Ellen Pao verdict: A lesson in gender, fairness for Indian start-ups

  • Durga Raghunath, None, Mumbai
  • Updated: Apr 01, 2015 02:35 IST

After five weeks of rivetting drama, last Friday, one of Silicon Valley’s most powerful venture capital firms Kleiner Perkins Caufield & Byers won a sweeping verdict that it had not gender discriminated against Ellen Pao, an ex-employee who had sued the firm for $16 million in damages. Pao had accused the firm of not promoting her to Senior Partner and eventually dismissing her because she had complained. The jurors concluded that it was her performance that had held her back not her gender.

As KPCB begins mending investor fences, #ThankYouEllenPao has already gained some momentum on Twitter. It is unlikely, however, that the Ellen Pao drama will have burst any bubble, big or small. Silicon Valley will move on quickly to the next big startup and the next round of mammoth funding with hungry journalists in tow.

While as a lay reader in far-away India, it is hard to know whether Ellen Pao was discriminated against for a promotion, it is clear that the context she worked in was sexually discriminating, and some of it rang true for every woman in the workplace. For five weeks, we all sat up and read through the uncomfortable truth of what many of us had seen but not spoken about.

As the global poster-child of early stage startups herself, India has the perfect opportunity to debate the male-dominated philosophy of technology startups and investing and configure some new rules.

Consider this: In 2014, according to VCCircle, over two billion dollars was invested in over 220+ Indian startups, a 200% plus incease over 2013. Spread predominantly across three cities (Bangalore, Delhi and Mumbai), 50% of the diclosed money is between $0-10 million, says a YourStory.com analysis. This will typically cover Angel, Seed and Series A (all rounds that validate initial product thinking and market fit). The average deal size in Series B and C has also doubled compared to last year, justifying investor interest and enabling exits).

Simply put, there could not be a better time to be an investor or an entrepreneur in India. Although in this euphoria, the absence of women in technolgy startups and investing is galling. Vani Kola who leads Kalaari Capital and Suchi Mukherjee of Limeroad, the fashion startup, are among the few exceptions.

Women are critical because you cannot build successful products for the billion-plus Indian consumer without a diversity of ideas that solve a diverse set of problems. Too often India’s homogenised into old economy scale rather than new economy diversity.

From my experience as a digital professional and beginner investor, having met over a 100 startups and working with a quarter of them over the last eight years in India, there are four key aspects that could be reimagined to build a more representative entrepreneurship culture, aided by investors and startups at the entry level and after.

Process-oriented investing vs aggressive stage investing: Incoming engineering classes are hugely skewed towards men -- IIT’s gender ratio is a legendary 10:1 as are the ‘non-male’ jokes. And male investors are hugely skewed towards the top engineering schools in India. Business plans from male students are predominantly built to huge scale, while women solve smaller problems first and want to grow incrementally. I would make a strong case that India needs small problems solved more than scale but that is for another post. The investing mindset into India however seems to prefer the former to the latter, despite the fact that too ambitious a plan can lead to more mistakes than incremental growth. A more patient, process oriented investing approach could enable a more diverse portfolio of successful Indian startups.

Redefining leadership communication: The politics of communication within boardrooms needs over-haul. I have sat in on many meetings and conferences with investors, where men tend to walk into rooms with hypotheses or fully-formed views that are often fairly commonplace, but mistaken for greater rationality. Women are more comfortable exploring and building on thoughts, a method that is often dismissed as meandering, despite the fact that it might lead to a more useful or original interpretation, a few minutes later.

Building a new culture: Sheryl Sandberg’s Lean In expertly deals with the litany of male culture manifestations (from complex sexual harrassment to interrupting women constantly as they speak). In India, women are so grateful to have a well-paying job that thinking about leadership seems precious, to most. While some of us have had outstanding male leaders guide us into it, I have often seen women asked to organize events, cut cakes, ‘dress up’ for a sales call or take notes by men who didn’t know that they were offensive. But these are real problems. It is time to build a more meaningful combined workplace culture, that is not a reaction to old male behaviours. Investors should and must play an important role in building this gender inclusive, multilingual culture for a changing India.

Diversity is India’s greatest digital strength: In digital use, segmentation has been turned on its head. You’re looking more and more for different users. You have more and more people that are not alike than before. You have to find patterns among very diverse people and scale that up. So startups must hire and build teams that are truly diverse in skills, gender, language and geography, rather than the tokenism of the past.

While Silicon Valley must battle a long history of investing, India’s entrepreneurship momentum is new but strong enough to build an original approach without simply copying established, older venture thinking. Let that be our disruption.

Durga Raghunath was previously CEO for Digital at Network18 and founder Firstpost. She currently helps very early stage startups with consumer thinking and tweets at @durgaraghunath.

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