Entrepreneurs: not who you think they are
Cross posted from Huffington Post:
If I say “entrepreneur,” whose image flashes into your head? Is it Mark Zuckerberg, who founded Facebook barely out of his teens? Is it a bunch of brash twentysomethings coding madly on their way to Silicon Valley stardom? If you’re a young mother, as I am, it might be that other working mom who just happened upon a million dollar idea while she was whipping up organic baby food in her kitchen. Guess what: none of these stereotypes fits the typical American entrepreneur.
The obsession with venture capital funded entrepreneurship, the big exit, the genius nerd working 24-7 on code is misplaced, and it’s really holding women back. About 41% of U.S. private companies are female-owned, but only 3 to 5% of them get venture funding, according to the Center for Women’s Business Research. But most successful businesses are not VC-funded, and they are not overnight sensations.
I recently started a small business. This is not a venture capital type of business. This is a business that I started to earn a decent living, enjoy the fruits and flexibility of being my own boss, and hopefully do some good in the world. I only hope it will be what people dismissively often call a “lifestyle” business. A lifestyle business, in VC terms, is a business that will not return the multiples a venture capitalist needs to justify an investment. It is a venture that might support its founder and staff, but is not going to be the next Google. This definition is perfectly reasonable if you are a venture capitalist: after all, you need to make money. And we need Google and Facebook. But we need other businesses too. And there is a meme out there in the business literature that women are hamstrung by the desire to create lifestyle businesses, that we’re thinking too small. An investor recently said to me, “You see women starting lifestyle businesses. They are capable of growing large businesses, but they want to stay small. And if that’s what they want, that’s fine.” The implied message is that women won’t change the world by simply starting lifestyle businesses; new research shows that may not be true.
I was lucky enough to be at a small meeting at Harvard this week with Vivek Wadhwa, plus women entrepreneurs, VC’s, and academics. Wadhwa, an entrepreneur turned academic who teaches at Duke and Harvard, shared work he has been doing with the Kauffman Foundation. The results show that entrepreneurs don’t have to be born; they can be made. And they don’t even have to be young!
Spending time with Wadhwa changed my thinking and I realized, perhaps it’s our very image of an entrepreneur that holds women back.
Vivek has been researching what makes an entrepreneur. It turns out they mostly come from the workforce, they are older than we might expect–middle aged–they have families, and want to make it big before it’s too late.
And here’s the thing about women: Wadhwa’s research finds that the profile of successful women entrepreneurs is the same as men. There are some differences: women are more conservative, women rely more on business partners, and need more encouragement than men do. But the life circumstances that lead them into entrepreneurship are not different. Wadhwa includes, “By almost every metric you look at, women-led companies do better than men do. And we’re handicapping these women.”
Wadhwa says too many decisions are guided by the stereotype that the ideal entrepreneur to invest in is Mark Zuckerberg. The people who get encouragement are those young brash white males. The vast majority of founders of companies that have made America what it is are not Zuckerberg. And, says Wadhwa, you end up leaving out half the population if you fund based on stereotypes.
On his blog A VC, Fred Wilson quotes entrepreneur Tereza, who provides a potential solution to the example of Y Combinator, a legendary tech incubator that has funded lots of successful (male) young tech entrepreneurs:
“Y Combinator participants are for the most part very young — in their early 20’s. This is not when women would be most inclined. Women who start businesses like to know what they’re doing, and be trained and experienced in it. That takes up our 20’s. We have kids in our 30’s. Our entrepreneurial sweet spot is around age 40. Conventional tech investors are not really into this group and the metrics they look for are really hard for these people to hit. Most of the (few) women’s businesses that go big were funded by friends & family or strategics, not traditional angels and VCs.”
If most successful businesses started by women who are older and rely on the dollars of families and friends (or try to grow the business from revenue) why do we promote the mythology of the VC-funded firm? Wadhwa suggested that perhaps we should encourage “lifestyle” businesses that encourage women to give a piece of profits to investors over time: He says this would create more jobs over time and encourage long term investment and growth. Sounds like the American dream to me. Now we need to build media and social media energy around changing the VC myth; Rachel Sklar is helping to get this started with Change the Ratio here.
It all comes down to how you define a successful entrepreneur, in the culture, in the media, and among ourselves. Very few are multi-million dollar venture funded efforts, but they can grow to be multi-million dollar businesses. Or not, and that’s fine too.
10:25 am, Tuesday
Tuesday mornings at the park with Ace are literally worth an extra $100,000 per year in salary, I swear.
When I was starting my career no one ever said, how much is having time for you life worth to you? When do you want to have kids and what do you want your work to look like when you do? When you are 33, how much do you want to be working? How much money do you want to earn in comparison to how much time you spend in your office?
This Mother’s Day, I wish for all the future moms that you sit down and think about these questions as you’re planning your work life. The day will come quicker than you think, and you’ll want the option.
Read His Lips: Workplace Flex Not a Women’s Issue
A few things really struck me at the first ever White House Forum on Workplace Flexibility today.
The first is that President Obama said “Workplace flexibility isn’t just a women’s issue.” Even if no public policy results from today’s session, the culture change that comes when people like Obama say things like that is big.
The President continued to stress the huge disconnect between the needs of our families and the demands of our workplaces. Many employers, he noted (and employees, I’d argue) see flexibility as a special perk for women rather than as a critical part of a workplace that can help all of us. How we treat our employees and each other at work “reflects out priorities as a society…raising the next generation and caring for our loved ones is the most important job you have. “ He asked the audience to spread the word and said, “my administration is committed to supporting efforts” to extend flexible workplaces.
Let me be clear that flexibility at work does not mean working part time. Flexibility means that workers have the right and ability to schedule their work hours and make time for their lives outside of work. This could be childcare or elder care. It means people can go back to school to continue their education or learn new skills. In some lucky workplaces, it means you can pursue your dreams or even work at the hours that suit you best (as Jim Turley, CEO of Ernst & Young said, flexibility means I can email you at midnight if that works for me. It also means you don’t have to answer the email until the morning). Study after study shows employers who provide flexible workplaces have lower turnover, higher employee productivity, and a stronger bottom line. A study released today by the Joint Economic Council contains hundreds of supporting figures.
The second remarkable thing is that the Federal Government –in the guise of the Office of Personnel Management–has hired Jody Thompson and Cali Ressler, founders of ROWE (and authors of a book called “Why Work Sucks and How to Fix It). ROWE stands for “results only work environment,” and it was pioneered at Best Buy a few years ago. When you work in a ROWE, you have no schedule, no PTO, and your time is pretty much yours as long as you get you work done. The OPM will be pioneering a ROWE project with 400 workers. I know that President Obama wants to make working for the Feds “cool” again. This would seem to be a good start.
The third issue is the thorniest and reflects the tenor of most debates these days. Are flexible work practices borne out of innovative businesses, or from public policy guidelines? There is no agreement on this issue, but there was much discussion today among the assembled business leaders (including the CEO’s of Ernst & Young and Campbell’s Soup), union leaders, and public policymakers.
Dr. Christina Romer of the Council of Economic Advisors led a roundtable discussion of leaders from all areas of work (such a cool room: Cokie Roberts to Joan Blades of MomsRising to Leslie Perlow of Harvard Business School and Ellen Galinsky of Families and Work Institute). Business leaders at firms can point to the innovative workplace practices among their roving teams of accountants and consultants and say, we’ll innovate ourselves because our assets are the people we employ. Flexibility makes sense for such firms. Their biggest problem, it seems to me, is controlling the overwork that accompanies technology and roaming offices. As Leslie Perlow of Harvard noted, it’s not that high-end workers spend so much time “at work,” it’s that they are always on- always online.
Those who represent low-wage workers tell a different story. 79% of low wage workers who happen to be women don’t get any paid sick days at all. Public policy protection in the name of paid leave and the right to request flexible scheduling provides a baseline of protection. Low-wage workers need support from policymakers- they have the opposite of workplace flexibility. They don’t make schedules- and as the President put it, they run on a highwire act. If one piece of the caregiving puzzle falls apart, they can easily be fired. If we are a society that believes in putting family first, said one union leader, we need to put family-supportive policy in place. We are behind 170 countries in terms of policy: the US has no paid parental leave, for example.
The First Lady noted that having her mother around made all the difference. She laughingly challenged the room, “We all need one of those, so can you figure that out.”
Isn’t that the truth? But how many of us have a grandma at home? At the end of the day, whether your workplace is supportive of your needs or punitive, you’re going to have to scramble for care. Most of us depend on a web of support, both paid help and family, to make it work. Mrs. Obama said when she was once in a work and childcare crisis she thought, “this shouldn’t be this hard.” It shouldn’t- but it usually is. Smart employers need to understand that we will give them more if we are allowed to take the time we need to manage our lives. It’s common sense. I’ll close with this comment from Lisa Belkin’s New York Times column. Does this sound like your workplace? Or do you have flexibility?
Ninety percent of my work could be done remotely if it were acceptable at my company. But face time is still important here. We use Web conferencing all the time to talk to employees in other offices, so why can’t we use them to conference wherever we are? Currently they get 8 hours of work out of me because it is 50 min commute (5 min to drop at daycare) – work – 45 min commute timed to get there before daycare closes.
How great would it be to do 5 min walk – work – 5 min walk back to home office?
Blogging from the White House Forum on Workplace Flexibility
I’ll be at the White House tomorrow covering the first ever Forum on Workplace Flexibility.
You can watch the meeting stream live starting at 1:15 on WhiteHouse.gov.
For incredible perspective on the historic nature of this event, please read Ellen Galinsky’s column on the Huffington Post:
The idea of having a White House Forum on Workplace Flexibility would have been beyond anything I could have imagined when a literally handful of us came to the independent conclusion in the 1970s that work was “not working” for employees.
We came from very different places in arriving at the same conclusion. My own research had been on children and families as had others’; a few had conducted research on the workplace; and a few worked for large corporations or for business schools. And even before the Internet would have made finding each other easy, we did manage to connect, to meet, conduct studies, and implement more family-friendly programs and policies (as they were called in those days).
At a meeting of the Conference Board’s Work Life Leadership Council (where many of us convened on a regular basis beginning in 1983), we once went around the room, round-robin style, to share why we cared so much about this issue. The reasons were all profoundly personal–one of us had had a boss who was not flexible during a difficult pregnancy, another had huge support during the death of a parent, and another had a daughter who was treated differently than her male colleagues. The reasons were all about our own families and personal lives.
Although those of us who joined forces to help create the field of work and family life were men and women, we began by focusing on women and child care. We used to say, “demographics are destiny,” meaning that the rapid influx of women into the workforce made workplace change inevitable. Our words, however, hit many brick walls–the prevailing attitudes were “if women can’t hack it in the workplace, they should go home.” So while the business champions argued that these shifts in workforce demographics were here to stay, they still had the need to make a strong business case for addressing child care (turnover and absenteeism were costly) so that they could “fix” the problem. And frankly, some truly believed that they could fix this problem and then move back to serious business issues.
But, of course, child care problems were not so easily “fixed,” and the business champions among us got more deeply enmeshed in doing more with child care, then in adding elder care and workplace flexibility to their portfolios.
Still there was strong resistance. Work and family life were seen private issues, not business concerns. I can’t tell you how times we heard, “if you give employees an inch (flexibility), they will take a mile.” In a worldview where “presence equals productivity,” the business champions found the road to workplace change full of pitfalls.
What’s more, we all understood the resistance. The view that “presence equals productivity” is appropriate in an industrial economy. Furthermore, managing in new ways to work can be difficult.
Wolf at BestBuy- Women’s Affinity Group with Bottom Line Effect
I’ve been fascinated by BestBuy’s Wolf program (their women’s leadership program) for a long time. I’m also a member of Julie Gilbert’s excellent WolfPack Online Community. Julie founded Wolf when she worked at BestBuy and has since left to start her own Wolf venture.
At the Conference Board Work Life Conference in DC current Wolf leaders Mary Stoddart and Liz Haesler talked about their strategy. It’s a bit shocking to a purist. Wolf is a women’s leadership- or affinity group- made up of BestBuy hourly employees, BestBuy corporate/executive employees…and BestBuy customers. At some level, it’s meant to sell more appliances for BestBuy. But it also seems to function as an effective way to promote women’s leadership and professional growth at BB. They noted that “six years ago women weren’t banging down the door to work at BestBuy,” now, apparently, they are. Unlike a lot of corporate affinity groups, the Wolf model helps literally push the company’s bottom line.
There’s a whole Wolf language but the concept is simple: networking events with local customers create pilot groups of “Omegas” who give BestBuy advice. Local store employees drive these groups, and then get help from corporate women to put together proposals, business cases, etc.
Dr. Leslie Wolfe of the Center for Women Policy Studies said, it’s “Basic community organizing.” Well, yes, but community organizing that gets corporate attention and money by driving sales in a slow sector for BB- appliances. It’s actually very smart.
About Me
Morra Aarons-Mele utilizes social media strategies to help employers, employees and communities connect. She also consults with leading organizations on how women can use the internet for professional and personal development. In her spare time, Morra enjoys blogging about women and politics. Read her full bio >>
Recent Posts
- Entrepreneurs: not who you think they are
- 10:25 am, Tuesday
- Read His Lips: Workplace Flex Not a Women’s Issue
- Blogging from the White House Forum on Workplace Flexibility
- Wolf at BestBuy- Women’s Affinity Group with Bottom Line Effect