Three of Fortune's most powerful women get real about the highs and lows of entrepreneurship. By Samantha Parent Walravens (Journalist & Author, Torn & Geek Girl Rising)
Starting a company isn't easy, but according to three of Fortune's most extraordinary female founders of 2015, it's is one of the most rewarding and fun things they've ever done.
Gathered Table co-founder and CEO Mary Egan, Revel Systems co-founder and CEO Lisa Falzone and StyleSeat co-founder and CEO Melody McCloskey shared their startup stories and advice with a packed audience at Fortune's Most Powerful Women Next Gen Summit 2015 in San Francisco earlier this month. The conference gathered some of Silicon Valley's top female business leaders and innovators to discuss topics ranging from unconscious bias and the gender pay gap, to the new consumer-driven economy and women on boards.
The good, the bad and the ugly of entrepreneurship was a theme that bubbled up throughout the two-day summit.
"It's not an easy life," admitted Falzone, "but it's the most rewarding thing you'll ever do." Her company, Revel Systems, makes iPad-based point of sale systems for retailers and restaurants.
StyleSeat's McCloskey agreed, calling the first year of her startup "insane" but at the same time, "rewarding and so much fun." Her startup StyleSeat is an online marketplace for beauty and wellness services.
"We bootstrapped for the first year and a half," McCloskey explained. "My co-founder Dan and I didn't have an office. We worked in cafes. The cafes would close and we would have to go to bars and find a table for our laptop and buy one drink between the two of us. We would be there until 1 a.m. every single night. It was insane. I could tell you so many horror stories, but it's so much fun every single day."
Realize the Impact You're Making
What keeps these women going? Knowing the impact they're having on their customers.
"You're creating something that you really deeply believe in," explained McCloskey. "You meet with customers and you show them the app that you built and it actually changes their lives. For us, there's a beauty component in our business, but we're also a platform for small business owners who are mostly women."
McCloskey talked about getting on the phone with a customer who cried because StyleSeat was helping her grow her business and, as a result, changing her life. "When I start beating myself up, I'm like, okay, this is why I'm doing it," she said.
Egan, whose company Gathered Table offers online meal planning, said that the reward for her is not just financial: "We get emails every day from customers saying, 'You changed my life. You saved my marriage.'"
She recently received an email from a woman who told her that her oldest kid was in college and was mad because the family now had great dinners.
"You put a lot of sweat into it, and the reward is not always about a financial return," said Egan. "It's about feeling that, where there was nothing, now there is something and that something has created a lot of benefit for a lot of people."
Embrace the Changing VC Landscape
While research shows that women founders get less than five percent of venture capital funding, Egan feels it's a great time for women to raise money.
"There's a perception (among investors) that there's a lot of women consumers and women are going to understand women better," she explained. "That's on everyone's side here. I also think there are more VCs who might take a meeting because you're a woman. In the meeting, it's all on merit, but being a woman helps you get in the door." Egan has raised $1.8 million from the likes of Starbucks CEO Howard Schultz and Seattle super angel Geoff Entress.
When Falzone started her business, the "woman issue" wasn't even on her radar. "I literally didn't really realize this woman challenge," she said. "I didn't even know that most VCs weren't women. I didn't look at myself as a woman, and I didn't really pay attention to the issue."
She did recall one meeting where she felt the impact of unconscious bias — an awareness that she was being treated differently because she was a woman.
"We were presenting to a whole partnership group at a VC firm, and I was going over this slide. The VCs were nodding along. Then my co-founder, who's a man, went through the same slide and the VCs were like, 'Oh my God, that's a genius idea.' I was like, 'I just said that.' People have their biases."
Learn to Tell a Compelling Story
Regardless of gender, once you're in the door with potential investors, all three women agreed that telling a compelling story is key to getting funded.
"At first I thought, if I can throw awesome metrics on the board, we'll get funded," said McCloskey. "But that isn't how it works. Metrics don't really have anything to do with your ability to fundraise. It's about telling the story," she explained. "It's about the relationship. It's about your ability to pitch someone the future."
It took McCloskey nearly two years to get good at telling her story and convincing investors why they should care. The shift came when she started to really own the narrative. "I would pitch myself in the middle of the night. I would just do it over and over and over. Then, it flows out of you like it's natural."
Falzone agreed that for venture capital, fundraising is about how well you can tell a story and "how buzzy you are." With private equity, it's a different story. Revel's latest round was a $100 million Series C funding led a private equity firm. "With private equity firms, that come in and run the company, they are more interested in the results. They want to see that you're making money," she said.
Find Amazing Advisors
All three founders agreed that having great advisors and mentors has been critical to their success. Advisors can make the right introductions, offer domain experience and fill in gaps where expertise is lacking.
McCloskey counts Uber founder and CEO Travis Kalanick as an early investor and mentor. He helped her run the fundraising process and introduced her to other VCs who ended up backing her company. StyleSeat recently raised $25 million.
"Your needs as a company change over the course of the business," McCloskey explained. "In the beginning, it was fundraising and then it was finding the right metrics. Having someone who's an expert in your biggest critical need as a company can just help you through it five times faster and ten times better."
Egan counts former boss and Starbucks CEO Howard Shultz as a mentor. You want someone who is going to be honest with you, she explained. "I had Howard Schultz tell me, 'Don't let anybody tell you Starbucks was easy. In the early days, our roaster caught on fire every day.' Everybody has their moments where they feel, this is never going to work out."
While not every founder is going to land a CEO of a billion dollar company as their mentor, having an advisor — or better yet, a group of advisors — who can be honest, make connections and offer industry expertise will help your business grow and succeed.
Learn to Code
While the stereotype of the tech startup founder is a geek locked in a dark room typing away on a keyboard, the truth is far from that. Like these three women, many tech founders today don't have a technical background.
Egan regrets not having learned to code early on, but she credits the success of her company to the positive relationship and communication style she has with her co-founder and CTO. For the first six months of their business, they were together day and night, "like a married couple," she said.
"If anybody is considering being an entrepreneur in software and you're not a coder, that relationship with your head of technology, I can't underscore enough how important that is and how important that communication is," she insisted.
Egan is not letting her kids make the same mistake. "My kids are not interested in coding. They're 16, 13 and 12, and I'm requiring them to learn it. Coding is just going to be like learning to drive. It's just going to be a skill that you need to have."
About the guest blogger: Samantha Parent Walravens is the author/editor of the New York Times-accclaimed book, TORN: True Stories of Kids, Career & the Conflict of Modern Motherhood, and is writing her next book, GEEK GIRL RISING: Unleashing the Power of Women in Tech. Follow her on Twitter at @geekgirlrising.