Lessons - Tech's Disturbing Gender Gap | Julia Boorstin, CNBC's Senior Media & Tech Correspondent

Welcome to Lessons episodes of Success Story, part of the HubSpot podcast network. These lessons episodes will be shorter conversations with past guests, valued members of the success story community, and myself. They'll be focused on teaching you actionable, insightful takeaways that you can use to upscale your personal and professional life. Where are we at in terms of equity? So what is the reality for somebody going into the workforce now and then trying to move up? What are the problems and struggles that perhaps we think are gone but are still there? What do we have to deal with? So what's interesting is that, you know, we've been actually graduating from college in higher numbers than men do. We've been going to more grad school than men do. I think the numbers are pretty close to equal when it comes to business. Well, these numbers change all the time. But there's no, it's not like men are getting more education than women do. But there have been a lot of studies trying to figure out why women may start in jobs at the same numbers as men, but don't end up at the top of companies in the same numbers as men. And one of the key theories, and this was something that was sort of articulated by Alina and McKinsey studies, is this idea of a broken wrong. And it gets promoted at the lower levels, but then there's a sort of a leap to more of a management level where often women just don't get those promotions. And interestingly, it doesn't necessarily seem to have anything to do with performance. It can have to do with how much women are pushing for promotions or maybe they are sort of inadvertently penalized for taking time off from work for maternity leave, et cetera. So there are so many different reasons. But one thing that I really focus on in this book is I look at the tech industry in particular because the tech industry has more of a gap in venture capital funding than in any other industry you'll see in terms of representation. So we all know that tech companies are incredibly powerful. They impact the way we live our lives, the way we travel, the way we order every product to our house or the Amazon. Like there's no tech companies have massive influence over everything. And tech companies are funded by venture capital, whether it's Facebook or Airbnb, Google, all these companies exist because venture capital fueled them and allowed them to grow massively while they were still losing money. So I wanted to look at this sector because this is the sector with the craziest gender gap. Women, on average, female founders have gotten 3% or less of all venture capital funding in the past 10 years. So if you look at billions of dollars in venture capital, like $30 billion last year, 3% of it actually 2021 was 2%, 3% or so of that money goes to companies with female founders. That's absolutely insane. So that's the reason why it doesn't really make sense. So I really want to focus on that world just because the gap was so crazy that I wanted to understand why that was happening and be how the women who had defined the odds and had managed to get that tiny piece of venture capital funding, how they had done it. I wanted to know there were secrets because I thought these women are by definition exceptional and I really want to learn from them. So so we'll unpack why some women did receive VC funding, but that's a really interesting stat. So I would have actually assumed that in yeah, of course, you think of tech as like, oh, there's all, you know, the tech bros and whatnot and there's this like sort of like a negative connotation with the tech bro SF startup. But the numbers that tech is worse than some other legacy industries is absolutely insane. So if 3% of, it's 3% of female founders are getting VC money, it's very obvious why there's not a lot. And it's actually slightly more complicated, 3% of VC dollars go to companies with female founders, but it's 6% of deals and what's interesting is because you know, each deals like the check that's written, what that means is that women's checks are smaller than the checks that men are getting. If they're getting 6% of deals and only 3% of dollars, it means the checks are on average smaller. So why is that? That's a huge problem to solve for right thing. It's another problem. So there's so much in here and I just want to be clear, I'm not pointing fingers at anyone. I think what's really interesting about this is I don't think there is one group, one person, no, no one group or organizations to blame for any of this. This is layers upon layers of structural historical societal patterns that have established this system and it's very hard to break them. What I was most interested to learn in my research is just this concept of pattern matching is hugely powerful. Pattern matching is this idea that if you're a VC and you want to make an investment in a founder, your instinct and the data would indicate that you should invest in someone who matches a pattern. You should invest in someone whose company is similar to another company you founded. Maybe you have a habit or a pattern of investing in people who were engineers at an Ivy League school and then founded an enterprise software company, which they sold and now you want to invest in these as second time founders. If you're looking at that subset of founder, you're going to be looking mostly at men. So it becomes this feedback loop where people disinvest in more and more of the same types of people. Part of it is that if you're a venture investor, you're making some big bets and you want to control every factor you can control. So if someone reminds you of Mark Zuckerberg, back at Influence you, there are some crazy quotes in my book about VC saying, I'll invest in anyone who reminds me of Mark Zuckerberg. But I think that it's just this instinct to go with the familiar. And also when you're an investor, you're going to be spending a lot of time with these companies you're writing big checks to. And so you want to make sure this is someone you like and don't mind spending hours upon hours with. So there's also this instinct to invest in people who feel like your friends. Maybe they went to your same for turn it, you know, for same college, we're in your same fraternity. So I think a lot of that is this sort of, it's a pattern matching, which is a symptom of unconscious bias. And the more we could just recognize it, the more there's a huge opportunity to break the pattern. And there's financial opportunity in breaking the pattern. There's a VC I interviewed for the book named Josh Cuppelman from First Round Capital. He was a fund in Philadelphia. He had a very successful fund. And after 10 years, he said, let's do a study and let's find out what has been working with our companies. The invested in early stage companies and early stage is when there's the most opportunity for bias because you're not investing in a company based on a five year track record. You're investing in a company based on the idea and the founder. So he went back and looked at the results of his investments over the years and he found that the female founded investments, which weren't, there weren't very many of them. They tended to perform better. And he thought, this is crazy. If the female founders, their companies are doing better, why are we investing in more of them? So he sort of took a step back and realized that there were systems they could put in place to make sure they weren't just, you know, investing in the, in the obvious thing based on the pattern. So they before used to only have investors who had had a successful company that they had invested in. That limited the pool and they said, why do we only have to hire people we've invested in their company? Let's, you know, let's broaden the pool. So they started hiring different kinds of investors, more women and women are choices likely to invest in a female founded startup than men are. So they all the sudden got this different pool of companies who were coming to them with their ideas because they diversified who their, who their venture partners were basically. And then interestingly, they put these systems in place in their meetings to make sure that they were getting rid of bias. They'd hear a pitch. And then instead of just opening, you know, having that founder leave and they'd open the floor of a conversation, this is something that happens in meetings no matter what type of company you're in. They would have a, here a pitch like you could hear a presentation, but they'd have everyone write down what they thought about the company. Then they'd have a conversation. That way you didn't have one very loud, charismatic person railroad everyone else and to listening to their opinion and then everyone would be like, okay, fine, this guy's loud. We should do what he wants to do. This way you could get people who are maybe more introverted, maybe, maybe more women who are less likely to want to go out on a limb in a male dominated room. And you could just let everyone share their opinion without, you know, without it having to be a public performance. And he found that the outcomes of implementing this system were really, really powerful. So I think there's so much upside to recognizing and stripping out the pattern matching in the unconscious bias.