An Interview with:
Women are at the helm of increasing numbers of U.S. businesses. They already have held a nearly three-to-two majority in undergraduate and graduate education, and, in 2010, for the first time, more women than men in the United States received doctoral degrees.
While the numbers of highly educated women who have the potential to start scalable ventures have reached record levels, these women are not pursuing entrepreneurship or being exposed to entrepreneurial possibilities through networking. At a time when the world needs high-growth entrepreneurs more than ever, the Kauffman Foundation has declared this to be the Decade of the Woman Entrepreneur to pursue opportunities that will inspire women to seek advisors, training, and networks that will help them unleash their potential and fundamentally change lives.
To discuss the needs of women entrepreneurs in the decade ahead, Lesa Mitchell of the Kauffman Foundation talked with two women who lead organizations specifically focused on providing entrepreneurial education and support for other women who have the potential to become high-growth entrepreneurs.
Mitchell: Why do you think now is the time to make this the "Decade of the Woman Entrepreneur?"
Charania: It's a good time to start a business, regardless of gender, so it's an opportune time to encourage women to take the leap. Startup costs have come down, and open source approaches enable individuals who don't necessarily have an extensive technical background to become part of the entrepreneurial ecosystem. Despite the recession, funding is available and accessible, and, overall, the barriers to entrepreneurship are relatively low.
Vosmek: Women represent 51 percent of the nation's Ph.D.s, 51 percent of business school applicants, and more than 70 percent of last year's valedictorians. Women are well equipped to become entrepreneurs, and are primed to look at different ways of approaching challenges to find better solutions. As a nation, we must make sure we tap into this supply of able business leaders.
Mitchell: Leaders at MIT would tell you a key reason MIT graduates have such a high level of entrepreneurship is that they have had so many experiential opportunities. How do you think we can increase women's awareness, at any stage, that entrepreneurship is an option?
Vosmek: This is an important question, especially in light of the fact that women are extremely entrepreneurial. Women are particularly underrepresented in the high-growth space. Why are women not finding their way there? I believe there are two reasons, as shown by research.
Women, particularly those older than thirty, have a lack of cockiness, and I wish they had more of it.
Number one, data out of the University of Wisconsin show that women self-assess differently than men do. This fact matters, particularly in the high-growth space, because we see women with fifteen years of industry experience fearful they're not qualified to start a company. That phenomenon really becomes a pain point for high-growth entrepreneurship, where women would be stepping out onto a limb to launch companies.
Second, Kauffman Foundation research shows that women use their networks differently than men do. This is where Astia has invested the last ten years in building out a community that will validate not only a woman's business opportunity, but also her skill set as it's matched to that opportunity.
Mitchell: Of the two items you list, which is most important?
Vosmek: Our experience tells us both are very closely linked. However, validation that female entrepreneurs are headed in the right direction is critical. Women, particularly those older than thirty, have a lack of cockiness, and I wish they had more of it.
Charania: Women tend to undervalue themselves and what they've accomplished. Rather than underselling themselves, female entrepreneurs need to own what they've done and become confident in making the sales pitch that correctly positions their high-level performance.
Mitchell: Some women have shied away from women's entrepreneurship organizations because they believe they should network only with men's groups. How do you respond to that?
Charania: We are trying to bring a new generation of female entrepreneurs into the early stage funnel of startups. Those who hide their networks or remain in only their existing networks are stifling the innovation ecosystem. What we are building is an open network—future founders, men and women; investors, men and women; resources and tools for all.
To engage experienced women, we take baby steps by starting with a low commitment. We may ask them to make a presentation or to serve as a mentor—just a few hours of their time. Before you know it, the desire to support is infectious.
Vosmek: The key to attracting women to advisory networks is to be very targeted in what we ask them to do. We explain what the startup does, what we're asking the advisor to do, and when the commitment will end. We have devised an ask that shows women how they can give their time very efficiently—that makes our network attractive.
Charania: Another practical approach is to align the call to support
Women 2.0 with business objectives. The Women 2.0 community of future founders is a lucrative market! We are potential customers, or, for female investors, our community is a unique set of deal flow. I try to learn what a woman's personal or business goals are, and then try to align her donated time with us accordingly.
Mitchell: Do men and women respond differently to serving on the board of a women's organization?
Vosmek: Men on our Astia board of directors get kudos for being on the board of a woman's organization, and the women get harassed. Herein lies the difference. The men talk about the bragging rights they get for being on the board. The women talk about defending their commitment to the board not only to their immediate world, but also to themselves.
Charania: The fact that Women 2.0 has been so gender-balanced in our programs may be a reason I've been able to pull more people, men and women, successful entrepreneurs, and investors into our community. None has ever said they felt that Women 2.0 is a women's organization. Rather, Women 2.0 is clearly understood as a pre-incubator, a place for the next generation of entrepreneurs, a community that leverages diversity to fuel startup innovation.
Mitchell: We spend a lot of time helping women understand the benefits of establishing for-profit companies. Now, changing directions a bit, what are the challenges in getting women to think big as entrepreneurs?
Vosmek: The first is inspirational. Women self-assess differently than men do and, according to the research, that pressure still proves to be a societal norm. Women are not going to aspire naturally to high-growth entrepreneurship. Organizations such as ours are going to have to inspire them.
The second is access to networks. Still today—in our society, and in Europe and India—men and women are in separate business networks, by and large. Because men still largely control capital, and women entrepreneurs need capital to succeed, they need men in their business networks. We have to break down network barriers and ensure men and women are working together.
I'm excited that all early research shows that women-led companies are out-performing their male counterparts for their investors. Innovation-related research shows that gender diversity is among the most important elements. We are finally at that tipping point, ready to say that men and women doing business together is the most effective means for creating jobs, growth, and wealth creation going forward.