female leader, women leading the way

Article by Abadesi Osunsade, Acumen Fellow and Founder and CEO of Hustle Crew

Questionable, unethical and, arguably, dangerous behaviour has run rampant in the world of tech start-ups in recent years.

And yet it was the recent trial of Theranos founder, Elizabeth Holmes, that supposedly lifted the lid on the culture of Silicon Valley.

Who is allowed to fake it ‘til they make it?

As the evidence of Holmes’s crimes were laid out during the trial, it seemed the once-heralded entrepreneur had followed the fake it till you make it playbook of so many of her peers, albeit it on a much bigger scale. Indeed, Apple announced its first iPhone before it had figured out how to mass-produce its prototypes, while WeWork’s Adam Neumann and Uber’s Travis Kalanick have, through a blend of bravado, optimism and diversionary tactics, hyped their way to raising over $10 billion for their companies.

And despite this, Holmes is facing up to twenty years in prison while the three companies mentioned above are now worth a combined $3.12 trillion – leading one to question, why are some allowed to fake it while others can’t?

This question was the focus of a recent piece in The New York Times by the former CEO of Reddit, Ellen Pao, which asked why “the boys club” in the tech industry “supports and protects its own – even when the costs are huge” and yet “when the door cracks open ever so slightly to let a woman in, the same rules don’t apply.”

The lack of VC funding for female-founders

It’s easy to see where Pao is coming from given that in the past 18-months a huge number of female founders or c-suite leaders have stepped down, with much of this being driven by a drying up of VC funding. In October, data firm PitchBook reported that VC funding for companies with female founders dropped to $434 million in the third quarter of last years – its lowest level in three years. And before the pandemic, women-only founding teams received just 2.6% of all venture capital invested in start-ups in 2019, with black women receiving less than 0.3% of VC in 2018 and 2019.

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This is despite the proven success of female-founded tech start-ups. A 2018 study by the Boston Consulting Group, Why Women-Owned Start-ups Are a Better Bet, found that for every dollar of investment raised, start-ups with at least one female founder produced 78 cents in revenue, compared to 31 cents generated by all-male run start-ups. Start-ups founded or co-founded by women also performed better over time, generating 10% more in cumulative revenue over five years – $730,000 compared with $662,000 for all-male run start-ups.

The success of female-founded start-ups contrasts with the lack of funding offered by VCs and points to something much bigger and worrying than the usual peaks and troughs of start-ups in Silicon Valley. It reflects the implicit biases we hold against women that we as society often fail to recognise.

The impact of the likeability bias

Women face what’s called a likeability bias: where they face a social penalty when they assert themselves. This is rooted in the historical expectations of how women and men are expected to behave. Society expects men to be assertive so when they take the lead – or to put into context with tech start-ups, are bombastic and full of bravado – it feels natural to us. In contrast, society expects women to be kind and communal, so when they assert themselves, we often react unfavourably or, as shown by the lack of funding given to female-founded start-ups, we ignore them.

This double-bind makes the workplace and entrepreneurialism challenging for women because they have to assert themselves to be seen as effective, but when they do assert themselves, they may be less liked or rejected simply because they do not fit societal expectations of how women should behave. Whereas men do not walk this same tightrope – in fact, men are often rewarded for asserting themselves or, when they do assert themselves and cross the line, such as Neumann and Kalanick’s overinflation of their companies worth, they are not punished in the same way a woman may be.

The double standard that exists for women in the tech world must be addressed and this is something we are attempting to do at Hustle Crew, and Acumen Academy is seeking to build the leadership that can make this change happen. The status quo cannot continue – because, as Pao correctly points out, it was sexist for Holmes to be held “accountable for alleged serious wrongdoing and not hold any array of men accountable for reports of wrongdoing or bad judgement.” There must be consistency across the board and either no one or everyone should be allowed to follow the fake it ‘til you make it mindset.