Why Startups Need Female CEOs
This quote by Luo Mingxiong from Jingbei Investment in an article by Tech in Asia almost made me spit out my morning coffee. With all the positive work being done with organizations like HeForShe and the topic of equality in the workforce becoming an increasingly hot topic, I never expected to see a quote like that from a Chinese businessman in 2017. As a CEO of a tech company myself, who just so happens to be a woman here in Southeast Asia, reading this was completely enraging. Unfortunately Luo is a little behind this age in time given the supporting data, proving the positive implications of women in leadership roles within tech companies. I've gone through the gauntlet of fundraising for my company, it's not easy. I've talked to many VC's in the U.S. and Europe who are incredibly supportive of female founders. I find it sad that there are still some people that are missing out on the opportunities that female leaders can bring to innovation, technology and business in both products and services, because the company is led by a woman.
We don't usually invest in female CEOs. It's not because of any kind of prejudice. Just think about it carefully, besides giving birth, what can women do better than men? Nothing.
With only 29% of employees that are women and an even less that are CEOs it is more important than ever to encourage gender equality. Studies have shown that diversity is a key element in the workplace. It makes teams smarter, fosters innovation, more accurately reflects consumers and improves the bottom line.What do you think companies and societies stand to lose by fostering gender bias, rejecting inclusion and gender equality? Here's why tech startups in China and around the world should be investing in female CEOs.
High Performing Companies Have One Thing in Common: Women in Senior ManagementAccording to Fortune 500 statistics, companies with at least three female directors have seen their ROI increase by 66% or more. This positive bottom line correlation is further backed up by the Why Diversity Matters study. This study interviewed 366 companies across a range of industries in Canada, Latin America, the UK and the United States and found that businesses in the top quartile for gender diversity are 15% more likely to have financial returns above their industry mediums. The report also found that companies in the bottom quartile for both gender and ethnicity are statistically less likely to achieve above-average financial returns. Before anyone rebuts with the idea that there aren't enough suitable female candidates in tech to be considered, here is some food for thought: A study by the Credit Suisse Research Institute found that companies with at least one woman on the board outperformed companies with no women on their boards by 26%. So if you want your startup to start making bank, it's clear that having a gender-balanced workplace is key to a successful bottom line.
Diversity in the Workplace Leads to More Accessible SkillsOne of the main arguments for gender equality in the workplace that I firmly stand behind is that women and men bring unique experiences and viewpoints to the table. If you only exclusively hire one gender or only promote men to senior positions, you are inevitably losing out on an entire skillset. In the tech industry, there is overwhelming evidence that shows more diversity leads to innovation, and critical thinking flourishes. Imagine how much more the tech industry in China, Southeast Asia, and the world could achieve if they worked harder to include women and distance themselves from such archaic thinking. Moreover, it's no longer not enough for tech companies in 2017 to just be donating to an all-girls coding group. With only 17.1% of tech workers being female, companies need to take a stand and show their commitment to real diversity through their hiring processes and by training women for leadership roles.
Truth Bomb: Women Are Part of Your Consumer BaseLike it or not, women form part of your target market. Deciding to avoid hiring females in senior management roles, sets up your company to alienate half of your client base. With women showing different consumer patterns to men such as buying more online or preferring certain social networks, not representing an entire gender puts your company at a disadvantage of identifying their needs. A startup skewed towards more female users might need to highlight certain features over others to appeal to that user group, and if women are not involved in critical stages of development and marketing, you might find blind spots that hinder success. Goldman Sachs says they invest in companies with impressive returns, and the best investments are in female entrepreneurs. So if you want your tech startup to be successful, you need to draw from the entire talent pool and not exclude half of the population.
In Conclusion: Women Are Capable of More than ChildbirthWith compelling data like this, it's hard to imagine why Luo would think investing in women would be damaging or why he thinks not doing so isn't sexism. Perhaps he has been reading one too many articles claiming that the technology industry is not sexist and that women's brains just aren't well suited for programming. High profile Silicon Valley venture capitalist firm, Andreessen Horrowitz reported as of January 2017, 76% of top performers at their investment company are women. Many more women are also stepping into VC roles and focus on investing in female-founded tech startups. Here's a list of some of these firms on Female Entrepreneurs Institute worth checking into. Therefore, there will be a smaller talent pool of highly profitable tech companies for Lau to access. 500 startups also has a fund dedicated to investing in female-led tech startups called 500 Women. Action is being taken in the U.S. and in Europe on investing in women founders, however, Asia still remains behind because of people like Lau. So while there is a slow pace of change in the tech workforce, I feel confident saying that the impact of women in the workplace is undeniable and that we are highly capable of succeeding at many other things other than childbirth. As Jon Bische, CEO of Entelo said:
"Gender diversity is not only the right thing to do, it's the profitable thing to do."This post was originally published on Forbes.com as republished here, with the permission of the author Andrea Loubier.