Lessons From Coco Chanel, a Self-Made Woman

My Saturday night was spent enthralled by Audrey Tautou's rendition of Gabrielle (Coco) Chanel's incredible rags to riches story. After hours of my afternoon had disappeared in frustration as a result of entrepreneur's block (like writer's block, except worse because there's just no time to wait for creative genius to strike), I decided to clear my head by going to the movies. Coco before Chanel could not have been a better choice. Here I was, an aspiring woman entrepreneur in 2009 learning from and relating to a woman entrepreneur who existed at a time when I'm sure that "woman" and "entrepreneur" were never uttered in the same sentence.

Coco Chanel, the epitome of a self-made (wo)man, singlehandedly redefined suffocating French fashion from constraining corsets and feathery displays of wealth to simple, feminine elegance that allowed a woman to breathe. A woman ahead of her time, Coco Chanel was a true entrepreneur, who brought women freedom through fashion.

The relevant questions that this biography sparked for me were: Why was Coco so different from the male entrepreneurs of her time? A century later, why are women entrepreneurs still so different from their male counterparts? What makes a woman's journey to becoming her own boss so different from that of a man's? And, most importantly, why are there still so few of us?

Sure, the first question may be easy to answer - Coco lived in a time when it was truly a man's world and women's rights were a thing of the future. Fine; but why is it that even today, in a more gender-neutral world, only 10 of the 1,125 Forbes 2008 billionaires are self-made women? Why is it that only a minuscule number of women have made their fortunes by launching big companies? The fact that I can name many of the biggest women entrepreneurs of all time by their first names is clearly not a good sign. Hats off to Coco, Estee, Oprah, Martha, and Arianna.

A USA Today article from last year asks a similar question: Why is it so rare to find women who have built big companies? Their explanation falls largely into two camps: 1) men have easier access to start-up capital from banks and venture capitalists, and 2) that women are naturally more devoted to family, and "even those who out-earn their husbands often remain responsible for children and households." While I can understand anyone (man or woman) who chooses to make family a priority; I have trouble understanding why, all things being equal, women are not as fundable as men?

The House of Chanel wouldn't exist if Coco's love, Arthur "Boy" Capel, hadn't provided her with the startup capital to fund her first hat shop. Back then, it wasn't even an option for women to get a loan to start a business from the bank, but today, banks (at least those in the developed world) don't discriminate based on gender, so why is it that women aren't getting funded as readily as men? Does the corporate glass ceiling for women also exist in entrepreneurism? Are women not getting the proper education or experience to succeed as entrepreneurs? Or are women just not coming up with as many good ideas as men?

A bit of research reveals some startling statistics. Although women launch twice as many businesses as men, only 6% of all venture-backed startups are women-led, only 1.7% of venture capital-backed technology startups are founded by one or more women, and only three companies on the Fortune 1000 were founded or co-founded by women.

The Clinton Global Initiative (CGI) last month spotlighted the issue of women and girls in the developing world. Women perform 66 percent of the world's work, and produce 50 percent of the food, yet earn only 10 percent of the income and own 1 percent of the property," President Bill Clinton said. I applaud the global companies, nonprofits and foundations that made over a dozen commitments to empowering women and girls in the developing world at CGI last month. But we also need commitments to help empower women and girls in the developed world, because even in the developed world, decreases in inequality can improve overall productivity. Goldman Sachs reported that different countries and regions of the world could dramatically increase GDP simply by reducing the gap in employment rates between men and women: the Eurozone could increase GDP by 13 percent; Japan by 16 percent; the U.S. by 9 percent. To learn more about the campaign for women and girls check out the Girl Effect. If I could make my own girl effect video to make the case for more women entrepreneurs, it would go something like this: "Woman Entrepreneur + No Funding = Glass Ceiling, Gender Imbalance, Lack of Role Models." But, "Woman Entrepreneur + Funding = Job Creation, Gender Equality, Better Role Models."

The stark statistics of women being underrepresented in entrepreneurism is sad and disappointing, but I hope that these statistics prompt entrepreneurs out there to action. Entrepreneurs (women and men alike) have very little tolerance for what should be done, because it's all about what can be done. So as I reflect on the story of Coco and the sacrifices she made to build her empire (she never married or had children), I draw hope from the fact that despite all odds, Coco succeeded. I believe that this is a good sign for us women entrepreneurs of the 21st century. If Coco could do it, so can we.

Resources for women entrepreneurs (again, there are too few): Women 2.0 in Silicon Valley, Young Women Social Entrepreneurs, Womensphere, and Forum for Women Entrepreneurs & Executives. If you know of other websites, please share!

Follow Rachael Chong on Twitter: www.twitter.com/catchafire

Comments

[bussgang]

Great post, Rachael. And thanks for your comment on my blog about the VC gender gap on BusinessWeek.com (original post also at www.seeingbothsides.com). I'm serving as an EIR at HBS and I can see that women are more interested in entrepreneurship than when I was a student 15 years ago. I hope that trend continues!

[astia ceo]

You ask for resources: Astia (www.astia.org) is a global network of experts committed to the success of women-led, high-growth start-ups that require capital to grow. We provide access to experts via programs in Silicon Valley, New York, London & Mumbai. We are network of men AND women working with start-ups on 3 fronts 1) we ensure access to capital, 2) we provide expertise to ensure the successful growth of the business, and 3) we invest in the leadership of the women on the founding team.

As societies we have invested in women within micro-enterprise and small business to great effect with women participating very successfully within in these arenas. During the same period we have invested in women's education. Today in the US women represent:
51% of businesses
35-40% of applicants to business schools
43% of environmental engineering degrees
40% of bioengineering degrees
25% of proprietary software developers
12% of mechanical & computer engineering degrees

I believe that the time is now with this convergence of women-at-the-ready and 50 years of proof that investing in women has measurable results for economies (not to mention for investors). To cite someone I respect, "For the past 20-50 years women have actively participated in entrepreneurship - but primarily within microenterprise.  Without taking anything away from those outstanding programs - it is now time for women to join the ranks of wealth and influence." Zainab Salbi, author and founder of Women for Women International.

[Rachael Chong - Huffpost Blogger]

Hi Sharon,

Thanks for these statistics. They show progress, I'm sure; but as part of the Millenial generation, these stats don't accurately reflect how I see the world (where all these numbers should be hovering around the 50% mark), and what these stats say to me is that we still have a heck of a lot of work to do. Only 25% of women are software developers?! Only 12% get engineering degrees?!

[Rachael Chong - Huffpost Blogger]

A BusinessWeek article (http://tr.im/BBlw) stated that 30% of Harvard MBAs are stay-at-home moms. No offense to stay-at-home moms, but I'm sure the stats for Harvard MBAs who are stay-at-home dads is definitely no where near that number. In fact, the author, Alison Damast, states that:

"Another consideration is that many of these women are married to men who are just as ambitious as they are, said Joan Williams, an expert on work and family life issues. Williams said she believes that what has been termed the "opt-out revolution," the notion that working women choose parenting over building their careers, is more complicated than meets the eye. Men who are in the upper ranks of their profession with stay-at-home-wives earn 30% more than men who are married to women who work, she said. Those men who want to reach the highest rungs of their career and earn the most money often need a stay-at-home wife to take care of all other aspects of their life, including raising a family, Williams said. "And since many women in business school marry those men, they end up being stay-at-home wives, regardless of their own vision of what they wanted from their careers," Williams said."

I think that when an equal number of Harvard MBAs are stay-at-home dads, the playing field for women in business will be finally level.

[SmartSamantha]

For the past three years, I have been researching women entrepreneurs for my site.
Some facts to be added to your column
-if women asked for capital..they got it at the same rate as men.
-that is if they had a solid business idea.
-the studies show many women grow businesses around their desired lifestyles/freedom over financial success.
Women have access to the tools now. It takes hard work, good ideas and much personal sacrifice to build a large firm-and women are doing it. And more can too if they will--- build a good idea, then "ask" for funding, network outside their comfort zone and learn something new everday.
Just make sure though..that your business plan matches your life plan!

[Rachael Chong - Huffpost Blogger]

Hi SmartSamantha,

Thanks for your comments. I agree with you that if more women "will" it, that is, if they choose to make the personal sacrifices to start a big business they can indeed be successful. The tools are out there. However, I still think it's important to understand and break down the barriers that are in the way of women starting big business, such as the fact that the majority of VCs are men and men feel more comfortable investing in men. I recently tweeted the following: "BusinessWeek-The VC Gender Gap: Are VCs Sexist? http://bit.ly/40mDcF. As more women entrprnrs emerge, more women will become VCs."

[SagaciousThink]

Just came across another one :https://www.springboardenterprises.org/ Springboard Enterprises. Don't know a lot about them yet.

[anndaly]

I was so disappointed wit that movie, which focused more on Chanel's lovers than her talent and business sense. How did she begin her businesses? Her rich lovers loaned her the dough.

[rongraham1]

There's two ways to look at this. First, it appears that you do indeed concentrate on the BIG entrepreneur, the $50M and up type, like Oprah and Martha and what-not. Those folks really do have a limited range of commercial interests (though I suppose you could attribute that to lack of opportunity in other industries), e.g. fashion, make-up, cooking, home and garden. Those are "traditional woman" interest areas.

Second, there are innumerable smaller start-ups and small businesses, that bring in, say, $100-250K a year. Many of these (though not enough) are also run by women, who are entrepreneurs as surely as the examples you name. And they have much more variation in their business interests. I meet these good folks all the time, and I know you do too. I know their hope to expand to the BIG level is slim in most cases, but they still offer an example to women (heck, to everyone), though they may toil unnoticed.

[SagaciousThink]

Good post - I work as a mentor with ASTIA which is a non-profit that helps women entrepreneurs. One of the interesting facts I learned was that while men almost view failure as a badge of courage - look at the number of failures versus success and then look at the number of serial entrepreneurs - they take that experience and apply it to their next gig. Women on the other hand, once they fail think, and I am painting with a broad brush here, I failed so I must not be any good and jump back into traditional employment.

I think the other part is that women are much more likely to look at the requirements and say - I cannot meet 100% of the requirements and therefore whatever it is - I cannot do it, whereas, and I'll use my brothers as examples, guys seem to thing that the same description means, here's the ideal, I can meet 50% and wing the rest, therefore I'm going for it.

I realize there are gross generalizations, but based on my conversations with women entrepreneurs this addresses at least some of the numbers.

But back to my original point - I mentor with ASTIA and think its a great organization. It started in the Bay Area but is now in NYC, London and soon Bombay.

[Rachael Chong - Huffpost Blogger]

Thanks for your insights. I also forgot to mention www.goldenseeds.com as another good resource. On their site I found some more interesting statistics. The fact that women receive less funding than men is NOT because women only start small businesses. In fact, only 4% of women owners of million-dollar-plus firms have raised private equity, compared to 11% million-dollar-plus businesses owned by men.

Another interesting paper I found called "Confidence and Angel Investors: Does Gender Matter?" by Sohl and Becker-Blease claim that: "Men and women angels invest at different rates. Compared to women, men are more likely to participate in the angel market, invest in earlier-stage projects and accept a greater proportion of proposals. These results are consistent with men investors having greater confidence compared to women. Further, evidence shows that women entrepreneurs are more likely to seek capital from women investors. Given that women investors invest at a lower rate and women are more likely to seek capital from other women, this suggests that women entrepreneurs have more restricted access to capital, ceteris paribus, than men." http://tr.im/AV2U

Now, all this sparks a couple of new questions: Why don't women entrepreneurs feel as comfortable raising money from men as they do from women? And of the women entrepreneurs who attempt to raise money from men, what are their success rates compared to that of men entrepreneurs?

I would love some insights from men entrepreneurs and VCs out there.

[Jules Pieri]

Rachel, Thanks for mentioning Golden Seeds. I'm building my third startup, www.dailygrommet.com Two of my strongest investors are Golden Seeds members/leaders. They are the perfect combination of active, supportive, demanding, and committed.

As for being a female CEO raising funds for a business that does not fit neatly into any existing models, that is a tough combination. It's a big $50M + idea but it requires real courage and, frankly, balls, to see the opportunity. My team combines deep experience in consumer branding, product development, and social media. Not many investors are comfortable in those areas.

Beyond that, I don't personally fit the pattern of "successful guys who look and act like me" that an investor naturally seeks. The entrepreneur archetype. (Not that they do that consciously, but the need to see a piece of yourself in an entrepreneur you want to fund is just plain human. To want to somewhat live vicariously through their efforts.) I don't look/act/talk/think in familiar male patterns. Even though I am a Harvard MBA, etc.

So...I rely on what has made me successful in other business situations­....delive­r the numbers that will quelch all doubt.

[pachel]

I also find that when women start their own company and try to reenter the workforce such as corporate america, they are not taken seriously and it limits their income capacity. Sure this can be seen as someone just took time to do something else so she has to start over or where she is seen as capable but still there lies a stigma.

[pachel]

I am a member of ladies who launch but i have noticed that the women on there rarely communicate with each other, why don't women support each other much more?

[Rachael Chong - Huffpost Blogger]

Hi Ron,

Thanks for your comments. I should have been more specific and explained that I was talking about women who have created big, Fortune 500 companies. I agree that there are many more women entrepreneurs build smaller business; and, yes, I think many of them are definitely just as much "entrepreneurs" as any of the famous ones I listed.

So please let clarify -- I think that there should be more women building large, $50M+ (or however we want to define "large") companies, because: 1) they can; 2) we need more women entrepreneur role models who are highly visible; and 3) we need and will benefit from having women being equality represented in entrepreneurial America because of the new ideas and leadership style they will bring to the table.

What's ironic is that America is a country known for gender equality and freedom as well as for being built by its entrepreneurs; however, the entrepreneurs it is known for are mostly men.

Would love to hear any additional thoughts you have!

[Rachael Chong - Huffpost Blogger]

A couple more resources for women entrepreneurs from a Twitter fan @breastmilk

http://www.makemineamillion.org/
http://www.ladieswholaunch.com/

[plumrelk]

That's very interesting Rach. You bring up some good points about why on average women make less money than men.
Also, historically women went into what society considered as "women's work", meaning that work such as nursing, teaching, seaming etc were consider women's natural abilities and hence their natural work. As such, they were paid considerably less for doing work that was deemed as naturally women's work.

[gilcunha]

Great post Rachael. I think that it is only a matter of time that the numbers even out between men and women entrepreneurs. Although it might seem slow now it will compound out and we'll see exponential growth. It is with your words, leadership, determination, and confidence that will allow young up-and-coming women to believe in themselves and understand that being their own boss is an option.

You represent the future of women entreprene­urship.... no pressure.