Really, Silicon Valley?

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Some Unsexy Truths About Silicon Valley

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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Over the next few weeks, Silicon Valley will be engrossed in a trial involving Reddit's chief executive, Ellen Pao, and the powerhouse venture capital firm that once employed her, Kleiner Perkins. It's the venture world’s version of the O.J. Simpson car chase -- a riveting, slow-moving wreck that’s sure to end poorly for someone.

Pao made waves in the low-key venture world in 2012 when she accused Kleiner of gender discrimination and retaliation for complaints about sexual harassment at the firm. Kleiner has denied her allegations.

One thing that fascinates me about the trial is that sex is a huge factor in the case -- details about affairs and colleagues showing up uninvited at hotel room doors in their bathrobes have dominated coverage of the hearing -- but sexual harassment per se isn’t the central question at hand.

Pao and Kleiner both say that she had an affair with one of her colleagues, Ajit Nazre. (Pao claims that he continued to harass her after she ended the relationship in 2006.) Both parties agree that Nazre was promoted into management positions during his tenure at the firm. And neither has denied that he was a jerk to at least one other female colleague as he rose through Kleiner's ranks.

A former Kleiner general partner, Trae Vassallo, testified Tuesday that Nazre sexually harassed her in 2009 and that when she told a senior partner about the incident he responded by saying that she “should be flattered.”

Vassallo’s complaints were part of an investigation of Nazre that Kleiner launched just before Nazre left the firm in 2012. Nazre had worked at the firm for almost a decade. (His departure hadn’t been previously linked to the investigation or to any sexual harassment allegations. Kleiner said this week in court that they terminated him after the investigation. He’s not a defendant in the Pao case.)

Titillation aside, here’s the central question in the case: Why did Pao fail to thrive at Kleiner? She majored in electrical engineering at Princeton, earned graduate degrees in law and business from Harvard University, and worked at the law firm Cravath Swaine & Moore before joining BEA Systems, an enterprise software firm. Her then boss at BEA, Adam Bosworth, praised her work in a Fortune feature that I co-wrote in 2012. I thought Pao clearly was smart, hardworking and ambitious.

Pao says that she didn’t succeed at Kleiner because she was fighting a boy’s club that condoned Nazre’s behavior and systematically blocked women from the best opportunities. Kleiner countered with a brief saying that Pao didn’t have the skills to navigate a job that depended on her ability to build trust and work as part of a team.

Here’s another way to look at the problem. Kleiner believes that Pao’s affair and her later dealings with an employee who received promotions while allegedly harassing women had no bearing on her ability to make good decisions, build trust and work as a good teammate. Pao says that these factors are part of why she didn’t succeed.

Pao’s case is part of a larger problem that the tech industry has failed to resolve: Why aren't more women in positions of power and authority in one of the U.S.'s most dynamic and promising industries?

Even when women embrace the science and math fields that are thought of as bedrocks for a successful tech career, they can end up stifled. The Los Angeles Times recently reported that workplace hostility is pushing women to leave the industry. Hillary Clinton recently took tech companies to task for retrograde ideas about having women and power in Silicon Valley.

These issues will sound familiar to anyone who has talked to women who worked on Wall Street in the 1970s, 1980s and early 1990s. Over the years I’ve spoken with women who worked at Citigroup, Morgan Stanley, Bear Stearns, Lehman Brothers and a handful of hedge funds during decades when men overtly ruled the banking world. They each have their own Nazre-like story, and they all describe the firms where they worked as somewhere on the scale of clubby-to-downright-hostile toward women. Not all men, of course, were actively harassing their female colleagues. But few of them, even “the good guys,” actively discouraged it.

In that era, women who succeeded on Wall Street were the ones who could perform, even in a hostile work environment. An ability to play in the boys’ sandbox was a skill, and women would fail if they were thin-skinned or maintained expectations that things would be fair. Some of them also probably failed because they weren’t capable of dealing with clients and endless spreadsheets. Not everyone can succeed in every profession. But an inability to overlook sexism in its myriad forms meant, on some level, that a woman wouldn’t succeed on the Street.

As banks morphed from private partnerships to publicly traded companies, as lawsuits rolled in and minority groups banned together, Wall Street was forced to create and abide by rules that leveled the playing field. Women and people of color were no longer expected to put up with arbitrary barriers or harassment if they were ambitious and capable.

While the Los Angeles Times story and Clinton's remarks highlight a general consensus that tech is a hostile industry for women and that only the toughest women need apply, those issues have been overshadowed in the Pao-Kleiner affair by the sexual intrigue.

Kleiner is going to fight hard to prove the Pao was a disastrously bad employee who would never have cut it as an investor. They may very well succeed. Much has already been made of the fact that Kleiner fought (and failed) to get job performance records from other employers, including Reddit. Investing requires qualities that are harder to measure than intelligence or hard work, like risk tolerance and judgment. Lots of smart people are bad at putting other people’s money on the line, a skill that Pao hadn’t honed before joining a VC firm.

But the underlying theme of Pao’s complaint is that the ability and toughness that was truly required of her involved having to navigate sexism at Kleiner. The complaint notes that being able to overcome that issue wasn't just an advantage at Kleiner, but one of the skills that made someone a good employee.

For example, both Pao and Kleiner agree that her supervisor, Randy Komisar, gave her a book by Leonard Cohen called “Book of Longing.” It contains erotic poetry and nude drawings, along with the usual melancholic fare that fans will recognize from his music. Pao didn't ask for the book and took offense. Should she have lightened up, thrown the book on a shelf and kept working? Does the fact that she got mad mean that she didn’t have what she needed to succeed at Kleiner? If your gauge is the antiquated logic of 1980s Wall Street, that’s exactly what it means.

I love Leonard Cohen, but in the companies where I’ve worked no human resources professional would have found it appropriate for a boss to give me a copy of “Book of Longing.” The very idea is laughable. But in a court filing Kleiner defends Komisar’s gift. He thought the book was perfectly appropriate for Pao. His wife even chose it!

If the allegations in Pao’s complaint are true, it’s clear that she didn’t think her job profile should have included a duty to just brush off Nazre's advances or roll with Komisar's weird and inappropriate gifts. She thinks she didn’t thrive because she lacked a skill that she didn’t think she should have to have - a willingness to toughen up and get the job done despite the harassment that enveloped her.

If so, this isn't a case about sexual intrigue. It's a case about whether tech’s biggest investors -- who sit on the governing boards of many of the country’s most prominent tech companies -- can follow codes of conduct that are different from those that govern the rest of Corporate America.

(Clarifies circumstances of Ajit Nazre's departure from Kleiner Perkins in sixth paragraph.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Timothy L. O'Brien at tobrien46@bloomberg.net