Dot-Com Firms Lacking in Black Execs
As a guest panelist at a recent conference for African American alumni of Harvard Business School, venture capitalist Karen Kerr knew it was a matter of time before someone asked how many of the companies she has invested in are led by black executives.
“I get asked this question a lot,” says Kerr, managing director of ARCH Venture Partners, which manages $325 million, much of that invested in various technology companies. “I hate to say it,” says Kerr, who is black, “but in our portfolio, the answer is zero.”
Black entrepreneurs and executives in the high-tech sector insist opportunities abound for well-educated and hard-working individuals, regardless of their skin color. Still, they are disappointed with the glaring under-representation of black people in senior management positions in an industry that has become a primary force in a robust U.S. economy.
“The Internet economy has the potential to be very good to African American entrepreneurs who want to have executive positions,” says Darien Dash, founder and chief executive of DME Interactive Holdings Inc., a New York-based multimedia company whose clients include Motown Records. “I would not say that has translated into results.”
Explanations vary. There is some disagreement about whether black people have less access to venture capital than others, but there is unanimity in the belief that too few black men and women are earning the science and engineering degrees necessary to thrive in the industry.
The technological revolution has no doubt done more good than harm for minorities, spurring job growth and opening the doors of prosperity to Web-savvy entrepreneurs. In California alone, 639 out of 6,268 high-tech firms profiled by the San-Francisco-based Small Business Exchange are owned by African Americans.
But industry insiders say most major technology companies, even those that pay close attention to diversity, look more or less like the rest of corporate America: the top ranks are, at best, speckled with diversity.
Precise demographic data on executives in the high-tech field are not maintained. However, in all industries combined, 88% of managers are white; 6%, black; 4%, Latino; 3%, Asian; and less than 1%, Native American, according to the U.S. Equal Employment Opportunity Commission.
Of the “The Top 50 Blacks in Corporate America” featured in the February issue of Black Enterprise magazine, only four work for high-tech companies.
“I can count on one hand, maybe two, the number of blacks who run publicly traded Internet companies,” says Dwayne Walker, who was Microsoft Corp.’s general manager of sales and marketing and director of Windows NT, before joining ShopNow.com in 1996 as its chief executive.
Walker says there were “maybe one or two” other high-ranking African Americans at Microsoft during his seven-year tenure there. In fairness, he says, the disparity had little to do with barriers put up by the company.
“At Microsoft, people have to have the skills to succeed in a highly charged environment. It was an environment where execution mattered more than anything. You could be a Martian and succeed at Microsoft.”
Other African American executives say, however, if outright racism was never a problem for them, the bar for advancement always seemed higher for minorities and women.
Robert E. Knowling Jr., president and chief executive of Santa Clara, Calif.-based Covad Communications Group Inc., a leader in high-speed Internet technology, says that when he started at Indiana Bell in 1977 (which later joined Ameritech), minorities and women moved through lateral “turnstiles” as others were moving upward.
Knowling, who is black, says today’s unprecedented demand for high-tech workers has opened doors that didn’t exist 20 years ago. “Chief operating officer jobs are out there in droves,” he says. “If you have any technical skill, you literally have a buyer’s market.”
But too many black people lack the necessary training to enter the field in the first place, says Al Zollar, the newly appointed president and CEO of software manufacturer Lotus Development Corp.
Of the 325,135 students who enrolled in U.S. graduate science and engineering programs in 1995, only 14% were minorities, and less than half of those were black, according to a 1998 National Science Foundation report. “Blacks and American Indians are concentrated in the social sciences, which are less likely to offer employment in business or industry,” the report says.
Overall, diversity has improved in the upper echelons of corporate America. The Washington, D.C.-based Executive Leadership Council, composed of black executives working no more than three levels below the CEO at Fortune 500 companies, has grown in the past decade from “a group of guys around a table” to more than 200 men and women, notes Lotus’ Zollar, a longtime member. Fewer than 10%, however, work for high-tech firms.
Whatever drag exists on upward mobility in large technology companies, resistance appears significantly reduced for entrepreneurs.
The availability of seed money is “phenomenal,” says Bill Gareth Neely, of Reston, Va., who co-founded e-tailer Singleshop.com after securing $1 million in July. “You go to venture capital fairs and they say, ‘We’re motivated by greed,’ and they are. It doesn’t matter what your background is,” says Neely, who is black.
But David Scott, co-founder of NextPlanetOver.com, an entertainment and e-commerce site for comic book enthusiasts, says there are less obvious cultural factors that may prevent would-be black entrepreneurs from seeking their fortune in the dot-com economy.
In 1998, the majority of Scott’s fellow black classmates at the Wharton School of Business sought out high-paying jobs on Wall Street, rather than accept the paltry salary and stock options most Internet start-ups were offering.
“We all came from situations where we were happy just to have a job, let alone take risks,” Scott explains. In fact, out of the 600 resumes Scott received when recruiting for NextPlanetOver.com, not one of the applicants was black.
