Diversity in corporate leadership, especially among fast-growth companies, is no longer a nice-to-have, a buzz-word, or a marketing ploy. It’s an economic necessity.
Research has shown that with greater diversity comes greater financial returns for our companies. That comes as no surprise since diverse teams – from leadership to entry-level positions -- help companies learn how to do business with diverse customer bases in the US and globally.
In my industry -- venture capital and technology -- there aren’t many executives with my skin color and gender, and even fewer who grew up Spanish speaking in a single-parent, "working poor" family. I’m a first generation college graduate with four Stanford degrees and am an emeritus trustee. I cofounded a technology startup and later was an early Google employee, then executive, who helped grow the company from $85M to $10B.
So how did someone like me end up where I am today? My story, while unique in its particulars, may serve Latinos and minority groups, as well as other leaders. Here are the three things we need to do to get more Latinas and other minorities, including women, into leadership roles in business:
We need to offer access to relevant education
The first pillar of continued diversification is education. Mine started well before Stanford: I was required to learn coding in math classes in high schools I attended on scholarship and participated in a federal HUD internship for low-income inner city kids to learn to use the first generation PC and Lotus 1-2-3. I was also exposed to real companies using such technologies.
Today, we're teaching people to read but not to write the language of the future. In America, 71 percent of all new jobs in STEM are in computing, yet only 8 percent of STEM graduates are in Computer Science, and only 1 in 4 K-12 schools teach computer programming. The American Dream will not be attainable for people like me unless we can learn to create using these new tools.
Earlier this year, President Obama said that he wanted every student to have “hands-on computer science and math classes.” The Chicago, Houston, and Los Angeles public school systems have made strides in this regard, but we have a long way to go without a national curriculum.
We need to showcase realistic success stories
The second step consists of positive examples for the next generation. Van Jones of Yes We Code has talked about the limited role models for success in low opportunity communities. Today we have athletes, rappers, hustlers and President Obama. Tomorrow we need business leaders because they represent a more realistic pathway to success.
We need to invest in women and minority-led companies
The third is less obvious, but perhaps the most important. We need to create a bandwagon effect among corporate leaders and investors by showing the economic value and fiduciary alignment of investing in diversity.
As a venture capitalist, I seek to replicate my success at Google in identifying diverse talent because it presents a tremendous financial opportunity. In our now majority minority country, we need business leaders to respond to the diverse wants and needs of our multifaceted population.
Minority and women-led companies need equal access to capital and consideration for the value proposition created by such firms and entrepreneurs. These companies change how we work, how we live; they impact our culture and the broader economy. If investors fail to recognize the urgency of these cultural shifts, and fail to invest in these fastest growth segments, the macroeconomic picture for all Americans will worsen.
My firm, Ulu Ventures has among the most diverse entrepreneurs of Silicon Valley VCs. While most of our CEOs are still Caucasian males, a full 19% of our teams are led by a woman, 23% by a minority and 9% by a Latino or African American CEO. With 145 cofounders in 70 companies, we have 2 to 3 times the industry average number of women and minority CEOs and cofounders, except for Latino and African American CEOs and cofounders where we have 9 times the industry average Minorities include those of Asian, Indian, Middle Eastern, African American, and Latino heritage.
Many of our initially non-diverse teams subsequently hired diverse leaders and moved on to incredible accomplishments. Ulu portfolio company SoFi was such a team. SoFi now has 6 women including 2 minority women (Asian and African-American) on its 18-person management team. SoFi recently raised $1B from Softbank, one of the top 5 venture rounds ever raised by a US company. SoFi also recently attained a Moody's AAA rating on a $380M bond offering backed by student loans, the first ever startup online lender to receive that designation. A Stanford study found that the top 10% most successful entrepreneurial companies—companies like SoFi—account for 80% of job creation by startups.
I’m grateful for the opportunities I’ve had, and there’s more work to be done if we want the next generation of business leaders and Americans to thrive. If we execute on these three pillars and broaden opportunity across the spectrum, the whole economy benefits.