Sometimes flawed statistics worm their way into positions where they can cause massive damage.
Here’s an example you might have come across before: some literature from the British Business Bank a few years back announced in grizzled tones of grey doom that only 2% of investment in the UK goes to women-led businesses. That figure definitely affected the choices I made around starting a new business and investing in others: and then I found out that it’s based on significantly flawed methodology.
I met Agata Nowicka, who runs Female Foundry, a few weeks back. She’s just produced the Female Innovation Index, which happens to expose that the team which produced that figure was operating on some flawed methodology: specifically, they were only counting businesses where all the founders were women. If you had a male co-founder, you wouldn’t make the list.
When Agata’s team looked more closely at the numbers across more than half a million European businesses, she found the situation looks a lot better than we’ve been told. Businesses with female founders, whether their co-founders were men or women, actually performed at parity with the set of all companies, male- and female-founded. There’s so little difference between funding awarded to female-founded companies and the set of all companies that it’s just lost in the noise. Here’s a graph. I like graphs.
So what can we take away from this? If you’re a UK person who thinks a lot about startups, especially if you’re a woman, you’ll be very familiar with that debunked 2% figure. It seems to have worked its way into a lot of people’s heads: it gets brought up at a lot of meetings I have with women in early-stage businesses who are trying to scale. It comes up again and again at pitch events. I can point to individuals I know who have viewed it as a caution to be less ambitious, and to take fewer risks. I know people who have been motivated away from approaching investors because they’ve internalised this idea that they only have a 2% chance of succeeding.
It’s bullshit.
I get asked to a lot of events about women in business, and one of the questions I almost always get asked is how women and men operate differently in the workplace, and whether that matters in eventual success. I do believe there are some fundamental differences between the way the sexes interact with people and with business, which are rooted in biology (which I’ll write about more later one day when I feel my appetite for being stoned to death is larger than it is today), but those differences are incredibly minimal.
Ultimately, we’re not starting from the same place. Men aren’t being fed incorrect data that discourages them from participating: they’re encouraged to think big and to dominate. Women should be doing the same. Think big; be ambitious; ignore the data that says you’re shit, because it’s probably wrong; and dominate your environment. It’ll give you a much better chance of succeeding in your business.