Women and Entrepreneurship: Why investing with a gender lens is a trend of the future
女性与创业：为什么投资女性是未来的趋势
Interview with Virginia Tan 陈玉馨 Co-founder of Lean In China
Can you tell us how did you become an entrepreneur?
I am Singaporean. I was a lawyer, and after 10 years in Europe and the Middle East I came to China 4 years ago. My job was to represent state owned companies and banks on “One Belt One Road” strategic investments. I saw myself as a professional in a finance industry, and I thought I would one day join the World Bank or the United Nations as my way of help my fellow woman. Being an entrepreneur is quite frankly the last thing I wanted to do. What happened after that is an accident. In China we call it destiny, or Yuan Fen.
How did Lean In China start?
In early 2013, I met a group of 10 likeminded professional women in Beijing, and inspired by the book Lean In, written by Facebook COO Sheryl Sandberg, we decided to build the first Lean In community in China. We started off with a small circle of women who met once or twice a month, discussing our personal challenges and experiences. In June 2013, we did a short survey of 500 women, WHO TOLD US THEIR MAIN CHALLENGES WERE THE LACK OF CONFIDENCE, THE LACK OF ROLE MODELS AND THE LACK OF NETWORKS. SO WE DECIDED TO BUILD A SOCIAL NETWORK FOR CHINESE WOMEN. From 10, we grew to 100, then 1000, then the community spread to other first tier cities, the second tier cities, then third tier cities. We worked as volunteers on the weekends, in the mornings, during lunch and during evenings.
Was there a specific moment or person that inspired you?
Then a little less than two years ago, my life changed in a big way. I heard Jack Ma speak at Guanghua School of Management at Peking University, at the opening ceremony of a new MBA program on social enterprise that he had founded – on the concept of social entrepreneurship公益 x 商业.
That day at Guanghua changed my life. In his speech, Jack said, that women were leaders of the future, as they were less selfish, and they cared more about others. I took it as a sign. That same day, I decided to quit my job as a lawyer, and to build Lean In China full time.
Did you have a clear plan how to build up Lean In China?
In the book Lean In, my favourite quote is “What would you do if you were not afraid?”
I realized leaning in for me was not becoming a partner, but doing what I was most afraid of doing. It was building something from scratch, becoming a social entrepreneur. I did not have a clear plan of what I would do. All I saw was a great social need and the opportunity to do something about it. So I mortgaged my house and used my savings to build my vision. Lean In China’s mission is to encourage more women to pursue their own definition of success and happiness, overcome internal barriers and grow their confidence. We realized that the most powerful way of changing society’s perception of you was changing your perception of yourself.
“Entrepreneurship is controlling your own destiny and being able to shape the destiny of others”
-Tony Fernandes, Founder of AirAsia“创业可以掌握你自己的命运，并且有能力去塑造其他人的命运。” ——托尼·费尔南德斯，亚洲航空创始人
What does entrepreneurship mean to you?
So what does entrepreneurship mean to me? First of all, 做生意 doing business is not quite the same as being an entrepreneur 创业。A few years ago, I had the pleasure of meeting Tony Fernandes, the founder of Air Asia. This was when I was too afraid to even think about quitting my stable job. He made me think of entrepreneurship in a different way. He said “Entrepreneurship is controlling your own destiny and being able to shape the destiny of others.” Tony owned an airline, a football team and an FI racing team so we were curious – I remember us asking him – was it because you wanted to get rich? He said, ‘Don’t do something for the money, do it because you want to build things”.
How does Lean In China impact women?
What I have slowly realized is that to truly impact women, helping them to build their confidence and overcome internal barriers is not enough. What Lean In China is seeking to do is to build an entire ecosystem to support women – as entrepreneurs, as employees and executives, as individuals through the use of three main focuses: education and training, research and data, and finally entrepreneurship and investment.
What are the challenges faced by women entrepreneurs TODAY?
The three main challenges that I think women entrepreneurs face today are:
- Less access to funding缺少机会得到资金
- Social expectations of women社会对女性的期望
- Lack of networks缺少人脉
Do women entrepreneurs have less access to funding?
Yes. Research shows that female founders are much less likely than men to the recipients of startup capital. Most venture capitalists and entrepreneurs are men, with female entrepreneurs receiving $1.5 billion in funding last year versus $58.2 billion for men, according to the data firm PitchBook.
This issue is further exacerbated by the issue of sexual harassment: where the power dynamic of money being in the hands of male venture capitalists make it an even a more delicate task for women founders to raise capital. In the last week alone, we see Silicon Valley at a crossroads with sexual harassment of female founders being more widespread than previously thought.
You also mentioned the pressure of social expectations imposed on women, would you be kind to explain?
One of the stated reasons that investors fear investing in women in China is that they will choose family life over their careers.
We socialize men and women differently. Men are expected to excel primarily at work and women are expected to be the primary caregivers for family. We expect our sons to be driven and ambitious, but we want our daughters to have an easy life.
To be a successful entrepreneur you need to have the courage to defy these social expectations.
Lean In China’s first white paper on Women , Work and Happiness published in 2016 stated showed that the top three challenges faced by women all had to do with balancing the tensions between work and family: with balancing work and life, disruption caused by maternity, and taking on more household responsibilities and supporting our partner.
We realise at Lean In China that for women to lean in, we cannot overcome the greatest challenges alone – and we need to engage with men – especially the support of our families and partners to achieve this.
Top 3 challenges faced by women 女性面临的三大挑战：
- Work life balance平衡工作和生活
- Career disruption caused by maternity怀孕，产假造成的事业中断
- Need to support partner’s career and take on more family responsibilities需要支持另一半的事业，同时还需要承担更多的家庭责任
– Lean In China 2016 Women, Work and Happiness survey
——励媖中国《2016年中国女性、职业与幸福感白皮书》
You also said “Lack of networks” – explain?
One of the biggest challenges for women entrepreneurs is to build a strong network and trusted advisors. Inc. Magazine reports that 48% of female founders report that a lack of available advisors and mentors limit their professional growth. In our Women Work and Happiness White Paper – this was the top 4th challenge cited by women.
Therefore one of Lean In China’s main missions is to build a national social network for women as well as building a culture of mentorship which was largely missing in Asia.
So many challenges, are you sure you could deal with all of these?
Despite these challenges I also want to tell you what gives me hope.
As a result of these challenges, Lean In China decided with our partners to build a global movement called She Loves Tech to promote technology for women and technology by women – to help provide a platform which can showcase the best women entrepreneurs as well as businesses (whether led by male or female founders) which can impact women positively. We started out with a small startup competition for women entrepreneurs in 2015.
This year, the She Loves Tech global startup competition has now launched in 8 international locations across the world this year (Singapore, Hong Kong, Indonesia, Pakistan, Germany, Canada, Israel and Mainland China), with the finals to be held in Beijing in September. We have received support from the Israeli and Canadian governments. We have had men and women reaching out from all over the world, the Middle East, Africa, South America, USA, Australia wanting to host rounds and help us build this movement. The focal point is China – and we hope to leverage China’s position as a leading technology hub to showcase the power of women entrepreneurs.
So why China? Is China different?
I have lived all over the world – and I think China is pretty unique. While Chinese women face challenges like women all over the world. This is the story that the data that we have tells me so far:
China has the Most self-made female billionaires in the world on Hurun list – 80% of 152 self-made female billionaires – Is that a coincidence?
Why is China producing so many of the world’s most successful women in business?
“There can be no question anymore that China is the best place in the world to be a woman entrepreneur,” said Rupert Hoogewerf, Chairman and Chief Researcher of Hurun Report.
When asked why, he stated the one-child policy coupled with traditional childcare, whereby grandparents often play a much larger role in bringing up the children than in developed countries, were perhaps the reasons. Another is the business boom this generation has enjoyed in China.
Bloomberg also released a report in September 2016 stating that “Women are fueling China’s tech boom” which reported that the Chinese government estimates women founded 55 percent of new Internet companies and more than a quarter of all entrepreneurs are women. In the U.S., only 22 percent of startups have one or more women on their founding teams.
There is also an unusual group of female investors who have risen to the top of the venture business in China and helped fuel the country’s technology boom. They’ve backed some of China’s most successful startups and their influence is growing as they raise more money, recruit other women and seed the next generation of technology companies. A new $500 million fund, the biggest ever by a woman, was also raised by a Chinese woman, Chen Xiaohong, and increased her assets under management to about $1 billion. The largest women-led fund in the U.S. was about half that size.
TECHNOLOGY AND THE INTERNET AGE ARE CREATING UNPRECEDENTED OPPORTUNITIES FOR WOMEN ENTREPRENEURS, with the sheer size of market opportunity and the fierce competition for talent an advantage for women in China.
So why do you think investing in women is the future?
Let’s go back to the business case for investing in women:
Why should we invest in women? because diversity is smart business.
Let’s start with the performance of female entrepreneurs and CEOs:
The data out there is not new. Fortune 500 companies with three or more corporate directors who are women (in at least four out of five years) outperformed those with zero women directors (in at least four out of five years) by 84% on return on sales (ROS), 60% on return on invested capital (ROIC), and 46% on return on equity (ROE).
Startup teams with at least one female founder performed 63％ better than all male teams.
Venture-backed companies in Silicon Valley run by women had annual revenues that were 12% higher than those run by men. These companies also used an average of one-third less committed capital, and had lower failure rates than those led by men.
However Investing in women goes beyond investing in female entrepreneurs. Gender lens investing is an emerging field – Using a gender lens means looking at the value of women at all parts of the value chain, as consumers, end users and agents.
What is the ‘SHE Economy’ is all about?
The rise of the She Economy:
- Women control 70% of 18 trillion global consumer spending.
- In China that number is expected to be 4 trillion USD in 2020.
- Women account for 80％ of China’s household spending
Data shows women consumers are driving growth in key sectors of the global economy, especially online: especially the verticals of healthcare, financial services, e-commerce, education, even though these sectors are not women focused. Businesses that understand and cater to these women consumers will be simply more competitive.
So many new questions arise now as we set into the new SHE Economy…
By failing to take gender into account: are we missing market opportunities? Do we understand what our consumers want? Are we taking our consumers into account when we are building our products? Can we be building better products and companies with the consumer in focus? And should we ensure diversity when building these products?
I am interested in how using a gender lens can help build better companies and better products. As an investor you want to be investing in companies that understand how to create products that their consumers want and this is reflected in the diversity of people who are creating this product.
An example of companies which have taken advantage of this is the Honest Company, founded by Jessica Alba. Now valued at 1 billion. She understood the needs of women consumers who were responsible for household spending and buying consumer goods for their children and that gave her an advantage which filled a gap in the market.
What is the meaning of gender lens investing?
When it comes to our investments: Women should be seen as an opportunity not just a screen:
I am not interested in what is morally good – I am interested in what is smart business. Can understanding the consumer behavior of women as a demographic give you a strategic advantage and differentiate you from your competitors?
So let’s take as an example financial services.
Jack Ma talked about Ant Financial (financial arm of Alibaba) preferring to lend to women, as they had better and quicker rates of repayment.
Microfinance institutions (MFIs) with more women clients have lower write-offs and lower credit-loss provisions, confirming the common belief that women in general are a better credit risk for MFIs.5
And finally when it comes to gender lens investing, this does not mean excluding men. Women cannot do this alone. Looking at gender in a wholistic sense means that if we find the next Mohammed Yunnus (who invented microfinance) or Jack Ma (Alibaba), we should be investing heavily into them to build businesses that can impact women positively.
Any final words? Something to summarize our interview?
And so this is the DREAM: To build Asia’s first gender lens fund committed to solving the most pressing economic and social issues of our day, and using women as a catalyst to achieve that.
The aim of such a fund would be finding the best entrepreneurs in the world to solve the problems we face today – and incentivizing them, whether male or female, to build businesses, products and services which empower women, in verticals such as healthcare, financial services, education, ecommerce, etc.
In many ways, China is my lean in story. The women I have met in China have inspired me, and made me a lot braver. As many of you will know, recently the movie Wonder Woman has been the first movie with a woman director to gross 100 million USD in its opening weekend. I want to leave you with a line from a video created by the original Wonder Woman of the 60s. If you don’t dream it, it can’t be done. You have to dream it first. This is my dream. Thank you for building it with me.
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As we join together, forming networks of human concern about the future, we will find the strength and wisdom needed to create a better future for all.
Raising humanity on a new path
It all starts with YOU!
With playful regards,
Galorian
