I often get asked the age-old question (by men) of “Who are the best entrepreneurs, men or women?” Women already believe they know the answer, so they never ask. I always try the diplomatic answer of “It depends”, but that doesn’t satisfy anybody.
First, here are a few facts to set the stage. According to the Center for Women’s Business Research, only one in five firms with revenue of $1 million or more is woman-owned, but the number of female-owned firms is growing twice as fast as all businesses. Overall, female-run businesses still grow slower, so create fewer jobs.
You can find lots of research facts on this subject, with much hedging on meaning. A Small Business Association research study a while back is typical in concluding that gender is not a factor in new venture performance.
Yet this study and others identify significant differences between the sexes in the approach and rationale for running ventures:
- Women start companies to better balance their work and family lives. Wealth is not their primary focus, so most remain smaller. But there are exceptions, like Martha Stewart (Omnimedia), Ruth Furtel (Ruth’s Chris Steakhouse), and Lillian Vernon, which make big money.
- Male owners are more likely to start a business to make money. They also spend more time on their new ventures, have higher expectations for their business, and do more research to identify business opportunities. Sometimes this works, and sometimes it doesn’t.
- Female-owned companies tend to offer family-friendly benefits. These include such perks as job sharing, parental leave and telecommuting. They argue that their more worker-friendly policies boost morale and lead to less turnover, less absenteeism and higher productivity.
- Male entrepreneurs seek investors much more often than women. Many feel this is due to a male affinity for technologically intensive businesses, and businesses that have a broad geographical customer base. Female entrepreneurs and their advocates say some women want financing, but can’t readily get it because of discrimination by banks and venture capitalists.
- Female owners are more likely to have positive revenues. They prefer lower risk opportunities, and are willing to settle for lower returns. Some women feel that pushing profits is “not polite.” More women entrepreneurs are single person businesses, while men tend to have more employees.
- Men have more business experience prior to opening the business. For most male entrepreneurs, business is their whole life, and has been since adolescence. Women often change their focus from business to marriage and family, then to entrepreneurship. Managing a family may have more synergy to a new business than a corporate role.
- Women have more difficulty delegating tasks. They are used to doing everything themselves and thus sometimes will spread themselves too thin trying to keep up their business and do their housework at the same time. A man might hire a housekeeper without guilt. Guilt seems to be a woman’s nemesis!
From these few highlights, it’s obvious that men and women do speak different languages, and neither is all right or all wrong. As I contemplate the differences listed above, it seems that in fact they are complementary – yin and yang – like masculine and feminine, rather than right or wrong. Societal trends actually seem to be favoring the women these days.
The best implication is that entrepreneurs of either sex would do well to find a business partner on the other side, capitalizing on the other dimension, rather than engage in a battle of the sexes. That way we all win. Wars are no fun for either side.