Necessity vs. Innovation-Based Entrepreneurs

This article originally appeared in Xconomy.

What makes someone an entrepreneur? Most simply defined, an entrepreneur is a person who identifies a need and starts a business to fill that void. But others will argue that a “true” entrepreneur must come up with an innovative new product or service and then operates their business to sell and profit from that innovation.

Under the broader definition are those people who become entrepreneurs out of necessity – starting their own business after losing a job, to supplement their income, or to gain the flexibility to attend to other demands in their lives.

Take Joanne, for example. Joanne started her holistic health business about eight years ago. Although she doesn’t necessarily consider herself an entrepreneur, the necessity of a family member’s health situation created both a challenge and an opportunity that shifted her path of employment. As a graduate of Boston University with a degree in math, and Syracuse with an MBA, Joanne had been working as a technical engagement director managing large-scale database development projects.

However, she was also managing the special needs of a son at home with learning differences. She was hit with a layoff from her job about the same time that her son required more services. She was doing tons of research to help him in any way possible, including alternatives to mainstream treatment, and she started an unpaid e-mail service to friends and family sharing what she learned. The response was tremendous – several people told her that she had changed their lives and she should make a career out of it. She decided to take the plunge, pursued further education, and then started JBS Holistic Nutrition where she offers health coaching and healing alternatives. The nature of her business allows her to be flexible. She is currently working part-time, which enables her to manage the needs of her family and help take care of an ailing parent. She sees her business as an opportunity to help people change their lives for the better.

Joanne is someone I’d consider a necessity-based entrepreneur. Often, necessity is financially based, but pursuing a passion and work-life balance issues also play into necessity.

One of the first references to “necessity entrepreneurship” was in the Global Entrepreneurship Monitor (GEM) report in 2001. This third annual GEM assessment researched entrepreneurship in 29 countries. Respondents were asked to indicate whether they were starting and growing their business to take advantage of a unique market opportunity (opportunity entrepreneurship) or because it was the best option available (necessity entrepreneurship). At the time, the average opportunity entrepreneurship prevalence rate across the 29 GEM countries was about 6.5 percent, while the average for necessity entrepreneurship was 2.5 percent.

Interestingly, GEM’s most recent report for 2017-2018 looks at entrepreneurship through a few more complex lenses, but it states that most entrepreneurs around the world are opportunity-motivated. On average, three-quarters of global respondents stated that they had chosen to pursue an opportunity as a basis for their entrepreneurial motivations, with 83 percent of entrepreneurs in North America falling into this category. Women were more likely to start businesses out of necessity, compared to men, in all regions except in North America.

My guess is that necessity-based entrepreneurs may be somewhat under-represented in these numbers as they may not self-identify as entrepreneurs. Necessity-based entrepreneurs also may be less likely to respond to this type of survey.

Some of the early research on the topic discusses a push-pull analogy. “Push” (or necessity-based) entrepreneurs are those who may be faced with a job loss, dissatisfaction with their current positions, or lack of career opportunities. For these reasons – unrelated to their entrepreneurial characteristics – they are pushed to start a venture. “Pull” (or opportunity-based) entrepreneurs are those who initiate venture activity because of the attractiveness of the business idea and its personal implications. They may seek independence, increased earnings, and opportunities to carry out their own ideas.

A study out of Stanford on Opportunity versus Necessity Entrepreneurship explores the common and seemingly paradoxical finding that business creation increases in recessions. It looks at two distinct motivations, “opportunity” entrepreneurship and “necessity” entrepreneurship (with the simple definition of a necessity entrepreneur as initially unemployed before starting their business). The research found that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical – that is, recessions drive necessity-based entrepreneurs to start their own businesses. Opportunity entrepreneurship was also found to be associated with more growth-oriented businesses.

I believe there are many profiles of the necessity-based entrepreneur, and it’s a segment of entrepreneurship that deserves more attention. Not every entrepreneur is the genius superstar with a new technology. Some forms of entrepreneurship are a bit humbler.

An example of this are gig economy entrepreneurs. These “gigs” are often short-term contracts or freelance work as opposed to (or in addition to) permanent jobs – think Uber and TaskRabbit. Although this is an emerging form of entrepreneurship, is it a positive experience for the entrepreneur (and the economy)? Or, is it a necessary side hustle some people need to survive?

Women and minority entrepreneurs are often necessity-based entrepreneurs. The startup rate for businesses created by both women and minorities exceeds the overall rate for new startups. The Minority 2018 Small Business Trends survey by Guidant Financial surveyed 2,600 business owners and aspiring entrepreneurs, and found that 45 percent of small business in the country were owned by minority ethnic groups and 26 percent were owned by women in 2018. What is driving these business owners, and are we measuring their contributions effectively?

While economic gain is certainly one component of necessity-based entrepreneurship, a broader definition includes entrepreneurs who are motivated by their belief that the traditional labor options available are insufficient to meet their non-economic needs and goals as well.

At MIT, we foster entrepreneurship through programs like our delta v student venture accelerator where our students are out to change the world with their innovations. But, entrepreneurship has many forms and there is no one right model or best way to measure success. Necessity-based entrepreneurs are shaping their own success in a way that works and should be included in the broader study of entrepreneurs.

This article was published in Xconomy on November 26, 2018.

Advertisements

How Imposter Syndrome Affects Our Best and Brightest

psychology-1957264_1920I heard a statistic the other day that 70% of people admit to feeling like an impostor at some point in their lives.* I work with students at MIT – one of the most prestigious universities in the world – and although it attracts the best and the brightest, college students at institutions like this are even more prone to suffering from insecurity.

A former student and I were discussing her experience at MIT and she said she completed her degree in three years – not because she was smarter than the other students, but because she felt someone would find out she didn’t belong there. Wow. And it continued when she went to Harvard Business School and felt the same insecurities. Today, this woman is a successful entrepreneur, but taking risks has never come easy for her.

Imposter Syndrome is a real thing. Although it is not an official clinical diagnosis, Scientific American classifies it as “a pervasive feeling of self-doubt, insecurity, or fraudulence despite often overwhelming evidence to the contrary. It strikes smart, successful individuals. It often rears its head after an especially notable accomplishment, like admission to a prestigious university, public acclaim, winning an award, or earning a promotion.” Interestingly, minorities and women are hit the hardest. Facebook COO Sheryl Sandberg, Oscar-winning actress and Harvard alum Natalie Portman, and Starbucks CEO Howard Shultz all admit that they suffer from Imposter Syndrome and share their stories here.

Fake It Until You Make It

Those who suffer from Imposter Syndrome will probably shudder when they hear the words “fake it until you make it,” but sometimes this can be the best approach. For instance, there is a lot of research that says men will apply for a job when they typically meet only 60% of the qualifications, but women only apply if they meet 100%. This is the type of “fake it until you make it” approach that gives you a chance to level the playing field and prove yourself. The most prominent fake role, in my opinion, is parenting. You may have babysat for children and thought, “I can do this.” However, it is not until you have 100% responsibility for a child that you are aware that you are faking it. Yet we adapt, learn from our mistakes, and become better parents.

Deep Stealth Mode

My boss often talks about his first startup company being in a very “deep stealth mode” – meaning it failed. It failed, but is he a failure? Of course not. Today, Bill Aulet heads up the Martin Trust Center for MIT Entrepreneurship and he’s an accomplished professor, speaker, and author. He learned that each risk he took – and continues to take – makes him stronger. The book Antifragile by Nassim Nicholas Taleb discusses that although fragile things break under stress, there’s an entire class of other things that don’t simply resist stress, but actually grow, strengthen, or otherwise gain from unforeseen and otherwise unwelcome stimuli. There are some benefits from stress, disorder, volatility, and turmoil that may allow us to not only survive but flourish.

If you fail at a job what is the worst that can happen? You may get fired. Yet, the sun does come up the next morning. You figure out what happened, and hopefully, what you’ve learned. Then you can address the problem and try again. The key is the reflection and the learning but also taking the risk to try again. So why do most entrepreneurs fail a few times before they get it right? It may be that they are doing things that have never been done before. In some instances, they may not have the necessary skills. But the question is, can they learn or surround themselves with the right people to move forward?

Advice for Overcoming Imposter Syndrome

Going back to the story of my former MIT student; she looked to her mentors when she was faced with a decision to go out on her own and start a business. I could see that it was a positive step for her and knew she would do well. She struggled to make the decision, but we helped her through the process and assured her of her strengths. Ultimately, the decision was her own, and the leap was significant. She now has a thriving business and influences many people with the work she does every day. So what did we tell her?

  1. Be open to the possibilities.
  2. Find joy in what you do.
  3. Be open to change and learn.
  4. Learn from both failure and success, and let them make you stronger.
  5. Be a disciplined entrepreneur.
  6. Surround yourself with a board of advisors.
  7. Enjoy life!

The Scientific American article suggests two of the ways to overcome Imposter Syndrome are to choose a mentor (the way she chose to work with the Entrepreneurs in Residence at the Trust Center) or become a mentor. Becoming a mentor lets you gain perspective, share what you know, and nurture others.

I have grown through the ranks at large companies, completed entrepreneurial stints at two startups, and now I’m in education, guiding new entrepreneurs. Each move was, in my opinion, a risk with challenges, new people, and new technology. However, if you are lucky, you will have a long life with lots of options. I can tell you first hand it is much more meaningful to want to learn, from mistakes or circumstances, but it’s also important to know that even if I fail … I can start again.

*Statistic attributed to the International Journal of Behavioral Science

Where are the Hungry Dogs? A Look at Entrepreneurs in the Nordics.

When you think of an entrepreneur, you probably conjure a picture in your head: a tenacious achiever, a passionate risk-taker – essentially one of the “hungry dogs.” But culturally, this is not a universal characterization.

I was recently invited to Norway to teach an “Innovation Crash Course” workshop to postdocs and PhDs at the Technoport 2018 Deep Tech conference, technoportwhich focused on deep tech and what governments, universities, entrepreneurs, and corporations are doing to speed research from R&D labs to make a real impact on society. I was fortunate enough to spend time with entrepreneurs, potential entrepreneurs, and those supporting entrepreneurship in the Nordics, and the experience taught me quite a lot – including not to filter my view of entrepreneurship with a US-centric lens.

This article in Entrepreneur outlines “7 Traits of Successful Entrepreneurs,” which include tenacity, passion, tolerance of ambiguity, vision, self-belief, flexibility, and rule-breaking. But, it makes me think –are we looking only at entrepreneurship from an American perspective? This post shares my experiences in Norway and my thoughts on how the region’s culture and social policies influence its entrepreneurs.

The Entrepreneurial Scene in the Nordics

Although Americans are known for our entrepreneurial spirit and the “American dream,” Nordic countries are also embracing entrepreneurship. Interestingly, according to The World Bank Economy Rankings, Sweden is ranked #13, Norway #19, and Denmark #34 for ease of starting a business, as compared to the U.S. at #49. (New Zealand is in the #1 slot.)

Oslo, Norway is seen as one of the world’s best startup hubs even though it’s one of the most expensive cities in the world. Entrepreneurs can expect a refreshingly balanced approach to work/life and a great environment to base tech or communication startups. Norway’s startup scene is also starting to blossom in terms of investment, and these articles in Shifter and Medium show how other Nordic countries, specifically Finland and Sweden, are doing particularly well in terms of investments, with Denmark also catching up.

The Problem for Entrepreneurship in Norway

Although there is a welcoming environment, is the drive to be an entrepreneur similar to the U.S.?  An in-depth article in Inc. magazine reports, “The problem for entrepreneurship in Norway is it’s so lucrative to be an employee,” says Lars Kolvereid, Professor at the University of Nordland, who was the lead researcher for the Global Entrepreneurship Monitor in Norway.

In the U.S., about one-quarter of startups are founded by so-called necessity entrepreneurs – people who start companies because they feel they have no good alternative. In Norway, there is less necessity; the number is only 9 percent, third lowest in the world after Switzerland and Denmark, according to the Global Entrepreneurship Monitor.

The social welfare system is quite different there as well. The article explains there are no private schools in Norway; education is public and free, from nursery school through graduate school. In addition, the unemployment rate is low, and, if you are unemployed, there are generous benefits. Every Norwegian trondheim-2068802_1920worker also receives free health insurance in a system that produces longer life expectancy and lower infant mortality rates than in America. At age 67, workers get a government pension of up to 66 percent of their working income.

Zoltan J. Acs, a professor at George Mason University and former chief economist for the Small Business Administration’s Office of Advocacy, summed it up, “The three things we as Americans worry about – education, retirement, and medical expenses – are things that Norwegians don’t worry about.”

Essentially, the wealth and comfort prevalent in Norway and Denmark mean there is less of a “hungry dog phenomenon,” something that was even remarked upon by the people I met with at the Technoport conference. This makes it a challenge to recruit young people to work for startups since they are well compensated in the public sector, don’t have debt, and generally lack incentives to take the risk. In addition, while I was in Denmark I heard that many startups are bought by American companies before they have a chance to make an impact on the Danish economy, so the benefits are not seen by the founding country.

Of course, Norway’s generous social benefits are financed largely from higher taxes, another consideration for entrepreneurs. However, as the Inc. article explains, Norwegian entrepreneurs tend to see taxes as an exchange of cash for services, rather than a burden. All of these factors certainly set a different stage for Nordic entrepreneurs as they consider starting their own businesses.

A Need for Entrepreneurship and Innovation in the Public Sector

I met with MIT alumni in both countries and came away with a better understanding of a need for entrepreneurship in the public sector. There is a strong corporate culture of innovation programs that are challenging the current thinking, but these share some of the same challenges that U.S. corporations face. Examples include budget cycles that are often incompatible with the reaction time needed to respond to new market changes and conditions, attention that gets divided between current versus future business challenges, functional silos, and challenging organizational dynamics.

A Successful Transformation from an Oil-Rich Economy

The economic impact of the oil industry is another factor when considering entrepreneurship in Norway. The focus of the Technoport conference was on energy, education, and ecosystems. And, although Norway’s oil industry has always been a key economic contributor for the country, it is a finite resource with all constituents looking ahead to what industries can, will, or should do to replace (or supplement) oil in the future.

In an article in TechCrunch, Anita Krohn Traaseth, the CEO of Innovation Norway, says that it’s time for the country to look beyond oil. “Norway needs to develop and build several growth sectors to contribute to a more diversified and sustainable national economy.”

“The fundamentals in Norway to make a successful transformation are solid,” she explains. “We still have a low unemployment rate, we still have a huge capital reserve toentrepreneur-593358_1920 make necessary investments for the future, we have a strong growth of entrepreneurial focus and companies. This is all about how we prioritize, reposition investments, build competence, and have the guts to make important, and maybe radical, political decisions today to secure tomorrow.”

Conclusion

Just as entrepreneurship in the U.S. is complex and driven by many factors, so is the entrepreneurial environment in the Nordics. On the plus side for Nordic entrepreneurs, because higher education is free in Norway, students don’t graduate with the crippling debt that is an issue for so many young professionals in the U.S. This provides an opportunity to focus on jobs they love, versus jobs that can pay back the loans.

A Forbes article titled “Four Things Entrepreneurs Can Learn from Denmark’s Work Culture” cites teamwork, a flat, non-hierarchical structure, autonomy, and a compassionate management style as reasons for successful entrepreneurship – quite a different list than the seven traits listed by Entrepreneur at the start of this post.

At Technoport I was able to see that Norway is working to create a vibrant entrepreneurial ecosystem to provide solutions to some of the world’s most difficult problems. I believe the mix of people I met in Norway and Denmark – young, older, entrepreneurs, corporates, and investors – are all willing to learn from each other and are looking for their role in supporting the entrepreneurial ecosystem.

 

The Time is Now for Women to Step Up, Speak Out, and Take Control

On this year’s International Women’s Day, I’d like to reflect on how we can encourage women to speak up, be heard, and support each other. The #metoo movement has brought to light countless examples of abuse, mistreatment, and harassment, but if there is one positive glimmer out of all that is being shared, it’s a sense of solidarity and empowerment.

I believe that entrepreneurship can be a path to channeling that energy and creating positive outcomes. The time is now to step up and speak out. The time is now to take control of your own destiny. Stop saying “I’m sorry” and start saying “I’m ready to make a difference.”

I believe that sometimes making a difference is being your own boss. In my role as Director of MIT’s educational accelerator program, delta v, I work every day with both female and male student entrepreneurs. Some of these students have ideas that may change the world someday, but even more important is their sense of pride and accomplishment when they can make decisions that shape their own direction and have a positive impact on other people.

Maybe being an entrepreneur is not for everyone. But, if and when you are in a position to define your own path, you have turned the tables and now have control. You can help not only yourself but others.

Female Entrepreneurs make a Difference

This infographic from Entrepreneur on female entrepreneurship shows that women are founding companies at historic rates with more than 9 million women-owned businesses in the U.S. today. These businesses will provide over 5 million jobs this year. Interestingly, businesses with a woman on the executive team are also more likely to have significantly higher valuations (64% higher) at Series A. These statistics demonstrate that women are creating new models of leadership, and that is hopefully changing the balance of power.

How to Get Started

Now is the time to be an entrepreneur, yet the hardest thing about entrepreneurship is getting started. Newton’s first law states an object at rest stays at rest unless acted upon by an external force – and this is true for entrepreneurship as well. So, you need to give yourself a push. For inspiration, here are some stories of female entrepreneurs gaining ground at MIT.

Find the focus that is right for you. Entrepreneurship for small and medium enterprises (i.e. opening your own business in an established industry, such as a florist, hair salon, or consultant) is different from innovation-driven entrepreneurship (i.e. the next “big idea”, inventing something new) but they both let you be your own boss.

What are you curious about? What do you dream of doing? How would you get started? Now is the best time. There are many educational resources (online, classes, workshops etc.), and there are a lot of folks who are willing to be mentors. Plus, check out co-working spaces that are great for startups. In the Boston area, we have the CIC in CambridgeVenture CaféWeWork, etc. that also have speakers and educational resources in all areas of building a business.

Resources for Entrepreneurs

On any given day in Boston, there are events that budding entrepreneurs can attend – many are free, or some charge a small fee. Find the one that fits you. The City of Boston just held a series of events for women, Linda Henry runs HUBweek, there are Mass Challenge programs around the world. These all help expose those interested in entrepreneurship to various options. Here are a number of resources and organizations in the Boston and Cambridge area. Search online to find others in your area. Starting a Business (City of Boston)

The activism among several organizations has opened a lot of eyes, and hopefully recognition. Where women were once dismissed, that there are signs that voices should be heard – from women on boards to women funding enterprises. There is positive momentum, and you can make a difference. The time is now. Give yourself that push!

Originally published here in BostInno.

Entrepreneurship: Making the Middle Matter

minnesota-1086095_1920Call it the problem of the middle—the middle states and the middle class—two groups that have struggled with problems that, while they are inexorably linked, are different all the same.

Historically, most of the venture capital in America has been active on the coasts, leaving a vast portion of the country without seed money for innovative new startups. At the same time, the Midwest has suffered from a loss of manufacturing jobs and, as a result, has in some ways failed to flourish in the same ways as other parts of the country. And, of course, there is no shortage of news articles outlining the many struggles facing the middle class, in general, in America.

“We live in a fractured society,” argues MIT economist Peter Temin in an MIT News article on America’s two-track economy. “The middle class is vanishing.”

According to Temin, America now features two sectors: an FTE sector, where people who work in finance, technology, and electronics tend to thrive, and a low-wage sector, where workers often struggle. The middle class, traditionally an area of national strength, is starting to disappear. Moreover, the FTE sector overwhelmingly focused and fixated on both coasts, has for a long time neglected investment opportunities in the Midwest.

Venture capital—specifically venture capital aimed at the oft-ignored middle states—could be part of the solution. The central part of our country is often ignored as an ideas hub. Most accelerators, venture capitalists, and startup programs are focused on a few key cities on the east and west coasts. The Kauffman Foundation, known for its emphasis on education and entrepreneurship, recently published an article focusing on both the middle class and the middle states, asking: “Is the Middle the New Edge?”

It states: “The middle ground is too often dismissed as unremarkable when it is truly necessary. The middle should be appreciated as an admirable place to be – where people work together to solve big problems and move our nation forward.”

Interestingly, research from the Kauffman Foundation shows that while startup activity is half of what it was a generation ago, entrepreneurs are making a comeback – and the mid-country states are particularly active. Of the 10 metro areas with the highest growth in entrepreneurial activity last year, six are in the middle of the country. This short video gives a great overview of how the middle might be able to give our nation a crucial advantage.

One way to energize innovation and entrepreneurship in Middle America is with infusions of capital and training. Steve Case, the billionaire co-founder of AOL, has started a seed fund called Revolution that plans to raise up to $100 million to fund promising startups in the Midwest. J.D. Vance, author of Hillbilly Elegy, has teamed with Case to find the right companies to champion. They are also starting a “Rise of the Rest” tour to educate entrepreneurs and fund pitch contests in emerging startup communities in the middle of our country.

How can innovation and technology help in the middle?

As new technology is disproportionately displacing middle-class jobs, how can innovation help narrow the income inequality gap?

Boston Globe article titled “MIT Awards Focus on Tech That Helps Low, Middle-income Workers” focuses on MIT’s first Inclusive Innovation Competition. Erik Brynjolfsson, who helped launch the competition, points out, “Technology is creating enormous wealth and curing diseases. But a lot of people aren’t sharing in that bounty. It’s been easier to think, ‘how do I take an existing task and automate it?’ We are trying to change the conversation.”

The competition awarded prizes of $125,000 to four companies that target the “sweet spot” between technology and people to drive more innovation to underserved communities. Twenty other finalists received $25,000 each. One of the goals of the competition is to start getting more nonprofits and private investors thinking about how to ensure the innovation economy works for all.

It is tempting to get wrapped up in the excitement around the next unicorn company with a $1 billion-plus valuation, but we also need to take a step back to see not only the shooting stars, but also the entire night’s sky. Those in the middle can offer a lot – backed by hope, pride, and rigor. As educators and supporters of entrepreneurship, let’s make sure we support their opportunities.

This article was originally published on Xconomy.

MIT delta v 2017: Ready to Change the World!

demo day pic 2017Are you ready to be inspired? MIT’s student venture accelerator, delta v, revealed itself to the world at our 2017 Demo Day on September 9. It was a fantastic culmination to this year’s program and our students are ready change the world with their startup companies.

I want to thank the students, our speaker Shireen Yates from Nima, the staff at the Martin Trust Center, and our live and online audiences at Demo Day. I invite you to watch the video and view the entire program to see our entrepreneurs pitch their startups.

This year, delta v hosted the largest cohort to date with 21 teams.  In addition to bringing a wide range of skill sets to the program, our 2017 cohort was the most diverse in gender and ethnic background, and had a worldwide perspective with representation from many different countries. This had a tremendous benefit in terms of networking and the teams helping each other solve challenges, supporting the philosophy that diversity fuels innovation. The teams took their skills in science, technology, design, management, and entrepreneurship to tackle everything from fresh water scarcity, climate change, and different ways of producing energy to the opioid crisis, soaring healthcare costs and gender inequality in healthcare to global financial transparency – all big problems in need of innovative solutions.

At delta v, our goal isn’t to tell the students how to do things, our goal is to lead them to their own conclusions. We are looking for students with the “heart of an entrepreneur” who are looking to solve the world’s really hard problems. We give them the opportunity to fail and get feedback in a safe environment. Plus, they learn from each other. Our value add is to help guide students who are ready to positively impact the world.

demo day 2Here’s a brief overview of each startup that presented at Demo Day (in alphabetical order). Remember them. It’s likely you’ll be able to point back and say, “I saw them when they were just a startup at MIT…”

 

 

Alba

Focused on empowering women to achieve their goals, Alba is a care giving marketplace for parents in Latin America.

Biobot Analytics

Biobot’s mission is to equip cities with data to build healthier and safer communities. Biobot Analytics’ first application is generating a new type of data on the opioid epidemic. (See recent coverage of the team in Boston Magazine.)

Blockparty

Blockparty tackles food insecurity through fun, engaging cooking classes where young professionals can learn a new recipe while also providing meals to our neighbors in need.

Bloomer Health Tech

Bloomer Health Tech is transforming heart health and quality of life for women suffering from, or at risk of, heart disease. Bloomer delivers effortless and comfortable medical-grade sensors embedded in a woman’s bra to monitor multiple biomarkers using patent-pending advanced fabrics and algorithms.

Divaqua

Divaqua is committed to making water scarcity yesterday’s problem. They are developing and commercializing higher performing, safer, and more cost-effective technology to treat wastewater.

InfiniteCooling

Power plants, the US’ largest water consumer, use 139 billion gallons of fresh water every day, which amounts to 50% of total US freshwater withdrawals. Infinite Cooling captures water in evaporative cooling tanks and reintroduces it into a powerplant’s cooling cycle.

Klarity

Klarity’s vision is to provide widespread access to concise and trustworthy legal advice through intelligent technology using machine learning to reduce the time spent on contract review.

Mayflower Venues

Mayflower Venues enables customers to create one-of-a-kind weddings and events while helping preserve unique open spaces across New England.

Mesodyne

Mesodyne is bringing portable power to those who need it most. Its breakthrough technology enables ultra-portable, reliable, and affordable energy generation for the military and beyond.

Octant

Octant’s data curation platform uses deep learning to accelerate autonomous vehicle (AV) development. Equipped with Octant’s solution, innovators can spend less time collecting and managing data, and more time improving the future of mobility.

Pine Health

Pine Health helps patients follow through on doctor’s orders by using patient data to trigger conversations with an AI-augmented health coach.

ReviveMed

ReviveMed is a precision medicine platform that aims to improve people’s health by unlocking the value of metabolomics data, allowing the right therapeutics to be delivered to the right patients.

Roots Studio

Roots Studio is a for-profit social enterprise that curates, digitizes, and markets culturally iconic artwork from indigenous and isolated artists to a global marketplace.

Sigma Ratings

Sigma Ratings is the world’s first non-credit risk rating agency and helps companies more effectively and efficiently navigate increasing regulatory challenges.

Sophia

Sophia connects patients with the right therapists for them using a data-driven matching process, creating stronger therapeutic relationships.

TradeTrack

TradeTrack aims to improve personalized customer services in the fashion industry. Their solution increases brand loyalty and helps to improve customer retention.

W8X

W8X helps athletes to become their best and strongest selves with strength training equipment that adapts to their specific needs. Inspired by robotics, W8X has developed a weight lifting system that creates resistance electrically.
Waypoint

Waypoint uses augmented reality (AR) to help frontline workers rapidly capture, access, and scale expert knowledge.

The delta v teams also present to alumni and investors in New York City and San Francisco – quite the exciting month!

See more coverage of Demo Day in the MIT News and MIT Sloan Management newsroom.

demo day 1

How Educational Accelerators are Aiming to Neutralize Gender Bias for Entrepreneurs

Overcoming-Gender-BiasGender bias is sneaky. It’s often subtle, yet pervasive – and the effects are far reaching.

We’ve heard a lot this summer about outright sexual harassment and discrimination against women in the tech industry. This is certainly disgraceful and I applaud the actions taken to remove the offenders from their positions. Yet, beyond these blatant examples, there is an implicit gender bias that has a cumulative effect in everyday decisions that stacks the deck against women and minorities.

This blog post will look at how we can help budding entrepreneurs to think differently – and how Educational Accelerator programs, like MIT’s delta v, are making changes to identify and root out these implicit biases.

Gender Bias in the Tech Industry

First, let’s look at some examples of gender bias in established tech industry companies. Susan Wojcicki, CEO of YouTube, wrote an exclusive feature for Vanity Fair on “How to Break up the Silicon Valley Boys’ Club.” She says she was “frustrated that an industry so quick to embrace change and the future can’t break free of its regrettable past.”

Wojcicki brings up sometimes subtle forms of bias that even well-intentioned male colleagues or managers may overlook. These include:

  • being frequently interrupted or talked over;
  • having decision-makers primarily addressing your male colleagues, even if they’re junior to you;
  • working harder to receive the same recognition as your male peers;
  • having your ideas ignored unless they’re rephrased by your male colleagues;
  • worrying so much about being either “too nice” or “sharp elbowed” that it hurts your ability to be effective;
  • frequently being asked how you manage your work-life balance; and
  • not having peers who have been through similar situations to support you during tough times.

Wojcicki states that by employing more women at all levels of a company, it creates a virtuous cycle that has proven to address both explicit and implicit gender discrimination.

So, how can we work with startups to take these biases out of the picture from the very start of a company’s formation?

Experience of Women Entrepreneurs at MIT

Steph Speirs

Steph Speirs, co-founder of Solstice presents at MIT delta v Demo Day, 2016

At MIT, we embrace the philosophy that diversity fuels innovation. By bringing together people with different backgrounds and experiences – people who don’t necessarily think the same way or agree with you – you will spark innovation from these diverse perspectives, even though it may be more difficult working together at first.

We also believe that hiring more women is part of the solution. We’re proud that 45% of our 2017 delta v cohort are women, and 75% of our teams have at least one female co-founder. I reached out to several of these female entrepreneurs and asked one fundamental question:

What is your perspective on what is being done at MIT and elsewhere to help women entrepreneurs?

Overall, I heard that:

  • Women are looking for role models and opportunities;
  • It is less about the classes at MIT and more about experiencing – programs that allow students to challenge themselves; or the attraction of going out of their comfort zone was appealing to them;
  • Many women have spent time with a non-profit, being motivated by a strong connection to the mission but it was often limiting as well;
  • There was a strong feeling of wanting to do things or make things happen as a reason to become an entrepreneur;
  • Several women had family members who were entrepreneurs, giving them a built-in role model;
  • In general, role models were significant – and seeing a female role model or working with a team with a woman founder was a clear reason for their interest in entrepreneurship.

Three of the entrepreneurs in particular summed up the feelings that many have – a hesitancy and second-guessing that sometimes held them back. Yet, the power of role models and mentorship helped propel them forward.

“Even when I started GETRID I didn’t really think I could be an entrepreneur, and kept telling everyone for a while that this is just a school project. Only when we had external validation (customers) and official external support (FUSE) is when I started believing in our ability.”

Get Rid

“One of the most meaningful moments was in the FUSE accelerator when [Entrepreneur-in-Residence] Nick asked the cohort on the first day ‘Who made money today?’ When I was the only one who raised my hand, and everybody clapped, it helped me realized that we accomplished something and it might indicate that we have the ability to succeed.”

 

-Bar Pereg, Founder of GETRID

Bloomers“As an engineer, I started asking questions about how things work. I wondered ‘Who is going to fix these big problems in the world?’ Then, it dawned on me … I can help fix these problems.”

-Alicia Chong Rodriguez, Founder of Bloomer HealthTech (P.S. To learn more about this female engineer founder and CEO from Costa Rica, read here.)

“Having other women on my team was one of the defining highlights of my first experience in entrepreneurship. These women were visionary, incisive, and caring. They made the team more thoughtful and our work more rigorous. They showed me what I could accomplish with team members that trust one another, are secure in their own contributions, yet are eager to get to the next level.”

-Joanne WongOctant

Here at the Martin Trust Center for MIT Entrepreneurship, we can see some of these gender differences in action. As we practice for our big Demo Day company presentations, some of the entrepreneurs don’t want to “sell” their companies too strongly, because not everything is proven yet.  We see this much more frequently with the female entrepreneurs than the male entrepreneurs. We let them know that investors want you to explain your vision and the milestones you’ll achieve to get there – and you need to be confident in your presentation and your abilities. This type of mentorship and hands-on experience is one of the ways we believe we can help female entrepreneurs effectively express their ideas and be considered equally alongside their male peers.

Here’s What Other Educational Institutions are Doing?

I also reached out to my personal and professional network and asked colleagues at other universities how they are tackling this issue. I believe their input is valuable and we can learn a lot from each other.

Wharton

“The business case for diversity has already been made. VCs can play an important role. This article from Knowledge@Wharton captures different approaches to Gender Lens Investing. This includes seed funding in targeted sectors (e.g. improving women’s health care or financial inclusion), helping startups sharpen how they think about their market, influencing startups to include women on the board or on the leadership team, or looking closer at policies and practices within the company.”

-Dr. Candice Reimers, SPHR

Stanford

At Stanford, Fern Mandelbaum will run three different entrepreneurship courses focused on diversity this coming year — one focused on Entrepreneurship from Diverse Perspectives, one focused on Building Diverse and Inclusive Organizations, and one about Entrepreneurship and Venture Capital from the Perspective of Women. They are popular courses (she’s increased from two last year) that address these topics, bringing in a wide range of diverse role models with entrepreneurial and/or investing experience

-Deb Whitman, Director, Center for Entrepreneurial Studies, Stanford Graduate School of Business

Our hope is that by examining, and hopefully eliminating, these biases at the beginning – when a company is first formed – it will lead to more equality, parity, and diverse viewpoints as the company grows. What better place to start than at the university level?

Come see how we’ve tackled this issue head on at the MIT delta v Demo Day on September 9 – Join us at Kresge Auditorium, and we’ll also live-stream the presentations.

Originally published on the MIT Sloan Experts blog, here.