How to Bake Diversity Into Tech Startups

Weekly Article
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April 4, 2019

Technology companies have demonstrated their potential to generate wealth at city-disrupting scale. Amazon’s HQ2 selection process—and its subsequent withdrawal from its promised expansion to New York—underscored both the appeal of tech-fueled economic development and the backlash against how unequally its benefits tend to accrue.

This push-pull has been particularly true in the San Francisco Bay Area, where the boundaries of Silicon Valley continue to blur and expand. Quickly gentrifying Oakland has been an epicenter of debate on the value of tech investment. In 2017, for instance, Uber pulled out of its plans to relocate there; now Square is moving in instead. And it’s doing so with promises from city officials—who are hoping to avert the kind of community pushback elicited by the Uber deal—that this new tenant will be aligned with residents’ interests and values.

Lili Gangas, a 2018 New America CA Fellow and Chief Technology Community Officer at the Kapor Center, sees potential in tech’s new interest in Oakland. Her team is experimenting with ways to build a regional ecosystem that supports inclusive companies that can build wealth for communities of color instead of displacing them. I spoke with Gangas just after she announced the Tech Done Right Challenge, a $1 million initiative to address and learn from tech equity gaps in communities across the country. We talked about where past efforts have fallen short, the key elements of inclusive tech ecosystems, and the power of startups that have diversity baked into their DNA.

Especially in the San Francisco Bay Area, displacement is a big piece of the tech story—when new tech jobs come into a community and price out people who’ve lived there. It’s something I think about and worry about a lot. But you’ve been focusing on leveraging the economic potential of tech companies to actually help longtime Oaklanders, in particular, thrive. Can you share a specific story of one way you’ve seen that happen?

Within the past five years in Oakland, I haven’t seen a tech company do it right. I think that there was potential when Uber was coming in. But what we saw was that the community’s understanding of how a tech company works and the tech company’s understanding of what the community wants were two very different things. With the Uber case, there were lots of unrealistic expectations on both ends, but there was also a lack of transparency. And in the end, it was too much—it didn’t work. So it’s hard to think of a recent, positive example. There are probably smaller wins that aren’t as public, but there’s nothing of the size of the Uber situation, which is exactly why I think that Square’s coming is an opportunity. It’s the biggest company coming to Oakland—which is rapidly growing—and with the right collaboration, it could be the one to do it right.

Are you engaging with local community leaders so that it’s not just up to the company?

Definitely. Many members of the local community, in particular, learned a lot from the Uber experience about working together. Afterward, there was a lot of, I didn’t know X-Y-Z organization, and I didn’t know that you were also doing this work, let’s come together. And so there have been a lot of pockets of collaboration created since then. Tech Equity Collaborative is the one that will work with Square to go on community listening tours across Oakland. They’ll include business areas, but they'll also include educational organizations, nonprofits, and everyday people through a variety of partnerships. In this way, Square is much more aligned with the ethos of what Oakland stands for. We’re also looking for the whole process to be as transparent as possible.

Have you learned from efforts elsewhere for greater tech inclusion?

Yes. My work at the Kapor Center has focused largely on Oakland and the East Bay. But thanks to our research, which does national landscape studies, I’ve also been learning from other cities, and I've been traveling to and connecting with different ecosystem builders, you could say. Yesterday, for instance, we were on the phone with Los Angeles, Baltimore, and Austin learning about what they’re working on, specifically what barriers we have in common with getting more diverse people in tech. Gentrification is an issue in all of these cities—folks aren’t able to get the higher-paying jobs they need, don’t have access to education, and end up leaving—and it’s important that we see that it’s not unique to Oakland. There’s lots of room to learn from other cities.

That’s why this year we launched a million-dollar “Tech Done Right” challenge—to actually help us learn from other cities, and to help other cities learn from us. Usually, you’d have to get a nonprofit organization that does the direct service—usually in some kind of training capacity—but what we’re trying to do is different: We’re looking for opportunities to incentivize the nonprofit, public, and private sectors to come together and, with a little bit of funding, test something out and see what they might be missing in their own work.

It’s easy for talk about ecosystem-building to get abstract, but it seems like you’re trying to make it specific to Oakland and make it actionable. Can you talk about the different players in your technology ecosystems and the roles they need to play to create an inclusive economy?

There are several key players. We definitely need the city. We need the public sector so that the ecosystem-building is accessible and scalable in the long run, and also so that any policies created are also supported—you don’t want to have to reinvent the wheel every time, right? In terms of education and training, we have a lot of different colleges, but they’re not too engaged with this work, especially when you look at the learning opportunities being offered. Most of the jobs in tech aren’t related to software engineering, but we have that perception. That’s a myth that we’re trying to dispel in our ecosystem-building by showing what a startup really looks like.

The other ecosystem-building player is the private sector. And within the private sector, you have your startups, your mid-sized companies, and then your larger Fortune 500 companies. They all need to have a place here. A challenge that we’re seeing here in Oakland is that we have to have a twofold strategy: continue to attract companies, but also foster and grow local companies. We have people who have two- or three-hour commutes just to go to the South Bay for jobs. But then Oakland isn’t able to keep those revenues here. We have a city government that, from a revenue perspective, is missing out on a lot of this growth. And so the question is how to foster the local economy and also foster mid-sized and starter startups.

And then there are funders, like foundations. And you also need your investors. What we’re starting to see, at least in Oakland, is more of a middle stage—some entrepreneurs don’t necessarily want to be a VC-backed company because they want to be more independently sustainable. There are more and more sourcing opportunities where entrepreneurs can keep their equity and their ownership but can still access some of the capital needed for them to grow and scale. All of these players are key components of these ecosystems.

Are you hopeful that we’ll achieve full race and gender inclusion in technology?

I am hopeful, especially if we see a culture shift that would keep more people at these companies. If larger companies, in particular, want to have full racial and gender inclusion, they have to be about it, and their leadership boards need to reflect it. Employees need to have the possibility for promotion. There needs to be a culture that’s flexible to people’s different working styles, not just sticking to what’s done by leadership or what’s been done in the past. But I’m hopeful that it’s possible to do this—to create a more positive and respectful work environment for everyone.

This interview has been edited for length and clarity.