Category Archives: Politics & World Affairs

Women of the Valley

In the wake of the resignations of Dave McLure (500 Startups), Justin Caldbeck (Binary Capital), and, of course, Travis Kalanick (Uber), I think it’s incumbent on everyone in the tech industry to not just take a pledge, but to take an active stand on the issue of sexism in the tech industry and, in particular, in Silicon Valley. This isn’t because it’s something new, it’s because the issue is finally being taken seriously and there is momentum that needs a few more pushes to really get rolling downhill. I’d like to see more people both sharing stories to show what a big deal this is as well as making suggestions for fixing it. So with that, here’s my experience.

First, let me say that there is undeniably a serious and endemic issue here. I’ve given hundreds of pitches to investors in the course of my career both as the principal and in the best supporting role for both male and female CEOs. I’ve seen the difference in how these executives were received. I’ve been asked to effectively put a pre-nuptial agreement into investment documents (literally, not figuratively) when I’ve presented with a female executive. And I’ve seen an entire sector (online childcare) – which now supports billions in market capitalization – belittled as a “babysitters club”.

The numbers alone tell a striking story. A priori, any industry that is only 7% women clearly in decision-making roles has some kind of gender gating. And it’s true at the engineering level as well. Phrases like “engineering culture” often get conflated with “brogramming” and for investors “pattern recognition” has become a euphemism for profiling and outright sexism. If you only fund or partner with entrepreneurs who look like the ones you’ve seen before, you just get more 20-something Asian and white guys.

Dean Kamen’s wise aphorism that you get what you celebrate applies here as well. The zeitgeist  of the tech industry has become about celebrating the indefinite prolonging of adolescence. Sometimes that becomes explicit as in the eulogies to some of the fallen – for example Kalanick was celebrated for his ability to spend 12 hours in a hot tub. Sometimes it is more visible in the products that are being created. But until that changes, it’s unlikely to be a welcoming place for women.

As a tech founder and CEO myself, I am proud that Public Good is 44% female including a woman cofounder/executive and women in every functional area. We’re a small team, but it’s difficult to correct a bad course later than it is to focus early on. I believe that one critical aspect to achieving and maintaining that is understanding that a lot of what has driven women out of the industry can seem to many men to be subtle. For example, many engineers like to talk about their beards. While it may seem trivial, this clearly isn’t something women can really relate to. When the problem in many cases is, as Cheryl Sandberg points out, women not having the confidence to lead, these things really matter. An inclusive culture encourages that confidence so focusing on that and starting early are certainly keys to success. I welcome more advice and suggestions and hope these ideas are useful to someone as well.

To paraphrase Bill Gates, if you’re not fully utilizing half the taken in the country it’s not clear how America’s tech industry will continue to lead the world.

An Autonomous Civic Network

network

The more I have engaged with supporter-driven organizations – political and nonprofit – the more I am convinced that the way they interact with their supporters is fundamentally wrong. So much of it comes from the sales and marketing world.

Each organization seeks to build its own base. The less sophisticated ones treat this base as a simple sales funnel, an audience to be solicited frequently with the goal of raising more dollars. The more sophisticated ones go beyond that and try to engender genuine concern in their bases about the issues the organizations are addressing. They often build some kind of ladder of engagement to get people to care, but that ladder too often represents a simple sales funnel: the only goal is for each piece of communication to get a user to level up or get out.

All of this is reflected both in the culture and tools of these organizations. Tools for nonprofits and tools offered for campaigns are essentially customizations of corporate CRM tools. But the problem of supporter engagement is fundamentally different than a sales funnel for a variety of reasons.

Many have written thoughtfully on this topic, notably Marshal Ganz, and may of my coworkers from Obama for America. In various places we implemented ideas of snowflake organizing – the notion of a semi-hierarchical structure that devolves down from headquarters through regional, state, and city levels to ultimately create action through neighborhood teams. Each neighborhood team is large enough to do meaningful work, but small enough to create accountability.

But one thing that each of these organizations have in common is that address the big, hairy issue in people’s lives. While there are multiple elected offices in the United States, none has the power to motivate people like the presidency. And while there are multiple community issues that need to be solved urgently, none are as holistic as people’s livelihoods. It is hard to get people to engage continuously around worthy but less all encompassing issues whether they are congressional elections or food banks.

This makes me question a fundamental idea of all supporter engagement. That it should be owned.

Let me pick that apart. One common thread in all of the supporter engagement approaches that I’ve seen is the idea that they roll up to an organization with an agenda and fixed leadership. Ultimately, that is a big constraint. What if, instead, the organization could be federated and self-governing, more like Bitcoin than like Salesforce.com?

As a thought experiment, consider how it might work.

First, you would form a legal entity. Fortunately, US law allows for a legal entity without ownership. It’s called a nonprofit. Since nonprofits don’t have owners, they are controlled by a board of directors. If the organization had bylaws allowing those directors to be directly elected by a constituency, we’d have a framework for a participant-managed organization where power could be transferred much as it is in government.

Second, the organization’s structure, bylaws, and voting could all be modeled in a software tool. Much like the snowflake model, their would be neighborhood teams and a hierarchy, but unlike the snowflake model, each layer of the hierarchy would be elected by the members of the layer below it. So the ten or so people on a team would elect a captain, the captains in a city would elect a city manager, the city managers would elect a county representative, the country representatives would elect state representatives, and the state representatives would elect the slate of directors (or might themselves be the directors) and a chief executive.

Broadly, the organization would engage in a few tasks: setting policy, directing action, and raising and distributing money.

Anyone on the network would be about to push ideas up vertically (so a team captain can send things to the city manager, the county manager, etc., hypothetically all the way up the chain) or down to everyone who is “below” them in the hierarchy (so a state representative could message everyone in the state). Broadly, this would apply not just to messaging, but to authority generally. Anything can be suggested up, anything can be decided and directed down.

This same structure would apply to policy making. It could be as simple as a wiki with cascading editorial rights. And it would certainly apply to information distribution and actions people could take. For example, the organization could decide to support a slate of candidates for office (not just a single one). Then the network would take action in support of those candidates even though individuals would be free to dissent.

On the issue side, the network could decide at each level of the hierarchy what issues matter to them and adopt organizations relevant to those actions. For example, the Chicago group might be most concerned about combatting violence while the Los Angeles group might be most concerned about immigrant right. These priorities could change, but they’d change democratically and people could have confidence that through their own involvement they could make the case for their own issues.

Smaller actions could work through such a network as well. Neighborhood watches, alley cleaning, even school board meetings could be coordinated.

One critical facet would be that teams could also connect regularly in the real world and they’d get some sort of credit for their level of engagement. It is simple enough to pick a spot in each neighborhood (the local Starbucks or McDonalds) and a time every week or few weeks for such meetings to occur.

If a network of this kind could gather momentum, it would ultimately become a highly democratic but autonomous civic network. Organizations and candidate could effectively put their cases to the participants and, if they prevail, get a meaningful level of support even though each person may not be able to contribute much individually. The organization could also take meaningful actions between elections and between fundraising cycles: town hall meetings, calls on policy issues, and so much more.

The key point is that the network isn’t owned. It isn’t locked into a single person, a single cause, or a single organization. It should be self-healing (unlike a campaign when a candidate leaves office), perpetual, and provide ways for people to make a difference. It could also be a binding layer for communities.

The software to support it is easy enough to build and maintain (I built a prototype while I was thinking through this that I might opensource.)
I curious about if people think such a network might work in reality?

RISE with us.

rise-logo-v1-3-2

Since I had the opportunity to work on President Obama’s 2012 campaign, it may be taking me longer than most to process the fact that the inauguration of the 45th president has just taken place. I’m trying to buy in to President Obama’s optimism about the future, but as he said, the future is in our hands only if we work for it and only if we organize for it.

With this in mind, since election day Genevieve and I have worked with a team of amazing volunteers to build RISE. Our goals are to create coordination among groups with an agenda of resistance to the most toxic incoming policies and to address many Americans’ real economic insecurity. We know that the country benefited hugely under President Obama with 8 years of economic growth, wages which are finally rising, a government budget in primary surplus, and so much more. But we also can see from the fact that the 45th president was elected that there’s a long way to go.

People no longer feel like the American Dream is working for them. Though wages are finally growing, middle class incomes have stagnated for a long time. We have huge issues around the impact of automation, climate change, and globalization. But we need answers that take us forward, not ill conceived ideas that try to take us back to a nostalgic history that wasn’t real, sustainable, or good for many groups of people like women and minorities. RISErs have many ideas for this and will work to engage new voters and persistent non-voters as well as the progressive base on these issues. We will do it by engaging thought-leaders and by listening to people’s individual concerns by building a permanent grassroots movement. We are also a political organization and will work directly to support like-minded candidates and policies as well as to oppose regressive ones. Our structure is a hybrid of tech startup and permanent campaign.

If you are as disturbed as I am by the direction the country has taken, please come and check out what we’re doing. RISE is only 60 days old so it’s a work in progress, but to be successful we need your support, your contributions, and your ideas. We need you to help us spread the word. Help us shape RISE and help us be a powerful voice for both resistance and change.

Genevieve is also touring the country to build support. Sign up to find out when she’ll be in your area (Cleveland, Philly, Milwaukee, Detroit, SF, and Denver are all coming soon.)

The Collins Proposal

Today Senator Susan Collins introduced a compromise gun proposal to limit gun sales to people on certain terrorist watch lists. I support the proposal, even though I don’t think it goes far enough and even in spite of several seemingly reasonable arguments against it. I want to explain why.

First, there is the argument that this proposal would not have prevented Orlando or Newtown let alone the violence plaguing big cities like Chicago. That may be true, but it is not a reason to oppose the proposal for several reasons. The most consequential public policy victories of the last few decades were won not with a single sweeping piece of legislation but through incrementally building up smaller pieces to build a foundation and to make it clear that the fear, uncertainty, and doubt associated with a big change is unfounded. Examples of this include gay marriage rights and health care reform. If this policy is a good policy, opposing it on the grounds that it doesn’t go far enough is wrongheaded and simply allows the great to be the enemy of the good. It’s not my opinion that we should pass this compromise and move on, but that we should use it as a starting point and build towards other sensible reforms. Even a small bill with bipartisan support would help build trust for further discussions. It would also help eliminate the fear that passing any reform whatsoever is equivalent to stepping on the political third rail.

A more interesting challenge to the proposal is the argument that using a government list (like the terror watch lists) as the basis for exclusion from a constitutional right (like the second amendment) is a slide down the path to tyranny. This sounds sensible until you pick it apart. Virtually all constitutional rights have exclusions (e.g. you can’t yell “fire!” in a crowded theater nor can you utter hate speech.) If the concern is that due process may not be observed, that can be resolved by allowing for an appeals process from the list. While that may seem tantamount to being considered guilty until proven innocent, that opens the whole issue of the legitimacy of the lists to restrict other rights like free travel. In fact, I don’t think it’s that different from someone being declared mentally ill (which virtually everyone accepts as a reasonable basis for exclusion from the right to buy a gun). The analysis is done by a professional and is either accepted or not accepted by a court. I may be wrong on this, but these kinds of decisions are what the Supreme Court is for.

The last point – that more guns make us safer and therefore any restriction is bad – simply flies in the face of the data. There are good reasons why people want to own guns (I own one myself) but this one doesn’t pass muster. And while I agree that not all policies make us safer, I still support this one for the reasons above.

Speaking of the courts, it’s still important to add that the scope of the second amendment has been subject to different interpretations (including skeptics of all political stripes ranging from John Paul Stevens to Robert Bork.) To simply throw up our hands and say there is no possible restriction that is constitutional is simply incorrect.

Lies, Damn Lies, and Economic Statistics

The title of this article is a minor adjustment of a favorite saw of Mark Twain’s, but I can’t imagine he’d grudge me the use because the intent is the same as the original. Every times I read business or economic news I become more frustrated by ubiquitous (and to some degree iniquitous) use of three economic indicators. Here’s what they are, why they are wrong, and simple ways to fix them:

GDP

GDP is meant to measure the overall size of the economy and, for some reason, has now become a proxy for the overall health of the economy. If GDP is growing, things are good, right? Well, no. GDP can go up while the business sector is shrinking so long as the gap is made up for in government spending (even deficit spending.) After all, it’s just defined by this simple formula:

GDP = C + I + G + (Ex – Im)

Where C is consumer spending, I is business investment, G is government spending, and (Ex – Im) is net exports. But could it really go up while business is in decline? Sure. GDP growth in the US over the years 2012-2015 has averaged around 3.57%. Over roughly the same period, government deficit as a percentage of GDP has been 4.5% and the trade balance has remained negative. Which means that if you subtracted out the “unsustainable” or deficit part of government spending, you’d end up with a net negative GDP.

But there’s an even bigger problem. GDP can go up even while wealth and incomes consolidate to a smaller and smaller number of people. So if it’s being used to inform policy about when stimulus is needed or how taxes should raised, lowered, or structured it gives a complete false impression.

Still, GDP is a single, easily accessible number so you can see why it would be useful for sound bites and news articles, right? Maybe, but not so much since there are better numbers that do something pretty similar. Even just using median income (not average income) would be much better if you want to know how average families are actually feeling.

Unemployment

This is another frustrating one. The unemployment rate is supposed to show how easy it is for people to get jobs. Since there’s always some natural and seasonal churn in the economy it constantly needs to be adjusted and a number of around 4-5% is considered “full employment”. But this one is broken, too. It measures jobless claims as a percentage of the labor force. So it doesn’t take into account the long-term unemployed (who no longer file for benefits) or those who have given up looking since it’s just too hard.

A much better statistic to use is the labor participation rate. This is the ratio of people who are working to the overall population that’s of working age. Admittedly, it still doesn’t help identify patterns among undocumented workers, cash employment, and various other categories, but it’s a darn sight better than the unemployment rate if you only get one data point for measuring the employment situation. It would take some time to adjust since you need to know what “healthy” is, but so did unemployment rate (it isn’t obvious that 4% rather than 0% is “full” employment.)

The DOW Jones Industrial Average

The DOW is the most commonly reported stock market index and it’s also the worst. No serious analyst thinks the DOW is a good measure of the market for a few reasons.

First, it’s small. It only includes a limited number of stocks and those stocks are of the biggest companies out there. If you believe that small business can have ups and downs independent of big business (and the data would support you if you do), the DOW provides a very incomplete view.

Second, it’s price weighted. Each component of the index is weighted by price rather than by market capitalization. This is a problem since price per share is market cap divided by the number of shares and the number of shares is completely arbitrary because a company can just pick how many shares to have outstanding through splits and reverse-splits. Net net, this means a company with a high share price can have a disproportionate impact on the DOW just by having a high share price even if it’s a relatively small part of the overall economy.

For all that, using the DOW to report on the market is probably a less of a big deal than GDP or unemployment since the DOW and broader indexes like the S&P 500 move together roughly 98.5% of the time and never, to my knowledge, move in completely different directions over any significant time frame. Having said that, it’s also the easiest to fix since indexes like the S&P 500 are already widely reported and are much more accurate.

After Mandela

The passing of Nelson Mandela is particularly on my mind not only because he was a great man, but also because I’m heading back to South Africa in two weeks for my sister-in-law’s wedding.

When I was there last time, I had the opportunity to explore Johannesburg and one memory particularly sticks with me. As you leave the Apartheid Museum, you enter a gallery bisected by beams of light. On the walls are quotes with hope for the future. It is a very different message than the one you get leave Yad Vashem. Instead of “Never again!”, the message of the end of Apartheid is one of reconciliation and hope. That, as much as anything, is the ultimate tribute to Mandela. Remember the past, but move to a better future.

With that in mind, I wonder if for all his contributions, Mandela’s passing will also open an opportunity for the country. While he was alive, it was impossible for alternative political parties to get real power outside of tribal and white-dominated districts. This has resulted in single party rule since Apartheid ended in 1994. All four presidents have been ANC and the ANC has dominated the National Assembly, most of the time with a supermajority sufficient to unilaterally amend the constitution. I believe that much of the stagnation, corruption and missed potential of the South African government can be attributed to this fact. When king-making happens within a single party and elections are essentially pre-determined, winners tend to be those who excel at patronage, not those who deliver for the voters. This isn’t uniquely South African by any means – it’s true all over the world. And this isn’t a condemnation of the ANC – no organization flourishes without real competition.

Rightly or wrongly, while Mandela was still alive, loyalty to him helped keep the party together. While he will be sorely missed, a competitive South Africa would not be a bad thing. Maybe now it can move forward and realize more of its potential as the economic powerhouse of the continent, providing essential services and lifting its citizens out of poverty. Mandela gave it a chance. Now it’s up to the country to seize it.