Creating Growth through Change
There is a subtle revolution taking place within the world economy. Women entrepreneurs have been creating companies at a rate much faster than many people would have predicted when they were younger. And the businesses being created by these women entrepreneurs are providing goods and services to people all around the world. Women entrepreneurs are not relegated to the sidelines anymore. They create startups, they are CEOs of venture-backed scale-ups and they head publicly held corporations. This article explores how they do it, what holds them back and why it matters for everybody else.
How Bold Ideas Begin
This journey does not usually start in the boardroom. For many women entrepreneurs, the journey starts with an irritation that they cannot overlook – a product that is not available, a service that is failing its target market, or a work environment that will not make any concessions. They translate this irritation into a prototype, and then into a business pitch. Technology makes this process quicker. Today’s laptop, social media accounts, and payment apps allow founders to test their ideas within days as opposed to years.
A Different Style of Leadership
The leadership style is yet another aspect that garners attention. Female founders have been observed to work towards creating teams based on trust and transparency and they also evaluate success on the basis of their customer loyalty, not just growth. They adapt swiftly if there is any change in the market scenario.
Proof in the Record
These examples speak for themselves. Sara Blakely started Spanx in the year 2000 with just $5,000 and in 2021, she managed to sell out the majority of her company shares to Blackstone worth $1.2 billion. Falguni Nayar quit her job as an investment banker at Kotak Mahindra and started Nykaa in 2012 and took the company public in India in November 2021. Whitney Wolfe Herd started Bumble in 2014 and in 2021, managed to take her company public becoming the youngest woman to do so. All these Female Entrepreneurs were from different countries and sectors, but nevertheless managed to turn their ideas into successful businesses.
The Funding Gap
The money aspect is still the hardest part to tackle. Despite the fact that women entrepreneurs still get a relatively small slice of the venture capital funding pie, they still find themselves having to face more difficult questions and getting smaller initial investments compared to their male counterparts. As a countermeasure, female entrepreneurs rely on bootstrapping, angel funding, and customer acquisition as the best ways to get things done. The banking sector is another hurdle in this process, especially in emerging economies where collateral takes precedence over anything else.
The Power of Community
Communities plug part of the missing puzzle. Mentoring programs, networks of founders and accelerators aimed at women provide something that cannot be learned from books – straight talk, networking opportunities and evidence that there is a way to follow. Today experienced entrepreneurs start mentoring the upcoming generation of founders and many re-invest their own gains into other women’s businesses. Women entrepreneurs creating connections and learning from each other create a synergy that can be achieved only by women. Even governments and universities joined in and initiated grants, incubators and training programs.
Impact Beyond the Balance Sheet
It reaches far beyond balance sheets. Firms founded by women do not outsource but focus on hiring local employees who offer flexible working hours, allowing them to retain skilled personnel within the workforce. Firms founded by women in the health, education, climate and fintech sectors create solutions for their clients that were ignored by the established players, ranging from maternity care to micro-financing of small shopkeepers. Female entrepreneurs operating on an international scale bring these solutions into new markets, thereby creating jobs and adding value. Economists believe that bridging the entrepreneurship gender gap could mean additional trillions in global GDP.
The Road Ahead
The journey ahead requires action from all sides. Investors should broaden their networks and evaluate ideas on their merits. Policymakers should do away with all regulatory and financial obstacles. Corporations should buy products from women-owned businesses and honor contracts with them. In the meantime, female entrepreneurs continue doing what they have been doing all along – identify the need, take the risk and create the solution. They have been shaping markets with their innovative ideas, and their influence across the globe is just beginning to be felt.