Hello and welcome to episode six of Microsoft Stories, a podcast about technology and the people who use it.
In this episode we will be chatting about female entrepreneurs and how the pandemic has affected them. According to research, women still struggle to get funding for their businesses. Why does this still happen and how can we ensure that female entrepreneurs are supported to start their own business?
You will hear from three women, all with huge amounts of experience with female entrepreneurs. They will shed light on what it’s like to be a woman starting your own business today, and how we can encourage more people to take that first step into running their own company.
Click the play button and join us on our journey.
Katie Gale, Philanthropies Coordinator at Microsoft UK
Hello and welcome to another episode of Microsoft Stories, a podcast about technology and the people who use it. I’m your host Katie Gale, Philanthropies Coordinator at Microsoft UK. In this episode, we’re focusing on female entrepreneurs, who traditionally struggle to get as much funding and support for their businesses as their male counterparts.
The COVID-19 pandemic hit and rewrote the rules on how and where we work. It seemed like the ideal opportunity to explore setting up a business but was that the reality for female would-be entrepreneurs? Did the pandemic make it easier or harder for women to start a business and how can we encourage more women to do so?
I’m delighted to welcome three amazing women to help me answer these questions. Joining to me today are Edith Szendrodi, Head of Programmes, AI for Sustainability, at Microsoft; Wincie Wong, Diversity in Tech Ceiling Breaker, Digital Innovator, Female Founders Champion and Entrepreneur, and Amanda Pickford, Director of Thermafy Group, a specialist software development company.
It’s great to have you here with me today. Thank you so much for joining.
Wincie Wong, Diversity in Tech Ceiling Breaker, Digital Innovator, Female Founders Champion and Entrepreneur
Great to be here. Thank you.
Edith Szendrodi, Head of Programmes, AI for Sustainability, at Microsoft
Thank you I’m very delighted to be here.
Amanda Pickford, Director of Thermafy Group
Thanks for having us. It’s lovely to be taking part in something like this.
I’m going to just jump straight in with you, Wincie, and ask you this first question. How do you think female entrepreneurship has been affected by the pandemic?
The pandemic has been an interesting time for all entrepreneurs and when I used to run the Rose Review – The Allison Rose Review for female entrepreneurship, which is a study done across the UK – we found that if female entrepreneurs were going to start and scale businesses at the same rate as men, we’d add another £250 billion to the British economy, which is a huge amount and certainly much needed in times like this.
According to the Rose Review, when we originally issued the report, what we found is that in 2018 females founded 56,000 – give or take – companies in that year and it’s now grown in 2021 to over 145,000 companies, which equates to about a 37% average year-on-year growth.
However, on the flipside if you actually really look closely at it, what we also found in the study that was done and the Rose Review progress report that was published in March this year, is we found that women were spending six to 10 hours more on family care than male entrepreneurs… so what would have happened is without certain barriers that the female entrepreneurs already faced and faced at a larger scale during the pandemic, the numbers probably would have been even higher.
Wow, that growth is incredible to hear. Edith, in your role in overseeing Microsoft’s start-up cohort in the UK you speak to a lot of different entrepreneurs. What have you heard from female entrepreneurs about the opportunities and challenges they face at the moment?
I think it shows an interesting landscape that we are facing – or, they are facing – at the moment because the awareness around the issues, around the numbers, is significantly higher than even a few years before. If I remember correctly, based on the last report I was reading, only 1.1% of venture capital (VC) investment has gone to female entrepreneurs in Europe, which is obviously terribly low. On the other hand, I do see a lot of great opportunities. A lot of programmes, a lot of possible solutions out there. I feel like that sense of community is very strong with female entrepreneurs and the helpfulness is incredible to see. There’s a lot of goodwill there. But they are facing that barrier and as soon as childcare or family care or any of the traditional roles are coming into play, it becomes even harder for them. There’s one additional thing in there – a lot of the female entrepreneurs are actually solving or trying to solve a lot of societal and environmental issues and they are less attractive to the usually very male-dominated VC industries. So there’s an additional barrier but I feel like some of these topics will receive more attention and hopefully, with that, more investment.
With any luck we do see some of these female entrepreneurs succeeding in the future and it’s great that they have such a good sense of community. Wincie, does that chime with what you’ve heard? You speak to entrepreneurs. What do you hear them say that they need to start and grow a business?
I think there are two things to remember. First, female entrepreneurs are absolutely starting businesses but only about 10% of them ever scale to £1m turnover or more, compared to about 21% of male-owned businesses that get to that level. We don’t have enough women in tech. Let’s just start there. I think in terms of the total tech workforce across the UK, according to WISE last year, I think it was 17% of the market working as tech engineers are female. So if you’re in a landscape where you have less women in tech, then you will also be in a landscape where they are less likely to found tech companies. But it’s the tech companies that are getting all the VC funding as well.
And then also what we found, in terms of scaling businesses, is family care is the biggest barrier. In general, women have 60% more family care responsibilities than men and I want to highlight that because of where we are in terms of generations and population. The burden of taking care of children falls on the women, and also the burden of taking care of the elderly, because we do have an aging population. So that’s a bit of a double-whammy and it’s the number one reason for women with family that they cite as why they haven’t been able to scale. Couple that with the pandemic, where there were a lot of childcare issues and also a lot of aging population caring issues.
The second thing is about finance. Finance and funding have always been big issues for entrepreneurs but it is particularly acute in the women trying to scale. They have difficulty securing the funding for their business and when they do ask for money they ask for about 50% less funding than men.
One of the other things that has crippled the ability for women to scale is that they feel they have limited professional networks. If I paint a picture of a woman who has caring responsibilities trying to run their own business, they are not going to be able to go out to network and meet lots of other people who are in the same shoes. And they do feel there’s always this feeling of loneliness, which a lot of female entrepreneurs seem to talk about. We know that if you know someone else who is also an entrepreneur you are way more likely to start a business yourself. One thing to note is that through our work – I mean, it hasn’t pushed the dial very much – when we first launched our review, VC funding going to all female-founded businesses was lower than 1%. And that was pretty dismal. I’m glad to say that we are now closer to … under 5%, maybe around 4%. I know it’s still a dismal number but at least it is four times better than it was a couple of years ago. So we have made progress and there has been a huge concerted effort, particularly in the Rose Review work, working with the industry, working with the financiers, the VCs, the angels.
Amanda, you started Thermafy, which is using technology to tackle sustainability issues. What inspired you to start your own business and what were some of the obstacles you faced?
I think because I left school very young, I was 15 when I left home and school, so I was very young and I tried my hands at lots of different things, from making trifles in factories and all sorts of things, that I soon realised that I could do much better if I work for myself. I’m also quite dyslexic.
And I think dyslexia makes you look at things differently, so I think I’ve always had the challenge of trying to work around problems, and I think to me, that’s one of the things that has set me aside, or what’s that giving me the opportunity to do businesses, because I’ve seen problems and I just find different solutions or different opportunities, and that’s certainly the case with our thermal analysis company.
What do we need to do as a country, from government to business to education, to support the creation of female-led businesses?
I think reach out and support others. Certainly, I know so many female founders who feel alone. If you have experience having started a business yourself and you were able to achieve and get funding then go out and find others who need your help. Go and give back and mentor. Look at networks, sign up to the Investing in Women Code, if you’re someone who runs any kind of investment firm or VC firm.
In the Investing in Women Code it’s worth noting that we’ve requested that they adopt best practices, that they’re sharing best practices, they adopt them and that they also provide data on an aggregated basis for how much they’re investing in women. And that actually allows us to gather and mark progress year on year for how much more – hopefully – we are investing in women.
When Allison Rose, who’s our bank’s CEO, when she actually said we’re going to set aside £2 billion of our balance sheet for female entrepreneurs or female-funded business, I think that got everyone’s attention. So that’s when you actually put it as a commercial decision for your company. You actually demonstrate that you actually care; that it is a commercial decision. So that’s what I want to emphasize, is that diversity, bringing more females, supporting female founders, is not just a Corporate Social Responsibility or a nice thing to do or a charity project. It’s actually profitable and commercial.
That’s really interesting to hear that it is going to make money in that way. Edith, what do you think we need from government and businesses and education in order to support female-led businesses?
I really think that financial literacy is something that we don’t talk enough about for women. That comes from multiple reasons, multiple situations, but the fact that how investment works or the financial community is very male-led is because we don’t talk about this. Basic app use, free trade etc, it’s not something typically that women talk about or use because the knowledge is not necessarily there, so they won’t go into angel investing because it seems even more daunting. The women in tech situation that Wincie has also mentioned, that’s very important. It is difficult to hire women … but there’s no pipeline because there is no training. There’s no knowledge there. It is growing. It is, again, significantly better but I think we do need to go back and this is from the government side to schools.
Then, I would love to see a 50% female team at every VC firm. If there’s representation on the board, if there’s representation in the companies who are making the financial decisions, the money will be there. I think mentoring is super-important, networks are incredibly important but at the end of the day the growth will come from money, so we need to get more money into female entrepreneurs’ pockets.
Yeah, I think that message about representation, particularly younger girls and younger women seeing females in tech roles in leading businesses, that’s such an important part. Edith, my final question to you. What is one piece of advice that you would give to any female listeners who are thinking of starting their own business?
Honestly, just go for it. The thing is with entrepreneurship is it’s all right to fail. It happens. 70% of startups fail and all of these success stories that we hear in the news, none of them were first companies. Maybe there are a few who literally just went from one great idea and then “unicorn” but the majority of those founders are serial entrepreneurs. Find your network, find your tribe, they are out there and they will want to help you.
Give it a go. If you look at me and I have done just about any anything and everything, I would hate someone to have to read my CV because nothing actually looks like I’ve had a career path, but actually everything has been an experience and everything has taught me something, which has led to the next thing, which has led to the next thing. And without all those different experiences, I wouldn’t be able to run the business I have now, so you don’t need anything specific, you just need passion and you need to see an opportunity.
I love that piece of advice. And Wincie, to end with you, I’m going to ask the same question: What’s the one piece of advice that you would give to any female listeners?
If there’s one piece of advice I would say, and it’s very similar to what Edith said, is when you start your business, you do it for a passion or for something you’ve seen or make sure that it is something that you will actually want to take on because it will affect everything – your family life and your personal life. Your business is basically having another baby. It takes a village to raise a child, and it takes a village to raise a business as well. So reach out to people who have expertise in areas that you don’t have expertise in. Don’t be afraid of asking. You’d be surprised how much help you actually get. There are loads of accelerator programmes out there, including the Microsoft one, which do offer a lot more structured support as well.
Another place is the British Library, which has free support for small businesses. There’s loads of help everywhere if you are willing to look, so just get out there and do it.
Thank you so much, Wincie, that’s really incredible advice.
I’m afraid that’s all the time we have for today. Thank you to Edith, Wincie and Amanda for joining me today to talk about such an important subject.
Thank you. It was brilliant to be here.
It was great. This is a subject I’m extremely passionate about and so I’m very glad to be able to highlight some of the challenges and potential solutions for female founders across the UK.
That’s great, it’s been lovely. I hope it inspires women to come on and join this wonderful journey of running your own business.
Thanks to all of you at home for listening. Make sure you look out for the next episode of Microsoft Stories soon. Bye for now.