Speaker 1: Don't let your legacy I T systems cost you money, innovation,
Speaker 1: and a place at the digital table of the future.
Speaker 1: You can change your systems and the economics of it
Speaker 1: with software from red Hat See how at red hat
Speaker 1: dot com. Today's episode is about a guy called Mitch
Speaker 1: al Lee. He runs a startup called Penny in San Francisco.
Speaker 1: We'll tell you later about what Penny does. For now,
Speaker 1: what you need to know is Penny is almost two
Speaker 1: years old and it's really small. It's Mitch, his co founder, Alex,
Speaker 1: and two employees. They're all software engineers, and big surprise,
Speaker 1: they're all guys. A few months ago, Mitch started looking
Speaker 1: for a fifth employee, and he wanted that fifth person
Speaker 1: to be different from him and the rest of the team.
Speaker 1: And since this is a podcast and we can't just
Speaker 1: show you a picture of Mitch, we asked Mitch's sister
Speaker 1: Christina to describe what he looks like. He's always got
Speaker 1: some like really soft hoodie or T shirt on and
Speaker 1: jeans or corduroys. If he was walking down the street,
Speaker 1: you probably wouldn't necessarily notice. He blends in pretty well. Basically,
Speaker 1: Mitch looks just like a lot of other people in
Speaker 1: Silicon Valley. He's young, he's white, he's straight, and he
Speaker 1: went to a top college. Yeah, he even has this
Speaker 1: neatly trimmed beard, and perhaps because he's a cyclist like
Speaker 1: the rest of San Francisco, he has a nice tan too.
Speaker 1: In Silicon Valley, most programmers are white and Asian men
Speaker 1: who have computer science degrees from elite universities. But for
Speaker 1: Mitch's next higher he's committed to looking outside that pool
Speaker 1: of people. That's pretty unusual for a company of penny size.
Speaker 1: Some people would call it affirmative action hiring, because Mitch
Speaker 1: is going to be actively considering the candidates background when
Speaker 1: he's deciding who to hire. And it's a very touchy topic.
Speaker 1: As we'll find out, not everyone agrees that it's the
Speaker 1: right thing to do him Ako and I'm Ellen Hewitt,
Speaker 1: and this week Undecrypted, we're going to be talking about
Speaker 1: something that every technology company says they want to do
Speaker 1: something about, which is diversity in the workforce. Well, they
Speaker 1: want to talk about it in these lofty slogans, but
Speaker 1: when you actually drill into the specifics, things start to
Speaker 1: get uncomfortable. We found one of the few guys in
Speaker 1: the industry, willing to speak completely openly, willing to get
Speaker 1: really uncomfortable with us. Someone who's trying to do something
Speaker 1: to fix the lack of diversity and tech from within
Speaker 1: his own tiny startup. Oh cool, I look at this
Speaker 1: giant chess board. The guy's penny work in a small
Speaker 1: coworking space in downtown San Francisco. They're on a shoestring budget.
Speaker 1: It's really not a glamorous place. They don't have free snacks,
Speaker 1: there isn't very good natural light, and their office is
Speaker 1: about the size of the bedroom room, A spacious, lovely
Speaker 1: I was telling her, I'm excited for her to see
Speaker 1: how like the other half of startups live, this is
Speaker 1: the don't spend a lot of money half of stars.
Speaker 1: Inside this tiny office, there are four guys sitting side
Speaker 1: by side. My name's Mitch. I grew up in San Jose.
Speaker 1: I'm a mid twenties white guy. I'm alex and Stanford
Speaker 1: is American. My name's Andrew Donnas. I'm half black, half white.
Speaker 1: Um I'm married, and I'm my dad. I am Jonathan,
Speaker 1: and I was born in Taiwan and I grew up
Speaker 1: in Maryland. All four of them believe it's the right
Speaker 1: move for their company to be prioritizing diversity now. Not
Speaker 1: just because it's the right thing to do, they also
Speaker 1: believe it will help their product. Yeah, Penny is this
Speaker 1: app that links to your bank accounts and can give
Speaker 1: you financial advice based on your spending patterns. Here's Mitch.
Speaker 1: As we were working on that core product, we were realizing,
Speaker 1: we're both two software engineers that grew up in the
Speaker 1: Bay Area. How are we going to get a product
Speaker 1: that does well in Montana and Kansas and Maine. And
Speaker 1: our answer to that was, we should be solving this
Speaker 1: by building out a diverse team that can empathize with
Speaker 1: people from different parts of the country, from different genders
Speaker 1: or different ethnicities. And you use the app by messaging
Speaker 1: this chap bot, this computer program that texts back and
Speaker 1: forth with you. The chat bot is called Penny, and
Speaker 1: Penny has a female face. But at the beginning, everything
Speaker 1: Penny said was written by two guys, Alex and Mitch.
Speaker 1: Here's Mitch's fiance, Lizzie Wagner, explaining one way that went awry.
Speaker 1: So they started to use a little bit of like
Speaker 1: a snarky tone, you know when you use like a
Speaker 1: winky emoji, it can also be considered flirty. So I
Speaker 1: told him I just read this conversation and I think
Speaker 1: Penny was flirting with me. And he was like, no way,
Speaker 1: it's a computer. It can't flirt, and I was like, no,
Speaker 1: it's a flirty conversation. He's like, this is exactly why
Speaker 1: we need more diverse perspectives, because Alex and I never
Speaker 1: even thought about that comment being taken that way. And
Speaker 1: building a relatable chatbot is super important when you're guiding
Speaker 1: customers through something as personal and sensitive and daunting as
Speaker 1: your finances. When a user writes in and says, I
Speaker 1: overdraft a lot, how do you respond? And some people
Speaker 1: will respond with, well, they should stop spending that much money.
Speaker 1: Other people will put themselves in their shoes and say
Speaker 1: that really sucks. That level of empathy doesn't come if
Speaker 1: everyone thinks and acts the same in a room. They're
Speaker 1: all just gonna confirm each other's opinions of like, well,
Speaker 1: that person shouldn't be spending money they don't have. And
Speaker 1: Penny stands out from the rest of startups and Silk
Speaker 1: on Valley because it's focusing on hiring for diversity so
Speaker 1: early in the company's history. I think the default for
Speaker 1: early stage companies is not necessarily in aversion to diversity.
Speaker 1: It's not an active process of saying we are only
Speaker 1: going to hire people that look and sound just like us.
Speaker 1: It's the idea that we want to move fast, and
Speaker 1: the fastest way to hire people is to pull from
Speaker 1: our network. They get this big paycheck from a venture
Speaker 1: capital firm and they say, great, we're going to spend
Speaker 1: it immediately. They expand their team from two or four
Speaker 1: people to eight or twelve. If you punt the issue
Speaker 1: of diversity down the line, it becomes much harder because
Speaker 1: when you have eleven men on your team on a
Speaker 1: twelve person team, it becomes a hostile work environment for
Speaker 1: women trying to enter into that team. When you have
Speaker 1: a group of all white or all Asian people sitting
Speaker 1: in the same room together, it makes it hostile for
Speaker 1: other minority groups to join that environment. These kinds of
Speaker 1: companies really do exist. We talked to Jennifer Barbattini, as
Speaker 1: software engineer who interviewed with Penny in September, though she
Speaker 1: didn't get the job. I remember there was one company
Speaker 1: that I interviewed with. It was a smallish company like
Speaker 1: fifteen to twenty. They had ten engineers, all ten were male,
Speaker 1: and all ten were from Stanford, And I was like,
Speaker 1: I don't know if I'm a good fit here, like,
Speaker 1: and the hiring person was telling me we're we're trying
Speaker 1: to be diverse, and I'm like, well, okay, but still
Speaker 1: like this is a little intimidating. I don't have a
Speaker 1: Stanford eventual, Um, I'm I'm definitely not. I can't brow talk.
Speaker 1: If it's a problem at a startup with twenty people,
Speaker 1: imagine what it's like at a Google or Facebook or Twitter.
Speaker 1: They have thousands, sometimes tens of thousands of employees, only
Speaker 1: about thirty are women, and only about six percent are
Speaker 1: black or Latino. These companies can hire only people from
Speaker 1: those groups for the next year and their numbers would
Speaker 1: barely move. So it makes sense to start early. But
Speaker 1: the problem for startups is a pressure they're under in
Speaker 1: the very early days. You have maybe a year of
Speaker 1: funding in the bank, you have a bunch of competitors,
Speaker 1: and if you can't hire quickly to build quickly your toast.
Speaker 1: The consensus opinion is start worrying about it. When your
Speaker 1: product is successful enough that you know that you're going
Speaker 1: to be building out a team for the long run.
Speaker 1: Even someone like Mitch who's really determined to focus on this,
Speaker 1: he's run into a lot of obstacle. Remember, Mitch isn't
Speaker 1: this diversity or HR expert. He's just a programmer trying
Speaker 1: to figure it out as he goes along. From a
Speaker 1: macro perspective of actively pursuing diversity, I'm almost but implementation wise,
Speaker 1: I'm i am just throwing darts on board and and
Speaker 1: hoping that we'll learn enough from those to get better.
Speaker 1: Every Monday, Mitch logs onto recruiting sites like angel Lists, Hired,
Speaker 1: and triple Bite. He's looking for candidates or approach, and
Speaker 1: he'll spend one or two hours on each platform. He
Speaker 1: said it takes him maybe six hours on Monday to
Speaker 1: do that outreach, and then the follow up throughout the
Speaker 1: week brings his time to about fifteen hours every week
Speaker 1: just to fill one role. We spent one such Monday
Speaker 1: with Mitch. As you look through a fresh batch of candidates,
Speaker 1: these ones he found and hired this week, there were
Speaker 1: forty two that match to search criteria. The very first
Speaker 1: candidate has real experience, which is great, comes from a university,
Speaker 1: I've never heard of also great and then has experience
Speaker 1: in different areas, and you see the person's photos, and
Speaker 1: you see the person's photo and their name, UM, and
Speaker 1: actually what salary they're interested in, which is pretty interesting.
Speaker 1: So I will start looking through this. Fortunately, when you
Speaker 1: have forty two people every week on this platform, plus
Speaker 1: the hundreds across, a lot of startups look at these
Speaker 1: sites when they're trying to hire. But after a while
Speaker 1: Mitch realized that these job sites, they're only good for
Speaker 1: finding a certain kind of candidate. Angel List is great, UM,
Speaker 1: but not a good place to look for diversity. Same
Speaker 1: with many of the hiring platforms that we tried. I've
Speaker 1: asked them about that in the past, and the typical
Speaker 1: answer is, sorry, this is just what's available. This is
Speaker 1: the pool of candidates. It's predominantly male, it's predominantly white origin.
Speaker 1: So Mitch started to look for ways to find people
Speaker 1: with more varied profiles, things like newsletters and meet ups
Speaker 1: for women and engineering. He also looked for new graduates
Speaker 1: from coding boot camps, which teach you how to code
Speaker 1: in a short period of time. These people tend to
Speaker 1: come from unusual backgrounds, but boot camps didn't turn out
Speaker 1: to be particularly helpful for Mitch. He found that a
Speaker 1: lot of these graduates didn't have enough experience to start
Speaker 1: contributing right away, and Penny, as a young startup, doesn't
Speaker 1: have the resources to train them. To apply to Penny,
Speaker 1: you have to complete a coding questionnaire, kind of like
Speaker 1: a take home test, and Mitch found that some people
Speaker 1: who started it weren't finishing, and a lot of the
Speaker 1: people who were dropping out were people who didn't have
Speaker 1: computer science degrees, or were women, or were programmers of color.
Speaker 1: And it was often these candidates that Mitch was most
Speaker 1: interested in. Mid suspected it might have something to do
Speaker 1: with a lack of confidence, like these people with non
Speaker 1: traditional backgrounds are taking themselves out of the running before
Speaker 1: they even tried. Maybe the job description will say you
Speaker 1: have to have at least three years of experience, and
Speaker 1: let's say often the men with two years of experience
Speaker 1: will apply anyway, but the women wouldn't. Submitch, he tried
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Speaker 1: Learn more at red hat dot com. Before the break,
Speaker 1: Mitch had a realization that the very candidates he was
Speaker 1: interested in were taking themselves out of the running, maybe
Speaker 1: because they didn't think they would get the job. Anyway,
Speaker 1: Here's what he decided to do about it. When we
Speaker 1: get the sense that somebody has either a confidence issue,
Speaker 1: like just doesn't think they're a good fit for the
Speaker 1: position or doesn't think they have the skill set required,
Speaker 1: we will have a lot more contact with that person
Speaker 1: to assuage their fears. That may mean a phone screen
Speaker 1: much earlier in the process. It may mean more checking emails.
Speaker 1: That helped him shepherd more people through the whole process,
Speaker 1: not just the ultra confident ones. And that was a
Speaker 1: small success, but it all came at a real cost
Speaker 1: in the form of mid just time, the fifteen hours
Speaker 1: a week that Mitch was spending on recruiting. That's fifteen
Speaker 1: hours he's not coding or troubleshooting or mentoring his team.
Speaker 1: Mitch said it was worth it, but you can see
Speaker 1: why a lot of other founders in his position wouldn't
Speaker 1: really have the time to do this. And that brings
Speaker 1: us to the most controversial part. When you get to
Speaker 1: that final stage. Would you pick one person or another
Speaker 1: because they're a minority candidate? What would you do? I
Speaker 1: talked to Jay Schweney Vassan. He's the CEO of Spoke,
Speaker 1: which is a nine person enterprise startup in San Francisco.
Speaker 1: Like Mitch, Ja says he wants a diverse team, but
Speaker 1: he said he's not comfortable with making someone's ethnicity or
Speaker 1: gender one of the reasons why he's hiring them. He
Speaker 1: explicitly did not factor that into the final decision because
Speaker 1: I think that's unfair to us as well as the
Speaker 1: person being hired. Um at the end of the day,
Speaker 1: we want to have the best people possible for each
Speaker 1: role in our company, and this makes sense right. Picking
Speaker 1: someone in part because of what they look like can
Speaker 1: even be seen as employment discrimination, or it can feel
Speaker 1: patronizing to the person who was hired. These are the
Speaker 1: kind of counter arguments you hear a lot in Silicon
Speaker 1: Valley and elsewhere. But we asked, Mitch, here are two
Speaker 1: hypothetical candidates equally strong encoding and other important values at Penny,
Speaker 1: but one's a white guy and the other has a
Speaker 1: less typical background. Who would you hire? You just said
Speaker 1: that they're equally qualified. What we're saying is that the
Speaker 1: the people that were interested in hiring were weighing them
Speaker 1: across all these factors, and so somebody with a diverse
Speaker 1: background and a totally different perspective, in our opinion, is
Speaker 1: more qualified for the position that we're trying to fill.
Speaker 1: Giving us a perspective that we've never considered helps the
Speaker 1: product more than somebody that has our same perspective but
Speaker 1: as good at engineering. Did you have put back from
Speaker 1: people who felt like, what's unfair? I should I be
Speaker 1: punished for going to Stanford's exactly that should I be
Speaker 1: punished for going to Stanford? It's it's something that I
Speaker 1: don't have a good answer to, other than the entire
Speaker 1: playing field is leaning in your direction. I know that
Speaker 1: it can feel like in that specific instance, you're being
Speaker 1: discriminated against or you're somehow unfairly disadvantaged, but you are
Speaker 1: unfairly advantaged everywhere else in your life. So it's just, uh,
Speaker 1: it's just a slight tilt of the playing field, a
Speaker 1: little less in your favor, um, which I'm okay with.
Speaker 1: I can. I can sleep easy at night knowing that,
Speaker 1: knowing that if you graduated from Stanford you're going to
Speaker 1: be fine. I'm not worried about you. And we just
Speaker 1: heard Mitch laughing there. But you can tell just how
Speaker 1: carefully and deliberately Mitch has been choosing his words through
Speaker 1: this whole interview. His face was flushed. You could really
Speaker 1: tell that he was nervous. And I don't blame him.
Speaker 1: Here we are shoving a mic in his face, asking
Speaker 1: him to talk about gender and race and all these
Speaker 1: other things that are so touchy. The things going on
Speaker 1: in my mind are I need to be careful about this.
Speaker 1: I know that people are going to look at me
Speaker 1: and say, you're just some white dude rattling off about diversity,
Speaker 1: but you have no idea what you're talking about. That
Speaker 1: may be true. I may not know what I'm talking about,
Speaker 1: but I want to get that conversation going so that
Speaker 1: I can learn, so that the rest of our team
Speaker 1: can learn, and so that um, we do better moving forward.
Speaker 1: We'd basically just saying, you know, Allen, I really can't
Speaker 1: remember the last time I was this nervous trying to
Speaker 1: come up with the most delicate way to pose these
Speaker 1: questions to me too. And Aki, you and I are
Speaker 1: both women of color, you're also gay. It really makes
Speaker 1: you think back to every time you've ever been offered
Speaker 1: a new job. Yeah, and I guess until now this
Speaker 1: has all been theoretical. But when we went in to
Speaker 1: interview the Penny team, they were in the final stages
Speaker 1: with one candidate. They were talking to a woman and
Speaker 1: she's of Indian descent. While we were in the Penny office,
Speaker 1: we got the team altogether in a room and asked
Speaker 1: them what they thought of her. Yeah, they all thought
Speaker 1: she would work well with the team, but she lacks
Speaker 1: some technical experience. Specifically, she wasn't fluent in the main
Speaker 1: programming language that Penny is written in. On top of that,
Speaker 1: the company was about to enter a really busy period.
Speaker 1: Great culture fit. It's somebody that we would all gladly
Speaker 1: having the room working with us, because she's articulate and
Speaker 1: well thought out and it's very responsive to feedback. How
Speaker 1: do you weigh that with the fact that shifts no
Speaker 1: experience shipping production Ruby code, which is the language that
Speaker 1: we write in UM, but seems to have the aptitude
Speaker 1: to pick that up quickly. Well, the answer is we
Speaker 1: don't know, so ak. When we visited Mention his team,
Speaker 1: everything that they were saying seemed pretty reasonable to us. Yeah,
Speaker 1: I thought he was a really thoughtful guy. I was
Speaker 1: just genuinely impressed. But we're not experts on this either,
Speaker 1: So we outlined Mitch's philosophy and tactics with my Von Hutchinson,
Speaker 1: a former labor lawyer who is now a consultant helping
Speaker 1: smaller startups on diversity and inclusion. You get an A
Speaker 1: for enthusiasm Mitch for this letter grade, I would give
Speaker 1: him a beat. Um. I think that he's doing some
Speaker 1: of the right things. Um, he's taking a couple of risks,
Speaker 1: but he could take bigger risks. I think that he
Speaker 1: could definitely educate itself a little bit more, just comb
Speaker 1: through the resources and see what's out there. My Van
Speaker 1: said that in the long term, Penny should build relationships
Speaker 1: with organizations that are trying to bring more underrepresented groups
Speaker 1: into tech host dinners and meetups and that kind of thing.
Speaker 1: But she also gave Mitch some practical advice for right now,
Speaker 1: like put your pledge to diversity on your company's landing page,
Speaker 1: not just on your job spage. Consider bringing in an
Speaker 1: expert to help guide you instead of trying to figure
Speaker 1: it out for yourself. And when you hire minority candidates,
Speaker 1: don't expect them to do the work of recruiting diverse
Speaker 1: candidates for you. I'm really happy there are guys out
Speaker 1: here like Mitch. I think, um, sometimes we see guys
Speaker 1: like Mitch. Don't stay like Mitch for very long. I
Speaker 1: think it's going to be in the next few years
Speaker 1: is going to be really hard to hold those values
Speaker 1: and not to succumb to the temptations that are going
Speaker 1: to be abound in the industry when it comes to
Speaker 1: making the final call on who to hire. My Van said,
Speaker 1: Mitch is taking the right approach by focusing on the
Speaker 1: different perspectives that a candidate would bring to Penny. I
Speaker 1: don't think that you should hire someone just because they're
Speaker 1: black or just because they're a woman. That will fill
Speaker 1: a short term goal. But that's not going to pay
Speaker 1: off in the long run. And I feel like so
Speaker 1: often we we equate identity with experience and it's not
Speaker 1: the same thing, although sometimes they're tied, right, So I
Speaker 1: think if you can figure out a way to really
Speaker 1: capture that, to capture the experience part of the identity
Speaker 1: as opposed to just the identity in a vacuum, like,
Speaker 1: that's when you're kind of like more set up for
Speaker 1: a success, Which brings us to our climax. Did Mitch, Alexandrew,
Speaker 1: and Jonathan hire the female programmer? We followed up with
Speaker 1: them in late November, and even though they were approaching
Speaker 1: a busy time, they decided to give her an offer.
Speaker 1: Her name's Vertica Shrivastav, and we met her just a
Speaker 1: few days after she accepted Penny's offer. She told us
Speaker 1: that as she's met with all these different companies, she
Speaker 1: knew she was likely going to be an outlier. I
Speaker 1: made it a point to ask Um how many female
Speaker 1: engineers they had, And after I started asking, I realized
Speaker 1: it made people uncomfortable. I didn't mean I didn't mean
Speaker 1: it as like a point of like superiority. I just
Speaker 1: wanted to know how many female engineers because it would
Speaker 1: affect me as someone joining their team, and it made
Speaker 1: people uncomfortable. UM. They kind of be like, you know, well,
Speaker 1: we had this engineer she left. UM, but she didn't
Speaker 1: sense that same discomfort at Penny. I had asked them
Speaker 1: a question, UM, saying that companies always asked me why
Speaker 1: am I interested in them? I think it's only fair
Speaker 1: for me to ask why are you interested in me?
Speaker 1: And I liked that they didn't like tiptoe around the
Speaker 1: fact that I'm a female engineer. They're like, diversity is
Speaker 1: something that's really important to us, and you're clearly different
Speaker 1: because you're female, and then also listed like other things
Speaker 1: that were a little differ and about me then I
Speaker 1: guess the average software engineer. So like that they're honest
Speaker 1: about that and they're not trying to just because I'm
Speaker 1: a girl come out of the team like they saw
Speaker 1: something more in me other than just that I'm a female.
Speaker 1: Vertica starts this week, but Mitch's work isn't over. Wi Bond,
Speaker 1: the diversity consultant, told us that it's not going to
Speaker 1: be enough to just hire candidates with minority backgrounds. The
Speaker 1: hardest part is making sure that the new hire feels
Speaker 1: like a real and necessary part of a team with
Speaker 1: challenging work, but also the right amount of support. It's
Speaker 1: a difficult balance, Mitch just success in the long term
Speaker 1: ultimately depends on whether Vertica stays and thrives at Penny
Speaker 1: and down the road, whether the different people Mitch keeps
Speaker 1: hiring will make the app more useful and enjoyable to everyone,
Speaker 1: not just people in the Silicon Valley bubble. And that's
Speaker 1: it for this week's episode of Decrypted. Thanks for listening.
Speaker 1: You can subscribe to the show on iTunes or any
Speaker 1: of your favorite podcast apps. While you're there, please leave
Speaker 1: us a rating and review. I read each and every
Speaker 1: one of these reviews. It helps us keep making the
Speaker 1: show better, and it also helps us find new listeners
Speaker 1: and tell us what do you think of the state
Speaker 1: of diversity in the tech industry. I'm on Twitter at
Speaker 1: Ellen Hewitt and I'm met aki its O seven. This
Speaker 1: episode was produced by Pierre ged Kari Magnus Hendrickson, and
Speaker 1: Liz Smith. Emily Buso edited Ellen's print story, which you
Speaker 1: can find on Bloomberg dot com Slash Technology. Alec McCabe
Speaker 1: is head of Bloomberg Podcasts. We'll see you next week.
Speaker 1: Don't let your legacy I T systems cost you money, innovation,
Speaker 1: and a place at the digital table of the future.
Speaker 1: You can change your systems and the economics of it
Speaker 1: with software from red Hat. See how at red hat
Speaker 1: dot com.