Why moms will rule the entrepreneurial world
We are at a tipping point for moms beginning a takeover of the entrepreneurial economy. Women are running and funding more startups than ever, beginning with businesses that serve women and families, but extending across an increasing number of industry verticals. And from crowd companies to the “do it for me” economy to the Maker Movement to the rise in human-to-human marketing, so many startup trends actually favor moms as never before. With gender parity in the best computer science schools for the first time in decades, it is suddenly likely that moms will soon rule the entrepreneurial world.
Moms run and fund more startups than ever
Entrepreneurship is one of the most satisfying career paths for moms now. In fact, women with established businesses rank their happiness nearly three times as high as women who are not entrepreneurs.
And today, women are starting more than 1,200 businesses a day, the fastest pace on record and more than double the rate of just a few years ago. According to American Express, there are more than 9 million women owned businesses in the US.
Women are leading growth of new businesses in an increasing number of industry verticals, including finance and real estate.
Unfortunately, while the number of women-owned firms is growing faster than the national rate, these businesses have tended to employ fewer people and generate lower revenues than national averages. But that should be on its way to changing as successful women take an increasing share of the angel market that funds businesses built to scale to great heights.
While just ten years ago, their participation in the angel community as investors and entrepreneurs was negligible, a review of angel investing data shows that not only are more women raising angel money, but also investing angel money.
“I’ve seen more female entrepreneurship over the last five years than I’ve ever seen. And a few things that I personally try to focus on that I think will really help shift that is getting more women into venture capital and positions of being able to dole out financial resources to new women creating business, driving ideas forward.” — Alexis Maybank, Gilt founder (and mom)
This is a virtuous circle being established right now, giving women an ever increasing share of the market as successful founders commercialize and grow their investing networks more and more. For example, the launch of #Angels earlier this year brought together some of the most successful women in consumer internet to invest together; most of them are moms.
Moms see opportunities that others fail to see
Across the last decade, a number of women have begun businesses or even created entirely new product categories born out of a vantage point handling the vast majority of household purchase decisions and controlling $20 trillion in spending.
Spanx founder Sara Blakely’s company creating story is well known. She saw an opportunity for a new kind of shapewear business and continued to pursue it in spite of being told by countless men in positions of power within manufacturing and retail that her idea was naive and misguided. She’s now a billionaire.
As a new mom in 2003, Jessica Herrin (who had previously co-founded TheKnot.com) spent nights and weekends designing products and building a new kind of business in the jewelry and accessories space called Stella & Dot. She iterated on her product line and business model, convinced that she was on to something. Today, the company she founded generates hundreds of millions in annual revenue.
Launched on Mother’s Day 2006, and founded and operated by moms, Happy Family created the organic baby food category when so called experts had told the founders that there was insufficient demand for such products. Now their products are sold in more than 20,000 stores across the US, and more in countries around the world.
Current startup trends favor moms
Many of the biggest trends in the current startup economy favor moms’ innate understanding of household spending and the potential for home-based “micropreneurs” to deliver new services to business and consumer markets. Sharing startups have raised more than $8 billion in funding. The ubiquity of mobile technology has made “human-to-human” marketing with personal, story-based approaches the new standard.
A deep understanding of and empathy for the buying public is essential to succeeding, so it’s not surprising that a woman was one of the first to see the potential of the “do it for me” economy and go on to found Task Rabbit (Leah Busque) or that entrepreneurs like Y Combinator graduate and Wevorce founder Michelle Crosby are seeing new opportunities to solve real problems for families via technology.
Women entrepreneurs have been better educated than male entrepreneurs for some time, but they have lagged in computer science for decades. That appears to be about to change, which means that more future moms will be better positioned than ever to create businesses based around whatever the next wave of company creation will be. After two decades of decline, more women are now going into computer science at some of the best schools in the world for doing so, like Carnegie Mellon where they now make up 40% of computer science students and at Stanford and Berkeley, introductory computer science classes have reached gender parity for the first time ever.
And women are breaking the stereotype of what a coder looks like, making it easier for others to follow in their footsteps. Their role modeling, combined with efforts by the technology community and outreach by universities is changing the composition of the technology workforce.
Behind almost every entrepreneurial success has been a mom
“Starting a startup is a process of trial and error. What guided the founders through this process was their empathy for the users.” — Jessica Livingston, Founders at Work
Of course, this story would be incomplete without mentioning the role that moms have always played in successful entrepreneurial ventures, in particular by developing in founders during childhood the empathy, resilience, and creativity they would end up needing in order to succeed.
“Children as young as 18 months exhibit compassion, empathy, altruism, so these characteristics are part of who we are. But, at the same time, these skills have to be cultivated, because the environment can inhibit their development.” — Vicki Zakrzewski, Director UC Berkeley Greater Good Science Center
“I’m so happy that people now recognize him for the genius I always said he was.” — Maye Musk, mom of Elon Musk