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Women Entrepreneurs Are Trapped Within Glass Walls

Posted: 05/11/11 09:10 AM ET

This much is known: The next round of economic recovery and growth in the U.S. will be led by new companies. The statistical evidence on that point is clear. While big, established firms employ the most people, it's the high-growth startups -- the new firms on their way to becoming big -- that create the lion's share of new jobs, and become the anchors for new industries. So it has been through every wave of growth in the country's history, from the days of Thomas Edison and Henry Ford to the IT boom of the late twentieth century.

Now here is the lesser known fact: If we want a real recovery, the next cohort of high-growth entrepreneurs cannot just be people with names like Thomas and Henry, or Bill and Steve. We need the women to get involved. The American growth engine can no longer afford to run on half of its cylinders.

Yes, women are starting plenty of new businesses. However if you look closely at the picture, as we have done at the Kauffman Foundation, where I work, you find a vast amount of potential left on the table. In our demographic data, the overall rate of entrepreneurial activity among women is less than 2/3 the rate for men.

And, as other sources along with Kauffman have found, womens' startups under-perform on key measures of growth. Comparatively, few of them even grow to $1 million per year in revenues. Very few build or hire on the kind of scale that can boost a region's economy, let alone show up on the national radar screen.

Part of the disparity stems from the types of companies many women start, such as local retail shops or professional service firms and consultancies. Serious growth and value creation tend to come from innovative startups in science- and technology-based industries. But this is where the gender gap becomes blindingly apparent.

Can you name one woman founder or co-founder who has taken a tech-based company from inception to true global scale? Several already-big firms, such as Oracle and Xerox, have women as CEOs. Meg Whitman joined eBay when it was growing and led it the rest of the way to the top, which is the closest example I can think of.

When you survey the technology fields where our economic future will be decided, it is hard to find women planting the seeds of the new growth companies we'll need.

In the past, there was a convenient excuse. Female engineers and scientists were scarce to begin with. Today that excuse is wearing thin, as women have made dramatic inroads into these fields. Nearly half of the undergraduates at MIT are women. It is now common to see women holding professorships at universities, or high posts in industry, as well as winning research grants, making discoveries and publishing papers.

So why, then, are we not seeing the next Intels or Genentechs founded by women? The answers do not appear to be simple. Drawing from what the best minds on the subject have learned so far, here are some clues.

• The slippage begins at the early stages of moving research and ideas from university labs into the private sector. One major study found that women faculty excel at research but lag far behind their male counterparts in patenting the results -- which of course makes them far less able to launch spinout companies based on their findings.

• And why should that be? Lack of contact with industry is cited as a big factor. While the men on the research faculty are networking with people at private firms, and serving on the scientific advisory boards of for-profit companies, the women tend to stay within the academic sphere and serve on nonprofit boards or government panels. The result: very little exposure to the connections and the commercial thinking that can help a person recognize a high-potential idea, and then bring it to market.

• Thus, instead of bumping up against a glass ceiling, today's female engineers and scientists tend to be trapped within glass walls. They can move up the ladder within a university or a big company, but the walls of isolation keep them from moving over into high-growth startup mode. One could debate whether this is their own doing or the work of exclusionary males, but the salient point is that the glass-wall effect isn't confined to our campuses. It operates out in the private sector as well.

Women who do start high-tech firms are not as likely as men to have outside equity investors or boards of directors (which can provide valuable expertise and contacts). Moreover, in tech startups that have multiple co-founders, as most do, rarely does the founding team consist of X men plus a woman or two.

Recently in TechCrunch, Aileen Lee wrote a column called "Why Women Rule the Internet." She noted that women are the primary users of the new social-networking services such as Facebook, Twitter and Tumblr, not to mention high-growth shopping sites like Zappos and Groupon. Ironically, see if you can find a woman among the co-founders of the firms mentioned. I could not.

The first step to a solution is to re-frame the problem statement. Instead of asking "Why aren't women becoming high-growth entrepreneurs?", start asking "What will it take?" Surely there is a woman in your circle who could do it. Find out what she needs to shift into growth gear. Support her however you can.

And when you do, remember we all have a huge stake in this issue. Women who could be high-growth entrepreneurs make up our most crucial source of untapped talent. It's time to start tapping on those glass walls.

I will be in London next month for the annual We Own It Summit, a conference aimed at helping women build high-growth companies worldwide. There we plan to proclaim this decade as The Decade of the Woman Entrepreneur. Given the global economic climate, it has to be.

 
This much is known: The next round of economic recovery and growth in the U.S. will be led by new companies. The statistical evidence on that point is clear. While big, established firms employ the mo...
This much is known: The next round of economic recovery and growth in the U.S. will be led by new companies. The statistical evidence on that point is clear. While big, established firms employ the mo...
 
 
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07:57 AM on 05/16/2011
Interesting revelations! may I just add that a lot of women with strong leadership qualities tend to focus on raising their kids and keeping the family together (a very important, noble, commendable, and much-needed role in our society).
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Rochelle MacDonald
Living life at the legally accepted maxium speed
02:23 PM on 05/14/2011
Women are not taught leadership skills like men. They are certainly not taught how to lead men. When was the last time a high school girl was encouraged to lead, coach or manage any of the male dominated sports? Of course no one would think twice about a male high school athlete working as a trainer for the girls, now would they? These are where young people are exposed to their first leadership experiences in life. Girls are usually left out of the game.
04:07 PM on 05/14/2011
That is a ridiculous comment from someone clearly working too hard to find their inner victim. Highschool girls do lead a lot of activities. My niece has been a leader in student goverment and various other activities thoughout her high school tenure. She is near the top of her class which is a female dominated position. Females are most of the valivaitorians and most of high school graduates. Females fill the AP and honors classes. When I was in High School there were 6 boys and 40+ girls in the honors class and that was in the late 90's. Females may not lead male sports but women are not the biggest sports fans. That is a choice and they don't need to redirect their focus just to silence your complaints. Sports are far from the only extracurricular activity females are involved in.

By the way boys are not taught to lead. Boys are raised the same way girls are except for the guilt trip feminist are always running on them while they are still failing to perform as well as girls academically. Ironically boys today have more statistics on their side to justify victim status.
11:37 AM on 05/13/2011
In the US world of science, men hold the vast majority of leadership positions in academia and industry as well as memberships in the National Academy of Sciences (NAS).They also garner most of the awards and prizes for scholarly achievement.

Where are the women?

Some argue that the low numbers of females among NAS members and scholarly prize winners are due to the paucity of women in STEM fields. But the data show under-recognition of women even after adjusting for their lower participation in most STEM fields.

Here's the date: http://awis.org/displaycommon.cfm?an=1&subarticlenbr=448
08:27 AM on 05/13/2011
I'm looking forward to joining you in this conversation at the We Own It Summit next month. As you know, our ACTiVATE women's entrepreneurship program (http://www.ActivateProgram.org) is working to support women enclosed by those glass walls to break out and start their own tech-based company. Thanks to the help from Kauffman, we're positioned to expand our program to ACTiVATE women across the world!

Julie Lenzer Kirk
Path Forward Center for Innovation and Entrepreneurship
Home of the ACTiVATE program
http://www.PathForwardCenter.org
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dlo2
01:43 AM on 05/13/2011
Women are highly capable of simultaneous multitasking and men, for the most part, able to attend to a series of linear tasks. Women make excellent leaders because they often possess not only the capital of intelligence but the capital of emotional IQ as well, a sine qua non for any startup.

To envision a future of these talented individuals in creating successful enterprises ...this will require recalcitrant banks to begin investing in such talent here in the US...otherwise this is all rather shallow and hollow banter...and the suffocating glass walls will prevail.
04:16 PM on 05/14/2011
Yes please, more sexist comments to degrade men and promote female chauvinism. Let's tell our men and boys they suck, and tell our girls they are better than men. Who needs equality when you can have superiority.

This is why we have a feminist backlash. Men need not stand by while women go around trying to do to them what our great grand fathers did to women. The main difference is women were respected as a pillar of the family where men today are treated as redundant and disposable.

The gender wars need to stop. Women are doing great so have some patience and let the next generation of women start out without your feminist baggage and sense of entitlement.

There are no glass walls or glass ceiling. The fact is everybody has to work damn hard to get ahead and being male will give you no advantage if anything you will be at a disadvantage, socially, academically, and overall statistically.
07:31 AM on 05/15/2011
Honey, I hate to break this to you, but there is NO feminist backlash. I know the wishful thinking of MRA guys, but it's simply not true. Feminism is deeply into the bones, blood and brains of every human being born after the year 1985 or so. It doesn't even need a name anymore. The human race has been transformed by it and that bell will never be unrung.

Men still start life with significant advantages, though not as much in enlightened Western societies as in the rest of the world. That is a good thing. Boys aren't failing in school for any reason connected with discrimination. They are failing for reasons of personal responsibility - on their parts and that of their parents.

It's a fairly easy issue to address. Get your boy off the computer and away from the video games. Hold him to high academic standards starting in his preschool years. EXPECT him to excel - and he will, to the best of his ability. It's parenting 101. It has nothing to do with feminism and such whiny self victimization only distracts from the solutions that are very clear and simple.
08:54 PM on 05/12/2011
We have quite a few women clients that are putting together startups and taking highly technical leadership roles. In fact, most of the businesses and projects that are run by the women we work with tend to better managed in my opinion. I don't know exactly why but they seem better able to juggle all the roles it takes to get a startup company off the ground. I think statistically speaking it's pretty clear that this pendulum is starting to swing in the direction of women and I think it would be diserving to think that women need special treatment. At least the women we know are just capable if not better prepared to be business leaders in technology. It may not be as apparent to you where you are, but it's pretty apparent at least here in Washington DC.
06:18 PM on 05/12/2011
Not one women has taken a tech company from inception to gloabal eh? Just watch me and other women social entrepreneurs move this needle hard.

www.firstpowercanada.ca
04:44 PM on 05/12/2011
To much complaining not enough doing. It is clear that women are intimidated by the men in this field, and thus have seen a lot less productivity. As a women designer/developer, I know first hand that we are severely out numbered. I've also learned that when it comes to the tech game it's not about whether you pee standing up or sitting down, it's about what you KNOW! So ladies if your interested in developing the next great start-up application or web site, don't take "NO" for an answer, and educate yourself. Knowledge is still the greatest power. It's going to take more then 1 high heal to break this glass ceiling.... but I'll be happy to put a crack it for us.
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WoodsideCraig
Author of the blog "The Weiler Psi"
11:42 AM on 05/12/2011
The author is leaving out a crucial point that many women keep in mind when they have their own business: quality of life. Women, in general, don't throw their whole entire lives into one single area.

Racing from small business to industry Behemoth requires living and breathing the job and giving up everything else. guys are far more willing to do this than women and you can find this in a wide variety of areas where no discrimination is present. (Gaming, for example.)

These blanket statements may have some validity, but you have to take everything into account.
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Joshy X
observer in Weimar Amerika
04:38 AM on 05/12/2011
you mean the Glass Walls that prevented a woman entrepreneur from becoming Governor of California?
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Eli Davidson
Award Winning Women's Small Business Coach,
12:32 AM on 05/12/2011
As a coach to women entrepreneurs, I bump into the glass ceiling with clients frequently. As a fellow Huffington Post blogger, I am thrilled to see your research. I will be using your blog in my upcoming post. As a Kansas City native, I am deeply grateful for the amazing work the Kaufman Foundation offers our world.
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Aquest
No one here is exactly what they appear.
10:16 PM on 05/11/2011
Glass walls, glass ceilings, I guess glass floors are inappropriate.
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satanlite
If ur neibor wtchs Fox Nws wtch ur neibor
09:51 PM on 05/11/2011
I want innovative products. I want jobs and employment. It doesn't matter to me if a woman owns and/or started the company or not.
09:40 PM on 05/11/2011
Thanks for this great article, as a nontechnical woman with a bold vision of starting a social conscious tech firm, I am intrigued and inspired. Now if I can find the technical expertise to make my vision reality.
09:23 PM on 05/11/2011
Face it. Intelligent women just are not as greedy.
They might even be happy with less! Sick, isn't it.
When women start acting like Junior Men, then the world will hurry to its end.
12:45 PM on 05/12/2011
Meg Whitman and Carly Fiorina aren't greedy?
11:41 PM on 05/15/2011
Junior men personified.