/08/2017 | Written by Jonathan Cotton


Company culture

Unconscious bias maybe, but true value lies in a diversity of ideology not collective indignation...

In a week where LaunchVic has cut ties with 500 Startups and a Google engineer was dismissed for holding views which fall outside of the politically-correct mainstream, a question worth asking arises: where and how is value created, and how central are the so-called ‘soft’ issues of diversity and culture to that? Is there room for those who don’t buy into the prevailing groupthink? This is a topic where angels fear to tread – but let’s open Pandora’s Box and take a look anyway.

First, LaunchVic, the $60m accelerator for Victoria’s startup ecosystem, is no longer working with 500 Startups, the embattled early-stage seed fund formerly headed by confessed sleaze Dave McClure.

The move follows the resignation of 500 Melbourne lead Rachael Neumann from the organisation.

Presently, Neumann’s reasons for the break are unclear, but she said in a statement via Twitter: “When I accepted the role to head up 500 Startups in Australia, I believed that the program would be able to offer local founders and the wider startup community new opportunities to grow and thrive at a global level.”

“I’ve just returned home from Silicon Valley, where I spent time with the 500 team to try and find the right path forward for the 500 Melbourne program. I determined that this is simply not the right time for 500 to launch in Australia so I have resigned from the 500 team.”

Clear or not, that was all it took. Neumann resigned, LaunchVic pulled its funding and it’s all over rover for 500 Startups down under.

“Without Rachael Neumann at the helm we don’t believe it will work,” LaunchVic CEO, Kate Cornick said of the schism. “Without trusted local leadership, we don’t believe that 500 Startups will be able to build a strong and inclusive culture and the social capital it needs to be able to successfully roll out its accelerator program in Victoria” the organisation said in a statement.

It’s good to see that inclusion and company culture is so important to LaunchVic, and more power to them. They must certainly have been at their wits end in dealing with the problematic accelerator group.

When allegations of “inappropriate interactions with women in the tech community” first surfaced in June, 500 Startups did the unthinkable, burying the news, keeping it from both LauchVic and the Victorian government, which only became aware of the issue after it was published in the media.

Most would consider such deceit a deal breaker, but not LaunchVic.

Instead the accelerator gave 500 Startups a warning, demanding it implement a plan to do better in the future – not in regards to honesty and openness – but rather to sort out its harassment and diversity issues.

That implementation didn’t happen so, thanks, but no thanks, 500 Startups.

Diversity…or honesty?
But isn’t that a little strange? Sure, an inclusive company culture is a very important thing, but it’s not the only thing, right? If anything, the fact that 500 Startups was willing to keep LauchVic in the dark about its founder’s rapidly surfacing dirty secret should be enough to force an honest conversation about whether the company is ready set up shop here.

In 2017 corporate thinking, does diversity trump honesty?

Take the recent high-profile axing of Google engineer James Damore, after his notorious (on the internet, anyway) “anti-diversity manifesto” entitled Google’s Ideological Echo Chamber: How bias clouds our thinking about diversity and inclusion.

Basically, Damore questioned the way Google was setting about remedying the gender gap in the tech industry, saying that the current approach was damaging to “ideological diversity” and was creating a culture that discriminated against those with conservative viewpoints (of which he was a member).

Irony of ironies, Damore was summarily fired, the reason given, Damore’s advancing of “harmful gender stereotypes”.

If you haven’t read it, check it out here. While ill-advised, not-quite-politically-aware and perhaps a little unworldly, it’s hardly the racist, sexist screed many say it is.

What it is, however, is conservative. And it was only when that conservative document spread online and became politicised did management take issue with it.

“I shared [the manifesto] with many of our diversity programs and with individual Googlers, but no one high up ever came to me and said ‘no, don’t do this’,” said Damore in an interview with Bloomberg.

“It was only after it got viral that the upper management started shaming me and eventually firing me”.

“I support diversity and inclusion,” said Damore, “but I think our lack of ideological diversity has hurt our products.”

About that company culture, then
And herein lies the problem.

Managers don’t actually know anything about company culture, they just say they do. Too afraid to demonstrate political nuance, bound by a litany of buzzwords they don’t really understand and terrified of public blowback of any kind, the corporate prerogative is always to cut and run from any issue that can’t live up to the ideological purity of its ‘core values’ and printed brochures.

500 Startups’ sleazebag McClure is long gone (now replaced by Christine Tsai), but the stain of his character flaws remain. Damore isn’t a neo-nazi, but you could certainly say he is without much challenge and that’s reason enough to give him the axe.

McClure, the man, is an oversexed idiot with a respect for women as deep as a puddle.

But isn’t there more to the story? 500 Startups appears to have had a decent rate of success so far and has (or had) the potential to do some good in this part of the world.

But it’s distasteful
So why isn’t anyone saying that?

“Either you are with us, or you are with the terrorists,” said George W. Bush in 2001, nailing the mood of the moment and that so very American strain of puritanism: Then, as now, we understand that if you’re not unequivocally this, you run the risk of being outed as that.

That’s what’s happened to James Damore, and it would be a pity if the same reductive dichotomy was applied to 500 Startups.

In 2017, ambivalence is all too easily reframed as connivance. We find ourselves free – more than free – to publically condemn pariahs, but what we’re not free to do is offer balanced appraisals, warts and all.

‘McClure is bad, yes, but he did some good’. That’s a sentence that could get you killed, at least on social media.

Outrage is okay, but qualification is complicity.

Hopefully, all is not lost as LaunchVic looks to regroup: “Of the grant funding we have allocated to date, 70 percent has been invested in local home-grown programs and we will continue to invest at a local and a global level to drive outcomes that will position Victoria’s startup ecosystem as a leader,” said Dr. Cornick.

And what about 500 Startups? McClure’s gone large on his apology, directly addressed the people he hurt, promised to sort his shit out and resigned from the company. But he’s also badly damaged the 500 Startups brand.

Whether they can get past that, remains to be seen.

The question is, can we?

Questions or comments...

  1. R J

    …’does diversity trump honesty? Brilliant question and so relevant. Google is about business. I believe firing Damore was about business and not interest in diversity or honesty. It was about protecting themselves from those that might attack it on social media and possibly decrease its profits. Knowing which decisions are based on pure belief and which ones are made to protect your profits is difficult? Only God knows! These days many leaders and politicians sway depending on what gives them a business or political outcome.

    Reply

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