Changing the Wrong Ratio?
Charlie O’Donnell, who is prominent on the NY startup scene, took a gander at the complex topic of women and entrepreneurship on his blog yesterday.
He is unconvinced that market opportunities being missed in the tech world right now, by virtue of the shortfall of women-led venture potential startups:
So far, no one has been able to make a good case for me why a certain percent of the entrepreneurial base *should* be any particular demographic
He suggests that many people he speaks with, including women, are probably not cut out for entrepreneurship. They would do themselves and everyone else a favor by heading into corporate America.
Would it be terrible if we created 10 female heads of marketing of 10 billion-dollar companies instead of 10 new female entrepreneurs? Whose career more positively affects the role of women in the tech industry? Marissa Meyer as a non-founder at Google or some new female tech entrepreneur who statistically won’t create nearly as many jobs and revenues as Marissa does everyday—because startups, no matter what the color or gender of the founder, are hard. Most of them don’t work. Why push your smartest underrepresented professionals into the role that has a relatively low chance of success and a less interesting expected economic outcome?
I appreciate what Charlie’s trying to say. I think he means well. But I also think he lacks the experience — generally, in corporate America, as a woman, and as a mother — to make this call.
So here’s my perspective, based on a lot of years experience generally, in corporate America, as a woman, and as a mother.
1. Corporate America, as a career path, is broken.
It never worked for women anyway. And it’s as broken as the funding path for women-led venture-potential companies. It cannot be viewed as a panacea vis-a-vis where women should go in lieu of entrepreneurship.
The rubber hits the road on this argument when you start looking at professionals who become mothers. I’ve led strategic planning for a $6 billion company, spent 8 years directly in a massive company and worked with dozens over 15 years. I was part of task forces at the highest levels, seeking to get at the root cause of diversity issues — to “change the ratio”. We did surveys and looked at tons of data.
We asked, for example:
Q: Why is it that we bring in 50% women just out of college, but almost all drop out when getting ready to hit the executive level (at appr. age 30)?
A: It’s the biological clock. The years when men are running up the ladder, and even scale the glass ceiling, are our prime childbearing years.
My colleagues surveyed women who’d left, to learn what they were doing now. Many left because they were pregnant. We assumed they were staying home to take care of their kids full-time. It turns out this was a HUGE fallacy. Most professional women get back to some sort of work. In fact, as many as 75% of U.S. moms work.
Yet at the same time, there are almost no “on-ramps” for professional women to return to corporate jobs after they’ve had kids. Especially for the good jobs with career path potential. Those who do go Corporate America, overwhelmingly take a demotion or a “support role” to get back in the door. We learned a huge proportion re-entered by doing their own thing, starting companies.
Parents seek some modicum of flexibility. Corporate America is, on the whole, unable to provide it. Exceptions exist, but they are edge cases and not available at any scale. Before I had kids, this “flexibility” requirement rang hollow with me, I didn’t get it. Now that I have two kids, it has so much more meaning. Every dad I know gets it, too.
Our schools demand parent participation, our kids get sick, parent/teacher conferences…being able to get something done that matters to our kids, tucking them in, and getting back on line at 8pm until 2am. That’s the schedule of most startup parents I know. We put in all the same hours, but at different times of day.
2. Women’s under-representation in STEM, while accurate, is a red herring.
Women make up only 8% of Computer Science PhDs. True. Do we need more girls in STEM (Science, Technology, Engineering & Math) — and boys for that matter — Yes, for sure.
But in a recent poll at the recent Astia “Doing It Right” program in New York, Chris Fralic from First Round Capital and Amish Jani from FirstMark Capital were asked what percent of their CEO founders are programmers — the answer was only 25-30%. Huh? So, to break this down — 70-75% of founders are non-technical, but still mostly men. So while we might apply the 8% to that 25%-30% of technical CEO founders, it is appropriate to expect a greater proportion of women among the non-technical 70-75%. But we don’t. For fun, let’s say we apply a 30% ratio to the remaining 70-75% (which is roughly the ratio of women in business schools, not 50%). That gets us to ~21% — still much higher than the current 5-7% female funding today.
To me, resistance to increasing the number of women from such low levels has got to be about something else.
It even has me wondering — where are the Limited Partners (LPs), who fund the venture funds, in all this? Many funds underperformed in the last 10 years — so why is the status quo remotely acceptable? Isn’t it possible that this systemic choking out of ideas before the come to market is a possible culprit?
In most industries, when a business is failing, you do a turnaround. And that includes questioning practices which have yielded zero or negative value. If I were orchestrating this turnaround, that’s an area I’d give a cold hard look. It’s broken, so throw it away.
3. Exercise caution in generalizing between women without kids, and moms. Our needs are different.
When you cluster women without kids and women with kids into the same group to make and argument, and you are likely to draw erroneous conclusions which satisfy neither group. Women entrepreneurs without kids must overcome perceptual challenges, to be sure. And I want to help them. But many high-octane non-moms shudder at the notion of being put in a “women’s group”. To them, that says “B Team”. I know — I used to feel that way too. And I’d encourage them to apply and participate in the male-dominated programs if they can and want to.
But let’s say you’re the same high-flyer, five years later, and now you’re a mom as well. You have a killer idea, have done your homework on the market, and want to apply to a top national incubator. But you discover it requires the founder has to relocate for 4 months away from her family. Or….pull the kids out of school and relocate them, for the short program? Based on that structure, she cannot even consider applying. And that has absolutely nothing to do with her capabilities as an entrepreneur, nor her commitment to the company. But it’s a core part of today’s ‘ultralight’ web startup model.
So in today’s market, what should a mother, who is highly qualified and an entrepreneur, do?
Suddenly I don’t give two hoots if I’m perceived B or A team. I know I’m A Team. I just need to get my product to market ASAP, so the market can to the talking — and let it succeed or fail. AND I want to tuck my kids into bed at night, at least a few nights a week. So anything that helps me meet that end is fine by me.
And if women without kids, or dads, or African Americans, or any other folks, including young single white guys, want to join in on that structure, I say — c’mon in. We’re thrilled to have you.
4. Seed investing is, at core, visceral.
The investor has to fall in love with the product and the business. Especially if consumer web. If you don’t personally experience the pain point being addressed, or wouldn’t yourself be a user, it’s very hard to fall in love. Furthermore, female tokenism in VC firms has its risks. Quite a few VCs have one woman on their team. If you’re a woman entrepreneur pitching to that firm, and the one woman isn’t into you, then game over. I’d love to hear stories when that wasn’t the case, but I haven’t yet.
In conclusion
I do not claim to understand what it’s like to be a 20- or 30-year-old single guy. I ask in return that others not draw conclusions on what it’s like to be a 40-year-old mom of two, unless you’ve walked in my shoes for a day.
Someday some of these gentlemen may have wives or partners, and kids of their own. At that point, they’ll start to understand this viscerally. Hopefully, in the meanwhile, what I wrote helps Charlie and others understand it a little better, if still only intellectually.
I’ve been greatly heartened by the many supportive words from male entrepreneurs and investors, who see their wives and daughters struggle with this too. It means a great deal. Hats off to each of you. We notice.
