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Silicon Valley's Newest Exclusive Clubs Are All About 'Diversity'

Can a couple of $2,500-a-year social clubs help mitigate the tech industry's notorious whiteness and maleness? Probably not, but at least some millionaires seem to know there's a problem.

by Arielle Pardes
Dec 17 2014, 6:09pm

Silicon Valley from above. Photo via Flickr user  ​Patrick Nouhailler

There's an unspoken but by-now-well-established uniform in Silicon Valley: a pair of clean jeans, a button-down shirt, sneakers, a zip-up hoodie, and a fair amount of beard scruff. It's not hard to mistake a CEO for a college student (or vice versa) because pretty much everyone looks the same. That's also due, in part, to the fact that  Silicon Valley is not ver​y​ diverse. All that sameness is starting to get a little stifling—and the tech world's answer to that problem is to open up some exclusive social clubs. 

Rich people love fraternizing with other rich people (remember that social net​working site that costs $9,000 to join?), and the rich people in the Bay Area are no exception. The region has always had its share of elite, members-only establishments: The Gotham Club (which costs $2,500 in initiation fees and $1,250 in annual dues), the Club at Wingtip ($2,500 for an initiation fee and $3,000 in annual dues), and the Bohemian Club ($25,000 for an initiation fee and annual dues somewhere between $1,000 and $8,000). But lately, there have been a couple of new entries on the list, tech-centric establishments that are making a fairly big show of being more egalitarian than the older clubs for what are now called high-net-worth individuals. 

The Battery, which charges $2,400 a year in dues, opened last year in San Francisco's Financial District and has the sort of hoity-toity image you'd expect:  ​The website says members come here "to refill their cups. To tell stories. To swap ideas. To eschew status but enjoy the company of those they respected." It is apparently serious about that shit. There's also ​the Cuckoo's Nest, a planned $2,500-a-year, 1,200-member club that caters to "disruptive founders and CEOs, risk-taking venture investors, and other distinguished champions of the entrepreneur." The Nest plans to keep it's membership 51 percent female and 20 percent under 30. (Those youngsters will get discounted membership of $1,000 per year.)

This sort of "diversity" is pretty limited, obviously, but the founding of these clubs indicates that even Silicon Valley millionaires are concerned about the tech industry's notorious homogeneity. A whopping  ​87 percent of startup founders are white, the big tech companies are ​overwhelmingly white and Asian, and San Francisco, which is now the country's ​most expensive place to live, is itself "turning into a private, exclusive club," as a New Yorker article put it last year.

Some Silicon Valley companies are actively recruiting minorities by making hiring managers aware of  ​hidden biases in interviews, introducing programs that ​mentor girls in STEM fields, and so on. This isn't just diversity for diversity's sake—evidence shows that companies with employees from lots of different backgrounds are both ​"more creative" and "more profitable," according to a New York Times editorial. And there's another reason to seek out diversity: Hanging out with a bunch of white techies all the time is boring.

That's the stated impetus behind the Cuckoo's Nest and the Battery. The latter's co-founders, Xochi and Michael Birch—who made their fortune when they sold social networking site Bebo to AOL for $850 million—said in  an interview last year, "It's a diverse city, but you have to actively go out and look for it, otherwise you wind up running in the same circle." In other words, even a few hundred million bucks can't buy friends who you enjoy talking to.

So sure, all the members have to be rich enough to fork over a couple grand a year, and sure, they all had to know someone in the club, but the Birches wanted to make the membership at least as diverse as an interesting dinner party. Only a third of their members belonged to the tech scene. They encouraged women to join. They counted artists among their ranks, and a robotics professor, and people who worked for nonprofits. The club—which is housed in a five-story building and includes an exclusive restaurant, wine cellar, library, gym, spa, outdoor garden, four bars, 14 hotel rooms, and a rooftop Jacuzzi—is exclusionary by nature, but it shows that millionaires are curating the crowds they associate with slightly differently than they used to. 

That's progress, I guess—if not the sort of progress that will be of any help to the millions of people who will never see the insides of these clubs. 

Follow Arielle Pardes on ​Twitter.