Speaker 1: Before she became one of the world's most influential philanthropists.
Speaker 1: Before she even started working in the tech industry, Melinda
Speaker 1: Gates was a high school student at an all girls
Speaker 1: Catholic school in Dallas, Texas. One of the teachers, they're
Speaker 1: the math teacher, who I really admired a lot and
Speaker 1: worked with a lot. She went to a conference and
Speaker 1: she saw these Apple two's had just come out, and
Speaker 1: she was so excited about them. She came to the
Speaker 1: hen principle, who happen to be a nun, and said,
Speaker 1: we'd have to get these for the girls. The Apple
Speaker 1: two was an early personal computer, is the first of
Speaker 1: its kind intended for ordinary consumers instead of business professionals
Speaker 1: or hobbyists, and it was pretty expensive. The cheapest one
Speaker 1: retailed for about dollars back then, which is about five
Speaker 1: thousand dollars in today's dollars, which meant that as a teenager,
Speaker 1: Melinda got a head start tinkering with technology. And so
Speaker 1: she got several of the girls who were in math
Speaker 1: class and asked us if we wanted to sign up
Speaker 1: for her new computer class she was going to start,
Speaker 1: and that's how I got hooked. Melinda went on to
Speaker 1: major in computer science at Duke University, and back then
Speaker 1: that actually wasn't such an unusual choice for women. In
Speaker 1: the early eighties, women made up nearly forty of computer
Speaker 1: science graduates. But as Melinda entered the tech industry, rose
Speaker 1: through the ranks and then focused her attention on philanthropy,
Speaker 1: she watched the world change. Today, the share of female
Speaker 1: computer science grads is down to less than and tech
Speaker 1: has become a hostile industry for many women. Hi em
Speaker 1: Aiito and I'm Emily Chang, and this week Undecrypted, we're
Speaker 1: asking who has the power to make Silicon Valley a
Speaker 1: better place for women? Was a year of reckoning for
Speaker 1: male dominated Silicon Valley, particularly for venture capitalists who have
Speaker 1: an outside i share of power in the industry. With
Speaker 1: their money, these investors decide which startups thrive in which die.
Speaker 1: Several of them last year were accused of abusing their
Speaker 1: positions of power to pursue female entrepreneurs. As I was
Speaker 1: writing my new book ro Topia, breaking up the Boys
Speaker 1: Club of Silicon Valley, I looked and looked and looked
Speaker 1: for people who could change the status quo. And I
Speaker 1: started thinking about one group that pulled a lot of
Speaker 1: power over those venture capitalists, the people who give venture
Speaker 1: capitalists the money to invest in startups in the first place.
Speaker 1: Blinda Gates is just one of those investors funding venture
Speaker 1: capital firms with the aim of getting more women into technology.
Speaker 1: I recently sat down with Melinda for my long form
Speaker 1: interview show Bloomberg Studio one point out to talk about
Speaker 1: all of this today. You'll be hearing parts of that
Speaker 1: conversation stay with us. After Melinda finished college, she got
Speaker 1: an MBA from Duke's Business School. She joined a software
Speaker 1: company called Microsoft. It was an exciting time to be
Speaker 1: in the tech industry. The year before Microsoft had gone public,
Speaker 1: and two years before that, on January four, Apple Computer
Speaker 1: will introduce Macintosh and you'll see why nine Apple had
Speaker 1: started selling its Macintosh computer at Microsoft. Melinda's computer signs
Speaker 1: background helped her advance quickly. Soon she was managing teams
Speaker 1: of programmers and developing products like publisher in Carter and Expedia.
Speaker 1: But in the broader industry, Melinda could feel how alone
Speaker 1: she was as a woman in tech. I go present
Speaker 1: and you could tell like I would show up at
Speaker 1: a user group that is nine Mail, and they'd be
Speaker 1: like this woman's to present to us. What does she
Speaker 1: what could she possibly know about this product? Computer science
Speaker 1: wasn't always the boys club that it is now. In
Speaker 1: the NI and fifties, women played vital roles programming computers
Speaker 1: for NASA and the military. But actually a tech became
Speaker 1: more male dominated over the last few decades. That's the
Speaker 1: opposite of what's happened in other areas like lawn medicine,
Speaker 1: which have attracted more and more women. You lived this,
Speaker 1: what went wrong? Like? How did that happen? It looks
Speaker 1: like when the gaming industry turned, when the prob the
Speaker 1: games became more male games, more shoot him up. If
Speaker 1: you think about the earlier games that I played, pac Man,
Speaker 1: the adventure games, the Atari games, Breakout, they were pretty
Speaker 1: gender neutral. But when you got in these very combative
Speaker 1: games that were very male centered, it's and more and
Speaker 1: more men got into the industry, then it's two women.
Speaker 1: It's just started to feel unwelcoming. Family and your reporting
Speaker 1: for bro Topia, you found so causes of your own.
Speaker 1: In the sixties and seventies, as the computer industry was
Speaker 1: exploding in size, tech companies were desperate for new talent,
Speaker 1: so they started doing aptitude tests and personality tests to
Speaker 1: identify good programmers, and a software company called STC hired
Speaker 1: two psychologists to identify people who would be good at
Speaker 1: this job, and they decided that good programmers quote don't
Speaker 1: like people. Well, if you look for people who don't
Speaker 1: like people, the research tells us, you'll hire far more
Speaker 1: men than women. And it's more money came into the
Speaker 1: tech industry. Working in tech became a higher profile job. Absolutely,
Speaker 1: the jobs became more professional, higher status, so men wanted
Speaker 1: those jobs and women essentially got pushed and profiled out.
Speaker 1: Melinda married Microsoft co founder and then CEO Bill Gates.
Speaker 1: She left Microsoft in to focus on her family when
Speaker 1: their first child was born in two thousand, she co
Speaker 1: founded the Bill and Melinda Gates Foundation. For many years,
Speaker 1: Melinda's work with the foundation took her to remote parts
Speaker 1: of the world, often in communities living in deep poverty.
Speaker 1: The time she spent in the field far from home,
Speaker 1: was part of what made her realize things still needed
Speaker 1: to improve for women right here in the United States. Well,
Speaker 1: I've been lucky enough now to travel for over seventeen
Speaker 1: years in philanthropy, and I traveled all over the world.
Speaker 1: I'm in the developing world a lot. I'm in Asia,
Speaker 1: I'm in Africa, and who shaped my views were the
Speaker 1: women I talked to on the ground and what I
Speaker 1: was hearing in their conversations at the local village level,
Speaker 1: sitting in the dirt on a mat was the same
Speaker 1: thing I was hearing when I would hear the news
Speaker 1: in the United States about CEO under representation on boards,
Speaker 1: right of women on boards, or women's CEO s. So
Speaker 1: in Melinda to I did, she would focus on making
Speaker 1: Silicon Valley a better place for women. In an interview
Speaker 1: with Wired magazine, she said not having more women in
Speaker 1: tech was quote not good for society. It was around
Speaker 1: this time that I too was getting interested in this
Speaker 1: question of gender in Silicon Valley. And this was at
Speaker 1: a time when not a lot of people were talking
Speaker 1: about this. Right. I made it a chore at a
Speaker 1: certain point to ask investors and ask CEOs when they
Speaker 1: came on the show, what are you doing about this?
Speaker 1: What are you doing to fund women? What are you
Speaker 1: doing to hire women? And I wasn't liking the answers
Speaker 1: that I was getting, but I knew that this was
Speaker 1: a problem. Of course, a year later came the Reckoning
Speaker 1: first former Uber engineer Susan Fowler wrote a blog post
Speaker 1: that exposed a toxic culture of sexism and sexual harassment
Speaker 1: at the company. Uber promises an urgent investigation into sexual
Speaker 1: harassment claims made in a former employees blog post. She
Speaker 1: claims upper management tried to sweep her comple lanked under
Speaker 1: the rug, calling her supervisor a high performer. And then
Speaker 1: female startup founders came forward with their stories about how
Speaker 1: they got harassed by a number of male venture capital investors.
Speaker 1: Venture capitalists are the investors who give money to startups,
Speaker 1: which means they're the ones deciding which companies get more
Speaker 1: funding to expand more chances to succeed. Because of that,
Speaker 1: these investors are incredibly powerful people in Silicon Valley, this
Speaker 1: group consists mostly of men. Only eight percent of investors
Speaker 1: are women. After the torrent of news stories, many of
Speaker 1: the men accused of misconduct got fired or stepped down
Speaker 1: from their jobs. But stories of harassment are only one
Speaker 1: symptom of a much bigger problem, which is the severe
Speaker 1: gender imbalance in tech. So how do you fix that?
Speaker 1: Melinda Gates search for a solution that's coming up after
Speaker 1: this So twenty seventeen minute Clear that the tech industry
Speaker 1: needs to get better at creating opportunities for women. But
Speaker 1: this is a problem the industry has been aware of
Speaker 1: for some time, and solutions have been hard to find.
Speaker 1: That's when I started looking into one corner of the
Speaker 1: investing world that we don't hear from very often. There's
Speaker 1: a group of people called limited partners, and it's their
Speaker 1: money that venture capitalists are investing. As I did more
Speaker 1: reporting for my book, I realized there are a lot
Speaker 1: of really powerful women in this community of behind the
Speaker 1: scenes investors, Women like Lauren A. Messer, who is chief
Speaker 1: investment officer of the Metropolitan Museum of Arts three point
Speaker 1: one billion dollar investment portfolio. The io p A that's
Speaker 1: the International Limited Partners Association told us that roughly one
Speaker 1: third of their members are women. So I wanted to
Speaker 1: understand if these female LPs, these people who invest in
Speaker 1: the investors, were concerned about diversity in Silicon Valley. I
Speaker 1: checked in with Joel Caden, who spent eighteen years in
Speaker 1: investment banking before co founding her own investment company, Accolade Partners.
Speaker 1: Your contribution to the book, I really appreciate it. Oh, well,
Speaker 1: I'm excited for you. Joelts for manages about eight hundred
Speaker 1: million dollars and the majority of her investments are in
Speaker 1: the tech industry. I thought that perhaps these powerful investors
Speaker 1: like Joel could use their vast financial might to put
Speaker 1: pressure on tech investors to change. Maybe they could refuse
Speaker 1: to invest with firms that don't have any female investing partners,
Speaker 1: or maybe allegations of sexual harassment and the existence of
Speaker 1: nondisclosure agreements, which have helped keep accusations covered up, would
Speaker 1: become a bigger part of their due diligence process. What's
Speaker 1: more important whether there's a woman on board or what
Speaker 1: the returns are. Um, I don't think they should be
Speaker 1: mutually exclusive. So I'm I'm rooting for women to get
Speaker 1: to that metric that everybody knows. Look, our business is
Speaker 1: about making money. That's what we get paid to do.
Speaker 1: So at the end of the day, my job is
Speaker 1: to make as much money as possible for the wonderful
Speaker 1: institutions that have, you know, hired us to invest. So
Speaker 1: that's what gets us up in the morning. Silicon Valley
Speaker 1: knows it has a gender imbalanced and Joel told me
Speaker 1: she's having conversations with top venture capitalists encouraging them to
Speaker 1: look for more women they can hire. She said, it
Speaker 1: will happen. It just requires a lot of hard work,
Speaker 1: and it will take some time because as much as
Speaker 1: these investors would like to see change, they're worried about
Speaker 1: making changes that could jeopardize returns. But behind the scenes,
Speaker 1: Melinda was thinking about doing more. She was in talks
Speaker 1: with the venture capital firm run by two women. When
Speaker 1: Melinda announced she wanted to focus on helping more women
Speaker 1: get into the tech industry. She had created a private
Speaker 1: office called Pivotal Ventures. This will be different from the
Speaker 1: Bill and Melinda Gates Foundation, which is a philanthropic project.
Speaker 1: With Pivotal Ventures, Melinda would be making actual investments with
Speaker 1: the goal of making money. I mean, the first goal
Speaker 1: is to make money. I'm not putting my money out
Speaker 1: as a social impact. I'm putting it out to make money.
Speaker 1: But Melinda also believed that smart investments can help drive change.
Speaker 1: And I kept thinking there would be a woman to
Speaker 1: speak out or women who would speak out more. And
Speaker 1: there are women speaking out, But I hadn't honestly put
Speaker 1: together my background of realizing well, I was in that space.
Speaker 1: I've always cared about computer and tech um. But wow,
Speaker 1: maybe I should use my voice behind this. So when
Speaker 1: did you first believe that limited partners or the investors
Speaker 1: that fund venture capital firms have a role to play here. Well,
Speaker 1: I started to look at what the barriers were in
Speaker 1: the tech industry for women and people of color. We
Speaker 1: don't have enough women with patents, we don't have enough
Speaker 1: women founder c e O s who are getting funding.
Speaker 1: So basically, less than two percent of VC funds go
Speaker 1: to women, less than one percent go to women of color.
Speaker 1: And so in this innovation Asian space, I said to myself,
Speaker 1: what's the best way to use capital to move things
Speaker 1: for women? And that's when I started to say, Okay,
Speaker 1: I actually need to move some money into the venture
Speaker 1: capital space. That's what led Melinda to the venture capital
Speaker 1: firm Aspect Ventures, co founded by Teresa Go and Jennifer Fonstad. Yes,
Speaker 1: so we met Melinda actually through a mutual friend. That's
Speaker 1: Jennifer Fonstad, a straight shooting investor whose career I've been
Speaker 1: following for many years. I met them, I think it
Speaker 1: was my first time was about two and a half
Speaker 1: years ago, and they're just they're savvy and smart investors,
Speaker 1: right Jennifer and Theresa both distinguished themselves as venture investors.
Speaker 1: Jennifer spent seventeen years at a firm called d f J,
Speaker 1: and Teresa was a partner at another top firm, Excel Ventures,
Speaker 1: for fifteen years before they left to start their own fund. Now,
Speaker 1: four years after its founding, Aspect Ventures has one of
Speaker 1: the most diverse investing teams in Silicon Valley. I think
Speaker 1: about it more along the lines of how it drives
Speaker 1: better business outcomes, better performance, and better decisions. Where we
Speaker 1: are building to approach a point where we can have
Speaker 1: critical mass. We're having twenty to thirty of an organization
Speaker 1: which has a different perspective, diversity of voice, different diversity
Speaker 1: of experience. In the male dominated world of startup investing,
Speaker 1: this is a pretty new approach. And when you have
Speaker 1: that critical mass, you build in an entirely different culture
Speaker 1: around how you incorporate those voices, and I think that's
Speaker 1: what will drive change for us over the next couple decades.
Speaker 1: This idea that new voices will help identify new opportunities
Speaker 1: is a concept Melinda also believes in. Some LPs have
Speaker 1: said to me, all we care about is returns. We
Speaker 1: care about diversity, but we really care about how much
Speaker 1: money that we make. What do you have to say
Speaker 1: to those people? I have to say, you're investing in
Speaker 1: what you know. Women are of consumer dollars spent. Women
Speaker 1: control sevent financial decisions in the house. So you're missing
Speaker 1: an opportunity because you just don't see it. So you're
Speaker 1: leaving money on the table. You're not in the deal flow.
Speaker 1: So good luck ten years from now. I think what's
Speaker 1: really critical about what Melenda is doing is that she
Speaker 1: is She really understands and appreciates how diversity leads to
Speaker 1: better performance. In January, they announced Melinda was investing in
Speaker 1: Jennifer and Teresa's fund. It's encouraging to hear stories like this,
Speaker 1: but still, Melenda is just one investor, and Aspect Ventures
Speaker 1: is just one venture capital firm. There's a long way
Speaker 1: to go before these ideas filter out across the whole industry,
Speaker 1: and it's important to remember Jennifer and Teresa are the
Speaker 1: rare example of two women who have already been in
Speaker 1: tech for a long time. People know who they are
Speaker 1: and trust they can deliver good returns. That won't be
Speaker 1: true for every woman looking for someone to take a
Speaker 1: chance on her. How much of an impact can LPs
Speaker 1: have and should LPs have in galvanizing change, you know,
Speaker 1: because some of these funds don't necessarily have the returns
Speaker 1: yet you know that these investors would like to see.
Speaker 1: But someone has to give those people a chance. But
Speaker 1: we all care about making money, right, So how do
Speaker 1: you balance all of those concerns. I think that you
Speaker 1: I think we definitely need LPs who start to make
Speaker 1: those investments. And there's gonna be some people who are
Speaker 1: already out on the forefront of that, and I think
Speaker 1: they not only need to make investments, they need to
Speaker 1: open their networks because if you look at a woman,
Speaker 1: she often doesn't have the same network into the deal flow, right,
Speaker 1: So broader change will ultimately require more people to take
Speaker 1: some risks. Some of that pressure may come from behind
Speaker 1: the scenes investors like Melinda, but a lot of it
Speaker 1: will have to come from people within the tech industry
Speaker 1: deciding to make change as well. You know, all firms
Speaker 1: don't need to look and act the same. But you know,
Speaker 1: what is the burden on the rest of the industry
Speaker 1: to to make these changes that are you know, so necessary?
Speaker 1: I mean, I I just find it hard to believe
Speaker 1: that some of these firms can't find a qualified woman, right.
Speaker 1: I think that's a bit of an excuse, to be honest,
Speaker 1: and um, so firms need to figure out, you know,
Speaker 1: are they really serious about this issue or the window dressing.
Speaker 1: And it's just like the early days when we used
Speaker 1: to start to talk about corporate boards, Oh, they need
Speaker 1: to have a woman. So you had some some boards
Speaker 1: that did it as a token, they would put a
Speaker 1: token woman on. But eventually there was public pressure that
Speaker 1: people started to realize, actually, companies are doing better when
Speaker 1: they have a more diverse board. In March, hundreds of
Speaker 1: startup founders joined the Founders for Change movement, committing to
Speaker 1: consider the diversity of a venture capital firm before taking
Speaker 1: a check. For now, Jennifer and Theresa have closed their
Speaker 1: latest round of funding and are getting to work on
Speaker 1: deploying that money. They're looking for startups to invest in,
Speaker 1: and they're especially interested in cybersecurity, digital health, and future
Speaker 1: of work companies. As for Melinda, she's looking for more
Speaker 1: investments too. She says Aspect Ventures is just the first
Speaker 1: of many bets she wants to make on women in tech.
Speaker 1: Do you think Silicon Valley can fix this, the problem
Speaker 1: of not having enough women at the table. I know
Speaker 1: Silicon Vallet can fix this. They just have to decide
Speaker 1: they want to to be honest. Venture Capitals behind the
Speaker 1: ball on this way behind and they need to catch up.
Speaker 1: And that's it for this week's Decrypted. Thanks for listening.
Speaker 1: We always want to know what you think of the show.
Speaker 1: You can write to us at Decrypted at Bloomberg dot
Speaker 1: net and I'm on Twitter at Emily Chang TV and
Speaker 1: I'm at Akita seven. And please consider leaving us a
Speaker 1: rating and a review on Apple Podcasts or any of
Speaker 1: your favorite podcasts apps. It really helps us find new listeners.
Speaker 1: My book pro Topia, Breaking Up the Boys Club of
Speaker 1: Silicon Valley is in bookstores and online now. And the
Speaker 1: full interview of Melinda Gates will air as an episode
Speaker 1: on my show Bloomberg Studio One point Out on Bloomberg
Speaker 1: Television May second at nine pm Pacific six thirty pm Eastern.
Speaker 1: It'll also be available in audio form on our own
Speaker 1: podcast called Studio one point Out. This episode was produced
Speaker 1: by Pia Getkary Magnus Hendrickson, and Liz Smith. A special
Speaker 1: thanks to Candy Chang, Executive producer, of Studio one Point Oh,
Speaker 1: Kevin Hines, who edits the show, and our managing editor,
Speaker 1: Danielle Culperson. Francesca Leavie is head of Bloomberg Podcasts. We'll
Speaker 1: see you next week.