Renata Quintini
Dec 18, 2017 · 7 min read

The 7-step startup Kata can help you build a better future without damaging humanity — or your company

In the past year, dozens of companies have been called out for violating ethical norms and damaging public trust, resulting in lawsuits, boycotts, and investigations by local law enforcement and/or Congress. Tech outfits like Facebook, Twitter and Uber, as well as stalwarts like Equifax, Wells Fargo and The Weinstein Company — are facing critical existential challenges due to missteps and miscalculations. As a result, many executives have been fired, and billions of dollars in market valuation have been eviscerated.

Entrepreneurs and CEOs today have a great deal of moral, as well as fiscal, responsibility. If they get it right, they can truly make a positive, lasting impact and create meaningful businesses that improve the quality of our lives. If they get it wrong, the damage could be swift, severe and far-reaching.

I’ve spent a lot of time this past year thinking about what could help CEOs build a better future without damaging themselves, their companies or humanity. I found some inspiration from my childhood. When I studied Karate, my sensei drilled into me a series of practice moves called katas. The idea is that when you’re fighting, you don’t have time to think; you act on instinct, which comes from repetition and muscle memory. The more you practice, the better prepared you will be for an unexpected moment of truth.

In order to prevail over the unknown, startups need to prepare for all possible outcomes. They need to practice their own katas. I propose the following 7 steps:

1. Be consistent about your culture
In Silicon Valley, common sense, compassion and judgment sometimes take a backseat to growth-at-all-costs — euphemistically known as “scaling.” Companies that prioritize scaling inevitably stumble due to a culmination of oversights, unintended consequences and small bad actions. If leaders only value and reward growth, employees may make decisions that can lead to illegal and/or unethical behavior.

Zenefits, a company that set out to disrupt HR and health insurance management, was investigated for its use of “Macro” software, which let employees avoid the system and sell insurance without proper training. The founder and CEO, Parker Conrad, was replaced. In a talk at a venture firm, Conrad said, “There’s a low-level panic that suffuses the organization, a constant pressure to keep moving faster and faster and faster.”

The “Why” of things matter, as well as our corporate internal moral compass. From day one, founders should discuss the company’s “True North:” what you care about, what you stand for — and what you don’t. Be explicit about it, and determine where you draw the line. Write it down and share it with everyone, including your board, employees and contractors so that everyone knows what is expected of them.

2. Prepare to be published
In this era of social media and ubiquitous sensors, you should assume everything you do, say and write will be seen by millions of people in real time. What goes on within your company’s walls will inevitably get out in the open. As a CEO you’ll own the successes and mishaps of every member of your company. Screen for EQ. Hire the type of people who will act responsibly even when they think no one is watching. When hackers publicized the private emails of Sony Pictures executives, they exposed sexist, racist, and other irresponsible behaviors and viewpoints. The company’s co-chairperson, Amy Pascal, stepped down.

3. Build and act with empathy
Plenty of tech inventors have expressed regret about the impact their products have had on the world. To avoid this, start from the beginning by imagining how people will use your product when it reaches a mass audience. Try to think about whose lives would change, in small or large ways, positively or negatively, because of what you have built. When designing your product, as well as when you decide where and how to build it, how to promote it and how you will support it, tap into that empathy.

Mark Zuckerberg created Facebook to bring people together. The founders of Twitter gave people a platform for public discourse. Unfortunately, they underestimated the unintended consequences of the power of both platforms at scale. Both products have been accused of fostering deep cultural rifts, enabling bullying and other forms of abuse, and unwittingly assisting Russia with influencing the 2016 U.S. presidential election. Executives from both companies have been asked to share private records and testify in front of Congress.

4. Take care of your customers’ privacy
The combination of ubiquitous sensors and always-on connectivity means companies are tracking us more than ever, and in ways many of us do not fully grasp. Customers expect and deserve privacy and security. Just because you put a waiver on your Terms of Service agreement does not mean you are acting fully “above board.” When it comes to privacy, asking for permission is far better than asking for forgiveness. Build a fortress for your customers’ data. Comb through every layer of your product and service, as well as your supply chain and third party providers to uncover vulnerabilities. Periodically reassess. If you don’t do this right, it will cost you an incalculable sum in loss of trust and reputation.

Until a year ago, Uber was considered an undeniable rocketship with the potential to reinvent the future of transportation. It is now fielding multiple existential blows. Most recently, it got outed for concealing for almost 18 months an attack that exposed private information of 57 million riders and drivers — including driver’s license numbers. As with most things, the cover up is the worst part. The chief security officer and a senior lawyer were fired.

Privacy is more than just personal data. Consumers expect to have privacy around their actions, as well. Quartz reported that Google collected location information from all of its users of Android phones — even those who disabled location services on their phones. People want and deserve the ability to choose how and whether they will be tracked.

5. Check your biases — in your code and your source material
Artificial intelligence outcomes are not pre-programmed; computers “learn” by observing. But machines lack judgment. To “decide” what to do next, they draw on the rules, choices and biases of the humans that created them, as well as the content they’ve been served. A computer science professor at the University of Virginia discovered his image recognition software was drawing sexist conclusions. The culprit? Unconscious bias. He dug deeper and learned that when computers are “taught” by sifting through databases of photos, they amplify whatever bias is already in the picture. Stock photos show women cooking so often, for example, that his machine learning program began to label men cooking as “women.”

If you want to advance humanity and build products that will truly serve a diverse population, you need to make sure your data sets are truly bias free and representative of society at large. Build transparency into your code. Hire a diverse team to program, design, test and market your product.

It’s important to set up a human-led system of checks and balances for other issues, as well. Computers are not capable of policing themselves or each other. James Bridle wrote an exposé about the strange and sometimes violent videos created by bots and bad actors, and published on YouTube’s kids’ channel. His scary conclusion? Because the computers that are publishing this stuff don’t know how to discern right from wrong, millions of kids are exposed to these videos. YouTube is also being called out for allowing “predatory comments” on videos of children. As a result, many large companies are pulling their ads from the site.

6. Don’t ignore regulations
The lines between digital and physical worlds are blurred: traditional markets and services are being revolutionized by software and networks. As such, the lines where government begins and ends are changing. Companies such as Airbnb, Uber and Lyft all needed to make decisions about where they stood in relation to regulations. And all of them had to face the consequences of those actions at some point. Be prepared to follow — or work to change — regulations. If you are proposing something new, you need to educate and engage the community in the political process. Don’t try to take shortcuts around the law. Uber is suffering backlash for creating and using software called “Greyball” that deceived government authorities worldwide and this approach was one of the reasons the founder and CEO of the company, Travis Kalanick, was forced out.

7. Attract and support a diverse team
Cognitive diversity matters. It’s not enough to just hire a more diverse team; you need to ensure they thrive. Numerous companies have started off with good intentions and failed to support the employees they worked so hard to attract and sign. Standardize pay and evaluations across the board. Be gender- and color-blind in writing your specs, as well as reviewing applications, performance reviews and compensation packages.

Make sure everyone on the team feels safe and supported at work. Set up a policy of zero tolerance for abuse and harassment. Hire someone who owns the job of hearing and investigating complaints. These rules should protect anyone the company works with — whether they are employees or not.

Remember: In order for a kata to be effective, it has to be continually practiced. It is not a quick fix; it is a way of life.

If the startup kata speaks to you and you want to practice together, I hope you’ll reach out: @rquintini. I’m interested to hear ways in which you are building a better future without hurting humanity. Please also share your stories on Twitter with the hashtag #StartupKata.

Lux Capital

Early-Stage Venture Capital at the Boundaries of What’s Possible

Renata Quintini

Written by

VC @lux_capital. I’m actively seeking and supporting founders that aim to build a better future without destroying humanity.

Lux Capital

Early-Stage Venture Capital at the Boundaries of What’s Possible

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