James Brown once wailed, “This is a man’s world, this is a man’s world/But it wouldn’t be nothing, nothing without a woman or a girl.” And I’d have to agree with him. This is still, sadly, a man’s world – despite all of the strides women have made in my mere 23 years on this earth. However, I might disagree that – at this point – people truly realize that the world would be “nothing” without women. Certainly, no one can deny the importance of women as “incubators” for and mothers of the world’s children – but how many people see women as being integral to other functions in society? Universities might cite the move to coeducation as a major reason for their ascent in the rankings; employers might claim that increased innovation and success are the result of their increasingly diverse employee bases. However, do they – or anyone else – truly believe these claims? Or do we all generally believe that growth and development are byproducts of better technology, more years of experience, and the like? As I see it, the world largely continues to run as it did in the era so lovingly portrayed in Mad Men and in the years predating that – without much regard for the role of women outside of the home. Which is incredibly short-sighted given research such as that discussed in a 2011 Harvard Business Review article titled “Defend Your Research: What Makes a Team Smarter? More Women”. In this article, Professors Woolley and Malone of Carnegie Mellon and MIT, respectively, explained that women are incredibly additive to a team. Though a team’s collective intelligence shows very little correlation to the members’ individual IQs, if it includes more women, its collective intelligence increases. Other factors like group satisfaction, group cohesion, or group motivation showed no correlation to collective intelligence. Still though, the professional world continues to operate much like a good ol’ boys’ club.
So what are women doing to change this dynamic? If women inserted themselves more wholeheartedly in the same type of professional arenas as men, might there be a real opportunity to diminish this “man’s world” mentality? And that begs the question – why are there so few female entrepreneurs working to change the male-centric mindset of our society, and why are those women who do try their hand at entrepreneurship limiting themselves, for the most part, to hyper-feminine pursuits (in the most traditional sense of the word “feminine”)? Certainly, we need more women starting businesses of any type as a means to both resolve gender inequality in the world of start-ups and lead to broader economic expansion – but when do women start moving beyond the gender-constrained ventures that they seem to have a penchant for? Undoubtedly, there is a need for the female-oriented products and services that female entrepreneurs seem uniquely capable of offering due to their more complete understanding of the needs of women. However, if there were more female entrepreneurs overall, could they fill the void of products and services for women in our presently male dominated society while also starting other businesses that are gender neutral or traditionally masculine?
What originally got me thinking about this topic was my inability to find a dry cleaner that caters to women – sometimes, the most trivial “struggles” spark outrage and then critical thought. In New York, there is a dry cleaner on nearly every corner (they probably even outnumber Starbucks locations), and yet none of them are truly equipped to handle women’s clothing. In my experience, the machinery found at a cleaner is designed for men’s clothing, as many cleaners (or the machinery in their shops) have been around since the days when only a handful of women worked outside of the home and had a wardrobe (beyond gowns and the like) that required professional cleaning. As such, most cleaners must hand iron women’s shirts rather than use automated machines that are sized for men’s shirts – meaning that women’s shirts often cost significantly more than men’s to clean and iron. And when you can earn that kind of profit margin off of women – who, anecdotally speaking, are probably more concerned with the cleanliness and care of their clothing than men and thus have few other alternatives to paying these exorbitant prices – well then why would you invest in machinery sized to women’s clothing? And the profit margin really is huge. As cited in a Wall Street Journal article titled “The New Dirt on Dry Cleaners,” a 2009 study by Floyd Advisory LLC found that women pay, on average, 73% more than men for laundered shirts since “…women’s shirts don’t fit in [cleaners’] industrial presses as well as men’s and must be ironed by hand.”
If more women got into the dry cleaning business, would this problem be solved? Unisex pressing machines do exist – might female-owned dry cleaners utilize them in order to ensure that women wouldn’t have to pay so much more than men? Assuming the volume of female clients they could attract via a less discriminatory pricing scheme would outweigh the profit margin that can currently be made on women’s cleaning versus men’s, there should not be any conflict with the profit-motivation of these female business owners. In general, do we believe that it takes a woman to meet the needs of other women in society?
Perhaps ventures like this are good launching pads for female entrepreneurs. If women began to actively investigate opportunities to start their own businesses with the goal of providing themselves and other women with the products and services they need or want but cannot currently find, we could potentially see an increase in female entrepreneurship. However, this should just be a starting point. Female entrepreneurial pursuits should not be limited by gender norms, even if such pursuits legitimately fulfill the unmet needs of women and could be profitable ventures. Nonetheless, any female foray into the start-up world would be welcomed, as it is currently woefully lacking in female presence.
In a September 2011 study titled “Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers,” the Kauffman Foundation reported that only 35% of start-up owners are women – even though women account for roughly 46% of the workforce and more than 50% of college students. As Lesa Mitchell explained in the report, women have been able to break the “glass ceiling” and move up in the corporate world, but they have found themselves largely unable to break the “glass walls” that prevent them from moving laterally from a corporate job to a start-up. The root of this problem is not entirely clear, but is certainly multi-faceted. Studies have shown that a combination of factors limit female entrepreneurship or diminish the success of entrepreneurial endeavors undertaken by women: the desire for greater work/life balance than men, a fear of taking risk, greater difficultly securing funding (venture funds controlled by women are far more likely to invest in female-led start ups than those controlled by men – and only 14% of venture funds are led by women, according to the National Venture Capital Association), less financial security than men, and a narrow-minded view of potential due to a lifetime of both overt and subliminal gender stereotyping.
In 2007, the United States Small Business Administration (“SBA”) Office of Advocacy published a study titled “Are Male and Female Entrepreneurs Really That Different?”, in which it reported that gender in and of itself does not affect the gender imbalance in the start-up world or the performance of start-ups. Rather, other factors that vary between genders impacts outcomes. In summary, it found that men had more prior business experience, were willing to spend more money on their start-up, were more likely to start a business with the goal of making money, did more research to identify opportunities, and were more likely to start a tech-oriented business, while women had larger than average households to care for, were less likely to purchase their businesses, and were more likely to prefer low risk/return businesses – all factors that favor the success of male entrepreneurs over females.
Despite their marginal presence in the world of start-ups, female entrepreneurs seem to be a hot topic in a world that increasingly values independent thought and entrepreneurial spirit as a means to bolster the depressed economy and even bring about economic expansion. However, many of the discussions about and literature pertaining to female entrepreneurship are constrained by gender stereotyping, both purposeful and subconscious. Articles that detail the steps to success for female-led ventures often focus not on the technology needed to run a successful start-up or on tips for raising capital, but rather, on avoiding “late-night ice cream binges” brought on by guilt over having to be away from a young child at home. They describe networking opportunities taking place on a playground, a PTA meeting, or at a school event – locations that could all very well present rewarding networking opportunities but seem laughably narrow-minded and antiquated. Female entrepreneurs are often labeled with happy-go-lucky terms like “mompreneur” – though I haven’t seen cutesy, semi-demeaning labels applied to men who strike out on their own. Instead, you might see “visionary,” “revolutionary,” or the like used to describe a male entrepreneur. Even though many male entrepreneurs are husbands and/or fathers, you rarely see that part of their life influence the public perception of their entrepreneurial efforts in any meaningful way.
In March 2011, the New York Times spotlighted three books on female entrepreneurship – The Dressmaker of Khair Khana, Single. Women. Entrepreneurs., and Minority Women Entrepreneurs. The women highlighted in these books include one who make dresses in an oppressive, war-torn nation, a Southern “mompreneur” (their word choice, not mine) who opens her own cupcake shop, and a woman who “rescues” and “rehabilitates” discarded mannequins. Even though all of these women have been “empowered” by their entrepreneurial pursuits, the ways in which they seek “independence,” or perhaps just self-fulfillment, are limited to the scope of normative gender roles.
Also in 2011, Inc. magazine published its annual 30 Under 30 list, which included 13 women – a great honor for all of the female entrepreneurs included. And, certainly, all of them are amazing, confident, and talented businesswomen. However, taking a look at the companies that some have founded serves to further the notion that women tend to be more inwardly focused and limited in scope of thought when determining their business ventures. Birchbox, The Shirt by Rochelle Behrens, The Refine Method, and Gianna Fair Trade made Inc.’s list – all of which skew to the highly feminine side. To be fair though, there are a number of female-led ventures on this list that are decidedly unfeminine. These include a private jet charter service, an app to recommend restaurants, a Vietnamese food truck, and an online money management company.
The portfolio of Golden Seeds, one of the most prominent venture capital funds for female-led start-ups that also happens to be run by all women, also indicates that many businesses founded by women are still highly feminine. Such investments include Dancing Deer Baking Company, DRY Soda, FashionPlaytes, gDiapers, Little Passports, Lovesac, RuMe Bags, and sweetriot. However, the majority of Golden Seeds’ investments are decidedly gender neutral, if not seemingly masculine – Amplyx Pharmaceuticals, Carnegie Speech Company, Chromis Fiberoptics, Cognition Therapeutics, Crimson Hexagon, eJamming, Hatsize, LARK, the New Century Brewing Company, Open Road, HarQen, Proto, RedPath Integrated Pathologiy, Saladax Biomedical, TowerCare Technologies, and ZeeToo, Inc. This portfolio mix between traditionally “feminine” and “masculine” products and services proves that women are more than capable of starting businesses in the tech space or in other sectors that are completely unrelated to childcare, shopping, fashion, beauty, or the like.
Regardless though, the nationwide trend is still toward female-led ventures that are feminine in nature. In 2006, two studies – “Does The Business Start-Up Process Differ by Gender? A Longitudinal Study of Nascent Entrepreneurs” and “Women’s Entrepreneurship in the United States” – more or less confirmed what we can attest to anecdotally. Statistics have shown that women are more likely to start businesses within the personal services and retail trade sectors, while male-led businesses are more likely to be found in the manufacturing and tech spaces. Because women tend to pursue business opportunities to provide income for themselves and their nuclear families, their focus is not typically on business models with high growth trajectories – which is fitting, given that retail and personal services businesses are unlikely to inspire thoughts of global domination. In addition, Astia research published in 2010 showed that women only account for 8% of the venture-backed tech start-ups. As the previously mentioned SBA study asserted, this may be the result of “..socialization and structural barriers” – women are typically employed in industries and occupations that society has deemed “appropriate” for women and thus tend to stick to these same industries when they start their own businesses, as they feel most comfortable in those spaces.
Nowhere is the trend of women starting highly feminine businesses better documented than in the field of microfinance, in which micro loans are made to individuals in developing nations to start their own businesses such that they can operate outside of oppressive and discriminatory “economic” systems found in their respective nations. The majority of micro loans are made to women, as women have proven themselves to be more responsible with their loans. According to Mary Ellen Iskenderian, President and CEO of Women’s World Banking (“WWB”), 82% of the client bases of the 39 microfinance organizations the WWB works with in Africa, Asia, Eastern Europe, Latin America, and the Middle East are women entrepreneurs. As explained by the International Fund for Agricultural Development, impoverished women in developing nations have better credit ratings than their male peers. In Bangladesh, for example, women have defaulted less often on loans than men. As compared to men, women are more likely to put their loans to good use, more likely to pay them back, and more likely to work collectively with other women in their community to advance the whole. Men have frequently squandered their loans, failed to invest the proceeds of their ventures wisely (purchasing consumer goods is the most likely outcome), and refused to work with others to advance the community as a whole and improve business opportunities for themselves and others. Though the success of women in the world of microfinance is undeniable, it’s interesting to examine what these women are actually doing with their loans. Making jewelry. Sewing dresses. Handcrafting pottery. All of which are perfectly legitimate trades and are certainly empowering insomuch as they lead to financial independence, confidence, pride, etc. However, they seem to confine women to the usual mother, caretaker, homemaker roles prescribed to them by men for centuries (or, really, millennia). These women likely do not have the education or “professional background” necessary to start any type of “tech” business like we would hope women in developed nations would found, but why aren’t more of them farming, producing animal products, etcetera?
Not only are the ventures of female entrepreneurs in these developing nations seemingly constrained by gender norms, but as microfinance goes “mainstream,” the number of female clients served by microfinance institutions tends to decline sharply. As microfinance institutions have grown and transitioned from NGOs to for-profit entities, fewer loans have been made to women. A 2008 report published by WWB showed that two organizations that made the switch from not-for-profit to for-profit saw their percentage of female clients decrease 28%, on average, in the five years following the switch. To me, this can only indicate that, as for-profit entities, these organizations begin to subscribe to conventional (i.e. archaic) notions that men make better businesspeople and entrepreneurs than women. I cannot think of any other logical explanation given that women have more than proven their ability to utilize micro loans to start successful businesses, repay their loans, and bolster the economic health of their communities.
So – what do we do to compel more women around the world to explore their entrepreneurial sides, how do we better ensure the success of female-led ventures, and how do we encourage women to think outside of the rather narrow confines of the sectors in which they tend to feel “most appropriate” or “most comfortable” working? Given the multitude of factors that influence the types of ventures women pursue, the diminished success of female-led ventures as compared to those led by men, and the overall lack of female entrepreneurship, there is clearly no silver bullet. The core of the problem, however, relates to deeply engrained gender stereotypes and commonly accepted gender norms in the business world – which cannot be changed overnight. There are steps that can be taken to ameliorate the issues relating to female entrepreneurship, however. The Kauffman Foundation provided several “Actionable Next Steps” in its aforementioned report – (1) provide greater funding for initiatives aimed at advancing opportunities for female entrepreneurs, (2) create more formal networking opportunities for women with heads of start-ups and large companies, (3) make female entrepreneurs and investors more visible and establish formal and informal mentoring, and (4) invite more women to join the boards of tech companies such that the focus of female-led ventures expands beyond the retail and personal service sectors. We could also promote tech-oriented college majors, more actively recruit women into tech-oriented careers such that they have the comfort level to start their own businesses in that sector, establish more or better partnerships between venture capital firms and female entrepreneurs and groups that promote female entrepreneurship, and create more online resources for women considering starting their own businesses or better promote those that do exist – such as The Daily Muse, Ladies Who Launch, SMARTY., Women 2.0, Savor the Success, In Good Company, and the YEC (although the latter is not specially focused on women, it has a strong female presence).
To play devil’s advocate just a bit though, I have to ask the question – is my analysis somewhat unfair? Perhaps I am simply perpetuating the application of stereotypes to women and their ventures. Maybe there is nothing wrong with women staring businesses that some may deem “girly” when in fact they are meeting unmet needs of their peers and thus are pursuing ventures with a higher probability for success than something they have less experience with, something that there is less of a need for, etcetera. And maybe it’s not so wrong for women to pursue stereotypically “feminine” ventures when men are seemingly doing the same thing by starting “masculine” businesses instead of designing clothing, giving dating advice, or creating learning software for young children (though there are certainly examples of men doing all three).
Nonetheless, there is in indisputable problem with the lack of female entrepreneurship in our society and the hardship that women seem to face in getting their businesses off the ground as compared to their male peers. I hope that our society more wholeheartedly embraces the idea of female entrepreneurship and works to promote the start-up avenue for women – particularly in sectors that will help women across the world to branch out into jobs that do not fall within gender stereotypes. And if this goal is accomplished in my lifetime, I hope that one day I will find a dry cleaner that targets women – if I don’t just open one myself!