It’s time female founders received a level playing field

We laugh at how ridiculous ads like this seem nowadays, but have things really changed?

 

 

I recently interviewed a woman who was running a new startup and asked her about her capacity to be “all in” as running a new business is all-encompassing.

 

To illustrate the point, I rather smugly pointed out that I had been up since 6am and hadn’t left my laptop since then, as I was so busy.  I further added that I would be here until 7pm, still tapping away on the keys.

 

How silly did I feel?

 

The female startup owner then stated with some conviction, I’ve also been up since 6am, I am still here working in a serviced office space and I have dealt with two children under five in the meantime.  How silly did I feel?  But, I was delighted with her answer as with that attitude she has an improved chance of making in startupland. But, why is there bias or perceived bias in startupland and is it harder for female founders or female entrepreneurs to get ahead?

 

I started to look around and to be frank the evidence is all plain to see and paints a picture.  Babson College, consistently ranked number one for entrepreneurship in the USA , conducted a long term study on venture funding and whether or not females were getting an equal slice of the cake.   Well, how about this for a statistic!

 

“For the 10-year period from 1988 to 1998, women-led businesses received only 3.5% of the total venture capital invested in private companies (290 women-led ventures received investment compared to 4016 men-led ventures in the same period).”

 

It would appear that historically startupland favours the boys and while the situation is improving, there is still a bias that prevents female founders or teams with females in them from getting ahead.  And with all the news coming out of Silicon Valley around sexual harassment, we begin to see what has been happening.

 

Only last month, it became clear that even those running programmes in startupland were not averse to using their positions of power – as men – in, well, not a nice way.  The accelerator, 500 startups, is big in the USA and gets lots of media attention.  It appears to have been very successful and I have used video footage from it in talks I have done while at Entrepreneurial Spark.  Many founders and startups worked hard to get on to this programme led by Dave McClure.  McClure has been idolised by many for the work he does at 500 startups.  But, McClure has fallen from grace as he has been outed as not being a very nice chap when it came to females around him on his programmes.  In his own words:

“I made advances towards multiple women in work related situations, where it was clearly inappropriate….I put people in compromising and inappropriate situations.”

 

He has since been removed from running the 500 startups.  Quite right too.

 

So, what is to be done to change this and indeed make sure it doesn’t continue to manifest itself in startupland? Especially, as more and more female led businesses and those with females in the leadership teams emerge.

 

it should not need more females as investors to have more females making it in startupland

 

Well the answer is that it will not happen overnight.  As the complexion of angel syndicates and VC funds changes to include more females, then this will help.  But, it should not need more females as investors to have more females making it in startupland.  What it needs, is us blokes to stop thinking like blokes and stereotyping females as less capable than men. Couples have families – not women.  I hear it all the time – she’s about to start a family or she’s having a baby. Really?  What we mean to say is they are starting a family and they are having a baby – him and her or indeed her and her.

 

Don’t let the old boys networks and golf club anachronistic thinking colour your judgements

 

As I interview many new founders over the next few months, I will be even more aware of any gender bias that goes through my head. I consider myself  fair minded and to be honest gender does not really figure in my conscious thoughts when making decisions on female founders.  But it may be in the sub-conscious that all us blokes need to watch out .  Don’t let the old boys networks and golf club anachronistic thinking colour your judgements.

 

Its 2017 and it’s time to encourage more female founders into startupland and make sure they get a level playing field.

Listen to your customers – don’t get trapped on Fantasy Island

Corkscrew roller coaster

 

Boss, the plane, the plane!!  Yes it was these immortal words from Herve Villechaize aka Tattoo to Mr Roark on the programme – Fantasy Island – that I always knew would lead to a good story.

 

At a luxurious, but remote tropical island, the enigmatic Mr Roarke would make the dreams and fantasies of well heeled guests come true.  Money was no barrier and what the guests thought would be a terrific fantasy on many occasion turned out to be anything but.  Usually, as with all fantasies they had not thought it all through, so different circumstances and outcomes would pop up and surprise them.  This then got me thinking about people who start businesses from a laptop and a spreadsheet and create their own fantasies.

 

this is where the conversation became a little strained

 

I once had a guy  – who we will call an ‘entrepreneur’ as he told me he was one so I had to believe him – tell me his business was valued at £20 million.  Great news I thought as I studied him.  Can you tell me all about it and how many staff you have.  Tell me about the profit you make and your plans for growth.  And this is where the conversation became a little strained.

 

He pulled out his MacBook Pro and opened it up, where I was presented with a spreadsheet.  Now, I’m not a big spreadsheet fan, but I sat and had a good look at it all the same.  The spreadsheet outlined a £4M profit in year three.  It showed explosive growth in customers using his mobile App.  I must say it all looked good and most plausible on a laptop screen.  But, when I asked him some questions about the £4M profit, I ended up with more and more questions.

 

With not one customer at that time, this ‘entrepreneur’ had created his very own fantasy that would have fitted well into an episode of Fantasy Island.  He was convinced beyond reason that his early adopter customers would jump at the chance to use the App and that the money would tumble in thereafter.  I could see Mr Roarke and Tattoo shaking their heads behind the scenes as this fantasist in front of me was living in a world of make believe.  I suggested that he go out to a friend of mine who would be a model customer for his App.

 

the grim reality of facing a customer asking hard questions

 

A few days later I got two rather interesting phone calls.  One from my colleague who told me that the ‘entrepreneur’ was deluding himself and one from the ‘entrepreneur’ telling me that my colleague had been rude and did not understand how the App worked, so dismissed it.  Oh dear, I thought, the grim reality of facing a customer asking hard questions of your wonderful spreadsheet that is in fact, a fairy story or fable.  Suffice to say, the ‘entrepreneur’ with the £4M profit business in year three is no longer and in fact had disappeared into a black hole, despite me suggesting that he keep talking to customers to get more feedback and insight.

 

the best way is to co-create the business with customers and be prepared to pivot

 

This approach is typical of many who startup and get seduced by spreadsheet madness.  A zero here and there is easy to add into the spreadsheet and this is where it moves from reality to fantasy.  I’m not going to stifle anyone who wants to start a new business – far from it.  But, I would suggest from experience that the best way to do this is to co-create the business with customers and be prepared to pivot and swap out staff.  As I tell people who apply for the Moonshot Academy, there is no point in starting out with the wrong people taking up precious seats in the spaceship.  It only adds to the load.

 

Co-Creation with real people who you believe will buy your products really helps with product/market fit.  It is very different from the Fantasy Island approach on a spreadsheet, where Mr Roarke and Tattoo will allow you to live out your fantasy of being an entrepreneur for the day.  There is nothing wrong with talking to people about your idea.  Trust me it is where you gather your best insight…

 

Stop being a startup, become a business builder

 

Moonshot business building

 

Business is the beating heart of a country.  Whether it’s selling mangos at the roadside, building an Internet of Things startup or operating in a large corporate.  Business, as all politicians from all persuasions will tell you, is vital to the success of economies.

 

You’ve heard it all before – right?  Business creates jobs for people.  It gives people purpose and gets them out of bed.  It pays HMRC taxes and in some cases contributed towards pensions.  Business is essential and it is everywhere.  Train franchises to farmers to airlines to grocers to ecommerce to newspapers.  Every country has programmes in place to support business and encourage people to enter – startupland.

 

The UK has many such programmes.  But, something is missing…. And if we don’t take action, it will kill off the next generation of business builders.

 

much of what we have out there supporting these “startups” in startupland is not hitting the spot

 

I’m being pedantic here in my language and proactively referring to people starting businesses as business builders.  It’s time to re-frame the lexicon that has creeped in over the past decade where firstly startup and then scale up became the sexy words that encompassed business and indeed entrepreneurship.  Startups are everywhere and we have shed loads in the UK from Edinburgh to Manchester, Birmingham and London.  But, much of what we have out there supporting these “startups” in startupland is not hitting the spot.  Too many of them are still failing and still not making it.  There are multiple reasons for this.

 

Short termism permeates startupland

 

First off the bat is the short termism that permeates startupland.  I see it all over the UK.  Startups who are jumping onto the investment travelator and whose stole purpose in life is to get investment.  It’s all about the funding and that’s why they then dive bomb once they have brought it in.  Ostensibly, they are building a model that is attractive to investors, whether they be family and friends or high net worths or angel syndicates.

 

it may be more prudent to ask them, how they are going to run the bloody business

 

But, all the questions are wrong, it could be argued.  Instead of asking these newbie startups who have just come into startupland, what their exit strategy is, it may be more prudent to ask them, how they are going to run the bloody business.  It’s everywhere, startups creating three minutes pitches, business plans and investment decks showing potential investors the big pay days they may get.  But, these newbies in startupland don’t have a scooby doo on how to actually run a business.  Therein lays the first problem.

 

Secondly, our startups don’t understand what “timing” means.  Timing is crucial when starting a new venture, seeking investment and building a business.  Let me give you and example here.  Internet of things [IOT] businesses are trendy just now.  I spoke to a young startup recently who is developing an umbrella that uses photovoltaic energy to power your iPhone while it’s up. It can also Bluetooth stuff from your smartphone while interacting with beacons etc as you walk.  Pretty impressive stuff.  But, if this idea had been put out 5 years ago, it would have been too early.  The flip side of this is coming to market too late and trying to create the next Facebook.  Timing is key to understanding when investors invest and where they will be and where your service or product fits.

 

We have too many solopreneurs

 

Thirdly, despite all the signs and signalling from the USA, VCs and all the support out there, we just do not have enough teams.  We have too many solopreneurs, who cannot or do not have the capacity or nous to co-create a business with others.  Trust me when I tell you this is really tough and it requires you to think and act differently.  Team formation at the leadership level is crucial to potential success.

 

Having a co-founder is also a big plus point.  Whether it’s serendipity and you stumble across each other and hit it off with the same vision for the idea or whether you have to actively go looking, a great co-founder speaks volumes to investors.  It is the team that will execute.  It is the team that will think things through and overcome.  It is the team that will pull through when time are really tough.  It is the team that co-creates and has that emotional buy into progress and success.  But alas, we do not have enough startups in startupland who can pull this off.  And it is having an affect right now on how startupland is functioning.

 

think about you, your co-founder and team as business builders

 

Finally, and I could go on a bit on this rant, we do not have the mindset of business building.  As I said earlier in this piece, startups are looking too much like short term bets.  Forget labelling your self as a startup or scale up and think about you, your co-founder and team as business builders.  It’s a mindset change and one that is overdue in Scotland and beyond.  So, I would encourage all those involved in supporting businesses to re-purpose support and thinking into a longer term approach that puts Business Building at the forefront of a startup’s mind.

 

It’s perhaps time to take a step back and re-examine how we as a nation as helping to create our new business builders, after all….. business is the beating heart of a country.