Women are the largest disruptive force in business, and yet the existing systems can’t accommodate them. The problem is coded patriarchy — a mindset that presumes male as default and female as other. This needs to change so that businesses can tap into women’s potential fully. Most of the structures, designs, technology, and products we interact with assume males as the default.
There’s been a recent development in the business world where people only listen to those who agree with them, and as a result, there are now more opportunities than ever before for businesses. For years, companies and investment teams that are mostly composed of men have been ignoring this market. These gatekeepers to capital don’t have the ability to see opportunities outside of their own experiences.
Companies such as The Honest Company and Thinx have been gaining popularity due to their women-centered innovation. These products and services are designed by women, for women–based on the hardships faced every day. The current crowd of businesses and investment firms are unequipped to understand the potential of this burgeoning opportunity, let alone invest in or help these next-gen companies grow. What long-term effects will this have for technology, the industry as a whole, and future investing?
Understanding Our World
Very few people know that the wheel track — or, the distance between the center of a vehicle’s wheels across its width — is a standardized measurement that dates back to 300 BC.
The design element of width has remained the same throughout history, from the Roman gladiator’s chariot to horse-drawn carriages in Victorian England to train tracks in the 1800s and today’s automobiles. The size of the spaceships we launched into outer space was even determined by the wheel track because the ships’ components had to be transported via trains, with standardized wheel tracks, to the launch pads. It’s practically impossible to go through life without encountering this design element, and yet we never give it a second thought.
The wheel track continues to shape our lives today — from the width of our roads to the way our cities are designed, and even the sidewalks we walk on. It determines how many cars can fit on morning commutes and how large neighborhood parks will be.
The wheel track is something that most people never think about because it’s invisible and unstated.
It’s an organizing principle that orders your life without you noticing.
Patriarchy is similar in many ways:
It outlines our possibilities
It limits our perspectives.
It establishes what is taboo,
It establishes what is tolerable.
Clearly defining what is valued and why is essential,
It separates what is “default” from what is “other”.
What is rewarded is defined by it.
Patriarchy is an organizing principle that largely goes unnoticed in our daily lives, though its effects are everywhere, from the way women are left out of design and business to the way cities are planned. A few examples:
The average door is designed for a man’s tensile strength, making it more challenging for the average woman to open when entering or exiting a building. [i][ii]
Women often have to wait in line for the restroom, which shows that the bathroom was not designed efficiently; usually, women have to do 5 activities while men only need to do one:“many public restrooms continue to be facilities that are equal in physical space while favoring men’s bodies, experiences, and needs”[iii]
Pregnant women are considered “disabled” under many building codes because their needs differ from the average able-bodied person.
When airbags were first designed and released, they killed or injured hundreds of women and children because the all-male engineering team who created them only tested for people over 250 pounds.[iv]
Oftentimes, women have no choice but to put their purses or shoes on the floor of the car since most cars lack designated spaces for these items (other than the trunk).
Of the top health trackers (Apple, Fitbit, Nike)[v] — Out of all the apps, not one had a period tracker, even though it is a normal health routine for half the target customer base to track periods. Also, typically women are the ones who use health tracker apps. [iv]
If you want your product to sell well, avoid giving it a name that will turn away half of your potential consumers. In this case, naming the product “iPad” was not the wisest decision since many women associate that word with hygiene products.
Designing AI with a female interface to act as a personal assistant, such as Alexa, Siri, and Amy.
We Live in a Silent Female-Driven Economy
Women are often the unsung heroines of the economy, driving most if not all economic indicators — yet many people are unaware of this fact.
Women are responsible for the majority of consumer spending around the world.[vi][vii] The majority of women are responsible for purchasing not only for themselves, but also for their husbands or partners, children, and elderly parents. Women are the key decision-makers when it comes to finances in their household, which includes big purchases like homes and cars, as well as investments. In the United States alone, women manage 60% of personal wealth totaling $14 trillion in assets. This number is only expected to grow in 2020, as women are predicted to hold 51% of all stock globally–amounting to $22 trillion in total.[viii]
Based on statistics from 2015, it’s evident that women play a significant role in the second-largest economy globally, [ix]. It’s important to remember that these numbers don’t take into account the wage gap between genders or the 4.5 hours of unpaid work that the average woman does each week [x][xi][xii]. Women would be the most powerful economic group on Earth if we considered the amount of work that women do in developing countries. If we take these into account and calculate, there is an estimated $19T in true productivity.
Graph: Country GDP vs Global Female Earned Income
Inadequate data plagues many countries when it comes to understanding women’s productivity as Woman’s work often goes untracked or is not represented correctly by economic indicators. Only a fraction of the total productive work women do globally is reflected in traditional economic indicators. A country’s GDP does not reflect the multitude of productive work women do, both in and out of the home. Designed by men and defined as “the total value of everything produced by all the people and companies in the country,” If you take into account the staggering amount of uncompensated labor that women do globally. Current staggering estimates are that women globally produce a minimum of $10 trillion in uncompensated labor. [xiii][xiv]
The Irrationality of Markets
Given all this data, you would logically think that companies and businesses would invest money into balanced or female-based teams to develop a deeper understanding of their go-to customers.
Women are largely excluded from senior management positions across business, advertising agencies, media, health, and technology. Women, who make up 20% of employees in the tech industry, are largely excluded from participating in coding, innovation, and design divisions. Out of 1 500 S&P CEOs, fewer are female than those named John [xv]. Although women have been receiving more attention in the business world, they are actually getting less financial support. In 2015, women received 15% of all venture capital funding, but by 2017 that number had decreased to 2% [xvi].
Even though data shows that there is a massive economic opportunity in investing in women, money still isn’t flowing toward them.
The Coming Wave of Disruption
Women are steadily becoming more prominent in entrepreneurship and innovation. As this happens, we’re also seeing a rise in businesses that offer products and services specifically designed to address women’s needs. Remember that this one, the small idea goes against years and years of social conditioning to think in masculine terms.
Yet, I would argue that women are the single largest opportunity in the market today — overlooked, underfunded. There are few markets left in today’s world with no competition — yet this is exactly the state of affairs when it comes to women. While there are 23 billion pairs of shoes sold globally in 2015,[xvii] it’s estimated that men own an average of 12 pairs of shoes while women own an average of 27 pairs of shoes.[xviii] Women spend an estimated four and a half times more on clothes and shoes than men[xix] — however, there are almost no shoes designed by women with women in mind. And the same is true across almost every category that women consume with very few exceptions.
When it comes to business, investors are always seeking new opportunities in order to get above-market returns. A few examples of this can be seen with the investment into markets such as India, China, and Africa.
Women present the newest, and yet most overlooked market opportunity in today’s business world. They are constantly underserved and underfunded, which is strange considering there are few markets now with little to no competition. When it comes to women, however, this could not be further from the truth. In 2015, a whopping 23 billion pairs of shoes were sold globally,[xvii] The average man owns 12 pairs of shoes while the average woman owns 27 [xviii]. Women around the world spend an astonishing amount on clothes and shoes annually- almost five times more than men[xix]. Although a few women do design shoes, the great majority don’t have other women in mind when they do so. The same can be said about every category that women consume with only a handful of exceptions.
By targetting women, you are essentially guaranteed that your new product will be the first and leading market leader. Also, this is an emerging markets case study where you don’t have to wait for the market to fully mature; women have already reached full maturity in terms of size and spending power. Not only is there virtually no gap or lag time, but because women typically don’t have access to as much capital, they can’t afford to build businesses that are unprofitable for 5-7 years [xx]. Consequently, women entrepreneurs tend to focus on developing businesses that generate positive revenue from the start.
Companies founded by women have explosive growth potential. For example, Thinx earned tenfold its revenue within two years and The Honest Company was valued at one billion dollars in five years or fewer. [xxi]
Women are coming up with new products to solve their own problems, which will cause a domino effect of changes in how consumers shop, what they believe, and their purchasing habits.
Preference for female-designed products in all areas
People are more likely to pay closer attention and be unsatisfied with products or services that they think aren’t good enough. People are more likely to closely examine and be unhappy with products that don’t meet criteria such as “organic” and “sustainable” when they are next to other products that do meet these standards. If you see that an eggs brand is unlabeled, you may become suspicious of it, especially if the other brands around it are labeled “cage-free” or “free-range.”
Expectations of female-focused messaging and branding
If you want to engage female audiences, your branding and messaging must be authentically crafted with female-driven insights. “Pink-washing,” or the act of using pink to make consumers think a product is beneficial for breast cancer, will not be effective. If companies and brands don’t invest in promoting feminism and inclusion within their organizations, they will lose to new companies that have built these principles into their business model from the start. To succeed, companies will have to use the Unilever method – concentrating on brands like Dove that resonate with women and dramatically changing advertising to target this demographic.[xxii]
Purpose and Planet: Women tend to think systematically and consume with purpose.
WCI not only focuses on women’s direct needs but also aims to create products and brands with sustainability or social impact at their core. For example, The Honest Company produces organic and non-toxic items for babies and families. Thinx reduces the environmental impact of disposable hygiene products. Watermelon WTR supports organic farmers while addressing the inherent waste in our food system up to 50% of edible produce is disposed of for cosmetic reasons.[xxiii][xxiv] A purpose is a key driver for how millennial women purchase items, and this influences them to select one product over another. Also, recent trends indicate that millennial women will consume various products differently purchasing fewer non-reusable items.
Quick Waves of Adoption
Since almost 0 products or services reflect what women want, they have habitually stopped trusting advertising. According to recent research, 99% of millennials are not convinced by advertisements. Women have formed supportive networks in order to get product referrals and figure out whether a certain product is good for them or not.
Women join more online communities and share information 62% more frequently than men; using social networking to build connections and establish relationships while men prefer content-based sites that can improve their status.[xxv]. Because women tend to share their experiences with new products more frequently with other women, the implications for product adoption rates are significant. When women discover a new product they like, it won’t be long before others know about it too, resulting in faster uptake and adoption.
As was previously mentioned, women are in charge of the majority of spending because they purchase items for other people close to them. Women buy 68% of gifts across a number of gifting occasions, averaging more recipients than men: birthdays, bar + bat mitzvahs, wedding + baby showers, graduations, weddings, and holidays. Most men say they just buy their wives a present. [xxvi][xxvii] Women are constantly talking to one another and sharing their thoughts on what products and services they like. According to a study done by Nielsen, multicultural millennials make up for 47% of the GDP in America.“Profound influence on their peers, as well as both older and younger generations.”[xxviii]
These changes will have a big impact on brands and the way people shop, which will be long-lasting and more disruptive than anticipated.
cautious of what they buy and where their purchase goes, millennials have equally impacted the heritage brands like Campbell’s and Kraft. We don’t see a pattern of going back to these iconic brands once shifted. According to Boston Consulting Group, large companies have lost $18 billion in sales to small businesses between 2009-2014; the top 25 companies witnessed a 5% decline in market share within the food and beverage industry alone.[xxix][xxx]
Asleep at the Wheel
The current business, technology, and investment establishment are asleep at the wheel. For years, companies have approached women’s products with an “I’ll ask my wife” mindset or the belief that they can simply charge more for a pink version of their product. Furthermore, calls to diversify workplaces and make them less hostile towards female employees have gone largely ignored. As a result, these institutions do not have the internal resources or knowledge necessary to adapt at this juncture. If firms continue to encourage cultures where women are ignored, poorly compensated, and rarely promoted, they will lose their best female talent. Moreover, these companies and funds lack the internal culture or external network necessary to identify, invest in and cultivate this next generation of companies.
Long-Term Implications: Rise of the Female-Driven Economy
When a certain population group has such a great influence on consumer spending but only receives 2% of venture funding, it’s evident that there is some disconnect among leaders in the business and investment communities. There is a huge opportunity for women in the market today.
Rise of Female Investment Ecosystem
As more and more female-founded companies have successful IPOs or get acquired, a new business ecosystem will emerge. A new era of female entrepreneurs and employees will become serial entrepreneurs (like Jack Dorsey, Elon Musk), and launch their own VCs and PE funds to reinvest in other companies owned by women in the WCI space.
Rise of Female Investor Class
Women currently control a whopping $14 trillion in assets — which is approximately 60% of personal wealth and 51% of the stock in the US. To put this number into perspective, as of Financial Year 2016, US pension funds controlled roughly $19 trillion in retirement and pension assets.[xxxi]. However, the majority of banks, investment, and pension funds still choose to market towards men rather than women. As female-founded companies become more commonplace, the silent majority of female investors will go from passive to active. They will look to invest in companies that offer products they use or are familiar with, and female founders will increasingly turn to them when seeking funding. After taking control of their own finances, these women will have a disruptive influence on the status quo and change how we measure economic worth.
Mass Gutting of C-suites and Boards Across Corporate America and Investment Funds
The recent spate of firings at Uber is a warning sign for the company. After the resignation of its CEO, many senior executives and board members have been let go. This mass firing could be indicative of deeper problems within the company. Male executives who are unaware of social cues and their effects will not last in today’s business world. The conversation about “women in business” is changing from harassment to productivity, making the work environment less tolerant for those who don’t understand these new boundaries. As companies and boards see the benefits of engaging with women as customers, founders, and innovators, we’ll see a wave of changes in executive leadership. The image of success in the business world has changed dramatically over time, and it is about to change again.
Heritage Brands Will Continue to Lose Women and Millennial Customers
Existing brands will lose value, and those losses aren’t temporary. Even heritage brands that have been around for a while will have trouble appealing to women and millennial buyers in genuine ways. When it comes to values, millennials are much more likely to be loyal to those than any one brand.
Implications for Women, Innovation, and Leadership
The implications for women are vast, from a career, innovation, and business leadership perspective.
All women have the potential to be great entrepreneurs—every pain point is a signal for innovation in a wide-open market.
For the past 50 years of women in the workforce, they have been commonly encouraged to not express their femininity. In the new era, women leaders will be successful if they bring their whole selves to work and lead with all of their authentic qualities. Business opportunities abound in menstruation, motherhood, and other aspects of women’s daily lives.
Every pain point that you, as a woman, have experienced in your day-to-day life is an empire-building business idea that has never even crossed the mind of any male Fortune 500 CEO.
[i] K.H. Eberhard Kroemer, “Designing for Muscular Strength of Various Populations”. http://www.dtic.mil/dtic/tr/fulltext/u2/a011537.pdf. December 1974
[ii] Bill Dowell for Herman Miller, “The Evolution of Anthropometrics and User Control”. https://www.hermanmiller.com/research/categories/white-papers/the-evolution-of-anthropometrics-and-user-control/
[iii] Soraya Chemaly, “The Everyday Sexism of Women Waiting in Public Toilet Lines”. http://time.com/3653871/womens-bathroom-lines-sexist-potty-parity/. January 5, 2015
[iv] Colin Katagiri, “Debugging the Gender Gap: Documentary Film Screening & Panel — A Reflection”. http://foundry10.org/subject-areas/code-debugging-gender-gap/. January 6, 2017
[v] Arielle Duhaime-Ross, “Apple Promised an Expansive Health App, So Why Can’t I Track Menstruation?”. https://www.theverge.com/2014/9/25/6844021/apple-promised-an-expansive-health-app-so-why-cant-i-track. September 25, 2014
[vi] Ekaterina Walter, “The Top 30 Statistics You Need to Know When Marketing to Women”. https://thenextweb.com/socialmedia/2012/01/24/the-top-30-stats-you-need-to-know-when-marketing-to-women/#.tnw_wUzMxTvr. January 24, 2012
[vii] Jill Krasny, “Women Control The Money In America”. http://www.businessinsider.com/infographic-women-control-the-money-in-america-2012-2. February 17, 2012
[viii] Bank of Montreal Wealth Institute, “Financial Concerns of Women”. https://www.bmo.com/privatebank/pdf/Q1-2015-Wealth-Institute-Report-Financial-Concerns-of-Women.pdf. March 2015
[ix] Elena Holodny, “Women Are the Next China”. http://www.businessinsider.com/women-could-be-the-next-global-growth-engine-2015-10 October 6, 2015
[x] Sonam Sheth and Skye Gould, “5 Charts Show How Much More Men Make Than Women”. http://www.businessinsider.com/gender-wage-pay-gap-charts-2017-3/#the-gender-wage-gap-varies-widely-depending-on-the-state-1 March 8, 2017
[xi] Larry Elliott, “UN Launches Initiative for Women’s Economic Empowerment at Davos”. https://www.theguardian.com/business/2016/jan/21/un-global-womens-economic-empowerment-initiative-davos January 21, 2016
[xii] Annalisa Merelli, “There’s a Mind-Boggling Amount of Work Women Do That We Can’t Quantify”. https://qz.com/686075/we-still-have-literally-no-way-to-quantify-exactly-how-much-work-women-do/ May 18, 2016
[xiii] McKinsey Global Institute, “How Advancing Women’s Equality Can Add $12 Trillion to Global Wealth”. https://www.mckinsey.com/global-themes/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth September 2015
[xiv] Annalisa Merelli, “There’s a Mind-Boggling Amount of Work Women Do That We Can’t Quantify”. https://qz.com/686075/we-still-have-literally-no-way-to-quantify-exactly-how-much-work-women-do/ May 18, 2016
[xv] Justin Wolfers, “Fewer Women Run Big Companies Than Men Named John”. https://www.nytimes.com/2015/03/03/upshot/fewer-women-run-big-companies-than-men-named-john.html?mcubz=0 March 2, 2015
[xvi] Dana Kanze, Laura Huang, “Male and Female Entrepreneurs Get Asked Different Questions by VCs — And it Affects How Much Funding They Get”. https://hbr.org/2017/06/male-and-female-entrepreneurs-get-asked-different-questions-by-vcs-and-it-affects-how-much-funding-they-get June 27, 2017
[xvii] World Footwear, “Worldwide Footwear Production Reached 23 Billion pairs in 2015”. https://www.worldfootwear.com/news.asp?id=1817&Worldwide_footwear_production_reached_230_billion_pairs_in_2015 August 2, 2016
[xviii] Time Magazine, “Time Style and Design Poll”. http://content.time.com/time/arts/article/0,8599,1169863,00.html March 5, 2006
[xix] James Salmon, “Women Spend 7 Billion a Year on Clothes and Shoes”. http://www.dailymail.co.uk/news/article-3753812/Women-spend-7billion-year-clothes-shoes.html August 22, 2016
[xx] Matt Egan, “16 Firms Worth Billions Despite Losing Money”. http://money.cnn.com/2015/01/23/investing/shazam-tech-startups-lose-money/index.html January 23, 2015
[xxi] Sara Ashley O’Brien and Cristina Alesci, “Unilever Looks to Buy Jessica Alba’s Honest Company”. http://money.cnn.com/2016/09/16/technology/unilever-honest-company/index.html September 16, 2016
[xxii] Dominique Mosbergen, “Since Lingerie Brand Aerie Ditched Photoshopped Ads, Sales Have Surged”. http://www.huffingtonpost.com/entry/aerie-photoshop-sales-growth-2016_us_573d35d6e4b0646cbeec260c May 19, 2016
[xxiii] Suzanne Goldenberg, “Half of All US Food Produce is Thrown Away, New Research Suggests”. https://www.theguardian.com/environment/2016/jul/13/us-food-waste-ugly-fruit-vegetables-perfect July 13, 2016
[xxiv] Modern Farmer, “How WTRMLN WTR (With Help from Beyoncé) Turns Food Waste Into Health Fuel”. https://www.huffingtonpost.com/modern-farmer/how-wtrmln-wtr-with-help-_b_11201078.html July 28, 2016
[xxv] Jenna Goudreau, “What Men and Women are Doing on Facebook”. https://www.forbes.com/2010/04/26/popular-social-networking-sites-forbes-woman-time-facebook-twitter.html April 26, 2010
[xxvi] Chris Keane, “Men Think They Do All The Holiday Shopping, But Women Beg to Differ”. https://www.nbcnews.com/business/consumer/men-think-they-do-all-holiday-shopping-women-beg-differ-n694026 November 25, 2011
[xxvii] Monique M.H. Pollmann and Ilja van Beest. “ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3873259/ December 26, 2013
[xxviii] Nielsen, “Multicultural Millennials: The Multiplier Effect”, http://www.nielsen.com/us/en/insights/reports/2017/multicultural-millennials–the-multiplier-effect.html. January 18, 2017
[xxix] The Robin Report, “Kraft, Campbell Soup, Nestle …and More” http://therobinreport.com/kraft-campbell-soup-nestleand-more/?utm_source=The+Robin+Report&utm_campaign=50c9172c86- August 19, 2015
[xxx] E.J. Schultz, “Big Food’s Big Problem: Consumers Don’t Trust Brands”. http://adage.com/article/cmo-strategy/big-food-falters-marketers-responding/298747/ May 25, 2015
[xxxi] Wikipedia, “Pension Funds; United States” https://en.wikipedia.org/wiki/Pension_fund#United_States