Tech start-ups: Lack of women is homemade


Why are IT-driven start-ups male-dominated? A study by WU Vienna now shows that the lack of women in tech start-ups is not due to women's education or lack of experience but rather based on how start-ups are perceived from the outside: as young, tech-savvy, white and male.

A study by Sonja Sperber from the Department of Strategy and Innovation at the Vienna University of Economics and Business and Christian Linder (SKEMA Business School, Paris and University Côte d'Azur, Sophia-Antipolis) reveals that the overrepresentation of men in IT-driven start-ups is based on a self-referential process. The status quo shapes the perception of the founder prototype. Female founding teams are expected to conform to these prototypical standards; they experience these standards as given, which leads to a central dilemma: On the one hand, female founders are expected to have prototypical characteristics such as being young, tech-savvy, white and male. On the other hand, they require a certain “otherness” to set themselves apart from other founder types on the market.

Specifics of the IT industry

This effect plays a particularly important role in tech-driven IT start-ups as their business models are characterized by greater uncertainties than those of start-ups in other industries. Investors look for ways to compensate for the uncertainties at the business model level and tend to trust founders who meet their expectations - i.e. by being predominantly male, as this corresponds to the established prototype mentioned above. Therefore, men are more strongly and permanently overrepresented in the IT sector than in sectors with more stable and predictable business models.

Even though the "distinctiveness" of female founders is important for investors, it does not play a crucial role. While female founders need to be as different as possible in order to stand out from the competition, the study suggests that being female already deviates too much from the normative standard. As a result, female founders are not able to prove themselves in the first place because they are simply denied the chance (or the investors’ funding) to do so, regardless of their education or experience.

How tech start-ups could become more female

Education or support programs for women – something that politicians, associations and institutions have been promoting for a long time – cannot compensate for the focus on prototypes and the resulting imbalance at the expense of female founders. The practical implementation of such programs has not been able to improve the situation. On the contrary, the programs are assumed to have little effect, since the basic problem does not lie in education and training but can be traced back to female founders deviating too much from the prototype; this reduces women's chances of success.

With that in mind, what might be ways out of the systematic preference for male founding teams? In their study, Sperber and Linder suggest identifying niche markets in which women are not or less underrepresented since the prototype is not predominating these markets the way it does in classic male-dominated areas (e.g., IT or high-tech). Yet, there is one decisive property of entrepreneur categories: prototypes lose relevance if it is not clearly defined, who belongs to a certain category and who does not.

The solution, therefore, may be to avoid confrontation with the predominating IT prototype, but rather establish alternative prototypes by slow but steady infiltration. Ultimately, prototypes serve to simplify a complex entrepreneurial reality. If prototypes can no longer fulfill this task, they either drift into insignificance or are replaced by others that better represent the entrepreneurial reality. Consequently, the new type replacing the old one will (hopefully) also contain female founders. Changing the “classic” tech prototype is a long-term process. However, change can be achieved through a successive adaptation of the type in niche markets.

Further information:

Sonja Sperber, Christian Linder: Gender Bias in IT Entrepreneurship: The Self-Referential Role of Male Overrepresentation in Digital Businesses

Alexander Vieß
Research Communication
WU (Vienna University of Economics and Business)
Tel: + 43-1-31336-5478

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