"Lean In" Entrepreneurs
According to the Kauffman Index of Entrepreneurial Activity, a leading indicator of new business creation in the United States, men are “substantially more likely to start a business each month than women”. In the seventeen year period from 1996 – 2012, the average rate of entrepreneurial activity for men was .37 percent; for women during the same period it was .23 percent. In A Rising Tide: Financing Strategies for Women-owned Firms”, Susan Coleman and Alicia Robb analyze data from the Kauffman Firm Survey, the world’s largest, longest longitudinal study of new U.S. businesses. They note that women-owned firms accounted for just 16 percent of all firms.
What accounts for this gap is an interesting question, especially when you consider research by Vivek Wadhwa et al. that suggests successful women and men entrepreneurs are similar in many respects: education, early interest in starting a company and access to funding. They even found that life circumstances (married, single) were very similar between the two groups. Wadhwa et al. uncover two small, but perhaps telling, differences: women view prior experience as more important than men do, and women emphasize the importance of their professional and business networks more than men do.
Why might women weigh prior experience more than men? And what difference would a network make? Discussion about Sheryl Sandberg’s book Lean In has focused a great deal of attention on women and work, particularly on opportunities for them to advance. What insights might be gleaned from Sandberg’s book about women and entrepreneurship?
In her book, Sheryl Sandberg identifies studies that suggest that women consistently underestimate themselves: “multiple studies in multiple industries show that women often judge their own performance as worse than it actually is, while men judge their own performance as better than it actually is” (p. 29). She argues that “feeling confident – or pretending you feel confident – is necessary to reach for opportunities” (p.34). Nowhere is this probably more important than making the (perhaps) audacious decision that you have an great idea for solving a problem or filling a need in the market, something that warrants giving up a great job, sacrificing time and money and perhaps, ultimately, failing. Perhaps having prior experience (cited in Wadhwa's study as slightly more important for women) helps confirm ability and bolster confidence. Professional networks can provide a variety of benefits (as can mentors) that can be helpful to women in reaching their goals.
So what do these findings suggest to women entrepreneurs? Evaluate your prior experience, add skills to your team as needed and reduce uncertainty through early market validation with customers. These are things every founder should do, but these steps may, given research findings, help propel women entrepreneurs forward. Cultivate personal and professional relationships that support you (and through which you support others), and consider Sandberg's suggestion that a lack of confidence could be holding you back.