The Winning Traits of Female Entrepreneurs

The great divide among the sexes is one of the biggest enigmas in business. No, I am not referring to the disproportionately high number of males in the executive ranks. I am speaking of the higher number of successful female entrepreneurs versus male entrepreneurs. Successful companies have 7.1 percent female executives versus 3.1 percent at unsuccessful businesses, according to a Dow Jones survey that asks, ‘Do female executives drive startup success?’ One cannot help but also ask, where are all the women in leadership positions?

The more important question is, what attributes make women more successful at business startups and how can you use them to your advantage in business? As females become a larger and more influential force in the business world, the ability to identify their winning entrepreneurial traits can be an important competitive advantage, especially for small, growth companies, an environment in which women out-manage men. Females now comprise one-third of entrepreneurs worldwide. This number is rapidly growing as more accessible financing becomes available through microfinance, venture capital, government-backed loans, and other forms of financing.

Stereotyping female entrepreneurial prowess is the greatest disservice you could do to your business. The convenient explanation has always been the mother model — that is, women are more patient and nurturing. They grow a business with tender loving care and do not take a lot of risks. This overly simplistic analysis not only discounts the talent women bring to the workplace but, disconcertingly, it means that their greater talents are not being put to work. Here, we set out to identify those female traits behind the large performance gap between female and male entrepreneurs.

Ingenuity — The Internet with its very low barriers to entry has allowed more and more women to showcase their business ideas. Women entrepreneurs have shown a knack for taking ideas the market considered tapped out — been there, done that — and finding new angles. Take the crowded social media space. Ning, the social network the closest to taking on LinkedIn for business users was co-founded by Gina Bianchini, who went on to found the creative social collaboration space MightyBell. While men have shown to be more creative in some entrepreneurship studies, women are proving to be more ingenious at finding new markets and niches.

Collaborative decision-making — Women entrepreneurs are more likely to consult with managers and engage in collaborative decision-making. This inclination is evident in the vast networks of innovative programs developed by women to help other women entrepreneurs. Almost all are involved in mentoring other women entrepreneurs through accelerators (e.g., the Pipeline Fellowship provides training in angel investing to women, many of whom invest in female-backed ventures), incubators, angel investing and other initiatives. Even the old-fashioned mentoring model shows ingenuity. Take Caroline Ghosn and Amanda Pouchot’s Levo League, which rents mentors by the hour, including Bianchini and Facebook’s Cheryl Sandberg.

Business confidence — Listen to the tales of women rising to the top and confidence and perseverance are must-have traits in the male-dominated, alpha world. Female entrepreneurs have more confidence in their entrepreneurial skills than men, yet an Edward Jones study observes that only 11 percent of women have confidence in their ability to start a business. When it is time to find a new project leader, you want to choose from that small set of self-starters in your workforce, and put their entrepreneurial skills to work.

Less risk taking — Men are greater risk takers but that does not mean that women are not movers and shakers. On the contrary, women are more likely to seek change and opportunities to work independently. A woman is more likely to pursue new opportunities and, as a measured risk taker, be more successful at capitalizing on them. And look to women, who require less financing and take on lower debt in businesses, to run your project more cost effectively.

Passionate — Being driven by passion is the most important driver behind the success of women-led businesses. Women are more likely to seek jobs that are aligned with their values. For sure, men are passionate about their business ideas but a male entrepreneur is more likely to kick the tires on a bunch of potential business ideas whereas a female’s passion will drive a strong commitment to one business idea. In a business world in which venture capitalists take successful models and seek to emulate them, this is an important distinction. Many of these women have engineering degrees and a passion for changing the world through technological innovation. Others have spun fresh ideas into new fashion and art business models. For today's woman who wants to plow her earnings back into her businesses rather than designer clothes, there is Jenn Hyman and Jenny Fleiss’ Rent the Runway, which rents out haute couture clothing; or Alex Tryon’s Artsicle, which rents out artwork of emerging artists.

Given the fine talents of women, it is worth asking, how much are you losing by not having more female business leaders? Put another way, how much are you losing by not having female leaders train your future leaders (in entrepreneurial skills)?

Thomas Walsh, Ph.D. is president of Grenell Consulting Group, a regional firm specializing in maximizing the performance of organizations and their key contributors. E-mail Walsh at tcwalshphd@grenell.com