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Print Edition StoriesWednesday, March 17, 2010
Post-recession women entrepreneurs see opportunity and challenges ahead
By James M. Connolly
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As the fog of recession clears, women entrepreneurs face new and ongoing challenges. But they also can leverage what they have learned during the tough economic times to take advantage of new opportunities, according to experts who follow entrepreneurship.
In some ways, women business leaders — such as the 2010 Mass High Tech Women to Watch profiled in the following pages — felt the same pain as men during the recession.
“You would think that the recession would set everything back quite a bit. While it impacted everyone — men and women, in terms of revenue — people really had to draw on their management skills. They had to find new ways of finding clients, of finding new sources of revenue. Entrepreneurs had to pull from within themselves,” said Aileen Gorman, executive director of The Commonwealth Institute, a Boston organization formed to help women executives and entrepreneurs. Gorman said that the management lessons learned during the recession will continue to aid entrepreneurs.
“It’s been pretty tough on everyone, but we’re seeing a couple of things in particular with women,” said J. Janelle Schubert, director of the Center for Women’s Leadership at Babson College in Wellesley. She noted that U.S. Department of Labor research showed that women were not losing their jobs as rapidly as men.
“As a woman, the temptation to stand up and applaud was overwhelming, until you realized that those women earned less to begin with, so it’s kind of a no-brainer to keep them. They’re not making as much money, but now they often are the single wage earners in the family,” she said. In addition, women-owned businesses have traditionally had less access to venture capital funding and have been more reliant on friends and family or U.S. Small Business Administration funds, she said. Both of those sources dried up during the recession.
But Schubert said that tech companies sometimes were the outliers during the recession.
“In technology, a lot of women entrepreneurs experienced very successful years. Some of that is because their competition died, and some of it is because people in organizations that were buying their services and products actually increased their purchases because it was smart, it was innovative and a way of saving money. So that’s some good news,” she said.
Schubert observes that challenges remain for women who want to advance in business, and that tech has its own barriers. Babson’s research shows that more women are entering tech fields as undergraduates, but at some point they shift to nontech roles. “Something happens, and I don’t think we fully understand exactly what it is, but the higher you go the fewer you see,” she said.
Experts point to factors like women entrepreneurs having to pass control of their projects to more senior men; women balancing work with child raising during prime years for corporate advancement; a shortage of role models; and women getting less attention from VCs, whether it is because women aren’t in the right networks or because they are less likely to claim high-growth potential for their companies.
Angel investor Jean Hammond, a member of the Women to Watch advisory board, says there’s no single cause, it’s a little of everything.
“It’s like pennies on a scale. You drop them onto the scale one at a time, and no one factor stands out. But when they are all taken together, you see less significant participation by women in the high-growth side of the tech industry,” said Hammond.
Noting that women in the U.S. actually launch more businesses than men, Hammond said, “Women continue to be underrepresented in high-growth businesses. There’s nothing wrong with those businesses that they run. They’re great. But they never exhibit high growth.”
Hammond, a member of the Golden Seeds angel group that invests in companies with women on their management teams, is among those who point to the lack of VC funding as a challenge. She said that women tend not to be in the right network when it’s time to go for VC funds; they also have to be “able to stand up and say I can grow a business at a fantastic rate” if they want to attract VC investments, she added.
Another member of the Women to Watch advisory board, Tufts University and University of Massachusetts Lowell educator John Hodgman believes that the pool of women entrepreneurs “is more robust than ever.” He noted that many of the successful women leaders he sees have been involved in “good, solid companies, not high-growth companies.”
But he added that women aren’t alone in that scenario. “In this region, it’s not unique to women. We haven’t had many game-changing companies for a while, if you think back to the days of the minicomputer companies,” he said.
Despite the challenges that women leaders face, each expert voiced optimism. For example, Hodgman spoke of the many bright young women in his classes. “Stay tuned, you’ll see them in five to 10 years.”
Schubert added that women who wrestle with the work/life balance today will benefit as the Generation X and Generation Y workers move up the corporate ladder because they are gender blind.
“The men of those generations also want to have different work-life integration patterns than some forms of work have traditionally provided for. I have great hope for these young men. I think they will help to solve a lot of the problems for the young women. They are really going to demand different work environments. It’s pretty exciting. We have to rethink how we do some of this stuff,” she said.
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