Surprisingly few startups are led by women. What are the reasons behind that and how can the situation be changed?
By Emmi Skytén
Have you ever looked around at startup events and noticed there are far more men than women? Or followed pitching competitions with only one or two women?
The percentage of women entrepreneurs varies from country to country between one third and a half of all entrepreneurs, but the share of female entrepreneurs in tech is even slimmer: in Silicon Valley, the percentage of women starting technology companies is around three percent.
According to Jarna Heinonen, professor of Entrepreneurship at the University of Turku, Finland, there are two reasons for these unbalanced statistics. Firstly, women tend to choose professions such as healthcare and education which are organised by the public sector, where there are fewer opportunities to become an entrepreneur. Many startups come from the high-tech industry, which traditionally has been dominated by men.
The second reason, according to Heinonen, are gender-specific beliefs and practices relating to leadership, entrepreneurship and technology.
“The stereotypical entrepreneur is often pictured as a white middle-aged male. Everything that differs from this norm is something special or abnormal and treated accordingly”, Heinonen says.
These are the facts that Girls in Tech, a global association aiming to accelerate the growth of women entering into the tech industry and building startups, want to change. A weekend-long bootcamp organised by Girls in Tech Helsinki is a good place to find out why so few women set out to become entrepreneurs.
Tiina Zilliacus, founder of Healthy Tiles Oy and advisor at Teezed Oy is here to run a personal leadership workshop for the participants. For her, the most important quality in an entrepreneur is their self-confidence, in other words their belief in one’s own ability to execute.
“When I run these leadership workshops, I always ask people to raise their hands if they have enough self-confidence to do what they want to do. Often only half of the participants raise their hands. People need to believe in themselves more. That’s one of the reasons why I’m here today. ”
“Women may have the image that startup entrepreneurship is difficult, and it’s true. You have to have a lot of self-confidence, trust and ideas”, says Zilliacus.
“Entrepreneurship is much more difficult than an employment relationship because you need far more competence in all aspects of the business and you need to consider other factors e.g. tolerance of uncertainty. But the passion for personal achievement has to surmount the difficulties.”
Zilliacus doesn’t encourage women to jump into entrepreneurship without thinking.
She advises those who are thinking about founding their own company to go and work in a startup and get experience that way.
“It could also be worthwhile for a woman to think about choosing a business sector like the healthsector or education where being a woman can be an advantage”, she says.
Zilliacus herself founded a gaming company in 2011. She admits that it was hard but is not able to say whether it would have been easier if she were a man.
“All entrepreneurs face difficulties. It’s hard to say which difficulties stem from the fact that one is a woman and which from the fact that your case is a startup.”
The particular difficulties of being a woman entrepreneur could have something to do with getting funding, Zilliacus reflects.
“In Finland, there aren’t that many investors and even fewer female investors. Female entrepreneurs’ business ideas are often targeted towards women. And it might be more difficult to sell a business idea targeting women to male investors”, Zilliacus says. “But things might have changed from three years ago when I was looking for funding for games targeted at females”, she adds. “There are more and more women pitching their ideas nowadays.”
There are good reasons for investors to listen closely to these womens’ pitches. According to TechCrunch, the success rate of businesses with two or fewer female executives is 50 percent, and with five or more women in high-level positions the success rate is 61 percent. Women-led technology companies are also more capital efficient, bringing a 35 percent higher return on investment.
Why does female entrepreneur performs so well?
Maria Horelli-Rosenlew from Rosebud Ventures, a Stockholm-based business consultant who participated and also gave a speech at the bootcamp, thinks it could have something to do with different leadership styles.
“In the past, ideal leaders were strong figures who led with their ego. But this kind of ego-leadership does not suffice anymore because the world changes so quickly. One person cannot know everything.”
Instead, Horelli-Rosenlew explains that leaders should listen to others, take input from different sources, and change the direction of their company according to the relevant information.
“Women have a good chance of shaping this type of environment where it is important to listen, make sure that everybody’s full potential is in use and take on the relevant opportunities to grow their businesses.”
Zeynep Falay von Flittner, a bootcamp participant and a lead service designer from Hellon, agrees with Horelli-Rosenlew.
“The startup world has been driven by egos and aggressiveness, pushing yourself to win. Women are more empathic and they don’t push themselves to the front”, Falay von Flittner says. “But I think it’s changing. More and more people understand that soft values matter in building a successful business. That’s what service design is about and I think that’s where the future is.”
Falay von Flittner shares her advice to aspiring female entrepreneurs: “Women need to be more courageous, they should promote themselves more. If they have a really good idea but feel uncomfortable in the current culture of startup business, they should collect like-minded people around them to support and bring their ideas to life.”