ENTREPRENEUR SPECIAL.... APP AND DOWN

ENTREPRENEUR .. APP AND DOWN





What Indian startups should learn from the ouster of Uber's Travis Kalanick

Indian entrepreneurs still worship Silicon Valley's idols and aspire to be like them.

The downfall of Uber cofounder Travis Ka lanick should teach them that they need better role models. They need to stop look ing up to the spoilt brats that lead some of the Valley's most hyped companies and the investors that fund their misbehaviour.

Kalanick's ouster from Uber is literally a watershed for Silicon Valley, something that is shaking up its venture capitalists and entrepreneurs. For too long, its elite has gotten away with sexism, ageism and lapses in ethics. Its cult of the entrepreneur idolised arrogant male founders who plun dered money and sank companies; the more money they raised and lost, the higher the valuations their companies received and the more respect they gained. Corporate governance and so cial responsibility were treated as for eign concepts.

Uber is not the worst company in the tech industry; it was just the most visible and the one that got caught. Its investors have been humiliated for having their heads in the sand. This is because it has long been clear that Uber needs man agement that is more responsible.

It started in 2013, when complaints about male drivers assaulting female passengers met with denials of responsibility by the company. Then followed the sexist “boober“ comment by Kalanick; ads in France that pitched attractive female drivers; suggestions by an Uber executive that he would dig up dirt on a journalist; and then the rape of a woman passenger in New Delhi partly caused by a lax screening of drivers.

Through all of this, Uber investors supported the company and ignored the ethical lapses. All that seemed to matter was that valuations were rising and business was expanding. When it was revealed that an Uber executive had secured a copy of the medical report of the Delhi rape victim and shared it with Kalanick and they both wanted to discredit her, they should have been fired.

Yet things only reached a boiling point when allegations by a woman employee about rampant sexism and sexual assault at Uber headquarters went viral. And when a board member illustrated the root of the problem by making a sexist remark at a meeting about eliminating sexism. The board was finally compelled to do something it should have done years ago: force Kalanick out and clean up its own act.

To be fair, there is outrage about this in Silicon Valley. And there are many technology companies that are, in this regard, exemplary, including Salesforce, Microsoft and Facebook. They are going to extremes to correct problems that they found to exist in their ranks. I know from discussions with Satya Nadella how hard he has been working towards diversity.

India's Boys Clubs

The downfall of Kalanick presents valuable lessons for Indian entrepreneurs as well as those in Silicon Valley. With the help of Arianna Huffington, Uber is working on reforming itself. And if Uber can do it, so can the US and Indian Boys Clubs.

To begin with, the people who fund the offenders need to be held accountable and boards need to be made diverse.

The Diana Project, at Babson College, documented that, as of 2014, 85% of all US venture capital­funded businesses had no women on the executive team, and only 2.7% had a woman CEO. The number of women partners in US venture-capital firms had also declined to 6% from 10% in 1999.

India is no better. Even with The Companies Act of 2013 and guidelines issued by Securities and Exchange Board of India that made it mandatory for listed companies to have at least one woman on their boards, only 13.7% on public company boards are women. Private companies are much worse.

And then there is the problem of age discrimination.

In most industries in the US, discriminating on the basis of gender, race or age would be considered illegal. Yet in the tech industry, VCs brag about their “pattern recognition“ capabilities. They say they can recognise a successful entrepreneur when they see one. The pattern always resembles Mark Zuckerberg, Bill Gates, Jeff Bezos, or them: a white nerdy male. Women, blacks and Latinos need not apply. VCs openly admit that they only fund young entrepreneurs; they claim that older people can't innovate.

The money that VCs invest is not their own. It is raised from pension funds, universities and state governments. VC firms must be required to pro vide public disclosures about the diversity of the companies they invest in -including the gender and age of the executives.

They must have a diverse set of investment part ners, without sugar-coat ing the numbers using in flated titles for junior as sociates.

And then all tech companies in India and the US must take heed of the report that was put to gether by former US attorney general Eric Holder for Uber. There are obvious procedures to employ in making diversity a priority: such things as blinded resume reviews; interviewing at least one woman and one minority candidate for each open position; limiting alcohol at work events and in the office; and banning employee­ manager relationships.

There are great role models in India who have built great businesses. And there is a culture of spiritualism, respect and giving back. Corporate social responsibility may be a foreign concept to Silicon Valley, but is ingrained in Indian business. These are the people that Indian entrepreneurs should look up to and the values they must imbibe.

Vivek Wadhwa