If you never step out of your comfort zone, who knows what could pass you by? So do your homework, take the risk and make your startup happen.
By Amna Mirza (Finance Professional)
A couple of weeks ago, I saw Alexa Von Tobel, CEO of LearnVest, speak at a Startup Grind event in New York. LearnVest provides financial planning advice to individuals at a fraction of the cost of a traditional financial planner. LearnVest was initially aimed at women, but has since expanded to include men. It recently disclosed a $28 million investment led by Northwestern Mutual, with help from Accel Partners.
What struck me most about the presentation was not LearnVest’s success, but Alexa’s story of how she founded the company. She is roughly my age, and dropped out of Harvard Business School in December 2008 to work on her business. This was about the time that the market had hit bottom after the collapse of Lehman Brothers, and the Great Recession had begun. She said that she had about nine months of savings to help make her idea a reality and raised $1 million in funding within six months of starting.
Confidence is Crucial
I too, am a young woman. I too have worked in Finance, and socked money away for business school. But I would never, ever drop out to start a business in the middle of a recession.
Sure, I have some mitigating factors. I am a recent immigrant to the US. I don’t have a trust fund. However, I have American women friends from college who are more economically secure. They have gone to medical school, law school, PhD school, and even culinary school. Not a single one of them, however, has displayed the kind of temerity that Alexa has, or ever expressed the desire to start a business that could scale.
Then, I attended another panel with mostly male founders who were all recent immigrants. Two of them had attended HBS and Wharton, and launched small start-ups that looked promising. Here is the kicker: they were both Indian, and had been in the US for less than seven years. I have been stateside for over a decade, and wouldn’t contemplate launching anything before I had a) gone to graduate school, b) saved for an apartment c) etc. etc. They just seemed so darn confident!
Networks and Funding
After Alexa’s talk, I thought about female entrepreneurs who had successfully launched businesses, say in the last decade. The following cases came to mind (please note that this list isn’t exhaustive; I am only mentioning businesses that have raised at least $20 million in funding):
- BirchBox, an ecommerce site for beauty products: launched by HBS grads Haley Burna and Katia Beauchamp, has raised $70 million to date, generating approx. $125 million in revenue per year.
- LearnVest, personal finance: founded by HBS drop-out Alexa Von Tobel, has raised over $30 million. Revenue estimates are very speculative, but the site seems to be generating at least $15 million annually by most estimates.
- Theranos, a biotech startup which promises to revolutionize blood testing by conducting multiple tests quickly on a single drop of blood; launched in 2003 by Stanford sophomore Elizabeth Holmes, with the help of a chemical engineering professor. The company has raised over $70 million in various funding rounds. Revenue information is very limited, but the company has a huge campus and facilities in Palo Alto.
- 23andme, a bio-tech startup which provides ancestry-related genetic reports if you send them a cheek swab using a $99 kit; founded by Anne Wokcicki, wife of Google’s Sergey Brin; has raised over $100 million in funding, revenue unknown.
So what do these female founders have in common?
Firstly, while they operate in different industries, and run drastically different businesses, they are all well-resourced when it comes to professional networks and access to VC funding. Two of them came directly out of HBS, one out of Stanford, and one had convenient access to Sergey Brin’s rolodex.
The most impressive of these, perhaps, is Theranos. Building Theranos has taken almost ten years, and requires significant physical resources such as labs and scientific facilities, in addition to the engineering talent typically needed for a web-based business such as BirchBox or LearnVest.
The Capability and Desire to Succeed
Secondly, these women are intelligent, well-educated and driven. Theranos’ Elizabeth Holmes came up with an idea that had failed to strike her chemical engineering professor in his own decades-long research career, as a sophomore.
Alexa attended Harvard College and spent time doing research in the university’s Happiness Lab (yes, such a thing exists). Anne Wojcicki attended Yale University, and was an Equity Research analyst on Wall Street before she met Sergey. She obviously had the option of being a well-appointed society wife, but she founded her own biotech company instead.
So, we can make a case that if you give driven, intelligent woment access to educational resources and VC networks, they can build successful businesses that scale just as quickly as those built by men. The challenge is to move the entrepreneurial mindset beyond the halls of Harvard and Stanford, and encourage the male-dominated VC community to back female founders.
Additionally, we need to create a sociological environment where young girls are encouraged to take risks. I grew up in Pakistan, where my parents would not let me go anywhere unchaperoned as a child, because the law and order situation was always dicey, and riots would break out and escalate without warning.
I believe that girls should be encouraged to take on summer jobs and internships early, and get involved in sports, so they can start taking small risks, and develop context for building professional relationships. Only after moving to the US for college did I learn to step out of my comfort zone, and take some personal and professional risks. I am still working on it.
This post originally appeared on Medium.