This document discusses entrepreneurship and career success. It summarizes that: 1) Entrepreneurship and high earnings are strongly correlated with high socioeconomic status at birth, contradicting perceptions of meritocracy. 2) Government policies from the 1950s-1980s promoting social services, middle class growth, and investments in innovation fueled mobility but these have decreased. 3) Traditional hiring, investment, and promotion practices contain strong biases that disadvantage women and minorities and undermine the benefits of diversity. Data-driven assessments can mitigate these biases. 4) Early government investments and partnerships were crucial to building innovation hubs like Silicon Valley, but these policies have changed along with rising inequality in recent decades.

1. You are not born an entrepreneur,
You become one
Julia Shapiro, CEO Hire an Esquire
Yale Law School Entrepreneurship & Innovation Lecture Series
November 7, 2019

2. “One is not born, but rather becomes a woman”*
~Simone De Beauvoir
*Translated from: “on ne nait pas femme, on le devient”

3. “Business model and product will follow if you have the
right people.” ~Adam Neumann, WeWork Co-founder
*Full Quote: “People are the most important thing. Business model and product will follow if you have the right people”
Echoing common VC sentiment that “we bet on team”.

4. What Does This Mean?

5. Gender, an earned badge
of honor?
Or something else?

6. Entrepreneurship-
self-determined?
Or something else?

7. Simone’s Lens
Left Bank- Deconstructing Social Norms &
Mores
● Privileged
● Post-War
Silicon Valley’s Screen
Left Coast - Deconstructing Capital Norms &
Mores
● Privileged
● Post-Reagan

8. Libertarian, “Bootstrap” Ethos
Generally Agree or Disagree?
● Hustle Harder (framed at just about every
WeWork in the country)
● I earned everything
● The free market can solve most problems
● [Insert message from inspirational poster
here]

9. What is the #1 factor in
determining entrepreneurial (and
overall financial) success?

10. High socioeconomic status at birth
=
the most shared trait of
entrepreneurs and others in top
earnings brackets
“What Makes an Entrepreneur “ by David G. Blanchflower and Andrew J. Oswald of Dartmouth College and Warwick University. Published in Journal of Labor
Economics, 1998, 16(1), pp. 26-60 http://www.andrewoswald.com/docs/entrepre.pdf

11. Perceived v. Actual Social Mobility
in the United States v. Europe

12. “It is increasingly the case that no matter what your
educational background is, where you start has
become increasingly important for where you end...
The general amount of movement around the
distribution has decreased by a statistically
significant amount”
Michael D. Carr and Emilye E. Weimers, economists at UMass who analyzed the difference in economic mobility for workers in the
prime of their careers from 1981-1996 versus 1993- 2008 using census earnings data
https://www.theatlantic.com/business/archive/2016/07/social-mobility-america/491240/

13. What Was Behind the Mid-Century Man
why is there nostalgia for his time?

14. Sharp Divisions of Wealth in the US
name economic winners and losers from birth

15. What Happened to the Mid-Century Man?
where did he go?

16. Divisions of Wealth in the US Track to Tax Policy
Ordinary Income Tax Brackets

17. Long Term Capital Gains Tax Rates Over Time
Investments, stock options, non-wage income
2020 Capital Gains
rates are graduated and
at 20% for income
$430K

18. ● Globalization, rising powers was shifting markets elsewhere fueling anxieties
● “Deinstitutionalization” - Defunding of mental health
● Expansion of Nixon Era “War on Drugs,” focused on prosecution versus reform
● “Welfare Queen” (who didn’t actually exist)- Subsequent Clinton era welfare reform
● Ideological beginning of privatizing government*
● Privatization of military, prison systems beginning and accelerating
The 1980s Were a Pivotal Time
for ideology and subsequent tax & other policy
*https://www.nytimes.com/1988/02/15/us/reagan-plan-to-privatize-government-is-gaining-support-from-democrats.html

19. Spending on Social Services Declined
defense & prison spending privatized, increased

20. How do cities win & lose?

21. What makes it so special?

22. How Was Silicon Valley Built?
chance accelerated by government investment
● Military and space program spending begun under Eisenhower launched modern day
Silicon Valley and private public partnerships
● Fairchild Semiconductors an early foundational SV company was fueled by Federal
Contracts
● 1958 Small Business Act - generous matching loans for startup investors a catalyst for
1st wave of VC Funds
● Stanford is 19th Century University with practical purposes, it creates part-time
graduate industry affiliated programs to get graduate degree for free while working

23. What other factors impact
entrepreneurial & career success ?

24. Entrepreneur magazine + Rate my investor, Diversity Report
Group % of US Population % of VC Funding Received
Non-Hispanic White 60% 77%
Women 51% 2.2%
Men 49% 97.8%
Black 13% 1%
Asian 5.6% 17.7%
Latino 19% 1.8%
Race and Gender Correlate Strongly
to investment dollars

25. “Venture investors prefer funding
handsome men”
“Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men,” published in the March 2014 Proceedings of the National Academy of Sciences.
https://hbswk.hbs.edu/item/venture-investors-prefer-funding-handsome-men

26. Research & Studies from Harvard Business Review
On Gender and Fundraising
Women and men given identical backgrounds and delivered identical pitches to VCs:
○ 68.33% chose to fund the pitches from men
○ <32 % chose to fund the pitches from women
○ Women VCs chose to award men funding at equal rates to their male peers
TechCrunch Disrupt questions to male & female founders were analyzed:
○ 66% of questions asked to women were “Prevention Questions” oriented towards
the risks of the business
○ 67 % of questions posed to men were “Potential” oriented towards the potential of
the business
○ Entrepreneurs that fielded primarily prevention questions raised 1/7 of the money
as those asked promotion questions
https://hbr.org/2017/06/male-and-female-entrepreneurs-get-asked-different-questions-by-vcs-and-it-affects-how-much-funding-they-get
https://hbswk.hbs.edu/item/venture-investors-prefer-funding-handsome-men

27. Hiring & Promotion Practices
Follow Same General Trends

28. “We’ll hire women, we just don’t
want to lower our standards
“
~Silicon Valley Giant and Sequoia Capital Partner, Michael Moritz

29. 10
seconds
Average time it takes hiring
manager to make a decision
about a candidate
Interviewers generally spend the
rest of the interview confirming
initial decision

30. Non-ethnic
names are
50% more
likely to get
called back

31. ● No noticeable difference in the way women performed or acted at work as tracked by
wearing sociometric badges and analyzing emails
○ Promotion rates between men and women appeared not due to their behavior but
how they were treated*
○ Lean In Study came to similar conclusions
● Women are perceived negatively when they negotiate on salary, men are viewed
favorably
● Men are more likely to be promoted and salary increases 6% when they have kids, a
woman’s salary decreases by 4% for each child she has
https://hbr.org/2017/12/what-research-tells-us-about-how-women-are-treated-at-work, https://www.newyorker.com/science/maria-konnikova/lean-out-the-dangers-for-women-who-negotiate
https://www.nytimes.com/2014/09/07/upshot/a-child-helps-your-career-if-youre-a-man.html
Research & Studies
On Gender and Work

32. Have Standards Actually Been
Compromised Because of Bias?

33. Diverse Teams = Better Outcomes
Racial & Ethnic
Diversity
35% more likely to
have financial returns
above industry
medians
Gender
Diversity
15% more likely to
have financial returns
above industry
medians

35. Traditional Hiring Methods are a Guessing Game
Improve your chances with valid and reliable assessments
Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85
years of research findings. Psychological bulletin, 124(2), 262.
Making the wrong hiring decision is a costly and
time consuming mistake—these costs add up
significantly in large organizations.
Unstructured interviews and resume reviews are
littered with bias and are poor predictors of a
candidate’s performance and fit for a role.

36. Hire an Esquire’s Goal Was to Automate Legal Recruiting
we began assessing traits that predict fit & performance
*Developed from 85 years of outcomes driven Industrial Organizational Psychology and Legal Industry specific research
on predicting performance in the workplace; trait assessments are weighted against our large attorney population.

37. We Triangulate Multiple Data Sources
From Proven Best Hiring Practices
Completed by law firms to identify
hard and soft skills for a role.
Completed by candidates
to assess their soft skills
Structured
Interviews
Cross
Referenced
with
Structured
Professional
References
Job Analysis Form Work-style Assessment
Structured Client
Feedback post
project

38. The Results of our Proprietary “Moneyball” Method
Developed over 3+ years and thousands of placements
Results of 2+ years of R&D:
❏ 71% fulfillment rate (v. 44%
industry avg)
❏ 73% of hires from instant
recommendations
❏ + 15% diverse placements
❏ <1% Candidate Incident rate
❏ 18% temp-to-perm conversion rate

39. Much Bias is Unconscious, Diversity Training Backfires
Making decisions with data not the amygdala

40. Correlations Calibrations
Table of Predictions - Small Correlations Matter!

41. What Inherent Traits do Make the Best Entrepreneurs
when other factors are even
Trait Description Correlation
Need for achievement Desire for accomplishment, mastering of skills, control, high standards. .30
Innovativeness The ability to think of something new, solve problems in ways not been done before. .27
Proactive personality Individual difference factor capturing the behavioral tendency toward displaying proactive
behaviors to enact positive situational changes.
.27
Self-efficacy How much people believe they can achieve their goals, despite difficulties. .25
Stress tolerance How emotionally stable an individual is and how they cope with stress. .20
Need for autonomy A desire to be self-governed rather than controlled by external forces .16
Locus of control the degree to which people believe that they have control over the outcome of events in their
lives, as opposed to external forces beyond their control.
.13
Risk-taking general willingness to approach or avoid risk situations .10

42. Practical Tips & Tricks?

43. Books:
● The Code: Silicon Valley and The Remaking of America by Margaret O’Mara
● Nickeled & Dimed: on (not) getting by in America by Barbara Ehrenreich
● Savage Inequalities: Children in America’s Schools by Jonathan Kozol
Online Resources:
● Harvard Business Review Generally
● NYU Professor Scott Galloway Blog, No Mercy, No Malice
● The Careerist - Vivia Chen
Further Reading