10 Mar 2015
Women in Tech: Breaking the Digital Ceiling
How the HBS community is taking on the tech industry’s “brogrammer” CEO stereotype.Re: Sheryl Sandberg (MBA 1995); Meg Whitman (MBA 1979); Victoria Ransom (MBA 2008); Michelle Zatlyn (MBA 2009); Matthew Prince (MBA 2009); Alexis Maybank (MBA 2004); Alix Wilson (MBA 2004); Edith Dorsen (MBA 1984); Monica Dodi (MBA 1984); Karla Friede (MBA 1989); Lindsay Hyde (MBA 2014); Alison Brooks; Myra Hart; Robin Ely; Boris Groysberg; Lynda Applegateby April WhiteTopics:
HBS Entrepreneur-in-Residence Janet Kraus is the CEO of fashion e-commerce company Peach. (Photo by Webb Chappell)
Janet Kraus doesn’t wear a hoodie. She doesn’t live in Silicon Valley. She doesn’t write code. And she isn’t, perhaps most significantly, a straight, white, 20-something man. “I have built tech-enabled businesses,” says the HBS Entrepreneur-in-Residence, a 48-year-old woman in a business jacket with a successful entrepreneurial track record and a Boston address. “I am a tech CEO.”
With so few women in leadership roles in the information technology sector and a dramatic gender imbalance throughout the field, Kraus’s title is more than a description of her leadership position in her new women’s fashion e-commerce company, Peach. It’s also a challenge to an industry where a company’s potential is often predicted based on its similarity to other successful ventures, most often led by CEOs who look a whole lot like Mark Zuckerberg.
Tech has long had a reputation of being the realm of the gamer, the coder, the hacker—all stereotypically male. Recent statistics give some truth to that image. In 2014, Google reported that 7 out of every 10 of its then 48,600 employees were men. The number was even higher among its engineers and managers, and only 3 of the company’s 36 top executives and managers were women. Google’s disclosures led other major tech companies to follow suit. Apple (98,000 employees) and Twitter (3,300 employees), for instance, reported similar overall percentages: about 70 percent men and 30 percent women. (Perhaps unsurprisingly, the companies also reported that employees were overwhelmingly white.)
Then there are the stories. Although few women working in the field will offer details of personal encounters with sexism and sexual harassment, they hear them frequently. In the past year, they’ve also read about them on front pages and homepages, from the gender discrimination and harassment lawsuit a woman cofounder lodged against the Tinder dating app to the comments of Microsoft CEO Satya Nadella, who advised women against asking for a raise, but instead “knowing and having faith that the system will actually give you the right raises.” (In the tech industry, men earn 24 percent more, on average, than women, according to data from the Bureau of Labor Statistics.)
These stories aren’t encouraging, though the widespread response to them is. And these numbers, and others looking at woman-founded startup and venture capital investment, aren’t encouraging, though their release is. Last year marked the first time most of the leading technology companies publicly reported statistics on gender diversity. The conversation is changing. The question is no longer, does the tech industry have a gender diversity issue? The question now is, how do we solve it?
Tech didn’t always have a gender diversity problem, at least not by the numbers. In the early days of the industry, when computers were the size of rooms, not wristwatches, women had a significant presence in the field of computer programming: they were the coders. In the United States, the number of women graduating with undergraduate computer science degrees rose through the 1960s and ’70s, until the mid-1980s. In 1985, 37 percent of computer science graduates were women. In 2012, only 18 percent of computer science graduates were women. Why? No one knows for sure, but the shift coincided with both the rise of the home computer, marketed mainly as a toy for boys, and the rise of the male tech geek.
This stereotype of a so-called brogrammer played an important role in the development of the now male-dominated tech industry. “When a girl sees a guy in a hoodie in a garage,” says Kraus, “that doesn’t look like her path.” Kraus has witnessed this dynamic as an entrepreneur. When she cofounded and served as CEO of Circles, a national corporate concierge, in 1997, there were even fewer women on the entrepreneurship path. By the time she sold Circles in 2007, it had 1,000 employees and was on track to generate $75 million in revenue. Kraus then cofounded and sold the high-end travel website Spire.
Now Kraus is examining the place of women entrepreneurs as a scholar. During her time at HBS—as a member of the faculty and now as a Rock Center Entrepreneur-in-Residence, advising MBA students in their startup endeavors—Kraus says colleagues have frequently asked her for the names of other women founders and CEOs, within the tech industry and beyond. She finally decided to make a list. She identified more than 60 successful women entrepreneurs—whom she calls “high velocity” women—whose careers could provide some insight into these questions. “I wanted to understand what it is that they did to crack the code,” Kraus says of her research.
Through interviews, Kraus and her research team found some common threads among the women entrepreneurs. For example, an overwhelming majority recalled being encouraged in entrepreneurial ventures from a young age, the “proverbial lemonade stand,” Kraus says. For Kraus, these women and their stories are key in encouraging other women to enter the tech field and to navigate its challenges. “These women are role models,” she says. It’s easy to doubt that there is a place in tech and entrepreneurship for women until you see the varied and successful paths other women have taken: “Oh wow, this woman started her business at 22. This woman did it at 28. She was raising money when she was pregnant. This woman did it right after having kids,” Kraus says. “You need to see that it can be done.”
If the first step in increasing the number of women in tech leadership is role modeling, notable HBS alumnae in the industry are leading the way. Women who aspire to be tech leaders can look to Facebook COO and Lean In evangelist Sheryl Sandberg (MBA 1995) and HP president and CEO Meg Whitman (MBA 1979) as well as entrepreneurs such as Victoria Ransom (MBA 2008), who cofounded the social marketing software developer Wildfire in 2008 (selling the 350-plus employee firm to Google in 2012 for a reported $240-$400 million), and CloudFlare cofounder Michelle Zatlyn (MBA 2009), to name a few.
Like Kraus, Zatlyn has a list, an Excel spreadsheet of hundreds of names of other women in the tech field. So many more women than she could name when she started in the tech world 10 years ago, or even when she founded CloudFlare, an Internet security company, with classmate Matthew Prince (MBA 2009), five years ago. For Zatlyn, who oversees user experience at CloudFlare, the trend is encouraging: “I don’t want to discourage women from getting into this industry. There are a lot of women now, 5 or 10 years ahead of them, doing really interesting things—making great strides, building big companies, and working on hard problems.”
In the early days of the tech industry, many women worked as coders. The number of women in computer science began to decrease after 1985. (Courtesy of NASA)
For those committed to promoting women in tech leadership, computer science education is a place to start. That’s the logic behind groups like Girls Who Code that combine the power of role modeling with an early introduction to computer programming and other science, technology, engineering, and math (STEM) fields. Alexis Maybank (MBA 2004) sits on the Girls Who Code board. “I’ve heard stories from the girls,” she says of the 6th- to 12th-grade girls involved in the program. “It starts early. Stories of them being chased out of the computer lab because it’s ‘Boys Only.’ ”
Maybank is an example of someone whose interest in tech wasn’t discouraged. After graduating from Harvard College in 1997, she arrived in Silicon Valley just as the Internet began to enter everyday life. Maybank worked as an investment banker on some of the first Internet IPOs before joining eBay; she’s been in e-commerce ever since, cofounding the successful members-only shopping site Gilt Groupe with classmate Alexandra Wilkis Wilson (MBA 2004). Now Girls Who Code students work as summer interns at the Gilt Groupe. The nonprofit has middle school and high school clubs in more than 20 states.
“The pipeline is very thin,” says Maybank, “but the numbers are growing.” At HBS, the numbers are particularly encouraging. The Tech Club currently has almost 500 members; slightly more than 40 percent are women. (This year’s graduating MBA class is about 40 percent women.) And for each of the last three years, the club has been led by women copresidents and a diverse leadership team.
Although 17 percent of the School’s 2014 graduates went into tech, many current students—male and female—who are interested in the info tech sector are unfamiliar with the language of coding. To address this, two years ago the Tech Club introduced educational programming, a student-run answer to the popular Training The Street program offered to those interested in finance. “When you are working in the tech sector, it’s important to be tech literate,” says copresident Tatiana Louneva (HBS 2015). “You need to be able to have the conversation with—and to gain the respect of—engineers.” Louneva, who plans to head to Silicon Valley after graduation, took a computer science course at Harvard College. For others not ready to commit to a full semester, the club offers an always sold-out, two-day intensive coding marathon and classmate-taught workshops.
It’s education, not gender or the wider issue of diversity that is of most concern to HBS students considering a career in tech, Louneva says. She certainly doesn’t feel like a pioneer in the industry. “There are already women there to look up to,” she says, quickly listing five women mentors from her short tech career.
For many members of the Tech Club, startups will be their entry into the tech world. That often means raising venture capital, which presents another major barrier to women’s entry into the field as founders and CEOs. Raising venture capital, people are quick to point out, is not easy for anyone. Still, women entrepreneurs—11 percent of the US working population in 2013, according to a report by Global Entrepreneurship Monitor—receive significantly less venture capital money than their male counterparts.
HBS Assistant Professor Alison Wood Brooks has researched gender bias in entrepreneurial pitching. Her 2014 paper on the topic produced headlines: Investors prefer attractive men. Even when the content of the pitches—as observed both in lab experiments and in the field—was the same, attractive men were significantly more likely to successfully persuade investors. In second place, men deemed to be unattractive. Women—attractive or not—were least likely to successfully persuade investors.
The paper grudgingly acknowledges that this type of bias on the part of investors may “not necessarily represent irrational marketplace behavior.” Although these biases are thought to be largely subconscious, says Brooks, “if your metric is ‘success’ and ‘investment opportunity’ and assuming that attractive men have it easiest all the way along, then that might be the rational, optimal choice. And that is extremely frustrating.”
Brooks and her coauthors (including her twin sister, an entrepreneur) did not study interventions to change this bias—which was as prevalent among female investors as among male investors—but she hopes the findings will spark conversations about how to change the disparity. “The first step is awareness. The more investors and more entrepreneurs who are mutually aware of it, the more likely it is they can talk about it openly and can make efforts to overcome it,” she says.
In 1999, The Diana Project, cofounded by retired MBA Class of 1961 Professor of Management Practice Myra Hart to study women entrepreneurs, found that less than 5 percent of venture capital investments went to businesses with women on the executive team. A follow-up study published in 2014 found continued disparity but some progress: Between 2011 and 2013, about 15 percent of venture capital investments went to businesses with a woman on the executive team.
“There’s opportunity here,” says Edith Pripas Dorsen (MBA 1984, MPA 1985). Dorsen sees growing possibilities for women tech entrepreneurs—and for investors. With classmate Monica Dodi (MBA 1984), she founded the Women’s Venture Capital Fund in 2011. The fund currently has five early-stage firms in its portfolio—including NVoice Pay, led by CEO and cofounder Karla Friede (MBA 1989). The goal is to finance companies with an executive team that includes both men and women. “The name is a bit of a misnomer,” Dorsen says, citing research showing the success of diverse leadership. Instead it was a way to distinguish the fund. “We’re not interested in ‘fraternities’ or ‘sororities.’ ”
Some three years after its founding, the Women’s Venture Capital Fund is still one of only a few VC firms with the mission of funding businesses with women leaders. “Investors themselves, whether they are investing directly or through venture funds or via angel networks, have to recognize that this is a real opportunity to make money,” Dorsen says. The fund is making progress on that front. The Women’s Venture Capital Fund investors were once predominantly women. Now almost 50 percent are men.
Education can encourage more women to consider the tech sector, and access to venture capital can fund women-led startups, but the sector’s reputation for a boys-only culture remains an obstacle, many say. The industry is not simply lacking in women coders or women entrepreneurs. The deficit of women in the business aspects of the technology field is also pronounced: A recent report by Catalyst, which studies women in business, found that only 18 percent of newly minted women MBAs worldwide take managerial jobs at tech companies (including information technology among a wider field) as compared with 24 percent of men, and about half of the women leave the industry, compared with 31 percent of the men.
It’s not an issue that’s unique to the tech sector—most industries are male-dominated—but for many technology firms “this is new territory,” says Robin Ely, the Diane Doerge Wilson Professor and senior associate dean for Culture and Community, who is also chair of the School’s new Gender Initiative.
Ely has long studied gender in business, focusing her research on professional services firms. Recently, though, several large tech companies have approached her on the subject of gender in the workplace. The tech firms are beginning to recognize many of the same concerns that other sectors face, such as the effect of work-life balance issues on women and the “double bind”—the tension between the perception of competence and likability. “What’s different about the tech industry is that they aren’t really talking about other issues yet,” Ely says. “They aren’t talking about disproportionate turnover among women or about women ostentibly ‘opting out.’ ”
There are some lessons that the relatively young tech industry can learn from sectors that have been focused on the issue of gender for longer, but one answer to the question of why aren’t there more women tech CEOs is that there are few women CEOs across all sectors. According to Catalyst, in 2013 only 14.6 percent of executive officer positions were held by women among Fortune 500 companies. “No industry has licked the problem,” Ely says. Although tech culture has earned—and perhaps deserves—a bad reputation in the media recently, the problem is widespread, and cultural change is the only solution.
For Richard P. Chapman Professor Boris Groysberg, the tech industry’s biggest challenge—indeed the challenge that all industries face—is not simply increasing the number of women in its ranks. “We have to get to the point where we make the numbers count,” he says. Diversity needs be leveraged to create a new culture that embraces the skills of the entire team. Groysberg’s research has focused on corporate boards, where, he says, women represent only 17 percent of Fortune 500 board members, a number that has grown only by a percentage point a year in recent years. Groysberg’s research—published in 2012 with Deborah Bell in partnership with WomenCorporateDirectors and Heidrick & Struggles—also asked tech industry board members worldwide if their companies were effective at leveraging diversity. Only 1 percent said yes. (The health care sector was most confident about its ability to leverage diversity; 12 percent of board members thought their companies did so effectively.)
The tech industry’s reputation as a male-dominated field could reduce the number of talented women attracted to the sector, Groysberg says. And he sees a moment of opportunity for smart tech businesses to turn inclusiveness into a competitive advantage when competing for talent and investments.
Tech cofounder Michelle Zatlyn makes the strong business case for inclusiveness simply by running CloudFlare as a successful company. “There are investors who we have actually decided not to take money from, and they have said totally irresponsible things to me,” she says. “I feel like my responsibility is to prove them wrong, find people I can attach myself to who don’t care that I’m a woman, and build a really big, successful company, so they can be like, ‘Oh, I should have taken her more seriously.’ ” And perhaps they should have: CloudFlare now handles 5 percent of the world’s Internet traffic and has a reported $1 billion valuation.