I’m often asked by women, “how did you do it? What’s the secret to founding a successful tech company?” I’m asked as though I must have some sort of magic power. A sure way to eliminate risk. A formula.
I was a bit of an outlier when I started Armoire, a women’s online clothing rental service, with my co-founders three years ago.
In 2017 83% of start-ups were entirely male founded. Only 17% included a female co-founder.
At that time the venture capital firms we pitched to wouldn’t fund us. A little magic would have helped me too.
I didn’t leap directly into entrepreneurship. Start-ups are all risk, and I don’t fit the profile of an overt risk taker. I’ve never liked gambling, driving a race car isn’t on my bucket list, and I don’t wish I had more time to go rock climbing. Sure, I’ve always been up to compete. But only when I can calculate that I have a strong chance of winning. Picking winners is tough, when the judging panel can’t pattern match the contender. Further, it doesn’t help promote funding for female entrepreneurs like me, when the research shows that women are less inclined to take financial risks than men. This data troubles me. It may be short changing the way we value women’s decision making and leadership abilities in the professional world. And just by being a woman, I may be perceived as a high-risk for investors.
We might see a more complete picture if researchers investigated the type of risks women take. I believe there are high stakes decisions that aren’t considered in the professional world. For instance, making ethical choices that go against the current thinking, or standing up for a point of view when faced with resistance from superiors. Consider the young Malala Yousafzai, risking her life for the right for an education in Pakistan, the resistance faced by Tarana Burke, who started the #MeToo movement or in the most extreme of physical challenges, choosing to risk your physical health through childbirth.
These situations have value, even if what’s at stake isn’t the conventional return on investment.
Women were the ones who understood the clothing rental service and funded Armoire. Traditional venture capital firms were never able to fully understand why women would pay to share clothes, or why they would choose to replace their “love” for inefficient browsing with streamlined curation.
Some of these women who invested had never invested in business before. But they recognized Armoire as an opportunity and took a financial risk with us. So how do we factor this behavior into the risk-taking frame work?
Corporate leaders tell us that building a business requires bold decisions made quickly and confidently without a lot of second guessing. Researching and testing an idea takes time that may compromise time-to-market. Both paths can move your business idea forward. I think the answer lies in a grey area found between the two paths, but what matters most, are the results.
My methods aren’t exclusive to women and they may run counter to beliefs about what it takes to be a successful entrepreneur, but they’ve worked well for me.
I started testing the idea of clothing rental with a small group of friends, then expanded to larger groups to surface the business pros and cons. I was told I didn’t need to chase that last 10%, to stop second guessing my theory and go for it. But it’s a balance. I wanted to know all that I could about our market and try to identify the pitfalls. The time we spent researching and testing has paid off. Armoire is three years old and still going strong, while 60% of all start-ups fail.
Women tend to hold on to small financial gains, rather than taking a big leap forward the way men do, according to a 2013 risk and gender study. When I started out, the risks I took were palpable. Now that I have a larger team and funding, I can successfully take on more complex initiatives. I moved forward with whatever I was capable of at the time. If that means you build a simple website to gain customer insights, while you write a business plan, then do it. Taking small, calculated risks works and allows you to iterate and adjust. It’s not always about taking a big swing you can’t come back from.
I often hear that women second guess themselves more often than men. There’s some truth here, even for me, but the important difference is that I don’t let it limit me. Female co-founded businesses get less start-up funding than all-male founded businesses so the stakes are higher for me and my partners if I fail. It may be harder for me to get a second shot. So, I make better decisions. I am agonizingly thoughtful. And it pays off.
Collaboration vs. cut throat
I don’t think being competitive means you have to take an adversarial approach to the competition. Armoire is creating a significant shift in the way we all think about buying clothes. For this to happen we need other businesses with a similar model to be successful in the same marketplace. We need to support one another. You may view this as a vulnerability, but if your customer offerings are differentiated, then collaboration with like-minded competition will help lift everyone.
Attracting vs. attrition
Our culture at Armoire is one that attracts talent when other companies may be struggling to find or keep great people. Highly experienced people from all roles in technology come here wanting to work with us. We make a point of creating a culture of respect across all positions. We always want people to feel invested and heard in our organization. Everyone should feel their expertise and contribution is valued. If they don’t, then we risk compromising the positive dynamic and that’s not the kind of risk I want to take.
Building Armoire has been a zig-zag progression. I don’t fit the typical risk-taking profile of a CEO, but I love the work. I didn’t go running into entrepreneurship with a blind belief in what I was doing and end up a success. I entered unexpectedly and took measured steps to get the company off the ground. You can redefine risk-taking and leadership for yourself too, based on what you can do right now, and the kind of company you want to build.
If you’re not an overt risk taker I encourage you to teach yourself. Start by taking small risks each day. Consider changing those black pants out for a red pair. Clothing can be a kind of armor. When you feel confident in what you’re wearing, walking into a room of investors is a little easier. It’s all about finding your own style. Because at the end of the day, what counts is the outcome.