
Want to Solve Venture Capital's Diversity Problem? Start with Pension Funds - ericzass
https://dot.la/calpers-venture-capital-diversity-2646204153.html
======
whatshisface
What's the end goal here, to have people hired "because they are black?" I
guarantee that will happen if there is money to be made by doing it.

~~~
TheGrim999
If you haven't noticed, that's been the goal for a long time now. People get
accepted to college because of the color of their skin. People get better SAT
scores now because of the color of their skin. Every major company has
diversity boards which make sure to hire people based in the color of their
skin. Hollywood and big business choose who to be in ads, movies, and other
customer facing media because of the color of their skin. Groups decide their
memberships based on the color of people's skin. CHAZ protesters in Seattle
are arguing for judging people in court differently based on the color of
their skin.

It's really so interesting that these groups of politically motivated people
think they're ending what they perceive as racism ... by being as racist as
it's possible to be.

~~~
mullingitover
> It's really so interesting that these groups of politically motivated people
> think they're ending what they perceive as racism ... by being as racist as
> it's possible to be.

The existing system is already very biased against them, I don't have a
problem with some corrective action.

"In fact, companies are more than twice as likely to call minority applicants
for interviews if they submit whitened resumes than candidates who reveal
their race—and this discriminatory practice is just as strong for businesses
that claim to value diversity as those that don’t."

[https://hbswk.hbs.edu/item/minorities-who-whiten-job-
resumes...](https://hbswk.hbs.edu/item/minorities-who-whiten-job-resumes-get-
more-interviews)

~~~
john_moscow
I would actually blame the corrective action for it. Companies are not
personal, they are purely about managing business and risks. When you hire a
person, you care for 2 things:

1\. How likely will they perform their duties in a way that is profitable to
the company?

2\. How much will it cost to the company to fire them, if they turn out to
generate loss.

Some people may have a stereotype that people of certain backgrounds would
perform worse than people of other backgrounds, so that would affect heir
judgement at point 1. However, if we make special rules that make it harder to
fire underperformers from certain backgrounds, it greatly increases the costs
at point 2, making them actually much less favorable candidates.

So in the current political climate, companies at the same time are forced to:

1\. Claim that they will prefer diverse candidates and have diversity
policies.

2\. Actually avoid diverse candidates, because in case they underperform,
laying them off would be considerably more expensive due to PR issues.

The study very much confirms this behavior, and I bet that making more special
rules will only make it worse.

~~~
mullingitover
> Companies are not personal, they are purely about managing business and
> risks.

Let's completely refute this notion:

"Companies with more culturally and ethnically diverse executive teams were
33% more likely to see better-than-average profits. In McKinsey’s previous
study—conducted with 2014 numbers—that increase had been 35%. At the board of
directors level, more ethnically and cultural diverse companies were 43% more
likely to see above-average profits, showing a significant correlation between
diversity and performance."

[https://www.forbes.com/sites/karstenstrauss/2018/01/25/more-...](https://www.forbes.com/sites/karstenstrauss/2018/01/25/more-
evidence-that-company-diversity-leads-to-better-profits/#203436fc1bc7)

~~~
john_moscow
I would dare say the causality is reversed here. Once your company reaches a
certain size, NOT having a diverse executive team will very quickly get you
labeled as racist and will cost you dearly. Nobody cares about a mom and pop
bakery, but imagine the outrage in the media, if Apple or Google did not pick
their executive teams based on the diversity constraints.

~~~
malandrew
Not only that, for the time period when this study was done, the most
successful businesses will be in cities where there is statistically a more
diverse pool to draw from.

Is the cause the diversity or is it that cities are generally hyper-
competitive places that draw the most competitive people in society and filter
out those that can't hack it.

Your reason and my reason are just two possibilities of reversed causality.
I'm sure there are many others.

The conclusion of that study is basically a wet streets cause rain conclusion.

One only needs to look at foreign firms like those in China that are crushing
it to see that many non-diverse businesses are doing very well. I'm sure those
businesses weren't included because it wouldn't support the conclusion the
researcher wanted to arrive at.

~~~
Avicebron
China is a great example, very mono-cultural (relative to the US, I know there
is different great diversity in China) and (personal experience) a bit racist
or dismissive of Non-Chinese.

Yet they absolute crush it with almost everything they do? How do we square
that circle and say well..if everyone just looked different we would be better
off. Minus the white people, they shouldn't be around anymore.

~~~
mullingitover
It's pretty easy to pick this apart. China is actually quite diverse
culturally, but communism has long had a focus on equality. They're
demonstrating that equality is a competitive advantage.

~~~
malandrew
I've lived in China and the US and it doesn't even come close to the diversity
of thought as the US. That said, they still crush it despite the lack of
diversity of thought. With the US diversity of thought also comes the
diversity of work ethic. China doesn't have that issue. A lot of the diversity
of thought China has typically comes from expatriates that have returned home
after meaningful experiences living abroad. This alone demonstrates that
genetics is a terrible proxy for diversity of thought. What matters is
cognitive diversity and diversity of experience.

------
tuna-piano
What person from an underrepresented group wants to be chosen just because of
their group status? Isn't that highly patronizing for someone who likely had
worked hard to get to where they got? Do you want to be "pretty great for a
xxxxx person!" or just "one of the best".

Is this a lesson that people want their kids to learn?

Doesn't this also lead discrimination actually being a rational (and maybe
ethical) thing to do?

Simply put- if the top 100 medical students (based on MCAT, boards scores,
etc) are chosen to become heart surgeons, choosing a heart surgeon from those
100 based on race or gender is not only absolutely egregious morally but it's
also irrational.

But if the top 90 of the 100 medical students are chosen and then 10 are
chosen because of non-relevant factors (race, gender, etc)... doesn't it
become rational (and maybe morally acceptable) to try and avoid choosing those
lesser-qualified 10 for your life-or-death surgery?

~~~
blululu
>>What person from an underrepresented group wants to be chosen just because
of their group status? Isn't that highly patronizing for someone who likely
had worked hard to get to where they got? Do you want to be "pretty great for
a xxxxx person!" or just "one of the best".

For comparison, consider the case of people who get their jobs via nepotism.
The people who are hired for nepotism are seldom concerned with the fact that
they were chosen because of who their parents were. In many cases these people
are reasonably qualified and do just fine in spite of the fact that they were
given the job because of their family's status.

When there is a preponderance of talent and success is hard to quantify
precisely, choosing the best means choosing between a number of comparably
good alternatives (to within the large uncertainty of the measurement). In
certain cases there are very meritocratic scenarios where I think your
statement holds, but when there is a surplus of talent for a role and
quantifying success is very imprecise, I'm not sure if meritocracy makes
sense. Given that many hedge funds are basically glorified ETFs that average
to the market, I'm not if there is much difference between reasonably
qualified candidates for these jobs.

~~~
tuna-piano
I think your nepotism example and "preponderance of talent and success is hard
to quantify precisely" are nice arguments and give me something to think
about, thanks.

But when you say "I'm not sure if meritocracy makes sense"... you are really
saying that instead of trying for meritocracy, they should just use skin
color?

How do you feel about the idea of blind auditions for orchestras (auditions
where the candidate cannot be seen, only heard)? These were originally done to
eliminate the possibility of discrimination.

I think orchestras could also qualify for "preponderance of talent and success
is hard to quantify precisely"... should they eliminate blind auditions so
they can choose performers based on skin color+gender?

~~~
blululu
Well I'm not really advocating for choosing people based on skin color or
gender per se. Rather that in a cases where there is an surplus of talent for
the role we should consider making a choice based upon serving the interests
of society more broadly. Sometimes this will fall along racial lines. For
example, having doctors of color to serve communities of color has
demonstrable positive health outcomes for society more broadly.

In the case of managing portfolios, I think that there are compelling reasons
from a risk management perspective to cultivate different perspectives (a room
full of Bulls will get burned in a downturn). Increasing the number of people
from working class backgrounds, genders with different spending priorities, or
races with different community ties can potentially add a lot of important
perspectives to a financial portfolio.

Blind Auditions in orchestras are an interesting idea. People are actually
much better and judging sound quality of violins than they are judging the
quality of stock options, so it is easier to definitively state that someone
is the 'best' Violinist in a group.

~~~
malandrew
> we should consider making a choice based upon serving the interests of
> society more broadly. Sometimes this will fall along racial lines.

This line kind of contradicts this line:

> Well I'm not really advocating for choosing people based on skin color or
> gender per se.

------
MattGaiser
If we are going to have rules like this, then we need to sort out what legally
counts as a minority.

[https://www.seattletimes.com/seattle-news/lynnwood-man-
tried...](https://www.seattletimes.com/seattle-news/lynnwood-man-tried-to-use-
a-home-dna-test-to-qualify-as-a-minority-business-owner-he-was-denied-now-hes-
suing/)

[https://www.vox.com/2014/12/22/7431391/guess-where-white-
ame...](https://www.vox.com/2014/12/22/7431391/guess-where-white-americans-
have-the-most-african-ancestry)

------
JPKab
"At this moment of heightened public awareness, forcing big public pension
funds to commit to putting more of their dollars in funds controlled by
minorities could have a major impact. These public institutions, unlike their
corporate kin, represent a wide and diverse swath of the country, making
investment decisions for public servants like teachers, firefighters and
municipal workers."

While I think this is a phenomenal idea, it should be noted that systems like
this that currently exist are frequently, almost typically, gamed. I went to
work for a Federal Government certified 8a minority woman owned business with
at the time about 20 employees in my mid-20s. I remember thinking how cool
that was.

The "CEO" was a highly competent woman of Filipino descent who, after having
kids, had chosen to become a stay-at home mom. She was CEO in name only, and
her husband (a big giant white dude who was also highly competent) was the
actual CEO, but with a different title.

The company's main source of revenue was acting as a prime contractor on
contracts only available to 8a companies, then subbing the work out to large
contractors. Another regulation on the company was a cap on it's profits, as
well as a cap on salaries of individual employees. Their way around that was
that the acting CEO and his wife both earned max level salaries. Another C
level co-founder also payed his wife the maximum salary, and near as we can
tell, her sole item of work for the company was sending out holiday gift
baskets.

Again, good idea, but we need to think very hard about how to ACTUALLY help,
rather than just making a small number of people who know how to game the
system wealthy.

~~~
jandrewrogers
I'm not sure why this is being downvoted. It describes common practice for US
Federal government business in response to the creation of minority business
preferences in contracting.

Many companies that are not actually minority-owned essentially rent minority-
owned shell companies to clear the qualification hurdle for contract
preferences, it is _de rigueur_ unless you have unique capabilities that make
it likely you'll get a contract award regardless. The obvious consequence is
that once every company is "minority owned" no company is and you are back to
where you started, just with some middlemen.

~~~
dx87
It's probably getting downvoted because people who support the preferences
view it as someone trying to keep minorities down. I've seen a lot of people
game the system, where they'll have specialized knowledge from the government
of military, then start a small contracting company and make their wife the
CEO so they can win contracts. I've also known people doing government
contracting where the prime won because it's an Alaskan Native company, but
they subcontract out all the work, and there's only 1-2 natives actually doing
work on the contract.

------
lbj
I still don't see the value in diversity for diversities sake. Having read
much from Thomas Sowell on the matter I think most of these terms will lead to
much worse outcomes than what we have present day.

~~~
bitcurious
Diversity of viewpoints is essential for long term prosperity - it allows for
a marketplace of ideas and limits blind spots.

The first time this really clicked for me was when I dived deeply into the
history of the First World War. If I could restate the root cause, it was
complete failure by both the British and especially the Germans to envision a
point of view different from their own. They each operated like they were
sparring with themselves, and shit got out of control. The problem is that
it’s now vogue to assume what point of view a person holds bases entirely on
their race/gender/etc.

P.S. If WWI sounds interesting, I very much recommend the podcast “When
Diplomacy Fails.”

~~~
malandrew
> Diversity of viewpoints is essential for long term prosperity

Maybe the solution here is to develop a standardized test that measures
diversity of viewpoint in a way that is blind to genetics.

~~~
Avicebron
Hey I agree, once we say "you're genetics give you a diversity of viewpoint"
we are typecasting by genetics. Once we say, "you're genetics make you think
this way" we are walking right down the path of eugenics....seem's wrong?

------
Avicebron
Side Note for anyone joining later: I/someone should make a timer for post
visibility, contest to see which gets buried faster by HN.

Do some heuristics, we might even calculate a bias score.

------
tuna-piano
For those who don't read the article, here's a quote: "Unless you're only
selling to white people, if I was at a firm I would want every point of view
represented in the investment process"

Is this how people view the world these days? Where skin color is important?

I feel like I'm totally lost and saddened by this new race-focused world. Can
someone please tell me when I can go back to caring about the quality of air
traffic controller's[1], the quality of a manager's returns[2], and a
restaurant's food[3] and NOT their skin color? I'm exhausted by it.

[1][https://www.fullwsj.com/articles/affirmative-action-lands-
in...](https://www.fullwsj.com/articles/affirmative-action-lands-in-the-air-
traffic-control-tower-1433283292)

[2]The article from this discussion

[3][https://www.forbes.com/sites/korihale/2020/06/09/uber-
eats-d...](https://www.forbes.com/sites/korihale/2020/06/09/uber-eats-
delivery-fees-cancelled-for-black-owned-restaurants/#516926009f15)

~~~
WesternStar
How fortunate you are to merely be "exhausted" emotionally. This isn't really
a conversation about skin color its a conversation on how we treat each other
and we happen to treat people with certain skin colors in ways that make their
lives worse and in some cases more dangerous. Talking about it like its about
skin is foolish. It's about behavior.

~~~
tuna-piano
Who is this "we" that you speak of? What institution anywhere in the US treats
people of certain skin colors worse than others? I know of many (including
those referenced in the linked article), but yet all of them discriminate
against whites and asians, not blacks and hispanics.

Why do you believe that racism is so widespread? If there is evidence of
widespread racism among people and institutions, please share (the only
evidence I've seen is some name-on-resume-callback studies that appear more to
do with class than with race).

I'm guessing you believe that there is widespread racism because of disparate
outcomes. But disparate outcomes between groups doesn't mean discrimination.

For example, Iraqi-Americans avg income $32k, Iranian $78k income. How many
Americans even know the difference between those two peoples even if they
wanted to discriminate?[1]

[1]
[https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_U...](https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income)

------
mtgp1000
"diversity and inclusion" initiatives are coming up on a long overdue
reckoning. The premise is to allege discrimination, based solely on "evidence"
in the form of inequality of outcome, and then use that unilateral accusation
as justification for the accusing party to practice the discrimination they
claim to oppose. Bonus: you are liable to lose your job for criticising these
practices.

The comments ITT suggest that perhaps the taboo surrounding criticism of
diversity initiatives is finally lifting, and rightly so.

~~~
dang
You can't conclude anything from a single thread.
[https://news.ycombinator.com/item?id=23555398](https://news.ycombinator.com/item?id=23555398)

Would you please review
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)
and stick to the rules on HN? I'm afraid you've been breaking them in two
ways. First, it's not ok to use the site primarily [1] for political or
ideological battle. That's probably the single most destructive thing people
do here, because battle mode and curiosity mode do not go together. Some
political overlap is ok [2], but it's not ok to use the site primarily this
way.

Second, please stop creating accounts for every few comments you post? We ban
accounts that do that.

You needn't use your real name, of course, but for HN to be a community, users
need some identity for other users to relate to. Otherwise we may as well have
no usernames and no community, and that would be a different kind of forum.
[3]

[1]
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20primarily%20test&sort=byDate&type=comment)

[2]
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20political%20overlap&sort=byDate&type=comment)

[3]
[https://hn.algolia.com/?query=by:dang%20community%20identity...](https://hn.algolia.com/?query=by:dang%20community%20identity&sort=byDate&dateRange=all&type=comment&storyText=false&prefix&page=0)

~~~
malandrew
For people to use a consistent identity especially with issues where you get
fired for an unorthodox opinion, it's necessary for people to be able to go
back and delete comments that could be used to doxx them. This is one of the
biggest drawbacks of HN and why I increasingly use throwaway accounts.

~~~
dang
I can meet you partway on that by agreeing that there are lots of constraints
on this problem. But if someone is repeatedly creating accounts on HN just to
post on flamewar topics, that's not a high quality use of the site.

