Episode 26: It’s Time to Finally Fix Tech’s Diversity Problem
Read the transcript below, or listen to the full interview on the First Contact podcast.
First Contact with Laurie Segall is a production if Dot Dot Dot Media and iHeart Radio.
Sarah Kunst: We don’t travel anymore. And it seemed impossible. If you told anybody on February 1st that you will not be on a plane for March 15th until God knows when, people would have said that’s impossible. That’s impossible.
Laurie Segall: Right.
Sarah Kunst: Possible. The impossible has become possible, right? So we know how quickly things can change, but you have to have the will to do it. So I think what these companies, and what these powerful people, to your point, who are disproportionally white and male are going to have to grapple with is, “this isn’t working”. And our employees are telling us it’s not working, the press is telling us it’s not working, the protestors are telling us it’s not working, right? This isn’t working. They realize that the time has passed where they can say, “Do we think we should act?” And the answer is, “We have to act.” There is a business imperative, and I think that there’s a moral imperative, and I think that Silicon Valley can’t sit this out any longer.
I love technology. I love Silicon Valley. I’ve spent my career covering it. I’m also frustrated – sometimes it feels like we’re asking the same questions over and over and over again…
I’ve known Sarah Kunst as a person who will say things that other people won’t say. Who will call out inappropriate behavior. She’s quick to speak. Not just tweet. She’s been leading a discussion on the unfair situations for minorities in tech for a long time. She’s been a big supporter of funding women. And I know her as someone who’s made it her life’s work to change those things for the better.
My question right now, that I want to ask everyone in tech — while there’s momentum, how do we make sure we finally start making the necessary changes in the tech industry? That it’s not just about changing our profile photos but it’s about changing the makeup of board members, making companies more diverse, changing legislation, and putting our money where our mouth is?
I know these are times of listening and learning, we all have to do a better job of informing ourselves, and listening to others, and changing our behaviors. So let’s listen to Sarah Kunst.
I’m Laurie Segall Segall and this is First Contact.
Laurie Segall: First of all, it is so nice to see your face.
Sarah Kunst: I know. It’s so nice to see your face.
Laurie Segall: Oh my goodness. So I wanted to, I wanted to start by just talking about our first contact, right? So-
Sarah Kunst: Yeah.
Laurie Segall: First of all, for folks listening, like, we’ve known each other for a really long time, especially in tech years. Like, do you remember our first contact?
Sarah Kunst: We’ve known each other, I think, for, for two recessions now, which is quite a long time.
Laurie Segall: Oh, when you say it like that, it sounds so depressing.
Sarah Kunst: It sounds so long, it sounds so long. Yeah, I mean I, I remember, you know, back when, when we were both living in New York, and we were sort of, uh, young, young people, just starting out in the tech industry. And you know, it’s one of those things where the tech industry there at the time was so small that, you know, if you went to three parties and two bars, you knew everybody.
Laurie Segall: Right.
Sarah Kunst: And so it was uh, a fun time. Because it really did feel like a community.
Laurie Segall: Yeah. And I remember meeting you. And we, uh, it, it actually, that, it’s such an interesting thing, you brought up the recession. We’ve talked about this in prior episodes. Like, there was a lot of innovation, happening coming out of the recession, right?
Sarah Kunst: Absolutely.
Laurie Segall: There were a lot of really interesting companies that were coming out of it. And there was this movement in New York. Because people always think San Francisco tech. But there was this movement in New York tech.
Sarah Kunst: Yeah.
Laurie Segall: And you had a lot of founders just going and coding different apps, and being creative, and doing all sorts of stuff. And there was a very small group of people. And, I remember, uh, meeting you then. And that was our first contact. I think it was at a party in SoHo.
Sarah Kunst: Mm-hmm.
Laurie Segall: Not to be specific. So that was cool.
Sarah Kunst: The only place to meet anybody in 2010 was a party in SoHo.
Laurie Segall: Right, right. Um, and by the way, like, those seem like happy times. And, and I’ve been wanting to have you on for a while, because you’ve done so much work, I think, as an entrepreneur, and as an investor, too, and talking about a lot of issues. And, and something I’ve always liked about you, Sarah, um, and to give, I always like to kind of paint a picture, of the people I interview for our listeners.
Sarah Kunst: Yeah.
Laurie Segall: Like, you’re the person that says the unpopular thing. Or not the unpopular thing. You’re just like the person who says things out loud.
Sarah Kunst: Mm-hmm.
Laurie Segall: You will say things when other people won’t. You will call people out. You know, we talk about us you know, being in tech back in the day. Like, you have, um, said things to investors who have behaved inappropriately. You have been talking about how things are unfair for minorities in tech for a very long time. And so it seems appropriate for me to have you on now. But I should have had you on before. So I’m, I’m really happy to be speaking to you right now. Um-
Sarah Kunst: Yeah.
Laurie Segall: Because what an extraordinary moment we’re in.
Sarah Kunst: Yeah, thank you.
Laurie Segall: With everything going on. First of all, how are you feeling about everything? How are you doing? You’re in San Francisco.
Sarah Kunst: I’m in San Francisco, yeah. I mean, it, it, you know, it has been an absolutely insane couple of weeks, on top of an insane, you know, couple of, of months. And when it comes to, you know, issues around racism in America, on top of, uh, and on top of an insane, you know, 400 years, right? So on one hand, what’s happening right now feels unbelievable. And on the other hand, you remember that America is a country that started out with, you know, started out with genocide and then moved to slavery. And you’re like, “Actually, I guess these protests kind of make sense,” right? It, it’s probably more a question of, certainly, you know, we saw some of this stuff in the 1960s. But it’s probably more of, uh, a question of, “Why did it take so long?” Instead of, “Why is it happening now?”
Laurie Segall: Yeah. And I mean, and I’ve always looked at things through the lens of tech. And like, I had this moment where I was looking at all these venture capitalists we know, and a lot of people we know who are, you know, talking about Black Lives Matter. And I’m so happy to see people out there and posting, and, and voicing their support. But my question to you would be, you know,there are so many issues.
Sarah Kunst: Yeah.
Laurie Segall: In, in tech and, and there are so many larger issues around this. The numbers in, in tech are pretty terrible for minorities. I, I think, I was looking and doing research for this. Someone from Upfront Ventures posted, “Blacks are underrepresented in the executive ranks of start-ups by 82%. More than 75% of all rounds raised go to all White founding teams.” So you know, my, my first reaction as I was watching this whole movement happening in tech, and watching a lot of the people I know changing some of their profiles, and, and posting a lot of stuff-
Sarah Kunst: Yeah.
Laurie Segall: Was, “This is great. Change your profile. But also, change your, uh, boards. Change all these other things.”
Sarah Kunst: Yeah.
Laurie Segall: And so how are you feeling about it? I mean, what do you think about stuff happening in your own backyard? Do you think things will change because of this?
Sarah Kunst: You know, I’ve been drawing a lot of comparisons to the Me Too movement and what happened in tech then. And you know, having been very involved in, in that, um, it’s one of those things where, you know, the Reverend Jesse Jackson likes to say that in moments like this, there are kind of tree-shakers and jelly makers, right? So there are people who shake the tree, the people out protesting, the people who are saying, “This is absolutely, like, this is, we’re done,” right? “We’re, it’s been 400 years, we are not doing this anymore, this is done.” And, and this being, you know, racism and, and the systemic discrimination against people of color, particularly obviously Black people, right? So, so those are the people who are out there shaking the trees. And then the jelly makers are the people who aren’t necessarily always on the front lines protesting, but who are sitting there saying, you know, “What can we do to change legislation? What can we do to change hiring practices? What can we do to make our boards more diverse, to make the companies we invest in more diverse, to make the investor base more diverse?” Right? And, and we know from research that whatever your investor demographics look like, your investments tend to look like, right? So if funds hire women, then they invest in more women. And I think almost no funds, no large-scale funds have a mandate when they hire a woman saying, “Of course you’re supposed to invest in women.” It’s just that we tend to gravitate towards what we know. So you know, we, we know that that works, and we know that there are certain groups in tech that are incredibly underrepresented, right? Black people, incredibly underrepresented. Um, you know, Hispanic people, incredibly underrepresented, right? Native Americans are underrepresented to the point where they, they barely exist in tech, right? And, and so we know that these groups are underrepresented. And we also know from data that if we have more of them around the investing table, right, that we’ll invest in more of them. Because there’s not really a lack… There’s certainly not a lack of talent. And maybe five, 10 years ago, there was a lack of founders in these demographics, because they were very reasonably looking at, you know, the, the inability to get funded, and saying, “Maybe I don’t want to start a company,” right? “Maybe I should be a lawyer or a doctor, whatever.” Now we’re seeing something different. And we’re seeing that there are a lot of founders of these demographics who are brilliant, amazing, they’re coming from top schools, they’re coming out of top companies. You know, they are ready to go. They just deeply struggle to get money raised.
Laurie Segall: Yeah. I mean, I guess I think about it. And I think about the circles that we’ve been in in Silicon Valley. And I think about the rooms that we’ve had the, the privilege of-
Sarah Kunst: Yeah.
Laurie Segall: Of being in. And you know-
Sarah Kunst: Sometimes misfortune of being in, but yes.
Laurie Segall: Right, right. I, I mean, actually, we should also, we can have, uh, that whole conversation.
Sarah Kunst: Yes, exactly.
Laurie Segall: I mean, you are, you are one of the, the women that called out, uh, an investor for bad behavior, um, and harassment. And this started, like, a whole, a whole thing where a lot of other women spoke out against it. So yes, that, that as well. Um, but yeah. We, we have access to the room. But you’re a woman of color. I mean, there are not a lot of people that, you know, that look like you in the room, all, all, all the time.
Sarah Kunst: Yeah, yeah.
Laurie Segall: You know, h-, and, and so I, I wonder, like, you know, it is a boy’s club.
Sarah Kunst: Mm-hmm.
Laurie Segall: And, and so while there’s this momentum right now, and, and this feels different, hopefully. I mean, God, I, I want there to be change. Like, you know, specifically in Silicon Valley. Um, you know, I get frustrated, right? Like, how many times have we heard the company line, and even as, um, you know, as someone of privilege-
Sarah Kunst: Yeah.
Laurie Segall: And as someone in the media, and I have a responsibility, too, like, what can we actually do-
Sarah Kunst: Yeah.
Laurie Segall: To just not hear the company line over and over again?
Sarah Kunst: Yeah.
Laurie Segall: So we can get more, more people actually getting funded, more companies from diverse perspectives.
Sarah Kunst: Mm-hmm.
Laurie Segall: You know, what do you think specifically are, like, some action items that, that we could do?
Sarah Kunst: Yeah. You know, the, the great thing is, right, that it, that’s easy. And, and it’s easy, but it doesn’t mean that it is simple, right? And so it’s easy in that, I love to use the example, of crypto, right? I was really early in Bitcoin. And you know, I love to use that as an example where before Bitcoin was invented, right, by whoever Satoshi is, it didn’t exist. And then now, a decade later, almost every big fund has a crypto expert on staff, has invested in crypto companies, has made a bunch of money. Right? And so Black people have certainly existed, right, far longer than Bitcoin. And so the idea that you can’t go out and find a source of, of viewpoints, right, world view and voices that you haven’t already had in your fund or in your company, and that you can’t bring them in, and that you can’t empower them to do great work and give them real capital is, is demonstrably false. Because we’ve seen people do that in crypto, right? People woke up in maybe 2013 and said, “Hey, crypto is a real thing. We’re going to go out. We’re going to, you know, do some listening. We’re going to learn about it. We’re going to talk to experts. We’re going to get to know people in this space. We’re going to make some small bets, and then we’re going to make some large bets, and we’re going to bring people in to do this full time.” And they did it, right, within a year or two. In 2012, almost no major fund had a crypto investor. And now, you know, s-, by 2018, almost every fund did. So if you can make that kind of change in that short amount of time, take that playbook, right, that you just ran. This wasn’t 20 years ago, this was five years ago, three years ago, and go and do it around diversity. And we saw some of this post-Me Too where companies said, “Oh, should we hire women?” The answer is, “Well, yes.” Right? Because there’s really only two answers to this. You either fundamentally, truly believe that only white men are capable of greatness, in which case you’re probably not listening to this podcast, and please stop listening to this podcast. Um, or you are acknowledging that if you’re only working with white men, but there’s greatness everywhere and there’s talent everywhere, that you’re leaving money on the table, right? Like, I’m a venture capitalist. I’m not a full time activist, right? I’m a venture capitalist. It is my job to take capital and make more money with it. And so if I am leaving money on the table, I’m not doing my job.
Ok we’ve got to take a quick break to hear from our sponsors, more with my guest after the break.
Laurie Segall: I look at, even the controversy at Facebook right now.
Sarah Kunst: Mm-hmm.
Laurie Segall: I look at this idea that there’s this controversial decision over, um, free speech, and a decision that Zuckerberg made.
Sarah Kunst: Yeah, mm-hmm.
Laurie Segall: And a lot of people are talking about it, and saying, a lot of employees are beginning to speak out against it. But what’s interesting, and I think it was reported that that decision was made, and there was only one person of color in the room.
Sarah Kunst: Yeah, yeah.
Laurie Segall: Like, so there’s a lack of diversity of perspective. And, and you know, I guess, like, this isn’t a new story.
Sarah Kunst: Yeah.
Laurie Segall: Like, in the time that we’ve had our f-first contact, like- How many times have we had this conversation?
Sarah Kunst: Yeah, yeah.
Laurie Segall: But, but I guess that maybe is the point, right? How many times do we have to have this conversation? Because now there, there’s real world impact.
Sarah Kunst: Mm-hmm.
Laurie Segall: And we’re seeing it trickle out in these ways that are in many cases, unhealthy for society.
Sarah Kunst: Yeah.
Laurie Segall: Um, and, and so, you know, h-, what are you hearing? You talk to people. I feel like you’re kind of everyone’s confessional. And like, everyone tells you kind of like their war stories.
Sarah Kunst: I have all the tea. I have all the tea.
Laurie Segall: Yeah, you have, like, all the tea. What are you hearing?
Sarah Kunst: Mm-hmm.
Laurie Segall: Like, from people within these companies?
Sarah Kunst: That’s the thing, right? Like, my, like, probably starting like, like, Friday, Saturday last week, when, you know, this, this happened, uh, George Floyd was, was murdered, you know, like, oh my God, uh, like, less than two weeks ago. And it feels like a thousand years ago, right? And since then, um, that has just, you know, the, the amount of phone calls, texts, in-bounds, you know, emails, uh, and, and, and asked for what do we do? What do we say, right? I spent the weekend helping portfolio companies and my investors, you know, craft their statements. And, and you know, what do we say? Who do we donate to? What do we do? And the great news is, there are things that people can do right now in this moment that make massive differences, right? If you donate to the Bail Project, you are literally bailing out a protestor who is out there saying, “You know what? Black lives matter.” But they can’t afford the bail, right? And so you’re, you’re, like, helping in the moment. And that is so important, right? When you say, you know, “Hey, Black lives matter, right?” On your Twitter account, or your Instagram, or in your emails to your companies, and, and externally, yes, at some point it feels like every company is just saying it to check the box. But let me be very clear that that’s an important box to check, right?
Laurie Segall: Right.
Sarah Kunst: Because you need to say, when we live in a world where it is not inherently obviously to every human that Black lives matter, right? That my life matters as much as your life and as much as anyone else’s life, right? Then we need to say that but that’s the bare minimum. That’s where you start. And I’m glad that people are donating, I’m glad that people are, like, really, honestly, truly saving lives and helping to fund policy changes in real time. But that’s a beginning point. That’s not an end point, right? Because the policy changes need to happen. But on the other hand, you know, there’s a lot we can do without policy. I work in venture capital. It’s private equity, right? We don’t really interact with the government much. So what the government’s doing doesn’t have a ton of impact on our industry. It’s what we choose to do with the money. And so, you know, I’m getting a lot of in-bounds from people saying, “What do we do?” And I say, you know, “Think about your hiring, right? Think about your company’s hiring. Think about the board seats, right, that you have and that you control. You know, what are you doing to, to explicitly go out and look for this and bring it in and support it, right?” And there’s tons of great organizations already, you know, on the education side, like Code 2040 and Black Girls Who Code. And you know, there organizations like Black Women Talk Tech, and you know, Black VC. There’s, there’s not a lack of these things, right? These people are not hard to find. Um, my LinkedIn inbox, you know, has been overflowing all week, because I’ve been having these conversations with various media outlets. People can find you, right? People can find you, and you, there’s also endless resources online about how to do this. But at the end of the day, if you’re a venture fund, or you know, an elite tech company, and you are like, “We only really recruit from Stanford, MIT, and Harvard,” great news. Stanford, MIT, and Harvard have incredibly diverse student bases, right? Both at the undergrad and grad student level, you can go find these people. And so it’s not that it’s, you know, I, I’m sure you remember around Me Too, and even before that, right? There was this whole sort of conversation nationally about, where do we find women? Like, buddy, women are over 50% of the population. Where can’t you find women?
Laurie Segall: Right, right.
Sarah Kunst: Right? And, and so, like, that’s really the frustration, is, if you care about this, go do this. If you don’t care about this, one, like, I’ll pray for you, but two, then like, just, just you know, get out of the way and let people who do care do the work. And so, you know, I’m cautiously optimistic that some of the conversations that we’ve seen in the last week and a half will turn into, you know, real changes in capital allocation, will turn into real changes like who’s on boards and who’s hired. And also, candidly, who’s fired. Because as we learned with Me Too, it wasn’t enough to say we’re gonna bring more women in, you also have to have really honest conversations with yourself and say, “If I work at a fund that has, you know a hundred people across the investment and- and platform team, and I’ve never fired anybody for being sexist and racist.” Right? “But my team is incredibly un-diverse.” Like, you have to ask yourself are you sure that you understand what’s really going on at your firm? Right? If you work at a huge tech company and you’ve never fired anybody for being sexist and racist then we definitely know, right? That you probably are not being you know, vigilant enough about it, because you have to create an environment where not only do you, you know, get people to come work with you, or to come, you know, let you invest in their companies, but where you also are supporting them so that if there are people on your teams who aren’t making it welcome, who are doing things that are incredibly painful to those people that that you’re weening them out. Sort of like when you paint your house, right? You would never go to an old dirty house and just put a new coat of paint on it. You have to clean it off and you have to, like, scrape it off and get the old gross stuff off and then you can start fresh.
Laurie Segall: How do we, like, scrape off the paint in Silicon Valley?
Sarah Kunst: I mean that is a great question. The thing to remember, right? Is that Silicon Valley is not very old. Like, venture as an asset class is younger than our parents, by far. And so when you think about the fact that the asset class itself is barely 50 years old, and that these companies, right? Name- name- name a huge tech company and it is younger than we are, right? Most tech companies are not old enough to drive yet, right? And so when you think of it from that perspective… If new tech companies can become unicorns, you know, in five years, right? And go from not existing, right? You and I remember, when we met in New York, Uber didn’t really exist in New York, right?
Laurie Segall: Right.
Sarah Kunst: And now it’s like, you know, a 10,000 pound gorilla in the room. So if that can happen In the span of one decade, then why not make a conscious effort to say, “I’m gonna fund, a more diverse range of incredible founders.” So that the next Uber doesn’t, you know, have one, the same problems tha- that the first Ubers had. But two, that it- it doesn’t, you know, have a lack of diversity, um, because we know diversity drives better business returns, and drives better business decisions.
Laurie Segall: Yeah. I- I keep thinking, um, you know, I love technology. I love Silicon Valley. You know, this was, um, this is my career. Right?
Sarah Kunst: Yeah. Yeah.
Laurie Segall: This is when we met. You know- I’ve spent my career covering it. I am also, disappointed in many ways, to often times have to ask the same questions over, and over again. Like you can hear sirens outside my place right now, because-
Sarah Kunst: Exactly. Yeah.
Laurie Segall: … people are protesting on the street and they are frustrated.
Sarah Kunst: Yeah.
Laurie Segall: And there are questions about free speech. And there are questions about whether these tech companies are doing the right things. Um, but most importantly there are questions about, you know, like, racism and the-
Sarah Kunst: Yeah.
Laurie Segall: … deep-rooted pain this country-is in. And- and you won. And so I’ve always looked at it, um, and this is my way into is as saying-
Sarah Kunst: Mm-hmm.
Laurie Segall: …. “Okay, well what I know best is- is Silicon Valley-
Sarah Kunst: Yeah.
Laurie Segall: … and- and a lot of these powerful-
Sarah Kunst: Yeah.
Laurie Segall: … mostly, truthfully-
Sarah Kunst: Mm-hmm.
Laurie Segall: … white men-
Sarah Kunst: Yeah.
Laurie Segall: … at the top.
Sarah Kunst: Yeah. Yeah.
Laurie Segall: Right? What are the questions,
Sarah Kunst: Mm-hmm.
Laurie Segall: … as someone who’s been in the room with a lot of these people-
Sarah Kunst: Yeah, yeah.
Laurie Segall: … too? What are the questions we need to ask those people right now?
Sarah Kunst: Yeah, I mean, you know, I- I have a call later today with the- uh, a CEO of a Silicon Valley unicorn, because I- I, you know, use the product, I know the product well, and I noticed that, they hadn’t said anything about what’s going on. And they had, you know, they were promoting multiple, uh, webinars that they had coming up in the Zoom age, right? And they were all white men. And, like, one it’s 2020, we don’t do that anymore. And two, like-
Laurie Segall: Right.
Sarah Kunst: … this week? We’re really not doing that this week, right? So I reached out and I was like, “What’s happening?” And, you know, it- it’s gonna be an interesting conversation, but my general guidance is, “We don’t do this anymore.” And when you don’t do something anymore, then you just stop, and then you start to think about what we do do, right? So, like, we don’t travel anymore. Right now we don’t travel. And it seemed impossible. If you told anybody on February 1st that you will not be on a plane from March 15th until God knows when, people would have said that’s impossible. That’s impossible.
Laurie Segall: Right.
Sarah Kunst: Possible. The impossible has become possible, right? So we know how quickly things can change, but you have to have the will to do it, right? And so I think what these companies, and what these- these powerful people, to your point, who are disproportionately white and male are going to have to grapple with… I- I- it’s far past time they grapple with it, but what I think what they’re gonna have to grapple with is, okay, this isn’t working. And our employees are telling us it’s not working, the press is telling us it’s not working, the protestors are telling us it’s not working. This isn’t working. And candidly even if they’re not out there protesting, they’re feeling the pain too. And most of the country right now, in major cities, can’t leave their homes at night. We are under curfews in a way that, like, this isn’t something that I think very many people at all are comfortable with having happen in our countries. So when you think about it that way this is impacting you as well, right? We can hear sirens on one of our ends in the background right now. So I think-
Laurie Segall: That would be me, yup. Sorry-
Sarah Kunst: No, no, no.
Laurie Segall: … for more sirens, everybody.
Sarah Kunst: Yeah, but that’s the thing, right? Like, is it- it is not working, right? It’s not working for this podcast. It’s not working for us. I hope that as that becomes apparent to them, they realize that the time has passed where they can say, “Do we think we should act?” And the answer is, “We have to act.” Right? Our customers are not letting us not act. The things that I’ve heard, um, from various reporters and friends, you know, like you said, and the confessional booth of Silicon Valley, I’ve heard so much unrest that’s going on inside of companies, that doesn’t hit the news, where people are just mad. And the problem is when you have an entire workforce that’s remote, and they’re just mad, they don’t really have to pretend to be working, right? They don’t- they don’t really have to put on their A game. They just- they, “Oh, I’m sorry. I missed the email at noon on Friday.” What are you gonna do? You can’t walk over to their desk.
Laurie Segall: Right.
Sarah Kunst: And so I think that there is a business imperative, and I think that there’s a moral imperative, and I think that Silicon Valley can’t sit this out any longer.
Laurie Segall: You know, it’s interesting. I- I heard from, a friend of mine who works at one of the big tech companies, and I won’t say which one, but, um, she is, a woman and a minority-
Sarah Kunst: Mm-hmm.
Laurie Segall: … and-
Sarah Kunst: Mm-hmm.
Laurie Segall: … had to, in this, reapply for her job.
Sarah Kunst: Yeah.
Laurie Segall: And some of the- some of the men in her unit-
Sarah Kunst: Mm-hmm.
Laurie Segall: … did not have to.
Sarah Kunst: Yeah.
Laurie Segall: Um, but the woman of color did. She did.
Sarah Kunst: Mm-hmm.
Laurie Segall: And also, this week of all weeks-
Sarah Kunst: Mm-hmm.
Laurie Segall: … in New York.
Sarah Kunst: Yeah.
Laurie Segall: You know-
Sarah Kunst: Yes.
Laurie Segall: … and she had to do an interview over Zoom. And-
Sarah Kunst: Yeah.
Laurie Segall: … and I- just… And- and with- with people on the other end that just say, “Hey, how are you?” And- and it just seems like-
Sarah Kunst: Yeah.
Laurie Segall: You know? And it just seems like sometimes there there’s this- this disconnect-
Sarah Kunst: Mm-hmm.
Laurie Segall: … between Silicon Valley and the idea that we can do good. And that we’re changing the world for the best.
Sarah Kunst: Yeah.
Laurie Segall: And we’re gonna have the good outcome.
Sarah Kunst: Mm-hmm.
Laurie Segall: And then, you know, maybe I sit here passionately talking about it, because I- you can hear it outside.
Sarah Kunst: Yeah.
Laurie Segall: And you can see it.
Sarah Kunst: Mm-hmm.
Laurie Segall: And I, you know, have the privilege of being inside-
Sarah Kunst: Yeah.
Laurie Segall: … at the current moment talking to you. But, you know, there’s still that- that disconnect.
Sarah Kunst: Mm-hmm.
Laurie Segall: That I- I hope that, um, you know, that- that things really- that really do change, um-
Sarah Kunst: Yeah.
Laurie Segall: … in some capacity. That this is a C- a C change for- for that kind of thing.
Sarah Kunst: Yeah, yeah. And that’s the thing, right? That needs to be, because I mean, you know, that woman’s experience sounds horrific. But the thing is that people around her are seeing that as well. A friend works at a company, actually a- a start-up in New York. And it’s a big start-up, very well funded, they are doing very well, and they talk about, you know, the- the values that they have on their posters, right on their wall, are- are, you know, about equality and freedom, and all these things, and they hadn’t spoken up on this issue. And- and they hadn’t done anything about it. And the founders, you know, are very successful. And so, you know, one of the engineers, a- a white man, right? Went to their Slack, and said- like, went to their Slack channel, and- and messaged the entire company, and said, like, “Are we not gonna talk about this?” “Are we gonna pretend like this isn’t happening?” And it spurred action right? Within a day, um, you know, immediately the founder said, “Hey, actually, you know, we’re working it out. Of course we’re working on it.” Right? You’re just- “You caught us a couple minutes beforehand. We’re working on it.” They had to release a statement internally, they had- you know, they did their external statement. They’re doing fund matching. They’re doing donations. They’re elevating voices of color and that’s just one guy writing candidly. The fact that it was a white guy who did it, is- is probably, you know, one of the more powerful things you can do, right? So if you’re listening to this, and- and you have a ton of privilege, and- and, you know, you’re like, “How do I spend it?” Like, yes, donate. Yes, you know, go out and protest if that’s- if that’s what works for you. You know, talk on social media. Be incredibly clear. Have conversations with your friends, right? When somebody makes a joke or says a thing, like, shut them down. And make it clear that this is not okay, this is not welcome. But you can also do that in your workplace, right? And- and you mentioned Facebook, and if change comes to Facebook from this, it’s likely going to be because a bunch of very highly paid white guys say, “You know what? No. This isn’t going to work. We are done.”
Laurie Segall: Well, you know, what’s really interesting about, um, if you look at the petition of some of these- employees who are talking about- whether you agree with what they are saying or not about the company’s stance on free speech. But there’s a lot of unrest at the company right now.
Sarah Kunst: Yeah.
Laurie Segall: Um, and a lot of it, you know, uh, if you look at some of the-you know, it’s like the head designer for Portal- white man.
Sarah Kunst: Yeah.
Laurie Segall: Um, you know the guy who resigned.
Sarah Kunst: Mm-hmm.
Laurie Segall: White man.
Sarah Kunst: Mm-hmm.
Laurie Segall: A lot of people who are, you know… And I mean, and by the way, the company does, you know, there are diversity-
Sarah Kunst: Yeah.
Laurie Segall: … issues-
Sarah Kunst: Yeah.
Laurie Segall: … at every major tech company-
Sarah Kunst: Yeah.
Laurie Segall: … so it is interesting to see that some of the people speaking out, around this moment in Silicon Valley are exactly kind of how you describe.
Sarah Kunst: Yeah. Yeah. And- and that- that I think matters, because it- it shows, you know, that this isn’t a siloed thing. One, if you don’t feel like there’s enough of an imperative to- to care about people’s lives, just because it’s not you, I mean, you as a Jewish woman understand this, you know, very deeply, right? It’s not okay to say, “That group of people, you know, can be treated this way because it’s not me.” That isn’t okay. But even more than that is it’s not just impacting that group of people. We’re all under curfews, right? There are people at these companies who are speaking out who candidly, you know, they don’t- they don’t need to for their own survival. But- but that isn’t, you know, where they’re coming from. They’re coming from a place of humanity, of this isn’t okay. And I think for these big tech companies, I think for these big funds, as that happens, they’re going to realize that they have to reckon with it. And not even because it’s the right thing to do, but because it’s very hard to run a tech company if all your senior and best people are quitting.
Laurie Segall: Yeah. Listen, I- I- I very, very much hope that, like, all of this comes true. You know? I just think it’s- it’s time, the world as a whole. And then where I look at the, and through the lens, like, in tech, because I think tech products influence the world. Like, we’re at a moment-
Sarah Kunst: Mm-hmm.
Laurie Segall: … where all of us are having to move online in these different ways. There will be even more issues-
Sarah Kunst: Yeah.
Laurie Segall: … with the haves and the have-nots-
Sarah Kunst: Mm-hmm.
Laurie Segall: … and people having access to online-
Sarah Kunst: Absolutely.
Laurie Segall: … education.
Sarah Kunst: Mm-hmm.
Laurie Segall: Um, and if we don’t have a diverse group of perspectives-
Sarah Kunst: Mm-hmm.
Laurie Segall: … in these- these tech companies that are gonna be-
Sarah Kunst: Yeah.
Laurie Segall: … leading the charge into what a post-pandemic world looks like- we’re gonna have even more issues that are gonna-
Sarah Kunst: Exactly.
Laurie Segall: … disproportionally impact minorities. And I think when I look at that I think, well that’s terrifying.
Sarah Kunst: Mm-hmm.
Laurie Segall: You know? And- and so we gotta start thinking about that kind of thing as well.
Sarah Kunst: Yeah. Exact- I mean the thing is the world doesn’t work… Right, if you look at COVID and- and there are a lot of countries where there were crazy outbreaks of COVID, and it was traced back to, uh… It was traced back to the fact that, you know, in certain places, and certainty this happens in the US as well, right? And this is partially why you saw crazy outbreaks of COVID around, like, ski resorts and stuff, is if you work in an industry, a service industry job, where you are in very close proximity to everybody else in your service industry job, right? So the examples were, you know, places where all of- all of the wait staff, or all of the service staff, you know, is maybe bunked together, right? In like, kind of, dorm style. Well, okay. So you are, you know, probably somebody who doesn’t have as much money. And you are maybe disproportionately somebody who is, uh, a person of color. On top of that, guess who wait staff serves, right? And so you’d see these things where people are coming back from the Swiss Alps dying of COVID, because they’re an incredibly privileged… You know, one story, I don’t have all of the details, top of mind, but like, I remember reading one story about a group of like, three or four guy friends, right? White men in their 50s who had gone to, like, the Alps to go skiing, and great fun. I’d love to go, right? And then they got back, and- and they all got sick, and one of them died. So the fact that if you’re not taking care of the most vulnerable populations, it’s not just them, right? And- and- and one, it’s more than enough if it is just them. Like, people are people-
Laurie Segall: Yeah.
Sarah Kunst: … and people deserve to live. But it’s also going to impact you. And so, you know, that, I think, is a real wake up call for people to realize, you know, there’s- there’s, uh, a- a famous quote that I think is- is a- is an African proverb that like, Hilary Clinton, of all people, I think, re-popularized-in the 90s, right? “There’s no such thing as other people’s children.” There’s no such thing as other people’s anything, right? You know, a virus that started halfway across the world has killed over a hundred thousand Americans, right? And everything is global and until you understand that, like, what hurts somebody somewhere hurts everybody everywhere, you know, we’re gonna keep having these- these deeply unequal outcomes. But they’re going- to hurt you too. And so that, I think, is hopefully something, that, you know, people are seeing with COVID, that people are seeing with these protests, that- that people remember and don’t forget, right? If you don’t care about black lives, like that’s on you. But if you care about your own life, and you- you want to be able to leave your house at 9:00 PM at night in the next few months, then, like, you might wanna get on board.
Laurie Segall: Hm. That’s such a powerful statement. And- and I do think, like, man if this doesn’t make you care about all of this, I don’t know what will. You know?Like this- I- I just-
Sarah Kunst: I don’t know what that is yet.
Laurie Segall: I really-
Sarah Kunst: I don’t know, yeah.
Laurie Segall: … like, this is boss level.
Sarah Kunst: Yeah.
Laurie Segall: Like, I just don’t know what will-
Sarah Kunst: Yeah.
Laurie Segall: … at this point.
Ok we’ve got to take a quick break to hear from our sponsors, more with my guest after the break.
Laurie Segall: You created Cleo Capital-
Sarah Kunst: Mm-hmm.
Laurie Segall: Like, at the time, it’s been so cool to watch you, uh, throughout the years-
Sarah Kunst: Thank you.
Laurie Segall: be very vocal about-
Sarah Kunst: Mm-hmm.
Laurie Segall: … about women, minorities, and kind of breaking into the boys club in Silicon Valley, and, fighting for certain causes- and saying, “Hey, we’ve got a problem.” And even, by the way, in your own personal life, having-at one point an investor doing something inappropriate to you and you saying “You know what, like I’m just not gonna, um, sit here and take this.” And, and you spoke out publicly and, and so, you know, it’s been interesting to watch throughout the years and, you really dev- not developed, you’ve always had that voice.
Sarah Kunst: Yeah.
Laurie Segall: When was it that you launched Cleo? 2018 or 2019?
Sarah Kunst: Yeah so 2018, um, and, and we have been going strong for about a year and a half now.
Laurie Segall: So take me to the idea behind Cleo, because I remember when you … I feel like I, I gave you that whole backstory to kinda give little pieces about like, this didn’t just come out of like, “Oh. I think I wanna help women.” Or, or, you know? I just feel like it was always in your DNA that you were going to do something like ah, launch a investment fund to help different types of people, you know, not the typical Silicon Valley dynamic get, get funding. So take me to the, the thought process behind it and why you launched and what it is.
Sarah Kunst: Yeah. Y So, so, you know, Cleo Capital is a, is a, pre seed venture fund, and you know, we, we, don’t have a mandate around race or gender in terms of diversity investing. We just invest in incredibly smart people and, turns out that women and minorities and, and members of the LGBTQ community and people from all over the country, right? Not just Silicon Valley or New York, are incredibly smart and they’re building incredible companies. And so, you know, for us that is easy because to your point, that’s in our DNA. That’s what we believe and that’s those people flock to us and that’s what we do. Um, in terms of the fund, you know, I invented a large venture capital fund years ago, and then left and, and went and started a company and raised venture capital for that and saw all the challenges that, that there is in doing that period, much less, you know, as a woman, as a black woman,and, and it was really interesting and eye-opening experience. And you know, I, I then was tapped by um, by two sort of, very different, but very interesting um, opportunities. One was I was on a board at Michigan State University where I went to college and, I was on a board to help them do their LP investings, so to help them allocate into, you know, venture funds, hedge funds, all of that. And so I learned a lot about um, that side of the equation, which is often kind of a mystery um, even to very experienced fund managers. Um, so I got to sit in that seat and then I also, on the other side, you know as a scout for Sequoia, and was seeing, you know, how scouting works, which scout investing, basically is when a bigger fund, says, “Hey. You know, we know all these smart, brilliant people in our networks who aren’t personally liquid yet, they can’t actually angel invest, or, or, they can’t angel invest, why don’t we fund their angel investing, you know, they’ll find us amazing deals and that we might end up wanting to put money into as well, and then we’ll split the proceeds.” And so, that’s scout investing. I was a scout at Sequoia, you know, my company had run out of money. I was winding it down. Kind of thinking about what I wanted to do next and I was really bothered that, you know, I was scout investing, so I’d call my female founder friends and, ’cause they’re, you know, my closest friends and I would say, “Hey. You know, I’m angel investing now, I’m scout investing, um, you know, can you, ah, you know, send me deal flow, right. What, what are you investing in?” And these are brilliant women, many of whom you’re friends with as well, who’ve been in this industry for a long time. They’re, they’re, you know, super smart. They’ve had success, some success, but they all said, oh, we don’t angel invest. I’m like why? They’re like not personally liquid, right? Because they’re raising so much less money at lower valuations, it’s harder to take money off the table, they’re less likely, you know to be getting hired into these big tech companies to begin with and getting those big paydays. They’re less likely to be made advisors at companies so that then they’re exit that they’re getting some of that free cash flow, that funds most of the angel investing in Silicon Valley. Um, so they weren’t really angel investing. And I was like, okay, that makes sense, but then why aren’t you scout investing? And all of them looked at me and said, what’s a scout. And so I started doing some digging and I found out that, you know, there are about fiveish firms at any given time that have scout programs in Silicon Valley and all of them have, by far, predominantly men, and they’re also relatively, you know, pretty undiverse, right. So I was shocked to hear this. I shouldn’t be shocked but sometimes, you know we still get shocked by the things that are probably obvious at this point.
Laurie Segall: Right. Right.
Sarah Kunst: And so, I was really bothered that, that I knew all these amazing, brilliant women who were insanely well-connected and, you know, they, they weren’t able to angel invest. And so, my thought, what I said, was you know, why not give them the opportunity to angel invest, why not give them money? And I was thinking about joining larger funds and even post #metoo, I wasn’t, wildly impressed what I was seeing at the bigger funds in terms of their, their commitments to diversity, how they were treating diverse audiences, all of that, so, you know, I decided to launch my own fund, and, you know, we invest in anyone. I invest in anyone. My scouts invest in anyone, but my scouts, are an amazing group of women who are female founders, they’ve raised between 5 and 50 million themselves. They have, they’re backed by top funds. They co-invest with top funds. You know, and, and it’s working. The two best performing um, investments in our fund right now, you know, one is two female founders, one of whom is a women of color, and the other, is u you know, two male founders, but they are you know, they’re both immigrants and, and, and one is a man of color. And so, it works, right? And we didn’t do those deals because of that, we did those deals ’cause they’re great deals. And we have top tier investors who followed us into both of those deals and they’re, you know, they’re doing incredibly well because these people, like the talent is out there and it doesn’t need training, it is ready, it just needs capital. And it’s awesome to be a part of doing that.
Laurie Segall: Yeah and you, I think, as, when all of this happened with coronavirus, you put out a program for folks who were laid off um, ah, you know, can you tell us a little bit about that? I feel like that could be a good resource for folks.
Sarah Kunst: Yeah. So, so, that was something that we put together very quickly. And, you know, investors generally say, actually, the last business trip I took before, before COVID really shut things down, was to New York. So I was in New York in early March, the first week of March and I was on a panel, an investor panel, talking about how, you know, someone said, ah, you know, what about downturns? And I said I’m a pre seed investor, right? Historically, downturns are a great time to start a company, because talent is cheaper, the opportunity costs of starting a company is cheaper, even ad rates, right? On Facebook and Instagram, as we’ve seen during coronavirus, are cheaper, because there’s less capital, there’s less competition. And so, you know, Uber, AirBnB, all of these companies, right? If AirBnB, if those guys, had had well paying jobs in that moment, AirBnB would never exist because it never would have occurred to them to rent out their beds, right? So, so we know this to be true, but now this downturn hit and hit incredibly suddenly and incredibly hard, and within two weeks, 30000 plus tech workers had been laid off, disproportionately female, disporporately people of color, and what we were seeing is that all these investors were saying, you know, time to build, go build stuff, this is a great time to start a company, but they weren’t giving them any instruction on how to do it or any resources or any help. And so, my thought was, you know, I know. I’ve started companies. I know how to do that, I’m a pre seed investor. I work with founders at the earliest stages, I, I write checks before there’s anything beyond a person I believe in who has an idea. So I said, well why not just do that? And so we launched a program called Chrysalis, because, you know, when the caterpillar thinks its life is over, it turns into a butterfly. Um, and, and so, we launched this program with a really simple mandate, which was, you know, we put up an application page and TechCrunch, you know, wrote about it. And we, we reached out to some people, some amazing people we knew who had been laid off and we started to get hundreds and hundreds of applications, right? And so we launched the program, it’s a six week program and they’re people who have been laid off. And they are people who are brilliant. They come out of top tech companies, you know, we have physics PhD’s we have CXO’s of publicly traded companies, and everything inbetween, an incredibly diverse group of people and they’re building, right? They all came together and they started getting to know each other, trading company ideas, shut, trading company ideas, and, you know, from there, they were able to say, okay, great, you know, let’s go out and, and start working on stuff, and so, we’re, we’re in week four and we have about 15 companies that people are working on now. And, and they’re, they’re pretty viable, right? They’re good ideas. They’re incredibly talented founders with great experience, and they’re building and they’re working. And you know, we’re really bullish that this is gonna result in some real companies, from people two months ago, if you told them hey, you’re gonna be launching a company, you know, before, before fourth of July, they would have said, what are you talking about?
Laurie Segall: Wow. And also so appropriate that it’s like seven o’clock here in New York and that like, people are cheering outside for the healthcare workers, so like as you’re talking about that, people are cheering.
Sarah Kunst: Right, Yes.
Laurie Segall: I feel like we’ve had, it’s been a range of emotions going.
Sarah Kunst: What range, what a roller coaster.
Laurie Segall: We’ve had the sirens, we’ve had people cheering. Um, well, you know, to wrap up with love, you know, what about this is a, is personal to you? I mean, all of it is personal to you.
Sarah Kunst: Yes. I’d rather not, I’d rather not die because people are racist, so it’s very personal, yes. Um, and and, and, and like, I laugh, but it’s also true, and it’s insane that, that you have to say that, right? So, so of course it’s personal, but to me, you know, the thing that I think about all the time is like, I, you know, I, I’m in my 30’s, like I wanna have kids someday and like, I can’t, like, I hope that the world has changed by the time my kids are old enough to have questions about this. But I certainly can’t, you know, with any moral authority, right, bring kids into the world and then have to tell them when they ask why is the world like this? I can’t say I don’t know, and I didn’t do anything to change it, right? And, I see, you know, ah, so many of my friends because of my age, right, are, are, having babies and they’re, they’re really thinking about that. They’re saying, like I’m gonna raise this human in this world and it, it can’t keep looking like this, right? It can’t keep looking like this for women, for people of color, for LGBTQ people, like, we can’t, you know, for immigrants, it can’t keep looking like this and I think that’s really an amazing kind of north star. Um, that if we focus on that, and if we say am I comfortable right, with the fact that in 25-30 years, I might be having a, a, daughter, right, who’s a black women who’s graduated college and is headed off to work in Silicon Valley and if she calls me and says, Hey mom, you know I’m I’m getting sexually harassed. Hey people are being, you know, racist, I can’t say oh yeah, sorry. That’s just how it is, because it doesn’t need to be how it is.
First Contact is a production of Dot Dot Dot Media, executive produced by Laurie Segall and Derek Dodge. This episode was produced and edited by Sabine Jansen and Jack Regan. The original theme music is by Xander Singh.
First Contact with Laurie Segall is a production of Dot Dot Dot Media and iHeart Radio.