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Ellen Pao

Notes from Silicon Valley’s trial of the year

Feb 25, 2015

And on the second day ennui set in.

Sparks flew on the first day of the jury trial pitting Ellen Pao against her former employer, Kleiner Perkins. Or so I’m told. I wasn’t there. Pao’s lawyer, making the case that she had been discriminated against as a woman, took swipes at the venerable venture firm. Kleiner’s lawyer besmirched the impeccably pedigreed Pao, who has gone on to become interim CEO of the content site Reddit. Then former Kleiner investor Trae Vassallo told of improper behavior by yet another former Kleiner colleague, Ajit Nazre, who wasn’t there. I understand the courtroom near San Francisco’s Civic Center was packed. (Katie Benner and I wrote about the origins of this suit in 2012.)

Today was a bit different. I arrived at Room 604 of the Superior Court of San Francisco at the precise moment Chi-Hua Chien was walking into the room. That he is one more ex-Kleiner investor tells you something about Kleiner’s personnel problems that may or may not have anything to do with gender discrimination. I shook hands with Chien, whom I’ve known for years, and shortly thereafter regretted it: On cross examination (read: the friendly part of his testimony), he told the court he had been up most of the night holding his six-year-old daughter who has a bad bout of the stomach flu. I left the courtoom at my first opportunity to wash my hands.

But wait, yes, there was a trial going on, and an important one. Yet you know the two sides are settling in for the long haul by how many empty seats there were in the courtroom. (The case is expected to take about a month.) Pao sat with her legal team, but no senior member of Kleiner Perkins sat with theirs. (UPDATE: Many Kleiner bigwigs, including John Doerr, are scheduled to testify at the trial, and are prohibited from attending other sessions.)

Here’s a short synopsis of what happened:

Pao’s lawyer presented evidence to suggest that Chien, like Pao, had received plenty of negative feedback during his time at Kleiner, though at least until very recently he didn’t suffer for it. He was promoted during his time there, but Chien was told late last year his "services were no longer needed."

Pao’s lawyer also walked Chien through some of the details of his plans to organize what became an all-male ski trip to Vail, Colo., in early 2012. He and his pal Dave Morin—Chien invested on Kleiner’s behalf in Morin’s company, Path—discussed by email whether they should invite the two co-founders of Rent the Runway, another company in which Kleiner Perkins has invested. Given that participants on the trip were going to share condos with three or four bedrooms, and given that it wouldn’t be appropriate for men and women to share the condos, Jennifer Hyman and Jennifer Fleiss (referred to in court as “Jenn and Jenny”) ultimately weren’t invited to the slopes.

Kleiner’s lawyer led Chien through a series of questions to make three general arguments. First, women did succeed at Kleiner Perkins, namely Mary Meeker and Beth Seidenberg, both of whom remain at the firm. Second, Pao’s lawyer misread constructive criticism of Chien as negative feedback. Third, Chien made an effort to include Pao in plenty of discussions—countering one of her key assertions that she was excluded from things that mattered during her time at Kleiner Perkins.

Other than acknowledging that no one will come out of this process with their reputations enhanced, it’s too soon to guess how it will turn out. Pao may or may not have had the potential to be a talented investor; it isn’t clear to me this question will be answerable in a court of law. Kleiner clearly treated some women well and others shabbily. Or at least they suffered from shabby treatment during their stay at Kleiner Perkins, which in turn tolerated a male-dominated environment that is as prevalent as fluoride in the water on Sand Hill Road. Whether this will amount to gender discrimation in the eyes of a jury remains unknown.

Some tidbits:

* A genuinely amusing series of exchanges between Pao's attorney, Therese Lawless, Chien, and Judge Harold Kahn involved the general befuddlement of the non-Silicon Valley types. Brief mentions during testimony of Path, Zaarly, and Y Combinator required explanation. This is a good reminder that the names and faces the Silicon Valley echo chamber takes for granted are absolutely meaningless to the rest of the world, which is most of the world.

* There was a brief exchange having to do with Pao being excluded from certain meetings that alluded to Path’s Morin having participated in employment interviews at Kleiner Perkins in 2010. If I heard this correctly, then Morin considered joining Kleiner that year, which is when he left Facebook and started Path, a social-networking app that has struggled to live up to its initial lofty press clippings. That may or may not be news in the abovementioned echo chamber, but I hadn’t heard it before. (Morin didn't respond to an email requesting comment. Someone else who knows about his interactions at Kleiner says he was briefly part of a "super off-the-books" design team at Kleiner.)

* In one of those unintended gems of procedural drama, Kleiner’s lawyer Lynne Hermle took Chien through a detailed description of his career as well as what happens at a venture capital firm. She did this generally to help ground the jury in some of the lingo surrounding venture capital but also so she could then draw a contrast between Chien’s venture-capital experience and Pao’s. (Kleiner’s defense against Pao’s assertion of discrimation is that she was inexperienced as an investor.) The details of Chien’s testimony won’t be of great interest to the tech crowd, but the transcript could be published as a wonderful primer on venture capital, a subject that understably confuses most everyone else.

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