The CQ: Empathy as a superpower
CNBC's Julia Boorstin gives an inside look at her new book, When Women Lead
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Inside the minds of women leaders who are defying odds and creating change
By Forerunner
@ForerunnerVC
Over the past decade, we’ve seen a long overdue boom in women’s leadership and entrepreneurship. There are no shortage of reasons to be excited about this: having women in the C-suite is known to lead to stronger business performance and greater corporate social responsibility, women leaders provide great inspiration for the next class of aspiring women entrepreneurs, and they are uniquely well-suited to build companies in industries that are predominantly women-led or impact women – such as health, personal care and commerce.
This week, we talked to Julia Boorstin, CNBC’s Senior Media and Tech correspondent, about her new book When Women Lead. In her writing, she delved into the minds of successful women founders and CEOs to understand how they defied odds in their respective industries, overcame obstacles, and leveraged empathy as a superpower.
Our favorite snippet: none of these women saw themselves as natural born leaders – no one does.
Forerunner: First things first, can you provide a quick summary of why you wrote this book and what it covers?
Julia Boorstin: I’ve been so lucky to get to interview thousands of CEOs and leaders as a business reporter for the past 20 plus years — a small minority of whom are women. I was so curious about how those women had defied the odds to succeed in male-dominated worlds, particularly the world of VC-backed tech startups. Inspired by their courage and ingenuity, I wanted to tell their stories, and as I interviewed them (I ended up interviewing over 100 female founders), I dug into academic studies and research to understand the skills and strategies these women were using to such success, and how we could all learn from them. In the book, I weave together the stories of dozens of entrepreneurs with research explaining their techniques — laying out a new road map for leadership.
Forerunner: In your book, you talk a lot about how empathy is a unique superpower of women leaders. Can you elaborate on what this means, both on the leadership level and how it impacts companies?
Julia: Women tend to rank consistently higher than men in their ability to empathize with others — to understand what others are feeling and put themselves in other people’s shoes. This is an incredibly valuable trait to understand what employees need, what will resonate with customers, and how to best relate to (and negotiate with) investors and partners. I’ve seen so many women found companies because they empathized with customer needs — needs which, in many occasions, have been overlooked by male investors. For instance, the founder of Zola empathized with the challenges women faced when planning weddings, and Carrot Fertility founder Tammy Sun empathized with the need for women to have more support from their employers for fertility services. Dr. Toyin Ajayi co-founded CityBlock Health to invert the healthcare system, because she empathized with patients’ distrust with the current medical system and roadblocks to complying with their doctor’s advice.
Forerunner: Related to empathy being a superpower, there’s long been an understanding that many powerful founders are more ruthless and emotionally detached, which enables them to be so effective in building businesses. How do you weigh the power of empathy with this long held conception about leadership?
Julia: I think there’s a stereotype that powerful founders have to be ruthless to be powerful. But that’s not always the case — and I found dozens of examples of women who, in fact, used their empathy to be more effective as leaders. Yes, founders often have to make very tough choices and their decisions aren’t going to make everyone happy. But I believe that the pandemic has shed light on the importance of leaders to be empathetic — it seems like table stakes to connect with and motivate employees in uncertain times like these.
Forerunner: We’re seeing women leaders build a lot of purpose-driven companies (your book cites that women are 20% more likely to build a purpose driven company than men!) and companies specifically related to women’s needs (beauty, fertility, etc.). Why do you think that is?
Julia: In terms of purpose-driven companies, studies have found that women say they are more concerned about the environment than men are. But there’s a perk that comes from creating a company with a purpose alongside generating profits: a study by Professor Laura Huang at HBS found that framing a company with a social purpose eliminates the negative impact of bias from investors. So investors could be more interested in backing a female founder who’s tackling a social or environmental issue with her company, because that additional purpose plays into the stereotype that women are nurturing and warm. This can help women behind these purpose-driven companies — but it still perpetuates stereotypes that women have to be caretakers, and are discounted when they’re simply ambitious businesspeople.
In terms of all the women who have founded companies to serve women’s needs — those founders simply have more proximity to problems and an advantage in understanding overlooked markets. Again, that’s a superpower.
Forerunner: Related to the above, what did you learn about the journeys of women building in historically male-dominated spaces, such as finance or enterprise software? And how do you think of the importance of women’s leadership in these areas with regard to countering biases about what women “should” work on, or where women’s expertise lies?
Julia: It’s a lot harder for women in traditionally male-dominated spaces — I write about a really interesting study that found that the more a group is underrepresented, the more that group is underestimated. And the idea of token theory is that when someone is the only one in a group or category, they draw heightened scrutiny and criticism. But there are women leading in all industries and categories — and I write about two powerful women in the enterprise software space — PagerDuty CEO Jennifer Tejada and Workboard’s Deidre Paknad.
Forerunner: Over the past few years, we’ve unfortunately seen a lot of negative stories about women’s leadership style, which have begged the question of whether women leaders are held to much higher standards than their male counterparts. What do you make of this?
Julia: Women are held to much higher standards than their male counterparts. I went through a dizzying pile of studies about all the ways women are judged more harshly than men: for showing emotion, for making jokes, for succeeding in a male-dominated field, for failing to demonstrate warmth. There are so many double standards — but I’ve seen how understanding those double standards can be incredibly helpful in helping women (including myself!) navigate them.
Forerunner: At Forerunner, we take a lot of pride in backing women-led teams, which account for about 50% of our portfolio. However, on the industry level, the latest research shows that 82% of all VC dollars go to all-male founding teams and only ~2% go to women-led teams. However, your book finds a lot of optimism in the future of women leadership. How do you weigh that despite these seemingly uninspiring statistics?
Julia: It’s true that the statistics are horrifying — dollars to female-only teams have been declining rather than increasing — and it doesn’t make sense considering the studies that have found that female-founded companies tend to outperform and yield returns to investors a year earlier on average. But yes, I am optimistic — because there are more and more VCs such as Forerunner that are finding opportunity in backing female-led or co-ed teams and I believe that ultimately the data about the value of investing in diversity will overcome bias and pattern matching which can work against women.
Forerunner: What was the thing that surprised you most in getting inside the heads of all of these amazing successful women?
Julia: I was so lucky to get to interview so many phenomenal women and though they were all so different from each other- they did all have one common trait– none of them were born leaders, no one is. I was so impressed by how each of these incredible women worked to understand their strengths and weaknesses and turn traits — many of which have traditionally been seen as flaws — into superpowers. It was surprising to hear about so many of these women’s massive evolution as leaders, and it inspired me to think differently about my own potential to grow and change.
Forerunner: What’s one thing you want women leaders to know when it comes to building a company in the coming years?
Julia: The economic uncertainty that we’re facing right now is certainly challenging, but we’ve seen out of other downturns and recessions that the companies that are born in the toughest times can define the next generation. Uber, Square, Airbnb, and Slack, were all founded during the 2008-2009 financial crisis. Women may continue to face major headwinds in fundraising, but I’m hopeful that all the traits I’ve found that women are more likely to demonstrate– such as empathy, vulnerability, a tendency to found purpose-driven companies–will help them succeed in the toughest of times.
This Week’s Top 10 Consumer Insights
Free returns are on their way out as many major retailers are reevaluating their policies, including shortening the return window and charging a return or restocking fee. The rationale being that consumers will be more likely to accept a return charge over a higher price.
Pop-up shops are going to be a thing at Walmart. The big-box giant is renting retail space within its stores to small businesses on short leases.
A UN panel sets its target on greenwashing. It rolled out a list of 10 guidelines to clarify the murkiness of net-zero commitments of companies, which often have “loopholes wide enough to drive a diesel truck through.”
The Guardian looks into TikTok and its effect on mental health. Researchers say that while openness about traumas on the platform can provide support, it can also exacerbate traumatic feelings.
Consumers are more aware of the environmental impact of deliveries and 56% would pay more if purchases were shipped in an electronic vehicle. And 48% would opt for one package carrier over another if it was known they used an electric vehicle.
DoorDash is teaming up with Sephora. Consumers can shop for beauty products through the app and have their purchase delivered to their doorstep within the hour.
Instead of trying to compete for the speediest delivery possible, retailers are now focusing on providing delivery on an expected date. This shift helps cut costs and the predictability is valuable to consumers.
Macy’s has pledged $30M to back diverse businesses. Black, Latino and women founders receive only single-digit percentages of venture capital, even though those groups make up a much larger percentage of the U.S. population.
Despite inflation concerns, consumer online spending increased 10.9% to $72.2 billion in October compared with the prior month, with many taking advantage of the early holiday sales.
There’s a lot to learn from the dotcom crash and 2008 recession. But there’s also some optimism: There are many real-world problems that entrepreneurs can help solve with today’s technology along with new opportunities to add value to digital experiences.
Weekly Wisdom
”A consumer is really savvy; you cannot fool the consumer. And there's a lot of people out there trying to fool the consumer all the time. And to build a lasting business, you have to be in partnership with your consumer. You have to treat them with respect and you have to think about how you can do that while building a really great business. It sounds so basic and it's like, ‘yeah, everyone thinks that,’ but not everybody operates from that place and certainly not everybody executes to that place.”
— Kirsten Green, Partner, discusses one of the most important factors of building a brand with Patrick O’Shaughnessy on Invest Like the Best podcast.
Forerunner Highlights
Kirsten Green spoke at The Wall Street Journal’s Tech Live conference on Monday, along with Lydia Jett, managing partner at SoftBank Investment Advisers.
Portfolio Highlights
ModernRetail talks with Lauren Cooks Levitan, CFO of Faire, on the company’s overseas expansion.
Hims & Hers CFO Yemi Okupe speaks with Yahoo!Finance about the company’s strong growth.
Thingtesting examines why more and more DTC brands are turning to live shopping, via QVC.
Yahoo!Finance tests out if you can make money investing $100 in Arrived as well as two other alternative investment platforms.
MakerSights’ collaboration with Ralph Lauren is featured in WWD.
Matt Alexander, co-founder and CEO of Neighborhood Goods, is quoted in a story about its POS Go checkout in Good Morning America.
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