SXSW shines light on tech sector's ongoing diversity issues

AUSTIN, Texas -- In the technology industry, Kela Ivonye is an anomaly.

He's a black tech entrepreneur.

Ivonye, 31, who lives in Louisville, Kentucky, has spent recent years in the tech industry -- and he's learned how it's different for people like him.

About four years ago, Ivonye started a food delivery company. But the venture flopped, and Ivonye had to sell the company's remaining assets. Ivonye tried again in 2016, this time co-founding Mailhaven, a curbside mailbox that stores packages for people who aren't home. He's still trying to gather his first rounds of funding.

"People invest in what they know," Ivonye said at a gathering of black tech entrepreneurs and other black professionals during South by Southwest. "A lot of people want to invest in repeatable processes with outcomes they've already had, and if outcomes they've already had are associated with race or gender, they stick to that. They would rather not take an outside risk."

Diversity and inclusion in the technology sector were among the most discussed and debated topics at SXSW 2018, with a number of speaking events and gatherings focusing on the issues.

Hugh Forrest, chief programming officer at SXSW, said inclusion is significant to creating a succesful conference, especially since SXSW is known as an environment where idea-sharing happens.

"SXSW believes that presenting different viewpoints from a diverse group of people is an important way of arriving at more creative approaches to every industry -- including tech," Forrest said in an emailed response. "We hope that offering programming that is representative of different voices aids in furthering a conversation about this important issue."

Across the U.S. technology sector, 68.5 percent of employees are white, according to a 2015 report from the U.S. Equal Employment Opportunity Commission. Hispanic employees make up about 8 percent of the tech workforce and black employees about 7.4 percent. That's about half their representation rate in the full U.S. workforce.

The study found that 65 percent of tech employees were male and 35 percent were female. Woman make up about 48 percent of the full U.S. workforce, according to the commission's data.

'Don't have that social network'

A lack of early funding is one of the key obstacles for minority-owned startups, Ivonye said.

Black, Hispanic and female tech entrepreneurs have a tougher time securing venture capital funding, experts said at SXSW, with the majority of tech company executives being male and white. Philanthropist Melinda Gates, co-chair of the Bill and Melinda Gates Foundation, estimated during a SXSW speech that less than 2 percent of VC money is being invested in companies owned by women entrepreneurs.

Certain minority groups and women have relatively little representation in leadership at VC firms. And in a world where the first round of investment can often come from friends and family, the race and gender pay gap in the U.S. can matter. Black people in the U.S., for example, earned 75 percent as much as white people in 2015, and women earned 83 percent as much as men, according to the nonpartisan Pew Research Center.

"Sometimes, for black entrepreneurs, you don't have that social network of people with a lot of income," Ivonye said. "So it's really hard for you to get that first round, for you to get traction."

That's why conferences such as SXSW can be an important resource, Ivonye said. They bring underrepresented tech professionals together to ask questions and form partnerships.

Ivonye and about five dozen other black tech entrepreneurs and professionals took part in a "black tech meetup" that focused on issues of diversity and inclusion during the conference. Also during SXSW, a group of historically black colleges and universities hosted multiple networking opportunities, and there have been pitch events for minorities in tech, an Uber- and Walmart-hosted women in tech panel, an "Africa House" day-long showcase of that region's tech influence, and a number of speeches and panels focused on inclusion.

"It's about continuing to bring awareness about the importance of allowing resources to go to fast-growing populations that are the future customers and future workers and future leaders," said Yulkenda Valdez, a 23-year-old entrepreneur from Boston. Valdez four years ago co-founded Project 99, a startup aimed at providing diversity training to the tech, business and education sectors.

"It's best for everyone that we even the playing field," Valdez said.

Valdez said improving diversity within the tech sector can start with more VC firms run by underrepresented groups receiving investment, so they can then provide capital to more diverse startups.

'It's going to get better'

That has happened some in recent years. In 2015, Arlan Hamilton, who is black, founded Backstage Capital, a California-based VC firm that since then has raised millions and funded dozens of businesses led by underrepresented founders. Those startups include ShearSpace, which connects salon owners with independent stylists, and Please Assist Me, an on-demand phone app for house chores.

Gates, meanwhile, invests in Aspect Ventures, a VC firm that funds companies operated by underrepresented entrepreneurs such as BaubleBar, a clothing accessories retailer founded by Amy Jain and Daniella Yacobovsky. Last year, rap mogul Jay-Z also announced a new VC fund, Arrive, to invest in startup companies.

Stacy Brown-Philpot, CEO of startup TaskRabbit, said that she sees another important step taking place -- more women and minority entrepreneurs are speaking up and pushing for change than ever before.

"At some point growing up in your career ... you're thinking about someone else who is taking care of you culturally, or ethnically, or (as a) gender, and at some point, you become the person who is responsible for that," Brown-Philpot said.

She said tech executives need to ask: "'How do we keep people in Silicon Valley? It's an isolating place. How do we build community in Silicon Valley?' We're in the middle of the fourth industrial revolution. As women, we have to be a part of that. As people of color, we have to be part of that."

Awareness of the issue seems to be growing, and that's having an impact, said Ivonye, the Mailhaven co-founder.

"I believe it's going to get better," Ivonye said. "The people who write the checks to investors -- it's getting them to put their money in what they talk about. It's setting actionable metrics you can hit."

Sebastian Herrera writes for the Austin American-Statesman. Email: sherrera(at)statesman.com.

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