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Canadian startups are noticing U.S. headlines about sexism in tech – but will they take action?

Dave McClure was always known for having a potty mouth.

So when he took the stage for a Q&A at Montreal Startup Fest in July 2016, event founder Philippe Telio jokingly asked him to get the swearing out of the way right off the bat. McClure obliged, reciting comedian George Carlin’s famous seven words you can’t say on TV, including c-nt, motherf—-r and t-ts.

Later, Telio asked McClure why his venture capital (VC) firm, 500 Startups, is boosting its investment in startups run by women and visible minorities. McClure answered with more off-colour humour.

“We’re greedy f—ing bloodsucking venture capitalists who just want to make g–damn money and invest at low prices in under-arbitraged women and diversity,” McClure said. “Sorry about that.”

500 Startups founder Dave McClure, left, during a July 2016 Q&A at Montreal Startup Fest with event founder Philippe Telio.

Adopting McClure’s jocular tone, Telio asked, “So you’re taking advantage of minorities, is (that) what you’re saying?”

“Yes, arbitraging racism and sexism for our own selfish f—ing benefit globally,” McClure said sarcastically.

The conversation stunned audience member Petra Kassun-Mutch, a social-entrepreneur-in-residence at Community Innovation Lab in Oshawa, Ont. Taken aback, she asked more than a dozen other people there (males, females, whites, minorities) if they found any of it offensive. Only one person did, a man who called it “disgusting and uncalled for.”

Although Kassun-Mutch blogged about McClure’s profanity-laced bravado, other media covering Startup Fest (including TechCrunch) made absolutely no mention of it. McClure’s vulgar remarks seemed to be laughed off as harmless shock jock shtick by pretty much everyone who was there.

A year later, other words McClure had used – not in front of hundreds of people but in a private message to one woman – would come back to haunt him.

The stories

On June 30, 2017, the New York Times published the contents of a Facebook direct message Dave McClure sent to a woman in 2014, when she was seeking a job at 500 Startups.

“I was getting confused figuring out whether to hire you or hit on you,” McClure’s message read.

McClure wasn’t the only VC exec named in the story. Over 20 women claimed that when they applied to various VCs for jobs or startup financing, male investors subjected them to harassment such as groping, kissing, inappropriate remarks and sexual propositions.

On July 1 McClure published a blog post confirming his resignation as managing partner of 500 Startups. In the post titled I’m a Creep. I’m Sorry, he also apologized for “making advances towards multiple women in work-related situations where it was clearly inappropriate.”

Screenshot detail of a blog post by Dave McClure in which he apologized for “clearly inappropriate” behaviour with women in work-related settings.

(500 Canada, the Canadian VC arm of 500 Startups, announced shortly after the Times exposé that it would cease investment activities and expressed its support for women quoted in the story.)

The Times article is one of many recent media reports featuring accusations of sexism in the tech sector. Travis Kalanick resigned as Uber’s CEO in June after allegations of company-wide discrimination towards female engineers. Google fired engineer James Damore in early August after he posted an intranet memo questioning the firm’s diversity policies.

The Canadian impact

Here in Canada, tech companies are taking notice of the U.S. headlines. It’s even prompting startups – where formal human resource (HR) policies are rarer than at established IT companies – to consider gender diversity policies, said Debby Carreau, CEO of Calgary-based Inspired HR.

Debby Carreau of Inspired HR

“People are starting to look in the mirror and say, ‘Is this a need for our business? Do we need this as a risk mitigation strategy?’ Whereas before it wasn’t even on the radar screen,” said Carreau, the only Canadian partner member of LeanIn.org, the gender diversity initiative launched by Facebook COO Sheryl Sandberg, who authored a book with the same title.

Although some IT firms worry about legal liability, Carreau said it’s tough to prove a company demonstrates “implicit bias” by “intentionally excluding women or not considering them in the same way” as male candidates. Instead, she advises companies to think about gender diversity for two other, more pressing reasons.

“First is accessing and leveraging the talent they need. Are they leaving (female) talent on the table?”

A study released in April suggests they are. When the Kapor Center for Social Impact surveyed 2,000 people who had left tech jobs in the previous three years, it found that one in 10 women had experienced unwanted sexual attention at work; 57 per cent of those women said it was a factor in them departing their jobs.

“Second is the social licence issue,” Carreau continued. “Companies in the headlines like Google and their (user) community expecting all businesses to respect diversity, I think, is a bigger issue.”

What can tech startups do to remove gender bias from hiring and recruiting processes? Carreau said using a gender blind system to assess job candidates (by removing names and gender specific terms from applications and resumés) “changes the hiring process dramatically.” Some HR apps and software programs can do this quickly and inexpensively, she said.

Diversity data

It’s impossible to tackle gender disparity without knowing how big the problem is. That’s why Kassun-Mutch wants to see hard data. In March, she called on government-funded accelerators and incubators to collect figures on gender diversity in startup cohorts – and make them public.

Daneal Charney is working on that right now. The director of talent services at MaRS Venture Services said that Toronto-based accelerator MaRS is collaborating with other Canadian startup stakeholders on a report slated for release in November.

The study will shed light on key metrics like the number of female startup founders in Canada and the quantity and dollar value of VC investments they receive.

The Pythia Program

From his office in Ottawa, one male CEO has been tracking gender metrics at his own tech firm for nearly two years.

In late 2015, Paul Vallée launched the Pythia Program. It’s designed to increase the percentage of women working in technical roles at Pythian, the Ottawa-based IT services firm Vallée founded in 1997.

The centerpiece of the program is the Pythia Index, which measures the proportion of Pythian employees who are female leaders or who report to a female leader. Rather than just tracking the total percentage of females working at Pythian overall, it tries to measure the degree of influence held by women and female leaders in the organization.

Pythian has seen many of its metrics improve since the initiatives were created. Although the total percentage of female employees has stayed the same at around 24 per cent, the number of women in technical roles has increased from nine per cent to 11.5 per cent. Yet Vallée acknowledges the company’s Pythia Index score has actually dropped from 56 per cent in November 2015 to 21 per cent in July 2017.

Pythian CEO Paul Vallee: “Identify gaps in the culture.”

“Since (2015) one of our top female executives has left the company,” Vallée explained. “So we went from a score that was very impressive and a huge chunk of what the index reported went away.”

Still, he’s committed not only to tracking Pythian’s gender metrics but to making them public on his firm’s website (and in media interviews like this one). Privately, other tech execs have told him they’ve followed his lead and started collecting data too – but none are willing to share their results publicly. Despite that, Vallée hopes that just generating their own gender data will spur those companies to be more diverse and inclusive.

“A lot more (companies) have looked at their score and are thinking about an opportunity to identify gaps in their culture,” Vallée said.

Battling ‘bro culture’

Although Vallée called gender metrics “a really great scoreboard for where you want to go” towards gender inclusion, he said it takes more than tracking and boosting female IT job stats to root out “bro culture.”

“Bro culture emerges from a bunch of people who share the same background, only interact with each other and have no need to see the world (differently),” Vallée said.

“There’s a jock-like tech elite similar to the attitudes that (Google’s James) Damore went public with. They’re just not sure women can ‘fit in’ with their teams. Off-colour jokes and very challenging and aggressive comments tend to be less comfortable for some people, not only women. It’s very uncomfortable for people who share a different cultural heritage than the 20-something white guy.”

Pythian “realized we had a monoculture developing and it was out of the fact our technology groups were dominated by men,” he said.

Vallée concluded this young, white, male monoculture wasn’t just “harmful” to his own staff but also misaligned with Pythian’s global customer base in 30-plus cities around the world. That’s when he launched the Pythia Program and the Pythia Index.

To address the culture part of the problem, Pythian complements the statistics-based Index with an action plan that includes “educating employees on subconscious gender bias and ways to eliminate it,” according to its company website. The action plan also includes participating in initiatives like the Protégé Project run by Women in Communications and Technology. It was created to help female IT managers advance into senior leadership roles by matching them with top mentors (both male and female) in the technology sector.

Charney, who helps MaRS startups recruit staff, said that kind of engagement can help tech firms can find female talent by expanding their professional networks as well as their mindset.

Daneal Charney of MaRS Venture Services: “Open up your network, host events.”

“The reality is, (companies) hire based on a workplace culture fit and a ‘family’ fit, which means they tend to hire more from their existing network. So open up your network, host events. Open your doors to other parts of the community and that way you start to open up your pipeline.”

She said some IT firms do this by inviting groups like Venture Out (which organizes a conference for LGBTQA students interested in tech careers) and Ladies Learning Code (which provides IT training for women) to recruiting functions and other company events.

The VC imbalance

Kassun-Mutch agrees that a numbers-based approach of just adding more women won’t banish deep-seated bro culture. She recalled a male investor making this comment after a pitch from a female startup founder: “Did she just say she was getting married? Well she won’t have time to work on that venture, will she? So let’s just put that to the side.”

“I’ve seen it all, not just from VCs but CEOs,” said Kassun-Mutch, who is also founder and CEO of Fifth Town Artisan Cheese and former executive director of the Imagination Catalyst incubator at OCAD University in Toronto.

“As sometimes the only female at the table, you kind of grin and bear it because you want to fit in and if you don’t, you get sent to the back of the class. It’s not just men, it’s women too. The women trying to fit in with male culture will do the ‘ha, ha, ha’ critique along with the men,” she said.

Petra Kassun-Mutch: “I’ve seen it all.”

Female entrepreneurs quoted in the Times story said they didn’t speak up sooner about sexual harassment from venture capitalists because they feared it would cost them VC financing which, statistically, they’re already less likely to receive than male founders.

According to PitchBook data cited in the Times article, women-run tech businesses in the U.S. only received $1.5 billion USD in funding last year compared to $58 billion USD invested in male-led startups in 2016.

Here in Canada, a new VC fund has just been launched to help correct the imbalance. The StandUp Ventures Fund will be managed by the MaRS Investment Accelerator Fund and invest in Canadian pre-seed and seed stage health, IT and cleantech ventures. Startups must have at least one female founder in a C-level role with a significant ownership position to qualify.

Going forward

At the end of our interview, Vallée started thinking ahead to a meeting he had scheduled later that afternoon. Coincidentally, it was on the subject of how to craft new diversity programs at Pythian.

“But what those programs should be is still a challenge,” he conceded.

Just adding more females clearly isn’t enough, he said, if they don’t wield any real influence in a company or still face bro culture attitudes once they get there. Gender blind resumé processing isn’t foolproof either.

“We tried blanking names off of resumés but resumés actually are an artifact of someone’s career experience. But if there are fewer successful women in tech to begin with, that doesn’t solve the problem. So we have to keep trying new things and cross-pollinate. It’s not gonna be a quick lickety split.”

Vallée also points to a substantial problem in the talent pipeline. Since women now comprise only 18 per cent of first-year computer science students at Canadian and American universities, “we know we’re going to have a problem (hiring females) in 2021,” he said. “The top-of-funnel challenge is real but that doesn’t mean we can’t try to change it.”

Faced with such a fundamental recruiting hurdle, IT companies are starting to move beyond the idea of merely hiring more women to confront their own attitudes as well, said HR veteran Carreau.

“They’re doing both. You have to have the (gender hiring) target to show where you want to get to. But where the change happens is not by setting a target, it’s by changing your behaviours and your processes and a way of holding yourself accountable.”

McClure’s mea culpa

It’s been a year since Dave McClure’s appearance at Startup Fest Montreal. According to his resignation blog post, he’s going to counseling “to address my sh—y behaviour and poor judgment. I don’t expect anyone to believe I will change, but I’m working on it.”

McClure has lost his management gig at 500 Startups but not his unique sense of humour. His LinkedIn profile now lists his current job as “janitor at DMC” (his initials, i.e., Dave McClure) and describes his duties there as “cleaning up DMC.”