The Pipeline Problem

I recently read an online discussion where some woman was saying there's no pipeline problem for women in business. The only issue is (sexist pig) men refusing to fund women-owned businesses and if men would just throw money at the problem, women could succeed in business.

No, honey, there's definitely a pipeline problem and it's vastly worse than you think because the reality is most MEN also don't know how to start and run a successful business and this problem not only cannot be solved by throwing money at it, it would be made worse by doing so.

I am fairly confident that a lot of "startups"[1] get their first VC check and basically take a vacation at that point and stop really working at developing the business.

If their primary motive is money, then a big check from a venture capitalist emotionally equals "Mission accomplished! Time to relax, kick back and let the good times roll!"

Women tend to be worse about feeling like men should just give them money "because I'm pretty" or "because they care" and bad about glossing over the ugly reality that men spending money on women are typically looking for sex primarily and maybe secondarily hoping she will be a good live-in maid and excellent cook -- which she will also do "because she cares for him."

That's the crux of the deal heteronormative culture tries to impose on everyone everywhere and both men and women tend to be equally guilty of having stupid mental models and bad habits rooted in that fact. No, it's not remotely "just men" who need to change because it's not remotely just men who shape our culture.

VCs are looking for companies that can grow big, grow fast AND where the founders have some stronger motive than mere money because otherwise they can be readily milked for money by an endless stream of fast-talking people with "a business idea" and no real business yet.

The movie Extraordinary Measures is apparently inspired by real world events but only very loosely based on them. A father with two kids with the same genetic disorder quits his job to try to find a cure or more effective drug treatment.[2]

So that's an example of a guy who is absolutely not in it for the money and you know he's going to keep working at solving the problem whether he gets funding or not. Most businesses are not started by someone quite so strongly motivated.

If just throwing money at the problem increased the rate of success, venture capitalists wouldn't have such a hard time finding businesses to fund. I'm sure they would love to just cut checks, see businesses succeed because the VC cut a check and watch the profits roll in.

Venture capitalists are typically people who have money because they started their own successful business and sold it. They not only bring cash to the table, they bring business acumen and they use this to not only judge whom to bet on, they use it to try to help them succeed.

I think women have two big problems with trying to start a business. One is we get raised to be wives and moms and most of us simply don't learn something essential to having a real career, as a business founder or otherwise.[3]

The second is that there are relatively few people in the world with substantial business acumen, they tend to be male and it's even harder for women to learn what they need to learn about business from men with business acumen than it is for men to do so. And it's plenty hard for men to get it.

I don't think businesses fail "randomly." It's a numbers game for VCs but it's a numbers game in part because most people don't have the business acumen they have and don't listen to them.

Paul Graham, one of the co-founders of YC, has said that they keep telling applicants they've funded the same stuff over and over and over. Sometimes one of them eventually listens and does what they were told and says something like "I should have listened sooner."

Presumably the ones who never do listen have a higher failure rate. It's a numbers game because applicants think they need the money and the networking opportunity but don't think that VCs have essential knowledge they need in order to succeed.

I used to read books and articles about economic cycles. Historically, they typically followed a pattern where you could predict the next one based on how many years since the last one.

Typically but not always and people were always trying to find some pattern in the numbers. They were constantly trying to imbue the numbers with meaning.

I stopped reading such after seeing an explanation that finally made sense to me. Some guy said that people get money and start partying and stop working. Then the money runs out, they get off their lazy butts and do something about it.

I don't see a lot of analysis of root causes of economic events. When I do, it's typically rooted in real world resource limitations, like Hubbert's theory of Peak Oil.

For the business world, a very significant limited resource is that few people have much business acumen. Women who think male VCs won't fund them "because of my gender" fail to understand what greedy pigs people are.

If they thought you would make them money, they would fund you. They don't care about your gender. You could be a little green alien from Mars and they would fund you if they thought odds were good it will make them money.

They don't fund you because they don't think there's a snowball's chance in hell they will get one thin dime of their money back, much less make a profit. And you whining about what sexist pigs they are in no way convinces them they are wrong about that.

Footnotes

[1] "Startup" as defined by Y Combinator, the multibillion dollar tech VC company that funded Reddit and many other big tech companies you've heard of. Their definition boils down a new business with the potential to grow big.

In other words, not a "mom and pop shop" or "lifestyle business." A business that has the potential to grow big enough, fast enough that it's worth it for a VC to invest in and hope to get a payoff.

Because it's a numbers game and a lot of the companies they fund fail. So they need a few to really knock it out of the ballpark for it to be worth it financially for them to invest in new companies and their unproven tech ideas.

[2] There's a wonderful and funny scene where someone gets fired. You should watch the movie. I'm not spoiling it here.

[3] I talk about that hypothesis more on Feminine Character Works.