Although the tech world aims to be free from human biases, the startup scene still has structural barriers that can hinder female entrepreneurship. What can be done to change this and why does it matter? In the latest episode of the Samsung interview series “The Next Wave,” Samsung’s president and chief strategy officer, Young Sohn, talks to Catherine Bischoff, chief relationship officer at Factory Berlin about what the startup ecosystem can do to become fairer and more diverse.
The path to a more equal startup scene
One hope of advancing technology is to move our societies beyond human prejudices and create a more equal and just world. Data, after all, ought to be objective. But again and again, we’ve seen the biases of our old systems creeping into our new ones as well. From job recruiting software that favours male candidates to facial recognition that can’t read different skin tones, “smart” technology hasn’t always been so smart.
The problem is not the nature of these technologies but the implicit and often unknown biases of those who create it – a group that, right now, is predominantly white and male.
According to Crunchbase, 20% of newly funded startups in 2019 had a female founder. This figure has more than doubled since 2009 (with 9.5 %), but in fact, it’s still very much a boy’s club. Based on the German think-tank, Zukunftsinstitut (Future Institute), the startup scene often falls behind more traditional employers when it comes to diversity of gender, race, and background.
This kind of homogeneity not only hurts women’s opportunities to succeed in tech, it stifles both innovation and bottom lines. Respected companies such as McKinsey and the Knight Foundation have shown that diverse startup teams consistently outperform their male-only counterparts and generate above-average profits.
There are many talented women with tech backgrounds out there looking for this type of program and support structure.
Prejudice and lack of recognition hinder diversity
Organisations want diversity. So, what stands in their way?
Catherine Bischoff, chief relationship officer at Factory Berlin, has seen the challenges of the gender gap in tech firsthand. In the latest episode of Samsung’s interview series “The Next Wave with Young Sohn,” she talks to Young Sohn about the lack of both financial and mentoring support female entrepreneurs often face.
With very few women partners and investment managers among large VCs in Germany (and indeed, globally), it’s a vicious cycle. Investors choose to put their money in projects and founders that appeal to them personally, and if the majority of investors are male then they are more likely to see themselves in male entrepreneurs.
But it’s not just the investment side that lacks support. The situation is not much better when it comes to representation at the public level. For example, the proportion of women on the decision-making bodies that oversee startup aid and promotion is between 12.5% and 25%, depending on the institution. Not surprisingly, female startup founders receive only a fraction of the public startup funds given to their male counterparts.
Funding — or lack thereof — can be measured, but some challenges are more difficult to pinpoint. For example, while men may feel comfortable asking questions about how to navigate the intimidating startup ecosystem, women often don’t feel comfortable seeking the same advice or know who to ask.
Initiatives for change
Bischoff sees limited access to capital financing and partner networks as two of the greatest challenges for female entrepreneurs. Fortunately, she also believes they can be addressed by thoughtful and targeted support of the next generation of women, non-binary and women-identifying founders in tech. And that’s exactly what Bischoff and the startup community Factory Berlin have created through their initiative, Stealth Mode.
Stealth Mode is a three-month mentorship program. It analyses the individual hurdles women face and connects them with mentors explicitly chosen for their needs. Participants receive support with financing and establish the critical contacts and partners from the tech and business sectors that will guide them from idea to MVP.
While Stealth Mode currently only takes on a handful of participants now, in its short time operating, hundreds of women have applied. As Bischoff tells Sohn in her interview, “There are many talented women with tech backgrounds out there looking for this type of program and support structure.”
More women — as well as people of colour and those from different socioeconomic and geographical backgrounds — make organisations stronger and more productive. And with different perspectives, the technology and innovation we create will truly begin to represent the diversity of our experiences. As Bischoff says in “The Next Wave” episode, “It’s good for this ecosystem and it’s good for the entire world.”