Fast forwarding women in tech
Few women have joined or founded startups and gained the kind of experience that enables their careers to explode like Marissa Mayer’s. Here are specific recommendations on accelerating the pace of women in high-tech.
The announcement Monday that Yahoo selected Marissa Mayer as its new chief is a great signal for Silicon Valley. Marissa joined Google as its 20th employee back in 1999 when it was a fledgling company and had an uncertain future. Historically, few women joined or founded startups and gained the kind of experience that enabled Marissa Mayer and Sheryl Sandberg of Facebook to rise to their positions of responsibility. Yet, we are now seeing some positive signs.
Across the US, we are seeing more and more tech startups co-founded or run by women. These include: Silver Tail, One King’s Lane, CloudFlare, Get Satisfaction and AllVoices on the West Coast. On the East Coast there has also been an explosion of women-led startups: Birchbox, Kollabora, iRobot, Chomp, Blip, and Hunch just to name a few.
While it is good to see this rise in the number of women entrepreneurs, it is off a small base: though women hold over one-third of the jobs in the tech space, less than 10% of venture-backed companies have women co-founders.
The environment for first-time entrepreneurs has never been more favorable. Less capital-intensive sectors such as cloud computing-based digital media, business applications and online commerce solutions are natural points of entry for first-time entrepreneurs. Access to the cloud eliminates up-front expenditures for infrastructure and development tools, creating opportunity for a wide of range of new entrepreneurs, including women, to bring their ideas and dynamism to the table.
Here are specific recommendations that we can implement to accelerate the pace of women in high-tech:
Recruit more women into venture capital firms: Women entrepreneurs seek investment environments where they can succeed. Research shows that venture capital firms with even one female partner are 70% more likely to invest in a woman co-founded business, in part because the entrepreneurs recognize them as places where they want to take their business. Similarly, early stage angel investment groups with a significant number of women investors are shown to have 30% more women-led companies approaching them.
Two thirds of active US venture firms in the tech sector do not have a single female partner, yet VCs who recruit one are likely to see a wider range of deals. Recruiting successful entrepreneurs as partners is a long tradition in venture capital. With the growing number of women entrepreneurs having successful outcomes, venture firms and angel groups now have the opportunity to recruit some of these leaders into their ranks. With women representing less than 7% of high tech VC partners and 15% of angel investors, we have plenty of opportunity for improvement.
Spotlight high growth businesses co-founded or run by women: The impact of role models cannot be overestimated. If women don’t “see it” as an attractive role, they won’t want to “be it”. Expose women to the opportunity, and more will make the decision to become entrepreneurs. The thriving communities of women founders in NY, Silicon Valley and other regions can serve as a source of stories for tech and business journalists.
Attract women with a wide range of backgrounds: Tech companies can recruit great talent by widening their search beyond individuals with traditional tech backgrounds. While the number of women studying for technical degrees is on the rise, tech companies can also find great talent among MBA students, marketing programs and other fields which are so critical in today’s tech world.
Startup incubators can gain advantage by attracting women entrepreneurs: Startups are all-engrossing. Women with families, in particular, need an environment where they can find support as they meet the unpredictable challenges of entrepreneurship. Incubators can differentiate by developing formats that encourage all types of people to be entrepreneurs.
Dispel the myths: There are long-held beliefs that simply aren’t true: that you must have a STEM degree to be a tech entrepreneur; that investing in women-led companies is higher risk; that you can’t have a family and be a high-growth entrepreneur at the same time; that women are only suited to consumer-oriented companies. We have the data that proves each of these wrong – let’s share it widely.
Support and leverage formal networks: Access to networks can bring capital and expertise to women founders. There are many groups focused on women in tech such as The Anita Borg Institute, Astia, Girls in Tech, Springboard Enterprises, Women Inspiration Enterprise (WIE), NCWIT, Women 2.0, and Forte. Networks such as these can help create job opportunities and internships for women in startups, showcase women entrepreneurs and help women develop their entrepreneurial skills. At the same time, women also need to become involved in the networks available to male entrepreneurs – not just separate groups for women.
Bringing more women into the entrepreneurial sector will bring a more diverse range of ideas and innovative offerings to our economy. With only 10% of venture-backed startups now co-founded by women and women representing such small numbers in the investing community, we can readily increase the creative power of this critical economic engine. This will have positive effects not just for women, but for all of us who will benefit from the jobs they create and the products and services they bring to market.
Marissa Mayer joining Yahoo as its CEO Monday is a great signal that we are widening the tent for all to participate in leading the tech revolution.
Jack Hidary is a startup investor and co-founder and former CEO of Dice.com . Cindy Padnos is the founder & managing partner of Illuminate Ventures, an early stage venture firm. She was the founder & CEO of Vivant , CEO of Acumen, a VP at Scopus, and authored the white paper “High-performance Entrepreneurs: Women in High Tech”.