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Summary:

Picture a tech startup founder. Are they male, maybe around 27 years old, and a resident of Silicon Valley? Apparently that’s what it takes to build a tech startup according to the explicit and implicit wisdom shared at the Seed Combinator’s panel today at SXSW.

Quick, picture a tech startup founder: Are they male, maybe around 27 years old, a resident of Silicon Valley? Apparently that’s what it takes to build a tech startup for a seed incubation program, at least according to the explicit and implicit wisdom shared at Seed Combinators panel today at South by Southwest.

The panel, which featured Paul Graham from Y Combinator, David Cohen from TechStars, Naval Ravikant co-founder of Venture Hacks and Josh Baer from Austin’s Capital Factory, offered much of the expected commentary on how the ability to build cheap startups has changed the funding and entrepreneurial landscape. We at GigaOM have covered that, even the debate on whether you need to found your startup in the Valley (answer: if you want venture capital you have to go to the Valley), so what was most interesting was how narrow the definition of entrepreneur was for these programs.

Someone on the panel tried to make a point about how not all startup entrepreneurs are young, but then backed off of that when Cohen said the median age of a TechStars participant was 27 — ditto for those in Y Combinator. When an audience member asked why the programs didn’t accept older entrepreneurs, the consensus onstage was that it’s much more difficult to find two founders who are older, ready to pull up stakes and move to a new place to risk it all on building a company. And no one wanted to back an entrepreneur without a co-founder.

This makes sense in some ways. Investing in startups is risky, and all investors look for ways to mitigate those risks. Forcing folks to have a founder is simply part of that risk-mitigation formula, although it tends to force out older entrepreneurs. It’s also a reason why Valley companies tend to do better — they can find capital because they’re closer to their investors, eliminating travel and risk for their backers. So this brings me to the other elephant in the room, or rather the one that wasn’t in the room.

There were very few women — one in 10 would be a stretch. One actually asked about the lack of women in the programs, prompting Baer to note that of the 15 startups that Capital Factory has worked with, five of them had women as co-founders. And TechStars tweeted that a mere 11 percent of its founders are women (I have yet to hear from anyone from Y Combinator). But instead of wondering where the women are, or say you wish they were more (as a few panelists did), why not ask what is it about these programs that either make it difficult for them to accept women or make women not even bother to apply (or show up for panels on the topic?)?

I’ve put forth some ideas as to why there are so few women tech entrepreneurs, as have others. Do female entrepreneurs not get into these programs because they don’t fit the formula? Then we need to be talking about the risks to a startup’s success that women pose — we need to bring that into the open. If that’s not it, then we need to figure out why women aren’t in these programs. Are they not applying in equal numbers? My hunch is they don’t.

Doesn’t that mean we need to figure out why? Are there not enough of them? What opportunities are being denied to women, and more importantly, what are the ideas and businesses that venture firms lose out on? I welcome your thoughts and comments.


For the GigaOM network’s complete SXSW coverage, check out this round-up.

  1. So much has changed for women, it’s hard to imagine that any more work has to be done in bringing about gender-equity in the business world, but the stats belie the reality (see also the most recent issue of Harvard Biz Review, “Women in Mngt: Delusions of Progress http://bit.ly/9vMTRZ).
    I believe the low percentage of women in technology – as entrepreneurs, in start-ups, and in established corporations – is an extension of the relative lack of women in hard sciences, where there is a long, inherent, gender bias. “The Madame Curie Complex” by Julie Des Jardins, just published by The Feminist Press, excellently addresses this historical “gendering” of science.
    I think too, of Malcolm Gladwell’s examination of the great power of cultural conditioning in shaping careers for various ethnic groups in “Outliers,” and my hope is that he will turn his gaze to ‘the female problem’ next.
    Bias against women is still embedded deeply in the psyche of men, and women, and it may take longer to eradicate it in the oldest and most stridently male-dominated fields such as science & math.
    What can we do to help? Advocate for our daughters, and our sons, for equality in education – from kindergarden and up – in the sciences. Also, women must be encouraged to start their own companies and to stop waiting to be asked to dance at the nerd-ball.

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  2. I think asking YCombinator and TechStars is a little self selecting.

    I read somewhere that the average age of a startup founder is more like 35. Startups dont just happen at YC and TS, they happen in “the wild” as well.

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    1. I agree on startups in the wild, and I’ve written about research into the average age of entrepreneurs http://gigaom.com/2009/06/18/the-young-entrepreneur-stereotype-bites-the-dust/ Still, if these incubators are a filter for venture capital, as one panelist mentioned, then perhaps this is a reason few women are funded by VCs? I don’t know, but the questions are relevant.

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      1. Anecdotally, I know lots of women running their own businesses, but they tend to prefer the bootstrapping model of controlled growth as you can afford it rather than the high risk, high reward venture capital route.

        It takes them longer to reach a point that their venture capital funded brothers reach with the funds injection, but also means that fewer fall by the wayside.

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      2. Agree with Sophie on this one — most women entrepreneurs I meet started VERY small and then slowly worked up to being their sole job. More men will at least try to get funding for a business (loan, angel or VC), which makes them get profitable slower but peak/sustainable faster.

        I think asking Y-Combinator (etc) is very to-the-point. Most of their selections are single, willing to relocate (ie no school or major job), and must make the venture their only job. That realistically only appeals to young, single, no-kid-having, doesn’t own a profitable business, no major job prospects, entrepreneurial men.

        For this reason, even if awarded most people in general wouldn’t be able to go to Y-Combinator. Just the way of the world.

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  3. First, I agree with @Ryan that these groups are self-selecting. More startups are founded by people older than 27 than younger, as I’m sure vivek wadhwa would tell us from his research. But, if you add to that a requirement that the founders relocate for a very small amount of capital and a larger dose of advice and mentoring… then the #’s will skew younger.

    Add to that, most startups done by people in their 30’s and 40’s probably feel a little less need to be “mentored” by the y-combinators and techstars of the world.

    Long story short, I wouldn’t worry too much about the implied age-bias at this panel… A great # of my friends & peers are owners and co-founders of startups today, but 10 years ago we all worked for someone else. Time yields interesting opportunities.

    Regarding the gender bias, can we also ask the women of our world why they don’t find the seed/incubator programs interesting? Or why they don’t choose to pursue startups? Maybe the reasons that women would give are different than what we expect?

    Hopefully we’ll get some good comments regarding that here… you write: “Are they not applying in equal numbers? My hunch is they don’t.” I want to know why.

    “Doesn’t that mean we need to figure out why? Are there not enough of them? What opportunities are being denied to women, and more importantly, what are the ideas and businesses that venture firms lose out on?” I don’t agree that we should pre-judge that opportunities are being denied until we hear from women about why they aren’t doing their own startups. I think we already know what venture firms are losing out on -but until we know why they’re losing out on women entrepreneurs how are we supposed to fix it? Let’s set aside the “prejudice” argument long enough to hear about the other reasons – because maybe fixing some of those issues will actually help us resolve some of the prejudice and perceived prejudice?

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    1. Scott, we have to hang out soon so we can talk about this. But I ask the why aspect very sincerely. I think fewer women are drawn to tech, which starts whittling down the pool of technical founders. I think the age skews the incubator experience toward men because women may found companies later. At dinner tonight Chris Shipley suggested that women tend to build lifestyle businesses which are inherently less interesting to VCs. But the why behind that is worth exploring.

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      1. But it isn’t just “technical” founders – its founders of web companies. I hate to say it, but many of these companies are less technical than any company that has to produce a product and distribute it. However, it may be that many people (including women) perceive these companies to require lots of tech capability – but the most important ingredient isn’t the tech for these companies – its getting the market/audience/business right – and women should be just as good at that as men (and just as likely as the men to need a more technical co-founder…)

        When I was in college, the average CS major in my program skewed male (and caucasian). But still, there was some fantastic talent among the few women we had in CS, and while I’m not aware of any of them starting companies, one or more of them may have, and some of them hold key roles at their firms. Meanwhile, a non-technical classmate, Gina Bianchini (http://en.wikipedia.org/wiki/Gina_Bianchini), was CEO and co-founder of Ning, and another classmate co-founded WeddingChannel.com and Stella & Dot (Jessica DiLullo Herrin). So, my own circle of friends doesn’t seem to follow the trend pointed out by others, but I would point out that neither of these women started companies out of an incubator… and if you read articles where Jessica has explained her own story, clearly the 100-hour workweeks at WeddingChannel were not conducive to starting a family and were part of the seeds planting the new company.

        Let’s get together for coffee. I’m pretty familiar with businesses inherently less interesting to VCs since both my wife and I own such businesses :)

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  4. Thanks for asking the tough questions, Stacey. I think you’ve nailed the key underlying issues in your previous blog post on the NYT article.
    Women are grossly underrepresented in technology and I suspect (as you do) that the number of women applying to these programs is also low. Could it because the median entrepreneur age also coincides with prime child-bearing age and women are biologically forced to take a break?
    I don’t think women are denied opportunities but the system isn’t exactly designed in their favor either. Some women are able to make it because of the unique combination of sheer determination, hard work, professional network and most importantly, personal support system (family, significant other, etc. who can help with the reality of domestic chores).
    What hurts the cause is the tendency to tout high-profile female tech executives/entrepreneurs and use their success to disprove gender inequities.
    Until I see the number of Stay-at-Home Dads go up (and I mean statistically significant numbers, not just cute little anecdotes) I am not buying it.

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  5. I will just throw this out there, what role does the biological differences play and does it still have an impact. Why hasn’t the packing order changed despite so many more equal opportunities ou tthere especially in today’s world where gender differecned don’t matter anymore but the idea matter and is the decidign factor behind what gets funded and what does not get funded.

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  6. I just don’t buy the age thing. My experience is that age is not a key factor (I’ve been starting companies since I was 18 and have a sale and two IPO’s of companies I founded to show for it so I think I know something about this :-) Did anybody perhaps think that the older entrepreneurs don’t need $20K from the likes of Y Combinator?

    As to the lack of women, why not start with the gender ratio of engineering graduates over the last 20 years – does the number of women founders differ markedly from the number of women engineers?

    John Pettitt (47)
    CEO clp.ly

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    1. I think you hit the nail on the head regarding age.

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    2. Agreed. At my age I don’t need $20K nor much basic mentoring. I only need connections to VCs and the instant press attention given to YC startups. Also, many people I know aren’t in consumer ad-supported web startups. Instead, they’re doing enterprise software for paying customers (real money!!). I wonder what the average age of founders is for KPCB’s Greentech investments.

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  7. I’m the person who asked the panelists whether they’d backed anyone over 40. My suspicion is that in this and several other ways, these guys are guided by a “search image” that wouldn’t stand up well under close scrutiny. I doubt it’s just that they get more applications from male 20-somethings.

    The presumption that you’re a bad bet if you don’t have a cofounder surely doesn’t stand up well under close scrutiny. As I yelled out to Graham, “Ever heard of WordPress?” Matt Mullenweg didn’t need a cofounder. What makes Graham et al. so sure I do? Ravikant asserted,
    “You can raise kids on your own, but it’s better in a marriage.” That’s rhetorically clever but intellectually vacuous. It’s biologically necessary that a child has both a father and a mother, and humans have been co-parenting since time out of mind. There’s only the fuzziest of analogies between raising children and building businesses.

    Older founders may indeed have trouble finding cofounders, because their friends and associates have “settled down.” (It happened to me. The friend who was considering being a cofounder with me decided he was more interested in starting a family with his wife.) Rather than just disqualifying founders without cofounders, it seems to me it would be more constructive for seed accelerators to see whether such founders would like to find cofounders, which might be easier in a tech hub and with help from the social network of the accelerator.

    As for the paucity of women, I wonder if it’s relevant that tech startup culture tends to be so swaggering. For example, take a look at Jason Fried’s diatribe against the sale of Mint.com,

    http://37signals.com/svn/posts/1927-the-next-generation-bends-over

    I find the bravado almost comical, but my girlfriend’s reaction is, yuck.

    Stereotypes are hard to break. I suppose the surest path to breaking them is for those of us who aren’t supposed to succeed – those of us who are too old, too female, too brown, or too whatever – to succeed anyway, despite getting less help than other entrepreneurs who fit the “search image.” We can at least encourage each other.

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    1. Of course Matt had a co-founder — the open source community! He didn’t take VC until WordPress was a huge hit. The success of that community was a strong signal to the VCs that he could recruit smart people to his vision. None of the incubator companies can say that. So the second-order signal is, can you recruit at least one other person who’s willing to bet the farm?

      I’m a big fan of TechStars. But as an older founder I would never apply to their program. Why? Because I already have a network of mentors.

      Some young kids in, say, Nowheresville, Alabama? TechStars is a smart bet for them.

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  8. There are two major issues I see:
    1. It is about the working environment. How many women want to spend that much time in pure frathouses? I have a lot of respect for those “incubators”, but having visited a couple, I can only describe those places that only a male in their 20s can be comfortable in them (and they sure advertise that well in the community). Many of the startups build their environments the same way and that repulses diverse talent that could make them more likely to hit it big. See my article on the subject “How a foosball table can kill your startup – part two” http://leanstartups.com/how-foosball-table-can-kill-your-startup-part-two.html
    2. Yes, even in 2010, the sexism is rampant. We (men) don’t do enough to be more inclusive. Open your PROFESSIONAL contacts and count how many men and how many women you have in it (no, your “bootiecall” list is not a professional contact list). We tend to be dismissive to the talents of women. Many of us get intimidated by a woman, who is ambitious and is focused on a career. We also forget that more that there are more women than men in this world, more women than men hold at least an undergrad, more women than men make majority of purchasing decisions, and organizations with more women in leadership ranks tend to deliver 35% higher total return to shareholders than those with male dominated (see the Illuminate Ventures whitepaper http://www.illuminate.com/whitepaper/).

    I am lucky to have had some great male and female mentors, have worked for very diverse (and successful) companies, and have a good number of very smart women in my network. I reap the rewards every day!

    Gents, time for us to wake up! We can be a lot more successful and there is no secret – we do need more women in our midst. See my article on the subject: “Time to end the frat house culture!” http://leanstartups.com/time-to-end-the-frat-house-culture.html

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  9. Yevgeny Ioffe Tuesday, March 16, 2010

    This is worrying. Anyone should be able to start a startup, whatever the age or gender without having to battle the new obstacles in form of stereotypes. There are enough battles for entrepreneurs to battle as is.

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  10. Much like Women entrepreneurs, there’s a dearth of African-American entrepreneurs.

    There’s a painfully small number of us.

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    1. Mark, that occurred to me as I wrote the post. I wonder what lessons about women also apply to the lack of African-Americans founding tech startups.

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