We all know the numbers:
Women may own 40 percent of the private businesses in the United States, but they create only 8 percent of the venture-backed tech start-ups.
Women account for just 6 percent of the chief executives of the top 100 tech companies, and 22 percent of the software engineers at tech companies over all.
It doesn’t help matters that of all venture capitalists, just 14 percent are women.
I am not going to be able to speak on the topic of women and technology, why there aren’t more of us in the tech business, why we aren’t running more companies, etc.
I can only speak about my own experience and observations starting and running one small tech-ish company in New York City, mediabistro.com
I am not an engineer; but I did learn how to build a company heavily reliant upon tech and I did learn how to manage engineers.
I’ll tell you what I learned, but first a little background on who I am and how I developed mediabistro.com.
Not so long ago, I was an editor and writer who had worked for many years in the media and who saw my calling as something halfway between beat reporter at BusinessWeek and a novelist, monkishly writing atop some mountaintop – or (more likely) in a local East Village café.
If someone had told me “one day, Laurel, you’re going to start a company, hire and manage 40 people, grow it to millions of dollars in sales and sell it for millions more?” I would have said “You’re out of your mind! I don’t even want that. Just give me a shot at Harper’s.”
I had developed a very mild interest in business, because I was writing about small business, management and career issues for various publications, as kind of my “day job.”
Because I was lonely — working from home as a freelancer — a friend and I started a series of cocktail parties at bars. Mainly to meet guys, but ALSO for career reasons. My second secret agenda was to get to know editors who might assign me stories. I had been in the NY media scene for 7 years and knew about fifteen people in the media. Barely enough to make a kaffee klatsch, much less a rockin’ party….
At first just a few people showed up, then 20… 30… 50 and before long I had thousands of people entered into a database. In 1996, I started a web site to serve those same people. I had discovered they wanted bulletin boards, job listings, event listings and other community services.
TODAY, strictly through THIS kind of word of mouth, more than a million people have signed up on the site, making more than 12 million page views per month. Tens of thousands have in some way engaged with the brand – many to purchase one or more of our services.
They have attended the parties, posted jobs for a fee to our popular job board, taken classes with us, gone to one of our Conferences, joined AvantGuild to read our premium content OR just lurked on the bulletin boards.
So, how did I cross over from Party Girl to Tech CEO and what did I learn along the way? I have 10 lessons, so get ready!
Lesson 1. NO AMOUNT OF TECH MAKES UP FOR CUSTOMERS. PUT YOUR AUDIENCE FIRST AND THE BUSINESS WILL FOLLOW
Why, back then, did all these people show up and why did they bring friends and have their friends bring friends? They weren’t ALL single.
It was because, they, like me, truly wanted to make friends and business contacts and to feel part of a community.
That’s what the party provided. Making people feel taken care of and warmly greeted wasn’t being done at your standard-issue New York party. I wore a colorful feather boa and went around and personally introduced people. In fact, I forced people to meet. Go ahead, call me a Party Dominatrix. But, folks seemed to love that. The feedback I kept getting was: Don’t stop these parties.
At this point, I had no business though. Just a successful party and a growing community. And the guests kept saying “You need to make money at this somehow.” But I suspected that they weren’t going to pay to attend a party. And, how do you turn community into a money-making business, anyway. We’re talking pre INTERNET (not to mention Pre-Facebook). This was 1994.
But, from the very beginning, I LISTENed to my community of customers. I found out what they wanted and gave that to them. Over the next few years, I turned each party, each conversation, each point of contact, with my media “customers” into a focus group opportunity. And, in fact, I did have a few dinner parties that were specifically designed as listening exercises.
Anyone can do this. Whether you stand outside of a mall with a clipboard and ask people in your target demographic to answer a few questions, or hang out at some local bars and quiz people there! LinkedIn or Facebook can connect you with friends of friends of friends. SurveyMonkey stands at your service. There are so many more tools today then there were when I started.
When I listened, I discovered that my media customers had a lot of needs in common. They wanted more work (both freelance and full-time), they wanted more ways to meet each other and to stay connected, they wanted to be up on the news and gossip in the industry, they wanted to be continually learning and improving their skills.
I made a bucket list of possible services that I could give away or sell to my customers: Monthly parties in other cities, Health Insurance for Freelancers, cheap monthly Lexis-Nexis access, a Freelance Marketplace and much much more. I didn’t get to every single item that first year or even by the fifth. But years later, I looked at that list and I had come pretty close to creating every single item on it.
The very first thing I began to produce after the monthly parties was an email newsletter (once people were USING email, that is). The emails contained information that was extremely helpful and targeted to the community – mainly media job listings and media event listings, and announcements like “Apartment for rent” “part-time office needed.”
After all, these were some of the core functions of the parties. Along with the occasional work assignment and job offer, the parties generated multiple deep friendships, 5 marriages, 3 babies — one out of wedlock – and countless one-night-stands!
The next step for me was in 1996, when someone in the community suggested that I put up a web site so that the party could continue 24-7. The person who made the suggestion was an editor; her boyfriend was a programmer and he already had the code for a basic community website. His downtown hipster community was called TagMag. So, being a good sport, he offered me his code for free – as long as he could use all the banner ads in perpetuity. I said “Sure! …er, what’s a banner ad?”
No matter, in 1996, I had my first web site. In fact, I had one of the first Social Media Sites for Media People (talk about meta!). It wasn’t much to look at – just a few pages, but it was extremely useful to the community.
LESSON 2. BE AUDACIOUS IN YOUR VISION
So, fast forward a few years to 1999. Within 3 years of launching, I had one of the more popular media web sites out there; it was growing at 30% a year. And I was already cash flow positive because my customers had started paying $100 a pop to post jobs on the site.
Now, my story could have ended there. Party Girl makes good on the Internet, earns herself a nice, steady income from her apartment in her pajamas, with her cats jumping all over the keyboard. In fact, I think that story exists even now at JournalismJobs.com, which started a bit later, has a small staff and isn’t really known for much more than job listings. I’m not even sure if they have cats. (Was that catty of me? 🙂
But I had other ambitions. I didn’t want just a job board, I thought this community thing held pretty exciting possibilities. So, I came to a decision point. How do I take this thing and make it BIG, Go global, go Galactic — go anything but postal? Do I get funding or not? Do I solicit a partner to help me make decisions or go it alone? What is the very next step?
Luckily, my background expertise in business writing came to the rescue. I had edited stories like these before for Executive Female magazine and written features like this for Working Woman. “Entrepreneur launches empire on a shoestring – well-financed competitor comes in to eat her lunch.” “CEO takes on wrong business partner and business crumbles in a bickering mess.”
SO, I decided I needed a business plan, a more sophisticated web site, more parties to market everything — and that meant raising money to hire people to make the magic happen.
LESSON 3. WRITE a plan.
No matter how ill-equipped you are to do this, no matter how simple you think your business is, write a business plan. You can buy books guiding you through the process, there’s software to help. I hired someone who had professional experience doing this. (I paid him a very small fee and paid him the rest in stock options). Go through your network. Ask for help from small boutique bankers in your industry; B-school professors can recommend students who might do your plan as a class project.
A plan helps you clarify your ideas, your market, your marketing, your product and your prospects.
LESSON 4. GET FUNDING, whether from a bank, from friends and family or from professional money.
Never make the mistake that most founders — especially women — make, which is to starve their baby businesses. You’ll need breathing room; 6 – 12 months of capital in the bank.
If you are getting money from any type of investors, take as little as you need in the beginning from the smartest, richest people you know. Keep as big a chunk of your company as possible – there are exceptions to this rule, of course. If you are rushing a product to market that is mass-market, is easily copy-able and/or requires a heavy marketing budget to grab market share, then you may have to raise more upfront and give up a lot in equity. But you’re betting on the fact that you’ll have a smaller amount of equity in a much bigger pie.
And if you don’t know smart, rich people – find them through your network. I offered a finders fee of 5% of any capital raised, plus some stock options to get my $1 mm investment in 2000. I didn’t know any people with money, so I tapped into the old boy Harvard network through a guy who had dated the daughter of a guy who taught there.
LESSON 5. BLUFF WHEN NECESSARY
Very important for women to learn this. When we were entering the Internet Bubble of 1999, I remember going to an event called CyberSuds. The name of that event would have been foreshadowing in a bad Hollywood Flick about the Crash: Cybersuds? All the startup guys and the investors who would fund them were in the house. It was one giant exciting sausage fest and I desperately wanted to be one of those guys. They were predominantly young, white, male, privileged and funded — or on the cusp of being funded, or about to be re-funded.
I remember trying to converse with a few of them. So, what’s your product? “Blah, blah blah technology that will change the way people do blah, blah, blah activity.” Cool. How does it make money? “Oh, we’re not worried about that. We’re just going to capture market share and we’re going for our B-Round now. Our burn is like $60k a month.” I don’t know what happened to that guy, but I suspect he was toast when his investors pulled the plug — like so many VC’s at the time — later that year.
Still, there was a takeaway there. The guys were writing business plans to raise multiple rounds of money. Yet, they weren’t afraid to lose that money. They were fearless. I admired that.
So, when I wrote my plan and went for funding, I brought the same sense of bravado. The plan was a guess. But in investor meetings, I acted as if it were a done deal.
LESSON 6. THINK OF TECH AS A MERE TOOL.
I have always been one of those people who likes to read the manual that comes with an appliance I buy. But, I never graduated to reading the manuals for my PCs. Still, I did learn to think of tech as nothing more mystical than any tool (a hammer, a tweezers) to get the job done — build the house, remove the splinter, create the product, serve the customer. And women are fantastic at serving (aren’t we?):)
One of my first challenges after raising capital was switching to a bigger tech platform. That meant figuring out how to sort through the vast array of software tools available. Would I build out the site using SQL server or Cold Fusion? Would our HTML code have nested tables? Would I need a relational database and what does scalable mean anyway? There was no free blogging software back then (we’re talking 2000).
I couldn’t exactly go back to school and learn all these things — and search sites like Google barely existed (but I sure didn’t know about them). I used my journalistic training instead. I started calling random strangers I met on tech bulletin boards on the internet to find the answers. I didn’t believe the first person’s answer. I always asked a variety of skilled people before trusting in a direction.
I cannot emphasize this point enough. Don’t be cowed by tech. Consider tech a tool towards achieving a further aim. Ask for help from multiple expert sources. Don’t be afraid to seem stupid. Act like a journalist. Flatter the source. “Hi, I am next to an idiot when it comes to database design. You on the other hand are a genius. Perhaps you wouldn’t mind my taking you for coffee and showing me the difference between relational databases and other kinds….”
LESSON 7. KNOW YOUR STRENGTHS
Most successful small companies are NOT ones started by MBAs with years of experience as CEOs or entrepreneurs. They are ones started close to home. Meaning: something in an industry you understand deeply or for which you are a domain expert. It could be a hobby, even. Start with an area you know and worry about adding business skills later. It’s more important that you know the PRODUCT, SERVICE or CUSTOMER than that you be an Excel Monkey.
In my case, I was a journalist and I knew journalists. Only later did I figure out what products or services journalists wanted. I never went to business school, but I hired people who had those skills and listened to them.
Also, it’s important to know what kind of founder you are. Are you operational or outward-facing? I discovered the hard way that I am Outward Facing, not interested in operations and should never manage people. I’m impatient, demanding, unrealistic, too direct and aggressive for a female boss. If I were male, I’d be worshipped. Early on, my employees actually appointed a fellow employee to “do an intervention” and tell me that they were about to quit unless I left them alone.
Being a strong/opinionated/direct female, I learned I always needed a buffer manager between me and the staff.
However, when it came to dealing with the customer, advocating for the customer, doing partnerships, rainmaking, speaking and anything external, I was the Company’s “It girl.”
LESSON 8. HIRE HELP, NOT A PARTNER
Why do many people start businesses with partners? Fear, loneliness, small amounts of startup capital, supposed expertise, the desire not to make a decision by themselves.
Don’t team up with a partner for the wrong reasons. If the business is your idea, keep it that way. And keep the power in your hands. When you get a partner who has nothing to offer but keeping you company, you’ve basically given away a bunch of your equity for something you could have gotten cheaper through advisors or through a trusted employee.
In the short term, rely on the kindness of strangers. Ask people to be informal mentors and advisors. I had no money and I just asked many smart, talented people for their time and advice. They happily gave it to me – even lawyers and accountants. In some cases, I offered to pay folks “later, after I raised money.” In other cases, I offered small amounts of stock options in exchange for help. People like that [lawyers, accountants, etc.] are in the business of building relationships with up and comers. Make yourself appear to be one of the winners and everyone will want to be associated with you.
Later, when you have money, hire staffers or consultants to do the jobs you’re NOT good at.
LESSON 9. DELEGATE WELL
Delegating is hard. It’s hard to find someone you can trust, hard to train the person, hard to hand stuff over to her and then once you do that, you kind of want to say “Okay, that’s done. Now, I don’t have to bother with that any more.” Then you wonder why all your priorities aren’t being met.
In the beginning, when you’re too small to hire a COO, unfortunately, you do have to manage people. You can’t get away from that. If you’re lucky – as I was, you’ll find a couple of people early on who can operate the company and to whom everyone else reports – and then you only have those one or two to directly manage.
With any employees you manage, even those who are senior-most and trusted, you STILL need to keep them accountable in very strict and formal ways.
Schedule regular weekly meetings in which you are updated on the progress of every project. In those meetings, you will see the entire scope of the tasks being done, where each one is in its cycle and whether or not new priorities are pushing important projects to the back-burner. That way there are no surprises.
The last thing you want is to tell your best employees to do something and three months later, when you finally get around to checking in, you discover that nothing was done. “But you told us to do these other things first,” they retort. You are furious that the priorities were rearranged and projects got lost in shuffle. They are furious and hurt that you didn’t understand what was being given up when you sent them all those Urgent, Must-DO task memos.
LESSON 10. KEEP YOUR HANDS DIRTY
While I’m a big fan of hiring experts and letting them do their thing, I also feel that you need to know what their “thing” is, what goes into making their “thing” happen and why their “thing” works the way they say their “thing” works. I was terrible at finance and knew nothing of tech, but I made sure to sit down with the people in charge of those areas and get to know intimately what decisions they were making and why.
For example, you’d be surprised at how divergent your ideas can be from those of your technical people, based on simple misunderstandings. And Techs can be pretty convincing when they tell you “Oh, that can’t be done.”
My Advice. You need to learn what a database is and how it works; you need to know what a relational database is. You need to know how Search on your own site works and can work. You need to know what HTML looks like and HTML5, and Drupal or Ruby On Rails (or whatever they’re using).
I’m not saying program code, I am saying ask a LOT of questions like a child to find out how things work. And ask the programmer to show you things. Once I saw the difference between straight HTML and Nested Tables, *I* was hooked. Joking aside, it will help you ask the right questions later and get to the bottom of those “it can’t be done,” retorts.
To help you out, here are 7 KEY questions to ask any tech who replies “It can’t be done:”
1) Why exactly can’t it be done?
2) Is anyone else you know doing it that way?
3) Why can they do it and we can’t?
4) What could we do to enable it to be done?
5) What steps would we have to take?
6) Is it really impossible, or is it just impossible the way you’ve got things set up now?
7) How much would it really cost to do it the way I’d like it to get done? Can you please spec out: How many developers, how many hours over how many months?
On many occasions, my developers have told me “it can’t be done,” and after this line of questioning, I learned that it can be done. It was just inconvenient for them because they didn’t share my vision for the product.
That’s all folks, let’s open it up to questions.
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