Why aren’t there more women entrepreneurs?
Image by The Library of Congress via Flickr
Women own the majority of small businesses around the world. Women are talented, hard working, educated, have many of the qualities necessary for leadership. Yet somehow the percentage of women entrepreneurs running successful startups runs in the single digits. The businesses women own tend to be low-impact and make up perhaps 5% of GDP: home-based boutique companies, childcare centers and the like. There’s nothing wrong with such businesses, but we can do so much more.
Why don’t we?
We might debate why venture capital firms do not invest in female-led companies, but the harsh truth is simple: the opportunities only go to the best, and the competition is intense. If you’re not on top of your mental and emotional game, you’ll be watching while others grow.
In 2001 I (with the help of a great team) started a company called ConnecTerra in Cambridge, Massachusetts. Our first day of business was September 11, 2001. Our first year was the lowest investment year in the history of the venture capital world. It turned out that the market was not quite ready for our product, which centered on radio frequency identification (RFID) technology. But we brought in individual and corporate investors, grew the company and after five years, we were acquired by BEA Systems, which was in turn purchased by Oracle. It is possible.
It would have been easy blame not getting funded on the fact that I was a female CEO, but that is not the case. Technology is a meritocracy. Yes, there are “old boy networks” in a sector dominated by men. Yes, there are some prejudices against women. But for the most part, a brilliant idea and a savvy operational strategy presented with confidence and professionalism has a good chance to get funding. The trouble for women entrepreneurs is not having two “x” chromosomes. In years of counseling and coaching women entrepreneurs, I’ve seen that we are often our own worst enemies. Some of the traps I’ve seen women fall into:
- Lacking confidence in their idea and themselves.
- Not knowing enough about the market.
- Not having a strong, A-list team.
- Not knowing the competition well enough.
- Lacking the ability to inspire the people around them.
But I think the greatest shortcoming I’ve seen in women who are otherwise just as gifted, driven and brilliant as any male computer science Ph.D. coming out of MIT is that we as a gender are too thin-skinned. I’ve seen too many women unable to handle confrontation and disagreement and not take it personally. Entrepreneurship is a harsh environment. Investors ask tough questions without consideration for your feelings. If you were being asked to part with $20 million, you would ask the same questions. You can’t take the doubts and interrogation personally. If that’s just how you’re wired, get in another business.
The best advice I can offer woman is to separate your self-esteem and emotions from your business life. I have watched women suddenly get upset in the middle of an intense business situation and cringed as the entire thing started to collapse. Business should not be personal. Men might get ugly and start conflict, but things get resolved and nobody takes it as a personal affront. I would like to see women entrepreneurs develop thicker skins and self-esteem commensurate to their enormous talent.
We certainly can’t claim bias in the business world. After all, two of the largest tech companies on the planet are now being run by women—Hewlett-Packard by Meg Whitman and (beginning in January) Virginia Rometty at IBM. Does that look like bias? More important, what do these women have that so many other women need? I’ll explore this more in a future post.
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Interesting. I agree that ANYONE in business cannot be thin-skinned. Maybe it’s my time on the planet as a writer, but I have developed a pretty thick skin. I understand the difference between business and personal. If things work they work; if they don’t the problem needs to be addressed, repaired or dumped. If that involves the firing or letting go of consultants or staff, so be it. No room for feelings. That said, I am still respectful of others’ feelings. I see more men who are at least aware of the politically correct way to act. However, that may be driven by our sue-happy society. I learned a lot about appropriate corporate (and entrepreneurial as that too is business) behavior when working for a very interesting woman-owned and operated law firm in the San Francisco area, Miller Law Group. That was a few years ago. During the time I worked with them they opened a second location. I have watched them. They are still growing, adding attorneys to the firm, etc. They only had female attorneys until recently. They did things a little differently. As women, they all had families, so the founding partners came up with flex time and desk sharing for some of the younger female attorneys. This allowed for more time with family. The result was a far more productive and cohesive team. Together they conquered! They had a different mindset than male attorneys. They were tough though. I’d have Michelle Ballard Miller go to bat for my company any time. She was smart and tough, but also had a family she adored and for whom she made time. Again, that’s the difference between women in business and men in business. This topic came up yesterday at an all-women business lunch. I cannot share why I was there, but it’s pretty big. As a part of think tank situation, we dissected reasons why women may be more challenged on the business front. Time and family ranked at the top of the list. We as women feel a form of guilt about not serving clients when we are serving our children and vice versa. I don’t think men have that going on in their heads. Women think all the time, too. Men — at least those in my age group — are one-thing-at-a-time thinkers. Want to blow any man’s mind (who is over the age of 26)? Give him a verbal task list. Say, “George, when you’re on the way to the conference room, can you stop by the copy center and pick up the reports and give them to Lenny? Oh, and then stop off at Cheryl’s desk and deliver this message for me? I have to do a few things before I get to the meeting.” Poor George was thinking, “I am going to the meeting now. I am walking to the conference room.” You just put a dent in George’s day. He may get the added tasks done, but then he might pass it to someone else or wait till the meeting is over. That’s just how their brains function. You ask Susan to do the same tasks on her way to the meeting and she will do things as requested. This is how we as women function, so it is quite interesting why there aren’t more of us running our own businesses. I like running mine. I also believe in mentoring. Well, I could speak to this topic all day, but I have a few things on my to-do list to get done.
I agree as women we are too thin skinned. Not to mention competitive with one another. I can’t name many women that I worked with in real estate whom was not a “hen.” In the south where I’m from there was a saying that offices where women dominated was like working in a hen house. The constant “clucking” of office gossip etc.
In my opinion that is another contributing factor. Sometimes we sit silently by counting all our amazing deeds that we do without asking and expect validation. When you start a business you will spend way more hours working than is healthy and at times humanly possible. It will test the relationship of your spouse, your family and your sanity. Not to mention the emotional stress. You will work much harder and get paid much less than what you are worth.
Nevertheless, that is at the beginning….and only then is it acceptable. You need to have a system to measure your success vs your time.
thanks for posting such nice post. the business women network empowers working women to achieve their full potential and partners with employers to build successful workplaces through education, research, knowledge and policy. It transforms workplaces by strengthening the capacity of organizations and businesses to create work environments that are inclusive and value the skills and contributions of working women
I find your tone demeaning. Women are not their own worst enemies. For the most part, women are great team players. Statistically, their companies are much less likely to go bankrupt than those run by men.They do well in corporate environments like HP and IBM. I have yet to meet a really strong woman entrepreneur who just didn’t want “it” enough. You need to look at the data.
When I started my company in 1997, fewer than 4% of all companies started by women got venture capital. That number is only around 7% now. At one point, I started a very innovative education company and organized a Board of Directors with what you call “A Players”. My first Board member was a brilliant Hispanic Attorney with an MBA and JD from Harvard. He was joined by an African American woman who was the first person of color in her state to receive a Rhodes Scholarship. She had a JD and was the former Secretary of Education in her state. I was approached by a phenomenal Chinese engineer who was the former Director of NASA, he had a PhD, MBA and MD. Our formidable group was then joined by someone who worked at the OECD. He had doctorate in economics from Oxford. Together, we had hundreds of years worth of experience in everything from education to starting companies. I presented our business model to more venture capitalists than you could shake a stick at and was amused to hear my team referred to on almost every occasion as “not experienced enough.”. While I tried banged on closed doors, one investment banker told me even the pizza MAN could get money in 2000. Another venture capitalist told my client (a woman with a degree in Engineering from Stanford and an MBA from Harvard) we should be spanked. Seriously.
Please do not underestimate how difficult and often demoralizing it is to start a business. Here is an article written about the time of my experience. http://www.bizjournals.com/sanfrancisco/stories/2004/09/27/focus7.html?page=all
Also note, this did not stop me from having a successful small business or from helping build companies. Our early stage companies and products grow and sell for $Billions. We have a very strong track record in the medical device space. Like Steve Jobs, I am constantly looking for brilliant people and amazing teams of artists and technologists because this is where the rubber meets the road. Innovation is where women win hands down.
For the record, the playing field will not be level until men and women are equal. When you see equal numbers of men and women on BODs of start ups and when an African American or Hispanic woman can drop out of Harvard and get the level of funding it takes to build a Facebook or a Twitter. Then, we will talk.