How Melinda Gates Is Tackling Tech's Gender Problem

we'd have to get these for the girls. The Apple two was an early personal computer, is the first of its kind intended for ordinary consumers instead of business professionals or hobbyists, and it was pretty expensive. The cheapest one retailed for about dollars back then, which is about five thousand dollars in today's dollars, which meant that as a teenager,

Melinda got a head start tinkering with technology. And so she got several of the girls who were in math class and asked us if we wanted to sign up for her new computer class she was going to start, and that's how I got hooked. Melinda went on to major in computer science at Duke University, and back then that actually wasn't such an unusual choice for women. In the early eighties, women made up nearly forty of computer

science graduates. But as Melinda entered the tech industry, rose through the ranks and then focused her attention on philanthropy, she watched the world change. Today, the share of female computer science grads is down to less than and tech has become a hostile industry for many women. Hi em Aiito and I'm Emily Chang, and this week Undecrypted, we're asking who has the power to make Silicon Valley a

better place for women? Was a year of reckoning for male dominated Silicon Valley, particularly for venture capitalists who have an outside i share of power in the industry. With their money, these investors decide which startups thrive in which die. Several of them last year were accused of abusing their positions of power to pursue female entrepreneurs. As I was writing my new book ro Topia, breaking up the Boys Club of Silicon Valley, I looked and looked and looked

for people who could change the status quo. And I started thinking about one group that pulled a lot of power over those venture capitalists, the people who give venture capitalists the money to invest in startups in the first place. Blinda Gates is just one of those investors funding venture capital firms with the aim of getting more women into technology. I recently sat down with Melinda for my long form interview show Bloomberg Studio one point out to talk about

all of this today. You'll be hearing parts of that conversation stay with us. After Melinda finished college, she got an MBA from Duke's Business School. She joined a software company called Microsoft. It was an exciting time to be in the tech industry. The year before Microsoft had gone public, and two years before that, on January four, Apple Computer will introduce Macintosh and you'll see why nine Apple had started selling its Macintosh computer at Microsoft. Melinda's computer signs

background helped her advance quickly. Soon she was managing teams of programmers and developing products like publisher in Carter and Expedia. But in the broader industry, Melinda could feel how alone she was as a woman in tech. I go present and you could tell like I would show up at a user group that is nine Mail, and they'd be like this woman's to present to us. What does she what could she possibly know about this product? Computer science

wasn't always the boys club that it is now. In the NI and fifties, women played vital roles programming computers for NASA and the military. But actually a tech became more male dominated over the last few decades. That's the opposite of what's happened in other areas like lawn medicine, which have attracted more and more women. You lived this, what went wrong? Like? How did that happen? It looks like when the gaming industry turned, when the prob the

games became more male games, more shoot him up. If you think about the earlier games that I played, pac Man, the adventure games, the Atari games, Breakout, they were pretty gender neutral. But when you got in these very combative games that were very male centered, it's and more and more men got into the industry, then it's two women. It's just started to feel unwelcoming. Family and your reporting for bro Topia, you found so causes of your own.

In the sixties and seventies, as the computer industry was exploding in size, tech companies were desperate for new talent, so they started doing aptitude tests and personality tests to identify good programmers, and a software company called STC hired two psychologists to identify people who would be good at this job, and they decided that good programmers quote don't like people. Well, if you look for people who don't like people, the research tells us, you'll hire far more

men than women. And it's more money came into the tech industry. Working in tech became a higher profile job. Absolutely, the jobs became more professional, higher status, so men wanted those jobs and women essentially got pushed and profiled out. Melinda married Microsoft co founder and then CEO Bill Gates. She left Microsoft in to focus on her family when their first child was born in two thousand, she co

founded the Bill and Melinda Gates Foundation. For many years, Melinda's work with the foundation took her to remote parts of the world, often in communities living in deep poverty. The time she spent in the field far from home, was part of what made her realize things still needed to improve for women right here in the United States. Well, I've been lucky enough now to travel for over seventeen years in philanthropy, and I traveled all over the world.

I'm in the developing world a lot. I'm in Asia, I'm in Africa, and who shaped my views were the women I talked to on the ground and what I was hearing in their conversations at the local village level, sitting in the dirt on a mat was the same thing I was hearing when I would hear the news in the United States about CEO under representation on boards, right of women on boards, or women's CEO s. So in Melinda to I did, she would focus on making

Silicon Valley a better place for women. In an interview with Wired magazine, she said not having more women in tech was quote not good for society. It was around this time that I too was getting interested in this question of gender in Silicon Valley. And this was at a time when not a lot of people were talking about this. Right. I made it a chore at a certain point to ask investors and ask CEOs when they came on the show, what are you doing about this?

What are you doing to fund women? What are you doing to hire women? And I wasn't liking the answers that I was getting, but I knew that this was a problem. Of course, a year later came the Reckoning first former Uber engineer Susan Fowler wrote a blog post that exposed a toxic culture of sexism and sexual harassment at the company. Uber promises an urgent investigation into sexual

harassment claims made in a former employees blog post. She claims upper management tried to sweep her comple lanked under the rug, calling her supervisor a high performer. And then female startup founders came forward with their stories about how they got harassed by a number of male venture capital investors. Venture capitalists are the investors who give money to startups, which means they're the ones deciding which companies get more

funding to expand more chances to succeed. Because of that, these investors are incredibly powerful people in Silicon Valley, this group consists mostly of men. Only eight percent of investors are women. After the torrent of news stories, many of the men accused of misconduct got fired or stepped down from their jobs. But stories of harassment are only one symptom of a much bigger problem, which is the severe gender imbalance in tech. So how do you fix that?

Melinda Gates search for a solution that's coming up after this So twenty seventeen minute Clear that the tech industry needs to get better at creating opportunities for women. But this is a problem the industry has been aware of for some time, and solutions have been hard to find. That's when I started looking into one corner of the investing world that we don't hear from very often. There's a group of people called limited partners, and it's their

money that venture capitalists are investing. As I did more reporting for my book, I realized there are a lot of really powerful women in this community of behind the scenes investors, Women like Lauren A. Messer, who is chief investment officer of the Metropolitan Museum of Arts three point one billion dollar investment portfolio. The io p A that's the International Limited Partners Association told us that roughly one

third of their members are women. So I wanted to understand if these female LPs, these people who invest in the investors, were concerned about diversity in Silicon Valley. I checked in with Joel Caden, who spent eighteen years in investment banking before co founding her own investment company, Accolade Partners. Your contribution to the book, I really appreciate it. Oh, well, I'm excited for you. Joelts for manages about eight hundred million dollars and the majority of her investments are in

the tech industry. I thought that perhaps these powerful investors like Joel could use their vast financial might to put pressure on tech investors to change. Maybe they could refuse to invest with firms that don't have any female investing partners, or maybe allegations of sexual harassment and the existence of nondisclosure agreements, which have helped keep accusations covered up, would

become a bigger part of their due diligence process. What's more important whether there's a woman on board or what the returns are. Um, I don't think they should be mutually exclusive. So I'm I'm rooting for women to get to that metric that everybody knows. Look, our business is about making money. That's what we get paid to do. So at the end of the day, my job is to make as much money as possible for the wonderful institutions that have, you know, hired us to invest. So

that's what gets us up in the morning. Silicon Valley knows it has a gender imbalanced and Joel told me she's having conversations with top venture capitalists encouraging them to look for more women they can hire. She said, it will happen. It just requires a lot of hard work, and it will take some time because as much as these investors would like to see change, they're worried about making changes that could jeopardize returns. But behind the scenes,

Melinda was thinking about doing more. She was in talks with the venture capital firm run by two women. When Melinda announced she wanted to focus on helping more women get into the tech industry. She had created a private office called Pivotal Ventures. This will be different from the Bill and Melinda Gates Foundation, which is a philanthropic project. With Pivotal Ventures, Melinda would be making actual investments with the goal of making money. I mean, the first goal

is to make money. I'm not putting my money out as a social impact. I'm putting it out to make money. But Melinda also believed that smart investments can help drive change. And I kept thinking there would be a woman to speak out or women who would speak out more. And there are women speaking out, But I hadn't honestly put together my background of realizing well, I was in that space. I've always cared about computer and tech um. But wow,

maybe I should use my voice behind this. So when did you first believe that limited partners or the investors that fund venture capital firms have a role to play here. Well, I started to look at what the barriers were in the tech industry for women and people of color. We don't have enough women with patents, we don't have enough women founder c e O s who are getting funding. So basically, less than two percent of VC funds go to women, less than one percent go to women of color.

And so in this innovation Asian space, I said to myself, what's the best way to use capital to move things for women? And that's when I started to say, Okay, I actually need to move some money into the venture capital space. That's what led Melinda to the venture capital firm Aspect Ventures, co founded by Teresa Go and Jennifer Fonstad. Yes, so we met Melinda actually through a mutual friend. That's Jennifer Fonstad, a straight shooting investor whose career I've been

following for many years. I met them, I think it was my first time was about two and a half years ago, and they're just they're savvy and smart investors, right Jennifer and Theresa both distinguished themselves as venture investors. Jennifer spent seventeen years at a firm called d f J, and Teresa was a partner at another top firm, Excel Ventures, for fifteen years before they left to start their own fund. Now, four years after its founding, Aspect Ventures has one of

the most diverse investing teams in Silicon Valley. I think about it more along the lines of how it drives better business outcomes, better performance, and better decisions. Where we are building to approach a point where we can have critical mass. We're having twenty to thirty of an organization which has a different perspective, diversity of voice, different diversity of experience. In the male dominated world of startup investing,

this is a pretty new approach. And when you have that critical mass, you build in an entirely different culture around how you incorporate those voices, and I think that's what will drive change for us over the next couple decades. This idea that new voices will help identify new opportunities is a concept Melinda also believes in. Some LPs have said to me, all we care about is returns. We care about diversity, but we really care about how much money that we make. What do you have to say

to those people? I have to say, you're investing in what you know. Women are of consumer dollars spent. Women control sevent financial decisions in the house. So you're missing an opportunity because you just don't see it. So you're leaving money on the table. You're not in the deal flow. So good luck ten years from now. I think what's really critical about what Melenda is doing is that she is She really understands and appreciates how diversity leads to

better performance. In January, they announced Melinda was investing in Jennifer and Teresa's fund. It's encouraging to hear stories like this, but still, Melenda is just one investor, and Aspect Ventures is just one venture capital firm. There's a long way to go before these ideas filter out across the whole industry, and it's important to remember Jennifer and Teresa are the rare example of two women who have already been in tech for a long time. People know who they are

and trust they can deliver good returns. That won't be true for every woman looking for someone to take a chance on her. How much of an impact can LPs have and should LPs have in galvanizing change, you know, because some of these funds don't necessarily have the returns yet you know that these investors would like to see. But someone has to give those people a chance. But we all care about making money, right, So how do

you balance all of those concerns. I think that you I think we definitely need LPs who start to make those investments. And there's gonna be some people who are already out on the forefront of that, and I think they not only need to make investments, they need to open their networks because if you look at a woman, she often doesn't have the same network into the deal flow, right, So broader change will ultimately require more people to take

some risks. Some of that pressure may come from behind the scenes investors like Melinda, but a lot of it will have to come from people within the tech industry deciding to make change as well. You know, all firms don't need to look and act the same. But you know, what is the burden on the rest of the industry to to make these changes that are you know, so necessary? I mean, I I just find it hard to believe that some of these firms can't find a qualified woman, right.

I think that's a bit of an excuse, to be honest, and um, so firms need to figure out, you know, are they really serious about this issue or the window dressing. And it's just like the early days when we used to start to talk about corporate boards, Oh, they need to have a woman. So you had some some boards that did it as a token, they would put a token woman on. But eventually there was public pressure that people started to realize, actually, companies are doing better when

they have a more diverse board. In March, hundreds of startup founders joined the Founders for Change movement, committing to consider the diversity of a venture capital firm before taking a check. For now, Jennifer and Theresa have closed their latest round of funding and are getting to work on deploying that money. They're looking for startups to invest in, and they're especially interested in cybersecurity, digital health, and future of work companies. As for Melinda, she's looking for more

investments too. She says Aspect Ventures is just the first of many bets she wants to make on women in tech. Do you think Silicon Valley can fix this, the problem of not having enough women at the table. I know Silicon Vallet can fix this. They just have to decide they want to to be honest. Venture Capitals behind the ball on this way behind and they need to catch up. And that's it for this week's Decrypted. Thanks for listening. We always want to know what you think of the show.

You can write to us at Decrypted at Bloomberg dot net and I'm on Twitter at Emily Chang TV and I'm at Akita seven. And please consider leaving us a rating and a review on Apple Podcasts or any of your favorite podcasts apps. It really helps us find new listeners. My book pro Topia, Breaking Up the Boys Club of

Silicon Valley is in bookstores and online now. And the full interview of Melinda Gates will air as an episode on my show Bloomberg Studio One point Out on Bloomberg Television May second at nine pm Pacific six thirty pm Eastern. It'll also be available in audio form on our own podcast called Studio one point Out. This episode was produced

by Pia Getkary Magnus Hendrickson, and Liz Smith. A special thanks to Candy Chang, Executive producer, of Studio one Point Oh, Kevin Hines, who edits the show, and our managing editor, Danielle Culperson. Francesca Leavie is head of Bloomberg Podcasts. We'll see you next week.