Startups, like the male anatomy, are designed for liquidity events. Consider the metaphors: “seed” funding, “up and to the right” trajectories, “acceleration,” “exit.” Paul Graham’s seminal essay “Startup = Growth” argues that explosive growth is the only measure of success. “Making it” means one of two things: go public or sell.
But a startup has about as much chance of making it as a single sperm has of fertilizing an egg.
Look no further than the numbers: 90% of startups fail. The majority die within 20 months of their last round of funding. Success equals the amount of money raised, or the profits made upon exit — never mind whether any value is generated in the world beyond capital.
Much is made about Silicon Valley’s culture of “innovation.” But the model for startup venture financing, and the system of rewards driving this supposed innovation, isn’t creative — it’s masturbatory. It wastes potential. It’s uninspired. It leaves founders like us staring at the ceiling.
Yes, we want to build businesses that succeed financially. But we also want so much more than that, and we aren’t alone. Most of the founders we know, many of whom happen to be women, are driven to build companies that generate money and meaning. And they’re in it for the long haul — not just to get their jollies, make their names, and exit.
We’d be lying if we said size doesn’t matter. We’re as excited as anyone at the prospect of making money from the companies we’ve built — companies we hope will grow and flourish. But growth is more than numbers. Growth is impact. Growth means improving our local communities; promoting our employees’ happiness; acquiring paying, loyal customers; helping users succeed; making and measuring improvements in people’s lives; and spurring cultural change. This is a more nuanced view of growth, but one in which quantity is decidedly not king.
The author and commentator Rebecca Solnit, in an essay from her collection “Men Explain Things to Me,” refers to something a friend of hers calls “the tyranny of the quantifiable.” In such a system, Solnit writes, “what can be measured almost always takes precedence over what cannot: private profit over public good; speed and efficiency over enjoyment and quality.” This she attributes partly to the failure of language to communicate the value of “slipperier things,” things that “cannot be named or described.”
“The tyranny of the quantifiable” describes the current ethos of venture financing. Imagine us on Sand Hill Road, in a room full of investors, with a slide deck of slippery things. They would laugh us out of the room. Thus founders like us are coached to lead pitches with the “money shot” chart, the hockey-stick-shaped revenue graph that arouses venture capitalists.
In private, we squirm over how raising money requires faking it. But we don’t get off on that, and that means we don’t get off the ground.
Outside of bootstrapping, or relying on wealthy friends or family, or having connections to the limited network of mission-driven angel investors, there’s a dearth of options for tech companies seeking financing: It’s venture capital or bust. So what are founders like us to do? Where do we go from here? We see two ways forward.
In one version of the future, we maintain the status quo of fast, hard, and disposable. We continue to reward only those founders who promise to build explosive-growth companies. We await the arrival of the next billion-dollar unicorn, crossing our fingers that a woman might break into that kingdom. We put contenders on the covers of magazines and shake our heads when things don’t work out. We watch as worthwhile startups with satisfied customers and respectable revenue are pejoratively rechristened “lifestyle companies.” We stand by as women angel investors shoulder the initial risk to support non-traditional founders. We celebrate brave VC experiments that struggle for the support of investors. We pretend that “just add a few women” is the magic ingredient for a balanced startup ecosystem.
But we don’t need more players playing the same old game. We need new rules for winning.
In an alternative version of the future, we create a new model: We invent another style of investing, one that recognizes founders with long-term, wide-ranging visions. We focus not only on how much money is raised, and on investor returns, but also on how we generate value for users, elevate communities, and build a more equitable and inclusive system. We applaud company founders as contributors, not heroes. And we return to “mundane” ideals born of this world, with an emphasis on repairing, cultivating, and connecting rather than “disrupting,” “crushing,” “owning,” or “killing” it.
mundane (adj.) mid-15c., “of this world,” from Old French mondain “of this world, worldly, earthly, secular”; also “pure, clean; noble, generous” (12c.), from Late Latin mundanus “belonging to the world”
So what do these mundane businesses need, if not traditional venture capital?
To start, they need a 21st-century digital chamber of commerce and community, made up of businesses committed to working with one another and local citizens. In Portland, we have begun such an effort, and our members are invested in both commercial and civic growth and sustainability.
Companies like ours are also looking to partner with visionary thinkers in the banking, foundation, government, and nonprofit sectors to create funding alternatives. We are calling on journalists to report on who is being left out of the current system and why. We are seeking supporters eager to promote another kind of growth: one with a broad foundation that satisfies profit and people, and leaves everyone happy to spend more than just the night.
We already know who benefits from the existing model. We’re curious to know who could benefit from a new one. We don’t have all the answers. But if enough of us are up for the challenge, we’ll find the answers together. If you want in, join us, and let’s reimagine a different path to prosperity.
The following works and approaches informed our thoughts: Christopher Alexander’s A Pattern Language, David Deida’s Intimate Communion, C.G. Jung’s Aspects of the Feminine, George Orwell’s Politics and the English Language, Wendell Berry’s It All Turns on Affection, Rebecca Solnit’s The Mother of All Questions and Woolf’s Darkness: Embracing the Inexplicable, Cacilda Jethá and Christopher Ryan’s Sex at Dawn, the Bahá’í Faith’s 1977 message Two Wings of a Bird, David Heinemeier Hansson’s Reconsider, Jennifer Armbrust’s feminine business principles, Chroma Fund’s alternative financing models, Tim O’Reilly’s “We’ve Got This Whole Unicorn Business Wrong,” Caterina Fake’s “The Age of the Cockroach,” Greg Borenstein’s mundane company idea.
Thanks to Valerie Aurora, Jennifer Armbrust, Rachel Bellow, Nadia Eghbal, Corey Haines, Erin McKean, Suzanne Muchin, Bryce Roberts, Allison Schultz, Ben Werdmuller, Joanne Wilson, and Holly Wood for reading a draft; to Jen McDonald for editing; and to Michelle Leigh for the linocut illustrations.