Silicon Valley’s self-cultivated image of meritocratic utopia has taken a beating in recent times. Last week, that image was knocked down another couple of notches as Ellen Pao’s accusation of gender discrimination against noted venture capital firm Kleiner Perkins Caulfield and Byers (KPCB) was finally brought to trial.
The details that have emerged from the case are unsavory and tawdry, but they also drew the curtains on the insular workings of the venture capital industry. Here are the main facts from the case:
Harvard- and Princeton-educated lawyer and engineer Ellen Pao was living out the archetypal immigrant success story. Her parents were first-generation immigrants to the country. Pao, now 45 years old and serving as interim CEO of Reddit, put herself through college and grad school, where she excelled. After that, she became a partner at KPCB, one of the most storied firms in Silicon Valley.
KPCB generally attracts the cream of the crop from prestigious business schools and engineering institutions. With her impeccable credentials, Pao, who had been hired as chief of staff to renowned venture capitalist John Doerr, would have risen up quickly within the ranks.
Except that things did not quite turn out the way they were supposed to. The recently divorced Pao ended up having an affair with Aniruddha Ajit Nazre, an India native who was also a Harvard graduate and also a partner at KPCB. The lawsuit filed by Pao claims that he retaliated against her after the affair ended by giving her a bad performance review. Subsequently, the lawsuit claims, that a dominant male culture worked to sideline her. KPCB, for its part, argues that Pao did not live up to expectations and was not fit for the job.
To be sure, there have been a number of similar cases in Silicon Valley. For example, the co-founder of Tinder, a popular dating app, was recently fired after news emerged that he had threatened a previous girlfriend (who was also a co-founder of the app) with termination after their relationship went sour. But most of these instances involved young entrepreneurs who did not have much prior work or professional experience.
KPCB is a vital cog in Silicon Valley’s history. It was an original investor in Amazon and Google, two companies that represent the technology industry at its finest. It is a firm of experience and professionals, and it’s a worthy representative of Silicon Valley culture. But, as the court case demonstrates, that culture is far from perfect.
Here are three key takeaways from the case.
1. The rules of engagement in a new workplace are not clear
The emergence (and growing popularity) of social media has made the distinction between personal and professional lives unclear. In more conservative industries, such as the financial sector, employee relationships are circumscribed by a code of conduct that is still based on a demarcation between personal and professional lives.
But technology companies and venture capital firms work on a different dynamic. With massive campuses and a suite of amenities that convert workspaces into homes, tech companies blur the difference between personal and professional lives. For example, both Google and Facebook have special exceptions for working with spouses and do not discriminate or take punitive action against coworkers who are in consensual relationships.
Pao claims that she was “pressured” into a relationship with Nazre, and KPCB claims otherwise. (Nazre was fired from KPCB after it emerged that he had sexually harassed another employee.) The problem, in this case, is that there were no guiding policies for such situations. As a result, the rules of engagement were unclear.
For example, should Nazre have been responsible for Pao’s work, given their earlier relationship? Also, what if the dynamic was reversed, i.e., Pao evaluated Nazre. Would similar allegations hold true?
The absence of such policies would not be such a serious matter if there were no inequities in sex ratios at technology companies. Pao’s allegations are important in the overall context of diversity in the technology industry.
2. Gender discrimination is a slippery slope
It is easy (and, indeed, tempting) to categorize this case as reflective of systemic bias in the tech industry. The truth, however, is complex and multi-layered. This is because the aggregate number of women in venture capitalism and tech industries is low due to a mix of factors, from societal perceptions of such careers to lack of female applicants for such positions.
As renowned venture capitalist John Doerr, who considered Pao his “surrogate daughter,” explained during the trial, the reason that there aren’t a greater number of women in venture capital is because there aren’t enough in the pool of applicants itself. If a greater number of women applying to engineering or venture capital positions were being rejected, then that would be clear evidence of gender discrimination.
One of the reasons there are fewer female programmers or venture capital professionals as compared to males is because societal stereotypes encourage male participation. The automotive industry, where one of the most powerful persons is female (Mary Barra, CEO of GM), suffers from similar problems. The same could be said to be true of other professions which are considered male domains, such as construction or armed forces.
3. Stereotypes are difficult to overcome
Ellen Pao was asked to speak up. She was asked to be confident but not cocky. This case abounds in contradictions and vague terminology. For example, “thought leadership” was a considerably-discussed term during the testimony. The term refers to an expert in a specific subject matter.
In the higher reaches of management, such terminology is not uncommon and might also become the subject of much humor. However, it becomes incendiary when juxtaposed against gender stereotypes. As an example, Pao was variously described as “territorial” and “domineering,” adjectives that are rarely used for males in leadership positions.
Such descriptions run counter to advice given by Facebook’s Chief Operating Officer Sheryl Sandberg’s exhortation to “lean in.” Sandberg, subsequently, launched a campaign to ban the word “bossy” from corporate lexicon.