Forty-two percent of small business owners are women. Yet, when small businesses grow and choose to go public, the lion’s share of venture capital goes to male-owned companies. Of the 2,000 IPOs every year, only 18% are led by women and only 3% of venture capital goes to women.
That’s a big disparity, but it is representative of the unbalanced gender dynamics at work in corporate America. I sat down with Julia Boorstin, CNBC’s Senior Media & Tech Correspondent and author of When Women Lead: What They Achieve, Why They Succeed, and How We Can Learn From Them to discuss the wider implications of bias in business and how data may be the key to defeating it.
Having spent years in corporate America, Boorstin brings a wealth of experience to her recent book about the role of women in business. After relating some experiences from her own professional life, she shared that it is often unconscious bias that rules the day in business. It is pattern matching—our instinctual desire to fit new people we meet into familiar patterns—that often contributes to unbalanced gender dynamics.
When conducting the 120 interviews that served as the foundation for her book, she heard several accounts of bias at work. For example, some women related being asked in job interviews or investor meetings how they would be able to manage the work required while still being a good parent to their children-–a question that is rarely asked of fathers. Others related that they had an easier time fundraising while pregnant during the pandemic because they could mask their pregnancy and avoid the inevitable questions about their ability to handle a business and a baby.
Pulling together enough research to require multiple pages of endnotes for her book, Boorstin uncovered data that provides a strong argument against the stereotypes and biases endemic in corporate life.
For example, data shows that, when a woman is named the CEO of a company in a largely male-dominated industry, company stock prices typically fall in the short term, which may reveal a lack of confidence in the new leadership. However, looking at those same companies a bit further down the road, the stock typically outperforms that of companies with new male CEOs by 20% within two years.
Boorstin also found that in seed funding Rounds A and B, men are more likely to win the trust of investors, whereas by Round C funding, that bias disappears. The reason? Males often approach funding with what Boorstin calls “bluster,” taking a forward-looking approach to where their company is likely to be in the future. Women, on the other hand, tend to talk about their company’s current status, which may appear to investors as projecting less confidence in the future than their male counterparts. In the later stages of seed funding, this issue is less important, as companies in these stages of funding have built a history of achieving milestones successfully.
Boorstin suggested a two-pronged approach for eliminating bias in the vetting process. First, when considering a startup’s leadership, look at its proximity to the problem it’s trying to solve. Does leadership truly understand the problem, and does its solution solve the problem?
Second, look at distance traveled. For example, how much progress has been made from a company’s inception to its current state? Looking at these two factors helps investors see a company’s potential sans unconscious bias.
Reviewing the data regarding the significant impact women make in business and the challenges they face, Boorstin identified some key takeaways for business leaders of any gender.
There is still plenty of room for improvement on the gender dynamics front in business, but Boorstin emphasized that she also found abundant reasons for optimism. From a human perspective, Boorstin was inspired by her interviewees, a group of phenomenal CEOs that are re-imagining the world and working with purpose-driven companies to make a real difference.
From the perspective of the data, Boorstin also found real reason for optimism. The data unilaterally indicated that diversity is better for business in two key ways. First, introducing diversity inherently means introducing new ideas, fresh perspectives, and a richer field of experience.
Perhaps just as importantly, the data indicated that introducing diversity into a team makes the original team members level up so that the entire team becomes smarter, more agile, and more innovative.
There is much to absorb from Boorstin’s insights.
Willy Walker: Good afternoon and welcome to another Walker Webcast. It is a real pleasure to have my friend Julia Boorstin joining me today to talk about her new book about women in leadership. In When Women Lead, how they lead and what makes their leadership so unique in guiding corporations around the globe. A little bit of background before we dive in Julia, or I guess maybe we can just dive right into when you got out of Princeton and went to work for Fortune magazine – you start your book talking about the fact that there had been a sexual harassment claim recently made against an executive inside of Fortune and another female colleague said to you, “This is a really good time to be here because you're good, you don't have to worry about sort of inappropriate behavior at this point.”
Julia Boorstin: Well, interestingly, it was not at Fortune magazine, but it was at Time Inc. It was at the parent company, and I heard about this third hand.
Willy Walker: And I guess it gave you a little bit of a wakeup call of welcome to corporate America, I guess?
Julia Boorstin: Yes. So, this colleague says to me, “Oh, yeah, good news. There had just been this big settlement, this big claim, sexual harassment situation. And so therefore, great news, everyone will be on their best behavior.” And I remember thinking that was such a weird situation and a weird thing to sort of celebrate as good news and that's why people would be on their best behavior. So, it sort of struck me as off but was an interesting part of a wakeup call of what the working world was going to be like and the fact that there were still these gender dynamics that were incredibly unbalanced. At Fortune magazine, where there are plenty of female writers, the most senior ranks were all dominated by men.
Willy Walker: And you had a colleague of yours who'd actually gone to Princeton with you, sort of studied the same course as you'd studied at Princeton, and here you are both working inside of Time Inc. Yet because of his backhand, seemingly of being a good tennis player and going and playing tennis with a couple of the higher ups, he seemed to have the inside track. As it relates to sort of the inequities that exist in sort of corporate America, how important do you think that that sort of you look like me, you sound like me, you went to the same school as I did. And therefore, you are going to be the one that I'm going to invest my time, energy and efforts in as far as a mentor.
Julia Boorstin: Just to tell a little bit about that story, I started Fortune magazine the same time as an English major from Fortune, who was a guy I had majored in history we had very similar backgrounds and we were very close friends. He left the journalism business, but we're still very close friends. We would catch up and talk office gossip. And he went and played tennis with our bosses. As a result, there was one day he came in and he told me that he had gotten this crazy assignment to go to Mongolia to do a story about the Mongolian gold rush, which is a crazy trip and a big swing for Fortune to take to invest in those kinds of resources, do a gorgeously reported, you know, beautiful photographs of the gold rush in Mongolia. And I was so jealous, and I knew that he had the opportunity to have casual conversations about his crazy story idea because he was having drinks with our bosses after playing tennis. He was also an incredibly talented writer. I mean, don’t get me wrong, but he had a different dynamic with our bosses because of his gender. First of all, I don’t play tennis. I’m terrible at tennis. But I wouldn’t have felt comfortable being in that kind of situation, having drinks at 9 p.m. at night with our bosses because of my gender. And so, I think that there was nothing malicious about that. He was incredibly talented. There was nothing malicious about the conversation that led to the assignment, but the social constructs of the situation enabled him to have different kinds of opportunities than I did. It all turned out fine for me in the long run, but I was distinctly aware that I would not have had that same conversation over Bourbon at 9 p.m. at night that he had had.
So, it's interesting to see how these things play out, but what I found in so much research about what actually was going on there and what continues to happen in the workplace is that there is this idea of pattern matching and there is nothing malicious about it. But people instinctively want to fit new people, new ideas into patterns of things that already exist or patterns of things that they're familiar with.
So, you know, we talk a lot about unconscious bias, but I think that term is so overused that we often lose sight of what it actually means. But basically, at the heart of so many things in the way we live our lives, in the way the decisions we make at work is this idea of pattern matching. What is a pattern of something that has been successful in the past? What is a pattern of a person? This type of person has succeeded in the past. And how can I continue to create these patterns so I could be successful in the future? So, there's really nothing malicious about it, but it is the perpetuation of those patterns, which is why I say women tend not to get funding. Or one reason why women tend not to get funding as entrepreneurs, because there just simply aren't that many of them. So, I think it's really important to identify the dominance of these patterns and how maybe people who don't fit into these patterns should be evaluated differently. And I think, really valuable to break free from these very powerful patterns in our culture and society.
Willy Walker: So, I want to get back to the pattern issue in a moment when we're talking about VC funding and how only 3% of VC funding goes to female sponsored or female founded companies, and why that is to a great degree, that pattern playing out: same schools, same experience, ambition, etc.. But before we get there, you moved over to CNN and you're kind of your breakthrough to get to network television was the opportunity while you were at Time-Life to move over and start doing a business report on a pretty consistent basis,
Julia Boorstin: I think made me well equipped to take advantage of that. I certainly had gone on CNN at some point or another as most of my colleagues had, based on the fact that they wanted to get as many of their journalists on air as possible. But I think that the fact that I was a woman and in fact, that I was quick on my feet and able to think very quickly when it came to having these cross talks about business topics did serve me as an advantage. So, yes, I'm not saying that being a woman has disadvantaged me entirely in business. And I think that, frankly, the fact that sometimes I've been underestimated has proven helpful as well.
Willy Walker: Let's talk for a moment about when you became pregnant with your first child. This issue is such an important one for women. I had an employee who had been at Walker & Dunlop for 12 years and called me in tears last week to say, today's my last day at Walker & Dunlop. It's been an amazing 12 years, but I want to spend time with my two young kids. And I said to her, I'm so appreciative of all the time you've spent at Walker & Dunlop, and I totally get that you want to spend more time with your kids, and you always have an open door to come back. But so many women, including yourself, who want to have a professional career, are also faced with that very real kind of, if you will, struggle and conflict of forming a family, being a great caregiver for the kids and keeping going with their career. And it posed challenges as it relates to you staying at your job and more importantly, kind of the biases, the commentary that came to you as you were getting pregnant, as you described in your book, as your stomach got bigger and bigger, this sort of the questions became bigger and bigger at the same time and seemed to be more and more unreasonable.
Julia Boorstin: Well, interestingly, I mean, I have to say, my company was very supportive of me coming back. And there was something about the structure of my job that actually enabled me, I thought, to be a good parent and also to have my career. And it is this. I work as a TV reporter for an East Coast based network, based on the West Coast. So, I started my job very early when my kids were born. I would start my day at 4:30 am and I would be back, and I would leave before they woke up. And so, I would sort of be working early in the morning before they woke up. So, I wasn't missing any time with them, but then I would be off air starting at three so I could pick my kids up in school. I could be home with them in the afternoon for those valuable hours in the afternoon. So, I actually think that there's something about being a TV reporter at CNBC that enabled me to be both a mom and a professional because I likely don't need that much sleep or especially earlier, didn't need so much sleep. But then I could have the afternoons to be with my family. So, I think that is the sort of the secret of how I have been able to do both. And also, one reason why I love my job so much is because I do have that flexibility in the afternoons. But it is definitely true that it was very weird to go from thinking that I had to hide everything about my personal life from having any relevance to my professional identity. I was very concerned with being taken seriously. Not talking about the decisions, I was making for my personal life or the fact that I was getting engaged or all of these things that are part of the life process. I didn't want to have the personal life figure into my career at all, and I figured if I talked about my personal life, I wouldn’t be taken as seriously by the people who are mostly older men who I was surrounded by, either at my company or in terms of the people I was interviewing. But then once I was pregnant, I couldn't hide my personal life anymore. And the fact that I was about to be a mom and the comments I got are so mind boggling and look like my older son is now 11. So maybe over a decade later, people would comment on my body, they would touch my belly. I mean, I'd be sitting there about to do a serious interview and the man I was about to interview came up and touched my belly and became part of my body and be like, What is going on here? Can’t we start this interview. And so, it was very disconcerting and also just sort of threw me off, but it made me realize that there was no reason for me to be hiding who I was outside of work. And in fact, I had to acknowledge it because it was so visible. And so, I started talking about being a mom, if it was relevant to the conversation. And I think ultimately being more comfortable with having my whole self be present on camera ultimately made me a better reporter and a more authentic anchor.
Willy Walker: When I was reading your book, Julia, about venture capital interviews, when there's talking to entrepreneurs, and you highlight the fact that many times the conversation with a female entrepreneur goes to how are you going to manage the challenges of being a full-time mom as well as being a full-time entrepreneur? And it made me think about how many venture capitalists meet a male entrepreneur and ask him if he's an avid golfer, how he manages spending five hours on the golf course with love for his company. And I sort of sat there and said, you know, that question never comes out. And yet for some reason, venture capitalists sit there and think that they have every right to sit there and say, how are you going to drop your kids off at school and make it to the office on time?
Julia Boorstin: Yeah. I mean, talk about a double standard. I've talked to a number of women who said that they were fundraising during the pandemic, and they were pregnant while they were fundraising. And it was so much easier to fundraise while pregnant during the pandemic than not during the pandemic, because they can hide from here and nobody could see that they were pregnant. But if they had been going into a room and people could see they were pregnant, they would be trying to hide it, they'd be wearing bulky clothing, and investors would be thinking, I can't invest in her. She's going to take maternity leave. So, it is very hard for women to raise money when they're pregnant. Something I've heard a lot. I don't know what the data is around it, but I've heard anecdotally from literally dozens of women that it's incredibly hard to raise money when you're pregnant for that very reason.
But forget about golfing. How many men are asked, how many children do you have? It's going to be hard to be launching this business while also being a father to your children. I mean, that's just not a question, frankly. It's not a question anyone should ask anyone. But I certainly would assume that men are not asked that question on the same frequency that women are.
Willy Walker: So, in another double standard, you point out an interview you did with Ann Sarnoff at Disney HBO.
Julia Boorstin: It was at Warner Brothers.
Willy Walker: At Warner Brothers. Excuse me. You asked her a question about how they were going to pay both the actors, as well as the producers of all this content that usually would have sort of an upfront payment when it got released in the theaters and now was going to go streaming. And therefore, the flows are going to come over time. And after you asked her these kind of very difficult questions, which obviously, as I listened to you describe it, had to have been very kind of painstaking decisions for them to make as far as this new distribution, then you got a phone call from a male PR executive who basically said your question was harsh and you asked him, would you be asking that question to me if I were a man?
Julia Boorstin: They said my tone was mean, and my questions were harsh.
Willy Walker: Yeah. I mean, really? A high-level PR executive at a major studio calling you and saying…
Julia Boorstin: A high level PR executive with a CEO, a very senior male CEO, a big male CEO who I was trying to book. So, I was having a conversation with his PR executive saying, hey, let's talk about setting up an interview with your CEO. And this PR executive said, well, that interview you just did, your questions were harsh, and your tone was mean. And I think a decade ago, before I'd report it out, when women lead, I probably would have thought, Oh my God, was I mean, like, I want to be fair. And I probably would have gone back and reviewed the tape. And there was this moment where I sort of had an instant of panic. And then I remembered all this data that I had been reading about how women are judged more harshly for any number of things, including if they are direct, if they don't demonstrate warmth and nurturing all the time, women are more likely to be judged on their style rather than their substance. And I had seen all this data. I had the research, and I literally had just been trying to figure out how to turn that research into a chapter. And so, I said to him, would you have given that same feedback to one of my male colleagues if he had done that interview? And the man I was talking to on the phone said, I would have expected it from him. I guess I wouldn’t have expected you to be mean or harsh. I said, well, maybe it's not at all about me being mean or harsh. So, he said, I'll have to think about it. And I was so relieved that he realized I was right that he did have a double standard and he didn't realize that he was treating me differently than some of my male colleagues.
But what was so interesting, and I did not include this in the books, I didn't find it out until later. Had a conversation with Ann Sarnoff about this, and during our interview, her company stock had gone up and she had gotten an email from her boss during our interview saying, “Great job, keep it up. This is great to have you out there answering these hard questions. This is exactly the kind of interview you should be doing.” And so, what's so interesting is there was nothing between her and me or even the CEO of her company that indicated that there was anything off about our interview. What was going on in this weird conversation I had with this executive was that there is this perception that women are expected to be warm and nurturing, especially with each other. And it would have been totally inappropriate for me to be warm and nurturing in that interview with her. And so, I think that all of these stereotypes are so ridiculous in so many ways that men should be able to be warm and nurturing when it's appropriate and women should be able to act direct and confrontational if that's appropriate. And just these double standards are just a waste of time for everyone.
Willy Walker: You mentioned in your book, actually, when you talk about Ann in the interview and the stock price going up during the interview and how well it went, in your book, you talk about research as it relates to the naming of female CEOs and the fact that the stock of the company typically sells off on the announcement of a female CEO. But then over the next two years, wildly and I mean wildly with a capital W, outperforms new male CEOs by 20%.
Julia Boorstin: Yeah. So, what's interesting is the stock goes down in the two days after a CEO has been announced. If there's a high attention paid to the fact that the CEO is a woman. So, it's not just that there's a female CEO appointed, but because that female CEO is rare as a woman, as a CEO, there is a lot of attention paid to it. So, the attention paid to her gender causes a temporary sell off in the stock.
It’s interesting because there is other research in the book that I find fascinating about how the less frequently you see someone in a role, the more you assume they're not good at that role. And so, we talk about how you can't be what you don't see and the importance of representation for the next generation to feel like they could do anything. But really, representation is important for everyone, including men, women. It's not that you just can't be “we don't see it.” If you don't see someone in a role, you're going to see them, you are going to assume they're not good at it. And there's a really fun study in the book about jockeys and male and female jockeys. Now, people are actually losing money when they're betting against female jockeys simply because they don't see them frequently in certain races. So, I think it's really interesting to think about the importance of representation and how it can change our decision making in a way that's irrational simply because representation is so powerful.
Willy Walker: Well, I thought one of the other interesting things about that jockey study you talk about…
Julia Boorstin: It's a fun one.
Willy Walker: It's a very fun one. The other one is that it's the jumpers that are the most discounted. And you would think that the thought is that men are stronger than women. Jumping jockeys need to be stronger on the horse. And therefore I'm going to discount a female rider just from the physicality of it and not necessarily from the skill of it, which I think only goes to these sort of embedded biases that we all carry as it relates to men and women, just from a physiological standpoint, much less not thinking about the performance and the training that goes into being a great jockey or being a great CEO.
Julia Boorstin: Yeah, absolutely. I mean, all of these things, like statistically, back to that jockey study. People were losing money because they were betting against women in those races where they didn't see women represented. So, I think the more that we can use that data will sort of pull out the impact of the bias. So that's why I think it's like whether you're talking about jockeys or female CEOs, you have to figure out how to use data to help remove our reliance on bias or stereotype or pattern matching because it's just not valuable. I mean, ultimately, I don't think people should be investing more women because it's like the nice thing to do or help balance things out. But ultimately, people should be following the data. And the data indicates that female founders are more likely to return on investment to their backers a year earlier on average, or they're more likely to yield higher returns. So is that data that's valuable, not the stereotype.
Willy Walker: And so, the book “When Women Lead,” you interviewed 120 predominantly women, but also men. In doing your research on it, you also read a tremendous amount of research to sort of inform the data that you gleaned from all the different studies that you put into the book. And I would say to anybody who wants really good data as it relates to performance of diverse management teams, companies led by women, companies led by minorities, it Julia puts into the book a treasure trove of data that sort of says, If you think that a group of white males with no diversity in it is going to be a winning combination, you are very wrong, and the data shows you that more diverse teams and teams that have women and minorities on them routinely outperform. And you mentioned a Kauffman Foundation study that underscores that in very large numbers. But talk for a moment because you do bring up, Julia, a lot of the difficulties as far as being a woman. And you also talk about a lot of the great progress that has been made. And you sort of end saying doing this book and doing the research gives me great hope that we are headed in the right direction. What gives you hope after having spent so much time and hearing the frustrations and the challenges that are out there?
Julia Boorstin: Well, first of all, I'm glad you see the value of all this data. And that's why I included the end notes in the book. There was a choice of the publisher to put the end notes in the book or to put the notes online and then just link to them. I thought it was really important to have the end notes in here. So, there are about 40 pages of endnotes with lots of links to different types of studies, whether it's the Kauffman Foundation or Harvard Business Review. Lots of great data in there.
So why am I optimistic? I am optimistic because I got to interview 120 amazing people. It was really inspiring. So, I would say there is the human reason I'm optimistic, and then there's the data reason I'm optimistic. The human more subjective reason is because I talked to so many phenomenal founders, many of whom I include in this book, who are creating companies that are going to be successful but are also driving systemic change, whether it's in health tech, in retail, whether it's enterprise software, they're really trying to not, and I use the word disrupt and I create the CNBC disruptor 50. And I'm always aware of the fact that that word is now oftentimes overused. But I would say that these are women who are creating companies that are disruptive but are really taking a new look at established, entrenched and oftentimes broken systems. So, I'm inspired by their effort to change things that are archaic and need changing. And I'm really inspired, especially by the purpose driven companies, the companies that have aligned profits with a positive purpose. And this idea that you can in success have a positive impact on society and on the environment. So, hearing those stories. Every time I did interviews, I would leave inspired and optimistic about the state of the world, despite the fact that I conducted these interviews during the pandemic.
Willy Walker: If I can jump in on that for two seconds. You cite in the book Harvard Business School survey slash study that they did on MBA students who are reading business plans. And if the business plan was kind of a male dominated business plan versus a female dominated business plan, the class would invest 4X in the male written business plan than the female. But if the business plan had a social aspect to it, it had that profits and purpose that you just spoke about, they invested equally. And I found it to be a fascinating study. But here you are being inspired by this. But that's like the special sauce for a female led business to get the type of funding that men can get. Correct?
Julia Boorstin: Well, interestingly. Okay, so there's so much in that comment that you just made. So, yes, the fact that Harvard Business School students, both male and female, would rather invest in the male founder than the female founder of an identical company, this was an experiment. These are basically actors presenting identical companies. That indicates how dominant the stereotypes are. That is what needs to change. Because if you have actors presenting the same business plan, there's no reason 4X as many should want to invest in the male founder. But what's so interesting about what the study found about the value of having a purpose is that the addition of purpose eliminated the bias, right? So, they wanted to invest equally because purpose fulfilled that stereotype that women are warm and nurturing. Back to that comment and that question. An interesting conversation I had after my interview with Ann Sarnoff. There is a perception and a stereotype, that women are expected to be warm and nurturing. Having purpose fulfills that stereotype. So, there is data showing that women actually say they care about the environment much more than men do, and women are dramatically more likely to found purpose driven companies, meaningfully more likely statistically to found purpose driven companies than men are. So, by some metrics, it’s like women are 20% more likely to found purpose driven companies. Part of that may be because they feel more connected to fixing issues like the environment. But there is this additional special sauce that if you have a purpose with your company, you may be able to eliminate the negative impact of bias when you’re fundraising.
So, I think it's a complex chicken and the egg question. Many of the women I interviewed who do have purpose driven companies were not aware of the fact. In fact, I don't think any of them were aware of that study because they'd all founded their companies before that study came out from Harvard Business School. Laura Huang, I believe, is the name of the researcher that found that having a purpose actually gives you a special advantage as a female founder. But it's so interesting because it all plays into these stereotypes, the bias and the pattern matching of women being warm and nurturing. But I do think that there is something to the fact that there is a great advantage to companies founded by people of any gender if you have an additional purpose right now more than ever, and I'll tell you why I believe that: motivating employees, we've talked about quiet quitting, great resignation, the great breakup. That's this phenomenon of women at the VP level and above resigning, if your company has an additional purpose – there is research showing it's easier to retain and motivate talent. It's also easier to connect with consumers. There is talk of a recession. Questions about what's going to happen with consumer spending. If you're a company, can say, in buying our products or investing in our services, you can have a positive impact in addition to just getting our stuff, then that may help retain customers as well. So, there is research. I mean, there's a lot of debate about ESG in general, but there's no question that having purpose can help your employee retention and motivation. So, I think that's an interesting piece of this, and that's why I would say everyone should be paying attention to that purpose piece that is separate from any ESG conversation.
Willy Walker: I also thought one of the interesting things that you identify in the book is to some degree, male bravado versus female conservatism in the sense that these male entrepreneurs come in and say, it's a big issue. I'm going to take over the world and back me and these women go in with a much more conservative stance of, I've got a great idea, I've got a great company, but here's kind of a more conservative view of what we can do. And it's that, if you will, either lack of bravado on the female side or this sort of boisterous bravado, no holds barred view, that most male entrepreneurs go in with that for whatever reason, attracts investment dollars.
Julia Boorstin: Well, yeah. I mean, look, you know how the VC world works and people want to have an outcome like Facebook or Meta.
Willy Walker: Talk about that for two seconds, because in it you talk to a venture capitalist who said someone walked in and looked and sounded just like Mark Zuckerberg. And so, they backed him just because he looked and sounded like him. I mean, talk to me about a ridiculous investment theme. He just happens to look like Mark Zuckerberg.
Julia Boorstin: And by the way, that is one of the Y Combinator investors who was quoted in The New York Times saying that. So that wasn't even an interview with me. That was the interview years ago in The New York Times saying that.
But what's so interesting to me is that what you're talking about is what I describe, you call it bravado, I call it bluster. You could call it B.S. You can go whatever you want to call it. Basically, this idea that one of the studies found that men are more likely to describe their companies in a pitch meeting as they see their company being in a year. Here's what we're doing. Talking in the present tense about something that maybe is going to happen in the near future. They're not lying. They're just very confident about where things are going. Women are more likely to be very specific and precise about what is happening right now, what their goals are, their likelihood of getting there statistically just much more sort of honest, current and talking about things happening in the moment. But if men are talking about things as if we're a year out, women are talking about things in the present, then women don't sound as confident because women are not sharing that bluster of their confidence in the company.
And I talk about one female CEO who was struggling to raise money, and she finally went up to the only female VC she had encountered in her journey. And she said, What am I doing wrong? Can you just give me any advice here? She said, Look, the guys are coming in here, they're pounding the table, and we know that they're inflating their numbers or they're a little bit optimistic. But like, that's what sort of we're used to. And when you come in here and you're very cautious, very conservative, we know that you're being more cautious than they are, but it still makes it seem like you don't have the same massive potential or massive optimism about your future as they do. So, she said, yeah, we know that there is a difference in the way you're talking about things, but you're still kind of doing yourself a disservice by not having that perception, you know, showing us that confidence as to where you think this could all be going.
So, it was a good wake up call for that CEO. Shan-Lyn Ma the CEO of Zola, which is a wedding planning and registry company. But I think it's a hard thing because no one should have to fake bluster to talk about their company in a different way. But sometimes it's just valuable to know that the playing ground might be a little different, and you need to at least know the way other people are pitching and also the questions they're getting. I mean, I was also surprised to find that the same investors, both male and female, are more likely to ask female founders about the downside risk and more likely to ask male founders about the upside potential. So, it's not just the way men and women are talking about their business, it's also the way investors are asking them about the business. And that, again, goes back to the fact that female founders are more rare. They're just not as common.
Willy Walker: I think it's such an important point you underscore here, Julia, in the sense that when Walker & Dunlop was a private company, I'd go to a board meeting, reflect on what we'd done that quarter, and then get back to it and talking to my management team of what we're going to do next quarter in the coming year, but not nearly as forward focused as I was when we became a public company. And every public CEO will tell you that investors don't really care about what you did last quarter. All they want to know is where you're going in the coming quarter and where are you going in the coming year. And so, I think that underscoring that, beyond the bravado, just the if you will, to some degree, and it's way too big a generalization, but for men to be dreaming about the future and women talking about the practical now, investors very much invest in the future and not in the practical now. And that's it. And you in your book talk about seed funding in A round and B rounds, but by the time you get to the C round, the gender bias goes away because women actually have numbers to show what they actually were talking about. But the men have gotten the A round in the B round because they don't have numbers to talk about. They can only be dreaming up their vision.
Julia Boorstin: Yeah, I mean, it's so interesting and I'm so glad you pointed out that statistic. I'm also so glad that you read the book so carefully, which is exciting. But so, this idea that seed A and B men are more likely to raise. But once women get to that C stage, the numbers speak for themselves. That's where the bravado or the bluster is just much less relevant because you have the track record. And so, your projections are much more based on tangible numbers and results. So, I think that's why I just like having transparency about the way people are asked questions, the way they answer questions. Women should know all of this and frankly mentioned, too, because transparency is the best way for women to understand like, look, this is what's working for the men. If I want to raise more money, maybe I should try talking about the future and say, here's where we're going to be in a year. Or Let me project out five years. Let me give you my best-case scenario, which is ultimately what Shan-Lyn Ma decided to do to help change her conversations with investors.
Willy Walker: One thing that I found very interesting as it relates to not only venture capital funding going into female run businesses, but as you point out in the book, Julia, 42% of small businesses in the United States are run by women. And yet you also look into IPOs in the United States between 2013 and 2020. And there were 2000 IPOs and a grand total of 18 of them were companies led by females, I want to dive into the biases in the venture world a little bit deeper because it is unbelievable that only 3% of venture capital is going to women led companies. And we can talk about the fact that it's mostly 50- and 60-year-old white males who went to Stanford and Harvard who are doling out that money and don't really have a view to what these female sponsored companies are doing and why they're so important, particularly you mentioned the wedding industry.
Julia Boorstin: Back to Shan-Lyn Ma, she was the one who couldn't get traction with any of these VCs she was pitching to. And she was the one who was told by the female VC, you just got to have the same kind of bluster that they do because you're underselling your potential. A number of the men she pitched to because it was almost all men, said to her, “how big of a business is the wedding business anyways? Like, does anyone really care about this?”
Willy Walker: My mother-in-law took care of that for me. I didn't have to know how much she spent.
Julia Boorstin: We didn’t seem to have a problem 20 years ago, today it’s a $50 billion business.
Willy Walker: It’s $50 billion!
Julia Boorstin: Yeah, so I think that there is this disconnect between the lived experiences of some of those investors to not understand the full potential of these problems that these women are trying to solve. And as an alternative to that, I think it's interesting to note Freada Kapor Klein and Mitch Klein who are a husband-and-wife team, who run a VC fund called Kapor Capital. And they've also done some interesting research, but they believe in investing in entrepreneurs based on two key things. This is essential to their thesis. One is proximity to the problem. So how much does the founder really understand the problem? So like if you're a woman trying to plan her wedding, then you really do understand that the Zola wedding business, or if you're trying to create an app for the unbanked people have never had access to bank accounts, the business of the unbanked may not be something that a VC who went to Stanford and Harvard Business School could understand. But if you're a woman who grew up in Mississippi, you and your family have never had a bank account, you might understand that problem. So, they invest based on proximity, but also in distance travel, which is something that traditional VCs don't necessarily look at. And that's this idea that you should make a bet on an entrepreneur, not if they remind you of Mark Zuckerberg or fit into a certain pattern of, you know, the engineer who sold his first company to Microsoft, but how far they have come. So, if you started off as a child of migrant farm laborers and you got an engineering degree from the University of Toledo, you've come really far. You grew up, didn't have access to extracurricular activities, but you grew up picking grapes in central California, and now you're running a startup. That distance traveled is a far greater indicator of someone's grit and potential than the fact that they grew up in an affluent Philadelphia suburb and happened to go to Stanford undergrad. And so, I think that's a really interesting way to think more about like, what is a really good measure of the potential of an entrepreneur? Maybe distance traveled is a good thing to look at.
Willy Walker: Yeah. You also talk about female entrepreneurs and leaders, generally speaking, they're better at being empathetic and the other one is leading with vulnerability. Two skill sets that have really been underscored from the pandemic. And you talked about the great resignation. You talked about what people are looking for in companies that both have purpose as well as profits. But talk for a moment about those female leaders that really understand being empathetic at difficult times, as well as leading with vulnerability, because clearly leading with vulnerability is one of the things that many male CEOs don't get at all, and female executives really excel at.
Julia Boorstin: Yeah, I mean, it's so interesting because in my book it is really very much about socialized skills and strategies. Women are more likely to lead in these ways, not necessarily because of any biological instinct. Women tend to rank higher on tests of empathy. And there's a great empathy test that's online that I have on my website, and I reference in the book, and women tend to be more empathetic. They're better able to figure out what someone is feeling or thinking based on a very limited photograph of their face. It's actually just a photograph of their eyes. And what's really interesting is I don't think that this is something that's just born. This is something that's socialized. From the time girls are little, they're told to try to figure out what their friends are thinking, to try to use that as a skill to be successful socially. And it is an incredibly valuable skill from a professional standpoint.
And I was talking recently to a male VC who equated empathy with kindness. I said, those are two totally separate things. Being empathetic can lead you to be compassionate and kind, but empathy is really just about the ability to understand what someone else is feeling or thinking, which is a superpower if you're negotiating against them. And you want to know what your counterparty is feeling and thinking because that helps you understand what they really want. So, I think it's really important to separate empathy from compassion, not that one can't lead to the other.
The interesting thing about empathy is that empathy can help you identify a new business. So, I think about the women in the health tech space. April Koh, the CEO of Spring Health, which is a unicorn health tech company focused on mental health. She saw her community of classmates at Yale struggling with mental health issues. And so, she wanted to figure out a better solution for people like them. The fact that she can understand what they were going through or all the fertility-oriented companies that have exploded in popularity recently, also out of empathy for women who are not finding solutions to their personal fertility struggles. So, there's this opportunity to use empathy to find better business solutions.
I also saw just to mention another health tech company in Cityblock Health, co-founded by Dr. Toyin Ajayi, who saw how the current healthcare system had no empathy for especially low-income patients who are not complying with their doctor's orders. And she said, if we could be more empathetic to why they aren’t taking their medicine, why they aren't coming in for their checkups, then we will be more effective, we will reduce health care costs, and we will improve health care outcomes and use empathy as a business tool.
So, I think it's really important to just understand how empathy can be really strategic and financially valuable. And vulnerability – admitting what you don't know, is essential to invite collaboration and also different perspectives to find the best solutions to solve problems. If you always think you have the answer to everything, you're never going to actually get to the right answer because no one ever has the right answer all the time. But I think that you're right to point out empathy and vulnerability as really highlighted by the challenges of the pandemic, as essential right now for everyone. And I think that it's interesting because I talk a lot about authenticity, but also humility. And every single person I've ever interviewed who's been successful, I think has a growth mindset. And to me, a growth mindset is the combination of the humility to understand that you don't know everything, so you should grow, and also the confidence to understand that you can grow.
I think that all of these things tied together and right now coming out of the pandemic with this realization that we're dealing with a new type of workforce, younger employees who may have different expectations, but also people who may be working in different ways, maybe in a hybrid work environment or working remotely, that having empathy to understand what's going to motivate them, and also having vulnerability to invite the best ideas from across the organization to deal with uncertain, volatile business times like where we're living in right now– I think all of those pieces are key for any leader of any gender.
Willy Walker: Talk as well about gratitude. It was interesting reading the various protagonists that you highlight in the book. They all have amazing stories. And as I read it, Julia, I was sort of like, I've read enough stories about male entrepreneurs that these stories, as it relates to coming from a family in Ecuador and creating a multi-billion-dollar company in the United States is, you know, that's not just a female story. That's a male story, that's an immigration story, that's an education story, etc. But potentially distinct is the sense of gratitude that these female entrepreneurs hold for those people who helped get them their success, and that many men entrepreneurs kind of get there and say, oh, it was all me. I was lucky, maybe I was in the right place at the right time. Maybe. But at the end of the day, I'm what pulled this whole thing together. Whereas these female entrepreneurs are very, very thankful, and gracious to those family members, funders, and team members who helped them achieve their success.
Julia Boorstin: And frankly, they're grateful for the opportunity to be able to solve the problem that they're solving. So, I won't comment on male founders on taking credit.
Willy Walker: Thank you. I am by the way, not one of those salt and pepper haired in suits who you interview whose a public company CEO.
Julia Boorstin: You sound very evolved.
Willy Walker: Thank you. I appreciate that.
Julia Boorstin: But no, look, I won't comment about whether men are taking full credit or not. But one thing that was really interesting and because that's a whole ‘nother conversation, but one thing that was really interesting is in interview after interview. And remember I was doing 120 interviews and after every interview I would take notes, I go through transcripts. I figured out what characteristics and skills and strategies each one was deploying. As I would go through the transcripts, there was this one week where I did a bunch of interviews where the women talked about being grateful. Grateful for their opportunity, grateful for their experience, even if the experience had been terrible because it informed their drive and their perspective. Grateful for this. Grateful for that. And I was like, gosh, what is going on here? And at first I was like, oh, they're just being deferential. They don't want to take all the credit. But then I was like, wait, this is something there's more than that. So, I went through, and I searched all my transcripts. Thanks to the magic of technology, I used a technology called Otter to transcribe all and record and transcribe all my interviews. And there were dozens of references to being grateful, gratitude, practicing gratitude, feeling blessed, feeling lucky, feeling honored to have the opportunity. Like there were so many different terms and tied into the concept of gratitude. So, I went from there, as I often did, starting with the story and then dug into the research to find research about gratitude in business.
In my experience, I'd always sort of associated gratitude with being a personal thing. It's about your family, it's about your friends and your health. That's what gratitude is about. But there's this research that finds that gratitude correlates with long term decision making and patience. And so obviously, there's lots of studies about how gratitude makes you healthier. It makes you happier. The idea that gratitude could drive longer term decision making in business, it's not something that occurred to me in my two decades as a business reporter. But to find that women are more likely to practice gratitude and women enjoy the experience and the feeling of gratitude. They tend to enjoy it more than men do. And again, that's a socialized thing because men are more likely to wonder, oh, does this feeling of gratitude mean I owe someone something? And maybe that makes me feel uncomfortable.
Willy Walker: You highlight that as it relates to women also looking for deferred returns, that women are longer term thinkers as it relates to the returns on their investments versus men who are much more sort of into instant gratification and how, you know, that is Shangri la for long term investors. They want someone looking at that long term view. And it's just interesting that that sort of core kind of orientation, I guess, or core quality about female entrepreneurs is something that's potentially overlooked by many investors about them not looking for a year from now to be there, but five years from now it will be where I needed to be.
Julia Boorstin: Yeah. And I mean, I also just think it's something that we need to shine a spotlight on is gratitude, not just being a personal characteristic, but a professional one, and the importance of using that to shift focus to the long-term potential and away from the need for the short-term win. And obviously as we go into this recession or whatever this economic downturn is, it's important to think about managing for the current economic environment, but also planning for the long term, getting out of this situation and sort of what their business or the economic landscape looks like five or ten years from now.
But in terms of tying it back into women and the purpose driven companies, so many of these purpose driven companies are trying to solve huge problems like fixing the American healthcare system is a huge problem, or addressing global warming in the Ag tech space and helping to remove the tons and tons of vegetables and fruit that goes to go to ways to help minimize impact on global warming. I mean, these are big problems, but these women are taking small bites at the proverbial apple as they try to address these bigger term problems. But they're saying this is an issue I want to solve over the next two decades, and this is what we could be doing right now. So, it is interesting to think about that balance of short term and long-term thinking. And I think especially in this economic environment, the more all entrepreneurs or no matter what kind of team you are in, you're thinking about that balance. What do we need to do for the near-term? And then how far ahead can we plan is a really interesting question.
Willy Walker: So, you profile Sallie Krawcheck in your book, and there are a number of themes inside of the Sallie story that I want to talk about for a second, Julie, because it has broader implications across a number of the entrepreneurs that you talk about, but you focus on her in the Fixing Problems section of the book. To those who don't know, Sallie Krawcheck was on the cover of either Forbes or Fortune back at the turn of the millennium.
Julia Boorstin: Fortune. She was Fortune, the last honest analyst.
Willy Walker: The last honest analyst at Bernstein and then goes in and becomes CFO of Citigroup, basically I mean, it's not whistleblowing, but she comes to the board with a proposal to try and basically bail out a lot of their customers who'd lost huge amounts of money in the great financial crisis. She presents to the board and quickly finds herself thrown under the bus and she's out.
A couple of things on her that I want to underscore because I think they're so important. A little bit back to the comment about men being able to articulate the future. I thought it was really interesting Julia that you underscored Sallie, understanding when she was an analyst at Bernstein that she wasn't a stock picker. She was a storyteller. And I walk into analyst meetings, investor meeting after investing meeting, and they constantly say I'm new to the Walker & Dunlop story, and if I hear that one more time, anyone who listens to this, who gets in front of me and says, I'm new to the Walker & Dunlop story. You might not want to start our meeting that way, but the point is that at the end of the day, a lot of investing is investing in a story. And Sallie understood that. And I do think that that's an important component for female entrepreneurs trying to figure out I am telling a story, I'm not talking about the here and now, I'm talking about the future and that Sallie clearly understood that.
But the other thing that you highlight is Sallie was thrown under the bus and when crisis happens, women is often pulled in to solve the crisis. But then also women have a tougher time recovering from crisis when they're tossed out of a crisis. And you talk about a couple of the dot.com companies where the male CEOs and CFOs turned around and had big, huge future opportunities to run big, big companies. And this one woman who had been thrown out of Pets.com as the CEO was, a scarlet letter for the rest of her career in Silicon Valley because, they wouldn't let go of that fact. And so that kind of double standard for men and women as it relates to taking risks and failing, sometimes women aren't given the benefit of the doubt on the other side of it.
Julia Boorstin: Oh, yeah. I mean, the double standards are many in this world. But what's so interesting about what you just described is there's this concept called the glass cliff. You know, we talk about the glass ceiling, but the glass cliff is the idea that women are more likely to be hired into roles that are precarious or companies at a precarious time. And oftentimes they're a scapegoat, you know, if they're thrown out at a tough time. And it's interesting because two of the women who were the most powerful women on Wall Street, along with Sallie Krawcheck during that financial crisis, were fired and they didn't have the same kind of bounce back as Sallie did. So, there's so many different pieces of this. But one thing that's interesting is Sallie Krawcheck standing up at Citigroup saying, I think we need to refund our investors part of their losses is because of what I have found to be her rejection of cultural numbness.
There is this phenomenon where the longer you spend in the company, the more numb you become to the practices or the social mores of that company. And so, what she was saying, she's like, I'm an outsider. And I think that even though you guys are numb to the fact that what you're doing is wrong, I still think it's wrong. And I'm going to reject that cultural numbness and call out the problem here. So, I think that that's an interesting concept, I think that sometimes people get too caught up in a system that they don't have the perspective to understand when something's wrong or either morally or strategically. And she thought that this failure to repay investors with boasters was both strategically an error, but also not going to do them any favors from a sort of long-term ethical standpoint. So, it's interesting there, but I think I didn't answer the second part of your question.
Willy Walker: Well, the second part of it was just the I mean, in Sallie's case, unlike Julie Wainwright, who was the CEO of Pets.com, could never kind of recover from it. Sallie did not only recover from being dismissed from Citigroup, but she started a company called Ellevest, really focusing on female investors and female 401k plans that are tailored because of that underlying bias of women being more conservative than men as investors. And therefore, the Wall Street banks go for the guys who want to put the money into the stock market and take the risk and give them fees vs. versus the women who want to be in cash and bonds, which doesn't generate as much fees. But Sallie's like they need advice just as much as the, if you will, high spending men do.
Julia Boorstin: Yes. And by the way, women need to maybe tailor their retirement planning differently because they may work fewer years, they may live much longer. But back to Julie Wainwright, who you're referencing, the former Pets.com CEO. She was told she was un-hirable because she was a woman and because she had this affiliation with Pets.com during its implosion. But also, they told her she was too old. So, she said, you're not going to hire me. I'm going to create my own company. So, she created The RealReal, which she then just led to an IPO. She's no longer CEO of it, but she proved them wrong when they said she was un-hirable. So, she said, fine, don't hire me, I'll create a new company.
But to me, what's so interesting is if you compare her trajectory in those years after the dot com implosion with other men who were similarly running companies that failed, it took her a lot longer to remake her reputation than it did some of those men who had no problem bouncing back. And their experience with these failures was seen as experience rather than something that was entirely their fault.
Willy Walker: So, the final part of the book is on defeating biases with data. And your book in itself is a wonderful example of defeating biases with data because you pack it with so much data that basically says you can sit around and have whatever thoughts you want about diversity, about women, about capabilities, butt the data will tell you that you're missing opportunity. Talk for a moment about those females, either entrepreneurs or CEOs, who are really gifted at using data to sort of defeat the biases.
Julia Boorstin: Well, here's a I'll say, I don't think I mentioned this before I was starting to go down this route. Why I'm optimistic is because of the stories, but also because of the data. Because the data so unilaterally indicates that diversity is better for business. And one of the key reasons that diversity is better for business is something I did not think about when I started reporting the book. And it is this: obviously that diversity brings in different points of view, but there's also research showing that the original, more homogenous group benefits and gets smarter when other diverse perspectives come into the group. And that's the study which you may remember about fraternities and sororities at Northwestern University, which is a really fun study. I won't get into the whole thing, but I hope people read the book and find the frat sorority study because it's fascinating.
But to me, that's the key thing about diversity. The original group, the homogenous group, becomes smarter. They raise the level of their game because they know they need to be reevaluating and reconsidering their assumptions. Everyone gets smarter. If you have new perspectives, join the group. And that's something that is incredibly borne out by the data, but also really was surprising to me and I hope is illuminating to people who read the book. But the idea is diversity is not just about other points of view, it's about raising everybody's game.
So, there are a number of companies that currently are using data to remove bias from things like hiring. So, I mentioned one company. I write about one company in the book called Pymetrics, and they're used by a lot of Fortune 500 companies to help hire based on potential, not based on experience. Especially if you're hiring people into roles, in the first five or so years of their career, experience is pretty irrelevant. It's more about what your growth potential is or what you can learn. So, they create these games to basically test what kinds of roles you should be hiring people in. So, I think it's really important to layer in data, whether it's around hiring or around promotion, to make sure you're doing it not just equitably, but in a way that really reflects what people are accomplishing or what their potential is. So Pymetrics is a good example of that.
We're also seeing a number of male-led companies understand the value of investing in diversity, whether it's Nio, which is an incubator and VC fund that loves investing in diverse students and getting to them early when they have a potential to launch companies that could have a game changing potential. And they're really looking for engineers with diverse backgrounds and perspectives to back their companies down the road or even First Round Capital, which is a male run VC fund that found financial opportunity and the diversity of its investments and said, hey, based on the data of what's been working so far, our female led investments are 63% more profitable. We should use that data to influence our investing strategy down the road.
Willy Walker: So, two final things. One, we lost a real pioneer last week in Barbara Walters. A real pioneer on women in media and women in television media. And there was a clip that I watched last week, Julia, where Oprah Winfrey did a kind of a thank you to Barbara where she brought in all of these incredible female journalists to say thank you to Barbara. And there's just this line out the door of one name after the other. And they showed this clip of Harry Reasoner back in 1972 and they put Barbara Walters on the evening news with him. And it's unbelievable, the palpable disdain that Harry Reasoner had on national television for having a woman sitting next to him. And you think about how far we've come since then, but it is quite something with someone like you who is such a successful media personality and what someone like Barbara Walters had to do to kind of pave the road for someone like you to have the television career you've had.
And then the final thing I'd say is that you and I have two dear friends, Gregg Renfrew and Dana Settle, who are both incredible female entrepreneurs. Gregg doing it with Beauty Counter and Dana doing it on the venture capital side. And it is due to the two of them that I know you. And I just wanted to give a shout out to those amazing two female entrepreneurs.
Julia Boorstin: And I write about both of them in the book!
Willy Walker: Yup, you do, indeed.
Julia Boorstin: I have to find the Barbara Walters tribute. I would love to see that.
Willy Walker: I will send it to you. And honestly, when you see the clip of Harry Reasoner on the first night she co-hosts the evening news with him. And he sits there and he's just kind of being like, I can't believe there's actually a woman sitting next to me. You really do realize that we have come a very long way, even though, as your book outlines, we've got a long way to go from here.
Julia Boorstin: Yeah, well, I feel like, especially in that field, I'm so lucky to have so many amazing female role models. I remember watching Barbara Walters growing up, Connie Chung, and Diane Sawyer. So, there's certainly quite a litany of women who have really paved the way in that world.
Willy Walker: “When Women Lead” is a fantastic book. Julia, thank you so much for joining me and giving so many, I hope, really insightful insights in this conversation. And if you really want to go deep and you really got the data buy the book, give it a read. And thanks for taking the time today, Julia.
Julia Boorstin: Thank you so much for reading the book and for your interest. It's such a pleasure to know you. And thank you to Dana Settle and Gregg Renfrew for the connection.
Willy Walker: Have a great day. Happy New Year, everyone. And thanks again, Julia.
Julia Boorstin: Happy New Year.
Willy Walker: Bye.