Bidiversity

Why are there not more women entrepreneurs in Silicon Valley? Techcrunch’s guest writer, Vivek Wadhwa, an entrepreneur turned academic, comments on Tech world’s Gender issue and what to do to overcome stereotyping.

“People in technology businesses are drawn to places known for diversity of thought and open-mindedness”, is what Professor Richard Florida concluded after studying the growth and success of 50 metropolitan areas in the U.S. The most successful regions were those with the most gays, bohemians, and immigrants. These groups flourish in Silicon Valley, and its diversity has undoubtedly provided it with great advantage. But after attending the recent Crunchies Awards, I realized that something important is still missing — women entrepreneurs. I was shocked that the only woman CEO on stage during the entire event was TechCrunch’s own Heather Harde. Nearly all the companies that competed in the event (other than the PR firms) had males at the helm. This dearth may be one of the reasons for which the Venture Capital community is in such sharp decline, and why the Valley isn’t achieving even more success.

An analysis of Dunn and Bradstreet data shows that of the 237,843 firms founded in 2004, only 19% had women as primary owners. And only 3% of tech firms and 1% of high-tech firms (as in Silicon Valley) were founded by women. Look at the executive teams of any of the Valley’s tech firms – minus a couple of exceptions like Padmasree Warrior of Cisco, you won’t find any women CTOs. Look at the management teams of companies like Apple – not even one woman. It’s the same with the VC firms – male dominated. You’ll find some CFOs and HR heads, but women VCs are a rare commodity in venture capital. And with the recent venture bloodbath, the proportion of women in the VC numbers is declining further. It’s no coincidence that only one of the 84 VCs on the 2009 TheFunded list of top VCs was a woman.

Is the background or motivation of women that prevents them from becoming entrepreneurs? I just completed a project with National Center for Women & Information Technology (NCWIT) to find out (Kauffman Foundation will be releasing our research paper this spring). Our analysis of 549 successful startups showed there was virtually no difference in motivation between men and women entrepreneurs. Just like men, women started companies because they wanted to build wealth, capitalize on business ideas they had, liked the startup company culture, and were tired of working for others and wanted to be their own boss.

Women entrepreneurs were as highly educated as their male counterparts, had the same early interest in starting their own business, and learned the same valuable lessons from their work experience and from prior successes and failures. The only real difference was that women put a higher value on their business partners and on their personal and professional networks.

Is it that women are less competent than men? Quite to the contrary….

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