This interview comes from our partners atProject Entrepreneur,Watch Exotic Forbidden Pleasures Online as part of their #WednesdayWisdom blog series featuring industry leaders and disruptive visionaries who are working to build the future of entrepreneurship.
Carol Rattray is co-founder of ZoomDojo, an early stage venture capital firm dedicated to investing in ambitious entrepreneurs to define and dominate a new generation of commerce. We sat down with Carol Rattray to discuss the future of entrepreneurship and the need for more women entrepreneurs.
What led you to start Zoomdojo?
My partner, Ritu Banga and I separately have had a long philanthropic involvement in education. We would from time to time compare notes on what we were doing, thinking about or worried about, that arose from our work in this area. One of those issues that we’d often discuss was the difficulty students faced finding jobs.
After 2008 the youth unemployment rate soared and although as the economy began to recover and overall employment rate improved, youth employment continued to remain very stagnant. Finding a job remained a difficult and discouraging process for many young people. The stats were bleak, and that was underscored by what we directly heard from students who shared with us their job search challenges and frustrations.
Our alarm and concern grew as our awareness grew. Job information was very fragmented and what information was available narrowed in scope or was mostly focused on experienced job searchers rather than entry level. Ritu and I decided we had to do something to find a way to address these issues.We began by conducting an extensive listening and research period that involved students, recent grads, parents, faculty, university administrators, trustees and other organizations focused on youth employment, and testing.
Our conclusion from the listening and research process was that students needed simpler, more relevant and customized job search and career readiness tools. We strongly felt that by combining our professional, personal and philanthropic experiences we could create a platform for students to access good job information and generate new ways to think about career pathways that would improve their success in the 21st-century job market.
That became Zoomdojo, an initiative that includes an open source global job search platform providing internship and job listings and related career readiness resources and advisory services for students and recent grads.
What issues are top of mind among twenty-somethings as they embark on their careers?
Based on conversations and interactions with the twenty-somethings (I’ll refer to this group as millennials from hereon) and those that teach or manage millennials in the workforce, top issues on millennials’ minds revolve around work/life balance, security and job fulfillment.
One of the questions that we’re often asked at our workshops is “how did we manage to do all that we’ve done?” This question covers a lot of territory, but it’s basically about work/life balance. When you break it down that means, how to stay connected (to friends, family etc.), pursue and develop outside interests, stay fit and healthy, be philanthropic while managing to build a strong happy family life. Combining these quality-of-life objectives with how to achieve, maintain and nurture them, while achieving career success describes the work/life balance issue.I believe security is on the minds of many millennials as well.
As a group who came of age during the Great Recession and as a witness to ongoing global tensions and turmoil, the world looks like a very uncertain place beyond one’s control. You can work really hard for a long time and then find everything you worked for has disappeared. In a world where unexpected stuff continually happens, millennials more so than those from my generation at their age, seem to be aware of and need to better ensure their future outcome. There is a sense that every step requires thought and risk analysis.
That doesn’t describe all millennials, but there are articles and studies that support the change in how the world is viewed by millennials compared to the way it was seen by their parents or baby boomers. The future feels less certain, more precarious and requires more carefully thought-out planning.
As for fulfillment, I would define fulfillment as finding and having a meaningful, purposeful, and satisfying work life. Through the review of reports and surveys, including one we conducted, and discussions with managers, we’ve learned that college students and young professionals want more out of their jobs (than compared to prior generations). There’s an expectation for more and frequent feedback from supervisors. There’s an expectation to form meaningful connections with managers and for managers to be more than supervisors, but to be mentors also. There is an expectation to be able to more clearly measure career growth on an ongoing basis and to be able to regularly track career progress and growth.
The hope is for meaningful, engaging work that offers good learning experiences. If the expectations are not being met, they are more likely than past generations to move on to another job in a short time. Recent articles support this. In the Gallup Report (May 21, 2016) Millennials: The Job Hopping Generation, it states that 21% of the millennials changed jobs within the past year that the poll was conducted in. Other reports cite the average tenure at one job for millennials to be 2 years, compared to the baby boomers and the generation before the boomers who averaged 7 and 9 years respectively.
This may seem in contradiction to the need for security, but security is not about striking the mother lode. Rather, it is about striking a balance between seeking financial security or a “secure position" in a good company and security gained by developing personal capital even at the risk of sacrificing future potential wealth.
Understanding what makes millennials tick, and how to effectively address and respond to their concerns and expectations is a key topic of discussion, research and review these days as it impacts how business is to be conducted and managed.
What advantages exist for young women with startup aspirations?
There has been a definite increase in attention and focus placed on improving and facilitating greater inclusiveness in the startup ecosystem for women and other under-represented groups, which is great news. While we are far from reaching the tipping point to achieve gender parity, the number of women-led startups has quickly risen in the last few years. The stats are encouraging.
There are also more women in business leadership positions along with more media attention being paid to women entrepreneurs. Shining a public spotlight on women founders and makers can definitely inspire and motivate. This is a global trend and one which we experienced first hand.
When my partner and I were in China a few years ago, we were invited to speak at one of the Chinese universities. The student groups that hosted one of the workshops were the university’s women’s finance club and the university’s Lean In Club. It took a minute for us to digest the name of the latter club. Who would have thought, in China, we’d meet members of the Lean In Club! We were delighted to be with all these young women who were so interested in learning about startups and about us as women founders. They were following social media, reading books and excited to be a part of the bigger community of women entrepreneurs and leaders. Public attention and awareness are factors that motivate and inspire, in this case, young women to strive to be like those they follow and read about.
Beyond the media attention, substantive changes and improvements can be found in many other areas. More organizations are making the push to support, educate and advance girls in science, technology, engineering, and mathematics (STEM). This is key to grow the number of tech-literate women. Financial support from established venture capital funds and through more recently formed investing groups for women founders has substantially increased. Programs supporting and empowering women entrepreneurs have grown. A wonderful example of such programs is Project Entrepreneur, which provides tangible and needed skills, tools and guidance to educate and inspire women founders and makers. We hope more will follow these trends and trendsetters.
The momentum is strong and the foundation building is evident through education, inspiration and other support efforts to provide young women with far greater opportunities than there were available ten years ago. The change of pace has been encouraging and it's a much better time for aspiring women entrepreneurs.
What barriers do they face?
Even though there’s been much progress made to support women-led startups, barriers still exist. We aren’t at a point to say, “yes, we made it!” yet and here’s why.
While in secondary schools, girls are at par to boys in studying STEM, a change occurs at the higher ed level. According to the National Girls Collaborative Project, “while women receive over half of bachelor’s degrees awarded in the biological sciences, they receive far fewer in the computer sciences (17.9%), engineering (19.3%), physical sciences (39%) and mathematics (43.1%).” We have to do more to improve these numbers. We need more women to study and succeed in STEM fields, to be early STEM adopters, adapters, and experts. That will help create a pipeline of women with skills that drive innovation and entrepreneurship.
More women in STEM is of course only a part of the answer. STEM is important, but not all of us have to become STEM majors and experts. STEM is only an aspect vital but only a part of what constitutes innovation and entrepreneurship. From my professional experience, it’s clear that key contributors to advancing innovation are the ability to apply critical thinking, to possess strong communications skills, along with the ability to step back, reflect and assimilate broader views and angles gained typically from a solid liberal arts education. The power of the liberal arts education combined with a level of comfort or being attuned to STEM concepts, in my opinion, create a compelling and substantive formula to build and deepen the pool of women entrepreneurs. We, therefore, need to do more work to further advance the intersection of women, STEM and the liberal arts.
There is also still a lack of a critical mass of women entrepreneurs to look up to as role models, mentors, and sponsors. Yes, more are in the news, but there are not enough women in various roles and positions throughout the startup ecosystem. Young women need seasoned women founders, investors, and managers to seek out for advice and support. Startups are hard work, and you want to be able to lean on others, in particular, those who share common ground and experiences to help support your efforts and that you can learn from and look up to as sources of inspiration.
The funding/buying side also represents a significant barrier. Raising capital is still challenging for women founders. Venture capitalists (VC) fund too few women-led startups. A recent CrunchBase report, Women in Venture Report (TechCrunch April 16, 2016), describes that “between 2010 and 2015, 10 percent of venture dollars globally, a total of $31.5 billion, funded startups that reported at least one female founder.” Only 10 percent.
One of the reasons for VCs funding few women-led startups could be attributed to the fact that women are under-represented in decision-making roles at VCs. In a report published by Deloitte and the National Venture Association in 2015, NVCA – Deloitte Human Capital Survey Report, they found that out of the sample of 2,500 employees at 250 firms, women represented only 11% of the partnership pool. And Fortune found only 6% were decision makers at the VC firms they polled. Sounds pat, but if you have a predominantly male VC “club”, the club members will be more likely to decide to invest in companies that reflect the membership profile. It will be interesting to see if the investment dollar figures increase, as more women are moved into decision-making positions at VC firms. I would hope so, but it does look like real funding challenges will continue in the short run for women founders.
On the other hand, you can’t just blame it simply on ingrained gender bias stemming from an all boys club environment. As an investor, investment decisions are made after reviewing many deals. Because there are few women-led startups seeking funding, there will be fewer to review and likely to invest in. We need to increase the number of women-led startups which leads me back to the need to find ways to increase the pipeline through education and other means to accelerate developing more women entrepreneurs, and remove the barriers young women entrepreneurs may still face.
The media portrayal of the Millennial says they are enterprising and entrepreneurial by nature, however, some studies show that the number of business owners under 30 today is lower than it has been since in the 1980s.
As an advisor to recent graduates and young professionals, what is your take on the future state of entrepreneurship?
Overall, the number of business owners under 30 is said to be lower than what there were in the 1970s and 1980s. There’s a lot of literature and statistical evidence that this is the case and very worthy of review. From where we stand, though, we’re so immersed in the startup community and culture that it’s difficult to objectively survey what’s happening overall in this ecosystem.
From our perch, there’s a great deal of activity and interest in entrepreneurship and startups directed in particular to support the under-30 crowd. There are programs offered at universities within the undergraduate and graduate levels, including funding, mentors and workspaces. Beyond the university system, attractive, cost effective technology and infrastructure to facilitate and promote entrepreneurship has proliferated.
Funding sources from traditional VC to new crowd funding options have provided greater access and opportunities for aspiring young entrepreneurs. There are articles about “kidpreneurship” that showcase teens, tweens and even younger kids who are starting businesses.
More recently, our work on advancing employment has led us to branch out to advise and review startups. We review many business plans and judge at pitch competitions. We’re obviously not the only ones involved in these activities, but it underscores the many channels young founders have access to seek assistance and support.
So from our perspective, we believe today there is greater access to key resources that facilitate startup development. While it’s a different landscape than in the 70s and 80s, as long as people are willing to work incredibly and ridiculously hard, I believe the future state of entrepreneurship looks to be in good shape.
From an investor's point of view, what problems should entrepreneurs be looking to solve right now?
This is an interesting, question without a simple answer! Let’s start with what I look for as an investor first and move from there onto what problems there are to solve.
As an investor, I want to understand the story. That is, the story behind and about the product, the team, the market, and then compare all that to what other investment options are currently available. I may not be looking specifically at what problems should be solved, but how a founder and his or her team is presenting what they perceive as the problem, their approach addressing the problem and why that works. It’s their story that I need to understand and believe in enough to want to make an investment. The interesting thing here is that I may not even be aware that such a problem exists, but by the story presented to me, I learn and am convinced that there is a problem and a solution worth investing in.
I would say entrepreneurs, as a general rule, should think about what’s happening around them and how they could change and improve a situation that leads to one or more of these outcomes: improve an existing product, improve access, reduce inefficiencies and costs, save time or bridge a gap or adjust and align a mismatch. You can apply these outcomes to many areas including healthcare, energy, conservation, transportation, food, education, consumer goods and services, financial markets or information. Problems exist in each of these and many other areas. Some are big problems and issues that have global reach and implications such as water and food security, pollution, climate-related disaster mitigation and curing diseases and preventing pandemics. As a concerned individual, these and many other global problems I hope will be top priorities for many around the world to solve.
When I look closer to my personal and professional interests and experiences, I would say problems such as the following are worth a look: in healthcare, biotech solutions to common issues that an aging population face; new inexpensive ways to conserve energy; bridging in an innovative inexpensive way the gaps in providing relevant skills training; better transportation and distribution solutions for people, as well as for goods and services; or ways to render massive amounts of information and data in a smart understandable, quick and accessible way.I would really suggest thinking local first.
I’d recommend to any aspiring entrepreneur to begin by looking at your own local environment and consider the following: is there something that bothers you a lot from personal or professional experience? Or, have you heard about a problem that urges you to fix it? That’s a good starting point. Then problem set to explore and determine if you have a possible approach to a solution. Most really successful startups began from solving a local problem: a few folks were unable to have a way to find rides to get around San Francisco, several entrepreneurs were unable to find affordable workspace in New York City and a group of young women were unable to afford a way to find accessible and affordable ways to make required upgrades to their wardrobe in Boston!
In each case, what originally was a local problem and a personal condition ultimately hit a wider universal chord and solutions application.I would say to any aspiring entrepreneur, learn what’s bothering you, your friends, family or neighbors. Can you make something that they need or better their situation? Is there a way you can improve your life or theirs? Do your research. Dig deep to find out the problem’s root cause and then figure out how you can change or make the situation better. Find out if there are others who have identified the same problem that you have and how you can differentiate your solution from theirs. Talk to a lot of people to find out if your solution is what works for them. Then start working as hard as you can on your solution.
You will always find investors willing and ready to hear your story, learn about your problem proposition, and your solution.
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