(Image: Fanatic Studio / Getty)
The headlines coming out of Silicon Valley are not great right now, particularly for the unicorns—or startups that seemingly come out of nowhere to be valued at more than $1 billion—from Airbnb to Uber to WeWork.
Is the Silicon Valley dream over? We put this question to Dr. Astrid Scholz, serial entrepreneur and co-founder of Zebras Unite, a growing movement that aims to make startup and venture capital culture more ethical and inclusive.
“The evidence against toxic ‘unicorn’ company culture has only mounted,” says Dr. Scholz. “Exposés on sexual harassment; damning studies revealing how funders ask biased questions and speak differently about male and female founders; lack of access to capital for anyone who isn’t white and male.
“The problem is clear: what exists is created by and for an exceedingly select breed of people,” she says.
Two years ago, Dr. Scholz teamed with Jennifer Brandel (CEO/Co-Founder of Hearken), Mara Zepeda (CEO/Co-Founder of Switchboard) and Aniyia Williams (CEO/Founder of Tinsel) to form Zebras Unite, which now has a community of 4,000 founders in over 40 chapters across six continents.
“When a system is corrupt, why endorse it by joining it? Instead of fighting to change this existing reality, why not design a new one of our own?” she says.
We spoke to Dr. Scholz recently about her effort to promote zebras instead of unicorns while still working a day job as CEO and Managing Partner at Portland-based design firm Sphaera. Here are edited and condensed excerpts of our conversation.
Dr. Scholz, I heard about the concept of “Zebras” from Teeny Breaks Founder and CEO Anne-Laure Le Cunff. It’s got momentum. Tell us how it started.
Jenn and Mara wrote “Sex and Startups” in the spring of 2016. Aniyia [Williams] and I both read it and resonated with it, separately, and I met with Mara in person here in Portland shortly thereafter. The four of us published the follow-up piece to Sex and Startups, “Zebras Fix What Unicorns Break” in spring 2017.
Which is now your manifesto.
We quickly realized that there was a real hunger for the community to get together. A group of zebras is called a dazzle, and so we invited about 200 founders, investors, and others to DazzleCon in Portland, Oregon, in November 2017.
More than 1,000 people wanted to attend, but we kept the inaugural gathering intentionally small so we could deeply listen to what the founders and investors were saying about their needs and wants. Hence our three Cs—community, capital, and culture.
The biggest win coming out of DazzleCon was a mandate to figure out how to build a global support infrastructure for founders, investors, and others to work together. We don’t necessarily want to do an annual event, but as it happens, we are hosting DazzleCamp in March 2020. We’re literally going to a summer camp outside Atlanta, Georgia, to roll up our sleeves and get to work on hacking cap tables and hacking the capital system.
There’s an actual Zebra Methodology. Tell us what that entails.
You are referring to the Why, How, Who, and What of acting like a zebra company, which we captured in this table:
We released it into the wild in this form while we iterate our way towards the kind of platform Zebras Unite wants to be. After DazzleCon, we set up an online community and created some minimal guardrails for people interested in organizing local chapters. We then let that run for a bit while the four founders went to work raising some seed capital for ZU.
We’re now working on the persistent form of Zebras Unite and its offerings. Curriculum could well be part of it!
Everyone’s looking for a better solution.
The sentiment we hear the most is probably: “I’m so glad to have found this community, I thought there was no one else like me!”
We all need community.
Yes, and part and parcel of our work is figuring out how we can help like-minded founders, investors, lawyers, accountants, engineers, and everyone else who wants to build successful, ambitious, purposeful businesses get into community with each other. Access to capital that’s responsive to what founders want to build, and how they are building it, is a huge component but not the only one. We like to say that we catalyze capital, community, and culture for people building businesses that are better for the world.
Your point with Zebras Unite is that the basic investment model itself needs to change.
Well, there is certainly something economically wrong with the current VC model: the quest for the one mythical unicorn that returns the fund leads to a number of behaviors and incentives among investors and founders that have unethical and other damaging consequences.
Which leads to an unbearable focus on growth at the cost of innovation (or sanity).
You hear it in the trauma and suffering of founders who have been pushed out of their companies because they were not growing aggressively enough. You see it in the #MeToo horror stories, and read it in the complaints from users who’ve had negative, unsafe experiences on VC-fueled platforms. The quest for unicorns has its own inescapable logic that leads to questionable decisions.
Where do you see the problem has reached its height?
A case in point are all the social media platforms that attracted gobs of VC before they had a revenue model. The money has a high and fast return expectation, so the easiest fix is to monetize your users’ attention. Taken to its logical conclusion, in an environment where moving fast and breaking things is venerated, you end up creating runaway propaganda machines that are now threatening the fabric of our democracy. VC isn’t morally wrong, but it can and has lead to morally questionable behaviors.
Everyone in Zebras Unite is an entrepreneur, running their own companies, as well as participating in the movement. Tell us about your “day job” at Sphaera.
Sphaera is a technology and systems design firm that is building the digital, legal, and financial infrastructure for mobilizing innovations and capital at the scale and speed needed to deal with climate change and the other Sustainable Development Goals. Doing that requires next-generation collaboration, and we think there is a role for technology in disrupting the global social change industry for the better.
I saw that your title there is “C of Everything.” Do explain.
All these C-Suite titles are so 20th century, so when I was first making business cards for Sphaera, I called myself Chief Everything Officer—tongue firmly in cheek. It’s a reflection of going from running a $10 million organization with a staff of 70 and $150 million in assets under management to running mostly myself and a small group of partners, staff, and collaborators, while also taking out the trash, and doing all the unglamorous things involved in building a company.
Sarah Drinkwater from the Omidyar Network—started by eBay creator Pierre Omidyar to “reimagine capitalism”—recently announced a significant investment.
Sarah and the team at Omidyar have been terrific thought partners and evangelists around our work. Their initial investment [is] a grant. One of the things that’s so refreshing about them is that they are actively supporting the creation of new zebra-aligned investment vehicles, and we very much look forward to that conversation with them as we get into the design of instruments that are responsive to the capital needs and opportunities we see among zebra companies.
What have reactions been like from the wider traditional financing sector, or do you not care?
The reactions have ranged from: “You’re just bitter because you couldn’t get venture financing for your companies” to “how do I give you $1 million to invest in zebra companies?”—and everything in between. We have been trolled, brain-picked to exhaustion, and had our ideas appropriated without attribution. And we have also entered into very productive, strategic partnerships with aligned investors, private foundations, and others around these ideas. Anyone who can read financials knows that the business model of VC itself is broken, so we have had a lot of interest from capital innovators in creating a greater diversity of investment approaches.
So if people are fed up with the current system, and want to become a Zebra, rather than a (mythical) Unicorn, how can they get involved and really change things?
Simple: just find us at zebrasunite.com and, if they’re around in March 2020, sign up for DazzleCamp, which runs from March 1-5, 2020 in Atlanta.