This Utah tech startup, led by Black CEO, just went public. Here’s why that’s a big deal for Black representation in business
Utah lags behind national curve in business diversity
Utah customer communications innovator Weave achieved rare Unicorn status in 2019, an industry term reserved for privately backed startups that reach the $1 billion valuation mark.
But on Thursday, the company did something even more rare in a tech sector that has widely failed when it comes to building diversity within its workforce and leadership ranks — Weave was led into the public markets by a Black CEO.
That leader, Weave CEO Roy Banks, is no stranger to the top of the corporate pyramid, having occupied the chief executive’s office for four other companies before joining Weave.
Banks said when it comes to improving diversity and opportunity in the tech sector, and the larger U.S. business community, open and honest public dialogue about the issues must improve.
“The way we do it starts right here,” Banks said. “You and I have never had a discussion before, even though I have sold multiple companies for billions of dollars.
“I’m an African American CEO leading a billion-dollar company into the New York Stock Exchange. I have a platform to show that, in spite of all the things that are happening in our country, the vitriol and division ... around Black Lives Matter, the LGBTQ community, George Floyd’s murder ... we need to remember there are also good things happening.”
Thursday’s IPO was a very good thing for Weave, raising about $110 million in fresh capital for the 13-year-old business, money company officials said will help fuel further market expansion and growth.
What is Weave?
Weave got its start in 2008, launching as a platform designed to integrate with health care providers’ existing customer relationship management software and “enable businesses to form stronger relationships with the people they serve.” Weave provides tools that include text messaging, email, marketing capabilities and a proprietary VoIP — or voice over internet protocol — phone service.
In a 2018 Deseret News profile of the company, Weave co-founder and CEO Brandon Rodman said his company’s product elevates efficiency while also creating a more personalized experience for users’ patients.
“We believe that in most service-oriented businesses … the key to success isn’t measured in dollars,” Rodman said in a statement for the profile story. “Revenue is a byproduct to building real customer relationships.”
“Weave’s platform makes this interaction as seamless and as natural as possible by providing a personal touch that results in increased productivity and profitability, and brings customers and businesses back together.”
Banks said Weave — which began with a focus on building more robust communication and customer experience outcomes for health care service providers like dentists and optometrists — has since expanded into other sectors, most recently for professional home service providers.
Banks said he sees a wealth of opportunity for Weave’s future growth both in new markets and within their current operation categories.
“We’re constantly looking to expand and grow the business, including vertical market expansion,” Banks said.
Banks, a Utah Valley University graduate whose previous companies have included Tritium Partners, LoadPay, Networks Merchants and Open Edge Payments, said he looks forward to a time when his successes in the business world are no longer viewed as outlier events.
But for now, challenges when it comes to diversity issues in corporate America, and Utah, run deep.
Black representation in big business
A count of Black CEOs among the country’s biggest companies finds the numbers are small and dwindling. Less than a decade ago there were seven Black CEOs of Fortune 500 companies but, as of late July this year, that was down to three, according to data assembled by Business Insider.
And last year’s list of companies making the biggest breakthroughs and having the most influence on markets and competition, CNBC’s Disruptor 50, had no companies with Black CEOs.
The news site reported that glaring omission could be sourced back, at least in part, to dysfunction within the venture capital community that fuels the growth — and success — of so many U.S.-launched startups.
“It speaks to the fact that Silicon Valley’s vast networks of capital exist in a community that traditionally has excluded Black entrepreneurs,” CNBC reported. “This has sidelined many of them from the financing that has delivered generations of tech-driven start-ups (most of them with white male CEOs) to the public markets and generated billions of dollars in wealth.”
And, Utah data suggests the state’s own burgeoning tech community is an underperformer on diversity issues, even when compared to dismal national averages for the overall sector.
Utah tech sector lags in diversity
A benchmark 2019 report by the University of Utah’s Kem C. Gardner Policy Institute amassed a wide range of data defining the depth and breadth of the Utah tech sector’s powerful economic wherewithal. But it also found the state’s tech businesses had even bigger diversity challenges than the overall U.S. tech realm, with the typical Utah tech worker likely to be male, white or Asian and mid-career.
Viewed against countrywide performance data, diversity in the Utah tech sector is lagging well behind national averages. According to the report, 83.2% of Utahns in tech occupations were white in 2017, while 16.8% were racial or ethnic minorities. Nationally, about 36% of tech workers in 2017 were racial or ethnic minorities.
Utah is trailing the national average for the number of women employed in tech, as well. While 2017 data reflects 22.5% of U.S. tech workers were female, in Utah in the same year, women made up only 15.2% of the state’s tech workforce.
Utah Black Chamber founder and Executive Director James Jackson III said Banks’ achievements can play a role in the work to overcome the enormous challenges that still face people in diverse communities in Utah and across the country.
“The diversity community needs to see themselves in this industry,” Jackson said. “Finding allies and mentors is so important, but where do you turn if there isn’t an ally at the CEO or executive level?”
Jackson said accomplishments like a Black CEO taking a successful tech company public can act as “doorstops” that create new openings to opportunities for other members of diverse communities, but much more work needs to be done.
“We’ve made incredible strides in the last 60 years,” Jackson said. “The civil rights movement gave us an equal playing field but not an equitable playing field.
“We’ve got a long way to go.”
In spite of the obstacles, Jackson said the last few years have raised the collective awareness and sparked new conversations when it comes to honest explorations of race, diversity and equity in the U.S., and his organization has experienced 300% growth over that time.
“These last two years have taught us a lot,” Jackson said. “People found out they didn’t know what they didn’t know. What that gives us is hope and lets us know that people are listening.
“Now, we need to continue to sustain that momentum and turn conversations into action plans.”