Female founders share sure-fire tips for startup success
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What does it mean to be a woman in tech?
That’s not a question with an easy answer. But generally speaking, it’s not a straight path for women who are would-be entrepreneurs to break into the "boy’s club" that is Silicon Valley (or Silicon Alley). (And to be clear, the entrepreneurial path is inherently challenging for women and men alike.) I had my own experiences during the early days of Policygenius – a company that’s reached a point where we can start helping up-and-coming female entrepreneurs with the help of founders who have made it big.
Policygenius was proud to host Fast Company’s Who Run the World? Women in Tech event at our Flatiron office, and to invite The Muse co-founder and CEO Kathryn Minshew, and WayUp co-founder and CEO Liz Wessel to talk about the challenges, opportunities, and excitement of being a female CEO in the tech startup world.
Here’s what we had to say about a few of the topics the audience asked about – and how fellow future and current entrepreneurs can forge their own path going forward.
Any entrepreneur needs to found their company on a basic premise: What problem are you trying to solve for customers?
But even though the premise is straightforward, it’s anything but simple. Not only do you have to decide which problem needs to be solved (and which solution can help make your company profitable, too), you have to sell yourself and investors on it as well.
Coming out of college and knowing she wanted to be an entrepreneur, Liz went through a list of problems to solve before she settled on WayUp’s mission of helping college students and recent grads with internship and job opportunities. Why? Because that was her passion.
Founding and running your own startup is a bit like being a parent: you’re going to have something rewarding in the end, but you better be ready to put in some long hours and sleepless nights. That’s why it’s so important to be passionate about the problem you’re solving. If you’re lucky, you’ll dedicate years of your life to your company, and you need to sell your mission to the world. You can’t half-ass it, so don’t choose a problem you’re only going to be half dedicated to.
And selling that problem to investors can be difficult. They might not have the same experiences as you (especially true if you’re a female founder – you’re going to find that most VCs are men), so you’ll have to get creative on bringing them around to your way of seeing things. Part of that is reframing the problem in a way that they’re familiar with. This is a little easier if you’re on your second company and have something to compare yourself to, but it’s also the reason why "Uber of X" is such a popular turn of phrase.
But if you’re passionate about something, it’s also easier to find that interesting hook. At Policygenius, we sell insurance. Finding out how to get people to shop online for the insurance they need isn’t exactly a sexy problem, right? But when you think about everything that goes into it – consumer behavioral quirks, cognitive biases, incentives – it’s suddenly a much more interesting puzzle to solve. This pays off, because it can cut down on the many (many) roadblocks you’ll have to power through when you’re raising money to get your startup off the ground.
You know the story of J.K. Rowling getting rejected by a dozen publishers before the first book in the Harry Potter series was accepted? Raising money for your startup is a lot like that (and you hope the end result is, too). Just because you know how to frame a problem the right way doesn’t mean it makes pitching your company to potential investors any easier.One of our company values at Policygenius is the motto, "It takes grit to be great." Trying to get seed money for Policygenius two years ago required a lot of grit.
We got a lot of "no"s while we were raising money. Kathryn and her Muse co-founder had a similar experience: the company has raised over $30 million now, but got turned down 148 times in their seed round.
What does that lead to? For us, it was a cap table full of $25,000 checks from angel investors rather than the big check from an institutional investor we were looking for. But that’s ok: you do what it takes to move forward and a lot of those angel investors have been incredibly helpful. It also meant that we learned how to pitch Policygenius – and the problem we were solving – in the "sexy" way we talked about before. It led us to a Series A round in June 2015 and a Series B round earlier this year.
It isn’t a secret that female founders are still rare in the startup world. Female Founders Fund shows that in the first half of 2016, only 14% of companies that raised a Series A round in New York City had a female CEO – a total of only 6 companies – while in San Francisco, that number is 11 companies, or 10% of the Bay Area Series A rounds (and that’s actually an increase over last year). Events like Fast Company’s Women in Tech help shed light on the successes of female founders to inspire the next generation. But there’s still a lot more we can do.
Kathryn recalled the success The Muse saw after their inclusion in Y Combinator – an experience they almost passed over because all of the other applicants were male. As it turns out, the Muse founders were the first all-female team in Y Combinator. Kathryn also shared her experiences with her fellow-entrepreneur husband; she’s often overlooked at events, where she’s seen as the plus-one, while he’s the entrepreneur. This has made her more mindful of how she’s perceived, and how she treats other people.
I’ve learned a lot of my own lessons by being the only woman in the room for most of my career. It’s taught me to be more inclusive and mindful of minority and junior team members who I know from experience don’t always get the same opportunities as everyone else. It’s taught me to emphasize objective performance, and to base my own work on facts, evidence, and metrics – things that can’t be easily dismissed just because they come from a woman and don’t fit into the paradigm that investors, boards, and startup peers are used to.
Being a woman in business has made me a more mindful leader and (I hope) has set Policygenius up for success, just as it has for Kathryn and Liz with The Muse and WayUp. But that doesn’t mean the status quo shouldn’t change; everyone should get a fair shake and be judged by their character and business acumen. With events like Women in Tech becoming more and more popular, it gives female founders more opportunities than ever to show the world the types of successes we can build.
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