When men and women start companies, do they approach the process the same way? Are there key differences? And how do those differences affect the success of the business venture?
For answers to these questions, I turned to Cynthia Kocialski. Cynthia is the founder of three tech start-ups companies. In the past 15 years, she has been involved in dozens of start-ups.Cynthia writes the Start-up Entrepreneur's Blog and is the author of Startup From The Ground Up – Practical Insights for Entrepreneurs, How to Go from an Idea to New Business.
I asked Cynthia to pull on her experience and expertise to answer the question….
Are there differences between men and women entrepreneurs?
Take it away Cynthia!
Cynthia Kocialski explains the differences between men and women entrepreneurs
As a woman in the start-up community, I am frequently asked about women entrepreneurs. A popular question is: How are they different from men?
There have been many studies of entrepreneurs and start-ups, and I’ve read a number of them. Many of them seem to me to fall short, because the researchers, not being entrepreneurs themselves, lack an in-depth understanding of the entrepreneurial mind. The result is often a lot of statistics that fail to enlighten readers about entrepreneurial behavior and motivation. So what follows are my personal opinions. They are not based on formal research, but on my own observations and interactions with other women entrepreneurs.
1. Women tend to be natural multitaskers, which can be a great advantage in start-ups. While founders typically have one core skill, they also need to be involved in many different aspects of their business. However, this can also be a negative. Multitaskers may try to do too much themselves. A woman will look at a task that needs to get done, and even if it’s something she doesn’t like or want to do, she’ll hunker down and do it. I refer to this as “the do-it-yourself trap.” Men don’t seem to fall into this trap so easily. Men go out and find someone to do the task for them, which grows an organization more quickly. As a result, men tend to be big picture thinkers, which is better for setting the tone and direction of the start-up.
2. Women tend to be more sociable than men. In an environment where who you know and who knows you is more important than what you know, it is a strength to be outgoing and well-connected. Even men who are sociable tend to focus more on getting to know the right people, those who can help them get ahead, than women do.
When women leave college and start their careers, they build a network of other women professionals. By the time they are in their mid-thirties, many of these women will have left the work force to start a family or, if they do continue to work, to shift their priorities from their career to their family. As a result, many women find their network disappearing at the same time they catch the entrepreneurship bug.
3. Women founders are much more willing to discipline an under-performing employee, and much more likely to fire a non-performing employee, than men are. This is Mom versus Dad. Dad wants to win over the kids by giving them with whatever they want, or letting them do whatever they want. Mom considers their safety and health. Mom demands acceptable behavior. Mom puts her foot down. Women have a reputation for being the more nurturing of the species. If that’s true in general, women entrepreneurs seem to be the exception.
4. Women tend to stick with a product concept or start-up longer, trying to work through it to find the answers. Men tend to abandon something as soon as they think there’s a better opportunity available to them. Men will shut down a start-up, abandon one start-up for a more promising one, or change direction faster. While this trait of women has its upside, the downside is that women can sometime “beat a dead dog,” trying to make a non-viable idea work.
5. Like it or not, women have more difficulty getting a company funded than men. Since women don’t get financial backing, they start companies that don’t require a big initial investment. As a result, women tend to build service companies or start-ups that can generate revenue quickly. Men are more likely to start a company with a long product-development cycle, which requires outside capital to develop the first version of the product before sales can cover operating expenses.
6. Most men founders who found a tech company have technical backgrounds. They were trained as engineers, programmers, or scientists. Most women founders have backgrounds in sales, marketing, or product management.
If one looks at the number of small businesses founded by women, the portion is directly proportional to the number of females in the general population. But this is not true of technology companies. The number of tech businesses founded by women is much smaller than the number of women working in the industry. The Women’s Liberation Movement allowed women to study and enter fields previously closed to them, but that’s about all it did. It allowed them to enter—to have a job, but not a career, in these fields. Investors and customers want to see start-ups led by founders who have held senior positions in corporations. They want to see people with a track record of success, of steadily increased responsibility, and ever greater contributions to projects. While some women have attained a C-suite position, many are in support roles. Almost no women hold such positions as CTO, Vice-President of Engineering, or Vice-President of R&D. Women are more likely to be Vice-President of Marketing or Vice-President of Sales. Many women simply don’t get the experience and exposure in corporations to go out and start a company on their own.
7. Every year, I attend the local Teen Entrepreneurship Conference. I noticed that young women almost always start ventures with a social purpose. They want to help humanity or save the environment. The young men only care about making money. Men almost never start a social venture. They want to start ventures that maximize revenue and profits. Investors often point out that women don’t propose start-ups that are big enough to interest them and that women think too small. Men will propose businesses that shoot for the moon.
8. Women are more capital-efficient. A woman is more likely to start a company from her home, and only after it has taken off will she move into an office. A man will start by renting office space.
9. I know a woman who is a speech coach. When giving presentations about their start-ups, everyone needs to be convincing. The listener keys on the non-verbal signals sent by the speaker. When she first observes their presentations meant to convince an audience, women non-verbally beg, whereas men demand.
10. Start-ups with co-founders are more successful. Women are much more likely to be the sole founder, whereas men are more likely to be co-founders. Women do co-found start-ups with men. Sometimes the co-founder was their husbands.
If the co-founder wasn’t their husband, I noticed that the woman had participated in a traditional male sport. When I ask women entrepreneurs if they played sports when they were growing up, many say they played a team sport such as ice hockey or soccer. I know a few who are into car racing or triathlons. These women tend to have a passion for traditional male sports, which helps them connect on a personal level to men they work with.
About the Author
Cynthia Kocialski is the founder of three tech start-ups companies. In the past 15 years, she has been involved in dozens of start-ups. Cynthia writes the Start-up Entrepreneurs’ Blog and has written the book, Startup From The Ground Up – Practical Insights for Entrepreneurs, How to Go from an Idea to New Business.