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Why Women Starting Small Businesses Are the Key to Workplace Gender Equality

Hana Mohan

Last updated on

The University of Arkansas and the Bureau of Labor Statistics each issued reports recently, stating that the pandemic has been more detrimental to women’s careers than men’s — which, if we’re honest, isn’t entirely a surprise. As The New York Times’ Claire Cain Miller tweeted, “Can’t help but wonder if the conversation about reopening schools and child care would be different and more urgent if there were more mothers in positions of power at companies and in government…”

Before I get into why I think this is (still) the case and what we can do about it, let me back up with an immediately relevant fact. In Silicon Valley speak, I am a “unicorn” of sorts: I am a transgender woman of color and CEO of a venture funded software company.

Which is to say, I bring a unique perspective to the issues around women’s equality in the workforce — particularly in the realm of small business — and why it is being outpaced by molasses. (The progress women saw in the 1980s slowed by the 1990s and has stayed there ever since.)

The lack of equal opportunity is not for lack of effort. Despite reforming corporate policy to be more female-friendly, and despite funding programs to support women in STEM, COVID-19 has reminded us that not enough has changed after all this effort. In software lingo, if these initiatives were packaged as a product, it would be dubbed vaporware — something that ”has been widely advertised but has not and may never become available.” (Merriam-Webster)

Because I have experienced the business world with both a male and female body, I’ve seen what causes the bigger, better successes in professional gender equality initiatives to fall through the cracks: lots of loopholes, misguided programs, and tepid follow through.

  • What good does an initiative to guide women to STEM careers do if the men running the companies won’t hire them?
  • Does it make much of a difference if male-dominated companies tout being an equal opportunity employer?
  • How effective is implementing more compassionate maternity leave packages if the boss will never promote a female executive after having kids?

What progress do we see when a company publicly commits to adding more female board members — but overwhelmingly opts for caucasian billionaire heiresses? (Fewer than 5% of female board members are women of color.)

Data shows that the occupations where women dominate hasn’t changed as much as one might expect — women retain an overwhelming presence as teachers, nurses, and secretaries. And while those are highly regarded careers crucial to any society’s success, it also reflects the barriers to entry in the boardroom and subsequent limitation for earning potential. There are endless available seats for self-made women millionaires, but there are only a handful of seats for teachers or nurses who want to become power-wielding administrators. (Nurses of all gender identities fill less than 25% of leadership roles.)

As someone who has experienced the ins and outs of the business world (no less, in tech!) as a transgender person of color, I’d like to make a few suggestions.

First: now that we have scrapped the belief that big tech and other corporate giants will really bring women into power, let’s stop waiting for other Fortune 100s to bring opportunities to women — flashy press releases and all. Women account for nearly half of the entry-level workforce, but make up only one-fifth of the c-suite — and only 6% of S&P 500 companies have a female CEO.

What if we shifted our thinking, and consciously started with women-owned small businesses? It’s unfair, I know, to put the onus on an already disenfranchised group — but women are familiar with unfair. SMBs accounte for 44% of U.S. economy activity, and worldwide, women own 6.2% of businesses. Imagine the speed and scale at which women would see better professional opportunities. Now imagine if female business owners gave opportunities to the ultra-marginizalized (non-cis, non-white women).

Throughout history, the biggest change has come from grassroots changes from those “at the bottom.” What if we started with the five-person, all-remote web design company and the local accounting business?

Not only can they build female-centered support systems, they reflect that back into their community. In short, it’s time more women leverage their positions of power — no matter how small or inconsequential they believe them to be.

I started with acknowledging the inevitable — my own hypocrisies.

When I began my company, then as a man, I didn’t actively discriminate against women. If I found a talented female candidate, I hired her. But now I see that simply not discriminating isn’t enough. Men have grown up in male-dominated environments, and can’t always see the depth of the problem or grasp the gravity of their decisions without continuous exposure to other perspectives, which is hard to come by in the echo chamber they have created. Men in positions of power do a very human thing — they tend to resonate more with those who are like them.

Only after I transitioned to a woman did I realize the ways in which I participated in this pattern.

Women in positions of power can be guilty of this, too. Last year The New York Times published a feature that detailed the transition experience of a transgender executive at a top financial firm — which was met with a surprising level of support, particularly from female employees. But read the comments and you’ll find cries of foul play by women who had worked at that same firm, and said the article’s subject was actively part of the oppression of women in the office.

Women at venture capital firms that fund mostly male-owned businesses, for example, aid in propagating the passive damage of the idea that simply believing in gender equality is enough to solve the problem. (December 2019 saw VC investment in women-owned startups at an “all-time high” of a measly 2.8%, and that is reduced to less than 1% for female entrepreneurs of color.)

In fact, a survey conducted by Inc. and Fast Company showed that only 29 per cent of women feel they hire more women, with another 21 per cent admitting they lean toward hiring men. The remaining half said gender doesn’t matter. And that’s the problem. Other statistics reveal that while female owners of small businesses make an effort to hire other women, this momentum is stunted when they struggle to obtain credit over their male counterparts.

Women business owners do themselves a disservice in the long-run. My experiences have taught me that, by nature, women are in touch with more women, and this can make for a huge competitive advantage.

If I compare my professional experiences in a man’s body against those I have had in my female body, I can say with conviction that women are much more open to collaboration and to creating something together than male-dominated working groups, a sentiment that has been reinforced by several studies.

Women need all-female, career-focused support groups that go beyond the annual conference for Women In [Insert Industry Here]. Clearly those are not sufficient.*

I’ve acted on my beliefs.

I have put together a team of women from non-traditional backgrounds. One of the women I hired runs her own cafe, and did all of its digital marketing. A working mother whose business was hit hard by COVID, I brought her on to build out a marketing plan that would grow the business. The work was amazing, and I remember asking her, “Why have you not done this before?” and she answered plainly, “I never had an opportunity.” The story is similar for others working mothers on my team, and according to Harvard Business Review, is still par for the course; when firms with a smaller percentage of women partners were surveyed, “Virtually everybody resorted to some version of the work/family narrative to explain the paucity of female partners.”

That leads to the final item on the menu of solutions to such a pervasive problem: what happens after the hiring process. Of the women who have had better professional opportunities, I’d be interested in how many of them feel their employers were as inclusive as they were diverse.

Getting hired and promoted is one thing, but existing in a truly inclusive, non-toxic environment — one where women can and will rise — is another.

We all read the news about Mackenzie Bezos’ and Melinda Gates’ initiative to fund female-owned businesses just started a charity, and we feel good inside. But unless that funding will prioritize gender-queer, non-cis, non-white entrepreneurs, then I’m not sure why we believe in this iinsanity — defined as executing the same actions over and over again, waiting for different results that will never arrive.

*“While both men and women benefit from having a network of well-connected peers across different groups, women who also have an inner circle of close female contacts are more likely to land executive positions with greater authority and higher pay, while there was no link found for the success of men in terms of the gender composition of their inner circles.” — Forbes on Harvard Business Review — “Men and Women need different kinds of networks to succeed.”