Shruthi Rao, CEO and co-founder, Adapt Ready, Inc., has faced down gender bias throughout her career. Now, she says, it must be broken down for good.
Having worked predominantly in a male-dominated industry, diversity, equality and women’s rights have been a key focus throughout my career since 2001. Now, as a female founder, gender diversity is particularly key on our agenda: 50% of our advisory board is female, as is 50% of our current team.
Diversity isn’t just about gender or race – ultimately, it’s about diversity in thinking. Too many men in leadership positions leads to group-think, which results in exclusionary policies that may create barriers to women reaching those positions. Therefore, hiring a diverse range of people is crucial to any business success.
Studies show over and over again the business benefits of diversity. The bottom line is, there’s a strong correlation between having a better balance of women and men and higher profitability. Women bring a very different set of leadership skills and they are very calculated risk takers. And these complimenting skills can make a huge difference.
Despite the fact that women-founded startups generate 10% more in cumulative revenue over a 5-year period (according to a recent study by the Boston Consulting Group), only 2.2% of venture capital (VC) funding went to female-led start-ups. In my experience there’s a huge amount of unconscious bias among the VC community towards women. There is even more bias against women founders working on anything complex and ground-breaking, lending credence to the fact that smarter and stronger women are ever more stifled from reaching their full potential.
Similar to the gender wage gap, there is also a “gender valuation gap” where venture capitalists expect female founded start-ups to have a lower valuation. Even in our case, despite winning multiple industry awards and strong customer proof points, some investors expressed unnecessary concerns: in one case, an investor asked my male co-founder about how he felt working under a female CEO, and whether she was aggressive. And this was in the first meeting!
Why is it automatically assumed that if a woman is leading she must be aggressive or power hungry? Is that something that they would ask a male-led start-up? The answer is quite simply no.
A rather depressing statistic is that over half of women who start their careers in tech move to other careers – and it’s largely due to unconscious bias that makes it very difficult for them to progress.
It’s not that there isn’t enough female talent in the tech industry, but there are flawed aspects that prevent women from entering and progressing in the sector. There is inherent bias towards males, not just at the recruitment phase but even when female talent performs well, they are passed on for promotion. As soon as women have children, many of them are sidelined even when they’re doing a great job; or they’re not given enough challenging work. That’s something that needs to be questioned. But a concentration of male leaders tends to overlook this.
Although quite a lot of women are quite supportive and have helped me advance my career, I’ve also noticed that that’s not always the case. Perhaps it’s because women in senior roles are so rare that they too start believing that such roles are reserved for a chosen few, and I think it’s also true that they can suffer the same unconscious bias as men.
What can be done to address these issues?
When there is imbalance, sometimes diversity may have to be forced to break down barriers; people need to experience first-hand to overcome the biases they have – e.g. policies such as hiring close to 50% of women.
On the investment side, there have been several studies highlighting the funding gap, yet VCs overlook female founders by giving excuses and circumventing the real problem (e.g. “not every startup is fundable” or “there aren’t too many female led startups in this field”). One way this can be fixed is by LPs taking a stronger stance on diversity, and they can be supported by hard data where VC-startup meetings are captured, analyzing each startup they chose to invest in over others and their reason(s), and then comparing how those investments perform over a short-medium period compared to startups they didn’t invest in.
All things being equal, this should reveal a stronger data point highlighting VCs mostly siding with male-led startups over female ones while subjecting them to higher levels of scrutiny/standards than their male peers despite them being around longer and performing equally well if not better. This would bring transparency into a rather opaque world not just in the gender funding gap but other aspects, bringing fairness to the process and more accountability - and hopefully lead to a bit more self-realization of inherent bias among VCs.
In our company we treat all genders equally and we have a system of governance to constantly challenge biases, not just towards gender but also towards other aspects including race and functional roles, and such challenging is a fundamental part of our business.
For women with children who want to advance in their careers, offering flexibility can make a huge difference.
It’s all about leading by example: by having happy, motivated employees, you can realise fantastic business results.