Chapter 23 - Conclusion: Entrepreneurs Must Lead Our Nation’s Healing
To read:
King’s Letter from Birmingham: “We are caught in an inescapable network of mutuality, tied in a single garment of destiny,” wrote Rev. Martin Luther King from the Birmingham Jail.
Center for the Study of Race and Democracy: Led by Dr. Peniel Joseph, one of the world’s leading incubators of thought on our racial reckoning is at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.
White privilege: One of the most lasting myths about Reconstruction is that the “forty acres and a mule” proposal was simply too radical to ever succeed, argues Keri Leigh Merritt in, Masterless Men: Poor Whites, Slavery, and Capitalism in the Deep South.
America’s longest-running affirmation action program: An estimated $10 trillion, in today’s dollars, was transferred to white homesteaders, essentially for free.
Diversity in tech: It’s pretty bad but getting better. Check out the state of progress with the series by Crunchbase News, entitled Something Ventured - How entrepreneurs access opportunity in America.
The roots of violence: White America’s progress, or rather the progress of those Americans who believe that they are white, was built on looting and violence, argues Ta-Nehisi Coates in Letter to My Son.
To listen:
What’s White? Why? Where did the notion of “whiteness” come from? What does it mean? What is whiteness for? Rutgers Professor Chenjerai Kumanyika explains in this podcast series.
The Destruction of America’s Black Wall Street: This Harvard Gazette review explores the seminal book on the economic devastation in Tulsa, Oklahoma – from which the city’s Greenwood District never recovered its status as America’s Black Wall Street.
Latino founders a rarity: Bain & Company consultants found that among the top 500 venture capital and private equity deals in 2020, fewer than 1 percent involved a Latino founder.
Venture capitalism’s gender divide: Female CEOs receive only 2.7 percent of all venture funding, while women of color get virtually none: 0.2 percent, finds this study by the Washington Center for Equitable Growth.
Ta-Nehisi Coates to his son: “Here is what I would like for you to know: In America, it is traditional to destroy the black body—it is heritage.”
To watch:
Capitalism’s ‘dirty secret.’: The market is the greatest social technology ever invented for solving human problems. So let’s use it, argues Venture Capitalist Nick Hanauer in this TED talk.
Bloody Sunday: Watch this historic video of the civil rights workers’ famous Sunday march across the Edmund Pettus Bridge in Selma, Alabama on March 7, 1965.
Chapter 23
Conclusion: Entrepreneurs Must Lead Our Nation’s Healing
“Many conversations about diversity and inclusion do not happen in the boardroom because people are embarrassed at using unfamiliar words or afraid of saying the wrong thing — yet this is the very place we need to be talking about it.”
— Dame Inga Beale, former CEO, Lloyds of London
Throughout the course of writing this updated and more comprehensive second edition of The Entrepreneur’s Essentials, dramatic and historical events have been unfolding at a breathtaking pace. The Black Lives Matter protests that followed the on-camera murder of George Floyd riveted attention worldwide, as do continued and tortured debates about policing. The pandemic that was still new when I began this project has accelerated the use of technologies as we’ve discussed. But it has also revealed stark disparities in American life, including the much higher mortality rates of Black, Brown, and Native Americans. Gun violence and hate crimes, including anti-semitism, are on the rise. As our political divides widen, race and identity are always scarcely below the surface of our discourse, if not front and center. In my home state of Texas, it needs to be said, voter suppression and thinly veiled political attacks on LGBTQ+ people are a near-daily occurrence.
Concluding this book with a polemic is not my intent. I’m a political independent, I’ve voted for as many Republicans as Democrats over the years. And I’m a proud American, loving this country with all of its beautiful pros and unfortunate cons as a patriot. If your blood pressure is going up as you read, trust me I’m with you on the “Defund the Police” branding, and probably a lot of other things. My allergy toward the binary thinking that we’ve explored together extends to characterizations of states, cities, and communities in red vs. blue simplicity. The country is much more purple than the inflammatory characters who dominate a lot of our 24/7-media attention in an attempt to stand out suggests. Simplistic formulas try to divide us, and “Defund the Police” branding is a good example of the growing “us vs. them” dynamics when public safety requires a racially just and equitable commitment to both law enforcement and the community. That said, a book on entrepreneurialism simply can’t end without acknowledgment of both business’ role in our current state of affairs, and the inescapable reality that business — and very specifically the innovative entrepreneurs who are creating a new economy — must drive the deep change that is urgent. It is not just that entrepreneurs should lead the healing of our society and civic culture, it is the fact that only entrepreneurs can lead — because you are the true architects of the future.
As with the iterative evolution of this book, these views have been building within me for a long time. I’ve arrived at the belief that the more success you earn, both by grit and luck, and the more educated you become on the very real history of racial injustice and inequity in our country, the greater moral imperative you have to strive for a much more diverse, equitable, and inclusive workforce — in all areas of business, of course, but particularly in technology which has frankly been slow to shed its White-male domination.
I want to share some of the learning experiences I’ve had, and acknowledge the many friends and institutions who have helped me realize the importance of diversity in the innovation economy. I also want to share the resources that have helped me and be very practical and prescriptive about what can and should be done. But there is some background I need to share.
We all know the story — or at least some version of the story — of chattel slavery in America, the displacement of Native Americans, the lynchings of both Blacks and Hispanics, and the discrimination against Asians, including the internment of Japanese-Americans in camps during World War II. We know about segregation, “colored only” drinking fountains, and the heroism of the Civil Rights Movement.
So, let me address the elephant in the room before some readers tune me out. Before the racial and political reckoning amplified in 2020, some and maybe even many White Americans believed that the Civil Rights Movement successfully eradicated the problems related to America’s original sin of chattel slavery and the racial injustices that this system produced. “It’s time to move on,” is the sentiment of many. After all, how could a nation that annually celebrates Dr. Martin Luther King Jr.’s holiday be racist? Most White people do not want to discuss race, and it is also true that many White people are financially hurting in our country and are scared about their futures. White working-class incomes have been stagnant for generations. Opioid addiction has run rampant in many White communities. Poverty and pain aren’t limited to people of color. So, before I discuss how these learnings and endeavors have moved me to create a much more diverse company at data.world, I understand that for many this is not a comfortable subject. And I realize that the debate over the stirring 1619 Project, or the remarkable book 1776 by David McCollough, will never end. Nonetheless, there are some hard truths about the history of business in this country that are less discussed, but immediately relevant to our task as entrepreneurs. The story we tell ourselves about American history deeply impacts entrepreneurs. Confronting the most difficult chapters of our history will not only contribute to the healing of the wounds of racial injustice, but also allow for the unleashing of human potential that will benefit businesses, entrepreneurs, and leaders everywhere.
For starters, I often remind friends who bristle at the phrase “White privilege” that as historians have documented, some 46 million White Americans today — a quarter of the adult population — can trace their family wealth to the 1862 Homestead Act, celebrated in films and on postage stamps. Virtually for free, some 10 percent of the land in America — an area larger than California and Texas combined — was distributed to 1.5 million White families. Until it was repealed in 1976, the act was the longest-running, race-based affirmative action program in America and the largest transfer of public wealth into private hands to date. Much of the land was seized from Native American peoples, and Black Americans were excluded from the Homestead Act.
White access to land through this legislation paralleled the Reconstruction era, a period where dreams of Black citizenship and dignity — one intimately tied to not just education but land and wealth and entrepreneurship — faltered under withering assaults that included racial violence, land dispossession, and segregation. Public policies that were designed to injure Black America, from convict leasing that offered a prelude to our contemporary system of mass incarceration to restrictions expressly designed to suppress the Black vote.
But it’s not just about barriers to creating wealth. We also need to consider its destruction. From mortgage redlining to bans on credit to Black farmers, examples are many. But it is only in the past few years that details have come to light of the destruction of America’s “Black Wall Street,” the financial center of Black American life in Tulsa, Oklahoma until June 1, 1921. Details of this are among the many items I include for this conclusion on the Digital Companion. But the top-line takeaway is that violence that began with a threatened lynching led to the obliteration of 34 city blocks, the destruction of more than 1,200 homes, more than $200 million in damage in today’s dollars, and as many as 300 deaths. Home to some 10,000 Black Americans, Tulsa’s Greenwood District never recovered and the trauma to Black American entrepreneurialism resonated throughout the country.
Bringing this sad portrait forward to our day, and expanding its frame around my own sector, let’s explore just a few numbers compiled by Sebastian Mallaby in The Power Law, a new book on venture capital that I’ve cited earlier. As of February 2020, women were just 16 percent of investment partners at VC firms. That same year, just 6.5 percent of venture deals involved female founders. To be fair, 15 percent of VC partners are of Asian origin. But Black Americans, who are 13 percent of the population, make up just 3 percent of venture partners. Even more disturbingly, Black American entrepreneurs raise less than 1 percent of venture dollars, Mallaby found. The situation for Hispanics is comparable. Hispanics make up 19 percent of the U.S. population, and headed half the new small businesses created between 2007 and 2017, but in 2021 garnered only 2 percent of all VC investments.
We can do better. We must. And at data.world we are committed to doing our part. I believe that the pursuit of equity, diversity, and inclusion in our work sphere is not just good for business, but is a moral imperative. America, at its very best, is a place where all things are possible. Turning this vision into a reality is the work of this generation.
One study concluded U.S. GDP would grow by 2 percent if we were to address these failures. That and a compendium of research on this subject by Crunchbase News, an ongoing series titled, Something Ventured - How entrepreneurs access opportunity in America, are on the Digital Companion.
This background is a preface to my own engagement with these issues that began in 2014 when my good friend Josh Baer nominated me for the Henry Crown Fellowship at the Aspen Institute. The Fellowship looks for successful leaders at inflection points in their lives. I was “retired” when Josh told me he had nominated me. I had achieved my dream of founding and taking a company public with Bazaarvoice around my 40th birthday, a goal I had set for myself at age 25 while I was at the Wharton School earning my MBA. I was primarily backing startups and actively helping entrepreneurs through our family office, Hurt Family Investments, and I honestly wasn’t sure if I would start another company myself. But the Fellowship really motivated me to do so and that led to the founding of data.world alongside my three incredible Co-founders, Bryon Jacob, Jon Loyens, and Matt Laessig, about whom you’ve heard much.
In the Fellowship I was first introduced to the writings of Ta-Nehisi Coates. We read Letter to My Son, which quite literally moved me to tears multiple times while reading. Along with other work cited here, it is on the Digital Companion. We had a very intense discussion about it, along with two of my Fellow colleagues, both very successful Black American leaders. If you haven’t read it, I really encourage you to open up your heart and do so. I was in denial while I read this — I just couldn’t believe this was still America. I frankly didn’t want to believe it, it was just too painful to accept. Our Fellowship discussions are confidential, so I can’t tell you what happened as we discussed it, but I can say that tears were shed there too. Our willingness to be vulnerable around the issue of racial inequality opened my eyes to the harsh reality of contemporary injustice. How could this be in the country that I love so much?
We also read and discussed Frederick Douglass’s speech, What to the Slave Is the Fourth of July? Mr. Douglass gave this speech nine years before the Civil War. He was just 34 years old. I can’t even begin to tell you how many times I’ve sent this speech to friends. I truly consider it the best speech I’ve ever read. If you haven’t read it, do yourself a favor — now is the time. As you read it, think about the moment in history in which it occurred and how he was the only Black man — a former slave — at the crowded July 5th, 1852 event, surrounded by American flags waving in the wind as a large crowd looked on.
We also wrestled with Rev. Martin Luther King Jr.’s Letter from a Birmingham Jail. Written almost two years before the 1965 March from Selma to Montgomery, Dr. King’s letter is a powerful reminder of the relationship between race and democracy. Like Frederick Douglass’s speech, I have sent this to a countless number of friends. Yes, I studied it in school at some point as a much younger man, but it just didn’t have the resonance then that it does now after being a leader and entrepreneur for so long. Again, do yourself a favor and read it — it’s a masterpiece.
The Fellowship also took me to South Africa, where we delved into the origins of apartheid and the incredible leadership of Nelson Mandela. How Mandela pursued racial justice and dignity after apartheid remains fresh in the South African political and cultural imagination. I’ll never forget standing in the former prison cell of President Mandela on Robben Island — imagining how a man of his stature managed to live in such a tiny cell. How cramped it must have been and yet how it didn’t break him after 27 years of captivity. And how gracefully he dealt with his oppressors after becoming South Africa’s first Black President.
Fast-forwarding to another period in my life, and thanks to the encouragement of Austin tech business leaders Stephen Straus, Christopher Kennedy, and Heather Brunner, in 2019 I joined the Beyond Diversity™ Courageous Conversations, a two-day seminar on systemic racism and ways to discuss race. After becoming more educated on how race shows up in everyday life in America, the course gave me the tools to discuss race with a diverse spectrum of non-White people. I’ve had my haircut from the same friend for 18 years now, even before either of us had children. And we had never really discussed his experience as a Hispanic American. What I learned from our frank discussion about race truly moved me, and it led to a much stronger bond as friends. Lisa Novak, our VP of Employee Experience (our better term for HR) at data.world, attended the course with me. She had an equally profound experience. Given how much it moved us, we wanted the rest of the executive team involved. They subsequently took it and were equally moved. Then we decided together to fund everyone at data.world to take the course, starting with the rest of our leadership team. It is taught all over the nation, and you can find it in your local area.
Shortly after Floyd’s murder, I got an email from a close friend, also a Henry Crown Fellow and fellow CEO. He asked me if I wanted to get involved in his group, White Men for Racial Justice. He recalled my referencing of our nation’s original sin of slavery during a 2018 talk at Austin’s SXSW festival and he thought I would be interested in further study and investment. He was right and it’s been a really soul-stirring and challenging endeavor. We met every other Tuesday night for six months and discussed many readings and listenings, including the very moving podcast series Seeing White and the documentary Suppressed, which will help you understand voter suppression in Georgia and the incredible leadership of Stacey Abrams. We are a support group for each other and I’ve gotten a lot of value out of being involved. To be candid, it has been very uncomfortable sometimes as ignorance is bliss when it comes to our history. This callowness, of course, has translated into our current reality.
I realize of course that many reading this will simply write me off as “woke” and perhaps a far-leftist. “Woke,” after all, is the new “virtue signaling” insult — it is a way to nullify someone’s message because they aren’t part of your “tribe” or “beliefs.” But let me set a few things straight. First of all, as mentioned, I’m an independent voter. Not only do I vote across the spectrum, but I also make political contributions to Republicans, Democrats, and independents. I didn’t inherit my wealth. When I got married, I had $1,000 and my wife had $2,000. It took a lot of both grit and luck for us to become successful. And I certainly believe in meritocracy, which we discussed in Chapter 11, The Most Proven Way to Hire Well. But I don’t believe in mirror-tocracy, which is the malady we have to conquer. And it’s a malady that is easy to ignore, as we have done, in a country that is roughly 73 percent White. If you were born White, there are inherent advantages you have. When you are in the majority, that majority shows up in leadership positions more often and the majority of wealth is concentrated there. When you were born, you weren’t aware of this. I certainly was not. This also doesn’t mean if you are White that you don’t have to work your ass off to become a successful entrepreneur, especially a self-made one. I’m not advocating casual hand-outs and I’m hardly a socialist. I believe fundamentally in the power of capitalism — Conscious Capitalism as we’ve discussed — to lift people up and make all of our lives better. I’m not saying that you don’t deserve the success you’ve earned because you are White. I am saying that the odds were far more in your favor and this should not dissuade you from learning about the way our country has been set up — quite literally, starting with the original sin of chattel slavery. As you do learn — as I have — the more you will realize the institutional, structural, and personal privileges that come with being born White.
Recognizing this reality is the first step toward an inclusive future. And frankly at data.world we are now sprinting. In no small part due to Lisa’s leadership, our workforce is now 59 percent female or minority. While we have been doing this there have been zero tradeoffs on performance. Quite the contrary, it has made our company much more fun and higher performing. There has been no “lowering of the bar” or whatever you may be thinking right now. If this is what you are thinking then you really need to stick with me to the end of this last chapter. Stephen DeBerry, a close friend, and Black American venture capitalist, put it best when he said that we all just need to chill out and really think about what is on the other side of racial equity. It’s beauty, it’s holding hands, it’s dancing in the street, it’s celebrating the best of being American.
That is my goal at data.world — to make it not just a standard-bearer for diversity in venture-backed technology, but also to make it a more American company. When I hear my fellow White CEOs and other leaders tell me they just can’t find enough _____ (fill in the blank race or gender) candidates for a role, a big part of that is that they just aren’t in the places where those people hang out. I’m White but also Jewish, and therefore I’m going to get invited to more Jewish events than a non-Jew. I’ve been invited to just one Black Chamber of Commerce event and that was for me to see a friend get an award. If you are female, you get invited to more female events. And so on. To hire diverse people, you need to figure out a way to show up at diverse places. If you aren’t seeing diverse candidates in your pipeline, you need to think hard about whether you are part of the problem or if this is important to you. This is why it is so important that you do the internal work. How hard have you tried, really?
I’m not sure any of us are qualified to suggest the right “steps” to change society. But it was with such a plan that started at our own company, and as a thought process, I believe it can help any company. Here are the five steps on which Lisa and I collaborated to bring transformation to data.world:
Recognize: Recognize and accept that there is a problem that needs to be solved. That’s the essential beginning, followed by the recognition that both our companies and our society must be actively involved in the solution.
Learn: Educate yourself. In our case, our task was to get all of data.world educated — leaders and team members. As mentioned above, after George Floyd’s murder our commitment to learning galvanized us to send all of our people to Beyond Diversity™ Courageous Conversations.” It’s why we have book clubs with books on racial injustice or being better allies. It’s why we invite expert speakers on diversity to come and talk with us at data.world. Another resource you’ll find on the Digital Companion is the Center for the Study of Race and Democracy at the University of Texas at Austin. Since its founding, I’ve proudly supported Dr. Peniel Joseph and his team’s work there, including serving on his Advisory Board (and he is on ours at data.world as well).
Develop your philosophy and goals: Make recognition and education part of the fabric of your company. At ours, it’s an ongoing part of who we are. We include “community” as one of our values, and diversity is among specific company goals. In fact, diversity is among the “OKRs” that we discussed in Chapter 14, Seven Lessons Learned on the Journey from Founder to CEO. It’s easier to build your philosophy and goals from the outset rather than to correct down the road.
Communicate: Create tools and an internal voice to ensure there’s a place for even the most challenging and difficult conversations. In our case, it’s #parliament-pod in our internal Slack channel. It’s a forum and opportunity for new ideas and ways to constantly improve.
Share: As a company that may be doing things well, it’s our responsibility to share approaches and ideas that work. All companies on similar journeys should be doing the same and spreading the positive results. It’s why we speak on panels about building and sustaining diversity. It’s why we’re part of groups in Austin to help guide other startups through their diversity journey.
So in conclusion, recall what I wrote in Chapter 1, The Soul of the Entrepreneur, that at no time in history has the world faced the challenge to adapt that it does today. And entrepreneurs, broadly defined, are the people to lead this adaptation. As I noted in the preceding Chapter 22, Seven Critical Lessons Learned in Angel Investing, our fast-changing world is in desperate need of leaders who can keep up. So my parting message is a call for entrepreneurs to embrace all of that, and to recognize that your company can have a workforce that reflects the best of what America truly offers. What a boring place America would be if we were all of one race, with one type of food and drink, one type of architecture, one type of entertainment, one type of literature, one type of political party, and so on. We have a moral obligation to lift each other up and embrace our uniqueness and the beautiful melting pot that our country is. It is the source of our strength as Americans, and it can be a huge source of strength in your company.
“Diversity is America's most valuable resource. It is what makes us the most innovative nation on Earth.”
— Nick Hanauer, venture capitalist