Ellen Pao talks Kleiner, the trial and her hopes for a tech reset - Axios

Ellen Pao talks Kleiner, the trial and her hopes for a tech reset

Photo Illustration: Lazaro Gamio / Axios

Ellen Pao was a relative unknown in Silicon Valley until May 2012, when she sued her employer, legendary venture capital firm Kleiner Perkins Caufield & Byers, for gender discrimination and retaliation. That complaint and the ensuing trial — which she lost — turned Pao into a household name and helped bring the issue of tech industry sexism out of the shadows.

Pao, now an investment partner with Kapor Capital and chief diversity and inclusion officer at the Kapor Center for Social Impact, has now written a book about her life, the trial and its aftermath. It's called Reset, and hits shelves next Tuesday (we'll publish a full review on Monday). She spoke to Axios about why she wrote the book, initial reactions to her complaint and her current thoughts about Kleiner Perkins.

The quick read:

  • She thinks the verdict might have been different today.
  • Pao feels many male reporters lacked empathy in their initial coverage of her complaint.
  • She doesn't regret serving as Reddit's interim CEO during the trial, but admits it was a distraction.
  • Pao continues to have a very dim view of Kleiner Perkins and its leaders, including John Doerr.
  • VC firms and corporate boards struggle to diversify because they rarely consider replacing existing partners or directors.
  • She hopes the book will give hope and spark action among those being discriminated against.

Did you always plan to write a book about the case?

I didn't think that far ahead during most of the time. But once I started getting deeper into the litigation process, it became clear to me that it was not a process for sharing experiences in a way that was going to be complete... It was hard to process it all again. I had a great ghostwriter and we had a great process, but I needed to get everything right in this book because it's the last one I'm going to write.

Before suing, did you weigh becoming a symbol for something bigger than yourself?

It wasn't part of the calculus at all. The initial press was just so negative. I did not see myself becoming a symbol at all. If anything it was pretty horrific. It was more about getting the truth out there than any expectation about what would happen to me. I spoke to some other women who had sued and they had very bad experiences, and you don't know any of their names.

Did men and women react differently to the initial complaint?

From a very general level, yes. You could see it in the reporting... Male reporters, for the most part, were skeptical of me and did not understand, had no empathy for my experiences. I think a lot of the women reporters had had similar experiences, many of them had been harassed. Many of them had been limited in their careers.

I also think there was more support from men in the public than I expected. I lot of men reached out and talked about the experiences their moms went through. One told me how his coworker told him it was happening to her and my suit helped him see it's much broader. People talked about their daughters, so there was more support, and I think people of color related to it because they'd had similar experiences. But definitely not as much from men as from women and more from people of color than from people who were white.

What part of your story didn't get enough attention at trial or in the media?

The performance reviews. It seemed to me very clear cut. They added people in a way that tanked my performance review and they had positive information that they hid. And that just seems so damning to me, but did not get as much, or clear, coverage as I would have expected.

Did you actively follow the trial coverage?

I didn't have time, so no. I was working at Reddit, trying to change the culture there. I would see the headlines on Twitter but I didn't have time to read anything.

Was running Reddit a distraction for you while the trial was ongoing?

It would have been better for the litigation if I'd been able to focus on it 100% of the time, but the work we did at Reddit during that time was really impactful. We got rid of revenge porn. We got rid of unauthorized nude pictures and every other major platform followed us shortly thereafter. It's hard to regret having chosen to do that at the same time, because then what would the Internet today look like? At the end of the day my work was at Reddit and that was my first priority.

What did the verdict turn on?

At the end of the day the people just didn't believe there was any bias in tech. And every potential juror who believes tech is a biased industry was kicked off the jury. So you have a bunch of people who didn't think there is bias in tech so they just didn't believe me.

Would it have been different if the trial was held today?

I hope so. I think the press and the public are more educated about all of the toxic behavior in tech. So I hope those jurors would have made a different decision because it would mean there has been a meaningful change in perception.

The only published book excerpt so far details a private plane conversation that touched on such things as pornography. You name Kleiner partner Ted Schlein as a participant, but leave Chegg CEO Dan Rosenweig anonymous. Why?

I don't know him that well. That was one of my very few experiences with him and there wasn't any context to it, so I didn't feel like outing him would make a difference to the story. If people really want to know it's in the trial coverage, but this was more about the systemic and repeated behavior at Kleiner than anything else.

There has been a lot of turnover at Kleiner Perkins since you left. Is it still the same firm?

I think the leader is still Ted.

John Doerr comes off particularly badly in the book.

People aspire to be inclusive. They aspire to be fair. In tech they aspire to be supportive of women. But they're not always there in their behaviors and their actions. And when you call out that difference, and when you show that gap exists, they get angry. So for a lot of people it's hard to change, hard to take down a system that works so well for you and when you don't know what you should replace it with it can be very limiting.

Do you feel John and Ted will be angry or self-reflective when they read your book?

They have not shown much self-reflection that I've seen. I'm not close to them, of course, but I'm not optimistic.

Was Kleiner Perkins the same or worse than other VC firms?

I hope that it was worse than most other firms because it was such a terrible experience. I think it was problematic because they brought in so many women who had there careers stagnate instead of accelerate. But you still see some firms that are all male or have just hired their first female investing partner and you know that those places are not great for women.

It seems hard for male-dominated venture firms to diversify, as much due to structure as desire.

If you look at the turnover at firms, they do end up firing people and forcing people to retire, so it's not as brittle as its made out to be... And you can step back. CEOs talk to me about needing more diversity on their boards. And I say to them: 'Well, then you need to tell them they need to bring in someone with a diverse background and replace themselves.' You're not going to add five more people to your board but you can replace some of the people who are on it today. It's not impossible. Same with venture capital firms.

My draft copy of Reset cites a positive Quora comment from Dave McClure after you were fired. Did that make the final version?

Of course. His bad behavior later doesn't change the fact that he did speak up for me.

What do you hope readers will take away from Reset?

I hope the biggest takeaway is we all need to act and we all need to help reset tech. What I hope to accomplish is helping the underrepresented, the people who are excluded – not just women, but people of color, women of color, people who are older, people who are immigrants – to understand what is happening to them so they don't spend 7.5 years in a job where they're never going to succeed. And I hope it also causes people who may be benefiting from the current tech system to take a look and adjust their actions and speak up for those who might not be doing so well. And to really think about what tech could be versus the path we are on today.


China fines social media services over banned content

Vincent Yu / AP

China's Cyberspace Administration said it has fined to the highest degree three social media services—Baidu's Tieba, Weibo, and Tencent's WeChat—for failing to censor banned content, according to CNBC. On Tuesday, it also appeared that Facebook-owned chat app WhatsApp was blocked, though some users report service has resumed.

Bigger picture: Chinese authorities said in January that they were planning to "clean up" online activities by March 2018. In June, a new cybersecurity law went into effect, though it's been criticized for not being clear enough as to how it will be implemented. China has also cracked down on VPNs (software that keeps online activity private and secure), forcing Apple to remove a number of them from its App Store in China, as well as certain cryptocurrency activities.


DOJ to file charges in college basketball corruption scandal

A Duke-North Carolina game at Madison Square Garden in March. Photo: Julie Jacobson / AP

The Justice Department will announce charges of fraud and corruption this afternoon against ten people in connection with a wide-ranging bribery scheme at some top college basketball programs, per the WSJ.

What's expected: The charges will be filed against coaches, managers, financial advisors, and some representatives of a major sportswear company. The investigation uncovered evidence that coaches from some schools had received kickbacks to steer their players toward receiving services from outside groups.

The coaches charged, according to NBC News' Tom Winter:

  • Tony Bland, USC, associate head coach
  • Lamont Evans, Oklahoma State, assistant coach
  • Chuck Person, Auburn, associate head coach
  • Emanuel Richardson, Arizona, assistant coach

What North Korea has labeled a declaration of war

North Korea's Foreign Minister Ri Yong Ho. Photo: Richard Drew/AP

On Monday, North Korea's Foreign Minister Ri Yong Ho said President Trump had declared war on North Korea when he tweeted they wouldn't "be around much longer" if Ho echoed "thoughts of Little Rocket Man."

Isaac Stone Fish, senior fellow at the Asia Society, laid out other instances North Korea interpreted as declaration of war:


The history of singing the national anthem before NFL games

Michael Perez / AP

Football season is now at the center of a heated political debate over whether or not players should be allowed to sit or kneel during the national anthem. Some agree with President Trump and find the move offensive, claiming it is disrespectful to those who serve in the U.S. military; others argue that the protest is a form of patriotism, and the U.S. guarantees the right of players to protest however they choose.

Why it matters: While patriotism should not be conflated only with the military, the history of playing the national anthem before sports games does have strong ties with honoring the armed forces.

Here's a timeline of how the national anthem became a sports tradition in the first place:

  • 1814: Francis Scott Key wrote the Star Spangled Banner, while watching the bombardment of Fort McHenry in Baltimore.
  • 1889: Secretary of the Navy Benjamin F. Tracy called for the song to be played whenever the American flag was raised.
  • 1916: President Woodrow Wilson signed an executive order declaring the "Star Spangled Banner" the American national anthem.
  • 1918: The song was played spontaneously during the seventh-inning stretch of game one of the World Series between the Cubs and Red Sox, while the country had been in World War I for a year and half. After this, the song was often played on holidays or special occasions in many baseball parks.
  • 1931: Congress passed an act officially confirming the "Star Spangled Banner" as the national anthem, and President Hebert Hoover signed it into law.
  • 1941-42: Playing the national anthem before the start of regular season baseball games became the standard. And with the U.S. in World War II now, the National Football League also included the playing of the anthem before games.
  • 1945: NFL commissioner Elmer Layden said, "The playing of the national anthem should be as much a part of every game as the kickoff. We must not drop it simply because the war is over. We should never forget what it stands for."
  • 2009: NFL players began standing on the field for the national anthem before the start of primetime games. Before this, players would stay in their locker rooms except during the Super Bowl and after 9/11.
  • 2015: Senators John McCain and Jeff Flake released a report revealing that the Department of Defense had spent $6.8 million of between 2012 and 2015 on what the senators called "paid patriotism" events before professional sports games, including American flag displays, honoring of military members, reenlistment ceremonies, etc. The DoD justified the money paid to 50 professional sports teams by calling it part of their recruiting strategy. However, many teams had these ceremonies without compensation from the military, and there was nothing found in the contracts that mandated that players stand during the anthem.

The states spending the most out-of-pocket on health care

Data: JPMorgan Chase Institute; Chart: Lazaro Gamio / Axios

Colorado's full of healthy hikers and mountain bikers, right? Well, it also has some of the highest out-of-pocket health care spending in the country. That's according to a report being released today by the JPMorgan Chase Institute, a new initiative that's using banking data to study spending trends and the financial pressures in people's lives.

Report details: The report looks at health care spending trends in 23 states where Chase has retail branches, and it found a lot of variation, even after controlling for age and income differences:

  • Highest average out-of-pocket spending: Colorado ($916), Utah ($906)
  • Lowest average: California ($596), Michigan ($601)
  • Highest average spending compared to income: Oklahoma (1.7%), Louisiana (1.7%)
  • Lowest average: New Jersey (1%), New York (1%)

Why it's happening: The report says it's likely due to differences in health care prices, insurance coverage, and how much people are using medical care — but demographics didn't matter.

Go deeper: Check out the report here, and more data visuals here.


Equifax CEO retires after security breach

Equifax headquarters in Atlanta, Photo: Mike Stewart / AP

Equifax chairman and CEO Richard Smith retired today after his company suffered a major security breach earlier this month that exposed personal financial information for approximately 143 million Americans.

The details: The information accessed in the three-month-long hack included customers' names, birth dates, addresses, social security numbers, and driver's license numbers. Close to 209,000 consumers' credit card information was accessed. Smith's exit follows two others. Equifax's chief information officer and chief security officer stepped down earlier this month.

From the company's statement: "The cybersecurity incident has affected millions of consumers, and I have been completely dedicated to making this right. At this critical juncture, I believe it is in the best interests of the company to have new leadership to move the company forward," Smith said

What's next: President of Equifax's Asia-Pacific division, Paulino do Rego Barros, Jr., will serve as interim CEO. Board member Mark Feidler has been appointed non-executive chairman.


Merkel's drift left allowed the far-right to grow

Angela Merkel in Berlin on Monday. Photo: Michael Kappeler / dpa via AP

Angela Merkel's leftward drift over her years in office, especially on issues like the European Union and migration, has made her more palatable to left-leaning voters, but it has created an opportunity for the far-right to proliferate, per the NYT.

Why it matters: Last weekend's election saw a strong showing for Alternative for Germany (AfD), the far-right populist party, that attracted voters from Merkel's right-leaning base and mobilized those who usually didn't vote via non-traditional campaigning. It illustrates how the far-right can continue to prosper across Europe even without the flashpoint issues, like last year's migration crisis, at the forefront of the news cycle.


The rebirth of Quirky

Quirky once was one of the tech world's most-watched startups, raising around $200 million to build a platform whereby inventors could submit ideas that Quirky might then manufacture and distribute via major retail channels. Even more exciting was that other users who contributed valuable feedback could receive royalties. More than 150 products came to market.

But then, two years ago, the whole thing went bust, filing for bankruptcy and selling off its Wink home automation hub product to Flextronics for $15 million. Company founder and CEO Ben Kaufman moved on to an e-commerce role with Buzzfeed.

Today, Quirky is back.

Something new, something old, something borrowed: The new Quirky is still an innovation platform focused on consumer products in the electronics, toys and home goods verticals. And the fractional royalties system remains in place. But the company no longer plans to manufacture "winning" inventions, instead employing a licensing model through which it will partner with companies like HSN, Vanderbilt Home, Atomi, Shopify and Viatek. This is a bit similar to the pivot Quirky attempted before its bankruptcy filing, but by that point it was too little too late.

While in limbo: Quirky's website received over 50,000 invention submissions during its reorganization, including around 3,000 per month over the past year, according to new company president Gina Waldhorn. "You'd have thought most of the traffic would disappear since we weren't picking new products, but the community just wouldn't quit," she says. Waldhorn adds that while Quirky is originally relaunching today, it has quietly helped launch 12 products in 2017 — including relaunches of some previously-successful ones — has another 10 offerings in production and over 40 in development.

Answering critics: Quirky's terms of service since the reorg gave the company all IP rights to a submitted product, in perpetuity, no matter if Quirky actually picked it for development. The company says it is introducing new terms that give Quirky exclusive IP rights for 12 months, but that they then revert back to the inventor if the product is not picked.

Reputational damage: Waldhorn acknowledges that while the bankruptcy hurt Quirky within the company's home market of New York -- where it received the most media coverage — most of its users didn't care. "There was an opportunity to represent open innovation for inventors, but no one else came around to do it."

Financing: The original iteration of Quirky raised around $200 million from investors like General Electric, Kleiner Perkins and Andreessen Horowitz. But its current owners, who purchased the company's non-Wink assets out of bankruptcy, have no plans to raise outside capital. But they have been investing in restaffing, including a development team based on Poland.

Well wishes: Quirky founder Ben Kaufman tells Axios that he "hopes it works out" for the new team. "I'd glad to see someone try, but it'll be hard."


Trump bullish on tax reform at dinner with conservative leaders

Trump speaks at a dinner with conservative grassroots leaders in the Blue Room of the White House. Photo: Shealah Craighead / White House

President Trump was in an unapologetic mood last night, dining on beef Wellington with conservative grassroots leaders in the Blue Room, joined by EPA Administrator Scott Pruitt and White House aides Marc Short, Kellyanne Conway and Nick Ayers.

A source in the room told all-terrain Jonathan Swan: "He was very juiced up about tax cuts... very bullish on passing tax reform, and he was specifically calling it a tax cut."

  • Trump — who was still equivocating on the Republican tax plan as recently as yesterday morning — told the group it's going to be "great, we're going to do tax cuts for everyone," said the source, paraphrasing the president. Trump said he's going to lower the corporate tax rate, "and that he wanted it to be lower but it's going to be great ... There were a lot of 'greats' in there."
  • Trump wasn't worried about NFL blowback, and gushed over Alejandro Villanueva — the Pittsburgh Steelers offensive tackle and Afghanistan veteran — who stood alone with his hand over his heart while the rest of his team stayed in the locker room. (His gear was the NFL's best seller yesterday.)
  • Who's who — The White House released this list of attendees: Penny Nance, CEO of Concerned Women for America; Tim Phillips, president of Americans for Prosperity; Matt Schlapp, chairman of the American Conservative Union; Leonard Leo, executive vice president of the The Federalist Society; Ralph Reed, chairman of the Faith & Freedom Coalition; Marjorie Dannenfelser, president of Susan B. Anthony List; Ed Feulner, founder and acting president of the Heritage Foundation; Tim Goeglein of Focus on the Family; and Bob McEwen, former congressman and executive director of the Council for National Policy.

Bannon’s last-minute, anti-establishment plea to Alabama voters

Former White House strategist Steve Bannon speaks at a rally for U.S. Senate hopeful Roy Moore. Photo: Brynn Anderson / AP

Steve Bannon went — as Steve Bannon might say — "buck wild" inside a barn in Fairhope, Alabama, last night. He was there to rally support for Roy Moore, who faces incumbent Republican Senator Luther Strange in today's special election. Trump was in Alabama last week hosting a rally for Strange (the same rally at which he began his tirade against the NFL), but that didn't change Bannon's mind on which candidate to support.

The recently departed White House chief strategist was unshaved, unkempt, dressed in a green military jacket and came out onto stage to "Street Fighting Man," by the Rolling Stones. He name-dropped Plutarch and Shakespeare, and described today's Republican Senate primary run-off in Alabama in typically hyperbolic terms.

  • "Tomorrow's going to decide who has sovereignty in the United States of America," said Bannon, who was stumping for the anti-establishment candidate Roy Moore, who leads incumbent Sen. Luther Strange, the favored candidate of Senate Majority Leader Mitch McConnell and President Trump, by eight or so points in the polls.
  • Things only escalated from there. "Mitch McConnell and this permanent political class is the most corrupt and incompetent group of individuals in this country," Bannon shouted. "They think you're a pack of morons. They think you're nothing but rubes. They have no interest at all in what you have to say, what you have to think or what you want to do."
  • Amazing to think that a little over a month ago, Bannon was working in a White House that was trying to pass health care in cooperation with Republican leadership.