The world of accessibility has experienced a tipping point thanks to the pandemic, which drove people of all abilities to do more tasks and shopping online.
For the last year, the digital world was the only place brands could connect with their customers. A Forrester survey found that 8 in 10 companies have taken their first steps toward working on digital accessibility.
What’s driving this change besides the increased digital interactions? Fortune 500 companies are finally starting to realize that people with disabilities make up 1 billion of the world’s market. That population and their families control more than $13 trillion in disposable income, according to Return on Disability’s “The Global Economics of Disability.”
However, only 36% of companies in Forrester’s survey are completely committed to creating accessible digital experiences.
Although digital accessibility has been around for decades, companies have not caught on to its benefits until recently. In its latest survey, the WebAIM Million analysis of 1 million home pages found accessibility errors on 97.4% of the websites evaluated.
What does this mean for you? Why should you care about this? Because this is an opportunity for your company to get ahead of the competition and reap the rewards of being an early adopter.
Companies are now realizing the advantages of creating accessible products and properties that go beyond doing the right thing. For one, people are living longer. The World Health Organization says people aged 60 and older outnumber children under 5. Moreover, the world’s population of those who are 60 and older is expected to reach 2 billion by 2050, up from 900 million in 2015.
W3C Web Accessibility Initiative provides an overview on Web Accessibility for Older Users. Here’s what it reveals.
In short, developing accessible digital products helps you reach a much larger audience, which will include you, your co-workers and your family. Everyone is going to become situationally, temporarily or episodically impaired at some point in their lives. Everyone enters a noisy or dark environment that can make it harder to see or hear. An injury or an illness can cause someone to use the internet differently on a temporary basis. People with arthritis, migraines and vertigo experience episodes of pain and discomfort that affect their ability to interact with digital devices, apps and tools.
Additionally, no one has ever advocated against making products and websites accessible to more people. Despite this, the relative universal appeal of accessibility as a principle does not mean that it will be as easy as explaining the need and getting people on board to make major organizational changes. A lot of work remains in raising awareness and educating people about why we need to make these changes and how to go about it.
You have the why. Now here are five things to help you with how to make changes in your company to integrate accessibility as a core part of your business.
According to the second annual State of Accessibility Report, only 40% of the Alexa Top 100 websites are fully accessible, proving the needs of people with disabilities are, more often than not, being overlooked when creating web experiences.
To design for people with disabilities, it’s important to have an understanding of how they use your products or web properties. You’ll also want to know what tools will help them achieve their desired results. This starts with having the right people on board.
Hiring accessibility experts to advise your development team will proactively identify potential issues and ensure you design accessibly from the start, as well as create better products. Better yet, hiring people with disabilities brings a deeper level of understanding to your work.
Having accessibility experts on your team to provide advice and guidance is a great start. However, if the rest of your team is not passionate about accessibility, that can turn into a potential roadblock. When interviewing new designers, ask about accessibility. It’ll gauge a candidate’s knowledge and passion in the area. At the same time, you set an expectation that accessibility is a priority at your organization.
Being proactive about your hires and making sure they will contribute to a culture of accessibility and inclusion will save you major headaches. Accessibility starts in the design and user experience (UX) phase. If your team doesn’t deliver there, then you will have to fix their mistakes later, essentially delaying the project and costing your organization. It costs more to fix things than to build them accessibly in the first place.
People deciding whether to invest in accessibility often ask themselves how many people are going to use the feature. The reasoning behind the question is understandable from a business perspective; accessibility can be an expense, and it’s reasonable to want to spend money responsibly.
However, the question is rooted in one of the biggest misconceptions in the field. The myth is that accessibility only benefits people who are blind or deaf. This belief is frustrating because it greatly underestimates the number of people with disabilities and minimizes their place in society. Furthermore, it fails to acknowledge that people who may not have a disability still benefit greatly from accessibility features.
Disability is a spectrum that all of us will find ourselves on sooner or later. Maybe an injury temporarily limits our mobility that requires us to perform basic tasks like banking and shopping exclusively online. Or maybe our vision and hearing change as we age, which affects our ability to interact online.
When we understand that accessibility is about designing in a way that includes as many people as possible, we can reframe the conversation around whether it’s worth investing in. This approach sends a clear message: No business can afford to ignore a fast-growing population.
Think about it this way: If you have a choice of taking an elevator or the stairs, which would you take? Most pick the elevator. Those ramps on street corners called curb cuts? They were initially designed for allowing wheelchairs to cross the street.
Yet, many use these ramps, including parents pushing strollers, travelers pulling luggage, skateboarders rolling and workers moving heavy loads on dollies. A feature initially designed for accessibility benefits far more people than the original target audience. That’s the magic of the curb-cut effect.
Whether you have a small team or are expanding an in-house accessibility practice, working with an agency can be an effective way to embrace and adopt accessible practices. The secret to a successful partnership is choosing an agency that will help your team grow into its accessibility practice.
The key to finding the right agency is selecting one that builds accessibly by default. When you know you are working with an agency that shares your organization’s values, you have a trusted partner in your mission of improving accessibility. It also removes any guesswork or revisions down the line. This is a huge win, as many designers overlook details that can make or break an experience for a user with a disability.
Working with an agency focused on providing accessible experiences narrows the likelihood of errors going unnoticed and unremedied, giving you confidence that you are providing an excellent experience to your entire audience.
On any given day, enterprises and large organizations often work with dozens of stakeholders. From vendors and agencies to freelancers and internal employees, the nature of business today is far-reaching and collaborative. While this is valuable for exchanging ideas, accessibility can get lost in the mix with so many different people involved.
To prevent this from happening, it’s important to align these moving pieces of a business into a supply chain that is focused on accessibility at every stage of the business. When everyone is completely bought in, it cuts the risk of a component being inaccessible and causing issues for you in the future.
A major challenge that comes up repeatedly is the struggle to change the status quo. Once an organization implements and ingrains inaccessible processes and products into its culture, it is hard to make meaningful change. Even if everyone is willing to commit to the change, the fact is, rewriting the way you do business is never easy.
Startups have an advantage here: They do not bear years of inaccessible baggage. It’s not written into the code of their products. It’s not woven into the business culture. In many ways, a startup is a clean slate, and they need to learn from the trials of their more established peers.
Startup founders have the opportunity to build an accessible organization from the ground up. They can create an accessible-first culture that will not need rewriting 10, 20 or 30 years from now by hiring a diverse workforce with a passion for accessibility, writing accessible code for products and web properties, choosing to work with only third parties who embrace accessibility and advocating for the rights of people with disabilities.
Many of these considerations here have a common denominator: culture. While most people in the technology industry will agree that accessibility is an important and worthy cause to champion, it has a huge awareness problem.
Accessibility needs to be everywhere in software development, from requirements and beyond to include marketing, sales and other non-tech teams. It cannot be a niche concern left to a siloed team to handle. If we, as an industry and as a society, recognize that accessibility is everyone’s job, we will create a culture that prioritizes it without question.
By creating this culture, we will no longer be asking, “Do we have to make this accessible?” Instead, we’ll ask, “How do we make this accessible?” It’s a major mindset shift that will make a tangible difference in the lives of 1 billion people living with a disability and those who eventually will have a disability or temporary, situational or episodic impairments affecting their ability to use online and digital products.
Advocating for accessibility may feel like an uphill battle at times, but it isn’t rocket science. The biggest need is education and awareness.
When you understand the people you build accessible products for and the reasons they need those products, it becomes easier to secure buy-in from people in all parts of your organization. Creating this culture is the first step in a long quest toward accessibility. And the best part is, it gets easier from here.
On average, men and women speak roughly 15,000 words per day. We call our friends and family, log into Zoom for meetings with our colleagues, discuss our days with our loved ones, or if you’re like me, you argue with the ref about a bad call they made in the playoffs.
Hospitality, travel, IoT and the auto industry are all on the cusp of leveling-up voice assistant adoption and the monetization of voice. The global voice and speech recognition market is expected to grow at a CAGR of 17.2% from 2019 to reach $26.8 billion by 2025, according to Meticulous Research. Companies like Amazon and Apple will accelerate this growth as they leverage ambient computing capabilities, which will continue to push voice interfaces forward as a primary interface.
As voice technologies become ubiquitous, companies are turning their focus to the value of the data latent in these new channels. Microsoft’s recent acquisition of Nuance is not just about achieving better NLP or voice assistant technology, it’s also about the trove of healthcare data that the conversational AI has collected.
Our voice technologies have not been engineered to confront the messiness of the real world or the cacophony of our actual lives.
Google has monetized every click of your mouse, and the same thing is now happening with voice. Advertisers have found that speak-through conversion rates are higher than click-through conversation rates. Brands need to begin developing voice strategies to reach customers — or risk being left behind.
Voice tech adoption was already on the rise, but with most of the world under lockdown protocol during the COVID-19 pandemic, adoption is set to skyrocket. Nearly 40% of internet users in the U.S. use smart speakers at least monthly in 2020, according to Insider Intelligence.
Yet, there are several fundamental technology barriers keeping us from reaching the full potential of the technology.
By the end of 2020, worldwide shipments of wearable devices rose 27.2% to 153.5 million from a year earlier, but despite all the progress made in voice technologies and their integration in a plethora of end-user devices, they are still largely limited to simple tasks. That is finally starting to change as consumers demand more from these interactions, and voice becomes a more essential interface.
In 2018, in-car shoppers spent $230 billion to order food, coffee, groceries or items to pick up at a store. The auto industry is one of the earliest adopters of voice AI, but in order to really capture voice technology’s true potential, it needs to become a more seamless, truly hands-free experience. Ambient car noise still muddies the signal enough that it keeps users tethered to using their phones.
There’s an old startup adage that goes: Cash is king. I’m not sure that is true anymore.
In today’s cash rich environment, options are more valuable than cash. Founders have many guides on how to raise money, but not enough has been written about how to protect your startup’s option pool. As a founder, recruiting talent is the most important factor for success. In turn, managing your option pool may be the most effective action you can take to ensure you can recruit and retain talent.
That said, managing your option pool is no easy task. However, with some foresight and planning, it’s possible to take advantage of certain tools at your disposal and avoid common pitfalls.
In this piece, I’ll cover:
Let’s run through a quick case study that sets the stage before we dive deeper. In this example, there are three equal co-founders who decide to quit their jobs to become startup founders.
Since they know they need to hire talent, the trio gets going with a 10% option pool at inception. They then cobble together enough money across angel, pre-seed and seed rounds (with 25% cumulative dilution across those rounds) to achieve product-market fit (PMF). With PMF in the bag, they raise a Series A, which results in a further 25% dilution.
The easiest way to ensure you don’t run out of options too quickly is simply to start with a bigger pool.
After hiring a few C-suite executives, they are now running low on options. So at the Series B, the company does a 5% option pool top-up pre-money — in addition to giving up 20% in equity related to the new cash injection. When the Series C and D rounds come by with dilutions of 15% and 10%, the company has hit its stride and has an imminent IPO in the works. Success!
For simplicity, I will assume a few things that don’t normally happen but will make illustrating the math here a bit easier:
Obviously, every situation is unique and your mileage may vary. But this is a close enough proxy to what happens to a lot of startups in practice. Here is what the available option pool will look like over time across rounds:
Image Credits: Allen Miller
Note how quickly the pool thins out — especially early on. In the beginning, 10% sounds like a lot, but it’s hard to make the first few hires when you have nothing to show the world and no cash to pay salaries. In addition, early rounds don’t just dilute your equity as a founder, they dilute everyone’s — including your option pool (both allocated and unallocated). By the time the company raises its Series B, the available pool is already less than 1.5%.
Startups devoted to reproductive and women’s health are on the rise. However, most of them deal with women’s fertility: birth control, ovulation and the inability to conceive. The broader field of women’s health remains neglected.
Historically, most of our understanding of ailments comes from the perspective of men and is overwhelmingly based on studies using male patients. Until the early 1990s, women of childbearing age were kept out of drug trial studies, and the resulting bias has been an ongoing issue in healthcare. Other issues include underrepresentation of women in health studies, trivialization of women’s physical complaints (which is relevant to the misdiagnosis of endometriosis, among other conditions), and gender bias in the funding of research, especially in research grants.
For example, several studies have shown that when we look at National Institutes of Health funding, a disproportionate share of its resources goes to diseases that primarily affect men — at the expense of those that primarily affect women. In 2019, studies of NIH funding based on disease burden (as estimated by the number of years lost due to an illness) showed that male-favored diseases were funded at twice the rate of female-favored diseases.
Let’s take endometriosis as an example. Endometriosis is a disease where endometrial-like tissue (‘‘lesions’’) can be found outside the uterus. Endometriosis is a condition that only occurs in individuals with uteruses and has been less funded and less studied than many other conditions. It can cause chronic pain, fatigue, painful intercourse and infertility. Although the disease may affect one out of 10 women, diagnosis is still very slow, and the disease is confirmed only by surgery.
There is no non-invasive test available. In many cases, a woman is diagnosed only due to her infertility, and the diagnosis can take up to 10 years. Even after diagnosis, the understanding of disease biology and progression is poor, as well as the understanding of the relationships to other lesion diseases, such as adenomyosis. Current treatments include surgical removal of lesions and drugs that suppress ovarian hormone (mainly estrogen) production.
However, there are changes in the works. The NIH created the women’s health research category in 1994 for annual budgeting purposes and, in 2019, it was updated to include research that is relevant to women only. In acknowledging the widespread male bias in both human and animal studies, the NIH mandated in 2016 that grant applicants would be required to recruit male and female participants in their protocols. These changes are slow, and if we look at endometriosis, it received just $7 million in NIH funding in the fiscal year 2018, putting it near the very bottom of NIH’s 285 disease/research areas.
It is interesting to note that critical changes are coming from other sources, and not so much from the funding agencies or the pharmaceutical industry. The push is coming from patients and physicians themselves that meet the diseases regularly. We see pharmaceutical companies (such as Eli Lilly and AbbVie) in the women’s healthcare space following the lead of their patients and slowly expanding their R&D base and doubling efforts to expand beyond reproductive health into other key women’s health areas.
New technological innovations targeting endometriosis are being funded via private sources. In 2020, women’s health finally emerged as one of the most promising areas of investment. These include (not an exhaustive list by any means) diagnostics companies such as NextGen Jane, which raised a $9 million Series A in April 2021 for its “smart tampon,” and DotLab, a non-invasive endometriosis testing startup, which raised $10 million from investors last July. Other notable advances include the research-study app Phendo that tracks endometriosis, and Gynica, a company focused on cannabis-based treatments for gynecological issues.
The complexity of endometriosis is such that any single biotech startup may find it challenging to go it alone. One approach to tackle this is through collaborations. Two companies, Polaris Quantum Biotech and Auransa, have teamed up to tackle the endometriosis challenge and other women’s specific diseases.
Using data, algorithms and quantum computing, this collaboration between two female-led AI companies integrates the understanding of disease biology with chemistry. Moreover, they are not stopping at in silico; rather, this collaboration aims to bring therapeutics to patients.
New partnerships can majorly impact how fast a field like women’s health can advance. Without such concerted efforts, women-centric diseases such as endometriosis, triple-negative breast cancer and ovarian cancer, to name a few, may remain neglected and result in much-needed therapeutics not moving into clinics promptly.
Using state-of-the-art technologies on complex women’s diseases will allow the field to advance much faster and can put drug candidates into clinics in a few short years, especially with the help of patient advocacy groups, research organizations, physicians and out-of-the-box funding approaches such as crowdfunding from the patients themselves.
We believe that going after the women’s health market is a win-win for the patients as well as from the business perspective, as the global market for endometriosis drugs alone is expected to reach $2.2 billion in the next six years.
Cohort analysis is a way of evaluating your business that involves grouping customers into “cohorts” and observing how they behave over time. A commonly used approach is monthly cohort analysis, where customers are grouped by the month they signed up, allowing you to observe how someone who joined in November compares to someone who signed up the month before.
Cohort analysis gives you a multivariable, forward-looking view of your business compared to more simple and static values like averages or totals.
Cohort analysis is flexible and can be used to analyze a variety of performance metrics including revenue, acquisition costs and churn.
Let’s imagine you’re the CMO of the “Bluetooth Coffee Company.” You sell a tech-enabled “coffee composer” that brews coffee, tracks consumption and orders replacement coffee when users are running low. The longer your customers are subscribers, the more money you make. You recently ran a Black Friday feature on a popular deals site and you’re interested to know if you should run it again.
The chart below is a simple analysis you might do to gauge your marketing performance. It shows the total customers added each month, and a clear spike in November following the Black Friday promotion. At first glance, things look good — you brought in more than double the monthly customers in November compared to October.
Image Credits: Sagard & Portage Ventures
But before you rebook the promotion, you should ask if these new Black Friday consumers are as valuable as they seem. Comparing monthly customer percentage is a good way to find out.
Below is a monthly cohort analysis of new customers between September 2020 and February 2021. Like our previous chart, we’ve listed the monthly cohort size, but we’ve also included the customer engagement rate (calculated by dividing daily active users by monthly active users or DAU/MAU for each month (M1 is month 1, M2 is month 2, and so on).
This analysis lets us see how the customer engagement of each monthly cohort compares to the next.
Image Credits: Sagard & Portage Ventures
From the figures above, we see that most cohorts have a customer engagement rate in their first month (M1, 42%-46%), meaning 42%-46% of new customers use the coffee composer everyday. The November cohort however has materially lower engagement (M1, 30%), and remains lower in subsequent months (M2, 26%) and (M3, 27%). Interestingly, the customer engagement rate only drops with the November cohort, returning to normal with the December cohort (M1, 45%).
Local TV streaming service Locast has closed up shop, at least for the time being. It suspended operations following a ruling on Tuesday that it couldn’t use its non-profit status as a legal shield. Networks have claimed that Locast violated their copyright.
“We are suspending operations, effective immediately,” Locast wrote in an email to users. “As a non-profit, Locast was designed from the very beginning to operate in accordance with the strict letter of the law, but in response to the court’s recent rulings, with which we respectfully disagree, we are hereby suspending operations, effective immediately.”
The court also took issue with the $5/month payments Locast took from users to ostensibly cover running costs. A judge said Locast was using those funds to expand into more markets and that it was bringing in “far more money from user charges than was necessary.”
Editor’s note: This post originally appeared on Engadget.
The US National Highway Traffic Safety Administration has ordered Tesla to hand over detailed Autopilot data by October 22nd or else face fines of up to $115 million, according to The New York Times. Back in August, NHTSA announced that it’s investigating incidents wherein Tesla vehicles with Autopilot activated crashed into parked first responder vehicles with flashing lights. The agency originally cited 11 such crashes, which resulted in 17 injuries and one death since 2018, but a 12th incident occurred just this Saturday.
In a letter it sent the automaker, the NHTSA told Tesla to produce detailed information on how the driver assistance system works. It wants to know how it ensures that human drivers will keep their eyes on the road while Autopilot is engaged and whether there are limits on where it can be used. Feds have long criticized Tesla for not having the safeguards to make sure human drivers are keeping their hands on the wheel. A few months ago, the company finally activated the camera mounted above the rear view mirror in Model 3 and Model Y vehicles to “detect and alert driver inattentiveness while Autopilot is engaged.” In addition, Autopilot is only meant for use on highways, but there’s nothing keeping drivers from using it on local roads.
In addition to detailed Autopilot data, the NHTSA is also asking for information on how many cars Tesla has sold in the US. It wants to know every Autopilot-related arbitration proceeding or lawsuit the company has been involved in, along with all the complaints Tesla has received about the driver assistance technology from customers.
Editor’s note: This post originally appeared on Engadget.
Add the Roadster to the list of delayed Tesla vehicles. On Wednesday, CEO Elon Musk said the performance EV wouldn’t make its previously announced 2022 shipment date. “2021 has been the year of super crazy supply chain shortages, so it wouldn’t matter if we had 17 new products, as none would ship,” he said in a tweet spotted by Roadshow. The executive added the Roadster should ship in 2023, “assuming 2022 is not mega drama.”
Can we have an update on the Roadster now that plaid with tri motors is out.
— Aaron (@AaronS5_) September 1, 2021
Tesla first announced its next-generation Roadster in 2017. Back then, the company expected to debut the car sometime last year. 2020 came and went without Tesla sharing much information on the supercar. Then, at the start of the year, Musk said production on the Roadster would start in 2022. Whether the car will make its new date is a big if. The global chip shortage that delayed the Tesla Semi is expected to continue until 2023, and Musk’s tweet hints at the possibility of further delays.
Editor’s note: This post originally appeared on Engadget.
Over the previous two or three years we’ve seen an explosion of new debit and credit card products come to market from consumer and B2B fintech startups, as well as companies that we might not traditionally think of as players in the financial services industry.
On the consumer side, that means companies like Venmo or PayPal offering debit cards as a new way for users to spend funds in their accounts. In the B2B space, the availability of corporate card issuing by startups like Brex and Ramp has ushered in new expense and spend management options. And then there is the growth of branded credit and debit cards among brands and sports teams.
But if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users.
To learn more about launching a card product, TechCrunch spoke with executives from Marqeta, Expensify, Synctera and Cardless about the pros and cons of launching a card product. So without further ado, here are all the reasons you should think about doing so, and one big reason why you might not want to.
Probably the biggest reason we’ve seen so many new fintech and non-fintech companies rush to offer debit and credit cards to customers is simply that it’s easier than ever for them to do so. The launch and success of businesses like Marqeta has made card issuance by API developer friendly, which lowered the barrier to entry significantly over the last half-decade.
“The reason why this is happening is because the ‘fintech 1.0 infrastructure’ has succeeded,” Salman Syed, Marqeta’s SVP and GM of North America, said. “When you’ve got companies like [ours] out there, it’s just gotten a lot easier to be able to put a card product out.”
While noting that there have been good options for card issuance and payment processing for at least the last five or six years, Expensify Chief Operating Officer Anu Muralidharan said that a proliferation of technical resources for other pieces of fintech infrastructure has made the process of greenlighting a card offering much easier over the years.
The Federal Aviation Administration is looking into an anomaly on the Virgin Galactic flight that carried Richard Branson to space. In a piece discussing not just that particular flight but the company’s various safety issues throughout the years, The New Yorker explained that Virgin’s spacecraft went off-course during descent, triggering an “entry glide-cone warning.” The spacecraft uses the glide cone method, which mimics water circling down the drain, for landing. Apparently, the pilots for the mission didn’t fly as steeply as they should have, causing the system to raise the alarm.
An FAA spokesperson confirmed to Reuters that the vehicle “deviated from its Air Traffic Control clearance as it returned to Spaceport America” and it’s investigating the incident. The agency gives missions to space a designated airspace they can fly in to prevent collisions with commercial planes and to minimize civilian casualties in the event of an accident. Virgin’s Unity 22 mission flew out of that designated airspace for a minute and forty-one seconds before the pilots were able to correct course.
Nicholas Schmidle, author of The New Yorker piece, said he attended a meeting a few years ago, wherein the same pilots on the Unity 22 flight said a red light entry glide-cone warning should “scare the shit out of you.” Apparently, that means it’s too late, and that the safest course of action is to abort. In a statement it published after the article went out, though, Virgin Galactic said it “disputes the misleading characterizations and conclusions” in the piece and that the people on the flight weren’t in any danger as a result of the flight deviation. The company said:
“When the vehicle encountered high altitude winds which changed the trajectory, the pilots and systems monitored the trajectory to ensure it remained within mission parameters. Our pilots responded appropriately to these changing flight conditions exactly as they were trained and in strict accordance with our established procedures. Although the flights ultimate trajectory deviated from our initial plan, it was a controlled and intentional flight path that allowed Unity 22 to successfully reach space and land safely at our Spaceport in New Mexico. At no time were passengers and crew put in any danger as a result of this change in trajectory.”
It also said that the spacecraft did not fly outside of the lateral confines of the mission’s protected airspace, though it did drop below the altitude of the airspace it was provided. The company added that it’s “working in partnership with the FAA to address the airspace for future flights.”
Editor’s note: This post originally appeared on Engadget.iv>
You’ve heard the phrase “leading by example,” but what about “leading with values”?
I’ve always led by example by using my values as my guide. Still, it wasn’t until I founded my first company that I fully understood the importance of embedding those values into the company, too.
Integrity, individuals, impact and innovation are the “4 I values” that drive my decisions and the actions of those at my company each day. These are not just words on a wall at our HQ or on a mousepad for our remote crew, but values that everyone in the company lives and breathes. Over the last two years, these four values became even more important and continued to guide me, my family and the leaders at our company.
As organizations map out their “return to the workplace” (NOT “return to work,” because we never stopped working) plans, we should not simply go back to how things were before. Instead, let’s all take a moment to redesign something that sets everyone up for success, with values as the compass. I think you’ll find this approach helps people not only survive, but thrive in the workplace.
Leading with values is, in my experience, the best leadership position to take, and there are three ways to accomplish this goal.
The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement.
At some point in your career — probably right out of school, a few years in or somewhere in the middle — you experienced a company where treating lower-level employees with less respect is just “a part of the job.” Companies with this type of “paying your dues” mentality tend to work these lower-level employees like grunts until they burn out and leave.
Or they eventually crawl their way up into management-level positions, and the cycle perpetuates itself as they deride the newer crop of employees, eroding any semblance of a healthy culture.
This is not the way.
As a leader, if you want your work environment to indicate inclusivity, support, collaboration and have the essence of a team mentality, you must set the precedent right away. This means stripping away the hierarchy that accompanies work titles and making it clear that your company values contribution based on merit, regardless of position. You are one team, united in your purpose to deliver on your mission, based on your values. This level setting ensures that everyone has skin in the game, and no one has the leeway to treat people poorly.
Early on in my career, I began sharing an office when I could. Those office spaces were purposely not what anyone would consider cool or nice “digs” — not the furniture and certainly not the view. Even as CEO now, I’ve had someone on the team describe my current office as a closet. But it gets the job done.
Simple signals like this send a powerful message, and the signal must remain consistent. Don’t take a limo; rent a cheap car. Don’t fly first class; fly coach. These may seem like minor details, but one of the biggest pitfalls any CEO can encounter is falling victim to an ivory tower mindset — when you become so out of touch with the people you manage, your employees start to notice.
Make a cognizant effort to know your people. Implement a “management by walking around” strategy. Don’t sit in your office all day; get out on the floor among your people. Drop by their desks and ask them how their day is going. Eat lunch in the break room. Put in the effort to attend new hire onboarding.
Not physically back in the office? Drop into Slack channels and Zoom meetings. I once “Zoom bombed” a baby shower for one of our crew members just to hear all the well wishes, and it made my day and theirs. Overall, just be present and humanize your workspace. It pays off in spades.
The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement. More importantly, you will not grow a solid culture if you don’t give these initiatives and practices 100% of your own effort.
For example, one new initiative we rolled out last year is a campaign we call “Free2Focus.” Twice a week, the SailPoint crew is asked to avoid booking meetings for a couple of hours during Free2Focus time. Not only does this address Zoom fatigue, it also gives our crew the chance to catch their breath whichever way suits them best — whether that’s taking a walk, helping with their children’s schooling or just turning off the camera for a bit.
If I want my team to show themselves some grace during the week, I’ve found that I need to apply the same practice. This means not setting up meetings during Free2Focus, not sending emails all hours of the day and night and not judging people for taking breaks when they need them. I trust my team to get the job done largely on their own time and own their own terms. I promise, your employees’ performance will be better because of it.
Being a CEO is more than building on a vision, a product or an idea. It’s about leading your people with values to accomplish mutual goals in a way that doesn’t zap them of their morale or dignity. It’s easy to get caught up in all the things that come with a job, but if you don’t put in the effort to immerse yourself and your values into the entire company, you’ll end up too big for your own good — and certainly too big for your company’s good.
It won’t happen overnight, but remember, the smallest things are often the ones that have the biggest impact. If you’re the leader, lead by example. It’s the only way to build teams that stand the test of time.
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
A few years ago, I moved my startup’s headquarters to New York from Estonia on an E-2 investor visa.
I’ve taken on a few investors since then, but if I take on more, I run the risk of no longer qualifying for an E-2 because my equity is diluting. I’m considering either having my startup sponsor me for an O-1A visa or self-petitioning an EB-1A green card.
Any advice or insights on how to present a strong case for an O-1A or EB-1A? Thanks!
— Savvy Startup Founder
Congrats on your success so far! Yes, we have many best practices to pass along for filing for an O-1A extraordinary ability visa or an EB-1A extraordinary ability green card.
Nadia Zaidi, an associate attorney at Alcorn Immigration Law and an expert in immigration law services for startups and creatives, and I recently did a podcast reviewing what to keep in mind when filing for an O-1A visa, EB-1A green card or EB-2 NIW (National Interest Waiver) green card. Take a listen! I would also recommend you consult an experienced immigration attorney who can help you determine the best approach based on your timing and goals.
Keep in mind that if you pursue an O-1A visa, you will need to show that your startup and you have an employer-employee relationship, or you will need an agent to file on your behalf. If demonstrating an employer-employee relationship, that usually involves showing that your startup’s board of directors oversees your work and can fire you.
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
You might also want to consider filing for International Entrepreneur Parole (IEP). My firm has filed several IEP petitions on behalf of clients. Based on our experience, it takes less time to prepare an IEP petition than an O-1A petition because it’s not as document-intensive. Moreover, if you’re married and you’re granted IEP status, your spouse will be eligible to apply for a work permit. The spouse of an O-1A visa holder is not eligible for a work permit.
Getting back to answering your question, here are some best practices for filing for either an O-1A or an EB-1A:
Spend some time homing in on your area of expertise. Because both the O-1A and EB-1A are for individuals of extraordinary ability or accomplishments who are at the top of their field, the more narrowly defined your field of expertise is, the easier it will be to demonstrate that you are at the top of it. For example, instead of listing tech entrepreneurship as your area of expertise, narrow it to something like entrepreneurship focused on developing machine learning software for the healthcare industry. Work with an experienced immigration attorney to craft your field for the petition.
Familiarize yourself with the qualification criteria for the O-1A and EB-1A, which are similar, and determine which of your skills and achievements best meet the criteria. As a startup founder, the critical and essential role you play at your startup should be easy to demonstrate. Remember, this is not the time to be humble.
Under your leadership, how much funding has your startup raised? Have you received any significant awards? What is your startup’s annual recurring revenue, and how many jobs have you created in the U.S.? Were you invited to judge a pitch competition, speak on a panel or mentor others based on your background, experience or skill set? Were you invited to become a member of an exclusive organization that has a rigorous selection process? Are you a thought leader in your field?
You will need to gather recommendation letters — more on those in a moment — and documentary evidence to demonstrate your achievements, such as a scan or photo of an award, email correspondences, copies or screenshots of articles written either about you or by you, or screenshots of a conference agenda or presentation on YouTube that generated a significant number of views. You should know that U.S. Citizenship and Immigration Services (USCIS) does not consider awards or prizes given out at the university level to be significant accomplishments. Some investments through competitions can qualify as awards, and some investments might not.
We typically recommend obtaining five to eight letters from experts in your field who can discuss your abilities and accomplishments and the significance of their impact on your field or beyond. Typically, the more details and examples provided in the recommendation letter — discussed in easy-to-understand terms — the more compelling the letter. You should keep in mind that the immigration official who is evaluating your case will likely not be an expert in your field.
It’s often valuable to submit letters from a variety of individuals, such as those who have worked directly with you and those who only know of you based on your work within your field, academic and professional experts, and individuals from both inside and outside the United States.
Make sure to ask prospective recommenders if they’re willing to submit a letter to USCIS on your behalf. While most recommenders are time-constrained individuals who prefer that you write a draft letter that they can edit, some recommenders prefer to write their own letters, which is good to know from the get-go. Make sure that those individuals who are doing so are willing to edit and make changes to any drafts, such as eliminating jargon or adding more detail.
The process of finalizing recommendation letters and getting them signed along with gathering documentary evidence for a case usually takes longer than most people anticipate. That said, get started!
All the best in the next phase of growing your startup!
Have a question for Sophie? Ask it here. We reserve the right to edit your submission for clarity and/or space.
The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major platforms. If you’d like to be a guest, she’s accepting applications!
Startups are hard work, but the complexities of global supply chains can make running hardware companies especially difficult. Instead of existing within a codebase behind a screen, the key components of your hardware product can be scattered around the world, subject to the volatility of the global economy.
I’ve spent most of my career establishing global supply chains, setting up manufacturing lines for 3D printers, electric bicycles and home fitness equipment on the ground in Mexico, Hungary, Taiwan and China. I’ve learned the hard way that Murphy’s law is a constant companion in the hardware business.
But after more than a decade of work on three different continents, there are a few lessons I’ve learned that will help you avoid unnecessary mistakes.
Shipping physical products is quite different from “shipping” code — you have to pay a considerable amount of money to transport products around the world. Of course, shipping costs become a line item like any other as they get baked into the overall business plan. The issue is that those costs can change monthly — sometimes drastically.
At this time last year, a shipping container from China cost $3,300. Today, it’s almost $18,000 — a more than fivefold increase in 12 months. It’s safe to assume that most 2020 business plans did not account for such a cost increase for a key line item.
Shipping a buggy hardware product can be exponentially costlier than shipping buggy software. Recalls, angry customers, return shipping and other issues can become existential problems.
Similar issues also arise with currency exchange rates. Contract manufacturers often allow you to maintain cost agreements for any fluctuations below 5%, but the dollar has dropped much more than 5% against the yuan compared to a year ago, and hardware companies have been forced to renegotiate their manufacturing contracts.
As exchange rates become less favorable and shipping costs increase, you have two options: Operate with lower margins, or pass along the cost to the end customer. Neither choice is ideal, but both are better than going bankrupt.
The takeaway is that when you set up your business, you need to prepare for these possibilities. That means operating with enough margin to handle increased costs, or with the confidence that your end customer will be able to handle a higher price.
Over the past year, many businesses have lost billions of dollars in market value because they didn’t order enough semiconductors. As the owner of a hardware company, you will encounter similar risks.
The supply for certain components, like computer chips, can be limited, and shortages can arise quickly if demand increases or supply chains get disrupted. It’s your job to analyze potential choke points in your supply chain and create redundancies around them.
This is the second post in a series on the Facebook monopoly. The first post explored how the U.S. Federal Trade Commission should define the Facebook monopoly. I am inspired by Cloudflare’s recent post explaining the impact of Amazon’s monopoly in its industry.
Perhaps it was a competitive tactic, but I genuinely believe it more a patriotic duty: guideposts for legislators and regulators on a complex issue. My generation has watched with a combination of sadness and trepidation as legislators who barely use email question the leading technologists of our time about products that have long pervaded our lives in ways we don’t yet understand.
I, personally, and my company both stand to gain little from this — but as a participant in the latest generation of social media upstarts, and as an American concerned for the future of our democracy, I feel a duty to try.
Mark Zuckerberg has reached his Key Largo moment.
In May 1972, executives of the era’s preeminent technology company — AT&T — met at a secret retreat in Key Largo, Florida. Their company was in crisis.
At the time, Ma Bell’s breathtaking monopoly consisted of a holy trinity: Western Electric (the vast majority of phones and cables used for American telephony), the lucrative long distance service (for both personal and business use) and local telephone service, which the company subsidized in exchange for its monopoly.
Over the next decade, all three government branches — legislators, regulators and the courts — parried with AT&T’s lawyers as the press piled on, battering the company’s reputation in the process. By 1982, a consent decree forced AT&T’s dismantling. The biggest company on earth withered to 30% of its book value and seven independent “Baby Bell” regional operating companies. AT&T’s brand would live on, but the business as the world knew it was dead.
Mark Zuckerberg is, undoubtedly, the greatest technologist of our time. For over 17 years, he has outgunned, outsmarted and outperformed like no software entrepreneur before him. Earlier this month, the U.S. Federal Trade Commission refiled its sweeping antitrust case against Facebook.
Its own holy trinity of Facebook Blue, Instagram and WhatsApp is under attack. All three government branches — legislators, regulators and the courts — are gaining steam in their fight, and the press is piling on, battering the company’s reputation in the process. Facebook, the AT&T of our time, is at the brink. For so long, Zuckerberg has told us all to move fast and break things. It’s time for him to break Facebook.
If Facebook does exist to “make the world more open and connected, and not just to build a company,” as Zuckerberg wrote in the 2012 IPO prospectus, he will spin off Instagram and WhatsApp now so that they have a fighting chance. It would be the ultimate Zuckerbergian chess move. Zuckerberg would lose voting control and thus power over all three entities, but in his action he would successfully scatter the opposition. The rationale is simple:
I write this as an admirer; I genuinely believe much of the criticism Zuckerberg has received is unfair. Facebook faces Sisyphean tasks. The FTC will not let Zuckerberg sneeze without an investigation, and the company has failed to innovate.
Given no chance to acquire new technology and talent, how can Facebook survive over the long term? In 2006, Terry Semel of Yahoo offered $1 billion to buy Facebook. Zuckerberg reportedly remarked, “I just don’t know if I want to work for Terry Semel.” Even if the FTC were to allow it, this generation of founders will not sell to Facebook. Unfair or not, Mark Zuckerberg has become Terry Semel.
It is not a matter of if; it is a matter of when.
In a speech on the floor of Congress in 1890, Senator John Sherman, the founding father of the modern American antitrust movement, famously said, “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.”
This is the sentiment driving the building resistance to Facebook’s monopoly, and it shows no sign of abating. Zuckerberg has proudly called Facebook the fifth estate. In the U.S., we only have four estates.
All three branches of the federal government are heating up their pursuit. In the Senate, an unusual bipartisan coalition is emerging, with Senators Amy Klobuchar (D-MN), Mark Warner (D-VA), Elizabeth Warren (D-MA) and Josh Hawley (R-MO) each waging a war from multiple fronts.
In the House, Speaker Nancy Pelosi (D-CA) has called Facebook “part of the problem.” Lina Khan’s FTC is likewise only getting started, with unequivocal support from the White House that feels burned by Facebook’s disingenuous lobbying. The Department of Justice will join, too, aided by state attorneys general. And the courts will continue to turn the wheels of justice, slowly but surely.
In the wake of Facebook co-founder Chris Hughes’ scathing 2019 New York Times op-ed, Zuckerberg said that Facebook’s immense size allows it to spend more on trust and safety than Twitter makes in revenue.
“If what you care about is democracy and elections, then you want a company like us to be able to invest billions of dollars per year like we are in building up really advanced tools to fight election interference,” Zuckerberg said.
This could be true, but it does not prove that the concentration of such power in one man’s hands is consistent with U.S. public policy. And the centralized operations could be rebuilt easily in standalone entities.
Time and time again, whether on Holocaust denial, election propaganda or vaccine misinformation, Zuckerberg has struggled to make quick judgments when presented with the information his trust and safety team uncovers. And even before a decision is made, the structure of the team disincentivizes it from even measuring anything that could harm Facebook’s brand. This is inherently inconsistent with U.S. democracy. The New York Times’ army of reporters will not stop uncovering scandal after scandal, contradicting Zuckerberg’s narrative. The writing is on the wall.
Facebook Blue, Instagram and WhatsApp all face existential threats. Pressure from the government will stifle Facebook’s efforts to right the ship.
For so long, Facebook has dominated the social media industry. But if you ask Chinese technology executives about Facebook today, they quote Tencent founder Pony Ma: “When a giant falls, his corpse will still be warm for a while.”
Facebook’s recent demise begins with its brand. The endless, cascading scandals of the last decade have irreparably harmed its image. Younger users refuse to adopt the flagship Facebook Blue. The company’s internal polling on two key metrics — good for the world (GFW) and cares about users (CAU) — shows Facebook’s reputation is in tatters. Talent is fleeing, too; Instacart alone recently poached 55 Facebook executives.
In 2012 and 2014, Instagram and WhatsApp were real dangers. Facebook extinguished both through acquisition. Yet today they represent the company’s two most promising, underutilized assets. They are the underinvested telephone networks of our time.
Weeks ago, Instagram head Adam Mosseri announced that the company no longer considers itself a photo-sharing app. Instead, its focus is entertainment. In other words, as the media widely reported, Instagram is changing to compete with TikTok.
TikTok’s strength represents an existential threat. U.S. children 4 to 15 already spend over 80 minutes a day on ByteDance’s TikTok, and it’s just getting started. The demographics are quickly expanding way beyond teenagers, as social products always have. For Instagram, it could be too little too late — as a part of Facebook, Instagram cannot acquire the technology and retain the talent it needs to compete with TikTok.
Imagine Instagram acquisitions of Squarespace to bolster its e-commerce offerings, or Etsy to create a meaningful marketplace. As a part of Facebook, Instagram is strategically adrift.
Likewise, a standalone WhatsApp could easily be a $100 billion market cap company. WhatsApp has a proud legacy of robust security offerings, but its brand has been tarnished by associations with Facebook. Discord’s rise represents a substantial threat, and WhatsApp has failed to innovate to account for this generation’s desire for community-driven messaging. Snapchat, too, is in many ways a potential WhatsApp killer; its young users use photography and video as a messaging medium. Facebook’s top augmented reality talents are leaving for Snapchat.
With 2 billion monthly active users, WhatApp could be a privacy-focused alternative to Facebook Blue, and it would logically introduce expanded profiles, photo-sharing capabilities and other features that would strengthen its offerings. Inside Facebook, WhatsApp has suffered from underinvestment as a potential threat to Facebook Blue and Messenger. Shareholders have suffered for it.
Beyond Instagram and WhatsApp, Facebook Blue itself is struggling. Q2’s earnings may have skyrocketed, but the increase in revenue hid a troubling sign: Ads increased by 47%, but inventory increased by just 6%. This means Facebook is struggling to find new places to run its ads. Why? The core social graph of Facebook is too old.
I fondly remember the day Facebook came to my high school; I have thousands of friends on the platform. I do not use Facebook anymore — not for political reasons, but because my friends have left. A decade ago, hundreds of people wished me happy birthday every year. This year it was 24, half of whom are over the age of 50. And I’m 32 years old. Teen girls run the social world, and many of them don’t even have Facebook on their phones.
Zuckerberg’s newfound push into the metaverse has been well covered, but the question remains: Why wouldn’t a Facebook serious about the metaverse acquire Roblox? Of course, the FTC would currently never allow it.
Facebook’s current clunky attempt at a hardware solution, with an emphasis on the workplace, shows little sign of promise. The launch was hardly propitious, as CNN reported, “While Bosworth, the Facebook executive, was in the middle of describing how he sees Workrooms as a more interactive way to gather virtually with coworkers than video chat, his avatar froze midsentence, the pixels of its digital skin turning from flesh-toned to gray. He had been disconnected.”
This is not the indomitable Facebook of yore. This is graying Facebook, freezing midsentence.
Zuckerberg’s control of 58% of Facebook’s voting shares has forestalled a typical Wall Street reckoning: Investors are tiring of Zuckerberg’s unilateral power. Many justifiably believe the company is more valuable as the sum of its parts. The success of AT&T’s breakup is a case in point.
Five years after AT&T’s 1984 breakup, AT&T and the Baby Bells’ value had doubled compared to AT&T’s pre-breakup market capitalization. Pressure from Japanese entrants battered Western Electric’s market share, but greater competition in telephony spurred investment and innovation among the Baby Bells.
AT&T turned its focus to competing with IBM and preparing for the coming information age. A smaller AT&T became more nimble, ready to focus on the future rather than dwell on the past.
Standalone Facebook Blue, Instagram and WhatsApp could drastically change their futures by attracting talent and acquiring new technologies.
Zuckerberg has always been one step ahead. And when he wasn’t, he was famously unprecious: “Copying is faster than innovating.” If he really believes in Facebook’s mission and recognizes that the situation cannot possibly get any better from here, he will copy AT&T’s solution before it is forced upon him.
Regulators are tying Zuckerberg’s hands behind his back as the company weathers body blows and uppercuts from Beijing to Silicon Valley. As Zuckerberg’s idol Augustus Caesar might have once said, carpe diem. It’s time to break Facebook.
The ownership of startups is often a mystery. In the absence of a public registry, it is difficult to figure out who owns what. Since most startups incorporate in Delaware, the Delaware Division of Corporations holds relevant information, but you may not be able to get all the information you need, and putting it together from the legal paperwork will be challenging.
To understand a startup’s capital structure, you must have access to its capitalization table, also known as cap table. The cap table shows shareholder information, current ownership stakes along with economic and voting rights, future equity purchase rights, vesting schedules and purchase prices. All of this information is compiled into a format that founders and investors can digest easily, allowing them to calculate payouts in various exit scenarios, analyze equity dilution from new hire equity grants, and understand the impact of additional funding rounds.
Initially, startups might collect this data using Excel spreadsheets, but as the ownership structure grows more complex, it becomes more difficult to follow and document, and the cost of errors become a big problem. This has led to the development of a cap table management software industry.
However, the way in which various cap table data items are organized and accounted for varies among the different service providers. Without a standard, it is impossible to automatically synchronize data between software platforms, making it difficult to switch vendors as well as to ensure that all parties are on the same page.
Now, a coalition of Silicon Valley law firms and startup vendors is forming to address this issue. In a Medium post from July 27, the Open Cap Table Coalition stated its intention to “improve the interoperability, transparency, and portability of startup cap table data.” Since standardization means fewer billable hours for lawyers and less lock-in for software platforms, it may go against the short-term interest of some participants. However, the coalition reflects Silicon Valley’s way of doing business – as AnnaLee Saxenian, the Dean of the UC Berkeley School of Information noted in her influential 1994 book “Regional Advantage”, the Valley is a place where intense competitors become partners and informal co-operation and exchange become institutionalized.
As such, the founding members certainly deserve praise. Eliminating inefficiencies allows the ecosystem to move faster and allows players to concentrate on creating value. However, if only founders and investors can see the data, the open cap table coalition will fall short of its potential. For the open cap table to be truly open, the information that determines equity value must be accessible to all equity holders, including startup employees.
I have written on TechCrunch in the past about the abuse potential of startup equity compensation, a highly opaque and practically unregulated market. Employees are often swayed by the allure of stock options without understanding what these securities are and how they are valued. Successful IPO stories portraying employees as instant millionaires create an impression that startup equity offers a fast track to financial prosperity. However, success is the exception, not the rule, when it comes to startups, and wrong investment decisions can result in an employee going into debt. Further, it can be damaging to the startup and the ecosystem in the long term if employees’ expectations are not in line with the startup’s financial reality.
“Pretty much nothing destroys trust between shareholders and startups quicker than poor communication, especially around issues such as the status of the cap table,” wrote Aaron Solomon, head of strategy for Esquire Digital, in support of the open cap table initiative. The exact same is true for employee trust in the company and its leadership — miscommunication around equity issues can be detrimental. As Travis Kalanick discovered first hand, messing with employee equity can backfire.
“We are going to IPO as late as humanly possible,” Kalanick said in June 2016. “It’ll be one day before my employees and significant others come to my office with pitchforks and torches. We will IPO the day before that.” However, waiting for employees to lose their temper is a risky game; you may wake up a day too late instead of the day before. Nowadays, when it is harder to find good employees than to raise money, transparency with both capital and human capital providers is vital.
A couple of years ago, I interviewed startup lawyers and founders in Silicon Valley to understand why they don’t share more information with employees. There was a recurring fear of liability as well as disagreement over disclosure formats. Now, when the industry’s influential players decide on a cap table format, it is possible to also form an agreement on how these data should be shared with employees. If the coalition takes on this challenge, it could easily change the industry by establishing a voluntary standard that everyone can rally around.
Capital/labor relationships in startups are inherently imbalanced, since employees contribute human capital but are denied information and voting rights. It is possible to partially rectify this imbalance by providing employee equity-holders with bottom-line information on what they stand to gain under various exit scenarios. Making information accessible and easy to understand for employees can help startups attract talent and maintain positive culture.
Saxenian’s book on Silicon Valley’s regional advantage describes also how employee stock options contributed to the transformation of Silicon Valley in the 1970s. However, as capital markets and regulations have changed, employee, entrepreneur, and investor relationships have been negatively impacted, resulting in ongoing friction over liquidity and risk allocation. Today, by establishing real equity transparency, Silicon Valley can retain its competitive edge. Until the Open Capital Table Coalition engages in this challenge, it cannot claim to foster a genuinely open community.
Startups have a seemingly intractable problem: a lack of diversity. Despite research showing that diverse founding teams have a higher rate of return than white founding teams, one characteristic of startups remains relatively unchanged: the dearth of BIPOC and women founders, investors, board members, and counsel in the venture capital (VC) ecosystem.
Why should we care? Venture capital has provided early funding for the most innovative and profitable companies of our time — Apple, Amazon, Google (now Alphabet), just to name a few. These companies have changed the way we live, work and play by impacting how we communicate, how we process information, and how we buy goods. With approximately one-quarter of U.S. professionals employed by the high-tech sector — comprising about 5% to 6% of the total workforce, according to the U.S. Equal Employment Opportunity Commission — imagine how much more innovation could happen with more diverse individuals at the table who bring different life experiences and perspectives. And we’re already seeing states enacting laws, and companies changing their practices, to help make this happen in the public company realm.
Many founders of VC-backed startups are white, male, and Ivy League or internationally educated. Women-founded companies receive a fraction of VC investments compared to all-male founded companies. In 2020, women-led startups received only 2.3% of all VC money. As of June 2021, less than 20% of total VC deals went to a startup with at least one female founder.
When looking at BIPOC representation in the VC ecosystem, the numbers are even more abysmal. Three percent of VC investors are Black and 1.7% of VC-backed startups have a Black founder. The number of Latinx founders in VC-backed startups is even lower — 1.3%. Plus, only 2.4% of funding was allocated to Black and Latinx founders from 2015 to August 2020. And, on the startup boards of high tech companies, women hold a mere 8% of the board seats.
But the lack of diversity extends beyond who gets funding or who is in the boardroom; it is also a problem in the executive suite. In California, Asian Americans were among the least likely to be promoted to manager or executive positions, and less than 2% of high-tech executives are Black.
This lack of diversity in the VC ecosystem is a structural problem that has no easy solution. While some VC firms have begun allocating funds for trainings and mentorship programs, additional steps need to be taken.
For example, laws on board diversity have already passed in a few states, but they apply only to public companies and typically focus on gender diversity. The laws generally fall into one of three categories — they mandate, encourage, or require disclosure of board diversity. In 2018, California led the way with SB 826, California’s board gender diversity law, which required public companies headquartered in California (irrespective of where they were incorporated) to have a minimum of one woman on each of their boards by the end of 2019. By the end of this year, the minimum threshold increases to two if the board has five directors and three if it has six or more directors. (In the statute, female is defined as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.”)
The law has already had an impact: between 2018 and March 2021, the number of board seats held by women in such companies increased by a whopping 93.6%, but the law is currently being challenged in the courts.
While legislation regarding gender diversity on public company boards has been passed in certain states, even fewer laws address the issue of the lack of minorities on boards. Only 12.5% of the board members of the 3,000 largest public companies come from underrepresented ethnic and racial groups despite the fact that these groups comprise 40% of the U.S. population. Deloitte and the Alliance for Board Diversity reported data that Fortune 500 board seats were held by individuals identified as African American/Black, Hispanic/Latino(a), and Asian/Pacific Islander at the rates of 8.7%, 4.1%, and 4.6%, respectively, in 2020.
In order to address this underrepresentation, California’s AB 979 requires that a public company headquartered in California has at least one director from an “underrepresented community” by the end of 2021, with the minimum number increasing by the end of 2022. That definition includes someone who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.
In addition to California, Colorado, Illinois, Maryland, New York, Pennsylvania, and Washington have also enacted some type of board diversity measure. Connecticut, Hawaii, Massachusetts, Michigan, New Jersey, Oregon, and Ohio have proposed legislation, too.
Non-governmental initiatives are also being considered. As an example, NASDAQ proposed new listing standards to the SEC requiring disclosure of board diversity. Goldman Sachs announced that it would manage initial public offerings only for companies with at least one diverse board member.
These kinds of laws, however, may be difficult to implement in startups. In order to change the narrative on diversity in startups, change cannot be limited to the board but rather should have a multi-pronged approach focused on diversifying (1) employees in middle and executive management, (2) directors in the boardroom, and (3) the VC firms and other funders.
With startups, board diversity mandates similar to the one passed in California would likely not work in the early stages given the size of these boards. However, creating a culture where diversity is prioritized can manifest itself in other ways.
For example, limited partners who invest in VC funds could contractually obligate their general partners to consider diverse candidates for their firms as well as the board and management of any portfolio companies. VCs can also continue to diversify the limited partners that invest in their funds by eschewing their immediate networks and more actively reaching out to groups historically underrepresented in the startup ecosystem, such as HBCUs. In fact, some VCs are using diversity riders in term sheets to do just that. VCs also need to take a hard look at what type of questions they ask their BIPOC and female founders and consider how they may differ in ways that are detrimental to those historically underrepresented in startups.
We are missing opportunities to foster further innovation by not taking more concrete action to add diversity to the startup ecosystem. There is no magic bullet to address the lack of diversity in the startup ecosystem. However, there are steps that founders, VCs, and limited partners can take to make strides in the right direction.
I’m a native French data scientist who cut his teeth as a research engineer in computer vision in Japan and later in my home country. Yet I’m writing from an unlikely computer vision hub: Stuttgart, Germany.
But I’m not working on German car technology, as one would expect. Instead, I found an incredible opportunity mid-pandemic in one of the most unexpected places: An ecommerce-focused, AI-driven, image-editing startup in Stuttgart focused on automating the digital imaging process across all retail products.
My experience in Japan taught me the difficulty of moving to a foreign country for work. In Japan, having a point of entry with a professional network can often be necessary. However, Europe has an advantage here thanks to its many accessible cities. Cities like Paris, London, and Berlin often offer diverse job opportunities while being known as hubs for some specialties.
While there has been an uptick in fully remote jobs thanks to the pandemic, extending the scope of your job search will provide more opportunities that match your interest.
I’m working at the technology spin-off of a luxury retailer, applying my expertise to product images. Approaching it from a data scientist’s point of view, I immediately recognized the value of a novel application for a very large and established industry like retail.
Europe has some of the most storied retail brands in the world — especially for apparel and footwear. That rich experience provides an opportunity to work with billions of products and trillions of dollars in revenue that imaging technology can be applied to. The advantage of retail companies is a constant flow of images to process that provides a playing ground to generate revenue and possibly make an AI company profitable.
Another potential avenue to explore are independent divisions typically within an R&D department. I found a significant number of AI startups working on a segment that isn’t profitable, simply due to the cost of research and the resulting revenue from very niche clients.
I was particularly attracted to this startup because of the potential access to data. Data by itself is quite expensive and a number of companies end up working with a finite set. Look for companies that directly engage at the B2B or B2C level, especially retail or digital platforms that affect front-end user interface.
Leveraging such customer engagement data benefits everyone. You can apply it towards further research and development on other solutions within the category, and your company can then work with other verticals on solving their pain points.
It also means there’s massive potential for revenue gains the more cross-segments of an audience the brand affects. My advice is to look for companies with data already stored in a manageable system for easy access. Such a system will be beneficial for research and development.
The challenge is that many companies haven’t yet introduced such a system, or they don’t have someone with the skills to properly utilize it. If you finding a company isn’t willing to share deep insights during the courtship process or they haven’t implemented it, look at the opportunity to introduce such data-focused offerings.
I have a sweet spot for early-stage companies that give you the opportunity to create processes and core systems. The company I work for was still in its early days when I started, and it was working towards creating scalable technology for a specific industry. The questions that the team was tasked with solving were already being solved, but there were numerous processes that still had to be put into place to solve a myriad of other issues.
Our year-long efforts to automate bulk image editing taught me that as long as the AI you’re building learns to run independently across multiple variables simultaneously (multiple images and workflows), you’re developing a technology that does what established brands haven’t been able to do. In Europe, there are very few companies doing this and they are hungry for talent who can.
So don’t be afraid of a little culture shock and take the leap.
Most founders fall into an extremely common trap: Just because you produced outstanding results for the last round of investors doesn’t mean new investors will believe you. This new cohort hasn’t seen that performance firsthand, and they have no reason to trust you yet.
As a founder approaching your next round, it’s common to wonder, “How do I get this new group of investors to trust that I will perform?”
In our experience, founders who fundraise successfully are great at building relationships, and they usually deliver what we call “the pre-pitch.” This is the “we actually aren’t looking for money; we just want to be friends for now” pitch that gets you on an investor’s radar so that when it’s time to raise your next round, they’ll be far more likely to answer the phone because they actually know who you are.
But the concept of the pre-pitch goes deeper than just having potential investors be aware of your existence. Building relationships with potential future investors requires you to think less like a founder and more like a marketer — much of the relationship heavy lifting comes long before it’s time to ask for a capital commitment.
If an investor has made a deal in your space, there’s a good chance they know an earlier-round investor who could potentially be a good fit for you today.
There’s a host of advantages to the pre-pitch approach:
Now you’re probably wondering, “What the heck do I say to build a good relationship with that next-round investor?” Here are a few notes on how to approach the pre-pitch:
Acknowledge you’re early, but mention that you think it could potentially be a good fit later on. State it up front that you’re seeking a relationship and want to find out if you could eventually be a good fit for one another. Don’t sneak in an ask; let the relationship blossom organically.
Here’s an example: “We’re actually not raising yet, and we’re probably too early for you. But I think this is something you might be very interested in, and thought it made sense to reach out, open up a relationship and see if there might be a fit.”
The average employee will prefer to work from home nearly half the time after the pandemic is over. Employees are also demanding flexible schedules and remote work, and as a result, executives are planning to reduce office space by 30%. The data surrounding the global shift to remote work is piling up and our post-pandemic professional landscape is starting to take shape.
Are you ready to lead a digital workforce?
The seismic shift in how we work requires a reassessment of how we manage, even for — or especially for — seasoned leaders. How do you wrangle a highly educated, decentralized workforce and rally them around a singular mission? How do you become a better people manager amid a workplace sea change?
As a seasoned CMO who has managed global workforces, I’ve finally hit my stride as a remote-only manager, all while navigating a global pandemic and riding my company’s unprecedented growth. What’s the secret sauce to managing today’s remote workforce? Strengthen your team by creating authentic workplace transparency, using numbers as a universal language and providing meaning behind your team’s work.
The biggest secret behind my management practices? It’s possible to produce more success with less stress. Consider these three ways I’ve strengthened my team and, in turn, become a more nimble manager.
A Harvard Business Review study found that knowledge workers are more fulfilled when they understand what organizations are trying to achieve and how their work lifts up their workplaces as a whole. In other words, meaning motivates your digital workforce.
On the surface, communicating your organization’s overarching mission, its reason for being, seems like a simple enough task. But I challenge you to ask each one of your team members to define your organization’s mission. If you have 10 employees, I bet you get nine or 10 different answers.
Instead of expecting employees to find your organization’s mission and vision on PowerPoint decks or on the website’s “about us” page, use the proven objectives and key results (OKRs) methodology.
The next piece of the puzzle helps you raise the visibility around why your employees are doing what they’re doing every day and creates a culture of motivation through meaning. Collaborate with your employees to create individual OKRs that identify goals and metrics for achievement. These OKRs should detail exactly how each employee contributes to the organization’s success and become the impetus behind everything an employee does.
I tell my workforce to review their OKRs every morning to help them focus on what’s important. It is like daily meditation for your business. So I didn’t worry when my director of marketing recently moved and had a baby. Because we had worked together to set thoughtful OKRs, my team member’s objectives and results were well defined. She knew where to focus her limited time. No distractions from the cacophony of requests. No anxiety over letting down her team. Just peace of mind that she was focusing on the right tasks.
In recent years, the private sector has been spurning proprietary software in favor of open source software and development approaches. For good reason: The open source avenue saves money and development time by using freely available components instead of writing new code, enables new applications to be deployed quickly and eliminates vendor lock-in.
The federal government has been slower to embrace open source, however. Efforts to change are complicated by the fact that many agencies employ large legacy IT infrastructure and systems to serve millions of people and are responsible for a plethora of sensitive data. Washington spends tens of billions every year on IT, but with each agency essentially acting as its own enterprise, decision-making is far more decentralized than it would be at, say, a large bank.
While the government has made a number of moves in a more open direction in recent years, the story of open source in federal IT has often seemed more about potential than reality.
But there are several indications that this is changing and that the government is reaching its own open source adoption tipping point. The costs of producing modern applications to serve increasingly digital-savvy citizens keep rising, and agencies are budget constrained to find ways to improve service while saving taxpayer dollars.
Sheer economics dictate an increased role for open source, as do a variety of other benefits. Because its source code is publicly available, open source software encourages continuous review by others outside the initial development team to promote increased software reliability and security, and code can be easily shared for reuse by other agencies.
Here are five signs I see that the U.S. government is increasingly rallying around open source.
Two initiatives have gone a long way toward helping agencies advance their open source journeys.
18F, a team within the General Services Administration that acts as consultancy to help other agencies build digital services, is an ardent open source backer. Its work has included developing a new application for accessing Federal Election Commission data, as well as software that has allowed the GSA to improve its contractor hiring process.
18F — short for GSA headquarters’ address of 1800 F St. — reflects the same grassroots ethos that helped spur open source’s emergence and momentum in the private sector. “The code we create belongs to the public as a part of the public domain,” the group says on its website.
Five years ago this August, the Obama administration introduced a new Federal Source Code Policy that called on every agency to adopt an open source approach, create a source code inventory, and publish at least 20% of written code as open source. The administration also launched Code.gov, giving agencies a place to locate open source solutions that other departments are already using.
The results have been mixed, however. Most agencies are now consistent with the federal policy’s goal, though many still have work to do in implementation, according to Code.gov’s tracker. And a report by a Code.gov staffer found that some agencies were embracing open source more than others.
Still, Code.gov says the growth of open source in the federal government has gone farther than initially estimated.
The American Rescue Plan, a $1.9 trillion pandemic relief bill that President Biden signed in early March 2021, contained $9 billion for the GSA’s Technology Modernization Fund, which finances new federal technology projects. In January, the White House said upgrading federal IT infrastructure and addressing recent breaches such as the SolarWinds hack was “an urgent national security issue that cannot wait.”
It’s fair to assume open source software will form the foundation of many of these efforts, because White House technology director David Recordon is a long-time open source advocate and once led Facebook’s open source projects.
Federal IT employees who spent much of their careers working on legacy systems are starting to retire, and their successors are younger people who came of age in an open source world and are comfortable with it.
About 81% of private sector hiring managers surveyed by the Linux Foundation said hiring open source talent is a priority and that they’re more likely than ever to seek out professionals with certifications. You can be sure the public sector is increasingly mirroring this trend as it recognizes a need for talent to support open source’s growing foothold.
By partnering with the right commercial open source vendor, agencies can drive down infrastructure costs and more efficiently manage their applications. For example, vendors have made great strides in addressing security requirements laid out by policies such as the Federal Security Security Modernization Act (FISMA), Federal Information Processing Standards (FIPS) and the Federal Risk and Authorization Management Program (FedRamp), making it easy to deal with compliance.
In addition, some vendors offer powerful infrastructure automation tools and generous support packages, so federal agencies don’t have to go it alone as they accelerate their open source strategies. Linux distributions like Ubuntu provide a consistent developer experience from laptop/workstation to the cloud, and at the edge, for public clouds, containers, and physical and virtual infrastructure.
This makes application development a well-supported activity that includes 24/7 phone and web support, which provides access to world-class enterprise support teams through web portals, knowledge bases or via phone.
Whether it’s accommodating more employees working from home or meeting higher citizen demand for online services, COVID-19 has forced large swaths of the federal government to up their digital game. Open source allows legacy applications to be moved to the cloud, new applications to be developed more quickly, and IT infrastructures to adapt to rapidly changing demands.
As these signs show, the federal government continues to move rapidly from talk to action in adopting open source.
Who wins? Everyone!